AR07 Mithril
AR07 Mithril
AR07 Mithril
CORPORATE INFORMATION CORPORATE STRUCTURE NOTICE OF THE FIFTH ANNUAL MEETING PROFILE OF DIRECTORS CHAIRMANS STATEMENT CORPORATE GOVERNANCE DIRECTORS RESPONSIBILITY STATEMENT AUDIT COMMITTEE REPORT STATEMENT OF INTERNAL CONTROL ADDITIONAL COMPLIANCE INFORMATION DIRECTORS REPORT & FINANCIAL STATEMENTS LIST OF PROPERTIES ANALYSIS OF SHAREHOLDINGS ANALYSIS OF WARRANT HOLDINGS ANALYSIS OF RCSLS HOLDINGS ANALYSIS OF ICULS HOLDINGS FORM OF PROXY 2 3 4 7 11 13 17 17 19 20 22 80 84 86 88 90
CORPORATE INFORMATION
: : :
Malaysia A public listed company incorporated in Malaysia under the Companies Act, 1965 and limited by shares Tunku Yahaya @ Yahya bin Tunku Tan Sri Abdullah - Executive Chairman Razman Hadz bin Abu Zarim - Managing Director / Chief Executive Ofcer Sim Lye Watt - Executive Director Muhamad Umar Swift - Non-Independent Non-Executive Director Yeo Took Keat - Non-Independent Non-Executive Director Alan Hamzah Sendut - Independent Non-Executive Director Dato Abdul Majid bin Mohamed - Independent Non-Executive Director Onn Kien Hoe - Independent Non-Executive Director Lily Yin Kam May Yeo Took Keat Alan Hamzah Sendut - Chairman Dato Abdul Majid bin Mohamed - Member Onn Kien Hoe - Member Yeo Took Keat - Member Trace Management Services Sdn Bhd Suite 20.03, 20th Floor, Menara MAA No. 12 Jalan Dewan Bahasa, 50460 Kuala Lumpur Telephone No : 03-2141 3060 Telefax No : 03-2141 3061 Suite 20.03, 20th Floor, Menara MAA No. 12 Jalan Dewan Bahasa, 50460 Kuala Lumpur Telephone No : 03-2141 3060 Telefax No : 03-2141 3061 Suite 18.05, 18th Floor, Menara MAA No. 12 Jalan Dewan Bahasa, 50460 Kuala Lumpur Telephone No : 03-2142 0366 Telefax No : 03-2142 0533 Messrs Cheang & Ariff 39 Court 39 Jalan Yap Kwan Seng, 50450 Kuala Lumpur Telephone No. : 03-2161 0803 Telefax No. : 03-2161 4475 Messrs Ernst & Young Level 23A, Menara Milenium Jalan Damanlela Pusat Bandar Damansara, 50490 Kuala Lumpur Telephone No. : 03-7495 8000 Telefax No. : 03-7495 7981 Alliance Bank Malaysia Berhad Malayan Banking Berhad Bursa Malaysia Securities Berhad (Bursa Securities) Stock Number 8311 http://www.mithril.com.my/
: :
Registered Ofce
Solicitors
Auditors
: : :
2
MITHRIL BERHAD
CORPORATE STRUCTURE
100% MITHRIL SAFERAY SDN BHD
100% MITHRIL FRP SDN BHD MITHRIL BERHAD 100% MITHRIL MANAGEMENT SERVICES SDN BHD
3
MITHRIL BERHAD
NOTICE IS HEREBY GIVEN that the FIFTH ANNUAL GENERAL MEETING of the Company will be held at The Auditorium, Podium 1, Menara MAA, No. 12 Jalan Dewan Bahasa, 50460 Kuala Lumpur on Thursday, 29 November 2007 at 4.00 p.m. for the following purposes :-
AS ORDINARY BUSINESS
1. 2. 3. To receive the Audited Financial Statements for the year ended 30 June 2007 together with the Reports of the Directors and the Auditors thereon. To approve the payment of Directors fees amounting to RM118,000.00 for the period from 1 July 2007 until the forthcoming Annual General Meeting to be held in 2008 to be payable quarterly in arrears. To re-elect the following Directors of the Company who are retiring in accordance with Article 77 of the Companys Articles of Association and who, being eligible, offer themselves for re-election :(i) (ii) 4. Dato Abdul Majid bin Mohamed Onn Kien Hoe (Resolution 2) (Resolution 3) (Resolution 1)
To re-elect the following Directors of the Company who are retiring in accordance with Article 83 of the Companys Articles of Association and who, being eligible, offer themselves for re-election :(i) (ii) Tunku Yahaya @ Yahya bin Tunku Tan Sri Abdullah Alan Hamzah Sendut (Resolution 4) (Resolution 5) (Resolution 6)
5.
To re-appoint Messrs Ernst & Young as Auditors of the Company and to authorise the Directors to x their remuneration.
AS SPECIAL BUSINESS
6. To consider and, if thought t, to pass the following resolutions as Ordinary/Special Resolutions :ORDINARY RESOLUTIONS (a) Authority to allot and issue shares pursuant to the Employees Share Option Scheme (ESOS) THAT pursuant to the Companys ESOS as approved by Ordinary Resolution passed at the Extraordinary General Meeting of the Company held on 26 December 2003, the Directors of the Company be and are hereby empowered pursuant to Section 132D of the Companies Act, 1965 to allot and issue shares of the Company from time to time in accordance with the Scheme. (b) Proposed Shareholders Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature (RRPTs) THAT the mandate granted by the shareholders of the Company on 30 November 2006 pursuant to paragraph 10.09 of the Listing Requirements of the Bursa Malaysia Securities Berhad (Bursa Securities), authorising the Company and its subsidiaries (the Mithril Group) to enter into the recurrent related party transactions of a revenue or trading nature which are necessary for the Mithril Groups day-to-day operations as set out in Section 3.0 of Part A of the Circular to Shareholders (the Circular) dated 7 November 2007 with the related parties mentioned therein, be and is hereby renewed, as set out in Section 3.0 of Part A of the Circular with the related parties mentioned therein provided that :(a) the transactions are in the ordinary course of business and are on terms which are not more favourable to the related parties than those generally available to the public and on terms not to the detriment of the minority shareholders of the Company; the transactions are made at arms length and on normal commercial terms; and disclosure will be made in the annual report providing the breakdown of the aggregate value of the transactions conducted pursuant to the mandate during the nancial year, amongst others, based on the following information: (i) the type of the RRPTs made; (ii) the names of the related parties involved in each type of the RRPTs made and their relationship with the Company. (Resolution 8) (Resolution 7)
(b) (c)
4
MITHRIL BERHAD
AND THAT authority conferred by such renewed and granted mandate shall continue to be in force (unless revoked or varied by the Company in general meeting), until (i) the conclusion of the next Annual General Meeting (AGM) of the Company following the forthcoming AGM at which time it will lapse, unless by a resolution passed at that meeting or Extraordinary General Meeting whereby the authority is renewed; or the expiration of the period within which the next AGM after the date it is required to be held pursuant to Section 143(1) of the Companies Act 1965 (the Act) (but shall not extend to such extension as may be allowed pursuant to Section 143(2) of the Act); or revoked or varied by resolution passed by the shareholders in general meeting, whichever is earlier ;
(ii)
(iii)
AND THAT the Directors of the Company be authorised to complete and do all such acts and things (including executing such documents as may be required) as they may consider expedient or necessary to give effect to the transactions contemplated and/or authorised by this Ordinary Resolution. SPECIAL RESOLUTION (c) Proposed Amendments to Articles of Association of the Company THAT the deletion, alterations, modications and/or additions to the Articles of Association of the Company as set out under Section 1 of Part B of the Circular to Shareholders of the Company dated 7 November 2007 be and are hereby approved and adopted. (Resolution 9)
By Order of the Board YEO TOOK KEAT (MIA NO. 3308) LILY YIN KAM MAY (MAICSA NO. 0878038) Company Secretaries Kuala Lumpur 7 November 2007
NOTES: 1. 2. 3. 4. A member entitled to attend and vote at a meeting of the Company is entitled to appoint a proxy to attend and vote in his stead. A proxy may but need not be a member of the Company. A member of the Company, who is an authorised nominee as dened under the Securities Industry (Central Depositories) Act 1991, may appoint one (1) proxy in respect of each securities account. The instrument appointing a proxy, shall be in writing under the hand of the appointer or his attorney duly authorised in writing, and in the case of a corporation, either under seal or under hand of an ofcer or attorney duly authorised. The instrument appointing a proxy must be deposited at the Companys Registered Ofce, Suite 20.03, 20th Floor, Menara MAA, No. 12, Jalan Dewan Bahasa, 50460 Kuala Lumpur, not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof. Any alteration in the form of proxy must be initialed.
5.
5
MITHRIL BERHAD
6.
Explanatory notes to Special Business of the Agenda 6 : (a) Authority to allot and issue shares in general pursuant to Employees Share Option Scheme (ESOS) On 26 December 2003, the shareholders of the Company had approved the ESOS. The purpose of this ordinary resolution is to enable the Directors of the Company to allot shares to those employees and Executive Directors who have exercised their option under the Companys ESOS. (b) Proposed Shareholders Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature (RRPTs) The Proposed Resolution 8, if passed, will empower the Company to conduct recurrent related party transactions of a revenue or trading nature which are necessary for the Groups day-to-day operations, and will eliminate the need to convene separate general meetings from time to time to seek shareholders approval. This will substantially reduce administrative time, inconvenience and expenses associated with the convening of such meetings, without compromising the corporate objectives of the Group or adversely affecting the business opportunities available to the Group. The detailed information on Recurrent Related Party Transactions is set out in Part A of the Circular dated 7 November 2007 which is dispatched together with this Annual Report. (c) Proposed Amendments to Articles of Association of the Company The Proposed Resolution 9, if passed, will update the Articles of Association of the Company to ensure continued compliance with the Listing Requirements of Bursa Securities and to further enhance the administration of the internal affairs of the Company as well as to streamline and add clarity to the Articles of Association.
6
MITHRIL BERHAD
PROFILE OF DIRECTORS
Tunku Yahaya @ Yahya bin Tunku Tan Sri Abdullah Aged 46, Malaysian Executive Chairman Member of the Nomination Committee Member of the Remuneration Committee Member of the Risk Management Committee Member of the ESOS Committee
Tunku Yahaya @ Yahya bin Tunku Tan Sri Abdullah was appointed as the Executive Chairman to the Companys Board of Directors on 12 November 2003. On 12 January 2007, he was appointed as a member of the Risk Management Committee of the Company. He currently sits on the Boards of Melewar Industrial Group Berhad, Melewar Group Berhad, Mithril Clay Manufacturing Berhad (formerly known as Tajo Berhad), MAA Holdings Berhad, Khyra Legacy Berhad, Melewar Group Berhad, The Melewar Corporation Berhad and several other private limited companies. Tunku Yahaya graduated in 1983 with a Bachelor of Science (Hons) degree in Economics and Accountancy from The City University, London. That year in London, he joined Peat Marwick Mitchell & Co. In 1986, he obtained his Master of Science degree in Economics from Birkbeck College, University of London. Returning to Malaysia in 1986, he joined the advertising company, MZC - Saatchi & Saatchi. In 1988, he joined the management of the refurbished Central Market (KL) as Executive Director. In 1994, he was appointed to put into operation and manage the television station, MetroVision, as Managing Director. In 1997, he started the music recording label, Melewar Parallax Sdn Bhd. Tunku Yahaya is the son of Tunku Tan Sri Abdullah ibni Almarhum Tuanku Abdul Rahman. He is an indirect substantial shareholder by virtue of his relationship with Tunku Dato Yaacob bin Tunku Tan Sri Abdullah, who has substantial interest in MAA Holdings Berhad via Khyra Legacy Berhad. His shareholding in the Company is disclosed in page 24 of the Directors Report. Tunku Yahaya does not have any conict of interest with the Company and has had no conviction for any offences within the past 10 years.
Razman Hadz bin Abu Zarim Aged 52, Malaysian Managing Director/Chief Executive Ofcer
Razman Hadz bin Abu Zarim was appointed as a Non-Independent Director to the Companys Board of Directors on 12 November 2003, but subsequently was redesignated as an Independent Non-Executive Director on 19 August 2004. On 12 January 2007, Razman was appointed as the Managing Director of Mithril Berhad and accordingly, became a Non-Independent Executive Director of the Company. He sits on the Boards of Malaysian Oxygen Berhad, Courts Mammoth Berhad, Panasonic Manufacturing Malaysia Berhad, Yeo Hiap Seng (Malaysia) Berhad, Toyochem Corporation Berhad, eBworx Berhad and several other private limited companies. Razman is a joint Honours degree holder in Economics and Accounting BSc (Econ), from University College, Cardiff, University of Wales. He is a Fellow member of the Institute of Chartered Accountants in England & Wales and a member of the Malaysian Institute of Accountants. Razman began his career in 1977 with Touche Ross & Co., chartered accountants, in London. In 1984, he moved on to Hacker Young, another chartered accountancy rm based in London, where he was admitted as an Audit Partner in 1987. In 1989, Razman returned to Malaysia as an Audit Partner of Price Waterhouse (PW), an international public accountancy rm. In 1993, he was appointed the Partner-In-Charge of PWs Management Consulting Practice and became an Executive Committee member. In 1994, he established Norush Sdn Bhd, an investment holding company and business advisory rm, where he remains as Chairman. Razman does not have any family relationship with any other Directors and/or major shareholders of the Company or any conict of interest with the Company. Neither has he been convicted of any offences in the past 10 years.
7
MITHRIL BERHAD
PROFILE OF DIRECTORS
( CONTINUED )
Yeo Took Keat Aged 50, Malaysian Non-Independent Non-Executive Director Member of the Audit Committee Member of the ESOS Committee
Yeo Took Keat was appointed as a Non-Independent Non-Executive Director to the Companys Board of Directors on 12 November 2003. At present, he also sits on the Boards of MAA Holdings Berhad (MAAH), Malaysian Assurance Alliance Berhad (MAA Assurance), MAAKL Mutual Berhad, MAA Bancwell Trustee Berhad and several other private limited companies. Yeo has vast experience in accounting and nance having served various capacities in insurance companies and audit rms upon completing his studies in 1980. He joined MAA Assurance in 1986 and has held several positions, the last of which was as Senior Vice President Finance & Admin before his transfer to MAAH in May 2002 as the Group Chief Operating Ofcer. Yeo is a Fellow of The Association of Chartered Certied Accountants, United Kingdom and a Member of the Malaysian Institute of Accountants. He is also an Executive Committee member of the Federation of Public Listed Companies Berhad and has contributed to the Working Groups on accounting standards led by the Malaysian Accounting Standards Board. Yeo does not have any family relationship with any other Directors and/or major shareholders of the Company or any conict of interest with the Company. Neither has he been convicted of any offences in the past 10 years.
Onn Kien Hoe Aged 42, Malaysian Independent Non-Executive Director Chairman of the Risk Management Committee Member of the Audit Committee Member of the Nomination Committee Member of the Remuneration Committee
Onn Kien Hoe was appointed as an Independent Non-Executive Director to the Companys Board of Directors on 12 January 2007. He was then appointed the Chairman of the Risk Management Committee, a member of the Audit Committee, a member of the Nomination Committee and a member of the Remuneration Committee on 12 January 2007. He currently sits on the Boards of Malaysian Merchant Marine Berhad, M3nergy Berhad, Nova MSC Berhad and several other private limited companies. Onn completed his professional qualication with the Chartered Association of Certied Accountants in 1988, and has been in the accounting profession since then. He is also a member of the Malaysian Institute of Accountants and Malaysian Institute of Certied Public Accountants. Onn joined Horwath (Kuala Lumpur Ofce), an international accounting rm, in 1994. He is currently the partner in charge of Horwaths audit and assurance and corporate advisory departments. Onn has acted as a Special Administrator over several Danaharta cases, as well as having served as an examiner for the Malaysian Institute of Certied Public Accountants and as a member of the Interpretation Committee of the Malaysian Accounting Standards Board. Onn does not have any family relationship with any other Directors and/or major shareholders of the Company or any conict of interest with the Company. Neither has he been convicted of any offences in the last ten (10) years.
8
MITHRIL BERHAD
PROFILE OF DIRECTORS
( CONTINUED )
Alan Hamzah Sendut Aged 47, Malaysian Independent Non-Executive Director Chairman of the Audit Committee Chairman of the Nomination Committee Member of the Remuneration Committee Member of the Risk Management Committee Chairman of the ESOS Committee
Alan Hamzah Sendut was appointed as an Independent Non-Executive Director to the Companys Board of Directors on 12 November 2003. He was then appointed Chairman of the Audit Committee and Chairman of the ESOS Committee on 12 January 2007. Alan is also the Chairman of the Nomination Committee at Mithril Berhad. Alan joined PriceWaterhouse London in 1982 where he subsequently qualied as a Chartered Accountant (ICAEW). He returned to Malaysia in 1986 where he held several nance positions with various subsidiaries of Shell Malaysia. Since 1992, Alan has been the Group Finance Director for several companies including CarnaudMetalbox Malaysia Sdn Bhd, Tractors Malaysia Holdings Berhad and Consolidated Plantations Berhad. In 2006, he was transferred to Sime Darby Berhad and as Director, Special Projects Division. He holds a Bachelors Degree in Accountancy and Computer Science from the University of Wales, United Kingdom. By qualication, Alan is a Chartered Accountant and he is also a member of the Malaysian Institute of Accountants. Alan does not have any family relationship with any other Directors and/or major shareholders of the Company or any conict of interest with the Company. Neither has he been convicted of any offences in the past 10 years.
9
MITHRIL BERHAD
PROFILE OF DIRECTORS
( CONTINUED )
Dato Abdul Majid Bin Mohamed Aged 66, Malaysian Independent Non-Executive Director Chairman of the Remuneration Committee Member of the Audit Committee Member of the Nomination Committee Member of the Risk Management Committee
Dato Abdul Majid bin Mohamed was appointed as an Independent Non-Executive Director to the Companys Board of Directors on 13 December 2006. He was then appointed the Chairman of the Remuneration Committee, a member of the Audit Committee, a member of the Nomination Committee and a member of the Risk Management Committee on 12 January 2007. Prior to joining the Company, he held various senior ministerial positions and directorships in several private limited companies in Malaysia. Amongst the positions held were Ambassador of Malaysia to Libya, Ambassador of Malaysia to the Republic of Korea, Ambassador of Malaysia to the Federal Republic of Germany, Ambassador of Malaysia to the United States of America and Deputy Secretary General with the Ministry of Foreign Affairs. Dato Abdul Majid does not have any family relationship with any other Directors and/or major shareholders of the Company or any conict of interest with the Company. Neither has he been convicted of any offences in the past 10 years.
10
MITHRIL BERHAD
CHAIRMANS STATEMENT
On behalf of the Board of Directors, l am pleased to present to you the Annual Report of Mithril Berhad (Mithril) for the nancial year ended 30 June 2007.
REVIEW OF FINANCIAL PERFORMANCE
This year continued to be a challenging year for the Group. For the nancial year ended 30 June 2007, Mithril generated revenue of approximately RM48 million as compared to approximately RM65 million for the previous nancial year. This represents a decrease of 26% as compared to the previous nancial year. The decrease in revenue is mainly due to the following: i) Lower sales value as a result of the strengthening of Ringgit Malaysia currency against the US Dollar, as the sales of polyurethane products (PU) are denominated in USD; ii) Increase in competition particularly from China; and iii) Temporary cessation of production and sales of bricks as compared to the previous year. The Group incurred a higher loss before taxation of approximately RM15 million as compared to approximately RM10 million as reported in previous nancial year. The increase in loss before taxation is mainly due to the following: i) ii) iii) iv) Decrease in revenue as compared to previous nancial year; Rising raw material costs, in particular, the chemicals for the production of the PU; Impairment in value and loss on disposal of idle factory amounting to approximately RM2 million; and Write off of damaged and obsolete stocks amounting to approximately RM3.8 million.
REVIEW OF OPERATIONS
Mithril continues to focus on its core business activities i.e. manufacturing and investment properties. For the nancial year ended 30 June 2007, the manufacturing division contributed approximately RM41 million or 85% of revenue and the investment properties division contributed approximately RM7 million or 15% of revenue. The main contributor of the manufacturing division is the manufacturing and trading of PU which operates under its wholly-owned subsidiary, Mithril Saferay Sdn Bhd. The PU business continues to face the challenges of increasing chemical prices as a result of higher crude oil prices and the shortage of supply during the nancial year under review. To mitigate the increase in prices of raw material, the Group has initiated the price adjustment to transfer a portion of the cost to the customers. Apart from the price adjustment, Mithril is currently in the process of relocating and centralising its production facilities under one roof to further improve its production capacity and efciency. As a result of a re which damaged a section of the bricks plant in the previous nancial year, the bricks business has temporarily ceased and therefore, did not contribute materially to the Group during the nancial year under review. The investment properties i.e. the two (2) ofce buildings (Menara MAA) in Kota Kinabalu and in Kuching continues to generate a stable source of rental income and cash ows to the Group.
FUTURE OUTLOOK
The Group expects the coming nancial year to continue to be challenging. The Group is currently undertaking the following key initiatives to arrest the declining performance of the Group: i) ii) to dispose of non-core assets to fund the working capital of the Group; to relocate and centralise the production facilities of the polyurethane manufacturing division to further improve the production capacity and efciency; and iii) to restructure the existing loans to reduce the gearing and interest expense.
11
MITHRIL BERHAD
CHAIRMANS STATEMENT
( CONTINUED )
TUNKU YAHAYA @ YAHYA BIN TUNKU TAN SRI ABDULLAH EXECUTIVE CHAIRMAN
12
MITHRIL BERHAD
CORPORATE GOVERNANCE
The Board of Directors of Mithril Berhad is committed to implement the highest standards of corporate governance which is imperative for the enhancement of shareholders value and essential to warrant the stability and sustainability of the Companys nancial performance. This Statement sets out the application of the principles of the Corporate Governance and compliance with the Best Practices of the Malaysian Code of Corporate Governance (the Code) by the Company. The Board is pleased to present the following on the application of principles and compliance with the best practices as set out in the Code for the nancial year ended 30 June 2007.
BOARD OF DIRECTORS
The Board is aware of its responsibility to ensure that all decisions to be made by the Group should take into consideration the effects on the shareholders including minority shareholders. The Board also acknowledges that it is the duty of the Board of Directors to act in the best interest of the Group and the Company at all times. The Board has delegated specic responsibilities to 4 sub-committees namely the Audit Committee, the Nomination Committee, the Remuneration Committee and the Risk Management Committee. These Committees have the authority to examine particular issues and will report to the Board with their recommendations. The ultimate responsibility for the nal decision on all matters, however, rests with the Board.
Board meetings
The Board meets at least four (4) times each year with additional meetings being convened as and when necessary. During the nancial year the Board met 10 times, where it deliberated and considered a variety of matters including the Groups strategic plans, nancial results, business acquisitions and management authority limits. In the intervals between Board meetings for exceptional matters requiring urgent decision, Board approvals are sought via circular resolutions, which are attached with sufcient information required to make an informed decision. Details of the Board attendance at meetings for the nancial year ended 30 June 2007 are set out below:
13
MITHRIL BERHAD
CORPORATE GOVERNANCE
( CONTINUED )
Directors Tunku Yahaya @ Yahya bin Tunku Tan Sri Abdullah Razman Hadz bin Abu Zarim Sim Lye Watt Yeo Took Keat Muhamad Umar Swift Alan Hamzah Sendut Onn Kien Hoe Dato Abdul Majid bin Mohamed
Designation Executive Chairman Managing Director/Chief Executive Ofcer Executive Director Non-Independent Non-Executive Director Non-Independent Non-Executive Director Independent Non-Executive Director Independent Non-Executive Director Independent Non-Executive Director
Number of meetings attended 10/10 9/10 8/10 10/10 8/8 8/10 4/4 5/5
* Dato Abdul Majid bin Mohamed and Onn Kien Hoe were appointed on 13 December 2006 and 12 January 2007 respectively.
All Directors have complied with the minimum attendance at Board Meetings as stipulated in the Listing Requirements of the Bursa Securities Malaysia Berhad during the nancial year.
Supply of Information
The Board is entitled to unrestricted, direct and timely access to all information necessary to facilitate them to perform their duties. All agenda and board papers containing information relevant to the business of the meeting including information on major nancial, operational and corporate matters in relation to the activities and performance of the Group are provided to the Board members to enable them to participate at the Board meetings. The Directors are regularly updated by the Company Secretary on new statutory requirements relating to the duties and responsibilities of Directors. All Directors have access to the advice and services of the Company Secretary, who is responsible for ensuring that Board procedures are followed.
Directors Training
The Board acknowledges that continuous education is vital in keeping abreast with changes in laws and regulations, business environment and corporate governance developments, besides enhancing professionalism and knowledge in enabling them to discharge their duties more effectively. Accordingly, the Group is committed to continuously provide pertinent educational programmes to the Board of Directors through internal and external means. All Directors receive updates from time to time on relevant new laws and regulations to enhance their business acumen and skills to meet changing commercial risks and challenges.
14
MITHRIL BERHAD
CORPORATE GOVERNANCE
( CONTINUED )
Details of the seminars and training programmes attended by the Board members during the nancial year ended 30 June 2007 are as follows: Corporate Fraud Macro Economics: Malaysia Scenario 2006 Innovation and Branding Talk on Macroeconomics - Local and Global Financial Reporting Standards Understanding Takaful Macroeconomics
DIRECTORS REMUNERATION
A summary of the remuneration of the Directors for the period distinguished between Executive and Non-Executive Directors in aggregate, with categorisation into appropriate components and number of Directors are set out below: Executive Directors RM Fees* Salary and other emoluments* TOTAL (RM) 873,477 873,477 Non-Executive Directors RM 118,000 118,000 Total RM 118,000 873,477 991,477
* Included in the directors fees and salary and other emoluments are RM29,000 of directors fees and RM275,300 of salary and other emoluments respectively, paid and payable to directors who have resigned during the nancial year.
Range of Directors Remuneration 0 RM50,000 RM50,001 RM100,000 RM100,001 RM200,000 RM200,001 RM300,000 RM300,001 RM400,000 RM400,001 RM500,000
Total 5 1 1 1
The Remuneration Committee was established by the Board on 10 December 2003 with the main responsibility to recommend to the Board the remuneration of the Executive Directors in all its forms. The members of the Remuneration Committee are: 1) 2) 3) 4) Dato Abdul Majid bin Mohamed (Chairman) Onn Kien Hoe Alan Hamzah Sendut Tunku Yahaya @ Yahya bin Tunku Tan Sri Abdullah
15
MITHRIL BERHAD
CORPORATE GOVERNANCE
( CONTINUED )
Internal Control
The Board acknowledges the responsibility for maintaining a sound system of internal control, which covers not only nancial controls but also the operational, compliance and risk management. The Board has established the Audit Committee, which is assisted by an independent internal audit function in the discharge of its duties and responsibilities. The Groups Statement of Internal Controls is set out on page 19 of this Annual Report.
Risk Management
The Board has established the Risk Management Committee to develop and implement a formal risk management policy for the Group. The implementation of the risk management program will ensure that the risk exposure of the Group will be managed more effectively. The members of the Risk Management Committee are: 1) 2) 3) 4) Onn Kien Hoe (Chairman) Dato Abdul Majid bin Mohamed Alan Hamzah Sendut Tunku Yahaya @ Yahya bin Tunku Tan Sri Abdullah
16
MITHRIL BERHAD
COMPOSITION
The members of the Audit Committee who have served during the nancial year ended 30 June 2007 are as follows:
MEMBERS
Alan Hamzah Sendut Onn Kien Hoe Dato Abdul Majid bin Mohamed Yeo Took Keat
Designation
Chairman Member Member Member
Directorship
Independent Non-Executive Director Independent Non-Executive Director Independent Non-Executive Director Non-Independent Non-Executive Director
TERMS OF REFERENCE
Objective
The primary objective of the Audit Committee is to assist the Board in fullling its duciary responsibilities to the nancial, accounting, management controls, nancial reporting and business ethics practices of the Group and to ensure that such practices conform to the highest possible standards of corporate governance.
Membership
The Audit Committee shall be appointed by the Board from amongst the Directors and shall consist of not less than three (3) members, the majority of whom including the Chairman shall be Independent Non-Executive Directors. The Chairman of the Committee shall be an Independent Non-Executive Director appointed by the Board. At least one (1) member of the Committee shall be a member of the Malaysian Institute of Accountants, or a member of an approved Association of Accountants with a minimum of three (3) years experience. No alternate director shall be appointed as a member of the Audit Committee. Any vacancy which affects the composition must be lled up within three (3) months.
Authority
The Committee is fully authorised by the Board to independently investigate without interference from any party, any activities within its terms of reference. It shall have: full and unrestricted access to any information pertaining to the Group; direct communication channels with both the external and internal auditors; full access to any employee or member of the management; and the resources which are required to perform its duties.
17
MITHRIL BERHAD
18
MITHRIL BERHAD
Board Responsibilities
The Board acknowledges its responsibilities for maintaining sound internal control systems to safeguard shareholders interests and the Groups assets and for reviewing the adequacy and integrity of these systems. Such systems, however, are designed to manage rather than eliminate the risk of failure to achieve business objectives and can only provide reasonable rather than absolute assurance against material misstatement or loss. The process to identify, evaluate and manage the signicant risks is a concerted and continuing effort throughout the nancial year under review. The process is regularly reviewed by the Audit Committee and the Board of Directors of Mithril Berhad. The Board conrms that the risk management process is an ongoing process to identify, evaluate and manage signicant risks to effectively mitigate the risks that may impede the achievement of the Groups business and corporate objectives. The Board reviews the process on a regular basis to ensure proper management of risks and measures are taken to mitigate any weaknesses in the control environment.
Risk Management
The Board has taken steps during the period to implement an ongoing process for identifying, evaluating, managing and reviewing any changes in the risks faced by the business in the Group. The risk management process involves the business and functional units of the Group in identifying signicant risks impacting the achievement of business objectives of the Group. It also involves the assessment of the impact and likelihood of such risks and of the effectiveness of controls in place to manage them. Steps are being taken to embed internal control and risk management further into the operations of the business and to deal with areas of improvement which come to the managements and Boards attention.
For the nancial year ended 2007, the internal audit function was performed by MAA Holdings Berhad, a substantial shareholder of the Company. The internal audit function reviewed the business processes to assess the effectiveness of the systems of internal control and highlighted signicant risks impacting the Group with recommendation for improvement. The existing system of internal controls was satisfactory and has not resulted in any material losses, contingencies or uncertainties that would require disclosure in the Groups annual report.
19
MITHRIL BERHAD
1. 2. 3. 4. 5. 6. 7.
Share Buyback During the nancial year, there were no share buybacks by the Company. American Depository Receipt (ADR) or Global Depository Receipt (GDR) Programme During the nancial year, the Company did not sponsor any ADR or GDR programmes. Imposition of Sanctions/ Penalties There were no sanctions and/or penalties imposed on the group, directors or management by the relevant regulatory bodies. Non-Audit Fees Non-audit fees payable to external auditors for the nancial year ended 30 June 2007 was RM5,000.00. Prot Estimate, Forecast and Projection This note is not applicable. Prot Guarantee There were no prot guarantees given by the Company during the nancial year. Material Contracts There were no material contracts involving Directors and major shareholders for the nancial year except for those disclosed under the Recurrent Related Party Transactions. Contracts Relating to Loans There were no contracts relating to loans by the Company and its subsidiaries during the nancial year. Revaluation of Landed Properties There was no revaluation of landed properties during the nancial year. Recurrent Related Party Transactions The aggregate value of transactions conducted during the nancial year in accordance with the Shareholders Mandate obtained in the last annual general meeting held on 30 November 2006 were: Actual value of transactions from 1 July 2006 to 30 June 2007 (RM) 5,200,000
8. 9. 10.
No.
Transacting Party
Nature of Transaction
Related Party
Nature of Interest
1.
Mithril Berhad
Ofce rental charged by Mithril to MAA Assurance for rental of property known as Menara MAA KK situated at Kota Kinabalu, Sabah and for the total area built-up area of 189,727 sq. ft. at a rate of RM2.28 per sq. ft.
MAA Assurance
TYahaya is deemed interested in MAA Assurance by virtue of his relationship with TY who has substantial interest in MAA Assurance via MAAH. YTK is representing the interest of MAAH. MUS is representing the interest of MAAH.
2.
Mithril Berhad
Ofce rental charged by Mithril to MAA Assurance for renting of property known as Menara MAA Kuching situated at Kuching, Sarawak and for the total area of 50,653 sq. ft at a rental rate of RM2.63 sq. ft.
MAA Assurance
TYahaya is deemed interested in MAA Assurance by virtue of his relationship with TY who has substantial interest in MAA Assurance via MAAH. YTK is representing the interest of MAAH. MUS is representing the interest of MAAH.
1,600,000
20
MITHRIL BERHAD
No.
Transacting Party
Nature of Transaction
Related Party
Nature of Interest
Actual value of transactions from 1 July 2006 to 30 June 2007 (RM) 158,304
3.
Mithril Berhad
Ofce rental charged by Related Party to Mithril for an ofce space situated at Menara MAA, KL and for the total area of 3,880 sq. ft at a rental rate of RM3.40 per sq. ft.
MAA Assurance
TYahaya is deemed interested in MAA Assurance by virtue of his relationship with TY who has substantial interest in MAA Assurance via MAAH. YTK is representing the interest of MAAH. MUS is representing the interest of MAAH.
Note: TYahaya is Tunku Yahaya @ Yahya bin Tunku Tan Sri Abdullah TY is Tunku Dato Yaacob bin Tunku Tan Sri Abdullah YTK is Yeo Took Keat MUS is Muhamad Umar Swift MAA Assurance is Malaysian Assurance Alliance Berhad MAAH is MAA Holdings Berhad
21
MITHRIL BERHAD
CONTENTS
DIRECTORS REPORT STATEMENT BY DIRECTORS STATUTORY DECLARATION REPORT OF THE AUDITORS INCOME STATEMENTS BALANCE SHEETS STATEMENTS OF CHANGES IN EQUITY CASH FLOW STATEMENTS NOTES TO THE FINANCIAL STATEMENTS 23 26 26 27 28 29 30 32 34
22
MITHRIL BERHAD
DIRECTORS REPORT
The directors hereby present their report together with the audited nancial statements of the Group and of the Company for the nancial year ended 30 June 2007. PRINCIPAL ACTIVITIES The principal activities of the Company are investment holding and property investment. The principal activities of the subsidiaries are described in Note 14 to the nancial statements. There have been no signicant changes in the nature of the principal activities of the subsidiaries during the nancial year. RESULTS Group RM Net loss for the year Attributable to: Equity holders of the Company Minority interests 15,174,299 15,174,299 15,174,299 Company RM 1,262,271 1,262,271 1,262,271
There were no material transfers to or from reserves or provisions during the nancial year other than as disclosed in the nancial statements. In the opinion of the directors, the results of the operations of the Group and of the Company during the nancial year were not substantially affected by any item, transaction or event of a material and unusual nature other than: (a) (b) the effects arising from the changes in accounting policies due to the adoption of the new and revised FRSs which has resulted in a decrease in the Groups loss for the year by RM947,331 as disclosed in Note 2.3(e)(ii) to the nancial statements; and the effects arising from changes in estimates where the estimated useful lives of moulds were revised resulting in a decrease of the Groups loss for the year by RM225,049 as disclosed in Note 2.4 to the nancial statements.
DIVIDEND No dividend has been paid or declared by the Company since the end of the previous nancial year. The directors do not recommend the payment of any dividend in respect of the current nancial year. DIRECTORS The names of the directors of the Company in ofce since the date of the last report and at the date of this report are: Tunku Yahaya @ Yahya bin Tunku Tan Sri Abdullah Razman Hadz bin Abu Zarim Yeo Took Keat Alan Hamzah Sendut Sim Lye Watt Muhamad Umar Swift Dato Abdul Majid bin Mohamed Onn Kien Hoe Dato Narayanan a/l K.S.A Narayanan Yeoh Hong Hwang Rosli bin Ismail DIRECTORS BENEFITS Neither at the end of the nancial year, nor at any time during that year, did there subsist any arrangement to which the Company was a party, whereby the directors might acquire benets by means of the acquisition of shares in or debentures of the Company or any other body corporate, other than those arising from the share options granted under the Employee Share Options Scheme. Since the end of the previous nancial year, no director has received nor become entitled to receive a benet (other than benets
(appointed on 13 December 2006) (appointed on 12 January 2007) (resigned on 05 February 2007) (resigned on 13 December 2006) (resigned on 13 December 2006)
23
MITHRIL BERHAD
DIRECTORS REPORT
( CONTINUED )
included in the aggregate amount of emoluments received or due and receivable by the directors or the xed salary of full time employees of the Company as shown in Note 9 to the nancial statements) by reason of a contract made by the Company or a related corporation with any director or with a rm of which he is a member, or with a company in which he has a substantial nancial interest. DIRECTORS INTERESTS According to the register of directors shareholdings, the interests of directors in ofce at the end of the nancial year in shares and options over shares in the Company and its related corporations during the nancial year were as follows: 1.7.2006 The Company Direct Interest: Yeo Took Keat Indirect Interest: * Tunku Yahaya @ Yahya bin Tunku Tan Sri Abdullah Number of Ordinary Shares of RM1 Each Acquired Sold 30.6.2007
100
100
36,608,739
36,608,739
Number of Options Over Ordinary Shares of RM1 Each 1.7.2006 Granted Exercised 30.6.2007 The Company Tunku Yahaya @ Yahya bin Tunku Tan Sri Abdullah 500,000 500,000
* Deemed interested through shares held in MAA Holdings Berhad and MAA Credit Sdn. Bhd. None of the other directors in ofce at the end of the nancial year had any interests in shares in the Company or its related corporations during the nancial year. EMPLOYEE SHARE OPTIONS SCHEME The Mithril Berhad Employee Share Options Scheme (ESOS) is governed by the by-laws approved by the shareholders at an Extraordinary General Meeting held on 26 December 2003. The salient features of the scheme are disclosed in Note 30 to the nancial statements. OTHER STATUTORY INFORMATION (a) Before the income statements and balance sheets of the Group and of the Company were made out, the directors took reasonable steps: (i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and satised themselves that all known bad debts had been written off and that adequate provision had been made for doubtful debts; and to ensure that any current assets which were unlikely to realise their value as shown in the accounting records in the ordinary course of business had been written down to an amount which they might be expected so to realise.
(ii) (b)
At the date of this report, the directors are not aware of any circumstances which would render: (i) (ii) the amount written off for bad debts or the amount of the provision for doubtful debts in the nancial statements of the Group and of the Company inadequate to any substantial extent; and the values attributed to the current assets in the nancial statements of the Group and of the Company misleading.
(c) (d)
At the date of this report, the directors are not aware of any circumstances which have arisen which would render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate. At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or nancial statements of the Group and of the Company which would render any amount stated in the nancial statements misleading.
24
MITHRIL BERHAD
DIRECTORS REPORT
( CONTINUED )
(e)
As at the date of this report, there does not exist: (i) (ii) any charge on the assets of the Group or of the Company which has arisen since the end of the nancial year which secures the liabilities of any other person; or any contingent liability of the Group or of the Company which has arisen since the end of the nancial year.
(f)
In the opinion of the directors: (i) no contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve months after the end of the nancial year which will or may affect the ability of the Group or of the Company to meet their obligations when they fall due; and no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the nancial year and the date of this report which is likely to affect substantially the results of the operations of the Group or of the Company for the nancial year in which this report is made.
(ii)
AUDITORS The auditors, Ernst & Young, have expressed their willingness to continue in ofce. Signed on behalf of the Board in accordance with a resolution of the directors dated 2 October 2007.
25
MITHRIL BERHAD
STATUTORY DECLARATION PURSUANT TO SECTION 169(16) OF THE COMPANIES ACT, 1965 I, Chong Kien Eng @ Teo Kien Eng, being the ofcer primarily responsible for the nancial management of Mithril Berhad, do solemnly and sincerely declare that the accompanying nancial statements set out on pages 28 to 79 are in my opinion correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, l960.
Subscribed and solemnly declared by the abovenamed Chong Kien Eng @ Teo Kien Eng at Kuala Lumpur in the Federal Territory on 2 October 2007 Before me,
26
MITHRIL BERHAD
REPORT OF THE AUDITORS TO THE MEMBERS OF MITHRIL BERHAD We have audited the nancial statements set out on pages 28 to 79. These nancial statements are the responsibility of the Companys directors. It is our responsibility to form an independent opinion, based on our audit, on the nancial statements and to report our opinion to you, as a body, in accordance with Section 174 of the Companies Act, 1965 and for no other purpose. We do not assume responsibility to any other person for the content of this report. We conducted our audit in accordance with applicable Approved Standards on Auditing in Malaysia. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the nancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the nancial statements. An audit also includes assessing the accounting principles used and signicant estimates made by the directors, as well as evaluating the overall presentation of the nancial statements. We believe that our audit provides a reasonable basis for our opinion. In our opinion: (a) the nancial statements have been properly drawn up in accordance with the provisions of the Companies Act, 1965 and applicable Financial Reporting Standards in Malaysia so as to give a true and fair view of: (i) (ii) (b) the nancial position of the Group and of the Company as at 30 June 2007 and of the results and the cash ows of the Group and of the Company for the year then ended; and the matters required by Section 169 of the Companies Act, 1965 to be dealt with in the nancial statements; and
the accounting and other records and the registers required by the Act to be kept by the Company and by its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.
We have considered the nancial statements and the auditors report thereon of the subsidiary of which we have not acted as auditors, as indicated in Note 14 to the nancial statements, being nancial statements that have been included in the consolidated nancial statements. We are satised that the nancial statements of the subsidiaries that have been consolidated with the nancial statements of the Company are in form and content appropriate and proper for the purposes of the preparation of the consolidated nancial statements and we have received satisfactory information and explanations required by us for those purposes. The auditors reports on the nancial statements of the subsidiaries were not subject to any qualication and did not include any comment required to be made under Section 174(3) of the Act.
Ernst & Young AF: 0039 Chartered Accountants Kuala Lumpur, Malaysia 2 October 2007
27
MITHRIL BERHAD
INCOME STATEMENTS
INCOME STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2007 Group Note Revenue Cost of sales Gross prot Other operating income Selling and marketing expenses Administrative expenses Operating (loss)/prot Finance costs (Loss)/prot before tax Income tax expense (Loss)/prot for the year Attributable to: Equity holders of the Company Minority interests 3 4 5 2007 RM 47,628,065 (40,885,951) 6,742,114 6,400,085 (1,620,769) (19,155,583) (7,634,153) (7,184,670) (14,818,823) (355,476) (15,174,299) (15,174,299) (15,174,299) Loss per share attributable to equity holders of the Company (sen): Basic loss per share for the year 2006 RM 64,509,781 (57,113,881) 7,395,900 4,139,960 (2,282,626) (12,071,995) (2,818,761) (8,065,409) (10,884,170) 454,754 (10,429,416) (10,429,416) (10,429,416) 2007 RM 6,845,000 6,845,000 265,869 (3,059,586) 4,051,283 (5,291,720) (1,240,437) (21,834) (1,262,271) (1,262,271) (1,262,271) Company 2006 RM 8,060,000 8,060,000 2,486,466 (2,396,899) 8,149,567 (5,501,005) 2,648,562 (1,336,158) 1,312,404 1,312,404 1,312,404
6 7 10
11
(14)
(10)
28
MITHRIL BERHAD
BALANCE SHEETS
BALANCE SHEETS AS AT 30 JUNE 2007 Group Note 2007 RM 2006 RM (restated) 2007 RM Company 2006 RM
ASSETS Non-current assets Property, plant and equipment Prepaid lease payments Investment in subsidiaries Investment properties Goodwill on consolidation Other investments
12 13 14 15 16 17
59,037,008 5,025,729 100,340,000 16,815,128 3,720 181,221,585 20,206,814 8,440,084 377 9,213,241 37,860,516 219,082,101
Current assets Non-current asset held for sale Inventories Trade and other receivables Tax recoverable Cash and bank balances
18 19 20 22
TOTAL ASSETS EQUITY AND LIABILITIES Equity atttributable to equity holders of the Company Share capital Share premium Revaluation reserves Equity components of: RCSLS ICCPS ICULS Accumulated losses Total equity Non-current liabilities Borrowings Deferred tax liabilities 23 32
210,640,948
30 31 25 27 28
109,976,472 80,339,088 14,858,647 12,205,861 10,518,927 46,031,405 (192,856,399) 81,074,001 79,929,992 838,826 80,768,818
109,976,472 80,339,088 27,423,866 12,205,861 10,518,927 46,031,405 (190,965,634) 95,529,985 72,962,980 1,358,137 74,321,117 23,274,888 23,994,060 1,962,051 49,230,999 123,552,116 219,082,101
109,976,472 80,339,088 12,205,861 10,518,927 46,031,405 (182,829,426) 76,242,327 66,955,049 669,825 67,624,874 1,200,000 15,794,157 16,994,157 84,619,031 160,861,358
109,976,472 80,339,088 13,056,000 12,205,861 10,518,927 46,031,405 (194,623,155) 77,504,598 58,529,851 470,821 59,000,672 14,879,602 511,899 15,391,501 74,392,173 151,896,771
Current liabilities Borrowings Trade and other payables Current tax payable
23 29
129,566,947 210,640,948
29
MITHRIL BERHAD
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 30 JUNE 2007 Non-Distributable Equity Component of Irredeemable Cumulative Convertible Equity Revaluation Preference Component of Accumulated Reserves Shares Loan Stocks Losses RM RM RM RM (Note 31) (Note 27) 80,000 27,343,866 27,423,866 27,423,866 (13,146,000) 14,277,866 10,518,927 10,518,927 10,518,927 10,518,927 59,222,312 (180,536,218) (276,243) (708,803) -
Note
At 1 July 2005 107,684,072 Issue of share capital 2,292,400 Equity components of: RCULS 26 ICULS 28 Loss for the year Revaluation surplus At 30 June 2006 At 1 July 2006 Effects of adopting FRS 140 At 1 July 2006 (restated) Loss for the year Realisation of revaluation reserve upon disposal of property, plant and equipment Reversal of deferred tax liabilities At 30 June 2007 109,976,472 109,976,472 109,976,472 -
31 32
109,976,472
80,339,088
10,518,927
137,534 -
718,315 81,074,001
58,237,266 (192,856,399)
30
MITHRIL BERHAD
Note
Total RM 61,828,840 2,292,400 (276,243) (708,803) 1,312,404 13,056,000 77,504,598 77,504,598 77,504,598 (1,262,271) 76,242,327
At 1 July 2005 107,684,072 Issue of share capital 2,292,400 Equity components of: RCULS 26 ICULS 28 Prot for the year Revaluation surplus At 30 June 2006 At 1 July 2006 Effects of adopting FRS 140 At 1 July 2006 (restated) Loss for the year At 30 June 2007 109,976,472 109,976,472 109,976,472 109,976,472
31
MITHRIL BERHAD
CASH FLOW STATEMENTS FOR THE FINANCIAL YEAR ENDED 30 JUNE 2007 Group Note CASH FLOWS FROM OPERATING ACTIVITIES (Loss)/prot before tax Adjustments for: Depreciation of property, plant and equipment Amortisation of prepaid lease payments Amortisation of goodwill Interest expense Interest income Doubtful debts recovered Allowance for doubtful debts Reversal of provision for doubtful debts Management fees from a subsidiary Write down of inventories Impairment losses: - Plant and machineries - Land and buildings Loss on disposal of property, plant and equipment Write-off of property, plant and equipment Writeback of over-provision of liabilities Impairment loss on unquoted investment Provision for insurance claims Operating prot before working capital changes Decrease in inventories Decrease/(increase) in receivables Increase/(decrease) in payables Development costs incurred and deferred Cash generated from operations Taxes paid Net cash generated from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Interest received Purchase of property, plant and equipment 12 Proceeds from disposal of property, plant and equipment Increase in investment in subsidiaries Net cash (used in)/generated from investing activities 2007 RM 2006 RM 2007 RM Company 2006 RM
(14,818,823) 7 7 6 5 5 7 7 7 7 7 7 7 5 7 7 5,886,472 305,712 7,184,670 (266,151) (38,000) 800,912 3,876,266 843,984 1,120,763 11,364 1,831,306) (1,966,072) 1,109,791 2,567,853 1,829,143 933,337 (697,281) 5,742,843 (679,052) 5,063,791
(10,884,170) 4,506,150 184,770 947,331 8,065,409 (155,939) 2,782,931 (8,220) 1,691,346 46,593 (1,481,223) 5,694,978 1,172,278 1,163,009 2,112,811 10,143,076 (838,215) 9,304,861
(1,240,437) 2,122 5,291,720 (265,869) (45,000) 515,001 4,257,537 (2,977,043) 25,644 1,306,138 (544,311) 761,827
2,648,562 911 5,501,005 (142,381) (2,344,085) (1,260,000) 4,404,012 7,979,433 (1,454,706) 10,928,739 (344,311) 10,584,428
32
MITHRIL BERHAD
Group Note CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from term loans Repayment of hire purchase and lease nancing Repayment of term loans Interest paid Net cash generated from/ (used in) nancing activities NET INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR CASH AND CASH EQUIVALENTS AT END OF YEAR Cash and cash equivalents comprise: Fixed deposits with licensed banks Cash and bank balances Bank overdrafts 22 2007 RM 2006 RM 2007 RM
Company 2006 RM
(6,626,000) (6,626,000)
33
MITHRIL BERHAD
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2007 1. CORPORATE INFORMATION The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the Second Board of Bursa Malaysia Securities Berhad. The registered ofce of the Company is located at Suite 20.03, 20th Floor, Menara MAA, No.12, Jalan Dewan Bahasa, 50460 Kuala Lumpur. The principal activities of the Company are investment holding and property investments. The principal activities of the subsidiaries are described in Note 14 to the nancial statements. There have been no signicant changes in the nature of the principal activities of the subsidiaries during the nancial year. The nancial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors on 2 October 2007. 2. SIGNIFICANT ACCOUNTING POLICIES 2.1 Basis of Preparation The nancial statements comply with the provisions of the Companies Act, 1965 and applicable Financial Reporting Standards in Malaysia. At the beginning of the current nancial year, the Group and the Company had adopted new and revised FRSs which are mandatory for nancial periods beginning on or after 1 January 2006 as described fully in Note 2.3. The nancial statements of the Group and the Company have also been prepared on a historical basis, except for freehold land and plant and machineries included within property, plant and equipment and investment properties that have been measured at their fair values. The nancial statements are presented in Ringgit Malaysia (RM). 2.2 Summary of Signicant Accounting Policies (a) Subsidiaries and Basis of Consolidation (i) Subsidiaries Subsidiaries are entities over which the Group has the ability to control the nancial and operating policies so as to obtain benets from their activities. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group has such power over another entity. In the Companys separate nancial statements, investments in subsidiaries are stated at cost less impairment losses. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in prot or loss. (ii) Basis of Consolidation The consolidated nancial statements comprise the nancial statements of the Company and its subsidiaries as at the balance sheet date. The nancial statements of the subsidiaries are prepared for the same reporting date as the Company. Subsidiaries are consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases. In preparing the consolidated nancial statements, intragroup balances, transactions and unrealised gains or losses are eliminated in full. Uniform accounting policies are adopted in the consolidated nancial statements for like transactions and events in similar circumstances. Acquisitions of subsidiaries are accounted for using the purchase method. The purchase method of accounting involves allocating the cost of the acquisition to the fair value of the assets acquired and liabilities and contingent liabilities assumed at the date of acquisition. The cost of an acquisition is measured as the aggregate of the fair values, at the date of exchange, of the assets given, liabilities incurred or assumed, and equity instruments issued, plus any costs directly attributable to the acquisition. Any excess of the cost of the acquisition over the Groups interest in the net fair value of the identiable
34
MITHRIL BERHAD
The residual values, useful life and depreciation method are reviewed at each nancial year-end to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benets embodied in the items of plant and equipment.
35
MITHRIL BERHAD
36
MITHRIL BERHAD
(ii)
37
MITHRIL BERHAD
(iv)
(v)
(vi)
(i)
Leases (i) Classication A lease is recognised as a nance lease if it transfers substantially to the Group all the risks and rewards incidental to ownership. Leases of land and buildings are classied as operating or nance leases in the same way as leases of other assets and the land and buildings elements of a lease of land and buildings are considered separately for the purposes of lease classication. All lease that do not transfer substantially all risks and rewards are classied as operating leases, with the following exceptions: - Property held under operating leases that would otherwise meet the denition of an investment property is classied as an investment property on a property-by-property basis and, if classied as investment property, is accounted for as if held under a nance lease (Note 2.2(d)); and - Land held for own use under an operating lease, the fair value of which cannot be measured separately from the fair value of a building situated thereon at the inception of the lease, is accounted for as being held under a nance lease, unless the building is also clearly held under an operating lease. (ii) Finance Leases - the Group as Lessee Assets acquired by way of hire purchase or nance leases are stated at an amount equal to the lower of their fair values and the present value of the minimum lease payments at the inception of the leases, less accumulated depreciation and impairment losses. The corresponding liability is included in the balance sheet as borrowings. In calculating the present value of the minimum lease payments, the discount factor used is the interest rate implicit in the lease, when it is practicable to determine; otherwise, the Companys incremental borrowings rate is used. Any initial direct costs are also added to the carrying amount of such assets.
38
MITHRIL BERHAD
(j)
Income Tax Income tax on the prot or loss for the year comprises current and deferred tax. Current tax is the expected amount of income taxes payable in respect of the taxable prot for the year and is measured using the tax rates that have been enacted at the balance sheet date. Deferred tax is provided for, using the liability method. In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that taxable prot will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on tax rates that have been enacted or substantively enacted at the balance sheet date. Deferred tax is recognised as income or an expense and included in the prot or loss for the period, except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is also recognised directly in equity, or when it arises from a business combination that is an acquisition, in which case the deferred tax is included in the resulting goodwill or the amount of any excess of the acquirers interest in the net fair value of the acquirees identiable assets, liabilities and contingent liabilities over the cost of the combination.
(k)
Employee Benets (i) Short term benets Wages, salaries and social security contributions are recognised as an expense in the year in which the associated services are rendered by employees. Short term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensated absences. Short term non-accumulating compensated absences such as sick leave are recognised when the absences occur.
39
MITHRIL BERHAD
(iii)
(l)
Foreign Currencies (i) Functional and Presentation Currency The individual nancial statements of each entity in the Group are measured using the currency of the primary economic environment in which the entity operates (the functional currency). The consolidated nancial statements are presented in Ringgit Malaysia (RM), which is also the Companys functional currency. Foreign Currency Transactions In preparing the nancial statements of the individual entities, transactions in currencies other than the entitys functional currency (foreign currencies) are recorded in the functional currencies using the exchange rates prevailing at the dates of the transactions. At each balance sheet date, monetary items denominated in foreign currencies are translated at the rates prevailing on the balance sheet date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rates prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not translated. Exchange differences arising on the settlement of monetary items, and on the translation of monetary items, are included in prot or loss for the period.
(ii)
(m)
Revenue Recognition Revenue is recognised to the extent that it is probable that the economic benets will ow to the Group and the revenue can be measured reliably. The following specic recognition criteria must also be met before revenue is recognised: (i) Sale of Goods Revenue is recognised net of sales taxes and upon transfer of signicant risks and rewards of ownership to the buyer. Revenue is not recognised to the extent where there are signicant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods. Rental Income Rental income from investment property is recognised on a straight-line basis over the term of the lease. Management Fees Management fees are recognised when services are rendered. Construction Contracts Revenue from construction contracts is accounted for by the stage of completion method as described in Note 2.2(e). Interest Income Interest income is recognised on an accrual basis using the effective interest method.
(v)
40
MITHRIL BERHAD
In addition to the above, the Group has also taken the option of early adoption of the FRS 117 Leases, for the nancial period beginning 1 January 2006. The adoption of the above FRSs does not result in signicant changes in accounting policies of the Group. The principal changes in accounting policies and their effects resulting from the adoption of the new and revised FRSs are discussed below: (a) FRS 3: Business Combinations, FRS 136: Impairment of Assets and FRS 138: Intangible Assets The new FRS 3 has resulted in consequential amendments to two other accounting standards, FRS 136 and FRS 138. In accordance with the transitional provisions, FRS 3 has been applied for business combinations for which the agreement date is on or after 1 January 2006. Prior to 1 July 2006, goodwill was amortised from the date of initial recognition on a straight-line basis over its estimated useful life of 20 years and at the each balance sheet date, the Group assessed if there was any indication of impairment of the cash-generating unit in which the goodwill is attached to. The adoption of FRS 3 and the revised FRS 136 has resulted in the Group ceasing annual goodwill amortisation. Goodwill is now carried at cost less accumulated impairment losses and is now tested for impairment annually, or more frequently if events or changes in circumstances indicate that it might be impaired. In accordance with the transitional provisions of FRS 3, the Group has applied the revised accounting policy for goodwill prospectively from 1 July 2006. The transitional provisions of FRS 3 also required the Group to eliminate the carrying amount of the accumulated amortisation at 1 July 2006 amounting to RM2,131,495 against the carrying amount of goodwill. The net carrying amount of goodwill as at 1 July 2006 of RM16,815,128 ceased to be amortised thereafter.
41
MITHRIL BERHAD
(13,146,000) 13,146,000
Summary of effects of adopting new and revised FRSs on the current years nancial statements The following tables provide estimates of the extent to which each of the line items in the balance sheets and income statements for the year ended 30 June 2007 is higher or lower than it would have been had the previous policies been applied in the current year.
42
MITHRIL BERHAD
2.
SIGNIFICANT ACCOUNTING POLICIES (CONTD) 2.3 Changes in Accounting Policies and Effects Arising from Adoption of New and Revised Financial Reporting Standards (FRSs) (contd) (e) Summary of effects of adopting new and revised FRSs on the current years nancial statements (contd) (i) Effects on balance sheets as at 30 June 2007 Increase/(Decrease) FRS 3 Note 2.3 (a) RM FRS 5 Note 2.3 (b) RM FRS 117 Note 2.3 (c) RM FRS 140 Note 2.3 (d) RM
Description of Change Group Property, plant and equipment Prepaid lease payments Investment properties Goodwill on consolidation Assets held for sale Revaluation reserves Accumulated losses Company Revaluation reserves Accumulated losses (ii)
Total RM
947,331 (947,331)
(340,000) 340,000 -
(4,720,017) 4,720,017 -
Effects on income statements for the year ended 30 June 2007 Increase/(Decrease) FRS 3 Note 2.3 (a) RM FRS 5 Note 2.3 (b) RM FRS 117 Note 2.3 (c) RM FRS 140 Note 2.3 (d) RM
Total RM
(947,331)
(947,331)
The following comparative amounts have been restated as a result of adopting the new and revised FRSs: Previously Stated RM Description of Change At 30 June 2006 Group Property, plant and equipment Prepaid lease payments 64,062,737 (5,025,729) 5,025,729 59,037,008 5,025,729 Increase/ (Decrease) FRS 117 Note 2.3 (c) RM Restated RM
43
MITHRIL BERHAD
FRS 124 FRS 139 FRS 6 Amendment to FRS 1192004 Amendment to FRS 121 IC Interpretation 1 IC Interpretation 2 IC Interpretation 5 IC Interpretation 6 IC Interpretation 7 IC Interpretation 8
Related Party Disclosures Financial Instruments: Recognition and Measurement Exploration for and Evaluation of Mineral Resources Employee Benets - Actuarial Gains and Losses, Group Plans and Disclosures The Effects of Changes in Foreign Exchange Rates - Investment in a Foreign Operations Changes in Existing Decommissioning, Restoration and Similar Liabilities Members Shares in Co-operative Entities and Similar Instruments Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds Liabilities arising from Participating in a Specic Market - Waste Electrical and Electronic Equipment Applying the Restatement Approach under FRS 1292004 Financial Reporting in Hyperinationary Economies Scope of FRS 2
The above FRSs, amendments to FRS and IC Interpretations are expected to have no signicant impact on the nancial statements of the Company upon their initial application. 2.4 Changes in Estimates The revised FRS 116: Property, Plant and Equipment requires the review of the residual value and remaining useful life of an item of property, plant and equipment at least at each nancial year end. The Group revised the estimated useful lives of moulds from four yachts to ten years with effect from 1 July 2006. The revisions were accounted prospectively as a change in accounting estimates and as a result, the depreciation charges of the Group for the current nancial year have been reduced by RM225,049. 2.5 Signicant Accounting Estimates and Judgements (a) Critical Judgements Made in Applying Accounting Policies The following are the judgements made by management in the process of applying the Groups accounting policies that have the most signicant effect on the amounts recognised in the nancial statements.
44
MITHRIL BERHAD
2.
SIGNIFICANT ACCOUNTING POLICIES (CONTD) 2.5 Signicant Accounting Estimates and Judgements (contd) (a) Critical Judgements Made in Applying Accounting Policies (contd) (i) Provision for obsolete and slow-moving inventories Inventories are stated at the lower of cost and net realisable value. The Group assesses slow-moving and obsolete inventories on an annual basis. Signicant judgement is required in determining the net realisable value of the slow-moving and obsolete inventories, which includes an estimation of the recoverable value from customers. In making the judgement, the Group relies on current market developments, evidence of demand for the slow-moving inventories as well as the ability to sell the inventories to willing customers at a discounted price. As at the balance sheet date, the Group estimated a recoverable amount equivalent to 60% of the value of its slow-moving and obsolete inventories. In the event that the recoverable amount is 10% lower than managements estimates, the Groups loss before tax will increase by approximately RM680,000. (ii) Determination of the Companys functional currency under FRS 121 Functional currency is the currency of the primary economic environment in which the Group operates. Upon adoption of the revised FRS 121 on 1 July 2006, the Group assessed and determined its functional currency to be Ringgit Malaysia (RM) on the basis that sales price of its products are inuenced by RM and not United States Dollar (USD) and Great Britain Pound (GBP), which is the currency that the Group purchases some of its raw materials and invoices most of its customers. The Groups sales price setting process is determined based on an analysis of costs and relevant margins based on RM. In addition, the effects of foreign exchange movements in other currencies are not passed on to the customers via price increases as any unfavourable impact arising from foreign exchange movements is absorbed by the Group. Group 2007 RM Sale of goods Rental income from investment properties Construction contracts Management fees from a subsidiary 40,539,965 6,800,000 288,100 47,628,065 2006 RM 55,404,981 6,800,000 2,304,800 64,509,781 2007 RM 6,800,000 45,000 6,845,000 Company 2006 RM 6,800,000 1,260,000 8,060,000
3.
REVENUE
4.
COST OF SALES Group 2007 RM Cost of inventories sold Construction contract costs 40,487,588 398,363 40,885,951 2006 RM 54,964,186 2,149,695 57,113,881 2007 RM Company 2006 RM -
45
MITHRIL BERHAD
In the previous nancial year, the Company recovered RM2,344,085 from the debts owing by a subsidiary, which was previously provided for. 6. FINANCE COSTS Group 2007 RM Interest expense on: Term loans Lease Bank overdrafts RCSLS (Note 25) RCULS (Note 26) ICCPS (Note 27) ICULS (Note 28) Other bank borrowings Advance from a subsidiary 977,497 812,069 103,441 3,660,782 96,438 921,066 613,377 7,184,670 7. (LOSS)/PROFIT BEFORE TAX The following amounts have been included in arriving at the (loss)/prot before tax: Group 2007 RM Auditors remuneration: - Statutory audit - Other services Depreciation of property, plant and equipment (Note 12) Amortisation of prepaid lease payments (Note 13) Write down of inventories Provision for insurance claims Impairment loss on unquoted investment (Note 14) Amortisation of goodwill (Note 16) Directors fees (Note 9) Rental of premises Realised loss on foreign exchange Rental of land Employee benet expense (Note 8) 125,000 5,000 5,886,472 305,712 3,876,266 (1,966,072) 118,000 1,170,889 516,519 20,400 10,872,466 2006 RM 148,000 5,000 4,506,150 184,770 (1,481,223) 947,331 108,000 1,032,144 9,079 20,400 15,051,055 2007 RM 40,000 5,000 2,122 515,001 118,000 158,304 1,418,375 Company 2006 RM 31,200 5,000 911 108,000 152,541 1,159,961 2006 RM 805,517 1,769,291 160,292 3,520,721 57,055 126,086 1,222,243 404,204 8,065,409 2007 RM 211,137 3,660,782 96,438 921,066 402,297 5,291,720 Company 2006 RM 3,520,721 57,055 126,086 1,222,243 574,900 5,501,005
46
MITHRIL BERHAD
Included in employee benets expense of the Group and of the Company are executive directors remuneration amounting to RM940,677 (2006: RM958,408) and RM550,827 (2006: RM531,080) respectively as further disclosed in Note 9. 9. DIRECTORS REMUNERATION Group 2007 RM Directors of the Company Executive: Salaries and other emoluments Bonus Pension costs-dened contribution plan 2006 RM 2007 RM Company 2006 RM
Directors of the Subsidiaries Executive: Salaries and other emoluments Bonus Pension costs-dened contribution plan
709,327
661,080
47
MITHRIL BERHAD
Executive directors of the Group and the Company have been granted the following number of options under the Employee Share Options Scheme: Group and Company 2007 2006 At 1 July 2006/2005 Resignation At 30 June 1,250,000 (750,000) 500,000 1,250,000 1,250,000
The share options remain unexercised and had been granted on the same terms and conditions as those offered to other employees of the Group (Note 30(a)). 10. INCOME TAX EXPENSE Group 2007 RM Malaysian income tax: Income tax Under/(over)provision in prior years Deferred tax (Note 32): Relating to origination and reversal of temporary differences Relating to changes in tax rates Overprovision in prior years 156,472 156,472 219,210 (16,689) (3,517) 199,004 355,476 2006 RM 448,868 34,400 483,268 (938,022) (938,022) (454,754) 2007 RM (177,170) (177,170) 219,210 (16,689) (3,517) 199,004 21,834 Company 2006 RM 307,359 548,851 856,210 479,948 479,948 1,336,158
Income tax is calculated at the Malaysian statutory tax rate of 27% (2006: 28%) of the estimated assessable prot for the year. Taxation for small and medium scale Companies with paid-up capital of RM2,500,000 and below are calculated at the rate of 20% on chargeable income of up to RM500,000 (2006: RM500,000). For chargeable income in excess of RM500,000, the statutory tax rate of 27% is applicable. The statutory tax rate will be reduced to 26% from the current years rate of 27%, effective year of assessment 2008.
48
MITHRIL BERHAD
651,505 1,061,084
21,941 1,885
651,505 1,061,084
319,057 -
49
MITHRIL BERHAD
At 30 June 2007 Cost or Valuation At 1 July 2006 At cost At valuation Additions Disposals Write-off At 30 June 2007 Representing: At cost At valuation At 30 June 2007 Accumulated depreciation and impairment At 1 July 2006 Depreciation charge for the year: Recognised in income statement Capitalised in construction cost (Note 21) Disposals Write-off Impairment losses recognised in income statement At 30 June 2007 Net carrying amounts At cost At valuation At 30 June 2007
Motor Vehicles RM
Total RM
14,709,160 14,709,160
4,963,093 4,963,093
1,023,088 1,023,088
456,482
78,228
5,540,798
2,433,510
405,437
8,914,455
157,230 562,667
7,793,313 7,793,313
2,157,300 2,157,300
460,421 460,421
50
MITHRIL BERHAD
At 30 June 2006 Cost or Valuation At 1 July 2005 Additions Revaluation surplus Disposals Reclassications Elimination of accumulated depreciation upon revaluation At 30 June 2006 Representing: At cost At valuation At 30 June 2006
Motor Vehicles RM
Total RM
14,136,324 14,136,324
4,617,647 4,617,647
1,023,088 1,023,088
Accumulated depreciation and impairment At 1 July 2005 12,165,552 Depreciation charge for the year 988,140 Disposals Impairment losses recognised in income statement 46,593 Reclassications Elimination of accumulated depreciation upon revaluation (12,743,803) At 30 June 2006 Net carrying amount At cost At valuation At 30 June 2006 456,482
8,595,526 8,595,526
2,184,137 2,184,137
617,651 617,651
51
MITHRIL BERHAD
Accumulated depreciation and impairment At 1 July 2006 Depreciation charge for the year Disposals Impairment losses At 30 June 2007 Net carrying amount At cost At valuation At 30 June 2007
7,490,000 7,490,000
52
MITHRIL BERHAD
12.
PROPERTY, PLANT AND EQUIPMENT (CONTD) * Land and Buildings of the Group Freehold Land RM At 30 June 2006 Cost or Valuation At 1 July 2005 Additions Revaluation surplus Elimination of accumulated depreciation upon revaluation At 30 June 2006 Representing: At cost At valuation 3,404,996 4,085,004 7,490,000 7,490,000 7,490,000 Accumulated depreciation and impairment At 1 July 2005 Depreciation charge for the year Impairment losses Elimination of accumulated depreciation upon revaluation At 30 June 2006 Net carrying amount At cost At valuation At 30 June 2006 31,452,584 79,160 596,330 (12,743,803) 19,384,271 19,384,271 19,384,271 1,380,415 1,380,415 1,380,415 1,380,415 36,237,995 79,160 4,681,334 (12,743,803) 28,254,686 1,380,415 26,874,271 28,254,686 Buildings RM Renovation RM Total RM
7,490,000 7,490,000
53
MITHRIL BERHAD
Included in property, plant and equipment of the Group are plant and machinery with net carrying amount of RM5,245,441 (2006: RM6,295,906) held under hire purchase and nance lease arrangements. The net carrying amount of the Groups property, plant and equipment pledged as securities for borrowings (Note 23) are land and buildings RM24,280,706 (2006: RM26,874,271). The net carrying amount of temporarily idle equipment of the Group amounted to RM6,999,303 (2006: RM317,997) and there are plans to use these equipment in the future. Details of independent professional valuations of property, plant and equipment owned by the Group as at 30 June 2007 are as follows: Year of valuation 2006 2006 2006 Description of Property, Plant and Equipment Freehold land Buildings Plant and machinery Valuation Amount RM 7,490,000 17,174,271 19,576,500 44,240,771 Basis of Valuation
54
MITHRIL BERHAD
12.
PROPERTY, PLANT AND EQUIPMENT (CONTD) (d) (contd) Freehold land and buildings were last revalued on 30 June 2006 by PPC International Sdn. Bhd. (formerly known as Pakatan Property Consultancy Sdn. Bhd.). Valuations were made on the basis of market value for existing use basis. Market value is dened as the estimated amount for which the asset or an interest in a property should exchange on the date of valuation between a willing buyer and a willing seller in an arms length transaction after proper marketing wherein the parties had acted knowledgeably, prudently and without compulsion. Had the revalued property, plant and equipment been carried at historical costs the net carrying amount of these property, plant and equipment that would have been included in the nancial statements of the Group as at 30 June would be as follows: Group 2007 RM Freehold land Buildings Plant and machinery 3,315,700 20,070,063 18,884,588 2006 RM 3,315,700 20,553,615 21,559,056
13.
PREPAID LEASE PAYMENTS Short-Term Leasehold Land RM Long-Term Leasehold Land and Buildings RM Short-Term Leasehold Land and Buildings RM
Group At 30 June 2007 At Valuation At 1 July 2006 * Amortisation for the year (Note 7) At 30 June 2007 At 30 June 2006 At Cost/Valuation At 1 July 2005 Revaluation surplus Amortisation for the year (Note 7) At 30 June 2006 Representing: At valuation
Total RM
* The Group has recognised the previously revalued land and buildings net of amortisation, as its surrogate cost as of 1 July 2006, in accordance with the provision of FRS 117. (a) (b) Leasehold land and building with an aggregate carrying value of RM4,720,017 (2006: RM5,025,729) are pledged as securities for borrowings (Note 23). Details of independent professional valuation of leasehold land and building owned by the Group as at 30 June 2007 are as follows:
55
MITHRIL BERHAD
Name of Subsidiaries
Principal Activities
56
MITHRIL BERHAD
14.
INVESTMENT IN SUBSIDIARIES (CONTD) (a) (contd) Equity Interest Held (%) 2007 Held by Mithril Clay Manufacturing Berhad (formerly known as Tajo Berhad) Prominent Landscape Sdn. Bhd. Tajo Project Management Sdn. Bhd. Alpha Glow Sdn. Bhd. Resolute Omega Sdn. Bhd. Tajo Development Sdn. Bhd. * Audited by rm of auditors other than Ernst & Young On 19 July 2007, Tajo Berhad, a wholly owned subsidiary of the Company, changed its name to Mithril Clay Manufacturing Berhad. On 12th January 2007, the Companys wholly owned subsidiary, Mithril Clay Manufacturing Berhad (formerly known as Tajo Berhad) acquired the remaining 30% equity interest of Alpha Glow Sdn. Bhd., a company incorporated in Malaysia, for a purchase consideration of RM1 from Aur Pelangi Sdn. Bhd., a company incorporated in Malaysia. During the nancial year, the Company increased its investment in Mithril FRP Industries Sdn. Bhd. by RM99,998 (2006: NIL) and Mithril PVC Sdn. Bhd. by RM99,998 (2006: NIL) respectively. During the nancial year, the Company made an allowance for diminution in value for Mithril Marketing Sdn. Bhd. of RM515,001 (2006: NIL). 100 100 100 70 65 100 100 70 70 65 Dormant Dormant Dormant Dormant Dormant 2006
Name of Subsidiaries
Principal Activities
(b) (c)
15.
INVESTMENT PROPERTIES Group 2007 RM At 1 July 2006/2005 Revaluation surplus Reclassied to non-current asset held for sale (Note 18) At 30 June 100,340,000 (340,000) 100,000,000 2006 RM 87,274,000 13,066,000 100,340,000 2007 RM 100,000,000 100,000,000 Company 2006 RM 86,944,000 13,056,000 100,000,000
The following investment properties are held under lease terms: Group 2007 RM Buildings 100,000,000 2006 RM 100,340,000 2007 RM 100,000,000 Company 2006 RM 100,000,000
57
MITHRIL BERHAD
The goodwill on consolidation is arising from the investment in Mithril Saferay Sdn. Bhd., a wholly owned subsidiary of the Company which mainly involved in the manufacturing and trading of polyurethane products. The evaluation of goodwill impairment test are based on the following key assumptions used in value-in-use calculations. The recoverable amount of the CGU is determined based on value-in-use calculations using cash ow projections based on nancial budgets approved by management covering a ve-year period. The following describes each key assumption on which management has based its cash ow projections to undertake impairment testing of goodwill: (i) Budgeted gross margin The basis used to determine the value assigned to the budgeted gross margin is the average gross margins achieved in the year immediately before the budgeted year increased for expected efciency improvements. Growth rate Management has estimated a weighted average growth rate of 5% over the ve-year period. Discount rate The discount rate of 7% is used and it reects specic risks relating to the business segment. Selling price A one-off increase in selling price by an average of 7.5%.
Sensitivity to changes in assumptions In the event that the average increase in selling price varies by 1% from the cash ow projections, it will result in an impairment loss of the goodwill by approximately RM1.9 million. 17. OTHER INVESTMENTS Group 2007 RM Quoted shares at cost, in Malaysia Less: Accumulated impairment losses Total other investments At market value 7,177 (3,457) 3,720 6,025 2006 RM 7,177 (3,457) 3,720 3,123
58
MITHRIL BERHAD
18.
NON-CURRENT ASSET HELD FOR SALE The non-current asset held for sale is a leasehold land and building, comprising a two storey shop house, which was previously classied under investment properties (Note 15). The property is pledged as security for short-term bank borrowings (Note 23).
19.
INVENTORIES Group 2007 RM Cost: Raw materials Work-in-progress Consumables Finished goods 2,178,695 8,206,449 21,046 2,730,191 13,136,381 Net realisable value: Finished goods 626,314 13,762,695 2006 RM 3,648,705 11,364,298 108,078 3,963,335 19,084,416 1,122,398 20,206,814
The Group has written down damaged and obsolete inventories amounting to RM3,876,266 (2006: NIL) during the nancial year. The amount written down has been included in administrative expenses. 20. TRADE AND OTHER RECEIVABLES Group 2007 RM Trade receivables Third parties Construction contracts: Due from customers (Note 21) Less: Allowance for doubtful debts Trade receivables, net Other receivables Deposits Prepayments Amount due from subsidiaries Other receivables Less: Allowance for doubtful debts 7,374,695 697,281 8,071,976 (3,643,288) 4,428,688 527,109 175,125 2,683,176 3,385,410 3,385,410 7,814,098 (a) Credit risk The Groups normal trade credit term ranges from 60 to 120 (2006: 60 to 120) days. Other credit terms are assessed and approved on a case-by-case basis. The Group has no signicant concentration of credit risk that may arise from exposure to a single debtor or to groups of debtors except for a subsidiary, Mithril FRP Industries Sdn. Bhd. which is exposed to credit risks of advances given to a single supplier, T.E.C Marine Mouldings Ltd, with an outstanding balance of RM1,750,794 (2006: NIL). Trade receivables are non-interest bearing. 2006 RM 10,046,855 10,046,855 (2,994,904) 7,051,951 686,010 248,432 1,511,238 2,445,680 (1,057,547) 1,388,133 8,440,084 2007 RM 66,124 2,952,274 4,900 3,023,298 3,023,298 3,023,298 Company 2006 RM 46,255 46,255 46,255 46,255
59
MITHRIL BERHAD
The costs incurred to date on construction contracts include the following charges made during the nancial year: Group 2007 RM Depreciation of plant and equipment (Note 12) Rental expense for factory 187,991 126,000 2006 RM 413,040 -
22.
CASH AND CASH EQUIVALENTS Group 2007 RM Cash on hand and at banks Fixed deposits with licensed banks Cash and bank balances Bank overdrafts (Note 23) Cash and cash equivalents 1,026,135 14,090,000 15,116,135 (2,991,723) 12,124,412 2006 RM 2,263,241 6,950,000 9,213,241 (2,725,268) 6,487,973 2007 RM 198,353 14,090,000 14,288,353 14,288,353 Company 2006 RM 1,243,264 6,950,000 8,193,264 8,193,264
Included in cash and cash equivalents of the Group is an amount of RM9,900,000 (2006: RM6,950,000) held as sinking fund for the purpose of redemption of the RCSLS on maturity date and therefore restricted from use in other operations. The weighted average interest rates and the average maturities of xed deposits at the balance sheet date were as follows: 2007 Weighted Average Interest Rates % Group: Licensed banks Company: Licensed banks 3.13 3.13 Average Maturities Days 30 30 Weighted Average Interest Rates % 3.20 3.20 2006 Average Maturities Days 30 30
60
MITHRIL BERHAD
1,200,000
Long Term Borrowings Secured: Term loan Hire purchase and nance lease payables (Note 24) RCSLS (Note 25) 10,800,000 12,874,803 47,650,550 71,325,353 Unsecured: Hire purchase and nance lease payables (Note 24) ICCPS (Note 27) ICULS (Note 28) 14,237,650 45,759,768 59,997,418 10,800,000 47,650,550 58,450,550 45,759,768 45,759,768
Total Borrowings Bank overdrafts (Note 22) Trust receipts Bill discount Bankers acceptances Term loan Hire purchase and nance lease payables (Note 24) RCSLS (Note 25) ICCPS (Note 27) ICULS (Note 28) 2,991,723 862,817 1,716,970 3,778,000 20,563,846 18,980,487 47,650,550 800,936 7,703,563 105,048,892 2,725,268 2,893,959 6,777,000 7,797,486 17,514,304 45,759,768 1,205,226 11,564,857 96,237,868 12,000,000 47,650,550 800,936 7,703,563 68,155,049 45,759,768 1,205,226 11,564,857 58,529,851
61
MITHRIL BERHAD
The weighted average effective interest rates at the balance sheet date for borrowings, excluding hire purchase and nance lease payables, were as follows: Group 2007 % Bank overdrafts Trust receipts Bill discount Bankers acceptances Term loans RCSLS ICCPS ICULS (i) 7.9 8.0 10.3 5.2 7.4 8.0 8.0 8.0 2006 % 7.2 10.3 5.1 10.0 8.0 8.0 8.0 2007 % 5.6 8.0 8.0 8.0 Company 2006 % 8.0 8.0 8.0
The bank overdrafts, trust receipts, bill discount and bankers acceptances are secured by the following: (a) (b) (c) a debenture over the xed and oating assets of a subsidiary; a xed legal charge over the landed properties of a subsidiary; and a corporate guarantee by the Company.
(ii)
The term loans are secured by the following: (a) (b) a debenture over the assets of subsidiaries; and an investment property.
(iii)
Included in the Groups borrowings is an amount of RM27,334,895 (2006: RM25,009,025) due to a related party, MAA Credit Sdn. Bhd..
62
MITHRIL BERHAD
The hire purchase and lease liabilities bore interest at the rate of 7.03% (2006: 7.03%) per annum at the balance sheet date. 25. REDEEMABLE CONVERTIBLE SECURED LOAN STOCKS (RCSLS) On 6 April 2004, the Company issued 59,000,000 of 3% 8-year Redeemable Convertible Secured Loan Stocks (RCSLS) at a nominal amount of RM1.00 each to raise funds to partly nance the Restructuring Exercise, for the acquisition of the investment properties and Mithril Saferay Sdn. Bhd., and for working capital purposes. The terms of the RCSLS are as follows: (a) (b) (c) (d) (e) (f) Conversion rights - the registered holders of the RCSLS will have the option at any time during the conversion period to convert the RCSLS at the conversion rate into new ordinary shares of RM1.00 each in the Company. Conversion rate - on the basis of RM1.00 nominal amount of RCSLS for 1 new ordinary share of RM1.00 in the Company. Conversion period - period commencing from the beginning of the second year to the end of the eighth year, during which the RCSLS may be converted into new shares of the Company at the option of the registered holders. All outstanding RCSLS will be redeemed at the end of the eighth year at the nominal amount of RM1.00 per RCSLS. The RCSLS bear interest at 3% per annum payable annually in arrears on 5 April, where payment had been made on 4 April 2007 with the next payment due on 5 April 2008. The new ordinary shares to be allotted and issued upon conversion of the RCSLS will rank pari passu in all respects with the existing ordinary shares of the Company including rights to dividends, rights, allotments or other distributions except that the new shares so allotted shall not be entitled to any dividends, rights, allotments or other distributions declared, made or paid to shareholders the entitlement date for which is before the date of allotment of the new shares. The RCSLS are secured by the Deed of Assignment and Security Deed of Assignment on twenty-nine subsidiary parcels of commercial/ ofce space together with 195 units of basement car park bays within an 11-storey ofce building with 3 basement car parks known as Menara MAA located in Kota Kinabalu as disclosed in Note 15. Up until 29 May 2007, the RCSLS were also secured by all the subsidiary parcels within eight levels of commercial/ofce space forming part of an 11-storey ofce building with a basement oor and an open-air carpark known as Menara MAA located in Kuching.
(g)
63
MITHRIL BERHAD
The amount recognised in the balance sheets of the Group and of the Company may be analysed as follows: 2007 RM Liability component at the date of issue: Nominal value of loan stocks Equity component, net of deferred tax Deferred tax liability 59,000,000 (12,205,861) (4,746,724) 42,047,415 Interest expense recognised in income statement: At 1 July 2006/2005 Recognised during the year (Note 6) At 30 June 2007/2006 Interest accrued: At 1 July 2006/2005 Accrued during the year At 30 June 2007/2006 Liability component at 30 June 2007/2006 (Note 23) 7,630,600 3,660,782 11,291,382 (3,918,247) (1,770,000) (5,688,247) 47,650,550 2006 RM 59,000,000 (12,205,861) (4,746,724) 42,047,415 4,109,879 3,520,721 7,630,600 (2,148,247) (1,770,000) (3,918,247) 45,759,768
Interest expense on the RCSLS is calculated on the effective yield basis by applying the interest rate of 8% (2006: 8%) for an equivalent loan stock to the liability component of the RCSLS. 2007 RM Equity component At 1 July 2006/2005 At 30 June 2007/2006 12,205,861 12,205,861 2006 RM 12,205,861 12,205,861
26.
REDEEMABLE CONVERTIBLE UNSECURED LOAN STOCKS (RCULS) On 15 March 2004, the Company issued 30,500,000 of 1% 5-year Redeemable Convertible Unsecured Loan Stocks (RCULS) at a nominal amount of RM1.00 each to partly nance the Restructuring Exercise relating to the acquisition of a subsidiary, Mithril Saferay Sdn. Bhd. The terms of the RCULS are as follows: (a) Conversion rights - the registered holders of the RCULS will have the option at any time during the conversion period to convert the RCULS at the conversion rate into new ordinary shares of RM1.00 each in the Company.
64
MITHRIL BERHAD
(e)
On 20 February 2006 the balance of 856 RCULS of RM1.00 each were redeemed and the RCULS Trust Deed was retired after the conversion of 1,371,900 RCULS of RM1.00 each to ordinary shares of Mithril Berhad of RM1.00 each on 22 August 2005. The proceeds received from the issue of the RCULS have been split between the liability component, representing the fair value of the conversion option. The RCULS are accounted for in the balance sheets of the Group and of the Company as follows: 2007 RM Nominal value Less: Unamortised discount Less: Converted to new ordinary share capital of RM1.00 each of the Company during the year Nominal value of loan stocks Equity component, net of deferred tax 2006 RM 1,372,756 (276,243) 1,096,513
Redemption of loan stock of RM1.00 each of the Company during the year Nominal value of loan stocks Equity component, net of deferred tax
The amount recognised in the balance sheets of the Group and of the Company may be analysed as follows: 2007 RM Liability component at 1 July 2006/2005 Nominal value of loan stocks Equity component, net of deferred tax Deferred tax liability 2006 RM 1,372,756 (276,243) (83,268) 1,013,245
65
MITHRIL BERHAD
(856) 172 (684) 1,705,648 57,055 (1,361,841) 400,862 (314,694) (2,900) (317,594) 276,243 (276,071) (172) -
Interest expense recognised in income statement: At 1 July 2006/2005 Recognised during the year (Note 6) Effect of conversion of RCULS At 30 June 2007/2006 Interest accrued: At 1 July 2006/2005 Accrued during the year At 30 June 2007/2006 Liability component at 30 June 2007/2006 Equity component At 1 July 2006/2005 Effect of conversion of 1,371,900 RCULS, net of deferred tax Effect of redemption of 856 RCULS, net of deferred tax At 30 June 2007/2006
Interest expense on the RCULS is calculated on the effective yield basis by applying the interest rate of 8% (2006: 8%) for an equivalent loan stock to the liability component of the RCULS. 27. IRREDEEMABLE CUMULATIVE CONVERTIBLE PREFERENCE SHARES (ICCPS) Number of Shares 2007 2006 Units Units Authorised: At 30 June Issued and fully paid: At 30 June 13,306,270 12,518,187 13,306,270 12,518,187 Amount 2007 RM 13,306,270 12,518,187 2006 RM 13,306,270 12,518,187
66
MITHRIL BERHAD
(g)
The proceeds received from the issue of the ICCPS have been split between the liability component and the equity component, representing the fair value of the conversion option. The ICCPS are accounted for in the balance sheets of the Group and of the Company as follows: 2007 RM Nominal value Less: Unamortised discount Amount included within long term borrowings (Note 23) 12,518,187 (11,717,251) 800,936 2006 RM 12,518,187 (11,312,961) 1,205,226
The amount recognised in the balance sheets of the Group and of the Company may be analysed as follows: Liability component at the date of issue Nominal value of loan stocks Equity component, net of deferred tax Transfer from reserves 12,518,187 (10,518,927) 21,897 2,021,157 Interest expense recognised in income statement: At 1 July 2006/2005 Recognised during the year (Note 6) At 30 June 2007/2006 324,500 96,438 420,938 12,518,187 (10,518,927) 21,897 2,021,157 198,414 126,086 324,500
67
MITHRIL BERHAD
2007 RM Interest accrued: At 1 July 2006/2005 Accrued during the year At 30 June 2007/2006 Liability component at 30 June 2007/2006 (Note 23) Equity component At 1 July 2006/2005 At 30 June 2007/2006 (1,140,431) (500,728) (1,641,159) 800,936 10,518,927 10,518,927
Interest expense on the ICCPS is calculated on the effective yield basis by applying the coupon interest rate of 8% (2006: 8%) for an equivalent loan stock to the liability component of the ICCPS. 28. IRREDEEMABLE CONVERTIBLE UNSECURED LOAN STOCKS (ICULS) On 6 April 2004, the Company issued 60,700,000 of 8% 5-year Irredeemable Convertible Unsecured Loan Stocks (ICULS) at a nominal amount of RM1.00 each to raise funds to partly nance the Restructuring Exercise, for the acquisition of MAA buildings and a subsidiary, Mithril Saferay Sdn. Bhd., and for working capital purposes. The terms of the ICULS are as follows: (a) (b) (c) (d) (e) (f) Conversion rights - the registered holders of the ICULS will have the option at any time during the conversion period to convert the ICULS at the conversion rate into new ordinary shares of RM1.00 each in the Company. Conversion rate - on the basis of RM1.00 nominal amount of ICULS for 1 new ordinary share of RM1.00 in the Company. Conversion period - period commencing from the beginning of the second year to the end of the fth year, during which the ICULS may be converted into new shares of the Company at the option of the registered holders. All outstanding ICULS will be automatically converted into new shares of the Company at the end of the fth year at the nominal amount of RM1.00 per ICULS. The ICULS bear interest at 8% per annum payable annually in arrears on 5 April, where payment had been made on the 4 April 2007 with the next payment due on 5 April 2008. The new ordinary shares to be allotted and issued upon conversion of the ICULS will rank pari passu in all respects with the existing ordinary shares of the Company including rights to dividends, rights, allotments or other distributions except that the new shares so allotted shall not be entitled to any dividends, rights, allotments or other distributions declared, made or paid to shareholders, the entitlement date for which is before the date of allotment of the new shares.
The proceeds received from the issue of the ICULS have been split between the liability component and the equity component, representing the fair value of the conversion option. The ICULS are accounted for in the balance sheets of the Group and of the Company as follows: 2007 RM Nominal value Less: Unamortised discount 59,779,500 (52,075,937) 7,703,563 2006 RM 60,700,000 (48,923,446) 11,776,554
68
MITHRIL BERHAD
The amount recognised in the balance sheets of the Group and of the Company may be analysed as follows: 2007 RM Liability component at the date of issue: Nominal value of loan stocks Equity component, net of deferred tax Deferred tax assets 59,779,500 (46,031,405) 5,428,808 19,176,903 Less: Converted to new ordinary share capital of RM1.00 each of the Company during the year Nominal value Equity component, net of deferred tax 2006 RM 60,700,000 (46,740,208) 5,428,808 19,388,600
Interest expense recognised in income statement: At 1 July 2006/2005 Recognised during the year (Note 6) At 30 June 2007/2006 Interest accrued: At 1 July 2006/2005 Accrued during the year At 30 June 2007/2006 Liability component at 30 June (Note 23) Equity component At 1 July 2006/2005 Effect of conversion of 920,500 ICULS, net of deferred tax At 30 June 2007/2006
1,826,052 1,222,243 3,048,295 (5,893,720) (4,766,621) (10,660,341) 11,564,857 46,740,208 (708,803) 46,031,405
Interest expense on the ICULS is calculated on the effective yield basis by applying the coupon interest rate of 8% (2006: 8%) for an equivalent loan stock to the liability component of the ICULS.
69
MITHRIL BERHAD
70
MITHRIL BERHAD
(f)
Number of shares comprised in Options granted Below 10,000 10,000 to 100,000 Above 100,000
* **
Year 1
Year 5
30%** 20%
20%
30% or 6,000 new shares whichever is higher 30% or the remaining number of new shares under the part of option unexercised
(g)
The new shares to be allotted upon the exercise of any option will, upon allotment and issue, rank pari passu in all respects with the then existing issue shares including rights to dividends, rights, allotments or other distributions except that the new shares so allotted shall not be entitled to any dividends, rights, allotments or other distributions declared, made or paid to shareholders, the entitlement date (namely the date as at the close of business on which shareholders must be registered in order to be entitled to any dividends, rights, allotments or other distributions) for which is before the date of allotment of the new shares.
The number of ESOS options granted and remain unexercised by the eligible employees is as fellows: Exercise Price RM At 1 July 2006/2005 Resignations At 30 June 2007/2006 1.00 Number of share options 2007 2006 Units Units 2,237,000 (1,019,000) 1,218,000 2,243,000 (6,000) 2,237,000
71
MITHRIL BERHAD
31.
REVALUATION RESERVES Company 2007 RM At 1 July 2006/2005 Effects of adopting FRS 140 At 30 June 2007/2006 13,056,000 (13,056,000) 2006 RM 13,056,000 13,056,000
Revaluation reserves include the cumulative net change, net of deferred tax effects, arising from the revaluation of freehold land, short term leasehold land, long term and short term leasehold land and buildings, buildings, plant and machinery and investment properties above their cost.
Long term Short term Short term Leasehold Leasehold Freehold Leasehold Land and Land and Land Land Building Building RM RM RM RM Group At 1 July 2006 As previously stated Effects of adopting FRS 140 Reversal of deferred tax liabilities Realisation of revaluation reserve from disposal of property, plant and equipment At 30 June 2007 At 1 July 2005 Revaluation increase, net of deferred tax At 30 June 2006 3,880,754 204,251 1,196,919 465,468 359,655 157,363 99,025 8,594,237 38,509 13,135,913 27,423,866 (13,146,000) (13,146,000) 10,087 718,315
Investment Properties RM
Total RM
(137,534)
(137,534)
- 8,594,237 -
72
MITHRIL BERHAD
The components and movements of deferred tax liabilities and assets during the nancial year prior to offsetting are as follows: Deferred Tax Liabilities of the Group: Property, Plant and Equipment RM At 1 July 2006 Recognised in income statement Recognised in equity At 30 June 2007 At 1 July 2005 Recognised in income statement Recognised in equity At 30 June 2006 Deferred Tax Assets of the Group: Unutilised Tax Losses and Unabsorbed Capital Allowances RM (14,511) (280,079) (294,590) (14,511) (14,511) 1,682,142 257 (718,315) 964,084 1,068,094 (623,144) 1,237,192 1,682,142
Allowance for Doubtful Debts RM At 1 July 2006 Recognised in income statement At 30 June 2007 At 1 July 2005 Recognised in income statement At 30 June 2006 (778,599) (778,599) (778,599) (778,599)
73
MITHRIL BERHAD
Deferred tax assets have not been recognised in respect of the following items in loss making subsidiaries due to their inability to achieve signicant taxable prots for offset in the near future: Group 2007 RM Unused tax losses Unabsorbed capital allowances Other temporary differences 71,707,798 25,486,178 1,403,065 98,597,041 2006 RM 66,672,883 20,624,737 1,324,619 88,622,239
The availability of the unused tax losses and unabsorbed capital allowances for offsetting against future taxable prots of the respective subsidiaries are subject to no substantial changes in shareholdings of the Company and those subsidiaries under Section 44(5A) and (5B) of Income Tax Act, 1967. 33. OPERATING LEASE ARRANGEMENTS (a) The Group as lessee The operating lease commitment is in respect of the rented factories and store. The future aggregate minimum lease payments under non-cancellable operating leases contracted for as at the balance sheet date but not recognised as liabilities is as follows:
74
MITHRIL BERHAD
33.
OPERATING LEASE ARRANGEMENTS (CONTD) (a) The Group as lessee (contd) Group 2007 RM Future minimum lease payments: Within one year More than one year 686,778 770,796 1,457,574 (b) The Group as lessor The Company has entered into non-cancellable operating lease agreements on its investment properties portfolio. These leases have remaining non-cancellable lease terms for an approximately 1 year and 8 months. The future minimum lease payments receivable under non-cancellable operating leases contracted for as at the balance sheet date but not recognised as receivables, are as follows: Group and Company 2007 2006 RM RM Within one year More than one year 6,800,000 4,533,336 11,333,336 6,800,000 11,333,336 18,133,336 2006 RM 747,951 396,732 1,144,683 2007 RM 158,304 118,728 277,032 Company 2006 RM 152,541 277,032 429,573
34.
CONTINGENT LIABILITY Company 2007 RM Unsecured: Corporate guarantee given to a bank for credit facilities granted to a subsidiary, Mithril Saferay Sdn. Bhd. 13,500,000 2006 RM 13,500,000
75
MITHRIL BERHAD
158,304
152,541
158,304
152,541
The directors are of the opinion that all transactions above had been entered into in the normal course of business and had been established on terms and conditions that were not materially different from those obtainable in transactions with unrelated parties. 36. FINANCIAL INSTRUMENTS (a) Financial Risk Management Objectives and Policies The Groups nancial risk management policy seeks to ensure that adequate nancial resources are available for the development of the Groups businesses whilst managing its interest rate, foreign exchange, liquidity and credit risks. The Board reviews and agrees policies for managing each of these risks and they are summarised below. It is, and has been throughout the year under review, the groups policy that no trading in derivative nancial instruments shall be undertaken. (b) Interest Rate Risk Cash ow interest rate risk is the risk that the future cash ows of a nancial instrument will uctuate because of changes in market interest rates. Fair value interest rate risk is the risk that the value of a nancial instrument will uctuate due to changes in market interest rates. As the Group has no signicant interest-bearing nancial assets, the Groups income and operating cash ows are substantially independent of changes in market interest rates. The Groups interest-bearing nancial assets are mainly short term in nature and have been mostly placed in xed deposits or occasionally, in short term commercial papers. The Groups primary interest rate risk relates to interest bearing debts. This risk is mitigated by the Groups investments in rental yielding investment properties and the issuance of convertible nancial instruments. The information on maturity dates and effective interest rates of nancial assets and liabilities are disclosed in their respective notes.
76
MITHRIL BERHAD
17,514,304
16,130,141
The following methods and assumptions were used to estimate the fair values of the following classes of nancial instruments:
77
MITHRIL BERHAD
45,103
8,684
75,036
744
129,567
187 79 -
8 2 -
11,789 778 -
78
MITHRIL BERHAD
48,223
7,957
65,200
2,172
123,552
119 73 -
11 1 -
79
MITHRIL BERHAD
LIST OF PROPERTIES
Approximate age of building years/ Tenure Land area/ Built-up area sq. ft NBV as at 30.06.07 RM Date of acquisition/ last evaluation
Title/Location Registered under Mithril Berhad Menara MAA, No. 6, Lorong Api-Api 88000 Kota Kinabalu, Sabah Under Master Title No. Town Lease 017545265, District of Kota Kinabalu, Sabah Menara MAA, Lot No. 86, Section 53, Jalan Ban Hock 93100 Kuching Sarawak Under Master Title No. 1LCLS125386 Kuching Town Land District, Sarawak
Twenty Nine (29) subsidiary parcels of commercial/ ofce space with 195 units of basement car park bays forming part of a 11 storey ofce building with 3basement car park Eight (8) Subsidiary parcels of commercial/ ofce space forming part of a 11 storey ofce building with basement oor and an open-air car park
47,145.85/ 189,727
75,000,000
2004
56,005/ 50,653
25,000,000
2004
Registered under Mithril Clay Manufacturing Berhad (Formerly known as Tajo Berhad) Lot PTD 7273, Mukim of Sedenak District of Johor Bahru Johor Darul Takzim Batu 35 1/2, Jalan Air Hitam Bukit Batu, 81000 Kulai Johor Darul Takzim Lot PTD 7274, Mukim of Sedenak District of Johor Bahru Johor Darul Takzim Batu 35 1/2, Jalan Air Hitam Bukit Batu, 81000 Kulai Johor Darul Takzim Lot PTD 7275, Mukim of Sedenak District of Johor Bahru Johor Darul Takzim Lot 225, Jalan Kampong Tui Mukit Bukit Kepong 84030 Muar Johor Darul Takzim Lot 9381 (MLO 2201), Mukim of Sri Medan District of Batu Pahat Johor Darul Takzim Quarry land Nil/ Leasehold expiring on 14 January 2022 6/ Not applicable 1,611,729/ Nil 752,140 1991 Industrial land NIL/ Leasehold expiring on 14 January 2022 435,600 1,338,341 1991 Industrial land with ofce building, canteen, quarters and guard house 22/ Leasehold expiring on 14 January 2022 130,680/ 12,650 401,519 1991
Factory
Nil/ 204,698
13,995,132
2001
Quarry land
Nil/ Freehold
387,991/ Nil
2,700,000
1991
80
MITHRIL BERHAD
LIST OF PROPERTIES
( CONTINUED )
Approximate age of building years/ Tenure Land area/ Built-up area sq. ft NBV as at 30.06.07 RM Date of acquisition/ last evaluation
Title/Location
Registered under Mithril Clay Industries Sdn. Bhd. C.T. 4750 Lot 1130, Mukim of Bukit Kepong District of Muar, Johor Darul Takzim C.T. 4751 Lot 1131, Mukim of Bukit Kepong District of Muar, Johor Darul Takzim C.T. 4752 Lot 1132, Mukim of Bukit Kepong District of Muar, Johor Darul Takzim C.T. 4753 Lot 1133, Mukim of Bukit Kepong District of Muar, Johor Darul Takzim C.T. 4592 Lot 1312, Mukim of Bukit Kepong District of Muar, Johor Darul Takzim HS (M) 150 Lot MLO 206, Mukim of Bukit Kepong District of Muar, Johor Darul Takzim GM 168 Lot 1238, Mukim of Bukit Kepong District of Muar, Johor Darul Takzim GM 167 Lot 958, Mukim of Bukit Kepong District of Muar, Johor Darul Takzim GM 165 Lot 1124, Mukim of Bukit Kepong District of Muar, Johor Darul Takzim Grant 15643 Lot 223, Mukim of Bukit Kepong, District of Muar, Johor Darul Takzim Grant 15644 Lot 224, Mukim of Bukit Kepong District of Muar, Johor Darul Takzim Agricultural land Nil/ Freehold 218,756/ Nil 243,400 1996
Agricultural land
Nil/ Freehold
218,756/ Nil
243,400
1996
Agricultural land
Nil/ Freehold
218,756/ Nil
243,400
1996
Agricultural land
Nil/ Freehold
112,646/ Nil
124,990
1996
Agricultural land
Nil/ Freehold
198,578/ Nil
220,785
1996
Agricultural land
Nil/ Freehold
187,492/ Nil
242,788
1996
Agricultural land
Nil/ Freehold
112,161/ Nil
124,446
1996
Agricultural land
Nil/ Freehold
95,714/ Nil
124,295
1996
Agricultural land
Nil/ Freehold
263,901 Nil
293,980
1996
Agricultural land
Nil/ Freehold
262,132/ Nil
324,660
1996
Agricultural land
Nil/ Freehold
68,870/ Nil
77,173
1996
81
MITHRIL BERHAD
LIST OF PROPERTIES
( CONTINUED )
Approximate age of building years/ Tenure Nil/ Freehold Land area/ Built-up area sq. ft 2,480,886/ Nil NBV as at 30.06.07 RM 2,440,000 Date of acquisition/ last evaluation 1996
Title/Location Grant 031523 Lot 225, Mukim of Bukit Kepong District of Muar, Johor Darul Takzim Lot 225, Jalan Kampong Tui Mukim Bukit Kepong 84030 Muar, Johor Darul Takzim GM 533 Lot 194, Mukim of Bukit Kepong District of Muar, Johor Darul Takzim
Description/ Existing Use Part agricultural land and part industrial land
Agricultural land
Nil/ Freehold
71,297/ Nil
86,683
1996
Registered under Mithril Saferay Sdn. Bhd. PT 7003 No. HS (D) LM 3/84 Mukim of Asam Kumbang District of Larut dan Matang Negeri Perak Darul Ridzuan No. 8A, Jalan Damai, Kampung Boyan 34000 Taiping Negeri Perak Darul Ridzuan PT 4192 No. HS (D) LM 5130 Mukim of Asam Kumbang District of Larut dan Matang Negeri Perak Darul Ridzuan Lot 2286, Lorong 1, Kampung Boyan 34000 Taiping, Negeri Perak Darul Ridzuan Lot 4193 No. HS (D) LM 5750 Mukim of Asam Kumbang District of Larut dan Matang Negeri Perak Darul Ridzuan Lot 2286, Lorong 1, Kampung Boyan 34000 Taiping, Negeri Perak Darul Ridzuan PT 496 No. HS (D) LM 844/84 Mukim of Asam Kumbang District of Larut dan Matang Negeri Perak Darul Ridzuan Lot 2286, Lorong 1, Kampung Boyan 34000 Taiping, Negeri Perak Darul Ridzuan Industrial land with Storage building 18/ Leasehold expiring on 29 May 2014 16,282/ 17,212 257,085 2000 Industrial land with Storage building 7/ Leasehold expiring on 22 July 2054 25,156/ 38,322 1,506,970 2000 Industrial land with factory building 13/ Leasehold expiring on 29 November 2053 31,799/ 20,786 1,980,323 2000 Industrial land with storage yard 5/ Leasehold expiring on 3 January 2014 21,367/ 20,240 568,858 2003
82
MITHRIL BERHAD
LIST OF PROPERTIES
( CONTINUED )
Approximate age of building years/ Tenure 18/ Leasehold expiring on 13 June 2087 Land area/ Built-up area sq. ft 87,120/ 24,607 NBV as at 30.06.07 RM 710,356 Date of acquisition/ last evaluation 2000
Title/Location PT 3642, No. H.S. (D) LM 934/88 Mukim of Asam Kumbang District of Larut dan Matang, Negeri Perak Darul Ridzuan PT 3642, Jalan Perusahaan 34600 Kamunting, Taiping, Negeri Perak Darul Ridzuan PT 9278, No. H.S. (D) LM 2146/89 Mukim of Asam Kumbang District of Larut dan Matang, Negeri Perak Darul Ridzuan No. 5, Jalan Medan, 34000 Taiping, Negeri Perak Darul Ridzuan
1,200/ 1,200
340,000
2002
83
MITHRIL BERHAD
ANALYSIS OF SHAREHOLDINGS
MITHRIL BERHAD (Company No.: 577765-U) STATISTICS OF SHAREHOLDINGS AS AT 28 SEPTEMBER 2007 Authorised Share Capital Issued and Paid Up Capital Class of Shares Voting Rights Number of Shareholders Analysis of Shareholdings Size of Shareholdings Less than 100 100 1,000 1,001 10,000 10,001 100,000 100,001 and below 5% of issued shares 5% and above of issued shares TOTAL No. of Shareholders 4,910 1,366 1,907 903 116 2 9,204 % of Shareholders 53.35 14.84 20.72 9.81 1.26 0.02 100.00 No. of Shares % of Issued Capital 98,507 570,630 9,170,181 30,212,976 36,150,874 33,773,304 109,976,472 0.09 0.52 8.34 27.47 32.87 30.71 100.00 RM513,306,270 RM109,976,472 Ordinary Shares of RM1.00 each 1 Vote Per Ordinary Share 9,204
List of Top Thirty Shareholders Name 1. 2. 3. 4. 5. MAA Holdings Berhad MAA Credit Sdn Bhd Afn Nominees (Tempatan) Sdn Bhd Beneciary : Pledged Securities Account for Chung Chee Yang BSN Merchant Bank Bhd AMSEC Nominees (Asing) Sdn Bhd Beneciary : AMFraser Securities Pte Ltd for Ramesh s/o Pritamdas Chandiramani Yek Chong CIMSEC Nominees (Tempatan) Sdn Bhd Beneciary : BC Trustee Advisory for Hasnur Rabiain bin Ismail RHB Nominees (Tempatan) Sdn Bhd Beneciary : Pledged Securities Account for See Thoo Chan Public Nominees (Tempatan) Sdn Bhd Beneciary : Pledged Securities Account for Khoo Mow Song No. of shares held 33,773,304 2,835,435 2,500,000 1,767,419 1,600,000 % of issued capital 30.71 2.58 2.27 1.61 1.45
6. 7. 8. 9.
10. Teh Choo Khim 11. Chung Soo Mai 12. AMSEC Nominees (Tempatan) Sdn Bhd Beneciary : Pledged Securities Account for Azmi bin Luddin 13. Chang Nyen Seng 14. HLB Nominees (Tempatan) Sdn Bhd Beneciary : Pledged Securities Account for Hwang Then Foo @ Ng Thiam Hock 15. PM Securities Sdn Bhd Beneciary : IVT 16. Tan Chuan Kiang @ Chin Shian Chang 17. Tan Heng Lam
84
MITHRIL BERHAD
ANALYSIS OF SHAREHOLDINGS
( CONTINUED )
Name 18. Ong Gik Lan @ Ong Gaik Lan 19. Tan Kuan Lee 20. Lew Yoon 21. Quek Phaik Im 22. Lie Poo Hon 23. Hong Yeam Wah 24. Loh Kew @ Law Kon Yew 25. Mah Siew Seong 26. Inter-Pacic Equity Nominees (Tempatan) Sdn Bhd Beneciary : Pledged Securities Account for Ahmad Jalini bin Mohamed Kamsan 27. CIMSEC Nominees (Tempatan) Sdn Bhd Beneciary : CIMB Bank for Linda Ooi Lie Na 28. Yong Hon Chong 29. Hee Khim Hong 30. Cheong Fook Chee TOTAL
No. of shares held 450,000 450,000 400,000 400,000 380,000 370,000 368,900 365,000 330,000
% of issued capital 0.41 0.41 0.36 0.36 0.35 0.34 0.34 0.33 0.30
85
MITHRIL BERHAD
MITHRIL BERHAD (Company No.: 577765-U) STATISTICS OF WARRANT HOLDERS AS AT 28 SEPTEMBER 2007 Number of warrants issued Number of warrant exercised As at 28 September 2007 Number of warrant holders Analysis of Warrant Holdings Size of Warrant Holdings Less than 100 100 1,000 1,001 10,000 10,001 100,000 100,001 and below 5% of issued shares 5% and above of issued shares TOTAL No. of Warrant Holders 223 1,366 309 135 17 5 2,055 % of Warrant Holders 10.85 66.47 15.04 6.57 0.83 0.24 100.00 No. of Warrants 10,000 583,086 1,075,361 5,000,373 5,127,933 20,890,027 32,686,780 % of Issued Warrants 0.03 1.78 3.29 15.30 15.69 63.91 100.00 38,270,780 5,584,000 32,686,780 2,055
List of Top Thirty Warrant Holders Name 1. 2. 3. 4. 5. 6. 7. 8. 9. CIMSEC Nominees (Tempatan) Sdn Bhd Beneciary : Danaharta Managers Sdn Bhd MAA Holdings Berhad MAA Credit Sdn Bhd BSN Merchant Bank Bhd HSBC Nominees (Asing) Sdn Bhd Beneciary : Exempt An for Credit Suisse Teh Teaw Kee RHB Nominees (Tempatan) Sdn Bhd Beneciary : Pledged Securities Account for See Thoo Chan Chin Kiam Hsung CIMSEC Nominees (Tempatan) Sdn Bhd Beneciary : BC Trustee Advisory for Hasnur Rabiain bin Ismail No. of warrants held 9,398,700 5,186,386 2,835,435 1,767,419 1,702,087 878,300 840,000 475,200 333,333 320,000 282,600 275,800 243,500 204,600 200,000 198,200 171,400 % of issued warrants 28.75 15.87 8.67 5.41 5.21 2.69 2.57 1.45 1.02 0.98 0.86 0.84 0.74 0.63 0.61 0.61 0.52
10. Koh Chin Liang 11. Ching Kean Lam 12. Chin Kian Fong 13. TA Nominees (Tempatan) Sdn Bhd Beneciary : Pledged Securities Account for Tan Tian Sheu 14. Inter-Pacic Equity Nominees (Tempatan) Sdn Bhd Beneciary : Pledged Securities Account for Teng Hock Heng 15. RHB Nominees (Tempatan) Sdn Bhd Beneciary : Pledged Securities Account for Tan Yee Ming 16. TCL Nominees (Tempatan) Sdn Bhd Beneciary : Pledged Securities Account for Chin Kiam Hsung 17. TA Nominees (Tempatan) Sdn Bhd Beneciary : Pledged Securities Account for Teh Teoh Guan
86
MITHRIL BERHAD
Name 18. Low Yoke Choo 19. OSK Nominees (Tempatan) Sdn Bhd Beneciary : Pledged Securities Account for Yap Kum Seng 20. Pang Swee Chien 21. Pong Pei Ching 22. OSK Nominees (Tempatan) Sdn Bhd Beneciary : Pledged Securities Account for Tan Gaik Suan 23. HDM Nominees (Asing) Sdn Bhd Beneciary : UOB Kay Hian Pte Ltd for Lee Kah Kiam 24. Khaled Kamel Ahmad Khader 25. Koh Cheng Kiat 26. Low Kuan Mun 27. Niap Kim Lock @ Andrew Niap Kim Fook 28. RHB Nominees (Tempatan) Sdn Bhd Beneciary : Pledged Securities Account for Chin Kiam Hsung 29. Teh Teaw Kee 30. TA Nominees (Tempatan) Sdn Bhd Beneciary : Pledged Securities Account for Teh Teaw Kee TOTAL
No. of warrants held 158,200 150,000 144,800 130,000 122,000 100,000 100,000 100,000 100,000 100,000 100,000 99,700 99,600
% of issued warrants 0.48 0.46 0.44 0.40 0.37 0.31 0.31 0.31 0.31 0.31 0.31 0.31 0.30
26,817,260
82.04
87
MITHRIL BERHAD
MITHRIL BERHAD (Company No.: 577765-U) STATISTICS OF RCSLS HOLDERS AS AT 28 SEPTEMBER 2007 Number of RCSLS issued Number of RCSLS exercised Class of Loan Stock As at 28 September 2007 Number of RCSLS Holders Analysis of RCSLS Holdings Size of RCSLS Holdings Less than 100 100 1,000 1,001 10,000 10,001 100,000 100,001 and below 5% of issued shares 5% and above of issued shares TOTAL No. of RCSLS Holders 2 2,143 1,391 393 25 2 3,956 % of RCSLS Holders 0.05 54.17 35.16 9.93 0.63 0.05 100.00 No. of RCSLS 100 2,091,400 5,523,500 8,263,800 6,169,100 36,952,100 59,000,000 % of Issued RCSLS 0.00 3.54 9.36 14.01 10.46 62.63 100.00 59,000,000 NIL RCSLS of RM1.00 each 59,000,000 3,956
List of Top Thirty RCSLS Holders Name 1. 2. 3. 4. 5. 6. 7. 8. 9. Malaysian Assurance Alliance Berhad Low Hong Kooi Neo Say Yeow Looi Lei Chow Khoo Yee Kew @ Khoo Ai Kiew Charles Yii Young Swee Choon RHB Capital Nominees (Tempatan) Sdn Bhd Beneciary : Pledged Securities Account for Hiew Kat Kee Chong Kam Thai No. of RCSLS held 36,952,100 700,000 696,600 680,000 650,000 340,000 311,500 311,100 221,100 200,000 184,000 180,000 174,000 165,000 140,000 134,500 121,000 % of issued RCSLS 62.63 1.19 1.18 1.15 1.10 0.58 0.53 0.53 0.37 0.34 0.31 0.31 0.29 0.28 0.24 0.23 0.21
10. Mayban Nominees (Tempatan) Sdn Bhd Beneciary : DBS Bank for David Rashid bin Ghazalli 11. MAA Bancwell Trustee Berhad Beneciary : MAAKER Fund 12. Liew Shin Choy 13. Ong Siow Teck 14. Tan Yoek Tin 15. Lim Kiat Hua 16. Lim Chin Seng 17. Public Nominees (Tempatan) Sdn Bhd Beneciary : Pledged Securities Account for Loh You Fong
88
MITHRIL BERHAD
Name 18. Loh Yin San 19. Lim Kwong Mee @ Ling Diong Ming 20. Ong Swee Keng 21. JF Apex Nominees (Tempatan) Sdn Bhd Beneciary : Pledged Securities Account for Voon Sze Lin 22. Public Nominees (Tempatan) Sdn Bhd Beneciary : Pledged Securities Account for Hiew Kat Kee 23. Chong Mei Key 24. Gan Poh Chin 25. Tam Chia Li 26. Tam Mao Hing 27. Lee Yew Lee 28. MAA Corporate Advisory Sdn Bhd 29. Song Chen Kiow 30. Ang Bu Han TOTAL
No. of RCSLS held 120,000 114,800 111,000 107,800 105,300 101,100 100,100 100,100 100,100 100,000 100,000 100,000 91,000 43,512,200
% of issued RCSLS 0.20 0.19 0.19 0.18 0.18 0.17 0.17 0.17 0.17 0.17 0.17 0.17 0.15 73.75
89
MITHRIL BERHAD
MITHRIL BERHAD (Company No.: 577765-U) STATISTICS OF ICULS HOLDERS AS AT 28 SEPTEMBER 2007 Number of ICULS issued Number of ICULS exercised Class of Loan Stock As at 28 September 2007 Number of ICULS Holders Analysis of ICULS Holdings Size of ICULS Holdings Less than 100 100 1,000 1,001 10,000 10,001 100,000 100,001 and below 5% of issued shares 5% and above of issued shares TOTAL No. of ICULS Holders 2 2,723 2,009 531 22 2 5,289 % of ICULS Holders 0.04 51.48 37.98 10.04 0.42 0.04 100.00 No. of ICULS 100 2,566,300 8,214,100 11,660,200 5,610,300 31,728,500 59,779.500 % of Issued ICULS 0.00 4.29 13.74 19.51 9.38 53.08 100.00 RM60,700,000 RM920,500 ICULS of RM1.00 each 59,779,500 5,289
List of Top Thirty ICULS Holders Name 1. 2. 3. 4. 5. 6. 7. 8. 9. Malaysian Assurance Alliance Berhad Melewar Group Berhad Wong Shak On Sim Lian Hing MAA Bancwell Trustee Berhad Beneciary : MAAKER Fund Mayban Nominees (Tempatan) Sdn Bhd Beneciary : DBS Bank for David Rashid bin Ghazalli Chow Wah Hing @ Lim Chung Shien Tan Beng Huat @ Tan Beng Sim Tai Yoon Voon No. of ICULS held 30,326,000 3,753,100 300,000 290,600 200,000 200,000 180,000 175,000 171,000 161,000 160,000 150,000 140,000 140,000 127,900 122,000 120,000 % of issued ICULS 50.73 6.28 0.50 0.49 0.33 0.33 0.30 0.29 0.29 0.27 0.27 0.25 0.23 0.23 0.21 0.20 0.20
10. Kok Mee Eng 11. Chan Kit Peng 12. Yoon Koh Fong 13. Lim Kiat Hua 14. Tan Paik Sim @ Tan Phaik Im 15. HLG Nominee (Tempatan) Sdn Bhd Beneciary : Pledged Securities Account for Toh Poey Gee 16. Arthur Lawrance Pharamond 17. Public Nominees (Tempatan) Sdn Bhd Beneciary : Pledged Securities Account for Hiew Yoke Kuen
90
MITHRIL BERHAD
Name 18. Teh Kah Hua @ Teh Kah Hah 19. Heng Kiok Ngan 20. Choong Fook Hing 21. Ong Tai Poh 22. Loh Nyet Mee 23. MAA Bancwell Trustee Berhad 24. Chua Wee Poh 25. TA Nominees (Tempatan) Sdn Bhd Beneciary : Pledged Securities Account for Nai Eng Seng 26. Tee Jen Tong 27. Chua Say Yong 28. Ang Bu Han 29. Mayban Nominees (Tempatan) Sdn Bhd Beneciary : Pledged Securities Account for Hwang Then Foo @ Ng Thiam Hock 30. Mayban Nominees (Tempatan) Sdn Bhd Beneciary : Pledged Securities Account for Ong Poh Tine TOTAL
No. of ICULS held 110,000 108,000 102,000 101,000 100,700 100,500 100,000 100,000 100,000 98,000 91,000 90,100
% of ICULS capital 0.18 0.18 0.17 0.17 0.17 0.17 0.17 0.17 0.17 0.16 0.15 0.15
88,700
0.15
38,006,600
63.58
91
MITHRIL BERHAD
MITHRIL BERHAD
(577765-U)
FORM OF PROXY
I/We
(Full Name in block letters)
of
(Full address)
being a member/members of MITHRIL BERHAD hereby appoint the following person(s) :Name of proxy, NRIC No. & Address No. of shares to be represented by proxy
1. 2.
or failing him/her, the Chairman of the Meeting as my/our proxy to vote for me/us and my/our behalf at the Fifth Annual General Meeting of the Company to be held at the Auditorium, Podium 1, Menara MAA, No. 12 Jalan Dewan Bahasa, 50460 Kuala Lumpur on Thursday, 29 November 2007, at 4.00 p.m. My/our proxy is to vote as indicated below :FIRST PROXY For Resolution 1 To approve the payment of Directors fees for the period from 1 July 2007 until the forthcoming Annual General Meeting to be held in 2008 to be payable quarterly in arrears. To re-elect the following Directors of the Company who are retiring pursuant to Article 77 of the Companys Articles of Association :Resolution 2 Resolution 3 (i) (ii) Dato Abdul Majid bin Mohamed Onn Kien Hoe Against SECOND PROXY For Against
To re-elect the following Directors of the Company who are retiring pursuant to Article 83 of the Companys Articles of Association :Resolution 4 Resolution 5 Resolution 6 Resolution 7 Resolution 8 Resolution 9 (i) (ii) Tunku Yahaya @ Yahya bin Tunku Tan Sri Abdullah Alan Hamzah Sendut
To re-appoint Messrs. Ernst & Young as Auditors of the Company and to authorise the Directors to x their remuneration. To authorise the Directors to issue shares in the Company pursuant to the Employees Share Option Scheme. To approve the Shareholders Mandate for Recurrent Related Party Transactions. To approve the amendments to Articles of Association of the Company.
(Please indicate with a or X in the space provided how you wish your vote to be cast. If no instruction as to voting is given, the proxy will vote or abstain from voting at his/her discretion).
Dated this
day of
NOTES: 1. A member entitled to attend and vote at a meeting of the Company is entitled to appoint a proxy to attend and vote in his stead. A proxy may but need not be a member of the Company. 2. A member of the Company, who is an authorised nominee as dened under the Securities Industry (Central Depositories) Act 1991, may appoint one (1) proxy in respect of each securities account. 3. The instrument appointing a proxy, shall be in writing under the hand of the appointer or his attorney duly authorised in writing, and in the case of a corporation, either under seal or under hand of an ofcer or attorney duly authorised. 4. The instrument appointing a proxy must be deposited at the Companys Registered Ofce, Suite 20.03, 20th Floor, Menara MAA, No.12, Jalan Dewan Bahasa, 50460 Kuala Lumpur, not less than 48 hours before the time appointed for holding the meeting or any adjournment thereof. 5. Any alteration in the form of proxy must be initialed. 6. Explanatory notes to Special Business of the Agenda 6 : (a) Authority to allot and issue shares in general pursuant to Employees Share Option Scheme (ESOS) On 26 December 2003, the shareholders of the Company had approved the ESOS. The purpose of this ordinary resolution is to enable the Directors of the Company to allot shares to those employees and Executive Directors who have exercised their option under the Companys ESOS. Proposed Renewal of Shareholders Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature (RRPTs) The Proposed Resolution 8, if passed, will empower the Company to conduct recurrent related party transactions of a revenue or trading nature which are necessary for the Groups day-to-day operations, and will eliminate the need to convene separate general meetings from time to time to seek shareholders approval. This will substantially reduce administrative time, inconvenience and expenses associated with the convening of such meetings, without compromising the corporate objectives of the Group or adversely affecting the business opportunities available to the Group. The detailed information on Recurrent Related Party Transactions is set out in Part A of the Circular dated 7 November 2007 which is dispatched together with this Annual Report. (c) Proposed Amendments to Articles of Association of the Company The Proposed Special Resolution 9, if passed, will update the Articles of Association of the Company to ensure continued compliance with the Listing Requirements of Bursa Securities and to further enhance the administration of the internal affairs of the Company.
(b)
Fold here
The Secretary MITHRIL BERHAD Suite 20.03, 20th Floor, Menara MAA No. 12, Jalan Dewan Bahasa 50460 Kuala Lumpur
Fold here