Experience
A Holistic Lifestyle
Garden Residence, Cyberjaya
www.gardenresidence.com.my
Call +603 9221 6888
Chairman’s Statement
Dear Valued Shareholders,
I am pleased to report that our focus on satisfying market needs and niche business model propelled us to greater heights in 2010 – we
breached the RM1 billion sales mark and achieved a record profit after tax of RM118 million. 2010 also saw us continue our expansion
drive with 10 land acquisition deals, and with an additional acquisition in 2011 to date, we now have 34 projects; 24 in Greater KL
(Klang Valley and Kuala Lumpur), 5 in Penang and 5 in Johor Bahru.
Operating Environment
Economic Conditions
2010 saw significant improvement in global economies with sustainable growth, jobs creation and macroeconomic stability given strong
emphasis. Emerging economies in the Asian region grew stronger, and the Malaysian economy expanded by 7.2%. In addition, Malaysia’s
employment market stayed very healthy with unemployment rate at only 3.2% (2009: 3.7%), indicating rising economic activities.
Malaysia Economic Performance
Source: Bank Negara Malaysia
The strong economic growth was mainly driven by robust domestic demand which was given a boost by the announcement of the
Economic Transformation Programme (ETP) in October 2010. As a programme to create a sustainable, competitive and high income
nation, 60 concrete projects amounting to RM95.35 billion in total investments have been announced as at April 2011. These will
create approximately 224,258 jobs until 2020 and raise RM137.22 billion in Gross National Income (GNI). As per the Neilsen Consumer
Confidence index, Malaysia is at 9th place globally and consumer confidence is on a 4-year high, ahead of Sweden, Vietnam, Thailand,
China, Hong Kong and New Zealand.
ETP projects
Source: PEMANDU (The Performance Management & Delivery Unit)
22
Core Facts
Chairman’s Statement (Cont’d)
Messages
The Malaysian Property Market
In tandem with the improvement of the domestic economy and rise in consumer confidence, the Malaysian property market enjoyed
a double-digit growth in 2010 of 11.4% and 32.4% in number of transactions and transaction value respectively. There were 376,583
property transactions that took place in 2010 valued at a total of RM107.44 billion. The residential sector continued its dominance in
the property market, capturing 47.1% of the value of transactions at RM50.7 billion.
Activities
The Malaysian All House Price Index rose 8.9 points to 140.7 with hotspot areas like Kuala Lumpur and Selangor recording one of the
highest house prices.
Governance
Financials
Information
Additional
Breakdown of transaction value by type in 2010 Breakdown of transaction value by states in 2010
Source: NAPIC Source: NAPIC
Notices
Form of Proxy
Mah Sing Group Berhad Annual Report 2010
23
Chairman’s Statement (Cont’d)
Financial Review, Corporate Highlights and Dividend
Mah Sing enjoyed an excellent year, recording many ‘firsts’ in 2010.
Record Sales - We broke the RM1 billion sales mark, registering RM1.5 billion and for the second consecutive year exceeded our
initial internal target, this time by 50%. Year on year, sales rose by 113% from RM727 million in 2009.
Record Profits - We achieved a record high profit after tax after minority interest of RM118 million, a 25% increase from 2009. The
Group was able to perform well over the years because of our focus on the right product mix, strategic locations, innovative designs
and concepts with comprehensive range of products comprising residential, commercial, retail and industrial in Greater KL, Penang
Island and Johor Bahru. Our branding efforts and strong track record over the years have also resulted in us garnering more customers
thus improving our results.
With the continuous and impressive performance for the past eight years, we were able to grow at a remarkable compounded annual
growth rate (CAGR) of 48% for our net profit from 2002 to 2010.
CAGR for 2002-2010
Revenue - 26%
Net profit - 48%
Expanding Our Reach - With the encouraging backdrop of the recovering economy and on the back of our strong balance sheet,
we forged ahead with our expansion plans within Greater KL and Penang Island. We were the busiest ‘shopper’ on the block in 2010
as we acquired a record 10 pieces of land for a total consideration of RM756 million and a total estimated Gross Development Value
(GDV) of RM4 billion. We went ahead with our expansion plans as we were confident that the property market would continue to
sustain and grow with the implementation of the initiatives under the ETP, ample liquidity, high savings rate, strengthening of the Ringgit
and healthy employment market.
Staying true to our philosophy of quick turnaround business model, we were able to preview and/or launch 9 of the new projects from
the 10 pieces of land by May 2011.
24
Core Facts
Chairman’s Statement (Cont’d)
Messages
Dividend - The Group has been consistently meeting the expectation of investors and keeping to our commitment of distributing at
least 40% of our net profits since 2006. The Board is pleased to propose a first and final dividend of 15.2% or 7.6 sen per ordinary
share, less income tax of 25% for the financial year ended 31 December 2010. The proposed dividend will be subject to the approval
by shareholders at the forthcoming Annual General Meeting.
Activities
Corporate Exercises
Recognising and appreciating the loyalty and continuous support of our shareholders, the Company completed a bonus issue
exercise on 8 April 2010. The issuance of new shares provided shareholders with greater participation from the improved liquidity
and marketability of our shares. In addition, the enlarged capital base of the Company gave a better reflection of the current scale of
operations and assets employed.
Governance
In view of the Group’s expansionary plans where we are planning to acquire more landbank to capture the growth of the economy
and meet the housing needs to cater for urban migration, we had also obtained shareholders’ approval on 3 December 2010 for
our proposed issuance of up to RM325 million nominal value of 7-year redeemable convertible secured bonds. Barring unforeseen
circumstances, the bonds will be issued in 2011 after taking into consideration, among others, the funding needs of the Group for our
expansion plans.
Financials
Corporate Social Responsibility
While capitalising on the strong growth momentum of the property market, we continued to support causes relating particularly to
education, medical assistance and charity through the Mah Sing Foundation.
Our Plastics division also continued with its sponsorship programme for students from lower income families. These students were
Information
Additional
sponsored for a 10-month apprentice course in plastic injection moulding, together with the provision of a monthly living allowance and
thereafter, provided with employment opportunity for a minimum of one year upon completion of the course.
Awards And Achievements
I am proud to report that the Company and the projects that we have churned out received both domestic and international accolades.
Notices
Mah Sing Group Berhad was adjudged the Overall Best Company in Malaysia and Best for Disclosure and Transparency in Malaysia
in the Corporate Governance Asiamoney Polls in 2010. In the same poll, we were also honoured with the Best Shareholders’ Rights
and Equitable Treatment in Malaysia. We are humbled by the recognition by CEOs, CIOs, senior executives, heads of research and
senior analysts from fund management and brokerages across Asia (excluding Japan) who had participated in the poll. We also won
The Edge Billion Ringgit Club Award for Highest Compound Returns to Shareholders Over 3 Years.
Form of Proxy
Based on the performance of the Group in 2010, Mah Sing was listed in the Top 10, The Edge’s Top Property Developers Award 2010.
We were also named for the third year running, Best Brand in the Property Category in The BrandLaureate Awards.
Staying true to our philosophy as a premier lifestyle developer, our products were recognised globally for their outstanding innovative
concepts, designs and high-quality offerings. In 2010, 4 of our projects won various awards at the Asia Pacific International Property
Awards 2010 in association with Bloomberg TV. Our Southbay, Penang project won the Cityscape Asia Real Estate Award 2010 for
Best Developer, Waterfront Development (Future). As at 2011, Mah Sing has been notified of 4 more wins namely Best Mixed-Use
Mah Sing Group Berhad Annual Report 2010
Development for Southbay City (Penang Island), Best Retail Development for Star Avenue@D’sara, Best Industrial Development for
i-Parc3 @ Bukit Jelutong and Best Developer Website.
Mah Sing Plastics Industries Sendirian Berhad (MSPI) was also honoured with the Asia Pacific Top Golden Brand Product 2010
organised by Global Business Magazine whilst our Indonesian counterpart, P.T. Mah Sing Indonesia was once again acknowledged
by its customers for satisfactory services rendered. This is evident with the presentation of the Good Quality & Delivery Performance
2010/2011 Award and Certificate of Appreciation for Participating on Cost Improvement 2010/2011 by P.T. Astra Daihatsu Motor,
Indonesia and Best Supplier Laundry System Business Unit 2009/2010 Award by P.T. Panasonic Manufacturing, Indonesia respectively.
25
Chairman’s Statement (Cont’d)
Future Prospects
The Malaysian economy is expected to continue with its growth momentum albeit at a moderate rate of 5 – 6% in 2011. Domestic
demand is expected to increase, and private consumption will be supported by capital spending in all economic sectors. Unemployment
rate is expected to be maintained at the current level of 3.2%.
Notwithstanding that the Overnight Policy Rate (OPR) was raised by Bank Negara Malaysia (BNM) by 25 basis points to 3% on 5 May
2011 and the average Base Lending Rates had risen to approximately 6.6%, the financing environment is still considered favourable.
Minimal impact is expected on the property market as based on past experience, there is little or no correlation between demand for
properties and interest hikes.
The fundamentals for demand in the property market are still sentiments and job securities. The OPR increase by BNM was due to the
sustained growth of the economy and concerns of rising inflation, even though the banking system is still flushed with liquidity.
Wealth creation from the local stock market is also expected to have a spillover effect on the property sector as the gains are invested
in physical properties. The stock market is supported by a robust economy, rising commodity prices and a stronger ringgit.
Further boost from the 10th Malaysian Plan, ETP and high impact projects like Greater KL, Integrated Urban Mass Rapid Transit
System, Kuala Lumpur International Financial District, Warisan Merdeka, the development of the Malaysian Rubber Board land in
Sungai Buloh, the redevelopment of Pudu prison and development of the Iskandar Malaysia corridor will also spur new growth areas
and drive the property demand moving forward, particularly the residential sub-sector.
2011 should be another good year particularly for developers with a knack for creative product development, market strategies, good
branding, track record and developments in strategic locations. The mid to high-end residential segment in well established locations
should continue to thrive together with the mass housing market, echoing the government’s call to provide affordable housing.
We will maintain our focus on the local property market and will continue to offer niche medium to high-end residential, commercial
and industrial to meet market needs. With our strong balance sheet and capacity to gear up to an internally acceptable level of 0.5
times of shareholders’ funds, we will continue our strategy of acquiring landbank in matured locations for our niche products which
enjoy quick turnaround. We shall also focus on acquiring sizable, strategic landbank via outright purchase or joint-venture to continue
our expansion plans.
In line with our strategy, we had on 12 April 2011 made our maiden acquisition for the year in Iskandar Malaysia. The land is just 1
km away from the Port of Tanjung Pelepas and 23 kilometers away from the Jurong Industrial Estate in Singapore. The proposed
development, Mah Sing i-Parc with an expected gross development value of RM610 million is an integrated industrial and business
park which complements the overall development of Iskandar Malaysia and its surrounding areas.
Appreciation
On behalf of the Board, I would like to thank the management and all staff for the continued passion, unwavering commitment,
dedication and loyalty which had enabled us to achieve such strong and remarkable performance in 2010. With your continued
support, we have strengthened our foundation and have emerged stronger to take on the opportunities and challenges ahead.
We would also like to thank all our shareholders, business associates, customers, the Government and the local authorities for their
confidence and trust in the Group throughout these years.
JEN. TAN SRI YAACOB BIN MAT ZAIN (R)
Chairman
26
Creating Venues
That Burst With Life
Garden Plaza, Cyberjaya
www.gardenplaza.com.my
Call +603 9221 6888
Group Managing Director’s Review of Operations
2010 was indeed an exciting and record (i) 3 residential launches, namely our Residence series
in Greater KL (Klang Valley and Kuala Lumpur)
breaking year for the Group. Riding on such as Garden Residence in Cyberjaya and
Perdana Residence 2 in Selayang and in Penang
the encouraging growth momentum Island, our Legenda series, i.e. Legenda@Southbay in
particularly in the domestic market, Penang;
(ii) Our M Series high rise project, i.e. M-Suites @
we had another great year in terms of Jalan Ampang; one of the star performers for the year;
and
financial performance, recognitions, (iii) 2 i-Parc series launches showed healthy take-up rates
landbanking and sales. as we were able to cater for the pent up demand for
such industrial products in those locations.
Our strong branding and track record of being able to consistently In addition to the above, other notable contributors to the
produce quality products, good services and generate innovative increment were:
products in terms of concept and product mix quality were factors
that had strengthened the buyers’ confidence in us as witnessed (i) Residential projects such as:
by the fast take-up rate during our launches. From being a small • Hijauan Residence in Cheras;
time property developer with merely 4 projects in our stable in • One Legenda in Cheras;
2004, we have grown from strength to strength over a span of 6 • Kemuning Residence in Shah Alam;
years. At the end of May 2011, we have 34 projects of which 5 • Aman Perdana in Meru - Shah Alam;
have been completed with 22 ongoing and 7 under planning. The • Residence@Southbay in Penang Island;
Group has a remaining GDV and unbilled sales of approximately • Sierra Perdana in Johor Bahru;
RM14 billion from its 34 projects, and these should last the Group • Sri Pulai Perdana 2 in Johor Bahru; and
for the next 5-7 years. • Austin Perdana in Johor Bahru.
(ii) Commercial projects such:
Delivering Results • Southgate Commercial Centre in Sungai Besi;
• StarParc Point in Setapak.
We reached a new milestone in our financial performance. We
breached the RM1 billion mark in sales, surpassing our target In terms of property segments, the residential sub-sector was
by 55% to RM1.545 billion. Net profit after minority interest of the main contributor as per previous years. The residential
RM118 million grew more than 25% on the back of our successful sub-sector consisted 80% of the sales registered in 2010
launches and previews of our projects during the year. Sales were followed by the industrial sub-sector and commercial sub-
strongly driven by: sector at 18% and 2% respectively. Greater KL remains the
stronghold for the Group’s property projects with 86% of
sales registered from this region. Johor Bahru and Penang
(From left to right)
Island trail with 9% and 5% respectively.
Southbay City, Penang
Icon City, Petaling Jaya
Legenda@Southbay, Penang
28
Core Facts
Group Managing Director’s Review of Operations (Cont’d)
Messages
Activities
Sales by type development
Governance
Financials
Sales by location
Information
Additional
The fast take-up rate, improved operational efficiency, timely execution and delivery of quality property units ensured the Group’s
balance sheets remained strong with net gearing at 0.22 times as at end 2010. The manageable gearing level would give us the
flexibility to further gear up for future land acquisitions when the opportunities arise.
Over the years, we have continuously enhanced our quality, concepts, designs and customer service to build up the Company’s
branding. We believe our commitment to purchasers have been noted and appreciated, reflected in the many repeat customers and
Notices
word-of-mouth referrals that have resulted in closed sales.
With the positive responses towards our launched projects, we foresee that we are able to exceed our sales target of RM2 billion for
2011. Our sales achievement as at 13 May 2011 of RM975 million already covers almost 49% of 2011’s sales target.
Form of Proxy
(From left to right)
M-Suites, Jalan Ampang
Icon Residence, Mont’ Kiara
Garden Plaza, Cyberjaya
Mah Sing Group Berhad Annual Report 2010
29
Group Managing Director’s Review of Operations (Cont’d)
PROPERTY DEVELOPMENT Cementing our footing in the hotspot area along Jalan
Ampang, we ventured into the medium to high-end high rise
Expanding Our Horizons property segment with the launch of M-Suites, the first of our
M brand series, to overwhelming response. Tapping on the
Our strategy of acquiring land in mature locations with success of M-Suites, we acquired a piece of land located just
comprehensive facilities and amenities together with good 1.26km away from M-Suites to build on the M brand series.
accessibility and good catchment from surrounding townships M-City, Jalan Ampang will be another niche project comprising
had enabled us to kick-start the projects at an accelerated rate. serviced residences, small office home office (SoHo) and retail
We had kept ourselves busy mostly in Greater KL with 20 projects outlets. To date, the project has already garnered more than
at various stages of development. 3,000 registrations of interest prior to its preview.
As each of the projects garnered good responses, it gave us On the back of our popular Residence@Southbay project
the confidence and provided the impetus for us to acquire more which is located at Batu Maung, Penang Island, we further
strategic landbank. expanded our reach in the Penang market with the strategic
acquisition of a 61-acre land at Batu Ferringhi earmarked to
In 2010, we mainly launched our medium to high-end residential be a resort style development. This acquisition would mark
products under the Residence and Legenda series. Garden our 5th project in Penang Island.
Residence, Cyberjaya’s first gated and guarded residential project
with lush greenery and resort clubhouse concept proved to be On the industrial front, we officially launched i-Parc @ Bukit
a winner. To tap on the spillover demand from this project, we Jelutong, having garnered tremendous response during
acquired an additional 35-acre land opposite of Garden Residence its preview in 2009. This further prompted us to secure 2
and launched our high rise residential development adjacent to additional lands to cater for the positive demand of our i-Parc
Garden Residence i.e. Garden Plaza. Our second gated and series, paving the way for the launch of i-Parc2 @ Shah Alam
guarded Residence series project launched in Selayang named and preview of i-Parc3 @ Bukit Jelutong.
Perdana Residence 2 after our success with Perdana Residence
also garnered similar excellent response. Riding on the success In the commercial segment, we previewed our Star
of our Residence series in Cyberjaya and Selayang, we forayed Avenue@D’sara towards the end of the year. The project
into the high growth area of Kinrara in Puchong with the preview comprises 3-storey shops, retail lots and offices incorporating
of our Kinrara Residence. We continued with other launches such a neighbourhood lifestyle mall. All the 92 units of the 3-storey
as the award-winning Legenda@Southbay and One Legenda in shop offices offered during the sales launch in April 2011
Penang Island and Cheras respectively and previewed Hijauan were fully taken up. The retail lots for Avenue Street Mall are
Residence in Cheras. currently open for registration.
30
Core Facts
Group Managing Director’s Review of Operations (Cont’d)
Messages
We are also upbeat about the upcoming launch of our Jiangsu province in China, we have taken the stance that we
groundbreaking integrated commercial project, Icon City. This will only act upon it if the venture is justified to be in the best
mega project in Petaling Jaya which is expected to generate interest of the Group.
GDV of more than RM3 billion for the Group, had since
previewed its 30 Jewels consisting 30 units of premium 7 to Moving forward, our land scouting activity will continue
8-storey shop offices to favourable response. To date, it has to remain a priority. In April 2011, we acquired a 206-acre
Activities
achieved approximately 60% take-up rate. land within proximity of the Tanjung Pelepas Port. This newly
acquired land is slated to be an industrial and business park
We believe that there is still a lot of upside to the domestic to be named Mah Sing i-Parc and shall comprise semi-
property market particularly with the pump-priming initiatives detached factories, detached factories and shop offices
of the 10th Malaysian Plan and ETP. As such, we made a with an estimated gross development value of approximately
conscious decision to fully capitalise on opportunities in RM610 million. With this acquisition, we now have 34 projects
Governance
Malaysia. With regards to our joint venture plans to develop under our belt.
a mixed development project in Wujin district in Changzhou,
Landbanking Exercise in 2010
Announcement of Land Size Cost Cost psf *Expected GDV
Projects Acquisition (Acres) (RM million) (RM) (RM million)
Financials
i-Parc2 @ Shah Alam# Feb 19 45 54.4 179
#
Garden Plaza, Cyberjaya Feb 6 22 79.0 346
#
M-Suites @ Jalan Ampang April 1 54 857.0 306
#
Kinrara Joint-Venture July 13 35 61.6 100
Information
Kinrara Residence# July 126 178 32.6 730
Additional
#
i-Parc3 @ Bukit Jelutong July 11 32 66.0 82
#
Star Avenue@D’sara July 18 66 85.0 280
Garden Residence 2, Cyberjaya Nov 35 52 34.0 280
M-City, Jalan Ampangˆ Nov 5 115 560.4 920
Notices
Ferringhi Residence, Penang Nov 61 157 59.2 800
295 756 4,023
Landbanking Exercise in 2011
Form of Proxy
Announcement of Land Size Cost Cost psf *Expected GDV
Projects Acquisition (Acres) (RM million) (RM) (RM million)
Mah Sing i-Parc April 206 55 6.1 610
* As at date of announcement (may have further value-adding)
#
Launched/previewed in 2010
Mah Sing Group Berhad Annual Report 2010
ˆ Previewed in May 2011
PLASTICS
Our Plastics division, via MSPI continued to perform well with an impressive growth of 36% in its revenue compared to 2009, from
RM135.2 million to RM183.6 million. It also more than doubled its profit after taxation in 2010, registering RM12.6 million from RM5.8
million in 2009. The improvement was in tandem with the recovery of the economy during the year resulting in increased demand for its
pallets and automotive parts. It was also able to improve on the margins as it was able to capitalise on the lower material cost arising
from the weakened US Dollar. Fixed overhead costs were also reduced due to the higher sales volume registered.
Artist’s impression only
31
Group Managing Director’s Review of Operations (Cont’d)
KEY PROJECTS LAUNCHED AND PREVIEWED IN 2010
Landed Residential Development - Greater KL
Garden Residence, Cyberjaya
Launched in 1Q2010, Garden Residence stood out as one of Mah Sing’s best selling products of the year. Strategically located
between KL City Centre and KLIA and within the Multimedia Super Corridor in Cyberjaya, this medium to high-end landed residential
development was conceptualised as a self-sustaining residential development within a resort style development. Being gated and
guarded with perimeter fencing for individual precincts for exclusivity, it promotes communal living through its private clubhouse and
various facilities and amenities. This development offers 2 and 3-storey superlink homes, 2 and 3-storey semi-detached homes, 2 and
3-storey bungalows and 3 ½ storey bungalows.
Perdana Residence 2, Selayang
Launched in 1Q2010, Perdana Residence 2 has been fully sold. An extension project of the completed Perdana Residence in Selayang,
this gated and guarded project offers 268 units of 3-storey superlink homes with built-up from 3,182 sq. ft. This resort-styled with lush
greeneries development is located in the heart of Selayang with easy accessibility via a network of highways and trunk roads including
the Middle Ring Road 2, Jalan Kuching, Selayang-Kepong Highway and the Rawang Highway.
Kinrara Residence, Puchong
Kinrara Residence was previewed in 3Q2010 to an encouraging response and was subsequently launched in 1Q2011. With take-up
rate already above 70%, Kinrara Residence is a mixed residential development with a wide range of superlinks, semi-Ds and executive
bungalows, located within the matured township of Puchong corridor. It is also equipped with a clubhouse with facilities such as a
swimming pool, wading pool, multi-purpose hall, gym room, barbeque (BBQ) area and a community centre for residents’ private
enjoyment. Kinrara Residence is expected to benefit from the enormous potential for capital appreciation due to its natural location
next to the 3,084 acres Air Hitam Forest Reserve and its accessibility to Sunway, Subang, Petaling Jaya, Seri Kembangan, Cyberjaya,
Putrajaya and also close proximity to KL City Centre.
(From left to right)
Garden Residence, Cyberjaya
Perdana Residence 2, Selayang
Kinrara Residence, Puchong
32
Core Facts
Group Managing Director’s Review of Operations (Cont’d)
Messages
Landed Residential Development - Greater KL
Hijauan Residence and One Legenda, Cheras
Hijauan Residence is an exclusive development of garden villas, linked semi-detached homes, semi-detached homes, garden
bungalows and bungalows within a gated and guarded community. The final phase of Hijauan Residence featuring 78 exclusive
Activities
4-storey Garden Villa units was opened for preview in 3Q2010. Garden Villa is an ultra spacious modern tropical home that commands
an exceptional 180-degree forest view. It is a 3-generation home with 3 designs to choose from, with built-up areas starting from 7,198
sq. ft. to 8,231 sq. ft. Land areas range from 3,800 sq. ft. to 5,500 sq. ft.
Launched in 3Q2010, One Legenda’s 26 units of 3-storey bungalows offered an average built-up area of 6,000 sq. ft. within a gated
and guarded environment lushed with greenery as the Hulu Langat Forest Reserve is just within walking distance. Priced indicatively
Governance
from RM3.55 million, these bungalows sit on average land size of 8,000 sq. ft. Each individual bungalow would be equipped with
an in-house lift as a user-friendly feature for the elderly or disabled. Its ‘avant-garde’ modern minimalist architectural design provides
maximum privacy and comes with its very own clubhouse facilities. This award-winning project (Best Residential Property for Malaysia
and Asia Pacific 2010) is expected to be the first-of-its-kind in Cheras.
Residents of Hijauan Residence and One Legenda developments are expected to benefit from the ETP due to the recent announcement
of the proposed Sungai Buloh-Kajang MRT Line. Our projects are located near the proposed Taman Suntex Station, which is
Financials
approximately 2.1km and 3km from Hijauan Residence and One Legenda respectively.
Landed Residential Development - Penang Island
Legenda@Southbay, Penang
Information
Additional
Legenda@Southbay, an award-winning project (Best Architecture for Residential Property), was previewed during 4Q2010. Offering 3
and 4-storey resort bungalows in a gated and guarded community with a luxurious resort environment, Legenda@Southbay is situated
on a hillside by the sea. True to its modern concept, Legenda@Southbay homes would be fitted with home automation features and
intelligent security. Each home is also equipped with its in-house lift for added convenience, especially for the elderly or disabled.
The project is also designed with rainwater harvesting catchment system, centralised solar hot water system, sun shade louvers, natural cross-
ventilation layout and allowance for abundant natural lighting - these combined features would contribute to conserve energy, water and nature.
Notices
Since its launch in January 2011, the take-up rate has been steadily increasing.
(From left to right)
Hijauan Residence, Cheras
One Legenda, Cheras
Form of Proxy
Legenda@Southbay, Penang
Mah Sing Group Berhad Annual Report 2010
33
Group Managing Director’s Review of Operations (Cont’d)
High-Rise Residential Development - Greater KL
M-Suites, Jalan Ampang
M-Suites, launched at the end of 2010, has recorded more than 95% take-up rate to date. Represented by 2 modern blocks of 20
storeys, M-Suites offers the most flexible apartment sizes. These freehold units are designed specifically to provide easy ownership,
ensuring long-term rental demand – a criterion which appeals to both investors and residents alike when investing in the city.
Strategically located at the heart of business and lifestyle districts of Kuala Lumpur’s City Centre, it is on the Embassy Row along Jalan
Ampang and approximately 3km from the Petronas Twin Towers. The project offers 2 towers dressed in a chic urban style with 442
freehold units ranging from 501 sq. ft. to 1,630 sq. ft. Available layouts vary from studios, single room, 1 + 1, 2 and 3 as well as 3+1
bedroom apartments. With multiple corner exposures, each unit will enjoy the spectacular panorama of the Embassy Row.
Garden Plaza, Cyberjaya
Garden Plaza was previewed in 4Q2010 to very encouraging response and is slated for an official launch in 2Q2011. It is located in
Cyberjaya, a global ICT hub which is exceptionally well connected with easy links to major locations within Greater KL. One such link
would be Maju Expressway, which also provides an alternative route to the city centre, all within 20 minutes. The project is also in the
vicinity of the renowned LimKokWing University of Creative Technology, which would provide a ready captive market for the project.
The development boasts 3 types of fully furnished Garden Suites, namely Executive, Deluxe and Family Suites. There will also be a
section of commercial lots to cater for retailing and shops for the residents and visitors at Garden Plaza.
Icon Residence, Mont’ Kiara
Icon Residence, previewed during 3Q2010, features 3 towers that are highly articulated 3 dimensionally, giving each tower a uniquely
different profile, with sky bridges linking internal spaces and gardens weaving in and around the units. Garden terraces that are
interspersed with the façade of the blocks are also featured. The freehold residential tower blocks consist of 260 units and offer more
than 200 types of layout designs; thus making every unit unique. Icon Residence is located only a stone throw away from the upscale
Mont’ Kiara and Sri Hartamas known for their expatriate communities.
The official launch of Icon Residence, Mont’ Kiara is expected to take place in 2H2011.
(From left to right - left page) (From left to right - right page)
Icon Residence, Mont’ Kiara Star Avenue@D’sara
Garden Plaza, Cyberjaya i-Parc2 @ Shah Alam
M-Suites, Jalan Ampang i-Parc3 @ Bukit Jelutong
34
Core Facts
Group Managing Director’s Review of Operations (Cont’d)
Messages
Commercial Development - Greater KL
Star Avenue@D’sara
Star Avenue was previewed towards end 4Q2010 and officially launched in April 2011. It consists of STAR series 3-storey shop offices and
Avenue Street Mall Retail Lots, and is the newest and most happening shopping destination in Sungai Buloh. The 125 units of Avenue Street
Activities
Mall retail lots will offer approximately 370,000 sq. ft. of gross lettable area (GLA) spread over four levels with planned ideal tenancy mix such
as supermarket, IT & telecommunications centre, F&B, fashion, convenience, wholesome entertainment and specialty outlets.
Star Avenue is strategically located within a massive population catchment that includes Subang, Subang Bestari, Sungai Buloh, Bukit
Rahman Putra, Ara Damansara, Kota Damansara, Mutiara Damansara, Shah Alam, the upcoming HELP Campus with at least 13,000
students and the upcoming development of 3,300 acres at Rubber Research Institute Malaysia (RRIM). In addition, Star Avenue is the
Governance
first commercial project along Jalan Sungai Buloh that directly affronts the new Jalan Sungai Buloh highway to Shah Alam and Kota
Damansara. It also enjoys great visibility from Jalan Lapangan Terbang/Jalan Sungai Buloh, as well as good accessibility via Jalan
Sungai Buloh, Guthrie Corridor, NKVE and Jalan Lapangan Terbang Subang.
The STAR Shop Offices were fully taken up during its sales launch and the Avenue Street Mall retail lots are currently open for registration.
Financials
Industrial Development - Greater KL
i-Parc2 @ Shah Alam
i-Parc2, launched during 2Q2010 has seen a 90% take-up rate to date. A 64-unit industrial parcel in Section 26 Shah Alam, it is
situated centrally within the HICOM Industrial Park zone which is an established and preferred address for the likes of industry giants
like Proton Malaysia, Sharp Electronics and Toyota. The project comprises 3-storey semi-detached factories with 3 types of design
Information
Additional
with built-ups of approximately 5,339 sq. ft. (Type A), 6,500 sq. ft. (Type B) and 7,621 sq.ft. (Type C).
i-Parc2 will enjoy superior accessibility by virtue of a network of highways leading to all major locations and key logistic ports. An
unobstructed Kesas highway connects i-Parc2 to Pulau Indah which houses both Northport and Westport to the southwest. Towards
the east will be North South Central Link (Elite) which leads to the Kuala Lumpur International Airport and further southbound to
Seremban, Johor and Singapore. Northbound access will see convenience via the Guthrie Corridor which links directly to the North
South Highway (PLUS). i-Parc2 is currently under construction and it is expected to be ready by early 2012.
Notices
i-Parc3 @ Bukit Jelutong
i-Parc3 offers 25 units of 3 types of design with built-ups of approximately 5,339 sq. ft. (Type A), 6,500 sq. ft. (Type B) and 7,621 sq.ft.
(Type C). i-Parc3 shares the same infrastructure and amenities as i-Parc @ Bukit Jelutong, being only 2km away. Accessibility is second
Form of Proxy
to none where it sits squarely on the intersection of New Klang Valley Expressway (NKVE), Guthrie Corridor Expressway (GCE) and North
South Expressway Central Link (ELITE). Since its preview in 4Q2010 and subsequent launch in 1Q2011, the project has received very
favourable response.
Mah Sing Group Berhad Annual Report 2010
35
Group Managing Director’s Review of Operations (Cont’d)
KEY LAUNCHES/PREVIEW PLANNED FOR 2011
Landed Residential Development - Greater KL
Garden Residence 2, Cyberjaya
Due to the overwhelming response of the Garden Residence launch, the Group had purchased another parcel of land adjacent to the
current location for the development, named Clover@Garden Residence. This development comprising 2 and 3-storey semi-detached
homes, were inspired by the high demand of similar products in Garden Residence. This project is expected to be launched by 2H2011.
Bayu Sekamat, Hulu Langat
This 6.4-acre freehold development is located in Taman Sri Sekamat which is an established residential housing estate. The project will
consist of link houses and medium-low cost apartments, and has a peaceful environment with two schools nearby. It consists of 42
units double storey terrace house built with a concept of affordable living yet spoilt with unparalleled finishing and attention to detail.
Land area is at 1,400 sq. ft. (20’ x 70’) with a built-up area of 1,894 sq. ft.
Bayu Sekamat is only 5 minutes drive away from modern amenities like shopping malls, hypermarkets and hospitals and approximately
30 minutes drive to KL City Centre via the Cheras-Kajang Highway. It should also be noted that the newly proposed MRT station of the
Sungai Buloh - Kajang line is located within 3km from the project.
The project was officially launched in May 2011 to overwhelming response with 100% take-up rate.
Landed Residential Development - Penang Island
Ferringhi Residence, Penang
Situated in the established tourist location in Batu Ferringhi, Ferringhi Residence shall be the epitome of luxurious resort living. This
gated and guarded community in a perfect location enjoys rolling green hills to one side and a golden shoreline to the other. Comprising
high-rise resort condominiums and low-rise condo villas, segmented precincts are set apart by their respective entrance statements
as well as a resort clubhouse and green features.
The project is scheduled for preview by 2H2011.
(From left to right)
Clover @ Garden Residence, Cyberjaya
Bayu Sekamat, Cheras
Ferringhi Residence, Penang
36
Core Facts
Group Managing Director’s Review of Operations (Cont’d)
Messages
High-Rise Residential Development - Greater KL
M-City, Jalan Ampang
One-of-a-kind Garden City Living, M-City is located along Embassy Row, Jalan Ampang and sits on 4.9-acre land. M-City’s concept
defies the usual grounds of property architecture with 6 thematic hanging gardens spanning over 4 acres at levels 7, 11, 17, 23, 29
Activities
and 35. Incorporating 3 towers, M-City introduces 4 unique components, namely residential suites, designer SOHO, Sky Villas and
3-storey boutique shops, making M-City a city to Live, Work and Play. The indicative boutique retail lots’ built-up size is 28’ X 78’ and
for the designer SoHo, it ranges from 780 sq. ft. to 1,300 sq. ft. for single to duplex units. Residential suites are planned with small to
medium-sized layouts from 500 sq. ft. to 1,800 sq. ft. M-City also offers Sky Villas with land for each unit with indicative built-up size
from 4,500 sq. ft. to 7,000 sq. ft.
Governance
True to the garden city concept, this freehold development provides owners with comfortable, sustainable and environmentally-friendly
surroundings that are cost-effective to own and operate. M-City utilises green features like energy efficiency and conservation of natural
resources to name a few.
The designer SoHo and boutique retail components for M-City are targeted for preview in 2Q2011.
High-Rise Residential Development - Penang Island
Financials
Icon Residence, Penang
Icon Residence on Pykett Avenue is located at the crossroads of Burmah and Anson Road, and adjacent to Penang Island’s most famous
street, Gurney Drive. This location is synonymous for its legacy as one of the most prime and high-end residential enclaves on Penang Island.
Information
Additional
A remarkable tribute to architectural excellence, Icon Residence offers more than just fashionable living spaces. Behind this one-of-
a-kind façade lies a range of power features that were designed to impress. From hanging plants to gurgling springs, this “Garden of
Eden” teases and serenades with its intricate water features and landscaping.
With the practical built-up sizes of 1,200 sq. ft. to the spacious 3,200 sq. ft., there will also be unique facilities built into the tropical
environment to cater to the modern lifestyle.
The project is scheduled for preview by 2H2011.
Notices
(From left to right)
M-City, Jalan Ampang
Sky Gym @ M-City, Jalan Ampang
Form of Proxy
Icon Residence, Penang
Mah Sing Group Berhad Annual Report 2010
37
Group Managing Director’s Review of Operations (Cont’d)
Mixed Development - Greater KL
Icon City, Petaling Jaya
An environmentally conscious project, Icon City is designed with sustainability in mind coupled with iconic architecture and modern
infrastructure. Icon City is poised to be the ultimate integrated development in Petaling Jaya and befits the preferred lifestyle of the
new generation.
Strategically located on 19.6 acres in Petaling Jaya, at the intersection of the Lebuhraya Damansara-Puchong (LDP) and Federal
Highway, Icon City enjoys exceptional visibility and accessibility to a network of other highways and expressways, such as NKVE,
ELITE, NPE and KESAS. Icon City is also easily accessible via public transportation, with both Seri Setia and Setia Jaya KTM stations
and Kelana Jaya LRT station within its vicinity.
One of the development components of Icon City is the 30 units of premium 7 to 8-storey Lifestyle Shop-Offices; aptly known as 30
Jewels. With a unique concept of 3 retail levels, followed by 2 levels showroom and 2 corporate suite floors (+1 level of penthouse
director’s suite), 30 Jewels accord direct frontage onto the busy Jalan SS8/39 and LDP highway. The 30 Jewels, priced from RM7.7
million onwards, were previewed in April 2011 and have to date received strong response.
In addition to the 30 Jewels, Icon City will also have a new concept Gourmet Street, 2 and 3-storey F&B outlets, small office versatile
office (SOVO) suites, serviced residences, retail mall, a hotel and corporate office towers. The spaciously-designed duplex SOVO suites
shall offer unparalleled levels of flexibility, adapting to users’ needs and will be priced from RM570,000 onwards. These SOVO units
shall offer two layouts (built-ups of 750 sq. ft. and 990 sq. ft.) and are expected to be previewed in 2Q2011.
Registrations for the serviced residences with sizes ranging from 550 sq. ft. to 1,820 sq. ft., are also expected to take place in 2Q2011.
Mixed Development - Penang Island
Southbay Plaza, Penang
Southbay Plaza is the first phase of Southbay City’s offering of a new unique living experience. Sitting on arguably the most accessible
location in Penang, Southbay Plaza boasts access via sea, land and air with close proximity to the Second Link Bridge which is due
for completion in 2013.
(From left to right)
Icon City, Petaling Jaya
Office View @ Icon City, Petaling Jaya
Southbay Plaza, Penang
38
Core Facts
Group Managing Director’s Review of Operations (Cont’d)
Messages
Featuring a modern design expression within Southbay City, Southbay Plaza offers a stunning balance between prime location, lifestyle
amenities and luxurious living spaces. It is an absolutely gorgeous landmark with two majestic towers connected by a retail podium,
perfect for the classiest and is currently the most architecturally distinct high-rise building in Batu Maung.
Southbay Plaza’s lifestyle retail shops combine a rich business and retail experience with variety of layouts affording flexibility of self-expression.
The residences at Southbay Plaza set a new standard for sustainable luxury real estate in Batu Maung by blending luxury amenities and life-
Activities
enhancing benefits with breathtaking views of the sea, Penang Bridge, the new Second Link and the Penang International Airport.
The project is scheduled for preview by 2H2011.
Industrial Development - Johor Bahru
Governance
Mah Sing i-Parc, Iskandar Malaysia
In April 2011, the Group acquired approximately 205.72 acres of freehold land in Johor Bahru, slated for the development of Mah Sing
i-Parc, an integrated industrial and business park. Mah Sing i-Parc is only 1km from Port of Tanjung Pelepas (PTP) and 23km from
Jurong Industrial Estate in Singapore. Such close proximity to PTP would attract industries which support port and marine activities,
for example those that provide bunkering facilities, ship repairs and cargo handling services. As PTP is a major transportation and
transshipment hub, there is a large target market comprising import, export, trading, forwarding and warehousing services.
Financials
Based on preliminary plans, Mah Sing i-Parc shall develop semi-detached factories with built-up of approximately 5,400 sq. ft., priced
from RM1.4 million and detached factories with built-up of approximately 10,000 sq. ft., priced from RM2.4 million. There shall also be
some factory land of approximately 0.5 acre to 1 acre per lot for sale within the industrial and business park.
The Group is expected to initiate awareness campaign for the development by 4Q2011.
Information
Additional
Ready To Forge Ahead
Property transaction values exceeded expectations and topped RM100 billion for the first time in 2010. We believe that 2011 will be
another good year of record property transactions and the house prices will continue to appreciate, especially in hotspot locations.
We will continue to scout for land to cater for the mid to high-end segment in well established locations including greenfield and brownfield
Notices
developments land in Malaysia’s hotspot areas namely Greater KL, Penang Island and Iskandar Malaysia in Johor Bahru. We would also
be looking to acquire larger tract of land to address the mass housing market demand which we foresee making a comeback in the
property cycle within the next 2 years. In addition, we are also open for any joint venture proposals and remain keen on Government land
privatisation projects.
We have the balance sheet to fund the acquisitions that fit our business model and allows us to value add. As competition from other
Form of Proxy
property developers to obtain land in prime locations is inherent and could escalate the land cost, we will strive to maintain an optimal
balance between landbank and capital adequacy.
Through the years, we have been able to produce laudable results thanks to our passionate, motivated and dedicated staff. Their
hardwork and perseverance had ensured that we constantly delivered to our stakeholders. With continuous teamwork, support and
trust, we shall continue to chart our course in becoming a world-class regional developer.
Mah Sing Group Berhad Annual Report 2010
TAN SRI DATO’ SRI LEONG HOY KUM
GROUP MANAGING DIRECTOR/GROUP CHIEF EXECUTIVE
39
Elevating Architectural
Benchmarks
40
Icon City, Petaling Jaya
www.icon-city.com.my
Call +603 9221 6888
Corporate Social Responsibility
Corporate social responsibility (CSR) is a concept with a growing currency at Mah Sing Group Berhad which encompasses corporate
responsibility and corporate citizenship. Being a continuing commitment by the Group, the Group’s main objective through CSR
activities are to behave ethically and to contribute to the economic development of the nation while improving the quality of life of our
workforce, their families as well as of the local community and society at large.
Through Mah Sing Foundation, the charitable arm of Mah Sing Group Berhad, the Group has successfully continued to build sustainable
livelihoods while voluntarily integrating medical, educational, humanity and national building concerns into our business operations and
in our interaction with customers, shareholders, investors, Government, and most importantly, our valued workforce.
About Mah Sing Foundation
Mah Sing Foundation is dedicated to assisting those in need. In tandem with our aim to consolidate the Group’s charitable efforts, Mah
Sing Foundation has been set up to receive and administer funds for purposes which fall within the spheres of medical, education,
human relief, and nation building while seeking to raise funds for its treasury through annual fund raising events and activities.
Mah Sing Foundation adheres to the following set of guidelines in administering its support:
(a) Medical assistance for Malaysians who are suffering from disease and disability, or critically ill. The Foundation also adopts and
supports schemes of organisations that oversee public health and welfare, including provision of financial support.
(b) Financial assistance and human relief schemes for those who are economically deprived and distressed.
(c) Education aid encompassing subsidies and donations to deserving students in need. The Foundation provides support to primary,
secondary, tertiary and post-graduate students towards the advancement of their respective education path.
(d) Encouragement towards a variety of social and sports related activities which enriches the community while simultaneously serving
to promote national unity.
42
Core Facts
Corporate Social Responsibility (Cont’d)
Messages
In the year 2010, Mah Sing Foundation granted financial assistance to the following causes:
Date Recipient Description
6th January Yayasan Asia Works Selangor & Wilayah Persekutuan Medical
Activities
5th March IMU Education Sdn. Bhd. Education
23rd July Yayasan Bursa Malaysia Underprivileged
28th July Kelab Putera 1 Malaysia – Gaza Humanitarian Relief Human relief
Global Entertainment Sdn. Bhd.
4th August Underprivileged
Persatuan Kebajikan Kanak-Kanak Istimewa Insan Wilayah & Selangor
Governance
3rd September IMU Education Sdn. Bhd. Education
15th November Tabung Pendidikan & Kebajikan – PKIPM Underprivileged
1st December Bendahari UTM Education
6th December Mutiara Breast Cancer Society Medical
Financials
Information
Additional
Notices
Form of Proxy
Mah Sing Group Berhad Annual Report 2010
43
Instilling A Sense of Desire
In All Our Creations
Garden Residence, Cyberjaya
www.gardenresidence.com.my
Call +603 9221 6888
Sustainability Report
To achieve long-term sustainability in performance, the Group recognises a need for a proper balance in bottom-line achievement,
safeguarding of the welfare and mutual growth of its people and the partners it works with, giving to the community and striking
a harmony with the environment it operates in. The Group strives to incorporate consideration for all these aspects in pursuing its
corporate objectives and activities.
The key stakeholders identified by the Group as important to its success and with whom the Group will continue to nurture stronger
relationships include:
Customers, for whom the Group will continuously improve on its delivery and branding for enhancement of investment value
and product satisfaction
Investors, who have trusted and supported the Group, to whom the Group will continue to deliver promising returns as
rewards for their confidence
Business Partners, with whom the Group shares knowledge, network and opportunities for mutual benefits and success
Contractors and Suppliers, the selective ones that the Group seeks aligned values on continuous improvement to quality and
operating standards for long-term mutual growth
Employees, the most valuable asset the Group treasures, for whom the Group will ensure personal growth and satisfaction
Community and the Environment, that the Group takes great concern of, and with whom the Group aims to operate
harmoniously alongside
The Group is proud to report as follows its sustainability efforts and achievements so far in the balancing of the various objectives.
SUSTAINABLE RETURNS TO SHAREHOLDERS
The Group has grown 124% in revenue since 2006 to achieve RM1.1 billion revenue for financial year 2010. Over the same 5-year
period, net profits attributable to shareholders have grown 81% to RM118 million. Shareholders’ funds at RM919 million as of 31
December 2010 is 191% increase from the level 5 years ago. Return on equity is at 11% - 13% for the last 4 years. The Group has
also been consistently paying dividends at more than 40% of net profit annually during these periods.
With strong landbank and financial position, proven track records in planning, execution and delivery, the Group is confident it is well
equipped to continue its journey to the next level of growth.
The Group was recognised for its consistent track record on returns to shareholders in July 2010 with The Edge Billion Ringgit Club
Award for Highest Compound Returns to Shareholders Over 3 Years. Our Group Managing Director/Group Chief Executive was named
The BrandLaureate Entrepreneur of the Year 2010-2011.
GOVERNANCE AS ENGINE OF SUSTAINABLE GROWTH
The Group places high priority in ensuring good governance in all areas of its operation, practises and administration processes.
Appropriate mechanism and controls are in place to ensure satisfactory levels of accountability and integrity. The Group is also
committed to ensuring high standards of disclosure and transparency, so that relevant and material information are disseminated
promptly to shareholders and other stakeholders.
The dedicated investors relations and communications teams within the Group have in place road maps for corporate event
communications and roadshows with investors. The investors relations team met with over 100 investment research analysts and fund
managers in financial year 2010. Efforts and attention are directed towards ensuring high quality communications with all stakeholders.
The corporate website www.mahsing.com.my had a total revamp and makeover in 2010 to ensure a more informative and enjoyable
experience for visitors.
46
Core Facts
Sustainability Report (Cont’d)
Messages
Control procedures, systems and policies are implemented internally to ensure operation efficiency and compliance. The property
division has obtained certification for ISO 9001:2008 Quality Management System, demonstrating the division’s commitment to
ensuring highest standards in the product delivery processes and systems towards meeting customers’ satisfaction and requirements
by the applicable statutory and regulatory bodies. The plastics manufacturing division is also ISO 9001 certified since 2000, with quality
management systems in place that conform to customer and regulatory requirements. The plastics division’s commitment to quality
and reliability in delivery has made it one of the biggest plastics manufacturers in Malaysia, and a reputable OEM supplier to world
Activities
renowned leaders in electronic and electrical products, as well as automotive industries in both Malaysia and Indonesia.
The Group has also implemented a performance management system to enhance its corporate and operating culture through better
measurement, monitoring, and reporting of performance.
The Group’s efforts on governance are recognised with the following awards:
Governance
- Corporate Governance Asiamoney Polls 2010
- Overall Best Company for Corporate Governance in Malaysia
- Best for Disclosure and Transparency in Malaysia
- Best for Responsibilities of Management and the Board of Directors in Malaysia
- Best for Shareholders’ Rights and Equitable Treatment in Malaysia
- Best for Investor Relations in Malaysia
- Best Investor Relations Officer in Malaysia
Financials
- 2010 National Annual Corporate Report Awards (NACRA) – Certificate of Merit for the Group’s Annual Report 2009
The Group’s property division is recognised for its excellence in many aspects of its delivery with the following awards:
- Asia Pacific International Property Awards 2010 in association with Bloomberg Television
- 5-Star Awards for Best Property Malaysia (One Legenda, Cheras)
- 5-Star Awards for Best Architecture Malaysia (Multiple Units) (Legenda@SouthBay, Penang)
Information
Additional
- Best Property Asia Pacific (One Legenda, Cheras)
- Highly Commended Award, Best Office Development Malaysia (The Icon, Jalan Tun Razak, KL)
- Cityscape Asia Real Estate Award 2010 – Best Developer, Waterfront Development (Future) for Southbay, Penang Island
- Listed in Top 10, The Edge’s Top Property Developers Award 2010
- The BrandLaureate 2010-2011 Award - Best Brand in the Property Category (third consecutive year)
As recognition for its excellence in operation and manufacturing practises, the plastics division has garnered various awards domestically
Notices
and internationally, from both the industry and from its customers. From its customers, the division received the following recognitions:
- Good Quality & Delivery Performance Award, 2009/2010 and 2010/2011 by P.T. Astra Daihatsu Motor, Indonesia
- Certificate of Appreciation for Participating on Cost Improvement 2010/2011 by P.T. Astra Daihatsu Motor, Indonesia
- Best Supplier Laundry System Business Unit 2009/2010 Award by P.T. Panasonic Manufacturing, Indonesia
- Outstanding Award of 2009 S.E.A. Supplier Innovation by Samsung Electronics
Form of Proxy
- 2008 Best Practice Productivity Award by Samsung Electronics (M) Sdn. Bhd.
- “Excellent Effort and Contribution 2007” Award by Panasonic HA Air-conditioning (M) Sdn. Bhd.
- “Best Supplier Award - Plastic Injection 2006” by Samsung Electronics (M) Sdn. Bhd.
Its achievement is also recognised in the industry, with the following accolades and awards:
- The Asia Pacific Top Golden Brand Product 2010 by Global Business Magazine
Mah Sing Group Berhad Annual Report 2010
- 8th Asia Pacific International Honesty Enterprise – Keris Award 2009 by Entrepreneur Development Association Malaysia
- The BrandLaureate – 2008 SME Chapter Award for Best Brand, Corporate Branding and Manufacturing
- The Best Practice Vendor Award by SEMA for achieving Level 7 of MSPI-BP 10 Factory Innovation
- “Industry Excellence Awards 2004-Special Award for Product Excellence (Innovative Product)” by Ministry of International
Trade & Industry Malaysia (“MITI”)
47
Sustainability Report (Cont’d)
IN HARMONY WITH THE ENVIRONMENT
Builder Of Green Spaces
The Group aims to be a leader in premier lifestyle concepts incorporating iconic architecture. Many projects of the Group encompass
features such as CONQUAS assessment for consistency in quality, green building features, smart home capabilities and secure living
environment.
The Group’s property division is committed to maintaining high standards of environmental protection and management practises
throughout the whole delivery system from design and planning stage, during construction to post-occupancy monitoring. The
Group’s projects aim to achieve high standards of green compliance, with its recent development, Icon City, benchmarking against 3
green standards in its various components, i.e. Green Building Index (GBI), Green Mark and Leadership in Energy and Environmental
Design (LEED).
To minimise environmental impact, the Group’s development projects incorporate extensive energy and water saving features, use
of green label building materials, and other innovative eco-friendly policies, practises and programmes. Environmental management
policies are in place to monitor implementation of targets for minimisation of energy use, water use and construction waste. For
certain projects, certified Green Mark professional, Green Mark manager and GBI facilitator are engaged during design phase to
ensure building design and enhancement of building performance for Green Mark certification and implementation, and to reduce
building’s environmental impact over its functional life cycle. Many of our projects are assessed by Singapore’s Construction Quality
Assessment System (CONQUAS).
During construction, waste management plan is implemented for proper disposal and recycling or reuse of construction waste and
materials. For relevant projects, to monitor effectiveness of green initiatives post implementation, survey on building occupants’ post-
occupancy thermal comfort, for example, will be conducted. Recycling bins will be provided for residents, and Building User Guide
will be distributed to residents to create awareness of the various green features and innovations.
Energy saving features incorporated in some of the projects include use of passive design principles to promote good thermal indoor
occupants comfort whilst allowing maximum day-lighting internally. This is to achieve low overall thermal transfer value (OTTV). 4 Ticks
rated air-conditioning systems, energy-efficient refrigerators and clothes dryers certified under Energy Labelling Scheme are provided
for certain residential units. T5 lamps with electronic ballasts are proposed for common areas, which are expected to save 40% in
lighting power consumption. Motion sensors are installed in common areas to reduce operational costs as lightings are switched on
only when traffic is detected. Other features such as centralised solar hot water system are provided for certain properties.
To save water, sanitary fittings certified under Water Efficient Labelling Scheme (WELS) are used. Rainwater harvesting system is
installed in some projects to harvest rainwater for landscape irrigation system. Centralised water filtration system is installed for some
properties. Submetering of major water consumption such as irrigation, swimming pools and other water features is practised for
better monitoring and hence management of usage.
For building materials, green label products are used as far as possible. These include low VOC carpet, paint, and adhesive. Green
label plasterboard and laminate flooring are proposed for certain projects. Industrialised Building System (IBS) is used for sustainable
construction and to minimise construction waste.
Some of the interesting greenery initiatives include a roof top garden that accounts for over 25% of roof area (proposed for Icon
Residence, Mont’ Kiara) to mitigate urban heat island effect. Also proposed for Icon Residence, Mont’ Kiara are eco-ponds, herb
gardens and vertical green walls. The use of compost recycled from horticulture waste is proposed for better site management to
promote conservation and restoration efforts.
Other innovative green features include saltwater chlorination system to produce on-site chlorine generation; syphonic drainage
system to operate full flow discharge instead of at part full flow rates; and automated waste collection system, a state-of-the-art
pneumatic conveying system.
48
Core Facts
Sustainability Report (Cont’d)
Messages
Lush landscapes of tropical gardens, concept for better ventilation and spaciousness, roof garden, private backyard, sun shading,
cross-ventilation, rain protection, cascading water features, jogging tracks and running trails are other eco-friendly features incorporated
for certain landed property projects of the Group to promote healthier, lifestyle living.
The Group’s emphasis on best architecture, quality and environmental friendly features is also extended to its commercial projects.
This is evident in the success of The Icon, Jalan Tun Razak, being the first Grade A building to be assessed under CONQUAS
Activities
assessment in Malaysia. The Icon, Jalan Tun Razak was bestowed the “Highly Commended Award in the Best Office Development”
category in the 2010 Asia Pacific Property Awards in association with Bloomberg Television.
To support Earth Hour, a global initiative by WWF (World Wildlife Fund), the Group’s headquarters participated in the turning off of non-
essential lights for an hour on 26 March 2011. The Group also displays the Earth Hour banner on its website days prior to 26 March
2011. Turning off lights and other electrical equipment during lunch breaks and absences is a group-wide practise throughout the year.
Governance
ISO 14001 (Environmental Management) Certified Plastics Manufacturing Division
Plastics products are growing in popularity for its economics, ergonomic and also environmental benefits as plastics can be reused
and recycled. Using modern facilities and technologies combined with strict enforcement of quality, productivity and innovative best
practises in manufacturing, the Group’s plastics manufacturing division offers wide range of proprietary products which carries the
‘MS’ brand for Plastic Pallets and Containers, ‘Magnum’ and ‘Cyber’ for Indoor and Outdoor Furniture and ‘MS88’ for Motorcyclist
Helmets. The division is also a significant player in the Original Equipment Manufacture (OEM) market focusing on electronic and
Financials
electrical products in Malaysia. The Indonesian facility supplies OEM parts and components for the automotive, electrical and electronic
industries.
As a commitment to embracing highest standards in environmentally friendly practises, the Group’s plastics manufacturing division
is ISO 14001: 2004 certified since 2007. The division has in place good environmental management system and complies with
recommended requirements for environmentally responsible manufacturing practises. The division is also certified by customers as
Information
an Eco-Partner Affiliate Company which fulfills the standards for control of substances with environmental impact within products and
Additional
has established a stable environmental quality control system.
Since 2008, the plastics manufacturing division has invested into a total of 12 units of new injection moulding machines with energy
saving features as well as sound reducing (low noise) for a better working environment.
Notices
Form of Proxy
Mah Sing Group Berhad Annual Report 2010
49
Sustainability Report (Cont’d)
A MOTIVATED TEAM TO DRIVE GROWTH
Balanced Workforce
Breakdown of employees by gender Breakdown of employees by Breakdown of employees by age
professional category
The Group does not discriminate against any particular group in its employment practises, and promotes meritocratic recruitment as
well as remuneration based on competency.
The Group’s property and investment holding division employs more female (55%) than men (45%). The female to male proportion for
Group (combined with plastics division) is 37% and 63%.
The proportion of executive to non-executive is 76% and 24% for property and investment holding division. The proportion for Group
(combined with plastics division) is 35% and 65%.
Majority or 61% of staff for property and investment holding division are aged between 30 and 50 years old. The proportion at Group
(combined with plastics division) is about equal for age group of less than 30 years (47%) and between 30 and 50 years old (48%).
Engaging With Employees
Recognising the importance of listening to the employees to understand the issues and concerns faced by all levels of the organisation,
the Group embarked on a Organisational Health Assessment exercise. The exercise involved an independent gathering of feedback
from staff of all ranking on questions surrounding leadership, teamwork, infrastructure and culture. This is followed by extensive
analysis sessions, setting up of focus teams and follow-up implementation workshops to address the issues identified.
It is hoped that the participation and involvement of employees from all levels will bring about improvement to work quality, efficiency
and greater staff motivation. The management will also explore further communication sessions between management-employees,
similar to the interaction sessions conducted that involved dialogue with the Group Managing Director.
50
Core Facts
Sustainability Report (Cont’d)
Messages
Training And Development
The Group aims to align its staff development closely to the growth of the organisation. During the year, the training facilities at HQ
were upgraded to cater to the tremendous growth in training needs. A training road map that comprises both internal and external
training courses has been drawn up for individual staff. Training courses are not restricted to technical courses that are competency
specific. The Group encourages development of staff into well rounded individuals. Included in the training road map are courses and
Activities
talks that are aimed at not just individual self-development and personal growth, but those that promote healthy work-life balance. For
example, the Group organised a grooming session talk titled “Face of the New Millenium” in 2010, conducted by a renowned beauty
care consultant to share tips on beauty and health care for the enjoyment of female staff.
Sponsorship of Learning
Governance
In line with the Group’s training and development objective, the Group also sponsors on selective basis learning courses undertaken
by staff towards attainment of certificate/qualification. This helps staff to equip themselves with qualification whilst acquiring the
relevant knowledge and skills.
Since 2008, the plastics division has also sponsored a total of 8 students from lower income families for a 10-month apprentice course
in plastic injection moulding. Besides providing them with monthly allowance, it undertakes to employ the students for a minimum
period of one year upon completion of the course.
Financials
Rewards And Recognition
The Group’s Employee Share Option Scheme (ESOS) was extended in July 2009 for another five years to July 2014. In addition to the
annual salary increment and bonus incentives, the objective of the ESOS scheme is to reward and retain employees of the Group who
have contributed to the Group’s success, and whose services have proven to be invaluable to the continued growth of the Group. The
scheme also aims to motivate the Group’s employees towards better performance through greater dedication and loyalty and instilling
Information
in them a greater sense of ownership.
Additional
During the financial year 2010, new batches of ESOS were granted to deserving employees of the Group.
Health And Safety
Safety and health is of utmost importance and the Group continues to implement programmes, training and awareness exercise
to limit safety related incidents and to improve lost time case rates. Safety measures in place include security guards, surveillance
Notices
equipment at relevant work locations, and appropriate notices and announcements on safety procedures. The plastics division, for
example, has implemented OHSAS 18001 (Occupational Health And Safety Assessment System) since April 2010 and has set target
to achieve certification by external accredited certification body by first quarter of 2012.
The Group also imposes requirements on its business partners such as the contractors to comply with relevant safety, health and
welfare regulations.
Form of Proxy
REACH OUT TO THE COMMUNITY
The Group’s efforts on corporate social responsibility are carried out via Mah Sing Foundation. Its support during the year towards
causes in areas of medical, education, and assistance for the underprivileged and human relief are set out in pages 42 to 43.
Mah Sing Group Berhad Annual Report 2010
Ongoing Efforts
The Group is of opinion its efforts thus far have achieved satisfactory balance on bottom-line growth, safeguarding of welfare of people
and community as well as striking a harmony with the environment. Whilst there are shortcomings and challenges to overcome,
proactive efforts are ongoing in all aspects and the Group is committed to improve and further engage in higher standards of
sustainability performances, practises and activities.
51
Building Sustainable
Futures
Legenda@Southbay, Penang
www.southbay.com.my
Call +604 627 1888
Calendar of Events
February 2010
January 2010 Several developments such as Sri Pulai Perdana 2, Legenda@Southbay, One
Legenda, Sierra Perdana hosted Chinese New Year celebration for buyers.
Pre-Chinese New Year Celebration were held for guests Various interesting activities were organised such as lion dance show, 24-drum
and buyers at Sierra Perdana. performance, fortune chambers, eating mandarin contests, etc.
21 March 2010
A Feng Shui talk and consultation
session was held at Sri Pulai
Perdana 2 by international Feng
Shui consultant Master Louis Loh.
2-4 April 2010
20 June 2010
Participated in Penang Fair in
Medan City.
Happy Father’s Day celebration at Sierra Perdana to pamper
23-24 June 2010 fathers with exciting activities such as foot massage, family photo
session and free hair cuts.
Participated in Penang
Mega Property &
Investment Expo 2010 at
Queensbay Mall, Penang.
54
Core Facts
Calendar of Events (Cont’d)
Messages
25 July 2010
Official launch of cluster
house with antique car show
Activities
16-18 July 2010 at Sri Pulai Perdana 2 show
village.
Preview of Icon
31 July - 1 August 2010
Residence, Mont’ Kiara
14-15 August 2010
was held at Sime Darby
Official launch of Garden
Convention Centre
Residence with show units Preview of Legenda@Southbay Show Village and Legenda Scenic Show bungalow.
with more than 1,200
Governance
ready for viewing.
potential buyers turning
up.
Financials
Information
Additional
Notices
Form of Proxy
21-22 August
2010
Preview of Austin
Suites Serviced
3-5 September 2010
Residence in
Johor Bahru with
Mah Sing Group Berhad Annual Report 2010
Preview of M-Suites at The Icon Jalan Tun Razak
excellent response.
sales gallery with show units. More than 1,000
potential buyers turned up.
18 September 2010
Sales launch for One Legenda was held in conjunction with
the Mid-Autum Celebration with a turn out of more than 1,000
guests. Event highlights included fire-eating show, acrobatic
shows and children dances.
55
Calendar of Events (Cont’d)
19 September 2010
Hari Raya celebrations with exciting activities being
19 September 2010 organised such as batik making workshop, Chinese
tea tasting and calligraphy session at Sierra Perdana.
A satay party was held at Kinrara Residence site office.
Mid-Autumn celebration at Sri Pulai Perdana 2 in
conjunction with Mid-Autumn festival activities such
as story telling and traditional moon cake making
demonstration.
23-24 October 2010
Participated in iProperty.com Expo in Marina Bay
Sands, Singapore.
30-31 October 2010
Kiddies Wonderland was hosted at One Legenda whereby children were entertained
with a host of interactive activities such as tattoo drawings, figurine painting and
scratch art.
56
Core Facts
Calendar of Events (Cont’d)
Messages
13 November 2010
Feng Shui Talk by renowned Master Joey Yap was held at One Legenda, attracting a crowd of more than 200 people.
21 November 2010
Activities
School Holiday Bonanza event at Sri Pulai Perdana 2.
Governance
Financials
Information
Additional
Notices
Form of Proxy
Mah Sing Group Berhad Annual Report 2010
19 December 2010
Christmas Celebrations were held at Sierra Perdana. Many fun-filled events were
8 January 2011 held such as Handmade Soap Workshop, Christmas Photo Corner, etc.
Mah Sing Group held its Annual Dinner 2010
themed “Night of Fame” at JW Marriott
Hotel.
57
Creating Art
In Architecture
Star Avenue@D’Sara
www.mahsing.com.my
Call +603 9221 6888
Corporate Governance Statement
The Board of Directors (“the Board”) of Mah Sing Group Berhad (“Mah Sing” or “the Company”) believes that good corporate
governance practises are of high importance to the long-term strategic objective of Mah Sing Group (“the Group”) and its drive for
sustainable continuous growth while achieving operational excellence.
The Board is committed to ensure the highest standard of corporate governance is practised throughout the Group as a fundamental
part of discharging its responsibilities in safeguarding the interest of all stakeholders as well as enhancing shareholders’ value and
financial performance of the Group. As testimony of the Group’s commitment to good governance, responsible management and
communication to shareholders, the Group is proud to receive the following awards and recognitions in 2010:
Asiamoney Corporate Governance Poll 2010
• Overall Best Company in Malaysia
• Best for Disclosure and Transparency in Malaysia
• Best for Responsibilities of Management and the Board of Directors in Malaysia
• Best for Shareholders’ Rights and Equitable Treatment in Malaysia
• Best for Investor Relations in Malaysia
• Best Investor Relations Officer in Malaysia
National Annual Corporate Report Awards (NACRA) 2010
• Certificate of Merit for the Group’s Annual Report 2009
The Board fully supports the recommendations of the Revised 2007 Malaysian Code on Corporate Governance (“the Code”) and
has taken appropriate steps to ensure compliance. The Board has set out the following statement on how the Group has applied the
principles of the Code and its extent of compliance with best practises in the Code throughout the financial year ended 31 December
2010. The Board is of the opinion that except where stated otherwise, the Group has generally applied the principles and complied
with best practises outlined in the Code.
A. BOARD OF DIRECTORS
1. THE BOARD
The Board takes full responsibility for the performance of the Group and guides the Group on its short and long-term goals, providing
advice and devising strategies on management and business development issues.
The Board conducts at least four (4) regularly scheduled meetings annually, with additional meetings convened as necessary depending
on business requirement. The Board met four (4) times during the financial year. Besides these Board meetings, the Board also
exercises control on matters that require its approval by way of circular resolutions and informal meetings. Proceedings of the relevant
meetings and the resolutions reached have been properly recorded and duly minuted.
The attendance of each Director at the Board meetings is as tabulated below:
Name of Directors Total Meetings Attended Percentage of Attendance (%)
JEN. TAN SRI YAACOB BIN MAT ZAIN (R) 4/4 100
TAN SRI DATO’ SRI LEONG HOY KUM 4/4 100
STEVEN NG POH SENG 4/4 100
LIM KIU HOCK 4/4 100
LEONG YUET MEI 4/4 100
CAPTAIN IZAHAM BIN ABD. RANI (R) 4/4 100
LOH KOK LEONG 4/4 100
60
Core Facts
Corporate Governance Statement (Cont’d)
Messages
All the Directors have complied with the minimum 50% attendance requirement in respect of Board meetings as stipulated by the Main
Market Listing Requirements of Bursa Malaysia Securities Berhad.
2. BOARD BALANCE
Activities
Mah Sing is currently led by a Board comprising seven (7) members of whom four (4) are Non-Executive Directors. Amongst the Non-
Executive Directors, three (3) are Independent Non-Executive Directors including the Chairman. This fulfills the prescribed requirement
for one-third (1/3) of the Board to be independent as stated in the Main Market Listing Requirements of Bursa Malaysia Securities
Berhad. Profiles of the Directors are provided on pages 18 to 20 of this Annual Report.
The Board constitutes an optimal size and appropriate composition, based on the Group’s current business profile, sufficient for
Governance
effectively leading the Group on its current business growth thrust. The Board guides the corporate strategy and directions of the
Group; and oversees the proper conduct of the Group’s businesses. The Directors, individually and collectively bring to the Board the
relevant skills, business experience, insights and professional judgment to bear on issues of strategy, performance, resources and
standards of conduct. Although all the Directors have equal responsibilities for the Group’s operations, the role of the Independent Non-
Executive Directors are particularly important in bringing independent judgement and ensuring all issues proposed by the executive
management are fully discussed and examined and take into account the long-term interests, not only of the shareholders, but also of
the employees, customers and business associates. To this effect, any concerns and queries relating to the Group may be conveyed
Financials
to any of the Independent Non-Executive Directors.
To maintain effective supervision and accountability of each of the Board and management levels, there is a clear division of
responsibilities between the Chairman and the Group Managing Director/Group Chief Executive. The Chairman acts independently in
the best interest of Mah Sing and is responsible for ensuring Board effectiveness and standard of conduct while the management of
the Group’s businesses and implementation of policies and day-to-day running of the business are handled by the Group Managing
Director/Group Chief Executive and Executive Directors. The Independent Non-Executive Directors provide independent views to
Information
Additional
safeguard the interests of shareholders.
3. SUPPLY OF INFORMATION
As a general rule, Board papers with sufficient notice of Board meetings are given to Directors before Board meetings so that Directors
may better understand specific matters requiring Board’s deliberation at the meetings.
Notices
During Board meetings, the Non-Executive Directors are briefed on, amongst others, major operational, financial and corporate issues,
activities and performance of projects, divisional performance, business outlook, major acquisition and disposal of assets including
investments and changes in the requirements of regulatory bodies. The Directors are also notified of any corporate announcements
released to Bursa Malaysia Securities Berhad. They are also notified of the impending restriction in dealing with the securities of the
Company at least one month prior to the release of the quarterly financial result announcement.
Form of Proxy
The Chairman of the Audit Committee would inform the Directors at Board meetings, of any salient matters noted by the Audit
Committee and which require the Board’s notice or direction.
All Directors have access to the advice and services of the Company Secretaries and senior management.
The Directors, whether as a full Board or in their individual capacity have access to all information within the Group and may seek
Mah Sing Group Berhad Annual Report 2010
independent professional advice, where necessary, in the furtherance of their duties and they may do so at the Group’s cost.
4. APPOINTMENTS AND RE-ELECTION OF DIRECTORS TO THE BOARD
Appointments to the Board are made based on the recommendation of the Nomination Committee.
In accordance with the Company’s Articles of Association, at least one-third (1/3) of the Directors shall retire from office every year
provided always that all Directors shall retire from office at least once in every three (3) years but shall be eligible for re-election in the
Annual General Meeting (“AGM”). In other words, no Director stays in office for more than three (3) years without being re-elected by
shareholders.
61
Corporate Governance Statement (Cont’d)
Over time, with in-depth knowledge of the Group’s business operations and activity, the Directors will be in position to contribute
meaningfully to the Group’s conduct of business. The Board values such skills in addition to other qualities and will exercise discretion
in the review of Board composition and appointments.
Directors who are above the age of seventy (70) are statutorily required to seek re-appointment at each AGM in accordance with
Section 129(2) of the Companies Act, 1965.
5. DIRECTORS’ TRAINING
All the Directors have attended the Mandatory Accreditation Program prescribed by Bursa Malaysia Securities Berhad. The Group
acknowledges the fact that continuous education is vital for the Board to gain insight into the state of the economy, changing
commercial risks, technological advances in our core businesses, latest regulatory requirements and management strategies. As such,
the Directors are updated from time to time on relevant new laws and regulations or will attend relevant trainings and workshops, when
necessary, to equip themselves with the relevant knowledge to discharge their responsibilities and duties more effectively.
During the financial year ended 31 December 2010, the Directors have attended the following training programmes and seminars:
• 2nd Annual Corporate Governance Summit 2010
• Goods & Services Tax for Malaysia: The Right Approach to Taxation
• CITI Asia Pacific Property Conference
• UBS AG ASEAN & India Conference
• Macquarie Connections Seminar Series – Guanxi
• The 2nd World Chinese Economic Forum
• CMDF-Bursa Research Scheme Seminar
• Sustainability Program for Corporate Malaysia
• International Real Estate Federation (FIABCI) Morning Talk - The New Trend of Property Development Drive by MRT System in the
Klang Valley
• Practical Application of FRS 139 - Financial Instruments: Recognition & Measurement
• National Conference on GST: Roadmap to Malaysia’s New Indirect Tax
• Briefing on Audit Oversight Board
• National Tax Conference 2010
• 2011 Budget Talk
6. BOARD COMMITTEES
To assist the Board in the discharge of its oversight function, the Board has delegated specific responsibilities to four (4) board
committees which include the Audit Committee, Nomination Committee, Remuneration Committee and Option Committee. These
Committees have the authority to examine particular issues within their terms of reference and report back to the Board with their
recommendations. The ultimate responsibility for the final decision on all matters, however, lies with the entire Board.
62
Core Facts
Corporate Governance Statement (Cont’d)
Messages
Audit Committee
The composition, terms of reference and summary of activities of the Audit Committee are set out separately in the Audit Committee
Report on pages 68 to 71 of this Annual Report.
Nomination Committee
Activities
Composition
Members
Governance
Two (2) out of three (3) of the Nomination Committee members, including the Chairman, are independent Non-Executive Directors.
Name of Members
JEN. TAN SRI YAACOB BIN MAT ZAIN (R)
Chairman (Independent Non-Executive)
LEONG YUET MEI
Director (Non-Independent Non-Executive)
Financials
CAPTAIN IZAHAM BIN ABD. RANI (R)
Director (Independent Non-Executive)
Terms of Reference of Nomination Committee:
Information
• to consider, in making its recommendation to the Board, candidates for all directorships/board committees, in respect of their skills,
Additional
knowledge, expertise, experience, professionalism and integrity; and in the case of Independent Non-Executive Directors, their
abilities to discharge such responsibilities/functions as expected from an Independent Non-Executive Director;
• to assist the Board in reviewing on an annual basis the required mix of skills and experience of the Directors of the Board/Board Committees;
• to recommend the appropriate Board balance and size of non-executive participation; and
Notices
• to establish procedures and processes towards an annual assessment of the effectiveness of the Board as a whole and contribution
of each individual Director and Board Committee member including Independent Non-Executive Directors as well as the Group
Chief Executive. The assessments and evaluations are properly documented.
Remuneration Committee
Form of Proxy
Composition
Two (2) out of three (3) of the Remuneration Committee consist of Non-Executive Directors.
Members
Mah Sing Group Berhad Annual Report 2010
The members of the Remuneration Committee are:
Name of Members
JEN. TAN SRI YAACOB BIN MAT ZAIN (R)
Chairman (Independent Non-Executive)
TAN SRI DATO’ SRI LEONG HOY KUM
Group Managing Director/Group Chief Executive
LEONG YUET MEI
Director (Non-Independent Non-Executive)
63
Corporate Governance Statement (Cont’d)
Terms of Reference of Remuneration Committee:
• to study and periodically review remuneration packages of all Executive Directors; and
• to make recommendations to the Board on all elements of remuneration and terms of employment for Executive Directors.
In the case of Non-Executive Directors, the determination of their remuneration is a matter for the Board as a whole and the level of
remuneration reflects the experience and level of responsibilities undertaken by each Non-Executive Director.
Individual Directors do not participate in the decisions regarding their individual remuneration.
The Level and Make-up of Remuneration
The remuneration of Executive Directors are so determined to ensure that the compensation and benefits commensurate with the level
of the Directors’ responsibilities, as well as taking into consideration the Company’s performance relative to the industry. Survey data
on the remuneration practises of comparable companies are taken into consideration in determining the remuneration package. The
objectives of the Remuneration Committee in determining the levels and components of the compensation packages are to motivate,
attract and retain dedicated Directors that are key to the success of the Group.
Disclosure on Directors’ Remuneration
For the financial year ended 31 December 2010, the number of Directors with total remuneration falling into the different bands are:
Remuneration Band (RM) Number of Executive Directors Number of Non-Executive Directors
Up to 50,000 - 3
50,001 to 100,000 - 1
1,100,001 to 1,150,000 1 -
1,600,001 to 1,650,000 1 -
7,750,001 to 7,800,000 1 -
Total 3 4
The aggregate remuneration of the Directors categorised into appropriate components:
Benefits- Total 2010 Total 2009
Fees Salaries Bonus EPF in-kind Remuneration Remuneration
(RM) (RM) (RM) (RM) (RM) (RM) (RM)
Executive
Directors - 2,862,000 6,544,750 1,128,816 114,852 10,650,418 6,249,908
Non-
Executive
Directors 150,000 - - - 18,300 168,300 168,300
Total 150,000 2,862,000 6,544,750 1,128,816 133,152 10,818,718 6,418,208
64
Core Facts
Corporate Governance Statement (Cont’d)
Messages
Option Committee
The Option Committee was established to administer the implementation of the Employees’ Share Option Scheme (“ESOS”) and is
vested with such powers and duties as are conferred upon it by the Board and the By-Laws of the ESOS. In addition, the Option
Committee may, for the purpose of administering the ESOS, make rules and regulations or impose terms and conditions which the
Option Committee may in its discretion consider to be necessary or desirable for giving full effects to the ESOS.
Activities
Members
The members of the Option Committee are:
Governance
Name of Members
JEN. TAN SRI YAACOB BIN MAT ZAIN (R)
Chairman (Independent Non-Executive)
TAN SRI DATO’ SRI LEONG HOY KUM
Group Managing Director / Group Chief Executive
LOH KOK LEONG
Financials
Director (Independent Non-Executive)
B. RELATIONSHIP WITH SHAREHOLDERS AND INVESTORS
Dialogue with Shareholders and Investors
Information
Additional
The Board recognises and values the importance of effective and clear communication to its shareholders as well as to potential
investors and the public, and is fully committed in ensuring the highest standards of transparency and accountability in the disclosure
of pertinent information relating to the Group.
In this respect, the Company, through its established Corporate Communications and Investor Relations Department and its active
investor relations programme, engages with research analysts, fund managers, shareholders, financiers and media to convey the
Group’s strategies, performance, products and major developments. Such forms of engagements include briefings, site visits as well
Notices
as participation in non-deal investment road shows, one-on-one meetings and press conferences with media. The Company’s top
management which includes the Group Managing Director/Group Chief Executive and/or Executive Directors also takes an active
role to participate in the investor relations programmes. During the financial year, the Company met more than one hundred (100)
investment research analysts and fund managers.
Other effective channels of communication employed by the Group include making timely and informative dissemination of quarterly
Form of Proxy
interim and full year financial results, Annual Report and announcements to Bursa Malaysia Securities Berhad on relevant transactions
undertaken by the Group. The Board believes that such timely releases of the financial statements and developments in the Group
are important to enable shareholders and the general public to receive information on the performance and prospects of the Group
on a regular basis. Shareholders, investors and members of the public are able to access such announcements on Bursa Malaysia
Securities Berhad’s website at www.bursamalaysia.com. Summary of interim results is also published in at least one (1) national
newspaper.
Mah Sing Group Berhad Annual Report 2010
All announcements made to Bursa Malaysia Securities Berhad together with information on the Group’s products are also available on
the Company’s website at www.mahsing.com.my. Shareholders, investors and members of the public may also pose queries to the
Company via its dedicated email address at ir@mahsing.com.my.
Annual General Meeting (“AGM”) and Extraordinary General Meeting (“EGM”)
The Annual General Meeting is the principal forum for dialogue with shareholders. The general meetings provide shareholders with an
opportunity to seek clarification on the Group’s business strategy, performance and major developments. The Company also held three
(3) EGMs during 2010 for shareholders’ approval of proposed transactions undertaken by the Group.
65
Corporate Governance Statement (Cont’d)
C. ACCOUNTABILITY AND AUDIT
Financial Reporting
In presenting the annual audited financial statements and quarterly announcements of consolidated financial results to shareholders,
the Board has taken reasonable steps to ensure a balanced and understandable assessment of the Group’s financial position and
prospects. The Board is assisted by the Audit Committee in overseeing the Group’s financial reporting processes and the quality of its
financial reporting.
Internal Control
The Directors’ Statement on the Group’s Internal Control, which provides an overview of the state of internal controls within the Group,
is set out on pages 72 to 73 of this Annual Report.
Relationship with Auditors
The Group maintains a transparent relationship with the External Auditors in seeking the professional advice and towards ensuring
compliance with accounting standards. The Group Internal Auditor was present at the Audit Committee meetings while the External
Auditors were invited to participate at all the Audit Committee meetings.
In 2010, the Audit Committee held three (3) informal discussion sessions with auditors, both the internal and external, without the
presence of the executive members of the Board of Directors and other employees.
D. DIRECTORS’ RESPONSIBILITY STATEMENT
The Board is responsible for ensuring the financial statements of the Group and of the Company are drawn up in accordance with the
provisions of the Companies Act, 1965, and the applicable approved Financial Reporting Standards in Malaysia so as to give a true
and fair view of the state of affairs of the Group and of the Company at the end of the financial year and of the results and cash flows
of the Group and of the Company for the financial year.
The Board of Directors is satisfied that in preparing the financial statements of the Group and of the Company for the financial year
ended 31 December 2010, the Group has adopted the appropriate accounting policies and applied them consistently; and that all
applicable approved accounting standards have been followed.
E. ADDITIONAL COMPLIANCE INFORMATION
Options, Warrants or Convertible Securities
Other than ESOS, the Company did not issue any convertible securities during the financial year.
The details of ESOS movement during the financial year are as disclosed in Note 24 on pages 134 to 137 of the financial statements.
Non-audit Fees Paid/Payable
For the financial year ended 31 December 2010, the amount of non-audit fees paid/payable to the External Auditors and their affiliates
amounted to RM152,260.
66
Core Facts
Corporate Governance Statement (Cont’d)
Messages
Material Contracts Involving Directors’ and Major Shareholders’ Interests
There were no material contracts entered into by the Group involving Directors’ and major shareholders’ interests which were still
subsisting as at the end of the financial year under review or which were entered into since the end of the previous financial year.
Activities
Recurrent Related Party Transactions
The existing shareholders’ mandate for the Group to enter into recurrent related party transactions of revenue or trading nature
(“Shareholders’ Mandate”) which is necessary for its day-to-day operations shall expire at the conclusion of the forthcoming Annual
General Meeting and is subject to renewal by the shareholders at the said Annual General Meeting.
Governance
The aggregate value of transactions conducted pursuant to the Shareholders’ Mandate during the financial year is as disclosed in Note
39 on page 157 of the financial statements.
Share Buybacks
The existing authority for Mah Sing to purchase up to 10% of its issued and paid-up share capital shall expire at the conclusion of the
Financials
forthcoming Annual General Meeting and is subject to renewal by the shareholders at the said Annual General Meeting.
During the financial year, there were no share buybacks by the Company.
Revaluation of Landed Properties
Information
Additional
Details on valuation of landed properties are as disclosed in Note 14 on page 117 of the financial statements.
Status of Utilisation of Proceeds Raised from Corporate Exercises
Total gross proceeds raised by the Company amounted to RM97,645,350 from private placement exercise with the listing of 62,997,000
new Mah Sing shares on the Main Market of Bursa Malaysia Securities Berhad on 10 December 2009, have been fully utilised as
follows:
Notices
Utilised as at
Proceeds Raised 20 May 2010 Balance
RM’000 RM’000 RM’000
Form of Proxy
Working capital 15,399 15,399 -
Subscription of new shares in Mah Sing
Property Consulting (Changzhou) Pte. Ltd. in
China for the acquisition of land use rights 81,946 81,946 -
Incidental expenses 300 300 -
97,645 97,645 -
Mah Sing Group Berhad Annual Report 2010
67
Audit Committee Report
COMPOSITION
The Audit Committee comprises three (3) members, all of whom are Independent Non-Executive Directors. One (1) of the Audit
Committee members, Mr. Loh Kok Leong is an accountant by profession and a member of the Malaysian Institute of Accountants as
disclosed in Directors’ Profile on pages 18 to 20 of this Annual Report.
The Audit Committee convened four (4) meetings during the financial year which were attended by the members as tabulated below:
Name of Members Attendance at Meetings
JEN. TAN SRI YAACOB BIN MAT ZAIN (R)
4/4
(Chairman, Independent Non-Executive Director)
CAPTAIN IZAHAM BIN ABD. RANI (R)
4/4
(Independent Non-Executive Director)
LOH KOK LEONG
4/4
(Independent Non-Executive Director)
The Group Internal Auditor and External Auditors have attended all the meetings.
TERMS OF REFERENCE OF AUDIT COMMITTEE
MEMBERSHIP
The Audit Committee shall be appointed by the Board from amongst the Directors and shall consist of not less than three (3) members,
all of whom shall be Non-Executive Directors, with a majority being Independent Directors. At least one (1) member of the Audit
Committee must be a member of the Malaysian Institute of Accountants or possesses the experience and such other qualifications as
specified in the Accountants Act 1967 or as approved by Bursa Malaysia Securities Berhad.
The Chairman of the Audit Committee shall be an Independent Director appointed by the Board.
RETIREMENT AND RESIGNATION
If a member of the Audit Committee resigns, retires or for any other reason ceases to be a member with the result that the number of
members is reduced to below three (3), the Board of Directors shall, within three (3) months of that event, appoints such number of
new members as may be required to make up the minimum number of three (3) members.
REVIEW OF THE AUDIT COMMITTEE
The term of office and performance of the Audit Committee and each of its members shall be reviewed by the Board of Directors at
least once every three (3) years to determine whether the Audit Committee and members have carried out their duties in accordance
to their terms of reference.
MEETINGS AND MINUTES
In assisting the Board to effectively discharge its fiduciary responsibilities for corporate governance, timely and accurate financial reporting
and development of sound internal control, Audit Committee meetings which shall be held preferably not less than four (4) times a year
will normally be attended by the Department Head charged with the responsibility of the Group’s financial reporting and the Group Internal
Auditors. The presence of External Auditors at the meeting will be requested if required.
The Chairman of the Audit Committee would engage on a continuous basis with senior management such as the Group Managing Director/
Group Chief Executive and the Executive Directors in order to be kept informed of matters affecting the Group. Attendance of other Directors
and employees at any particular Audit Committee meeting will be at the invitation of the Audit Committee.
68
Core Facts
Audit Committee Report (Cont’d)
Messages
A quorum shall consist of two (2) members and the majority of the members present must be Independent Directors.
The Company Secretary shall be the Secretary of the Audit Committee and shall be responsible, in conjunction with the Chairman, for
drawing up the agenda and circulating it, supported by explanatory documentation to the Audit Committee members prior to each meeting.
The Secretary shall also be responsible for keeping the minutes of meetings of the Audit Committee and circulating them to the
Activities
Audit Committee members and to the other members of the Board. The Chairman of the Audit Committee shall report on key issues
discussed at each meeting to the Board.
AUTHORITY
Governance
The Audit Committee is authorised by the Board to investigate any activity within its terms of reference and shall have unrestricted
access to both the Internal and External Auditors and to all employees of the Group. The Audit Committee is also authorised by the
Board to obtain external legal or other independent professional advice as necessary.
The Audit Committee is also authorised to convene meeting with the External Auditors and Internal Auditors separately, at least two (2)
times a year without the presence of the executive members of the Board of Directors and other employees in order to have unfettered
access to information that it may require.
Financials
DUTIES
The duties of the Audit Committee shall be:
Oversee all matters relating to external audit:
Information
Additional
• discuss with the External Auditors where necessary, the nature and scope of the audit and ensure co-ordination of audit where
more than one audit firm is involved;
• discuss problems and reservations arising from the interim and final audits and any matter the auditors may wish to discuss;
• review with the External Auditors, their evaluation of the system of internal controls, their management letter and management’s
response;
• consider the nomination and appointment of the External Auditors as well as their audit fee;
• consider any letter of resignation of External Auditors and any questions of resignation and dismissal; and
Notices
• review the assistance given by the employees of the Group to the External Auditors.
Review of reports by the Chairman of the respective Risk Management Teams in relation to the adequacy and integrity of
the Group’s internal control systems in mitigating significant risks.
Form of Proxy
Oversee all matters relating to internal audit:
• to review the adequacy of the scope, functions, competency and resources of the internal audit function and that it has the
necessary authority to carry out its work;
• to review and approve the internal audit plan;
• to ensure co-ordination of external audit with internal audit;
Mah Sing Group Berhad Annual Report 2010
• to consider major findings of internal audit reviews and management’s response and ensure that appropriate actions are taken on
the recommendations of the internal audit function;
• to review any assessment of the performance of the staff of the internal audit function;
• to approve any appointment or termination of senior staff members of the internal audit function; and
• to keep itself informed of resignations of internal audit staff members and provide resigning staff member an opportunity to submit
his/her reasons for resigning.
69
Audit Committee Report (Cont’d)
Review of financial statements:
To review the quarterly and year-end financial statements of the Group before submission to the Board, focusing particularly on:
• any changes in accounting policies and practises;
• significant audit issues and adjustments arising from audit;
• going concern assumption;
• compliance with the applicable approved accounting standards and regulatory requirements; and
• compliance with the Main Market Listing Requirements of Bursa Malaysia Securities Berhad and other legal requirements.
Additional duties and responsibilities:
• to consider any related party transactions and conflict of interest situation that may arise within the Group or the Company including
any transaction, procedure or course of conduct that raises questions of management integrity. They are also required to ensure
that the Directors report related party transactions annually to shareholders via the Annual Report;
• where the Audit Committee is of the view that a matter reported by it to the Board has not been satisfactorily resolved resulting in
a breach of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the Audit Committee must promptly report
such matter to Bursa Malaysia Securities Berhad; and
• to carry out such other responsibilities, functions or assignments as may be defined jointly by the Audit Committee and the Board
from time to time.
SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE FOR THE FINANCIAL YEAR
During the financial year, the Audit Committee carried out its duties as set out in the terms of reference and discussed the following issues:
• reviewed the extent of the Group’s compliance with the provisions set out under the Revised 2007 Malaysian Code on Corporate
Governance for the purpose of preparing the Corporate Governance Statement and Statement of Internal Control pursuant to the
Main Market Listing Requirements of Bursa Malaysia Securities Berhad;
• reviewed the Risk Management Teams’ reports on the risk profile of the Group and the adequacy and integrity of internal control
systems to manage these risks;
• reviewed with the External Auditors the audit plan and to ensure co-ordination of audit of the various companies within the Group
with different External Auditors;
• reviewed with the External Auditors any significant findings in relation to audits;
• considered and recommended to the Board for approval of the audit fees payable to the External Auditors;
• reviewed the internal audit plan and internal audit reports and considered the major findings of internal audit reviews and
management’s response;
• reviewed and discussed the internal audit function, its authorities, resources and scope of work;
• reviewed related party transactions entered into by the Group (if any) and the draft proposal to seek shareholders’ mandate
pursuant to Paragraph 10.09 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad to authorise the Group
to enter into recurrent related party transaction of a revenue or trading nature;
• reviewed quarterly financial results and year-end financial statements of the Group before recommending them to the Board for
their approval for announcement to Bursa Malaysia Securities Berhad; and
• had three (3) sessions of discussions with the Group Internal Auditor together with External Auditors without the presence of the
executive members of the Board and other employees.
STATEMENT ON EMPLOYEES’ SHARE OPTION SCHEME (“ESOS”) BY THE COMMITTEE
The Audit Committee has reviewed and verified that the allocation of options granted during the financial year under the Company’s
ESOS was in accordance with the criteria for allocation of options pursuant to the ESOS.
70
Core Facts
Audit Committee Report (Cont’d)
Messages
STATEMENT ON INTERNAL AUDIT FUNCTION
INTERNAL AUDIT FUNCTION
The Internal Audit (“IA”) function is considered an integral part of the assurance framework within the Group. IA function plays an
Activities
intermediary role in that it assists in the discharge of the oversight function which is delegated by the Board to the Audit Committee.
It serves as a means of obtaining sufficient assurance of regular review and/or appraisal of the adequacy and effectiveness of the risk,
control and governance framework of the Group.
The Group’s IA function is undertaken by the Group Internal Audit Department (“IAD”).
Governance
The Group IAD which reports to the Audit Committee undertakes independent, regular and systematic reviews of the systems of
internal controls so as to provide reasonable assurance that such systems continue to operate satisfactorily and effectively. The annual
internal audit plans which are designed to cover development projects and entities across all levels of operations within the Group
are approved by the Audit Committee. The Group IAD adopts a risk-based approach in planning the audit assignments taking into
consideration industry specific requirements.
The Group IAD also performs independent evaluation of the operation of the Enterprise Risk Management Framework focusing primarily
on the adequacy and effectiveness of the said framework.
Financials
SUMMARY OF INTERNAL AUDIT ACTIVITIES FOR THE FINANCIAL YEAR
During the financial year, various independent audit reviews on the appropriateness of the instituted controls and evaluation of the
acceptable level of principal risk exposures were conducted in relation to the Group’s operations and information systems as follows:
Information
Additional
• reliability of financial and operational information;
• effectiveness and efficiency of operations;
• safeguarding of assets; and
• compliance with policies, procedures, laws & regulations and contracts.
At the conclusion of the various audits, weaknesses together with the recommended corrective actions were highlighted to the
management. There were no material losses incurred during the current financial year as a result of the weaknesses in the internal
Notices
controls and management is proactive in strengthening the internal control environment. Follow-up audit reviews were conducted to
ensure that corrective actions are being implemented accordingly.
The Audit Committee then deliberates on the internal audit reports to ensure recommendations from the reports are duly acted upon
by management.
Form of Proxy
All the internal audit activities were performed in-house and the total costs incurred in managing the Group IAD in 2010 was RM119,995.
Further details of the activities of Group IAD are set out in the Statement of Internal Control.
Mah Sing Group Berhad Annual Report 2010
71
Statement of Internal Control
THE BOARD’S RESPONSIBILITY
The Board of Directors (“the Board”) of Mah Sing Group Berhad (“the Group”) affirms its overall responsibility for the Group’s system of
internal controls which covers, inter alia, risk management and financial, organisational, operational and compliance controls, in order
to safeguard shareholders’ investment and the Group’s assets. The Board ensures the adequacy, effectiveness and integrity of the
internal control systems through regular reviews.
It should be noted that such systems are designed to manage rather than eliminate the risk of failure to achieve business objectives.
As such, a system of internal controls can provide only reasonable and not absolute assurance against material misstatement or loss.
THE RISK MANAGEMENT PROCESS
The Board of Directors confirms that the Group has in place an Enterprise Risk Management Framework for the on-going process of
identifying, evaluating, monitoring and managing the significant risks affecting the achievement of its business objectives throughout
the financial year under review. This process is regularly reviewed by the Board of Directors and is in accordance with the Statement
on Internal Control: Guidance for Directors of Public Listed Companies (“the Internal Control Guidance”).
The key aspects of the risk management process are:
• The Risk Management Teams comprising management staff of the Property and Plastics Divisions as well as the Corporate Office
are charged with the responsibilities of continuous monitoring and management of the risks of the Group;
• Risk Management reviews are performed to identify, assess and manage the risks faced by the Group based on the likelihood
of occurrence and magnitude of impact and also to assist management in identifying procedures or steps to be taken to manage
or control these risks;
• The key risks identified in the Risk Management reviews together with the controls for managing them and the management action
plans to be implemented are summarised in the Key Risk Profiles and Risk Registers, serving as the means for assuring the Audit
Committee that the processes are effective. Independent compliance reviews are carried out by the Group Internal Audit function
on a continuous basis to ensure the controls for managing risks are functioning effectively; and
• The Audit Committee upon receiving reports from Group Internal Auditors shall review and monitor the effectiveness of the Group’s
systems of internal controls before onward submission to the Board of Directors for endorsement.
72
Core Facts
Statement of Internal Control (Cont’d)
Messages
THE INTERNAL CONTROL PROCESS
The key elements of the Group’s internal control system are:
• Operational structure with defined lines of responsibility and delegation of authority. A process of hierarchical reporting has been
established which provides for a documented and auditable trail of accountability;
Activities
• Standard operating policies and procedures are in place and are periodically updated to reflect changing risks or to resolve
operational deficiencies. Instances of non-compliance with such policies and procedures are reported thereon by Group Internal
Audit to the Board of Directors via the Audit Committee;
• Key functions such as business development, human resources, finance, tax, management information system, treasury, secretarial,
Governance
corporate and legal matters are centralised at the head office;
• Detailed budgeting process is established requiring all business units to prepare budget and business plan on an annual basis. The
Board of Directors reviews and approves the annual budget and business plan;
• Effective reporting systems which expose significant variances against budget and plan are in place to monitor performance.
Key variances are followed up by the management and management action is taken, where necessary and reported to senior
management on a regular basis. The Group Managing Director/Group Chief Executive meets on a regular basis with all divisional
Financials
heads to consider the Group’s financial performance, business developments, management and corporate issues;
• Regular visits to the operating units by the members of the Board and senior management;
• An on-going training and educational programme for Directors and relevant staff in assessing the adequacy and integrity of the
Group’s risks and control processes;
Information
Additional
• The professionalism and competency of staff are being emphasised through continuous training and regular performance evaluation;
and
• Group Internal Audit independently reviews the internal controls to provide the Audit Committee with sufficient assurance that the
systems of internal controls are effective in addressing the risks identified. On a quarterly basis, Group Internal Audit submits reports
and plans for review and approval by the Audit Committee.
Notices
Form of Proxy
Mah Sing Group Berhad Annual Report 2010
73
Directors’ Reports
The Directors are pleased to submit their report and the audited financial statements of the Group and of the Company for the financial
year ended 31 December 2010.
PRINCIPAL ACTIVITIES
The principal activities of the Company are investment holding and provision of management services to subsidiary companies in the
Group. The principal activities of the subsidiary companies are set out in Note 18 to the Financial Statements. There has been no
significant change in the nature of the activities of the Group and of the Company during the financial year.
RESULTS
The results of the Group and of the Company for the financial year are as follows:
The Group The Company
RM’000 RM’000
Profit attributable to equity holders of the Company 118,071 2,758
In the opinion of the Directors, the results of the Group and of the Company during the financial year have not been substantially
affected by any item, transaction or event of a material and unusual nature.
DIVIDENDS
On 17 September 2010, the Company paid a first and final gross dividend of 6.5 sen per ordinary shares of RM0.50 each, less
income tax of 25%, amounting to RM40,538,985.31 in respect of the financial year ended 31 December 2009 as approved by the
shareholders at the last Annual General Meeting.
The Directors have proposed a first and final gross dividend of 7.6 sen per ordinary shares of RM0.50 each, less income tax of 25%,
in respect of the current financial year. The proposed first and final dividend is subject to the approval of the shareholders at the
forthcoming Annual General Meeting of the Company and has not been included as a liability in the financial statements for the current
financial year. Such dividend when approved by shareholders will be accounted for in equity as an appropriation of retained earnings
during the financial year ending 31 December 2011.
RESERVES AND PROVISIONS
There were no material transfers to or from reserves or provisions during the financial year other than those disclosed in the financial
statements.
SHARE CAPITAL
As approved by the shareholders at the Extraordinary General Meeting held on 3 December 2010, the Company increased its authorised
ordinary share capital from RM500,000,000 to RM1,000,000,000 by way of the creation of additional 1,000,000,000 ordinary shares
of RM0.50 each.
The Company also increased its issued and paid-up ordinary share capital from RM346,487,016.50 to RM415,784,419.50 by way
of issuance of 138,594,806 new ordinary shares of RM0.50 each pursuant to the bonus issue on the basis of one (1) new ordinary
share for every five (5) existing ordinary shares of RM0.50 each held by way of capitalisation of RM69,297,403 from the share premium
account of the Company (“Bonus Issue”).
The new ordinary shares issued rank pari passu with the then existing ordinary shares of the Company.
74
Core Facts
Directors’ Reports (Cont’d)
Messages
EMPLOYEES’ SHARE OPTION SCHEME
At the Extraordinary General Meeting held on 8 March 2004, the Company’s shareholders approved the establishment of an Employees’
Share Option Scheme (“ESOS” or “Scheme”) which is governed by the ESOS By-Laws (“By-Laws”).
The salient features of the ESOS are inter alia as follows:
Activities
(a) The ESOS was implemented on 12 July 2004 and was in force for a period of 5 years (“Initial Period”). On 10 July 2009, the ESOS
was extended for another 5 years until 10 July 2014 in accordance with the terms of the ESOS By-Laws;
(b) The total number of new shares to be offered pursuant to the exercise of options granted under the ESOS (“Option”) shall be
subject to a maximum of 10% of the Company’s issued and paid-up share capital at the time of the offer;
Governance
(c) Employees (including Executive Directors) of the Company or its subsidiary companies (other than dormant subsidiaries) shall be
eligible to participate in the ESOS, if as at the date of offer, the employee:
(i) has attained the age of eighteen (18) years;
(ii) is employed full-time by and on the payroll of the Company or its subsidiary companies; and
(iii) is a confirmed employee of the Company or its subsidiary companies.
Financials
The allocation criteria of new ordinary shares comprised in the options to eligible employees shall be determined at the discretion
of the Option Committee. The participation of an Executive Director of the Company in the ESOS shall be approved by the
shareholders of the Company in a general meeting;
(d) The price payable upon exercise of an Option shall be based on the weighted average market price of the Company’s shares as
shown in the Daily Official List of the Bursa Malaysia Securities Berhad for the five (5) market days immediately preceding the date
Information
of offer with an allowance of a discount of not more than 10%, or at the par value of the Company’s share, whichever is higher;
Additional
(e) Subject to any adjustments which may be made pursuant to the By-Laws, the maximum number of new shares that may be
offered to an eligible employee shall be determined at the discretion of the Option Committee after taking into consideration the
performance, seniority and length of service of the eligible employees, subject to the following:
(i) not more than fifty per cent (50%) of the new shares available under the Scheme should be allocated, in aggregate, to the
Executive Directors and senior management of the Group; and
Notices
(ii) not more than ten per cent (10%) of the new shares available under the Scheme should be allocated to any eligible employee,
who either singly or collectively through his or her associates, holds twenty per cent (20%) or more in the issued and paid-up
capital of the Company.
(f) The new ordinary shares to be issued upon exercise of the Options shall, upon allotment and issue, rank pari passu with the then
existing ordinary shares, except that they will not be entitled to any dividends, rights, allotments and/or other distributions declared
Form of Proxy
by the Company which entitlement thereof precedes the allotment date of the new ordinary shares allotted pursuant to the exercise
of the Options; and
(g) The exercise price and the number of new ordinary shares comprised in the Options are subject to adjustment in the event of
alteration to the share capital of the Company in accordance with the provisions in the By-Laws. However, no adjustment shall be
made in any event whereby the exercise price would be reduced to below the par value of ordinary share in the Company.
Mah Sing Group Berhad Annual Report 2010
During the financial year ended 31 December 2010, the exercise price and number of options over ordinary shares have been adjusted
in accordance with the provisions in the By-Laws (as mentioned in item (g) above) as a result of the Bonus Issue that was completed
during the financial year.
75
Directors’ Reports (Cont’d)
The movements in the Company’s Options are as follows:
Unit ’000 Number of options over ordinary shares of RM0.50 each
Exercise At At
Offer Date price 1.1.2010 Adjustment* Granted Exercised Cancelled 31.12.2010
9 Jun 2006 0.77/0.64* 110 22 - - ( 78 ) 54
25 Nov 2010 1.65 - - 50,783 - ( 6) 50,777
6 Dec 2010 1.65 - - 620 - - 620
* Adjustment made to the option price and number of options pursuant to the Bonus Issue completed during the financial year.
OTHER STATUTORY INFORMATION
Before the income statements, statements of comprehensive income and the statements of financial position of the Group and of the
Company were made out, the Directors took reasonable steps:
(a) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful
debts and had satisfied themselves that all known bad debts had been written off and that adequate allowance had been made for
doubtful debts; and
(b) to ensure that any current assets which were unlikely to realise their book values in the ordinary course of business had been written
down to their estimated realisable values.
At the date of this report, the Directors are not aware of any circumstances:
(a) which would render the amount written off as bad debts or the amount of allowance for doubtful debts in the financial statements
of the Group and of the Company inadequate to any substantial extent; or
(b) which would render the values attributed to current assets in the financial statements of the Group and of the Company misleading;
or
(c) which have arisen and render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company
misleading or inappropriate; or
(d) not otherwise dealt with in this report or financial statements which would render any amount stated in the financial statements of
the Group and of the Company misleading.
At the date of this report, there does not exist:
(a) any charge on the assets of the Group and of the Company which has arisen since the end of the financial year and secures the
liability of any other person; or
(b) any contingent liability of the Group and of the Company which has arisen since the end of the financial year.
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 financial year which, in the opinion of the Directors, will or may substantially affect the ability of the Group and of the
Company to meet their obligations as and when they fall due.
In the opinion of the Directors, no item, transaction or event of a material and unusual nature has arisen in the interval between the end
of the financial year and the date of this report which is likely to affect substantially the results of operations of the Group and of the
Company for the succeeding financial year.
76
Core Facts
Directors’ Reports (Cont’d)
Messages
DIRECTORS
The Directors who have held office since the date of the last report are as follows:
Jen. Tan Sri Yaacob Bin Mat Zain (R)
Tan Sri Dato’ Sri Leong Hoy Kum
Activities
Ng Poh Seng
Lim Kiu Hock
Leong Yuet Mei
Captain Izaham Bin Abd. Rani (R)
Loh Kok Leong
Governance
DIRECTORS’ INTERESTS
According to the Register of Directors’ Shareholdings, the interests of the Directors who held office at the end of the financial year in
the ordinary shares and options over ordinary shares of the Company is as follows:
(a) Shares in the Company
Financials
Unit ’000 Number of ordinary shares of RM0.50 each
Balance at Bonus Balance at
1.1.2010 Issue Acquired Sold 31.12.2010
Indirect interest
Information
Additional
Jen. Tan Sri Yaacob Bin Mat Zain (R)* 21 4 - - 25
Tan Sri Dato’ Sri Leong Hoy Kum** 237,485 47,496 4,000 - 288,981
Leong Yuet Mei* 131 26 - - 157
* Deemed interested by virtue of shareholding of family member(s)
** Deemed interested by virtue of shareholding of Mayang Teratai Sdn Bhd and his family member(s)
Notices
By virtue of Tan Sri Dato’ Sri Leong Hoy Kum having an indirect interest of more than 15% of the shares in the Company, he is
deemed interested in the shares of all the Company’s subsidiaries to the extent the Company has an interest.
Form of Proxy
Mah Sing Group Berhad Annual Report 2010
77
Directors’ Reports (Cont’d)
(b) Options Pursuant to ESOS
Unit ’000 Option over ordinary shares of RM0.50 each
Exercise Price Balance at Balance at
RM 1.1.2010 Granted Exercised 31.12.2010
Direct interest
Tan Sri Dato’ Sri Leong Hoy Kum 1.65 - 4,800 - 4,800
Ng Poh Seng 1.65 - 3,000 - 3,000
Lim Kiu Hock 1.65 - 3,000 - 3,000
Indirect interest
Tan Sri Dato’ Sri Leong Hoy Kum* 1.65 - 2,500 - 2,500
Leong Yuet Mei* 1.65 - 120 - 120
* Deemed interested by virtue of shareholding of family member(s)
None of the other Directors in office at the end of the financial year held any interest in the shares and options over ordinary
shares of the Company and its related corporations during the financial year.
DIRECTORS’ BENEFITS
Since the end of the previous financial year, no Director has received or become entitled to receive any benefit (other than the fees, other
emoluments and benefits-in-kind as shown in Note 39 to the Financial Statements) by reason of a contract made by the Company or
by a related corporation with the Director or with a firm of which the Director is a member or with a company in which the Director has
a substantial financial interest except for those benefits which may be deemed to have arisen by virtue of those transactions entered
into in the ordinary course of business by the Company and its subsidiary companies with the Directors or the companies in which the
Directors are deemed to have substantial financial interests as disclosed in Note 39 to the Financial Statements.
Neither during nor at the end of the financial year was the Company or any of its related corporations a party to any arrangement whose
object was to enable the Directors to acquire benefits through the acquisition of shares in, or debentures of, the Company or any other
body corporate other than the aforementioned ESOS entitlements to subscribe for new ordinary shares.
78
Core Facts
Directors’ Reports (Cont’d)
Messages
AUDITORS
The auditors, Messrs. Deloitte KassimChan, have expressed their willingness to continue in office.
Signed on behalf of the Board of Directors in accordance with a resolution of the Directors,
Activities
Governance
JEN. TAN SRI YAACOB BIN MAT ZAIN (R)
Chairman
Financials
TAN SRI DATO’ SRI LEONG HOY KUM
Managing Director
Kuala Lumpur
25 February 2011
Information
Additional
Notices
Form of Proxy
Mah Sing Group Berhad Annual Report 2010
79
Independent Auditors’ Report
To The Members of Mah Sing Group Berhad
Report on the Financial Statements
We have audited the financial statements of MAH SING GROUP BERHAD, which comprise the statements of financial position of the
Group and of the Company as of 31 December 2010 and the income statements, statements of comprehensive income, statements
of changes in equity and cash flow statements of the Group and of the Company for the financial year then ended, and a summary of
significant accounting policies and other explanatory information, as set out on pages 82 to 161 .
Directors’ Responsibility for the Financial Statemens
The directors of the Company are responsible for the preparation of financial statements that give a true and fair view in accordance
with Financial Reporting Standards and the Companies Act, 1965 in Malaysia, and for such internal control as the directors determine
is necessary to enable the preparation of financial statements that are free from material misstatement whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit and to report our opinion to you, as a body,
in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility
to any other person for the contents of this report.
We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with
ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatements of the
financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to
the entity’s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also
includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the
directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence that we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements have been properly drawn up in accordance with Financial Reporting Standards and the
Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as of 31
December 2010 and of their financial performance and cash flows for the financial year then ended.
80
Core Facts
Independent Auditors’ Report
To The Members of Mah Sing Group Berhad (Cont’d)
Messages
Report on Other Legal and Regulatory Requirements
In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report that:
(a) in our opinion the accounting and other records and the registers required by the Act to be kept by the Company and the subsidiary
companies of which we have acted as auditors, have been properly kept in accordance with the provisions of the Act;
Activities
(b) we have considered the accounts and auditors’ reports of the subsidiary companies, of which we have not acted as auditors, as
disclosed in Note 18 to the financial statements, being accounts that have been included in the financial statements of the Group;
(c) we are satisfied that the accounts of the subsidiary companies that have been consolidated in the financial statements of the
Company are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the
Governance
Group, and we have received satisfactory information and explanations as required by us for these purposes; and
(d) the auditors’ reports on the accounts of the subsidiary companies were not subject to any qualification and did not include any
adverse comment made under Section 174 (3) of the Act.
Other Reporting Responsibilities
Financials
The supplementary information set out in Note 43 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not
part of the financial statements. The directors are responsible for the preparation of the supplementary information in accordance with
Guidance on Special Matter No. 1 “Determination of Realised and Unrealised Profit or Losses in the Context of Disclosure Pursuant
to Bursa Malaysia Securities Berhad Listing Requirements” as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and
the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in
accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.
Information
Additional
DELOITTE KASSIMCHAN
AF 0080
Notices
Chartered Accountants
Form of Proxy
KAMARUL BAHARIN BIN TENGKU ZAINAL ABIDIN
Partner – 2903/11/11(J)
Chartered Accountant
25 February 2011
Mah Sing Group Berhad Annual Report 2010
81
Income Statements
For The Financial Year Ended 31 December 2010
The Group The Company
2010 2009 2010 2009
Note RM’000 RM’000 RM’000 RM’000
Revenue 5 1,110,108 701,562 36,977 15,159
Cost of sales 6 (791,763) (514,384) - -
Gross profit 318,345 187,178 36,977 15,159
Other income 2,209 48,017 - -
Selling and marketing expenses (42,812) (30,418) - -
Administrative expenses (72,678) (55,221) (28,740) (11,954)
Other operating expenses (28,671) (3,158) - -
Results from operating activities 176,393 146,398 8,237 3,205
Interest income 9 4,103 461 - -
Finance costs 10 (2,631) (2,616) (3,806) (1,234)
Net finance income/(cost) 1,472 (2,155) (3,806) (1,234)
Profit before tax 7 177,865 144,243 4,431 1,971
Income tax expense 11 (49,462) (48,402) (1,673) (742)
Profit for the year 128,403 95,841 2,758 1,229
Attributable to:
Equity holders of the Company 118,071 94,282
Minority interest 10,332 1,559
128,403 95,841
Earnings per ordinary share (sen):
- Basic 12(a) 14.20 12.41
- Diluted 12(b) 14.19 12.40
Gross dividend per ordinary share (Proposed)
- Sen 13 7.6 6.5 7.6 6.5
The accompanying Notes form an integral part of the Financial Statements.
82
Core Facts
Statements of Comprehensive Income
For The Financial Year Ended 31 December 2010
Messages
The Group The Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Profit for the year 128,403 95,841 2,758 1,229
Activities
Other comprehensive income
Foreign currency translation
difference for foreign operations (9,695) (450) - -
Total comprehensive income for the year 118,708 95,391 2,758 1,229
Governance
Attributable to:
Equity holders of the Company 109,087 93,952 2,758 1,229
Minority interest 9,621 1,439 - -
Financials
118,708 95,391 2,758 1,229
The accompanying Notes form an integral part of the Financial Statements.
Information
Additional
Notices
Form of Proxy
Mah Sing Group Berhad Annual Report 2010
83
Statements of Financial Position
As At 31 December 2010
The Group The Company
2010 2009 2010 2009
Note RM’000 RM’000 RM’000 RM’000
ASSETS
Non-current Assets
Property, plant and equipment 14 66,070 60,982 905 941
Prepaid lease payments 15 3,149 3,701 - -
Investment property 16 30,609 - - -
Land held for property development 20 62,889 47,099 - -
Intangible assets 17 70 4 - -
Investment in subsidiaries 18 - - 102,555 66,655
Investment in associates 19 - - - -
Deferred tax assets 29 6,864 - - -
169,651 111,786 103,460 67,596
Current Assets
Property development costs 20 1,194,326 821,447 - -
Inventories 21 33,183 29,947 - -
Trade and other receivables 22 426,083 180,843 752,895 541,631
Current tax assets 5,853 5,899 2,866 3,378
Deposits, cash and bank balances 23 308,647 396,626 71,201 224,668
1,968,092 1,434,762 826,962 769,677
TOTAL ASSETS 2,137,743 1,546,548 930,422 837,273
84
Core Facts
Statements of Financial Position
As At 31 December 2010 (Cont’d)
Messages
The Group The Company
2010 2009 2010 2009
Note RM’000 RM’000 RM’000 RM’000
EQUITY AND LIABILITIES
Activities
Capital and Reserves
Share capital 24 415,784 346,487 415,784 346,487
Reserves 25 127,532 205,153 131,754 200,391
Retained earnings 26 375,550 294,054 60,512 98,293
Governance
Equity attributable to
equity holders of the Company 918,866 845,694 608,050 645,171
Minority interests 17,590 7,774 - -
Total Equity 936,456 853,468 608,050 645,171
Non-current Liabilities
Financials
Term loans 27 368,531 141,466 10,613 -
Long-term and deferred payables 28 4,191 19,227 - -
Deferred tax liabilities 29 1,838 1,807 197 194
374,560 162,500 10,810 194
Current Liabilities
Information
Additional
Trade and other payables 30 670,908 438,549 243,075 172,782
Term loans 27 73,019 66,358 12,487 19,126
Short-term borrowings 31 61,670 7,350 56,000 -
Bank overdrafts 32 74 705 - -
Tax payables 21,056 17,618 - -
Notices
826,727 530,580 311,562 191,908
Total Liabilities 1,201,287 693,080 322,372 192,102
TOTAL EQUITY AND LIABILITIES 2,137,743 1,546,548 930,422 837,273
Form of Proxy
The accompanying Notes form an integral part of the Financial Statements.
Mah Sing Group Berhad Annual Report 2010
85
Consolidated Statement of Changes In Equity
For The Financial Year Ended 31 December 2010
Distributable
Non-distributable reserves
reserves
Equity- Attributable
settled to equity
employees Exchange holders
Share Share benefit fluctuation Retained of the Minority
capital premium reserve reserve earnings Company interests Total
Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
At 1 January
2010 346,487 200,369 22 4,762 294,054 845,694 7,774 853,468
Effect of first
adoption of
FRS 139 2 - - - - 1,916 1,916 195 2,111
At 1 January
2010
(restated) 346,487 200,369 22 4,762 295,970 847,610 7,969 855,579
Profit for the year - - - - 118,071 118,071 10,332 128,403
Other
comprehensive
income - - - (8,984) - (8,984) (711) (9,695)
Total
comprehensive
income for the
year - - - (8,984) 118,071 109,087 9,621 118,708
Dividends 13 - - - - (40,539) (40,539) - (40,539)
Bonus issue 24 69,297 (69,297) - - - - - -
Expenses set off
against share
premium - (320) - - - (320) - (320)
Pre-acquisition
profits arising
from additional
interest
acquired in
a subsidiary
company - - - - 2,048 2,048 - 2,048
Options granted
under ESOS - - 980 - - 980 - 980
At 31 December
2010 415,784 130,752 1,002 (4,222) 375,550 918,866 17,590 936,456
86
Core Facts
Consolidated Statement of Changes In Equity
For The Financial Year Ended 31 December 2010 (Cont’d)
Messages
Distributable
Non-distributable reserves
reserves
Equity- Attributable
settled to equity
employees Exchange holders
Activities
Share Share benefit fluctuation Retained of the Minority
capital premium reserve reserve earnings Company interests Total
Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
At 1 January
2009 313,423 134,167 70 5,092 237,523 690,275 6,335 696,610
Governance
Profit for the year - - - - 94,282 94,282 1,559 95,841
Other
comprehensive
income - - - (330) - (330) (120) (450)
Total
comprehensive
Financials
income for the
year - - - (330) 94,282 93,952 1,439 95,391
Dividends 13 - - - - (37,799) (37,799) - (37,799)
Issuance of
shares
pursuant to: 24
Information
Additional
- Warrants
exercised 1,463 - - - - 1,463 - 1,463
- ESOS
exercised 103 55 - - - 158 - 158
- Private
placement 31,498 66,147 - - - 97,645 - 97,645
Notices
Reclassification of
reserve arising
from ESOS
exercised - - (48) - 48 - - -
At 31 December
Form of Proxy
2009 346,487 200,369 22 4,762 294,054 845,694 7,774 853,468
Mah Sing Group Berhad Annual Report 2010
87
Company Statement of Changes In Equity
For The Financial Year Ended 31 December 2010
Distributable
Non-distributable reserves
reserve
Equity-
settled
employees
Share Share benefit Retained
capital premium reserve earnings Total
Note RM’000 RM’000 RM’000 RM’000 RM’000
At 1 January 2010 346,487 200,369 22 98,293 645,171
Profit for the year - - - 2,758 2,758
Other comprehensive income - - - - -
Total comprehensive income for the year - - - 2,758 2,758
Dividends 13 - - - (40,539) (40,539)
Bonus issue 24 69,297 (69,297) - - -
Expenses set off against share premium - (320) - - (320)
Options granted under ESOS - - 980 - 980
At 31 December 2010 415,784 130,752 1,002 60,512 608,050
88
Core Facts
Company Statement of Changes In Equity
For The Financial Year Ended 31 December 2010 (Cont’d)
Messages
Distributable
Non-distributable reserves
reserve
Equity-
settled
employees
Activities
Share Share benefit Retained
capital premium reserve earnings Total
Note RM’000 RM’000 RM’000 RM’000 RM’000
At 1 January 2009 313,423 134,167 70 134,815 582,475
Governance
Profit for the year - - - 1,229 1,229
Other comprehensive income - - - - -
Total comprehensive income for the year - - - 1,229 1,229
Dividends 13 - - - (37,799) (37,799)
Issuance of shares of the Company
Financials
pursuant to: 24
- W arrants ex ercised 1,463 - - - 1,463
- ESOS exercised 103 55 - - 158
- Private placement 31,498 66,147 - - 97,645
Reclassification of reserve arising from
Information
Additional
ESOS exercised - - (48) 48 -
At 31 December 2009 346,487 200,369 22 98,293 645,171
The accompanying Notes form an integral part of the Financial Statements.
Notices
Form of Proxy
Mah Sing Group Berhad Annual Report 2010
89
Statements of Cash Flows
For The Financial Year Ended 31 December 2010
The Group The Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Operating activities
Profit before tax 177,865 144,243 4,431 1,971
Adjustments for:
Allowance for doubtful debts 1,019 789 - -
Allowance for slow-moving inventories 462 16 - -
Amortisation of license fee 4 8 - -
Amortisation of prepaid lease payments 314 349 - -
Bad debts written off-other receivables 70 - 70 4
Depreciation of property, plant and equipment 11,394 9,871 94 91
Dividend income - - (22,000) (10,000)
Finance costs 9,792 10,996 3,806 1,234
Amortised costs adjustment (693) - - -
Gain on disposal of other investments - (1) - -
Gain on disposal of prepaid lease payments - (172) - -
(Reversal of impairment)/Impairment loss for subsidiary - - (250) 3
Interest income (6,191) (2,822) (14,852) (5,147)
Loss/(Gain) on disposal of property, plant and equipment 98 (728) - -
Options granted under ESOS 980 - 308 -
Property, plant and equipment written off 116 66 - -
Provision for post-employment benefits 605 445 - -
Reversal of impairment loss on
property, plant and equipment (9) - - -
Unrealised foreign exchange differences 3,069 570 9,969 295
Operating cash flows before changes in working capital 198,895 163,630 (18,424) (11,549)
90
Core Facts
Statements of Cash Flows
For The Financial Year Ended 31 December 2010 (Cont’d)
Messages
The Group The Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Changes in working capital
Activities
(Increase)/Decrease in property
development costs (465,988) 56,331 - -
(Increase)/Decrease in inventories (3,699) 1,721 - -
(Increase)/Decrease in receivables (211,630) (35,412) 10,919 156
Increase in payables 245,301 39,137 716 2,622
Governance
Total changes in working capital (436,016) 61,777 11,635 2,778
Cash flow generated from/
(used in) operation (237,121) 225,407 (6,789) (8,771)
Interest received 3,296 2,337 2,088 2,337
Interest paid (18,741) (11,679) (1,322) (1,218)
Financials
Income tax (paid)/refund (53,039) (41,238) 1,591 (42)
Net cash flow from/
(used in) operating activities (305,605) 174,827 (4,432) (7,694)
Investing activities
Dividends received - - 19,250 7,500
Information
Additional
Interest income from deposits
with licensed banks - 293 - -
Net advances from/(to) subsidiaries - - (164,112) 53,148
Payment for acquisition of property,
plant and equipment* (14,908) (11,028) (58) (355)
Proceeds from disposal of other investment - 2 - -
Notices
Proceeds from disposal of property, plant and equipment 88 2,692 - -
Proceeds from disposal of prepaid lease payments - 1,413 - -
Purchase of balance of equity in a
subsidiary (1,380) - (1,380) -
Form of Proxy
Subscription of shares in subsidiary companies - - (21,850) (1,000)
Net cash (used in)/generated from investing
activities (16,200) (6,628) (168,150) 59,293
Mah Sing Group Berhad Annual Report 2010
91
Statements of Cash Flows
For The Financial Year Ended 31 December 2010 (Cont’d)
The Group The Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Financing activities
Deposits pledged with licensed bank as collateral (40,412) (8,924) - -
Dividends paid (40,539) (37,799) (40,539) (37,799)
Repayment of minority shareholder’s advances (1,614) - - -
Withdrawal/(placement) of deposits with licensed bank for
Escrow Accounts 17,675 (18,578) - -
Proceeds from ESOS exercised - 158 - 158
Payment for corporate exercise expenses (320) - (320) -
Proceeds from private placement - 97,645 - 97,645
Proceeds from short-term borrowings 74,600 38,094 56,000 -
Proceeds from term loans 432,597 117,936 10,613 -
Proceeds from warrants exercised - 1,463 - 1,463
Repayment of hire purchase and finance lease liabilities (1,429) (1,848) - -
Repayment of short-term borrowings (20,280) (32,837) - -
Repayment of term loans (197,770) (127,266) (6,639) (9,421)
Net cash generated from financing
activities 222,508 28,044 19,115 52,046
Net (decrease)/increase in cash and
cash equivalents (99,297) 196,243 (153,467) 103,645
Cash and cash equivalents at beginning of
the financial year 356,564 160,352 224,668 121,023
Currency translation differences (10,788) (31) - -
Cash and cash equivalents at end of the
financial year 246,479 356,564 71,201 224,668
92
Core Facts
Statements of Cash Flows
For The Financial Year Ended 31 December 2010 (Cont’d)
Messages
Note:
* Net cash outlay for the acquisition of property, plant and equipment during the financial year is as follows:
The Group The Company
2010 2009 2010 2009
Activities
RM’000 RM’000 RM’000 RM’000
Total acquisition (Note 14) 18,588 13,700 58 307
Less: Amount payable for
acquisition of property, plant
and equipment (8,890) (3,243) - (84)
Governance
Amount financed by finance
lease and hire purchase (480) (2,660) - -
Deposit paid in previous year (60) (1,140) - -
Add: Cash paid in respect of
previous year’s acquisition 5,750 4,371 - 132
14,908 11,028 58 355
Financials
The accompanying Notes form an integral part of the Financial Statements.
Information
Additional
Notices
Form of Proxy
Mah Sing Group Berhad Annual Report 2010
93
Notes To The Financial Statements
1. GENERAL INFORMATION
The Company is a public limited liability company, incorporated and domiciled in Malaysia, and listed on the Main Market of
Bursa Malaysia Securities Berhad.
The principal activities of the Company are investment holding and provision of management services to subsidiary companies
in the Group. The principal activities of the subsidiary companies are set out in Note 18. There has been no significant change
in the nature of the activities of the Group and of the Company during the financial year.
The registered office and principal place of business of the Company is located at Penthouse Suite 1, Wisma Mah Sing,
No. 163, Jalan Sungai Besi, 57100 Kuala Lumpur.
The financial statements of the Group and of the Company were authorised for issuance by the Board of Directors in accordance
with a resolution of Directors on 25 February 2011.
2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS
The financial statements of the Group and of the Company have been prepared in accordance with the provisions of the
Companies Act, 1965 and Financial Reporting Standards (“FRSs”), the applicable approved accounting standards in Malaysia
issued by the Malaysian Accounting Standards Board (“MASB”).
The financial statements are presented in Ringgit Malaysia (“RM”) which represents the functional currency of the Group and of
the Company and all financial information presented in RM are rounded to the nearest thousand (“RM’000”), unless otherwise
stated.
Adoption of New and Revised Financial Reporting Standards
In the current financial year, the Group and the Company have adopted all the new and revised FRSs and Issues Committee
Interpretations (“IC Interpretations”) and amendments to FRSs and IC Interpretation issued by MASB that are relevant to their
operations and effective for annual financial periods beginning on or after 1 January 2010.
FRS 2 Share-based Payment (Amendments relating to vesting conditions and cancellations)
FRS 7 Financial Instruments: Disclosures
Financial Instruments: Disclosures (Amendments relating to reclassification of financial assets and
FRS 7
reclassification of financial assets - Effective date and transition)
FRS 8 Operating Segments
FRS 101 Presentation of Financial Statements (revised)
FRS 123 Borrowing Costs (revised)
Consolidated and Separate Financial Statements (Amendments relating to cost of an investment in a
FRS 127
subsidiary, jointly controlled entity or associate)
Financial Instruments: Presentation (Amendments relating to Puttable Financial Instruments and Obligations
FRS 132
Arising on Liquidation and transitional provision relating to compound instruments)
FRS 139 Financial Instruments: Recognition and Measurement
Financial Instruments: Recognition and Measurement (Amendments relating to eligible hedged items,
FRS 139 reclassification of financial assets, reclassification of financial assets - Effective date and transition and
embedded derivatives)
94
Core Facts
Notes To The Financial Statements (Cont’d)
Messages
Improvements to FRSs issued in 2009
IC Int. 9 Reassessment of Embedded Derivatives
IC Int. 9 Reassessment of Embedded Derivatives (Amendments relating to embedded derivatives)
IC Int. 10 Interim Financial Reporting and Impairment
Activities
IC Int. 11 FRS 2 - Group and Treasury Share Transactions
IC Int. 13 Customer Loyalty Programs
IC Int. 14 FRS 119 - The Limit on a Defined Benefit Asset, Minimum Funding Requirements and Their Interaction
Governance
The adoption of these new and revised FRSs and IC Interpretations did not result in significant changes in the accounting
policies of the Group and of the Company and have no significant effect on the financial performance or position of the Group
and of the Company except for those discussed below.
FRS 7 Financial Instruments: Disclosures
FRS 7 and the consequential amendment to FRS 101 Presentation of Financial Statements require disclosure of information
Financials
about the significance of financial instruments for the Group’s and the Company’s financial position and performance, the nature
and extent of risks arising from financial instruments, and the objectives, policies and process for managing capital.
Comparative disclosures have not been presented upon initial adoption of this Standard as the Group and the Company have
availed themselves of the transitional provision in this Standard.
FRS 8 Operating Segments
Information
Additional
FRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are
regularly reviewed by the chief operating decision maker in order to allocate resources to the segments and to assess their
performance. In contrast, the predecessor Standard (FRS 1142004 Segment Reporting) required an entity to identify two sets
of segments (business and geographical), using a risks and returns approach, with the entity’s ‘system of internal financial
reporting to key management personnel’ serving only as the starting point for the identification of such segments. There were
no material changes to the reportable segments of the Group following the adoption of the FRS 8, as disclosed in Note 36.
Notices
FRS 101 Presentation of Financial Statements (revised)
FRS 101 has introduced terminology changes (including revised titles for the financial statements) and changes in the format
and content of the financial statements. In addition, the revised standard requires the presentation of a third statement of
financial position in the event that the entity has applied new accounting policies retrospectively. This change in accounting
Form of Proxy
policy affects only the presentation of the Group’s and the Company’s financial statements.
FRS 139 Financial Instruments: Recognition and Measurement
The Group and the Company have adopted FRS 139 prospectively on 1 January 2010 in accordance with the transitional
provisions in FRS139. On that date, financial assets were classified as either financial assets at fair value through profit or loss,
loans and receivables, held-to-maturity investments or available-for-sale financial assets, as appropriate. Financial liabilities
Mah Sing Group Berhad Annual Report 2010
were classified as either financial liabilities at fair value through profit or loss or other financial liabilities (i.e. those financial
liabilities which are not held for trading or designated as at fair value through profit and loss upon initial recognition). The
accounting policies for financial assets and financial liabilities are as disclosed in Note 3 to the financial statements.
All financial assets and financial liabilities within the scope of FRS 139 are recognised and re-measured accordingly, with the
related adjustments taken to opening retained earnings or hedging reserve as of 1 January 2010, as appropriate.
The effects arising from the adoption of this standard has been accounted for by adjusting respective opening balance as at 1
January 2010, as shown below and comparatives are not restated.
95
Notes To The Financial Statements (Cont’d)
As of 31 December Effect of FRS 139 As of 1 January
2009 Adjustment 2010
Statements of Financial
Position
The Group RM’000 RM’000 RM’000
Current Assets
Trade and other receivables 180,843 (28) 180,815
Equity
Retained earnings (294,054) (1,916) (295,970)
Minority interest (7,774) (195) (7,969)
Non-Current Liabilities
Long-term and deferred
(19,227) (113) (19,340)
payables
Current Liabilities
Trade and other payables (438,549) 2,252 (436,297)
FRSs and IC Interpretations in Issue But Not Yet Effective
At the date of authorisation for issue of these financial statements, the new and revised Standards and IC Interpretations which
were in issue but not yet effective and not early adopted by the Group and the Company are as listed below.
FRS 1 First-time Adoption of Financial Reporting Standards (revised)1
First-time Adoption of Financial Reporting Standards (Amendments relating to limited exemption from
FRS 1
Comparative FRS 7 Disclosures for First-time Adopters)2
First-time Adoption of Financial Reporting Standards (Amendments relating to additional exemptions for first-
FRS 1
time adopters)2
FRS 2 Share-based Payment (Amendments relating to scope of FRS 2 and revised FRS 3)1
FRS 2 Share-based Payment (Amendments relating to group cash-settled share-based payment transactions)2
FRS 3 Business Combinations (revised)1
Non-current Assets held for sale and Discontinued Operations (Amendments relating to plan to sell controlling
FRS 5
interest in a subsidiary)1
Financial Instruments: Disclosures (Amendments relating to improving disclosures about financial
FRS 7
instruments)2
FRS 124 Related Party Disclosures (revised)3
FRS 127 Consolidated and Separate Financial Statements (revised)1
FRS 128 Investment in Associates (revised)1
FRS 132 Financial Instruments: Presentation (Amendments relating to classification of rights issue)4
FRS 138 Intangible Assets (Amendments relating to additional consequential amendments arising from revised FRS 3)1
Financial Instruments: Recognition and Measurement (Amendments relating to additional consequential
FRS 139
amendments arising from revised FRS 3 and revised FRS 127)1
96
Core Facts
Notes To The Financial Statements (Cont’d)
Messages
Improvements to FRSs issued in 20102
IC Int. 4 Determining whether an Arrangement contains a Lease2
Reassessment of Embedded Derivatives (Amendments relating to additional consequential amendments
IC Int. 9
arising from revised FRS 3)1
Activities
IC Int. 9 Reassessment of Embedded Derivatives (Amendments relating to scope of IC Interpretation 9 revised FRS 3)1
IC Int. 12 Service Concession Arrangements1
FRS 119 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and Their Interaction
IC Int. 14
(Amendments relating to prepayments of a minimum funding requirement)7
IC Int. 15 Agreements for the Construction of Real Estate5
Governance
IC Int. 16 Hedges of a Net Investment in a Foreign Operation1
IC Int. 17 Distributions of Non-cash Assets to Owners1
IC Int. 18 Transfers of Assets from Customers6
IC Int. 19 Extinguishing Financial Liabilities with Equity Instruments7
Financials
1
Effective for annual periods beginning on or after 1 July 2010
2
Effective for annual periods beginning on or after 1 January 2011
3
Effective for annual periods beginning on or after 1 January 2012
4
Effective for annual periods beginning on or after 1 March 2010
5
Original effective date of 1 July 2009 deferred to 1 January 2012 via amendment issued by MASB on 30 August 2010
6
Applied prospectively to transfers of assets from customers received on or after 1 January 2011
Information
Additional
7
Effective for annual periods beginning on or after 1 July 2011
Consequential amendments were also made to various FRSs as a result of these new/ revised FRSs.
The Directors anticipate that abovementioned Standards and IC Interpretations will be adopted in the annual financial statements
of the Group and of the Company when they become effective and that the adoption of these Standards and IC Interpretations
will have no material impact on the financial statements of the Group and of the Company in the period of initial application,
except for the followings:
Notices
FRS 3 - Business Combination (revised)
The revised FRS 3:
• allows a choice on a transaction-by-transaction basis for the measurement of minority interests either at fair value or at the
Form of Proxy
minority interests’ share of the fair value of the identifiable net assets of the acquiree;
• changes the recognition and subsequent accounting requirements for contingent consideration. Under the previous version
of the Standard, contingent consideration was recognised at the acquisition date only if payment of the contingent
consideration was probable and it could be measured reliably; any subsequent adjustments to the contingent consideration
were recognised against goodwill. Under the revised Standard, contingent consideration is measured at fair value at the
acquisition date; subsequent adjustments to the consideration are recognised against goodwill only to the extent that they
Mah Sing Group Berhad Annual Report 2010
arise from new information obtained within the measurement period (a maximum of 12 months from the acquisition date)
about the fair value at the acquisition date. All other subsequent adjustments to contingent consideration classified as an
asset or a liability are recognised in statements of comprehensive income;
• requires the recognition of a settlement gain or loss where the business combination in effect settles a pre-existing
relationship between the Group and the acquiree; and
• requires acquisition-related costs to be accounted for separately from the business combination, generally leading to those
costs being recognised as an expense in statements of comprehensive income as incurred, whereas previously they were
accounted for as part of the cost of the business combination.
97
Notes To The Financial Statements (Cont’d)
Upon adoption, this Standard will be applied prospectively and therefore, no restatements will be required in respect of
transactions prior to the date of adoption.
FRS 127 - Consolidated and Separate Financial Statements (revised)
The revised Standard will affect the Group’s accounting policies regarding changes in ownership interests in its subsidiaries that
do not result in a change in control. Previously, in the absence of specific requirements in FRSs, increases in interests in existing
subsidiaries were treated in the same manner as the acquisition of subsidiaries, with goodwill or a bargain purchase gain being
recognised, where appropriate; for decreases in interests in existing subsidiaries regardless of whether the disposals would
result in the Group losing control over the subsidiaries, the difference between the consideration received and the carrying
amount of the share of net assets disposed of was recognised in statements of comprehensive income.
Under FRS 127 (revised), increases or decreases in ownership interests in subsidiaries that do not result in the Group losing
control over the subsidiaries are dealt with in equity and attributed to the owners of the parents, with no impact on goodwill or
profit or loss. When control of a subsidiary is lost as a result of a transaction, event or other circumstance, FRS 127 (revised)
requires that the Group derecognised all assets, liabilities and minority interests at their carrying amounts. Any retained interest
in the former subsidiary is recognised at its fair value at the date when control is lost, with the resulting gain or loss being
recognised in statements of comprehensive income.
Upon adoption, this Standard will be applied prospectively and therefore, no restatements will be required in respect of
transactions prior to the date of adoption.
IC Interpretation 15 Agreements for the Construction of Real Estate
This Interpretation clarifies when and how revenue and related expenses for the sale of a real estate unit should be recognised if
an agreement between a developer and a buyer is reached before the construction of the real estate is completed. Furthermore,
the Interpretation provides guidance on how to determine whether an agreement is within the scope of FRS 111 Construction
Contracts or FRS 118 Revenue.
The Group currently recognises revenue arising from property development projects using the stage of completion method. The
Group is in the process of making an assessment of the impact of this Interpretation.
3. SIGNIFICANT ACCOUNTING POLICIES
Basis of Accounting
The financial statements of the Group and of the Company have been prepared under the historical cost convention except as
disclosed in the significant Group accounting policies.
Economic Entities in The Group
(a) Subsidiaries
Investments in subsidiaries are stated in the Company’s Statement of financial position at cost less any impairment losses,
unless the investment is held for sale.
Subsidiaries are those corporations, partnerships or other entities (including special purpose entities) in which the Group
has power to exercise control over the financial and operating policies so as to obtain benefits from their activities, generally
accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights
that are currently exercisable or convertible are considered when assessing whether the Group controls another entity.
Subsidiaries are consolidated using the purchase method of accounting except for certain subsidiaries acquired prior to 1
January 2002 which have been consolidated using the merger method (as disclosed in Note 18) in accordance with
Malaysian Accounting Standard 2 “Accounting for Acquisitions and Merger”, the generally accepted accounting principles
prevailing at that time.
98
Core Facts
Notes To The Financial Statements (Cont’d)
Messages
The Group has taken advantage of the exemption provided by FRS 1222004 and FRS 3 to apply these Standards
prospectively. Accordingly, business combinations entered into prior to the respective effective dates have not been restated
to comply with these Standards.
The consolidated financial statements include the financial statements of the Company and all its subsidiary companies
made up to the end of the financial year.
Activities
Under the purchase method, the difference between the fair value of the cost of acquisition of subsidiary companies and
the Group’s share of the fair value of the identifiable net assets of subsidiaries acquired is included in the consolidated
financial statements as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiaries
acquired, the difference is recognised directly in profit or loss.
Governance
Subsidiary companies are consolidated from the date on which control is transferred to the Group and are de-consolidated
from the date that control ceases. The cost of an acquisition is measured as fair value of the assets given, equity instruments
issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition.
The gain or loss on disposal of a subsidiary of the Group is the difference between net disposal proceeds and the Group’s
share of its net assets with any unamortised balance of goodwill on consolidation.
Minority interest represents that portion of the profit or loss and net assets of a subsidiary attributable to equity interests that
Financials
are not owned, directly or indirectly through subsidiaries, by the parent. Minority interest is measured at the minorities’ share
of the fair values of the subsidiaries’ identifiable assets and liabilities at the acquisition date and the minorities’ share of
changes in the subsidiaries’ equity since that date.
Acquisition of subsidiary companies that meets the criteria for merger accounting is accounted for using merger accounting
principles. When the merger method is used, the cost of investment in the Company’s books is recorded at the nominal
Information
value of the shares issued and the difference between the carrying value of the investment and the nominal value of shares
Additional
transferred, if any, is treated as merger reserve. The results of these subsidiary companies are presented as if the merger
had been effected throughout the current and previous financial years.
Intragroup transactions, balances and unrealised gains on transactions between Group companies are eliminated.
Unrealised losses are also eliminated but considered an impairment indicator of the asset transferred. Accounting policies
of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.
Notices
(b) Associated companies
An associated company is a non-subsidiary company in which the Group holds not less than 20% of the equity voting rights
as long-term investment and in which the Group is in a position to exercise significant influence in its management.
Investment in associated company is stated at cost less any impairment losses in the Company’s financial statements.
Form of Proxy
The Group’s investment in associated company is accounted for under the equity method of accounting based on the latest
audited and/or the management financial statements of the associated company made up to 31 December 2010. Under
this method of accounting, the Group’s interest in the post-acquisition profit and reserves of the associated company is
included in the consolidated results while dividend received is reflected as a reduction of the investment in the consolidated
balance sheet. The carrying amount of such investment is reduced to recognise any decline, other than a temporary
decline, in the value of the investment.
Mah Sing Group Berhad Annual Report 2010
Where a group entity transacts with an associate of the Group, profits and losses are eliminated to the extent of the Group’s
interest in the relevant associate.
99
Notes To The Financial Statements (Cont’d)
(c) Goodwill on consolidation
Goodwill is identified as any excess of the consideration paid over the Group’s share of fair value of the identifiable assets,
liabilities and contingent liabilities acquired as at the date of acquisition. Goodwill is initially measured at cost less any
accumulated impairment losses. Goodwill is not amortised but instead, it is reviewed for impairment, annually or more
frequently if events or changes in circumstances indicate that the carrying value may be impaired.
Where the consideration is lower than the Group’s share of net fair value of the identifiable assets, liabilities and contingent
liabilities acquired, the difference is recognised as negative goodwill. Negative goodwill is recognised immediately in profit
or loss.
Goodwill acquired is allocated to the cash-generating units (“CGU”) expected to benefit from the acquisition synergies. An
impairment loss is recognised in the income statement when the carrying amount of the CGU, including the goodwill,
exceeds the recoverable amount of the CGU. The recoverable amount is the higher of the CGU’s fair value less costs to sell
and its value in use. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the
entity sold.
The total impairment loss is allocated first to reduce the carrying amount of goodwill allocated to the CGU and then to the
other assets of the CGU pro-rata on the basis of the carrying amount of each assets in the CGU. Impairment loss on
goodwill is not reversed in a subsequent period.
Foreign Currencies
(a) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary
economic environment in which the entity operates (the “functional currency”). The financial statements are presented in
Ringgit Malaysia, which is the Company’s functional and presentation currency.
(b) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of
the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the
translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised
in profit or loss.
(c) Group companies
Assets and liabilities of foreign subsidiary companies are translated to Ringgit Malaysia at rates of exchange ruling at the
balance sheet date and the results of foreign subsidiaries are translated at the average rate of exchange for the financial
year. Exchange differences arising from the translation are recognised as a separate component of equity.
On consolidation, exchange differences arising from the translation of the net investment in foreign operations are taken
to shareholders’ equity. When a foreign operation is partially disposed of or sold, exchange differences that were recorded
in equity are recognised in profit or loss as part of the gain or loss on sale.
100
Core Facts
Notes To The Financial Statements (Cont’d)
Messages
Revenue Recognition
Revenue comprises the fair value of the consideration received or receivable for the sales of goods or services in the ordinary
course of business.
Revenue from property development projects is accounted for using the percentage of completion method where the outcome
Activities
of the development can be reliably estimated and is in respect of sales where agreements have been finalised by the end of
the financial year. The percentage/stage of completion is measured by reference to the cost incurred to date compared to the
estimated total cost of the development.
Revenue from sale of completed properties is recognised upon the finalisation of sale and purchase agreements by the end of
the financial year and when the risks and rewards of ownership have passed to the customers.
Governance
Sales of goods are recognised upon delivery of products and where the risks and rewards of ownership have passed to the
customers, or performance of services, net of sales taxes and discounts.
Other revenue earned by the Group is recognised on the following bases:
Interest income accrual basis unless collectability is in doubt
Financials
Dividend income when the Group’s right to receive payment is established
Maintenance charges upon performance of services
and management fee
Rental income accrued on a time basis, by reference to the agreements entered
Information
Additional
Income Tax
Income tax on the profit or loss for the financial year comprises current and deferred tax. Current tax is the expected amount of
income taxes payable in respect of the taxable profit for the financial year and is measured using the tax rates that have been
enacted at the balance sheet date.
Deferred tax is accounted for using the “liability” method in respect of temporary differences arising from differences between
the carrying amounts of assets and liabilities in the financial statements and their corresponding tax bases used in the
Notices
computation of taxable profit.
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 future taxable
profit will be available against which the deferred tax assets can be utilised.
Form of Proxy
Deferred tax is measured at 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 end of the reporting period. Deferred tax is recognised
in profit or loss, except when it arises from a transaction which is recognised directly in equity, in which case the deferred tax is
also charged or credited directly in equity.
Property, Plant and Equipment and Depreciation
Mah Sing Group Berhad Annual Report 2010
Buildings are stated at cost or valuation less accumulated amortisation/depreciation and accumulated impairment losses.
Other property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. The
costs of property, plant and equipment comprise their purchase costs and any expenditure that is directly attributable to the
acquisition of the assets.
101
Notes To The Financial Statements (Cont’d)
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when
it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be
measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged
to profit or loss during the financial period in which they are incurred.
Certain leasehold buildings were revalued by the Directors based on valuations carried out by independent professional valuers.
The Directors have applied the transitional provisions when MASB first adopted IAS 16 - Property, Plant and Equipment. By
virtue of this transitional provision, upon implementation in 1998 of MASB Approved Accounting Standard IAS 16 for the first
time, an enterprise is allowed to continue carrying those assets at their previous valuations subject to continuity in depreciation
policy on the requirement to write an asset down to its recoverable amount. Accordingly, these valuations have not been
updated.
Surpluses arising on revaluation are credited to the revaluation reserve. Any deficit arising from revaluation is charged against
the revaluation reserve to the extent of a previous surplus held in the revaluation reserve for the same asset. In all other cases,
a decrease in carrying amount is charged to profit or loss. On disposal of revalued assets, amounts in the revaluation reserve
relating to those assets are transferred to retained earnings.
Depreciation of other assets is calculated so as to write off the costs or valuations of the assets to their estimated residual
values on a straight line basis over the expected useful economic lives of the assets concerned. The principal annual rates are
as follows:
Buildings 3.33% - 10%
Renovations 3.33% - 10%
Plant, machinery and factory equipment 10% - 25%
Motor vehicles 12.5% - 15%
Furniture, fittings and office equipment 8% - 25%
Depreciation for certain moulds by a foreign subsidiary for specific projects is determined using the units of production method
with expected year ranging between 2 to 10 years.
The residual value and the useful life of an asset is reviewed at each financial year-end and, if expectations differ from previous
estimates, the changes will be accounted for as a change in an accounting estimate.
At each balance sheet date, the Group assesses whether there is any indication of impairment. If such indications exist, an
analysis is performed to assess whether the carrying amount of the asset is fully recoverable. A write-down is made if the
carrying amount exceeds the recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with carrying amounts and are included in profit/(loss)
from operations. On disposal of revalued assets, amounts in revaluation reserve relating to those assets are transferred to
retained earnings.
Investment Properties
Investment properties are properties which are owned or held under a leasehold interest to earn rental income or for capital
appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services
or for administrative purposes.
A property interest under an operating lease is classified and accounted for as an investment property on a property-by-
property basis when the Group holds it to earn rentals or for capital appreciation or both.
102
Core Facts
Notes To The Financial Statements (Cont’d)
Messages
Investment properties are measured initially at cost and subsequently at fair value with any change therein recognised in profit
or loss for the period in which they arise.
Investment properties are derecognised when either they have been disposed of or when the investment property is permanently
withdrawn from use and no future economic benefit is expected from its disposal. Any gain or loss on the retirement or disposal
of an investment property is recognised in profit or loss in the year of retirement or disposal.
Activities
Transfers are made to or from investment property only when there is a change in use. For a transfer from investment property
to owner occupied, the deemed cost for subsequent accounting is the fair value at the date of change in use.
Finance Leases - For Lessee
Governance
Leases of property, plant and equipment where the Group assumes substantially all the benefits and risks of ownership are
classified as finance leases.
Property, plant and equipment under finance leases are capitalised and the capital element of the lease commitments is
reflected as lease payables. The capital element of the lease installments is applied to reduce the outstanding obligations
whereas the interest element is charged against the income statements so as to give a constant periodic rate of charge on the
remaining balance outstanding at the end of each reporting period.
Financials
Property, plant and equipment acquired under finance lease are capitalised and depreciated over the same useful economic
lives as similar equivalent owned property, plant and equipment.
Operating Leases - For Lessee
Leases of assets where a significant portion of the risks and rewards of ownership are retained by the lessor are classified as
Information
operating leases. Payments made under operating leases are charged to the income statements over the lease period.
Additional
Prepaid Lease Payments
Leasehold land that has an indefinite economic life and title that is not expected to pass to the Group by the end of the lease
period is classified as operating lease. The upfront payments for right to use the leasehold land over a predetermined period
are accounted for as prepaid lease payments and are stated at cost less amount amortised.
Notices
Certain leasehold land of a subsidiary company was last revalued in 1992. As allowed by the transitional provision of FRS
117, the prepaid lease payments at valuation are stated on the basis of its 1992 valuation and the said valuation has not been
updated.
Short-term and long-term leasehold land recognised as prepaid lease payments are amortised in equal instalments over the
respective lease periods.
Form of Proxy
License Fee
All costs incurred in the acquisition of license for assembly of certain plastic products are capitalised and amortised on a straight
line basis over a period of 10 years and they will be written off when, in the opinion of the Directors, the future economic benefits
are uncertain.
Mah Sing Group Berhad Annual Report 2010
Where an indication of impairment exists, the carrying amount of the intangible assets are assessed and written down
immediately to its recoverable amount.
103
Notes To The Financial Statements (Cont’d)
Property Development Activities
(a) Land held for property development
Land held for property development consists of land on which no significant development work has been undertaken or
where development activities are not expected to be completed within the normal operating cycle. Such land is classified
as non-current asset and is stated at cost less accumulated impairment losses.
Costs associated with the acquisition of land include the purchase price of the land, professional fees, stamp duties,
commissions, conversion fees and other relevant levies. Where the Group had previously recorded the land at a revalued
amount it continues to retain this amount as its surrogate cost as allowed by FRS 2012004. Where an indication of
impairment exists, the carrying amount of the asset is assessed and written down immediately to its recoverable amount.
Land held for property development is transferred to property development costs (under current assets) when development
activities have commenced and where the development activities can be completed within the Group’s normal operating
cycle.
(b) Property development costs
Property development costs comprise costs associated with the acquisition of land and all costs directly attributable to
development activities or that can be allocated on a reasonable basis to these activities.
When the outcome of the development activity can be estimated reliably, property development revenue and expenses are
recognised by using the stage of completion method. The stage of completion is measured by reference to the proportion
that property development costs incurred bear to the estimated total costs for the property development.
When the outcome of a development activity cannot be reliably estimated, property development revenue is recognised
only to the extent of property development costs incurred that are probable of recovery.
Irrespective of whether the outcome of a property development activity can be estimated reliably, when it is probable
that total property development costs (including expected defect liability expenditure) will exceed total property development
revenue, the expected loss is recognised as an expense immediately.
Property development costs not recognised as an expense are recognised as an asset and are stated at the lower of cost
and net realisable value.
Where revenue recognised in the income statements exceeds billings to purchasers, the balance is shown as accrued
billings under trade and other receivables (within current assets). Where billings to purchasers exceed revenue recognised
in the income statements, the balance is shown as progress billings under payables (within current liabilities).
Impairment of Non-Financial Assets
Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment. Assets that are
subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying
amount may not be recoverable. An impairment loss is recognised for the amount by which the carrying amount of the asset
or Cash-Generating Unit (“CGU”) exceeds its recoverable amount. The recoverable amount is the higher of an asset’s or CGU’s
fair value less costs to sell and value in use. For the purpose of assessing impairment, the Group estimates the recoverable
amount of the CGU to which the assets belongs.
Non-financial assets other than goodwill that suffer an impairment are reviewed for possible reversal of the impairment at each
reporting date.
104
Core Facts
Notes To The Financial Statements (Cont’d)
Messages
The impairment loss is charged to the income statements unless it reverses a previous revaluation in which case it is charged
to the revaluation surplus. Impairment losses on goodwill are not reversed.
An impairment loss is only reversed to the extent that the asset’s carrying amount does not exceed the carrying amount that
would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. A reversal is
recognised in profit or loss, unless it reverses an impairment loss on revalued assets, in which case, the reversal is treated as
Activities
a revaluation increase.
Inventories
Inventories of completed properties are stated at the lower of cost and net realisable value. Cost includes the relevant cost of
land and development expenditure.
Governance
Inventories of raw materials, work-in-progress and finished goods are stated at the lower of cost and net realisable value. Cost
is determined using the weighted average method. The cost of raw materials comprises the original purchase price plus cost
incurred in bringing the inventories to their present location and condition. The costs of finished goods and work-in-progress
comprise raw materials, direct labour, other direct costs and an appropriate proportion of production overheads.
Net realisable value is the estimated selling price in the ordinary course of business, less the costs of completion and applicable
variable selling expenses.
Financials
Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that
necessarily take a substantial period of time to get them ready for their intended use or sale, are capitalised as part of the cost
of those assets, until such time as the assets are substantially ready for their intended use or sale.
Information
Additional
The amount of borrowing costs eligible for capitalisation is determined based on actual interest incurred on borrowings made
specifically for the purpose of obtaining a qualifying asset and less any investment income on the temporary investment of that
borrowing.
All other borrowing costs are recognised as finance costs in profit or loss in the financial year in which they are incurred.
Provisions
Notices
Provisions for liabilities are recognised when the Group has a present or constructive obligation as a result of a past event and
it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable
estimate of the amount can be made. Provisions are reviewed at each balance sheet date and adjusted to reflect the current
best estimate. Where the effect of the time value of money is material, the amount of a provision is the present value of the
expenditure expected to be required to settle the obligation.
Form of Proxy
Contingent Liabilities and Contingent Assets
The Group does not recognise a contingent liability but discloses its existence in the financial statements. A contingent liability
is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence
of one or more uncertain future events beyond the control of the Group or a present obligation that is not recognised because
it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in the
Mah Sing Group Berhad Annual Report 2010
extremely rare case where there is a liability that cannot be recognised because it cannot be measured reliably.
A contingent asset is a possible asset that arises from past events whose existence will be confirmed by the occurrence or non-
occurrence of one or more uncertain future events beyond the control of the Group. The Group does not recognise contingent
assets but discloses its existence where inflows of economic benefits are probable, but not virtually certain.
105
Notes To The Financial Statements (Cont’d)
Employee Benefits
(i) Short-term benefits
Wages, salaries, bonuses and social security contributions are recognised as an expense in the financial year in which
the associated services are rendered by employees of the Group and the Company. Short-term accumulating compensated
absences for paid annual leave when services are rendered by employees that increase their entitlement to future
compensated absences are recognised based on the experience that absences will occur.
(ii) Defined contribution plan
The Group and the Company are required by law to make monthly contributions to the Employees Provident Fund (EPF), a
statutory defined contribution plan for all their eligible employees based on certain prescribed rates of the employees’
salaries. The Group’s and the Company’s contributions to EPF are disclosed separately. The employees’ contributions to
EPF are included in salaries and wages.
(iii) Defined benefit plan
A foreign subsidiary operates an unfunded defined Retirement Benefit Scheme (“RBS”) for its eligible employees. The
foreign subsidiary’s obligations under RBS are determined based on external actuarial valuation in accordance with the
labour law requirements in that country where the amount of benefits that employees have earned in return for their
service in the current and prior years is estimated. That benefit is discounted using the Projected Unit Credit Method in order
to determine its present value. Actuarial gains and losses are recognised as income or expense over the expected average
remaining working lives of the participating employees when the cumulative unrecognised actuarial gains or losses for RBS
exceed 10% of the higher of the present value of the defined benefit obligation and the fair value of plan assets. Past service
cost is recognised immediately to the extent that the benefits are already vested; otherwise, it is amortised on a straight-line
basis over the average period until the benefits become vested.
The amount recognised at the end of the reporting period represents the present value of the defined benefit obligations
adjusted for unrecognised actuarial gains and losses and unrecognised past service cost, and reduced by the fair value of
plan assets. Plan assets resulting from this calculation are to be used only to settle the employee benefit obligations and
only can be returned to the enterprise if the remaining assets of the fund are sufficient to meet the plan’s obligation to pay
the related employee benefits directly.
(iv) Employees’ share option scheme (“ESOS”)
The Group operates an ESOS plan for the employees of the Group as set out in Note 24. The fair value of the employee
services received in exchange for the grant of the share options is recognised as an expense in profit or loss over the vesting
periods of the grant with a corresponding increase in equity.
The total amount to be expensed over the vesting period is determined by reference to the fair value of the share options
granted, excluding the impact of any non-market vesting conditions (for example, profitability and sales growth targets).
Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. At
the end of each reporting period, the Group revises its estimates of the number of share options that are expected to vest.
It recognises the impact of the revision of original estimates, if any, in profit or loss, with a corresponding adjustment to
equity.
When the options are exercised, the proceeds received net of any directly attributable transaction costs are credited to
share capital (nominal value) and share premium.
106
Core Facts
Notes To The Financial Statements (Cont’d)
Messages
Cash and Cash Equivalents
The Group and the Company adopt the indirect method in the preparation of the cash flow statements. Cash and cash
equivalents are short-term, highly liquid investments with maturities of three months or less from the date of acquisition and are
readily convertible to cash with insignificant risk of changes in value.
Activities
Segment Reporting
In the previous years, a segment was a distinguishable component of the Group that was engaged either in providing products
or services (business segment), or in providing products or services within a particular economic environment (geographical
segment) which was subject to risks and rewards that were different from those of other segments.
Governance
Following the adoption of FRS 8, Operating Segments, an operating segment is a component of the Group that engages
in business activities from which it may earn revenues and incur expenses, including revenue and expenses that relate to
transactions with any of the Group’s other components. An operating segment’s operating results are reviewed regularly by the
chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance,
and for which discrete financial information is available.
Financial Instruments
Financials
(i) Initial recognition and measurement
Financial instruments are recognised in the statements of financial position when, and only when, the Group and the Company
become a party to the contractual provisions of the financial instruments.
Where the purchase or sale of a financial asset is under a contract whose terms require delivery of the financial asset within
Information
the timeframe established by the market concerned, such financial assets are recognised and derecognised on trade date.
Additional
Financial instruments are initially measured at fair value, plus transaction costs that are directly attributable to the acquisition
or issue of the financial instruments, except for those financial assets classified as at fair value through profit or loss, which
are initially measured at fair value.
(ii) Financial instrument categories and subsequent measurement
Notices
Financial assets
Financial assets are classified into the following specified categories: financial assets “at fair value through profit or loss”
(FVTPL), “held-to-maturity” investments, “available-for-sale” (AFS) financial assets and “loans and receivables”. The
classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition.
Form of Proxy
A financial asset is any asset that is cash, a contractual right to receive cash or another financial asset from another
enterprise, a contractual right to exchange financial instruments with another enterprise under conditions that are potentially
favourable, or an equity instrument of another enterprise.
(a) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted
Mah Sing Group Berhad Annual Report 2010
in an active market (including fixed deposits with financial institutions). Loans and receivables are measured at
amortised cost using the effective interest method, less any impairment. Interest income is recognised by applying
the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.
All financial assets, except for those measured at fair value through profit or loss, are subject to review for impairment.
107
Notes To The Financial Statements (Cont’d)
(b) Effective interest method
The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating
interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future
cash receipts (including all fees on points paid or received that form an integral part of the effective interest rate,
transaction costs and other premiums or discounts) through the expected life of the financial asset, or (where
appropriate) a shorter period, to the net carrying amount on initial recognition.
Income is recognised on an effective interest basis for debt instruments other than those financial assets classified as at
FVTPL.
Equity Instruments
(a) Classification as Debt or Equity
Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the
contractual arrangement.
(b) Equity Instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its
liabilities. Equity instruments issued by the Group and the Company are recognised at the proceeds received, net of direct
issue costs.
Financial Liabilities
Financial liabilities are classified as either financial liabilities “at FVTPL” or “other financial liabilities”.
A financial liability is any liability that is a contractual obligation to deliver cash or another financial asset to another enterprise,
or to exchange financial instruments with another enterprise under conditions that are potentially unfavourable. The Group’s
and the Company’s significant financial liabilities include trade and other payables, which are initially measured at fair value and
subsequently measured at amortised cost.
(a) Financial liabilities at FVTPL
Fair value through profit or loss category comprises financial liabilities that are held for trading, derivatives or financial
liabilities that are specifically designated into this category upon initial recognition.
Derivatives that are linked to and must be settled by delivery of unquoted equity instruments whose fair values cannot be
reliably measured are measured at cost.
Other financial liabilities categorised as fair value through profit or loss are subsequently measured at their fair values with
the gain or loss recognised in profit or loss.
(b) Other financial liabilities
Other financial liabilities are initially measured at fair value, net of transaction costs.
Other financial liabilities are subsequently measured at amortised cost using the effective interest method, with interest
expense recognised on an effective yield basis.
The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest
expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments
through the expected life of the financial liability, or, where appropriate, a shorter period.
108
Core Facts
Notes To The Financial Statements (Cont’d)
Messages
Derecognition
A financial asset or part of it is derecognised when, and only when the contractual rights to the cash flows from the financial
asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to
another entity. On derecognition of a financial asset, the difference between carrying amount and the sum of the consideration
received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been
Activities
recognised in equity is recognised in profit or loss.
A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract is discharged or
cancelled or expires. On derecognition of a financial liability, the difference between the carrying amount of the financial liability
extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities
assumed, is recognised in profit or loss.
Governance
Impairment of Financial Assets
All financial assets (except for financial assets categorised as fair value through profit or loss, investment in subsidiary company
and fixed and call deposits) are assessed at each reporting date whether there is any objective evidence of impairment as a
result of one or more events having an impact on the estimated future cash flows of the asset. Losses expected as a result of
future events, no matter how likely, are not recognised.
Financials
For an equity instrument, a significant or prolonged decline in the fair value below its cost is an objective evidence of impairment.
An impairment loss in respect of loans and receivable and held-to-maturity investments is recognised in profit or loss and
is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows
discounted at the asset’s original effective interest rate. The carrying amount of the assets is reduced through the use of an
allowance account.
Information
Additional
An impairment loss in respect of available-for-sale financial assets is recognised in profit or loss and is measured as the
difference between the asset’s acquisition cost (net of any principal repayment and amortisation) and the asset’s current fair
value, less any impairment loss previously recognised. Where a decline in the fair value of an available-for-sale financial asset
has been recognised in other comprehensive income, the cumulative loss in other comprehensive income is reclassified from
equity and recognised in profit or loss.
An impairment loss in respect of unquoted equity instrument that is carried at cost is recognised in profit or loss and is measured
Notices
as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the
current market rate of return for a similar financial asset.
Impairment losses recognised in the statement of comprehensive income for an investment in an equity instrument is not
reversed through profit or loss.
Form of Proxy
If, in a subsequent period, the fair value of a debt instrument increases and the increase can be objectively related to an event
occurring after the impairment loss was recognised in the statement of comprehensive income, the impairment loss is reversed,
to the extent that the asset’s carrying amount does not exceed what the carrying amount would have been had the impairment
not been recognised at the date the impairment is reversed. The amount of the reversal is recognised in profit or loss.
Mah Sing Group Berhad Annual Report 2010
109
Notes To The Financial Statements (Cont’d)
4. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
(a) Critical judgements in applying the Group’s accounting policies
The management is of the opinion that there are no instances of application of critical judgements in applying the Group’s
accounting policies which are expected to have a significant effect on the amounts recognised in the financial statements.
(b) Key sources of estimation uncertainty
Management believes that there are no key assumptions made concerning the future, and other key sources of estimation
uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts
of assets and liabilities within the next financial year other than as disclosed below:
(i) The Group recognised property development revenue based on percentage of completion method. The percentage of
completion is measured by reference to the property development costs incurred to date to the estimated total costs
for the property development. The percentage of completion method requires the Group to make reasonably dependable
estimates of progress towards completion of property development projects and costs in determining the percentage
of completion, and the recoverability of development projects. In making the estimate, management relied on opinion/
service of experts, past experience and a continuous monitoring mechanism.
(ii) Deferred tax assets are recognised for unused tax losses, unabsorbed capital allowances and other deductible temporary
differences to the extent that it is probable that taxable profit will be available against which the unused tax losses, capital
allowances and other deductible temporary differences can be utilised. Management judgement is required in determining
the amount of deferred tax assets that can be recognised, based on the assessment of the probability of the future
taxable profits.
5. REVENUE
The Group The Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Property development revenue 923,278 558,037 - -
Sales of goods 183,586 135,210 - -
Sales of completed properties 1,156 5,905 - -
Dividend income - - 22,000 10,000
Interest income from:
- bank deposits 2,088 2,361 2,088 2,361
- advances to subsidiaries - - 12,764 2,786
Rental income - 49 - -
Management fees - - 125 12
1,110,108 701,562 36,977 15,159
110
Core Facts
Notes To The Financial Statements (Cont’d)
Messages
6. COST OF SALES
The Group
2010 2009
Activities
RM’000 RM’000
Property development costs 637,222 394,216
Cost of goods sold 153,620 116,763
Cost of completed properties sold 921 3,405
Governance
791,763 514,384
Included in cost of goods sold are the following:
Raw materials and consumables used 133,670 87,047
Changes in inventories of finished goods and
Financials
work in progress (1,115) (1,153)
132,555 85,894
7. PROFIT BEFORE TAX
Information
Additional
The Group The Company
2010 2009 2010 2009
Note RM’000 RM’000 RM’000 RM’000
Profit before tax is arrived
Notices
at after charging:
Allowance for doubtful debts: 22
- trade receivables 7 795 - -
- other receivables 1,012 - - -
Form of Proxy
Allowance for slow-moving
inventories 21 462 16 - -
Amortisation of license fee 17 4 8 - -
Amortisation of prepaid
lease payments 15 314 349 - -
Auditors’ remuneration:
Mah Sing Group Berhad Annual Report 2010
- current year 252 234 25 25
- prior years (1) (3) - -
- non-audit fee 9 5 5 5
Bad debts written off
- other receivables 70 - 70 4
111
Notes To The Financial Statements (Cont’d)
The Group The Company
2010 2009 2010 2009
Note RM’000 RM’000 RM’000 RM’000
Impairment loss on investment in
subsidiary - - - 3
Interest expense in development
costs 7,161 8,380 - -
Lease rental expense 37 28,671 3,158 - -
Foreign exchange difference:
- realised 1 645 - -
- unrealised 3,069 570 9,969 295
Property, plant and equipment:
- depreciation 14 11,394 9,871 94 91
- written-off 116 66 - -
- loss on disposal 98 - - -
Provision for post-employment
benefits 605 445 - -
Rental of buildings 1,234 909 17 41
And crediting:
Allowance for doubtful
debts no longer required - 6 - -
Amortised cost adjustments:
- trade and other receivables 7 - - -
- trade and other payables 664 - - -
- long-term and deferred payables 22 - - -
693 - - -
Forfeiture income from:
- termination of sales of
commercial building - 42,676 - -
- others 256 1,956 - -
Gain on disposal of other
investment - 1 - -
Gain on disposal of prepaid
lease payments - 172 - -
Gain on disposal of property,
plant and equipment - 728 - -
Realised gain on foreign exchange 283 1,195 - -
Rental income* 1,155 47 - -
Reversal of impairment loss
on investment in a subsidiary - - 250 -
* Excluding those classified as revenue in Note 5.
112
Core Facts
Notes To The Financial Statements (Cont’d)
Messages
8. STAFF COSTS
The Group The Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Activities
Wages, salaries and bonus 49,956 39,176 13,081 8,307
Employees Provident Fund and social
security costs 5,530 4,147 1,564 992
Short-term accumulating
compensated absences:
Governance
- current year 31 221 - 8
- prior year (312) - (22) -
Provision for post-employment
benefits (Note 40) 605 445 - -
Other staff related expenses 3,220 3,745 30 34
Financials
Options granted under ESOS 980 - 308 -
60,010 47,734 14,961 9,341
Included in staff costs are directors’ remuneration of the Group and of the Company respectively as further disclosed in Note 39.
Information
Additional
9. INTEREST INCOME
The Group
2010 2009
RM’000 RM’000
Notices
Interest income from:
- bank deposits 449 115
- project accounts 759 178
- late payment from property buyers 2,895 168
Form of Proxy
4,103 461
Mah Sing Group Berhad Annual Report 2010
113
Notes To The Financial Statements (Cont’d)
10. FINANCE COSTS
The Group The Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Interest expenses on:
- term loans 16,169 11,396 1,024 1,234
- bank overdrafts 79 35 - -
- other borrowings 745 289 299 -
- hire purchase 198 284 - -
- advances from subsidiaries - - 2,483 -
17,191 12,004 3,806 1,234
Less: Capitalised in development properties (14,560) (9,388) - -
2,631 2,616 3,806 1,234
11. INCOME TAX EXPENSE
The Group The Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Estimated income tax payable:
Current year
- Local 57,509 46,389 1,688 826
- Foreign 2,065 596 - -
Overprovision in prior years (3,279) (472) (18) (168)
56,295 46,513 1,670 658
Deferred tax (Note 29) (6,833) 1,889 3 84
49,462 48,402 1,673 742
114
Core Facts
Notes To The Financial Statements (Cont’d)
Messages
A reconciliation of income tax expense applicable to profit before tax at the statutory income tax rate to income tax expense at
the effective income tax rate of the Group and of the Company is as follows:
The Group The Company
2010 2009 2010 2009
Activities
RM’000 RM’000 RM’000 RM’000
Profit before tax 177,865 144,243 4,431 1,971
Tax at Malaysian statutory tax
rate of 25% 44,466 36,061 1,108 492
Tax effects of:
Governance
Different tax rates in other
Jurisdictions - 61 - -
Income exempted from tax - - (2,812) -
Expenses not deductible for
tax purposes 2,887 3,072 3,395 418
Utilisation of deferred tax assets not previously
Financials
recognised (434) (1,374) - -
Deferred tax assets not recognised 6,829 11,910 - -
Reinvestment allowance utilised (1,007) (856) - -
Overprovision in prior years (3,279) (472) (18) (168)
Information
Additional
Tax expense for the financial year 49,462 48,402 1,673 742
12. EARNINGS PER ORDINARY SHARE
(a) Basic
Notices
The basic earnings per ordinary share for the financial year has been calculated based on the profit attributable to ordinary
equity holders of the Company for the financial year divided by the weighted average number of ordinary shares in issue
during the financial year as follows:
The Group
Form of Proxy
2010 2009
RM’000 RM’000
Profit attributable to equity holders of the
Company (RM’000) 118,071 94,282
Weighted average number of ordinary shares
in issue (Unit’000)* 831,569 759,661
Mah Sing Group Berhad Annual Report 2010
Basic earnings per ordinary share (sen) 14.20 12.41
115
Notes To The Financial Statements (Cont’d)
(b) Diluted
The diluted earnings per share has been calculated by dividing the profit attributable to equity holders of the Company by
the weighted average number of shares that would have been in issue upon full exercise of the remaining options under the
ESOS and Warrants adjusted for the number of such shares that would have been issued at fair value as follows:
The Group
2010 2009
RM’000 RM’000
Profit attributable to equity holders of the
Company (RM’000) 118,071 94,282
Weighted average number of ordinary shares
in issue (Unit’000)* 831,569 759,661
Weighted average number of ordinary shares
deemed issued at no consideration (Unit’000)*:
- Warrants - 746
- ESOS 503 76
Adjusted weighted average number of ordinary
shares (Unit’000)* 832,072 760,483
Diluted earnings per ordinary share (sen) 14.19 12.40
* Comparatives figures for the weighted average number of ordinary shares for both basic and fully diluted earnings per
ordinary share computation have been restated to reflect the adjustment arising from the Bonus Issue completed during the
financial year.
13. DIVIDEND PAID/PROPOSED
The Group and
Company
2010 2009
RM’000 RM’000
Recognised during the financial year:
Dividends on ordinary shares:
- First and final dividend for 2009: 6.5 sen (2008: 8.0 sen) per ordinary shares less
25% income tax, paid on 17 September 2010 (2008: 18 September 2009) 40,539 37,799
The Directors have proposed a first and final gross dividend of 7.6 sen per ordinary share of RM0.50 each, less income tax of
25%, in respect of the current financial year. The proposed first and final dividend is subject to the approval of the shareholders
at the forthcoming Annual General Meeting of the Company and has not been included as a liability in the financial statements
for the current financial year. Such dividend when approved by shareholders will be accounted for in equity as an appropriation
of retained earnings during the financial year ending 31 December 2011.
116
Core Facts
Notes To The Financial Statements (Cont’d)
Messages
14. PROPERTY, PLANT AND EQUIPMENT
At Cost/
2010 Valuation At Cost
Plant, Furniture,
Activities
machinery fittings
and factory Motor and office
Buildings Renovations equipment vehicles equipment Total
The Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Cost/valuation
Governance
At 1 January 33,748 1,154 110,698 11,335 9,699 166,634
Currency translation
differences (997) - (5,147) 361 (94) (5,877)
Additions 198 2,106 14,125 749 1,410 18,588
Disposals - - (1,710) (4) (32) (1,746)
Written off - (183) - - - (183)
Financials
At 31 December 32,949 3,077 117,966 12,441 10,983 177,416
Accumulated depreciation
At 1 January 16,752 354 77,557 5,195 5,726 105,584
Currency translation
Information
differences (428) - (3,758) 195 (73) (4,064)
Additional
Charge for the financial year 1,202 309 7,765 1,361 757 11,394
Disposals - - (1,530) (1) (29) (1,560)
Written off - (67) - - - (67)
At 31 December 17,526 596 80,034 6,750 6,381 111,287
Notices
Accumulated impairment
loss
At 1 January - - 68 - - 68
Reversal during the financial
year - - (9) - - (9)
Form of Proxy
- - 59 - - 59
Net book value
At 31 December 15,423 2,481 37,873 5,691 4,602 66,070
Mah Sing Group Berhad Annual Report 2010
117
Notes To The Financial Statements (Cont’d)
At Cost/
2009 Valuation At Cost
Plant, Furniture,
machinery fittings
and factory Motor and office
Buildings Renovations equipment vehicles equipment Total
The Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Cost/valuation
At 1 January 36,106 1,080 102,919 8,106 8,621 156,832
Currency translation
differences (176) - (817) (15) (16) (1,024)
Additions 311 152 8,623 3,506 1,108 13,700
Disposals (2,493) - (27) (262) (14) (2,796)
Written off - (78) - - - (78)
At 31 December 33,748 1,154 110,698 11,335 9,699 166,634
Accumulated depreciation
At 1 January 16,034 258 71,737 4,196 5,081 97,306
Currency translation
differences (80) - (645) (11) (13) (749)
Charge for the financial year 1,442 108 6,483 1,168 670 9,871
Disposals (644) - (18) (158) (12) (832)
Written off - (12) - - - (12)
At 31 December 16,752 354 77,557 5,195 5,726 105,584
Accumulated impairment
loss
At 1 January and 31
December - - 68 - - 68
Net book value
At 31 December 16,996 800 33,073 6,140 3,973 60,982
118
Core Facts
Notes To The Financial Statements (Cont’d)
Messages
Analysis of buildings
The Group At Valuation At Cost
Leasehold Leasehold Freehold Total
2010 RM’000 RM’000 RM’000 RM’000
Activities
Cost/valuation
At 1 January 6,297 17,575 9,876 33,748
Currency translation differences - (997) - (997)
Additions - 198 - 198
Governance
At 31 December 6,297 16,776 9,876 32,949
Accumulated depreciation
At 1 January 4,067 8,379 4,306 16,752
Currency translation differences - (428) - (428)
Charge for the financial year 239 838 125 1,202
Financials
At 31 December 4,306 8,789 4,431 17,526
Net book value
At 31 December 2010 1,991 7,987 5,445 15,423
Information
Additional
2009
Cost/valuation
At 1 January 6,297 20,134 9,675 36,106
Currency translation differences - (176) - (176)
Notices
Additions - 110 201 311
Disposals - (2,493) - (2,493)
At 31 December 6,297 17,575 9,876 33,748
Accumulated depreciation
Form of Proxy
At 1 January 3,828 8,169 4,037 16,034
Currency translation differences - (80) - (80)
Charge for the financial year 239 934 269 1,442
Disposals - (644) - (644)
At 31 December 4,067 8,379 4,306 16,752
Mah Sing Group Berhad Annual Report 2010
Net book value
At 31 December 2009 2,230 9,196 5,570 16,996
119
Notes To The Financial Statements (Cont’d)
The Company
Furniture and fittings Office equipment Total
2010 RM’000 RM’000 RM’000
Cost
At 1 January 48 1,176 1,224
Additions - 58 58
At 31 December 48 1,234 1,282
Accumulated depreciation
At 1 January 12 271 283
Charge for the financial year 5 89 94
At 31 December 17 360 377
Net book value
At 31 December 2010 31 874 905
2009
Cost
At 1 January 43 874 917
Additions 5 302 307
At 31 December 48 1,176 1,224
Accumulated depreciation
At 1 January 8 184 192
Charge for the financial year 4 87 91
At 31 December 12 271 283
Net book value
At 31 December 2009 36 905 941
Valuation
The leasehold buildings of a subsidiary company were valued by the Directors in 1992 based on a valuation carried out by
independent professional valuers on the open market value basis. The surplus arising from the revaluation amounting to
RM2,040,529 has been credited to the revaluation reserve account and eliminated upon consolidation.
The net book values of revalued leasehold buildings of the subsidiary company that would have been included in the financial
statements had these assets been carried at cost less accumulated depreciation, are as follows:
The Group
2010 2009
RM’000 RM’000
Net book value
Leasehold buildings 1,094 1,226
120
Core Facts
Notes To The Financial Statements (Cont’d)
Messages
Assets with restricted title
At the end of the reporting period, the net book values of property, plant and equipment of the Group pledged to financial institutions
as security for term loans, short-term borrowings and bank overdrafts as shown in Notes 27, 31 and 32 respectively are as follows:
The Group
Activities
2010 2009
RM’000 RM’000
Net book value
Freehold buildings 4,520 5,570
Governance
Leasehold buildings 5,136 5,991
Plant, machinery and factory equipment 7,572 13,483
17,228 25,044
Assets held under hire purchase and finance lease agreements
At the end of the reporting period, the net book values of property, plant and equipment of the Group held under finance lease
Financials
and hire purchase are as follows:
The Group
2010 2009
RM’000 RM’000
Information
Additional
Net book value
Plant, machinery and factory equipment 470 897
Motor vehicles 1,080 5,155
1,550 6,052
Notices
15. PREPAID LEASE PAYMENTS
The Group
2010 2009
RM’000
Form of Proxy
Leasehold land RM’000
Cost/Valuation
At 1 January 8,696 10,135
Currency translation differences (493) (88)
Disposals - (1,351)
At 31 December 8,203 8,696
Mah Sing Group Berhad Annual Report 2010
Accumulated amortisation
At 1 January 4,995 4,805
Currency translation differences (255) (49)
Amortisation for the year 314 349
Disposals - (110)
At 31 December 5,054 4,995
Net book value at 31 December 3,149 3,701
121
Notes To The Financial Statements (Cont’d)
The unexpired portions of the leasehold land as of 31 December 2010 are within the range of 9 to 12 years (2009: 10 to 13
years).
Certain parcels of leasehold land of the Group with a carrying value of RM2,269,690 (2009: RM2,410,428) are pledged to
financial institutions to secure term loans, short-term borrowings and bank overdrafts as shown in Notes 27, 31 and 32.
16. INVESTMENT PROPERTY
The Group
2010 2009
RM’000 RM’000
At Fair Value
Leasehold land 30,609 -
At 1 January - -
Transfer from property development costs (Note 20) 30,609 -
At 31 December 30,609 -
The fair value of the Group’s investment property at 31 December 2010 has been arrived at by reference to market evidence of
transaction prices for similar properties.
The investment property of the Group is pledged to a financial institution to secure term loan facilities as shown in Note 27.
17. INTANGIBLE ASSETS
The Group License fee Goodwill Total
2010 RM’000 RM’000 RM’000
Cost
At 1 January 82 - 82
Additions - 70 70
At 31 December 82 70 152
Accumulated amortisation
At 1 January 78 - 78
Amortisation during the financial year 4 - 4
At 31 December 82 - 82
Net book value
At 31 December - 70 70
122
Core Facts
Notes To The Financial Statements (Cont’d)
Messages
18. INVESTMENT IN SUBSIDIARIES
The Company
2010 2009
RM’000 RM’000
Activities
Unquoted shares, at cost 111,785 76,135
Less: Accumulated impairment losses (9,230) (9,480)
102,555 66,655
Governance
During the financial year, the Company acquired an additional 300,000 ordinary shares of RM1 each representing the
remaining 30% of the issued and paid-up share capital of Vienna View Development Sdn Bhd, to increase its effective equity
interest from 70% to 100%, for a total cash consideration of RM13,800,000.
During the financial year, the Company also subscribed for additional ordinary shares in the following subsidiaries:
Number of Cash
Financials
Ordinary Shares Consideration
Name of company of RM1 each RM’000
Multi Synergy Group Sdn Bhd 2,250,002 2,250
Nova Legend Development Sdn Bhd 1,500,002 1,500
Loyal Sierra Development Sdn Bhd 500,002 500
Information
Additional
Star Residence Sdn Bhd 1,600,000 1,600
Sierra Peninsular Development Sdn Bhd 1,500,002 1,500
Supreme Springs Sdn Bhd 2,500,000 2,500
Oasis Garden Development Sdn Bhd 2,500,000 2,500
Myvilla Development Sdn Bhd 2,500,000 2,500
Notices
Klassik Tropika Development Sdn Bhd 2,500,000 2,500
The following subsidiaries were acquired during the financial year:
Form of Proxy
i. On 23 March 2010, the Company acquired 2 ordinary shares of RM1 each in Grand Prestige Development Sdn
Bhd for a cash consideration of RM2. Subsequently, the Company further subscribed 1,999,998 ordinary shares of
RM1 each in Grand Prestige Development Sdn Bhd for a cash consideration of RM1,999,998.
ii. On 26 October 2010, the Company acquired 2 ordinary shares of RM1 each in Uptrend Housing Development Sdn
Bhd for a cash consideration of RM2. Subsequently, the Company further subscribed 2,500,000 ordinary shares of
RM1 each in Uptrend Housing Development Sdn Bhd for a cash consideration of RM2,500,000.
Mah Sing Group Berhad Annual Report 2010
123
Notes To The Financial Statements (Cont’d)
The subsidiary companies are as follows:
Name of company Country of Effective Principal activities
incorporation equity interest
2010 2009
% %
Subsidiary companies of Mah Sing Group
Berhad
Mah Sing Properties Sdn Bhd Malaysia 100 100 Property development
Mah Sing Plastics Industries Sendirian Malaysia 100 100 Manufacture of plastic
Berhad + @ moulded products and
property development
Mah Sing Enterprise Sdn Bhd + @ Malaysia 100 100 Trading of plastic and other
related products
Mah Sing Components Manufacturing Malaysia 100 100 Inactive
Sdn Bhd
Jastamax Sdn Bhd Malaysia 100 100 Property development
Multi Synergy Group Sdn Bhd Malaysia 100 100 Property development
Vital Routes Sdn Bhd @ Malaysia 100 100 Investment holding
Peninsular Connection Sdn Bhd Malaysia 100 100 Inactive
Vital Roles Sdn Bhd Malaysia 90 90 Inactive
Pleasant Network Sdn Bhd Malaysia 100 100 Inactive
Konsortium Lingkaran Lembah Kinta Sdn Bhd Malaysia 51 51 Dormant
Superior Focus Sdn Bhd Malaysia 80 80 Inactive
Intramewah Development Sdn Bhd Malaysia 100 100 Property development
Legend Grand Development Sdn Bhd Malaysia 100 100 Property development
Nova Legend Development Sdn Bhd Malaysia 100 100 Property development
Gentali Motor Corpn. Sdn Bhd Malaysia 60.5 60.5 Inactive
Nova Century Development Sdn Bhd Malaysia 100 100 Property development
Venice View Development Sdn Bhd Malaysia 100 100 Property development
Golden Venice Development (MM2H) Sdn Bhd Malaysia 100 100 Promote and market
Malaysia My Second
Home programme and
provide related services
Loyal Sierra Development Sdn Bhd Malaysia 100 100 Property development
Star Residence Sdn Bhd Malaysia 100 100 Property development
Sierra Peninsular Development Sdn Bhd Malaysia 100 100 Property development
and property investment
Maxim Heights Sdn Bhd Malaysia 100 100 Property development
Vienna View Development Sdn Bhd Malaysia 100 70 Property development
124
Core Facts
Notes To The Financial Statements (Cont’d)
Messages
Name of company Country of Effective Principal activities
incorporation equity interest
2010 2009
% %
Subsidiary companies of Mah Sing Group
Activities
Berhad
Enrich Property Development Sdn Bhd Malaysia 70 70 Property development
Vienna Home Sdn Bhd Malaysia 70 70 Property development
Suria Lagenda Development Sdn Bhd Malaysia 100 100 Dormant
Supreme Springs Sdn Bhd Malaysia 100 100 Property development
Governance
Oasis Garden Development Sdn Bhd Malaysia 100 100 Property development
Uptrend Housing Development Sdn Bhd ^ Malaysia 100 - Property development
Mah Sing Investment Singapore Pte Ltd * Singapore 100 100 Dormant
Mah Sing International Ltd British Virgin 100 100 Dormant
Islands
Financials
Myvilla Development Sdn Bhd Malaysia 100 100 Property development
Grand Pavilion Development Sdn Bhd Malaysia 100 100 Dormant
Klassik Tropika Development Sdn Bhd Malaysia 100 100 Property development
Mah Sing International (HK) Limited * Hong Kong 100 100 Investment holding
Grand Prestige Development Sdn Bhd Malaysia 100 - Property development
Information
Additional
Subsidiary company of Mah Sing
International (HK) Limited
Mah Sing Property Consulting (Changzhou) People’s Republic 100 100 Property consulting
Pte Ltd * of China
Subsidiary companies of Mah Sing
International Ltd
Mah Sing Vietnam Ltd British Virgin 100 100 Dormant
Notices
Islands
Mah Sing Vina Ltd British Virgin 100 100 Dormant
Islands
Subsidiary company of Mah Sing
Plastics Industries Sendirian Berhad
Form of Proxy
Kenwira Sdn Bhd Malaysia 100 100 Assembly of helmets
Subsidiary companies of Mah Sing
Properties Sdn Bhd
Mestika Bistari Sdn Bhd Malaysia 100 100 Property development
Acacia Springs Management Sdn Bhd Malaysia 100 100 Property management
Mah Sing Group Berhad Annual Report 2010
Mestika Kenangan Sdn Bhd Malaysia 100 100 Property management
Vienna Grand Development Sdn Bhd Malaysia 100 100 Property management
Quantum Noble Development Sdn Bhd Malaysia 100 100 Property management
Prima Peninsular Development Sdn Bhd Malaysia 100 100 Property management
125
Notes To The Financial Statements (Cont’d)
Name of company Country of Effective Principal activities
incorporation equity interest
2010 2009
% %
Subsidiary company of
Pleasant Network Sdn Bhd
Vican Technology Sdn Bhd ** Malaysia 68 68 Inactive
Subsidiary company of
Vican Technology Sdn Bhd
Vican Electronics Sdn Bhd # Malaysia 68 68 Inactive
Subsidiary company of
Vital Routes Sdn Bhd
P.T. Mah Sing Indonesia * @ Indonesia 65 65 Manufacture of
plastic moulded products
* Audited by other firms of auditors.
** This subsidiary company is under a court winding-up order and was deconsolidated from the Group results since financial
year 2000. The cost of investment in this subsidiary company had been fully provided for.
# This company has not been consolidated as its immediate holding company was deconsolidated from the Group.
+ Consolidated using merger method.
@ Shares of these subsidiaries are pledged to a bank for loan facilities granted to the Company as disclosed in Note 27.
^ Uptrend Housing Development Sdn Bhd was incorporated on 13 October 2010. As the first set of financial
statements is not due as of 31 December 2010, the subsidiary has yet to appoint auditors as of the report date.
19. INVESTMENT IN ASSOCIATES
The Group The Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Unquoted shares, at cost 1,035 1,035 99 99
Less: Accumulated impairment losses (125) (125) (99) (99)
Group’s share of post-acquisition accumulated losses (910) (910) - -
- - - -
The Group’s share in the accumulated losses of associated companies as shown below has not been recognised in the Group’s
income statement as equity accounting ceased when the Group’s share of losses of associated companies exceeded the
carrying amount of its investment in the associates.
126
Core Facts
Notes To The Financial Statements (Cont’d)
Messages
The Group
2010 2009
RM’000 RM’000
Accumulated losses
Activities
As at 1 January (3,791) (3,788)
Share of loss after taxation (3) (3)
At 31 December (3,794) (3,791)
Details of associated companies are as follows:
Governance
Name of company Country of Effective Principal
incorporation equity interest activities
2010 2009
% %
Associated companies of Mah Sing Group
Financials
Berhad
Prestige Greenery Sdn Bhd * Malaysia 39.5 39.5 Dormant
Associated company of Peninsular Connection
Sdn Bhd
True Mineral Water Sdn Bhd # Malaysia - 50 Inactive
Information
Additional
* Audited by other firms of auditors
# The associated company was disposed of by the Group during the financial year for total consideration of RM1.
20. PROPERTY DEVELOPMENT ACTIVITIES
(a) Land held for property development
Notices
The Group
2010 2009
RM’000 RM’000
Form of Proxy
Freehold land at cost:
At 1 January 47,099 47,099
Transfer from property development costs 2,004 -
Increase arising from additional investment in a subsidiary company 13,786 -
62,889 47,099
Mah Sing Group Berhad Annual Report 2010
Land held for property development is charged to a financial institution as a security for term loans as shown in Note 27.
127
Notes To The Financial Statements (Cont’d)
(b) Property development costs
The Group
2010 2009
RM’000 RM’000
At 1 January
Land costs 637,519 382,010
Development costs 183,928 242,616
821,447 624,626
Cost incurred during the financial year:
Land costs 470,989 313,470
Development costs 569,263 277,211
1,040,252 590,681
Increase arising from additional investment in a subsidiary company
- Land costs 1,991 -
Cost recognised as an expense in the income statements during the
financial year:
Land costs (137,459) (57,961)
Development costs (499,292) (335,899)
(636,751) (393,860)
Transfer to:
Investment property
- Land costs (Note 16) (30,609) -
Land held for property development
- Land costs (2,004) -
(32,613) -
At 31 December
Land costs 940,427 637,519
Development costs 253,899 183,928
1,194,326 821,447
128
Core Facts
Notes To The Financial Statements (Cont’d)
Messages
The title deeds in respect of certain land cost amounting to RM63,053,503 (2009: RM31,000,000) under joint development
arrangements with the land owner are not registered under the subsidiary companies’ names as the title deeds will be
transferred directly to house buyers upon sale of the properties.
Included in development costs is interest on borrowings capitalised during the financial year amounting to RM14,560,000
(2009: RM9,388,000).
Activities
Freehold and leasehold land of RM585,879,569 (2009: RM246,199,415) and RM319,074,865 (2009: RM3,649,155)
respectively are pledged to certain financial institutions as securities for term loans and short-term borrowings of the Group
as shown in Notes 27 and 32 respectively.
In the previous financial year, a wholly-owned subsidiary company of the Group has terminated a sale of a commercial
Governance
building due to a default on the part of purchaser to pay the balance of the sale consideration. Consequently, in accordance
with the terms of the sale and purchase agreement and consultation with legal advisors, an amount of RM42,676,470 being
part payment of the sale consideration has been forfeited and recognised as an income as disclosed in Note 7. Following
the aforementioned termination, the wholly-owned subsidiary company entered into a new sale and purchase agreement
for the sale of the same commercial building to another third party for RM226,514,800 during the previous financial year.
The new sale and purchase agreement was completed upon settlement of the purchase consideration during the previous
financial year.
Financials
In 2009, the title to parcels of freehold land with a cost of RM262,377,540 which were acquired in the previous financial year
have not been transferred to the Group as at 31 December 2009, pending registration process by local authorities, while all
other conditions precedent have been met. The transfer of the title of the land has been completed during the financial year.
Information
Additional
Notices
Form of Proxy
Mah Sing Group Berhad Annual Report 2010
129
Notes To The Financial Statements (Cont’d)
21. INVENTORIES
The Group
2010 2009
RM’000 RM’000
At cost:
Completed properties 15,847 16,768
Raw materials 10,846 7,342
Work-in-progress 1,345 1,353
Finished goods 6,806 5,683
34,844 31,146
Allowance for slow-moving inventories:
- raw materials (697) (432)
- finished goods (464) (267)
- completed properties (500) (500)
(1,661) (1,199)
33,183 29,947
Inventories of a subsidiary company amounting to RM4,782,788 (2009: RM4,954,464) are pledged to financial institutions as
security for foreign term loans, short-term borrowings and bank overdrafts as shown in Notes 27, 31 and 32.
Completed properties of a subsidiary company amounting to RM5,696,872 (2009: RM5,696,872) are pledged to financial
institutions as securities for term loans and short-term borrowings of the Group as shown in Notes 27 and 31 respectively.
Inventories amounting to RM2,558 have been written off against allowance for inventories during the previous financial year.
130
Core Facts
Notes To The Financial Statements (Cont’d)
Messages
22. TRADE AND OTHER RECEIVABLES
The Group The Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Activities
Trade receivables 117,931 114,916 - -
Less: Allowance for doubtful debts (1,049) (1,527) - -
116,882 113,389 - -
Other receivables 12,286 17,928 8,327 8,077
Governance
Less: Allowance for doubtful debts (11,492) (10,480) (8,053) (8,053)
794 7,448 274 24
Accrued billings for property development 263,260 48,707 - -
Amounts due from subsidiary companies - - 752,594 541,568
Amount due from associated company - 2 - 2
Financials
Deposits for land acquisitions 34,617 5,085 - -
Deposits for purchase of property, plant and
equipment 1,088 470 - -
Other deposits 8,430 4,655 20 30
Information
Prepayments 1,012 1,087 7 7
Additional
426,083 180,843 752,895 541,631
The currency exposure profile of trade receivables is as follows:
The Group
Notices
2010 2009
RM’000 RM’000
Ringgit Malaysia 103,545 102,432
Renminbi 337 -
Form of Proxy
United States Dollar 1,584 1,461
Indonesian Rupiah 11,877 10,569
Singapore Dollar 588 454
117,931 114,916
Mah Sing Group Berhad Annual Report 2010
Trade receivables of the Group amounting to RM485,407 (2009: RM65,233) have been written off against allowance for
doubtful debts during the financial year.
Trade receivables of the Group amounting to RM11,392,999 (2009: RM11,240,910) are pledged to financial institutions as
securities for foreign term loans and bank overdrafts as shown in Notes 27 and 32.
131
Notes To The Financial Statements (Cont’d)
Trade receivables comprise amounts receivable for the sale of goods of RM29,467,497 (2009: RM23,094,989) and amounts
receivable from customers for property development projects of RM87,414,129 (2009: RM90,294,716).
The terms for sale of goods range from payment in advance to 90 days (2009: payment in advance to 90 days) credit whilst the
credit term for receivables from property development is 21 days (2009: 21 days).
Movement in allowance for doubtful debts - trade receivables
The Group The Company
2010 2010
RM’000 RM’000
At 1 January 1,527 -
Allowance during the year 7 -
Reversal during the year - -
Written off (485) -
At 31 December 1,049 -
Ageing of past due but not impaired-trade receivables
Past due 4 months 5,585 -
49,398 -
Ageing of impaired-trade receivables
Past due > 4 months 1,049 -
1,049 -
Movement of allowance for doubtful debts-other receivables
At 1 January 10,480 8,053
Allowance during the year 1,012 -
At 31 December 11,492 8,053
Concentration of credit risk with respect to trade receivables are limited due to the Group’s large number of customers, which
are widely distributed and covers a broad range of end markets. The Group’s historical experience in collection of accounts
receivable falls within the recorded allowances. Due to these factors, the management believes there is no additional credit risk
beyond amounts provided for doubtful debts for the Group’s trade receivables.
Amounts due from subsidiary companies, which arose mainly from intercompany advances and payments on behalf, are
unsecured, repayable on demand and interest free except for advances amounting to RM591,350,727 (2009: RM83,176,567)
and RM39,698,911 (2009: RM5,136,577) which bear interest at 2% (2009: 2%) and 10% (2009: 10%) per annum respectively.
Included in other receivables of the Company is an amount of RM8,053,077 (2009: RM8,053,077) owing by indirect subsidiary
companies, Vican Technology Sdn Bhd and Vican Electronics Sdn Bhd, which had been excluded from consolidation as
explained in Note 18. The amount owing by the said subsidiary companies has been fully provided for.
In 2009, amount due from associate company which arose mainly from payment on behalf is unsecured and interest free.
132
Core Facts
Notes To The Financial Statements (Cont’d)
Messages
23. DEPOSITS, CASH AND BANK BALANCES
The Group The Company
2010 2009 2010 2009
Activities
RM’000 RM’000 RM’000 RM’000
Cash and bank balances 25,690 115,920 97 246
Projects accounts 69,344 11,925 - -
Deposits with licensed banks 213,613 268,781 71,104 224,422
Governance
308,647 396,626 71,201 224,668
The interest rates per annum during the financial year are as follows:
The Group The Company
Financials
2010 2009 2010 2009
% % % %
Project accounts 1.00 - 1.80 1.00 - -
Deposits with licensed banks 0.10 - 3.15 1.75 - 3.40 1.96 - 3.15 1.95 - 3.40
Information
Additional
Project accounts are bank accounts maintained in accordance with Section 7A of the Housing Developers Act, 1966. These
accounts, which consist of monies received from purchasers, are for the payment of property development expenditure
incurred. The surplus monies, if any, will be released to the respective subsidiary companies upon the completion of the
property development projects and after all property development expenditure have been fully settled.
Deposits with licensed banks have an average maturity of 18 days (2009: 30 days).
Notices
Deposits with licensed banks of the Group amounting to RM50,000,000 (2009: RM9,588,000) has been pledged as collateral
for financing facilities granted to subsidiary companies for purchase of development land.
Deposits with licensed banks of the Group amounting to RM12,094,000 (2009: RM29,769,000) have been deposited in
Escrow Accounts for the securing of bank guarantee facility and/or for the banking facilities of subsidiary companies.
Form of Proxy
The currency exposure profile of cash and bank balances is as follows:
The Group The Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Ringgit Malaysia 206,379 292,865 71,201 224,668
Mah Sing Group Berhad Annual Report 2010
United States Dollar 93,210 102,375 - -
Indonesian Rupiah 9,047 1,386 - -
Others 11 - - -
308,647 396,626 71,201 224,668
133
Notes To The Financial Statements (Cont’d)
24. SHARE CAPITAL
The Group and The Company
Number of shares Par Value
Unit ’000 RM RM’000
Ordinary shares
Authorised:
2010
At 1 January 1,000,000 0.50 500,000
Created during the financial year 1,000,000 0.50 500,000
At 31 December 2,000,000 0.50 1,000,000
2009
At 1 January and 31 December 1,000,000 0.50 500,000
Issued and fully paid:
2010
At 1 January 692,973 0.50 346,487
Bonus issue 138,595 0.50 69,297
At 31 December 831,568 0.50 415,784
2009
At 1 January 626,845 0.50 313,423
Exercise of Warrants 2,925 0.50 1,463
Exercise of ESOS 206 0.50 103
Private placement 62,997 0.50 31,498
At 31 December 692,973 0.50 346,487
As approved by the shareholders at the Extraordinary General Meeting held on 3 December 2010, the Company increased its
authorised ordinary share capital from RM500,000,000 to RM1,000,000,000 by way of the creation of additional 1,000,000,000
ordinary shares of RM0.50 each.
The Company also increased its issued and paid-up ordinary share capital from RM346,487,016.50 to RM415,784,419.50 by
way of issuance of 138,594,806 new ordinary shares of RM0.50 each pursuant to the bonus issue on the basis of one (1) new
ordinary share for every five (5) existing ordinary shares of RM0.50 each held by way of capitalisation of RM69,297,403 from
the share premium account of the Company.
The new ordinary shares issued rank pari passu with the then existing ordinary shares of the Company.
134
Core Facts
Notes To The Financial Statements (Cont’d)
Messages
Employees’ Share Option Scheme
At the Extraordinary General Meeting held on 8 March 2004, the Company’s shareholders approved the establishment of an
Employees’ Share Option Scheme (“ESOS” or “Scheme”) which is governed by the ESOS By-Laws (“By-Laws”).
The salient features of the ESOS are inter alia as follows:
Activities
(a) The ESOS was implemented on 12 July 2004 and was in force for a period of 5 years (“Initial Period”). On 10 July 2009, the
ESOS was extended for another 5 years until 10 July 2014 in accordance with the terms of the ESOS By-Laws;
(b) The total number of new shares to be offered pursuant to the exercise of options granted under the ESOS (“Option”) shall
be subject to a maximum of 10% of the Company’s issued and paid-up share capital at the time of the offer;
Governance
(c) Employees (including Executive Directors) of the Company or its subsidiary companies (other than dormant subsidiaries)
shall be eligible to participate in the ESOS, if as at the date of offer, the employee:
(i) has attained the age of eighteen (18) years;
(ii) is employed full-time by and on the payroll of the Company or its subsidiary companies; and
(iii) is a confirmed employee of the Company or its subsidiary companies.
Financials
The allocation criteria of new ordinary shares comprised in the options to eligible employees shall be determined at the
discretion of the Option Committee. The participation of an Executive Director of the Company in the ESOS shall be
approved by the shareholders of the Company in a general meeting;
(d) The price payable upon exercise of an Option shall be based on the weighted average market price of the Company’s
shares as shown in the Daily Official List of the Bursa Malaysia Securities Berhad for the five (5) market days immediately
Information
preceding the date of offer with an allowance of a discount of not more than 10%, or at the par value of the Company’s
Additional
share, whichever is higher;
(e) Subject to any adjustments which may be made pursuant to the By-Laws, the maximum number of new shares that may be
offered to an eligible employee shall be determined at the discretion of the Option Committee after taking into consideration
the performance, seniority and length of service of the eligible employees, subject to the following:
(i) not more than fifty per cent (50%) of the new shares available under the Scheme should be allocated, in aggregate, to
Notices
the Executive Directors and senior management of the Group; and
(ii) not more than ten per cent (10%) of the new shares available under the Scheme should be allocated to any eligible
employee, who either singly or collectively through his or her associates, holds twenty per cent (20%) or more in the
issued and paid-up capital of the Company.
Form of Proxy
(f) The new ordinary shares to be issued upon exercise of the Options shall, upon allotment and issue, rank pari passu with
the then existing ordinary shares, except that they will not be entitled to any dividends, rights, allotments and/or other
distributions declared by the Company which entitlement thereof precedes the allotment date of the new ordinary shares
allotted pursuant to the exercise of the Options; and
(g) The exercise price and the number of new ordinary shares comprised in the Options are subject to adjustment in the event
of alteration to the share capital of the Company in accordance with the provisions in the By-Laws. However, no adjustment
Mah Sing Group Berhad Annual Report 2010
shall be made in any event whereby the exercise price would be reduced to below the par value of ordinary share in the
Company.
135
Notes To The Financial Statements (Cont’d)
The number and movements in the Company’s Options are as follows:
Number of options over ordinary
shares of RM0.50 each
Unit ‘000
2010
At 1 January 110
Granted 51,403
Exercised -
Cancelled (84)
Adjustment* 22
At 31 December 51,451
2009
At 1 January 379
Exercised (206)
Cancelled (63)
At 31 December 110
* Adjustment to the number of options pursuant to the Bonus Issue completed during the financial year.
Details of the ESOS are set out in Note 25 to the financial statements.
Warrants 2004/2009
The Warrants 2004/2009 (“Warrants”) are constituted by a Deed Poll dated 2 April 2004 (“Deed Poll”).
The salient features of the Warrants are as follows:
(a) The issue date of the Warrants is 7 June 2004 and the expiry date is 6 June 2009. Any Warrants not exercised at the expiry
date will lapse and cease to be valid for any purpose;
(b) Each Warrant entitles the registered holder to subscribe for one (1) new ordinary share of RM0.50 in the Company at an
exercise price of RM0.50 per ordinary share;
(c) The exercise price and the number of Warrants are subject to adjustments in the event of alteration to the share capital
of the Company in accordance with the provisions in the Deed Poll. However, no adjustment shall be made in any event
whereby the exercise price would be reduced to below the par value of ordinary share in the Company;
(d) The Warrant holders are not entitled to participate in any distribution and/or offer of further securities in the Company
(except for the issue of new warrants pursuant to adjustment as mentioned in item (c) above), until and unless such holders
exercise the rights under the Warrants to subscribe for new ordinary shares; and
(e) The new ordinary shares to be issued upon exercise of the Warrants shall, upon allotment and issue, rank pari passu with
the then existing ordinary shares, including the entitlement to dividends, rights, allotments or other distributions, except that
they will not be entitled to the rights, allotments or other distributions declared by the Company which entitlement thereof
precedes the allotment date of the new ordinary shares allotted pursuant to the exercise of the Warrants.
136
Core Facts
Notes To The Financial Statements (Cont’d)
Messages
The movements in the Company’s Warrants during the financial year are as follows:
Number of Par Value of
warrants ordinary shares
Unit ‘000 RM
Warrants 2004/2009
Activities
2010
At 1 January and 31 December - 0.50
Number of Par Value of
Governance
warrants ordinary shares
Unit ‘000 RM
2009
At 1 January 3,374 0.50
Exercised (2,925) 0.50
Financials
Expired (449) 0.50
At 31 December -
25. RESERVES
Information
Additional
The Group The Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Share premium 130,752 200,369 130,752 200,369
Equity-settled employees benefit reserve 1,002 22 1,002 22
Notices
Exchange fluctuation reserve (4,222) 4,762 - -
127,532 205,153 131,754 200,391
Share premium
Form of Proxy
Share premium arose from exercise of ESOS, private placement and other issuance of shares in prior years.
Exchange fluctuation reserve
Exchange difference arising from translation of foreign controlled entities is taken to the exchange fluctuation reserve account
as disclosed in the accounting policies.
Mah Sing Group Berhad Annual Report 2010
Equity-settled employees benefit reserve
Equity-settled employees benefit reserve represent the fair value of the employee services received in exchange for the grant
of options which is recognised in equity with a corresponding charge to income statements when vested.
137
Notes To The Financial Statements (Cont’d)
Employees’ share option scheme
The number of granted options which are exercisable by the employees within a specified period will be tied to the Group’s
achievement of its internal target profit after tax and subject to the approval, at the discretion, of Option Committee.
Details of the share options granted during the financial year are as follows:
Date Exercise price No. of options over ordinary shares of RM0.50 each
option granted per ordinary share Unit ‘000
RM 1.1.2010 Granted Cancelled 31.12.2010
25 Nov 2010 1.65 - 50,783 (6) 50,777
6 Dec 2010 1.65 - 620 - 620
Options were granted on 25 November 2010 and 6 December 2010 with the estimated fair values of 35.81 sen and 39.12 sen
per option respectively. The options outstanding at the end of the year have a remaining contractual life of 3.5 years.
The fair values were calculated using the Black-Scholes Pricing Model. The inputs into the model were as follows:
Options granted on Options granted on
25 November 2010 6 December 2010
Share price RM1.81 RM1.78
Exercise price RM1.65 RM1.65
Expected volatility 25.54% 30.36%
Expected life (days to expiry) 1,305 1,294
Risk free rate 3.273% 3.287%
Expected dividend yield 3.62% 3.68%
The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may not
necessarily be the actual outcome. The expected life used is based on management’s best estimate, for the effects of non-
transferability, exercise restrictions and behavioural considerations.
The Group and the Company recognised total fair value in the income statement of RM979,917 and RM307,568 respectively
during the financial year.
The options granted during the financial year are not exercisable as at the end of the reporting period.
26. RETAINED EARNINGS
The Company
As of the balance sheet date, the Company has not elected for the irrevocable option in accordance with the Finance Act
2007 to disregard the Section 108 tax credits. Accordingly, subject to the agreement of the Inland Revenue Board and based
on the prevailing tax rate applicable to dividend, the Company has sufficient Section 108 tax credit and tax exempt income
to frank dividends out of its entire retained earnings as of 31 December 2010.
138
Core Facts
Notes To The Financial Statements (Cont’d)
Messages
27. TERMS LOANS
The Group The Company
2010 2009 2010 2009
Activities
RM’000 RM’000 RM’000 RM’000
Secured
Term loans (a) 427,467 200,364 23,100 19,126
Bridging loans (b) 13,938 4,000 - -
Governance
Foreign term loans (c) 145 3,460 - -
441,550 207,824 23,100 19,126
The terms loans are repayable as follows:
The Group The Company
Financials
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Term Loans
Current:
Information
Repayable not later than 1 year 73,019 66,358 12,487 19,126
Additional
Non-current:
Repayable later than 1 year and not later than 2 years 95,948 71,207 10,613 -
Repayable later than 2 years and not later than
5 years 271,479 70,259 - -
Repayable later than 5 years 1,104 - - -
Notices
368,531 141,466 10,613 -
441,550 207,824 23,100 19,126
a) Term Loans
Form of Proxy
The Group
As of 31 December 2010, the Group has term loans facilities from local licensed banks of RM613,983,992 (2009:
RM342,860,107).
The term loans are secured by way of legal charges, deed of assignment, deposits pledged, specific debenture and
Mah Sing Group Berhad Annual Report 2010
assignment of rights over the development land, completed properties and investment properties of the Group and are
guaranteed by the Company.
The Company
As of 31 December 2010, the Company has term loans facilities from local licensed banks of RM95,000,000 (2009:
RM47,426,373).
The term loans are secured by way of legal charges and assignment of rights over certain development land and completed
properties of a subsidiary company and pledge of shares of certain subsidiary companies as disclosed in Notes 14 and 18.
139
Notes To The Financial Statements (Cont’d)
(b) Bridging Loans
As of 31 December 2010, the Group has bridging loans facilities from local licensed banks of RM73,200,000 (2009:
RM40,200,001).
The bridging loans are secured by way of legal charges, specific debenture over the development land of its subsidiary
companies, deposits pledged, negative pledge over the present and future assets of the subsidiary companies and are
guaranteed by the Company.
(c) Foreign Term Loans
As of 31 December 2010, a foreign subsidiary has foreign term loan facilities obtained from foreign licensed banks of
RM7,139,714 (2009: RM6,981,728).
The foreign term loans are secured by way of a fixed charge over certain property, plant and equipment, leasehold land
and negative pledges over the present and future assets of the said foreign subsidiary.
The currency exposure profile of the term loans is as follows:
The Group The Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Ringgit Malaysia 437,681 204,364 23,100 19,126
Indonesian Rupiah 3,741 2,359 - -
United States Dollar 128 1,101 - -
441,550 207,824 23,100 19,126
During the financial year, the interest rates were in the following range:
The Group The Company
2010 2009 2010 2009
% % % %
Facilities:
Local Currency 3.7 - 7.5 3.1 - 7.8 4.3 - 5.6 4.3 - 5.6
Foreign Currency:
United States Dollar 6.0 - 6.5 2.1 - 7.5 - -
Indonesian Rupiah 11.0 - 12.5 12.5 - 15.5 - -
140
Core Facts
Notes To The Financial Statements (Cont’d)
Messages
28. LONG-TERM AND DEFERRED PAYABLES
The Group
2010 2009
RM’000 RM’000
Activities
Payable for acquisition of development land - 15,000
Finance lease and hire purchase liabilities 1,918 2,672
Retirement benefit obligations (Note 40) 2,016 1,555
Amount due to minority shareholder of subsidiary
Governance
company (Note 30) 257 -
4,191 19,227
Payable for acquisition of development land
Financials
Not later than 1 year ( Note 30) 203,381 235,569
Later than 1 year and not later than 5 years - 15,000
203,381 250,569
The amount payable for acquisition of development land by subsidiary companies of RM192,420,000 (2009: RM80,100,000 ) is
Information
Additional
secured by bank guarantees.
Finance lease and hire purchase liabilities
Minimum finance lease and hire purchase payments:
- not later than 1 year 1,530 1,752
Notices
- later than 1 year and not later than 5 years 2,159 3,013
3,689 4,765
Future finance charges on finance lease and hire purchase liabilities (403) (552)
Principal of finance lease and hire purchase liabilities 3,286 4,213
Form of Proxy
Principal of finance lease and hire purchase liabilities:
- not later than 1 year (Note 30) 1,368 1,541
- later than 1 year and not later than 5 years 1,918 2,672
3,286 4,213
Mah Sing Group Berhad Annual Report 2010
The average term for finance lease and hire-purchase is between 3 to 5 years. For the financial year ended 31 December
2010, the average effective borrowing rate was 5.47% (2009: 5.58%) per annum. Interest rates are fixed at the inception of the
hire-purchase arrangements.
The finance lease and hire purchase liabilities are secured by assets acquired under finance lease and hire-purchase
agreements as disclosed under Note 14.
141
Notes To The Financial Statements (Cont’d)
29. DEFERRED TAX LIABILITIES/(ASSETS)
The Group The Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
At 1 January 1,807 (82) 194 110
Recognised in income statements (6,833) 1,889 3 84
At 31 December (5,026) 1,807 197 194
Deferred tax assets and liabilities are offset when there is legally enforceable right to set-off current tax assets and current tax
liabilities and when the deferred taxes relate to the same tax authority.
The following amounts, presented after appropriate offsetting, are shown in the statement of financial position:
The Group The Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Deferred tax assets-net (6,864) - - -
Deferred tax liabilities-net 1,838 1,807 197 194
(5,026) 1,807 197 194
The components and movements of deferred tax liabilities and assets during the financial year are as follows:
Deferred tax liabilities
Property, plant
and equipment Offsetting Total
The Group RM’000 RM’000 RM’000
At 1 January 2009 (2,876) 2,258 (618)
Recognised in income statements (131) (1,058) (1,189)
At 31 December 2009 (3,007) 1,200 (1,807)
Recognised in income statements (1,024) 993 (31)
At 31 December 2010 (4,031) 2,193 (1,838)
142
Core Facts
Notes To The Financial Statements (Cont’d)
Messages
Deferred tax assets
Other
deductible Unused
temporary tax Reinvestment
differences losses allowances Offsetting Total
Activities
The Group RM’000 RM’000 RM’000 RM’000 RM’000
At 1 January 2009 - 2,250 708 (2,258) 700
Recognised in income statements - (1,050) (708) 1,058 (700)
At 31 December 2009 - 1,200 - (1,200) -
Governance
Recognised in income statements 291 6,495 1,071 (993) 6,864
At 31 December 2010 291 7,695 1,071 (2,193) 6,864
Deferred tax liabilities
Financials
Property, plant and
equipment Total
The Company RM’000 RM’000
At 1 January 2009 110 110
Recognised in income statements 84 84
Information
At 31 December 2009 194 194
Additional
Recognised in income statements 3 3
At 31 December 2010 197 197
Details of deductible temporary differences, unused tax losses and unused tax credits pertaining to certain subsidiary
companies which have not been recognised in the financial statements due to uncertainty of realisation are as follows:
Notices
The Group
2010 2009
RM’000 RM’000
Form of Proxy
Deductible temporary differences 83,722 68,416
Unutilised tax losses 14,684 27,384
Unabsorbed capital allowances 3,200 2,096
101,606 97,896 Mah Sing Group Berhad Annual Report 2010
The unused tax losses and unabsorbed capital allowances are available for offset against future taxable profits of the
subsidiary companies, subject to the agreement by the tax authorities.
143
Notes To The Financial Statements (Cont’d)
30. TRADE AND OTHER PAYABLES
The Group The Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Trade payables 171,669 100,279 - -
Payable for acquisition of development land (Note 28) 203,381 235,569 - -
Retention sum 53,055 36,784 - -
Other payables 29,201 7,202 12,768 740
457,306 379,834 12,768 740
Progress billings for property development 155,599 13,122 - -
Finance lease and hire purchase liabilities (Note 28) 1,368 1,541 - -
Amounts due to subsidiary companies - - 221,535 166,860
Amounts due to associated companies - 110 - -
Amounts due to minority shareholders of subsidiary
companies 3,574 6,408 - -
Payable for acquisition of property, plant and
equipment 8,631 6,044 - 84
Deposits received from customers 7,145 11,584 - -
Accrued operating expenses 37,285 19,906 8,772 5,098
670,908 438,549 243,075 172,782
The credit terms for trade and other payables of the Group range from cash basis to 90 days (2009: cash basis to 90) days.
Amounts due to subsidiary companies arose mainly from inter-company advances and payments on behalf. They are unsecured,
interest free and repayable on demand except for an amount of RM97,791,556 which bears interest at 2% (2009: Nil) per
annum. During the financial year, interest expense amounting to RM2,482,769 (2009: Nil) has been recognised in the income
statements of the Company.
Amounts due to associated companies in prior year are unsecured, interest free and repayable on demand.
Included in amounts payable for acquisition of property, plant and equipment is an amount of RM1,077,000 (2009: RM2,801,087)
denominated in Japanese Yen which is interest-free.
Included in other payables is an amount of RM12,420,000 (2009: RMNil) due to former minority shareholder of a subsidiary
company, which represents remaining amount payable for acquiring the interest of the former minority shareholder in the said
subsidiary company.
Amount due to minority shareholders of subsidiary companies are unsecured, interest free and have no fixed terms of repayment
except for an amount of RM1,617,000 (2009: RM1,795,000) which bears interest at rates varying between 0.24% - 0.56%
(2009: 0.22% to 0.90%) per annum. During the financial year, interest expense amounting to RM6,443 (2009: RM10,497) has
been recognised in the income statements of the Group.
144
Core Facts
Notes To The Financial Statements (Cont’d)
Messages
Amount due to minority shareholders is repayable as follows:
The Group
2010 2009
RM’000 RM’000
Activities
Not later than 1 year 3,574 6,408
Later than 1 year (Note 28) 257 -
3,831 6,408
Governance
The currency exposure profile of trade and other payables, including retention sum are as follows:
The Group The Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Ringgit Malaysia 450,416 372,004 12,768 740
Financials
Euro 32 - - -
United Sates Dollar 4,107 4,559 - -
Indonesia Rupiah 2,751 2,569 - -
Singapore Dollar - 702 - -
Information
Additional
457,306 379,834 12,768 740
31. SHORT-TERM BORROWINGS
The Group The Company
Notices
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Unsecured:
Revolving credit 50,000 - 50,000 -
Form of Proxy
Secured:
Revolving credits 11,500 6,500 6,000 -
Bankers acceptances 170 850 - -
11,670 7,350 6,000 -
Mah Sing Group Berhad Annual Report 2010
Total 61,670 7,350 56,000 -
145
Notes To The Financial Statements (Cont’d)
The Group
As of 31 December 2010, the Group has unsecured and secured local revolving credit facilities from licensed banks of
RM50,000,000 and RM21,000,000 (2009: Nil and RM38,300,000) respectively.
The secured revolving credit facilities are granted on negative pledges over the present and future assets of certain subsidiary
companies, legal charges over certain buildings and a piece of commercial land of a subsidiary company and are guaranteed
by the Company.
The local secured bankers acceptances are granted on negative pledges over the present and future assets of certain subsidiary
companies and are guaranteed by the Company.
The borrowings bear interest at floating rates and their fair values approximate their carrying values at balance sheet date.
The Company
As of 31 December 2010, the Company has revolving credit facilities of RM56,000,000 (2009: RM6,000,000) obtained from
local licensed banks. The secured facility is secured by a legal charge over a piece of commercial land of a subsidiary company.
During the financial year, the interest rates were in the following range:
The Group The Company
2010 2009 2010 2009
% % % %
Local revolving credits 3.83 - 4.69 3.80 - 4.70 3.83 - 4.69 -
Local bankers acceptances 2.70 - 3.58 2.55 - 4.00 - -
Foreign revolving credits:
United States Dollar - 7.50 - -
Indonesian Rupiah - 12.50 - 15.50 - -
146
Core Facts
Notes To The Financial Statements (Cont’d)
Messages
32. BANK OVERDRAFTS
The Group
2010 2009
RM’000 RM’000
Activities
Secured
Local - Ringgit Malaysia - 705
Foreign - Indonesian Rupiah 74 -
74 705
Governance
Bank overdrafts bear interest at floating rates in the following range:
The Group
2010 2009
% %
Financials
Local - 6.50 - 7.30
Foreign 11 -
The Group
Information
Additional
As of 31 December 2010, the Group has secured overdraft facilities from local and foreign licensed banks of RM6,681,889
(2009: RM10,450,000) and RM681,889 (2009: RM727,660) respectively.
The foreign bank overdrafts are secured by legal charges over certain property, plant and equipment and inventories and
assignment over trade receivables of a subsidiary company.
The local bank overdrafts of the Group are secured by legal charges over a building and certain pieces of mixed development
Notices
land, specific debenture over the said development land and are guaranteed by the Company.
Form of Proxy
Mah Sing Group Berhad Annual Report 2010
147
Notes To The Financial Statements (Cont’d)
33. CASH AND CASH EQUIVALENTS
The Group The Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Cash and bank balances 25,690 115,920 97 246
Project accounts 69,344 11,925 - -
Deposits with licensed banks 213,613 268,781 71,104 224,422
Bank overdrafts (74) (705) - -
308,573 395,921 71,201 224,668
Less: Deposits pledged as collateral (50,000) (9,588) - -
Deposits deposited in Escrow Account (12,094) (29,769) - -
246,479 356,564 71,201 224,668
34. CONTINGENT LIABILITIES
The Group The Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Corporate guarantees issued to financial institutions for
credit facilities granted to subsidiary companies - - 424,194 192,443
Corporate guarantees issued to third parties for
acquisition of development land - - - 8,161
Bank guarantees issued to third parties 7,893 6,181 - -
7,893 6,181 424,194 200,604
In the ordinary course of business, certain companies within the Group are defendants in various legal actions for breach
of contracts and claims for services rendered which have no material impact. In the opinion of the Directors, after taking
appropriate legal advice, the outcomes of such actions are remote and therefore, no provisions have been made in the financial
statements.
148
Core Facts
Notes To The Financial Statements (Cont’d)
Messages
35. CAPITAL RISK MANAGEMENT, FINANCIAL INSTRUMENTS AND FINANCIAL RISKS
Capital management
The primary objective of the Group’s capital management is to ensure that it maintains a healthy and optimal capital base in
order to maintain investors, creditors and market confidence and to sustain future development of the business so that it can
Activities
continue to maximise returns for shareholders and benefits for other stakeholders. The capital structure of the Group and the
Company comprises of net debt (borrowings offset by deposit, cash and bank balances as detailed in Notes 23, 27, 31, 32
respectively) and equity (comprising issued capital, reserves and minority interests as detailed in Notes 24 to 26).
The Group manages its capital structure and makes adjustments to it in light of changes in economic conditions and the risk
characteristic of the underlying assets. To maintain or adjust the capital structure, the Group may adjust the dividend payment
Governance
to shareholders, return capital to shareholders, issue new shares, buy back issued shares, obtain new borrowings or reduce
borrowings. No changes were made in the objectives, policies or processes during the year ended December 31, 2010.
Net Gearing Ratio
The net gearing ratio at the end of the reporting period is as follows:
Financials
The Group The Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Total borrowings 506,580 220,092 79,100 19,126
Less: Deposit, cash and bank balances (308,647) (396,626) (71,201) (224,668)
Information
Additional
Net debt/(Net cash) 197,933 (176,534) 7,899 (205,542)
Total equity 936,456 853,468 608,050 645,171
Net debt-to-equity ratio 0.21 - 0.01 -
Categories of Financial Instruments
Notices
The Group The Company
2010 2010
RM’000 RM’000
Financial assets
Form of Proxy
Loans and receivables:
Trade and other receivables 127,118 752,895
Deposits, cash and bank balances 308,647 71,201
Financial liabilities
At amortised costs:
Mah Sing Group Berhad Annual Report 2010
Trade and other payables 513,941 243,075
Loans and borrowings 506,580 79,100
Long-term and deferred payables 257 -
149
Notes To The Financial Statements (Cont’d)
Financial Risk Management Objectives and Policies
The operations of the Group are subject to a variety of financial risks, including market risk (which include foreign currency risk
and interest rate risk), credit risk, liquidity and cash flow risk.
The Group has formulated a financial risk management framework whose principal objective is to minimise the Group’s exposure
to risks and/or costs associated with the financing, investing and operating activities of the Group.
Financial risk management is carried out through risk reviews, internal control systems and adherence to Group financial risk
management policies. The Board regularly reviews these risks and approves the treasury policies, which cover the management
of these risks.
Foreign currency risk management
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes
in foreign exchange rates.
The Group is exposed to foreign exchange rate risk as certain transactions are entered into by subsidiaries in currencies other
than their functional currency.
Sensitivity analysis for foreign currency risk
The following table demonstrates the sensitivity of the Group’s profit net of tax to a reasonably possible change in the exchange
rates against the respective functional currencies of the Group entities, with all other variables held constant.
Change in Group
currency rate Profit after tax
% RM’000
2010
Rp/USD -3.0 92
Rp/USD +3.0 -92
USD/RMB -3.0 -2,836
USD/RMB +3.0 2,836
Interest rate risk management
The Group’s exposure to interest rate risk arises primarily from their loans and borrowings. The interest rate management policy
is aimed at optimising net interest cost and reducing volatility.
Sensitivity analysis for interest rate risk
The table below demonstrates the sensitivity to a reasonably possible change in interest rates with all other variables held
constant, of the Group’s profit net of tax through the impact on interest expense on floating rate loans and borrowings.
Change in interest rate Group Profit after tax
b.p.s. RM’000
2010
Cost of Fund -25 +944
Cost of Fund +25 -944
150
Core Facts
Notes To The Financial Statements (Cont’d)
Messages
Credit risk management
Credit risk refers to the risk that a counter party will default on its contractual obligation resulting in financial loss to the Group.
The Group is exposed to credit risk mainly from its customer base, including trade receivables. The Group extends credit to
its customers based upon careful evaluation of the customer’s financial condition and credit history. Trade receivables are
Activities
monitored on an ongoing basis by the Group’s credit control department.
Exposure to credit risk
At the reporting date, the Group’s and the Company’s maximum exposure to credit risk is the carrying amount of financial
assets which are mainly trade and other receivables, deposits with license bank and cash and bank balances.
Governance
Liquidity risk management
Liquidity risk is the risk that an entity will encounter difficulty in meeting its financial obligations due to a shortage of funds.
The Group and the Company practise prudent liquidity risk management to minimise the mismatch of financial assets and
liabilities and to maintain sufficient credit facilities for contingent funding requirement of working capital.
Financials
Analysis of financial instruments by remaining contractual maturities
The table below summarises the maturity profile of the Group’s and the Company’s liabilities at the reporting date based on
contractual undiscounted repayment obligations:
Within one One to five Over five
Information
Additional
year years years Total
2010 RM’000 RM’000 RM’000 RM’000
Group
Financial liabilities:
Trade and other payables 516,627 - - 516,627
Loans and borrowings 136,131 369,345 1,104 506,580
Notices
Total undiscounted financial liabilities 652,758 369,345 1,104 1,023,207
Company
Financial liabilities:
Form of Proxy
Trade and other payables 243,075 - - 243,075
Loans and borrowings 68,487 10,613 - 79,100
Financial guarantee* - - - -
Total undiscounted financial liabilities 311,562 10,613 - 322,175 Mah Sing Group Berhad Annual Report 2010
* At the end of the reporting period, it was not probable that the counterparties to financial guarantee contracts will claim
under the contract. Consequently, the amount included is nil.
151
Notes To The Financial Statements (Cont’d)
Cash flow risk management
The Group and the Company review their cash flow position regularly to manage their exposure to fluctuations in future cash
flows associated with their monetary financial instruments.
Fair Value
2010
The carrying amounts of current financial assets and liabilities are reasonable approximation of fair values, either due to their
short-term nature or that they are floating rate instruments that are re-priced to market interest rates on or near the reporting
date. The fair value of long-term financial assets and liabilities are determined by the present value of future cash flow estimated
and discounted using the current interest rates for similar instruments at the end of the reporting date. There is no material
difference between the fair values and carrying values of these assets and liabilities as of the reporting date. The Group’s long-
term loans bear interest at floating rate and hence their carrying amount approximates fair value.
2009
The carrying amounts of the financial assets and liabilities of the Group and Company at the end of the reporting period
approximate their fair values in 2009 except as set out below:
The Group
Carrying amount Fair value
Note RM’000 RM’000
Finance lease and hire purchase liabilities 28 4,213 3,936
Payable for acquisition of development land 28 15,000 13,736
Term loan with cross currency swap 745 742
The Group’s long-term loans bear interest at floating rate and hence their carrying amount approximates fair value.
152
Core Facts
Notes To The Financial Statements (Cont’d)
Messages
36. SEGMENT REPORTING
Segment information is presented in respect of the Group’s business segments, which reflect the Group’s internal reporting
structure that are regularly reviewed by the Group’s chief operating decision maker for the purposes of allocating resources to
the segment and assessing its performance.
Activities
For management purposes, the Group is organised into the following operating divisions:
(i) Properties - investment, construction, management and development of residential, commercial and industrial properties
(ii) Plastics - manufacture, assembly and sale of a range of plastic moulded products
Other operations of the Group include investment holding operations which are not of a sufficient size to be reported separately.
Governance
Inter-segment revenue comprise dividend income, interest charges and management fees which are undertaken on an arm’s
length basis.
Information regarding the Group’s reportable segments is presented below:
(a) Business Segments
Financials
Properties Plastics Other Group
2010 RM’000 RM’000 RM’000 RM’000
Revenue
Segment revenue 924,434 183,586 36,991 1,145,011
Inter-segment revenue - - (34,903) (34,903)
Information
Additional
924,434 183,586 2,088 1,110,108
Results
Segment results 180,844 17,502 4,276 202,622
Inter-segment results - - (26,229) (26,229)
180,844 17,502 (21,953) 176,393
Notices
Interest income 4,103
Finance costs (2,631)
Profit before tax 177,865
Form of Proxy
Income tax expense (49,462)
Profit for the financial year 128,403
Other information
Capital expenditure 2,827 15,704 58 18,589
Depreciation and amortisation 1,990 9,630 94 11,714
Mah Sing Group Berhad Annual Report 2010
Assets and Liabilities
Segment assets 1,843,074 116,777 165,175 2,125,026
Current and deferred tax assets 12,717
Total assets 2,137,743
Segment liabilities 1,032,755 44,977 100,661 1,178,393
Current and deferred tax liabilities 22,894
Total liabilities 1,201,287
153
Notes To The Financial Statements (Cont’d)
Properties Plastics Other Group
2009 RM’000 RM’000 RM’000 RM’000
Revenue
Segment revenue 563,991 135,210 15,169 714,370
Inter-segment revenue - - (12,808) (12,808)
563,991 135,210 2,361 701,562
Results
Segment results 146,518 9,250 3,559 159,327
Inter-segment results - - (12,929) (12,929)
146,518 9,250 (9,370) 146,398
Interest income 461
Finance costs (2,616)
Profit before tax 144,243
Income tax expense (48,402)
Profit for the financial year 95,841
Other information
Capital expenditure 4,253 9,140 307 13,700
Depreciation and amortisation 1,866 8,271 91 10,228
Assets and Liabilities
Segment assets 1,117,190 95,470 327,989 1,540,649
Current tax assets 5,899
Total assets 1,546,548
Segment liabilities 611,408 37,190 25,057 673,655
Current and deferred tax 19,425
Total liabilities 693,080
Segment assets consist of property, plant and equipment, prepaid lease payment, investment properties, intangible assets,
land held for property development, inventories, property development cost, investments, current assets that are used in
the operating activities of the segment and excluding current and deferred tax assets. Segment liabilities include borrowings,
trade payables, other payables and accrued liabilities and exclude items such as tax payable and deferred tax liabilities.
Capital expenditure comprises additions to property, plant and equipment.
154
Core Facts
Notes To The Financial Statements (Cont’d)
Messages
(b) Geographical Information
With the exception of a manufacturing set up for plastic moulded products in Indonesia, the entire Group’s active business
operations are located in Malaysia.
The following is an analysis of the Group’s external sales by location of customers, irrespective of the origin of the goods/
Activities
services:
Revenue by geographical market
The Group
2010 2009
Governance
RM’000 RM’000
Malaysia 1,015,818 638,189
Indonesia 80,310 55,452
Other countries 13,980 7,921
1,110,108 701,562
Financials
The following is an analysis of the carrying amount of segment assets and capital expenditure by geographical areas in
which the assets are located:
Carrying amount of Carrying amount of
Information
Additional
segment assets capital expenditure
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Malaysia 1,987,972 1,396,075 17,129 12,332
Indonesia 43,844 42,199 1,460 1,368
China 93,210 102,375 - -
Notices
2,125,026 1,540,649 18,589 13,700
Form of Proxy
Mah Sing Group Berhad Annual Report 2010
155
Notes To The Financial Statements (Cont’d)
37. OPERATING LEASE COMMITMENTS
As Lessee – for the lease of commercial buildings
The future operating lease commitments for rental of commercial buildings contracted for as at end of reporting period but not
recognised as liabilities are as follows:
Future minimum
lease payments
2010 2009
The Group RM’000 RM’000
- not later than 1 year 36,093 28,671
- later than 1 year and not later than 3 years 48,264 84,374
84,357 113,045
2010 2009
The Group RM’000 RM’000
Future minimum lease payments 84,357 113,045
Less: rental receivable (14,667) (1,818)
69,690 111,227
The operating lease commitments are in respect of leaseback of commercial buildings i.e. The Icon, Jalan Tun Razak (completed
building) and Southgate Commercial Centre (building under construction) from the purchasers at 7% and 8% per annum of the
respective building’s sale considerations. The lease is for a period of 3 and 2 years from the commencement date as set out
in the respective leaseback agreements. Leaseback for The Icon, Jalan Tun Razak has commenced. Southgate Commercial
Centre lease commitment is expected to commence in second half of 2011.
The lease commitments are expected to be offset with increasing income from subletting of the said commercial buildings. The
Group is in active negotiation with several prospective tenants and will continue to sign up quality tenants given the commercial
buildings’ strategic locations and award winning concepts.
During the financial year, an amount of RM28,671,000 (2009: RM3,158,000) has been recognised as an expense in the income
statements of the Group as disclosed in Note 7.
38. CAPITAL COMMITMENTS
The Group
2010 2009
RM’000 RM’000
Approved and contracted for:
Purchase of development land 318,332 34,786
Acquisition of property, plant and equipment 3,500 712
321,832 35,498
156
Core Facts
Notes To The Financial Statements (Cont’d)
Messages
39. RELATED PARTY DISCLOSURES
(a) Significant related party disclosures during the financial year are as follows:
The Group
Activities
2010 2009
RM’000 RM’000
Transactions with directors of the Company and subsidiary
companies
(i) Rental expenses paid to Principal View Sdn Bhd 816 617
Governance
(ii) Maintenance charges paid to Harian Madu Sdn Bhd 138 156
(iii) Sales of development properties to directors of the Company 3,121 -
(iv) Sales of development properties to directors of subsidiary companies
and/or family member(s) 6,153 703
Related party and relationship
Financials
Name of related party Relationship
Company in which Tan Sri Dato’ Sri Leong Hoy Kum has substantial
(i) Principal View Sdn Bhd
financial interest
Company in which the directors and shareholders are brothers-in-law to
Information
(ii) Harian Madu Sdn Bhd
Additional
Tan Sri Dato’ Sri Leong Hoy Kum
Notices
Form of Proxy
Mah Sing Group Berhad Annual Report 2010
157
Notes To The Financial Statements (Cont’d)
(b) Key management personnel compensation
The Group The Company
2010 2009 2010 2009
RM’000 RM’000 RM’000 RM’000
Directors of the Company
Directors’ fees 150 150 150 150
Other emoluments 9,407 5,500 9,407 5,500
Benefits-in-kind 133 108 133 108
Total short-term employment benefits 9,690 5,758 9,690 5,758
Post employment benefits:
- EPF 1,129 660 1,129 660
Options under ESOS 207 - 207 -
11,026 6,418 11,026 6,418
Other key management personnel (including
Directors of the subsidiary companies)
Remuneration 3,859 2,857 614 436
Benefits-in-kind 155 108 27 22
Total short-term employment benefits 4,014 2,965 641 458
Post-employment benefits:
- EPF 454 335 74 52
Options under ESOS 260 - 38 -
4,728 3,300 753 510
Total Compensation 15,754 9,718 11,779 6,928
Movements in share options granted under the ESOS to key management personnel during the financial year are as
follows:
2010 2009
Unit ’000 Unit ’000
Directors of the Company
At 1 January - -
Granted 10,800 -
Exercised - -
At 31 December 10,800 -
Other key management personnel (including
Directors of the subsidiary companies)
At 1 January 6 102
Exercised - (65)
Granted 13,600 -
Lapsed - (31)
Adjustment* (1) -
At 31 December 13,605 6
* Adjustment pursuant to the Bonus Issue completed during the financial year.
158
Core Facts
Notes To The Financial Statements (Cont’d)
Messages
40. RETIREMENT BENEFIT OBLIGATIONS
A foreign subsidiary operates an unfunded defined retirement benefit scheme (“the Scheme”) for its eligible employees.
The amounts recognised in the statement of financial position are determined as follows:
Activities
The Group
2010 2009
RM’000 RM’000
Present value of benefit obligations 2,914 2,210
Unrecognised actuarial losses (773) (515)
Governance
Unrecognised past service cost - non vested (125) (140)
2,016 1,555
The amounts recognised in the income statement are as follows:
The Group
2010 2009
Financials
RM’000 RM’000
Current service cost 353 245
Interest on obligation 227 186
Net actuarial losses recognised in financial year 18 7
Amortisation of past service cost - non vested 7 7
Information
Additional
Total included in staff cost (Note 8) 605 445
Unrealised foreign exchange (gain)/loss (179) 167
426 612
Movements in the net liability in the current financial year are as follows:
Notices
The Group
2010 2009
RM’000 RM’000
At 1 January 1,555 988
Form of Proxy
Currency translation differences 35 (45)
Net amounts recognised in the income statements 426 612
At 31 December 2,016 1,555
Principal actuarial assumptions used:
Mah Sing Group Berhad Annual Report 2010
The Group
2010 2009
% %
Discount rate 8.5 10.5
Expected rate of salary increase 10.0 10.0
159
Notes To The Financial Statements (Cont’d)
41. SUBSEQUENT EVENTS
(a) On 9 September 2010, the Company announced to undertake the proposed issuance of up to RM325 million nominal value
of 7-years Redeemable Convertible Secured Bonds (“Bonds”) (“Proposed Bonds Issue”).
The following approvals have been obtained in relation to the proposal:
(i) Bursa Malaysia Securities Berhad had vide its letter dated 4 November 2010, approved the listing of up to 191,176,471
new ordinary shares of RM0.50 each of the Company to be issued pursuant to the conversion of the Bonds.
(ii) The Ministry of International Trade and Industry had, vide its letter dated 9 November 2010, approved the Proposed
Bonds Issue.
(iii) The shareholders of the Company at the Extraordinary General Meeting held on 3 December 2010 approved the
Proposed Bonds Issue.
(iv) The Securities Commission vide its letter dated 13 December 2010 approved the Proposed Bonds Issue.
On 27 December 2010, the Company announced the fixing of conversion price for the Bonds at RM2.09.
The Proposed Bonds Issue is not completed as of the end of the reporting period, pending execution of relevant
documentation pertaining to issuance of the Bonds.
(b) On 19 January 2011, the Company acquired the entire issued and paid-up share capital of Elite Park Development Sdn
Bhd, a private limited company incorporated in Malaysia, with an authorised share capital of RM100,000 comprising
100,000 ordinary shares of RM1.00 each, of which 2 ordinary shares of RM1.00 each have been issued and fully paid up,
for a cash consideration of RM2.00.
42. COMPARATIVE FIGURES
Certain comparative figures have been reclassified to conform with their presentation in the current year’s financial statements
as follows:
As previously As
Income statement for financial year reported Reclassification reclassified
ended 31 December 2009 RM’000 RM’000 RM’000
The Group
Administrative expenses 58,379 (3,158) 55,221
Other operating expenses - 3,158 3,158
160
Core Facts
Notes To The Financial Statements (Cont’d)
Messages
43. SUPPLEMENTARY INFORMATION - DISCLOSURE ON REALISED AND UNREALISED PROFITS
On 25 March 2010, Bursa Malaysia Securities Berhad (“Bursa Malaysia”) issued a directive to all listed issuers pursuant to
Paragraph 2.06 and 2.23 of the Bursa Securities Main Market Listing Requirements. The directive requires all listed issuers to
disclose the breakdown of the retained earnings or accumulated losses as of the end of the reporting period, into realised and
unrealised profits or losses.
Activities
On 20 September 2010, Bursa Malaysia further issued guidance on the disclosure and the prescribed format of disclosure.
The breakdown of the retained earnings of the Group and of the Company as of 31 December 2010 into realised and unrealised
profits or losses, pursuant to the directive, are as follows:
Governance
2010
The Group The Company
RM’000 RM’000
Total retained earnings of the Group
and the Company
Realised 390,476 70,483
Financials
Unrealised 3,764 (9,971)
394,240 60,512
Less: Consolidation adjustments (18,690) -
Total retained earnings as per Statements of
Financial Position 375,550 60,512
Information
Additional
Comparative information is not presented in the first financial year of application pursuant to the directive issued by Bursa
Malaysia on 25 March 2010.
The determination of realised and unrealised profits or losses is based on Guidance of Special Matter No. 1 “Determination of
Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing
Requirements” as issued by the Malaysian Institute of Accountants on December 20, 2010. A charge or credit to the profit or
Notices
loss of a legal entity is deemed realised when it is resulted from the consumption of resource of all types and form, regardless
of whether it is consumed in the ordinary course of business or otherwise. A resource may be consumed through sale or use.
Where a credit or a charge to the profit or loss upon initial recognition or subsequent measurement of an asset or a liability is
not attributed to consumption of resource, such credit or charge should not be deemed as realised until the consumption of
resource could be demonstrated.
Form of Proxy
This supplementary information has been made solely for complying with the disclosure requirements as stipulated in the
directive of Bursa Malaysia and is not made for any other purposes.
Mah Sing Group Berhad Annual Report 2010
161
Statement By Directors
We, Jen. Tan Sri Yaacob Bin Mat Zain (R) and Tan Sri Dato’ Sri Leong Hoy Kum, being two of the Directors of Mah Sing Group Berhad,
state that, in the opinion of the Directors, the accompanying financial statements set out on pages 82 to 160 are drawn up so as to give
a true and fair view of the financial position of the Group and of the Company as of 31 December 2010 and of the financial performance
and the cash flows of the Group and of the Company for the financial year ended on that date in accordance with Financial Reporting
Standards and the provisions of the Companies Act, 1965 in Malaysia.
The supplementary information set out on page 161, is prepared in all material respects, in accordance with Guidance on Special
Matter No. 1 “Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia
Securities Berhad Listing Requirements” as issued by the Malaysia Institute of Accountants and the directive of Bursa Malaysia
Securities Berhad.
Signed on behalf of the Board
In accordance with a resolution of the Board of Directors dated 25 February 2011.
JEN. TAN SRI YAACOB BIN MAT ZAIN (R) TAN SRI DATO’ SRI LEONG HOY KUM
Director Director
162
Core Facts
Declaration By The Director Primarily Responsible For The
Financial Management of The Company
Messages
I, Ng Poh Seng, being the Director primarily responsible for the financial management of Mah Sing Group Berhad, do solemnly and
sincerely declare that to the best of my knowledge and belief, the accompanying financial statements set out on pages 82 to 160 and
supplementary information set out on page 161 are 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, 1960.
Activities
NG POH SENG
Governance
Subscribed and solemnly declared at Kuala Lumpur this 25 February 2011.
Before me:
Financials
SAROJA A/P PONNUDURAI, PPN
NO. W402
COMMISSIONER FOR OATHS
Information
Additional
Notices
Form of Proxy
Mah Sing Group Berhad Annual Report 2010
163
Properties Owned
By The Group as at 31.12.2010
Location Description Date of Acquisition / Tenure Land Area Net Book
Date of Valuation (Acre) Value (RM)
Lot 9, Lingkaran Sultan Mohamed 1 Industrial Building 8-Aug-1992 Leasehold 7.00 5,993,115
Kawasan Perindustrian (Age: 19 years) (expiring on
Bandar Sultan Suleiman 2-Mar-2019)
42000 Port Klang
Selangor Darul Ehsan
Wisma Mah Sing 31 units office lots 1995 Freehold - 4,304,250
163 Jalan Sungai Besi (Age: 14 years)
57100 Kuala Lumpur
Kawasan Industri Jababeka Industrial Building 25-Jun-1997 Leasehold 5.20 1,465,987
J1 Jababeka XIIB, Blok W17-20 (Age: 13 years) (expiring on
Cikarang Industrial Estate 29-Jun-2022)
Bekasi, Indonesia
Sri Pulai Perdana Mixed 23-Feb-2000 Freehold 53.03 21,642,740
Mukim Pulai Development Land
Daerah Johor Bahru
Johor Darul Takzim
Austin Perdana Mixed 30-Jun-2003 Freehold 32.99 15,906,244
Mukim Tebrau Development Land
Daerah Johor Bahru
Johor Darul Takzim
Aman Perdana Mixed 2-Apr-2004 Freehold 63.33 51,907,760
Mukim Kapar Development Land
Daerah Klang
Selangor Darul Ehsan
Sierra Perdana Mixed 21-Dec-2005 Freehold 149.96 66,885,058
Mukim Plentong Development Land
Daerah Johor Bahru
Johor Darul Takzim
One Legenda Residential 20-Mar-2006 Freehold 9.906 32,193,634
Mukim Pekan Cheras Development Land
Daerah Hulu Langat
Selangor Darul Ehsan
Kemuning Residence Residential 18-Jul-2006 Leasehold - 6,942,820
Mukim dan Daerah Klang Development Land (expiring on
Selangor Darul Ehsan 3-Sep-2105)
Hijauan Residence Residential 30-Oct-2006 Freehold 24.97 28,947,949
Mukim dan Daerah Ulu Langat Development Land
Selangor Darul Ehsan
Southbay Penang Mixed 13-Jun-2007 Freehold 43.67 152,934,263
Mukim 12, Daerah Barat Daya Development Land
Negeri Pulau Pinang
164
Core Facts
Properties Owned
By The Group as at 31.12.2010 (Cont’d)
Messages
Location Description Date of Acquisition / Tenure Land Area Net Book
Date of Valuation (Acre) Value (RM)
Southgate Commercial Centre Commercial 27-Jul-2007 Freehold - 20,727,480
Seksyen 92 Development Land
Bandar Kuala Lumpur
Activities
Sri Pulai Perdana 2 (SPP2) Mixed 13-Jun-2008 Freehold 35.34 57,784,536
Mukim Senai, Tempat Kangkar Pulai Development Land
Daerah Kulaijaya
Johor Darul Takzim
Governance
Bayu Sekamat, Cheras Residential 29-Sep-2008 Freehold 6.40 5,051,665
Lot 670 and Lot 671, Mukim Cheras Development Land
Daerah Hulu Langat
Negeri Selangor
Icon Residence, Mont’ Kiara Residential 28-Feb-2007 Freehold 2.57 31,347,972
Lot 55331, Mukim Batu Development Land
Financials
Daerah Kuala Lumpur
Wilayah Persekutuan
Garden Residence, Cyberjaya Residential 12-Aug-2009 Freehold 71.57 165,438,730
Mukim Dengkil Development Land
Daerah Sepang
Information
Additional
Selangor Darul Ehsan
i-Parc Bukit Jelutong Industrial 16-Sep-2009 Freehold 12.91 14,567,184
Lot 64237 & Lot 64238 Development Land
Mukim Damansara
District of Petaling
Selangor Darul Ehsan
Notices
Perdana Residence 2, Selayang Residential 28-Oct-2009 Freehold 6.98 25,602,122
Mukim Batu, Bandar Selayang Development Land
Daerah Gombak
Selangor Darul Ehsan
Form of Proxy
Petaling Jaya Commercial Hub Mixed 28-Oct-2009 Leasehold 19.60 109,013,987
Lot No.P.T.245 Development Land (expiring on
Mukim Damansara 29-Sep-2074)
Daerah Petaling
Selangor Darul Ehsan Mah Sing Group Berhad Annual Report 2010
Icon Residence, Georgetown, Residential 2-Dec-2009 Freehold 3.38 44,819,401
Penang Development Land
Lot No.951, Seksyen 13
Bandar Georgetown
Daerah Timur Laut
Pulau Pinang
165
Properties Owned
By The Group as at 31.12.2010 (Cont’d)
Location Description Date of Acquisition / Tenure Land Area Net Book
Date of Valuation (Acre) Value (RM)
i-Parc2, Shah Alam Industrial 8-Feb-2010 Freehold 19.18 44,805,280
GRN 122900 No Lot 61788 Development
Pekan Hicom
Daerah Petaling
Selangor Darul Ehsan
M-Suite Commercial 22-April-2010 Freehold - 61,704,441
GRN 71445 Lot 293 Development
Seksyen 89
Daerah Kuala Lumpur
Negeri Wilayah
Persekutuan
Kinrara Residence Residential 9-July-2010 Leasehold 139.00 184,685,723
Mukim of Petaling Developement
Daerah Petaling
Selangor Darul Ehsan
i-Parc3 Industrial 9-July-2010 Freehold 10.94 33,914,330
Geran 20999, Lot 1115 Development
Mukim of Damansara, District of Petaling
Selangor Darul Ehsan
Star Avenue Commercial 9-July-2010 Leasehold 4.37 36,704,323
Pekan Baru Subang Development
Daerah Petaling
Negeri Selangor
Kinrara Residence - 2B Residential 5-July-2010 Leasehold 7.59 42,248,785
Mukim of Petaling Developement
Daerah Petaling
Selangor Darul Ehsan
Starparc Point Commercial 10-Nov-2008 Freehold 5.30 17,552,188
GM2018, Lot 21717, Mukim Setapak Development (JV date) (JV)
Tempat Kampong Pasir Werdieburn
Jalan Genting Klang, Daerah KL
State of Wilayah Persekutuan KL
166
Core Facts
Statistics of Shareholdings
As At 4 May 2011
Messages
Authorised Share Capital : RM1,000,000,000
Issued and Fully Paid Share Capital : RM415,784,419.50
Class of Shares : Ordinary shares of RM0.50 each
Voting Rights : One vote per ordinary share on a poll
Activities
Analysis of Shareholdings
Size of Holdings No. of Holders No. of Shares %
1 - 99 316 9,847 0.001
100 - 1,000 801 614,638 0.074
Governance
1,001 - 10,000 4,953 20,679,887 2.487
10,001 - 100,000 1,545 42,010,051 5.052
100,001 - 41,578,440* 222 294,670,977 35.436
41,578,441 and above** 5 473,583,439 56.950
Financials
Total 7,842 831,568,839 100.00
Remark:
* Less than 5% of issued shares
** 5% and above of issued shares
Information
Additional
Substantial Shareholders
No. of Ordinary Shares Held
Name Direct % Indirect %
Mayang Teratai Sdn Bhd 292,116,676 35.128 - -
Notices
Koperasi Permodalan FELDA Malaysia Berhad 56,557,226 6.801 - -
Employees Provident Fund Board 48,207,020 5.797 - -
Tan Sri Dato’ Sri Leong Hoy Kum - - *292,116,676 35.128
Form of Proxy
Notes:
* Deemed interested by virtue of shareholdings of Mayang Teratai Sdn Bhd
Mah Sing Group Berhad Annual Report 2010
167
Statistics of Shareholdings
As At 4 May 2011 (Cont’d)
Directors’ Shareholdings
No. of Ordinary Shares Held
Name Direct % Indirect %
#
Jen. Tan Sri Yaacob Bin Mat Zain (R) - - 25,348 0.003
Tan Sri Dato’ Sri Leong Hoy Kum - - * 292,981,384 35.232
#
Leong Yuet Mei - - 156,976 0.019
Notes:
#
Deemed interested by virtue of shareholdings of family member(s)
* Deemed interested by virtue of shareholdings of Mayang Teratai Sdn Bhd and his family member(s)
List of Top Thirty Holders
No. Name No. of Shares %
1 Mayang Teratai Sdn Bhd 139,716,676 16.801
2 CIMB Group Nominees (Tempatan) Sdn Bhd
120,000,000 14.430
Pledged Securities Account For Mayang Teratai Sdn Bhd (49643 JPLE)
3 HSBC Nominees (Asing) Sdn Bhd
113,554,217 13.655
Exempt AN For Credit Suisse (SG BR-TST-Asing)
4 Koperasi Permodalan FELDA Malaysia Berhad 55,837,226 6.715
5 Citigroup Nominees (Tempatan) Sdn Bhd
44,475,320 5.348
Employees Provident Fund Board
6 EB Nominees (Tempatan) Sdn Bhd
32,400,000 3.896
Pledged Securities Account For Mayang Teratai Sdn Bhd (CSC)
7 Kumpulan Wang Persaraan (Diperbadankan) 30,213,400 3.633
8 CIMSEC Nominees (Tempatan) Sdn Bhd
29,510,900 3.549
CIMB Bank Berhad (ETP)
9 AmanahRaya Trustees Berhad
Amanah Saham Wawasan 2020 14,593,680 1.755
Permodalan Nasional Berhad
10 Valuecap Sdn Bhd 10,339,700 1.243
11 Citigroup Nominees (Tempatan) Sdn Bhd
10,250,200 1.233
Exempt AN For Prudential Fund Management Berhad
12 HSBC Nominees (Asing) Sdn Bhd
10,000,000 1.203
Exempt AN For JPMorgan Chase Bank, National Association (U.K.)
13 HSBC Nominees (Asing) Sdn Bhd
Exempt AN For JPMorgan Chase Bank, National Association (NORGES BK 8,187,600 0.985
NLEND)
14 AMSEC Nominees (Tempatan) Sdn Bhd
7,606,700 0.915
AMTrustee Berhad For CIMB Islamic Dali Equity Growth Fund (UT-CIMB-DALI)
168
Core Facts
Statistics of Shareholdings
As At 4 May 2011 (Cont’d)
Messages
No. Name No. of Shares %
15 AmanahRaya Trustees Berhad
6,886,700 0.828
Public Islamic Select Treasures Fund
16 Permodalan Nasional Berhad 6,764,401 0.813
Activities
17 AmanahRaya Trustees Berhad
Skim Amanah Saham Bumiputera 6,256,300 0.752
Permodalan Nasional Berhad
18 HSBC Nominees (Asing) Sdn Bhd
HSBC-FS For Legg Mason Western Asset Southeast Asia Special Situations Trust 5,972,900 0.718
(201061)
Governance
19 Citigroup Nominees (Tempatan) Sdn Bhd
5,864,300 0.705
Exempt AN For American International Assurance Berhad
20 HLB Nominees (Asing) Sdn Bhd
5,850,000 0.703
Pledged Securities Account For Silverspring Finance Limited (SIN 91235-7)
21 Cartaban Nominees (Asing) Sdn Bhd
4,597,500 0.553
Exempt AN For Cerdit Agricole Titres Brunoy
Financials
22 HSBC Nominees (Asing) Sdn Bhd
4,183,020 0.503
RBS Coutts HK For Neranti Investments Limited
23 Mayban Nominees (Tempatan) Sdn Bhd
3,500,000 0.421
Etiqa Insurance Berhad (Non-Par Fund 2)
24 Citigroup Nominees (Asing) Sdn Bhd
3,282,500 0.395
CB LDN For Aegon Custody B.V.
Information
Additional
25 Citigroup Nominees (Asing) Sdn Bhd
2,459,500 0.296
CB Spore GW For NTUC Income Insuarance Co-Operative Ltd (LIF-ASEAN EQ-IN)
26 Cartaban Nominees (Asing) Sdn Bhd
2,376,500 0.286
State Street Munich Fund Q600 For CERN Pension Fund
27 HSBC Nominees (Asing) Sdn Bhd
Exempt AN For The Hongkong And Shanghai Banking Corporation Limited 2,266,300 0.273
(HBFS-I CLT ACCT)
Notices
28 Mayban Nominees (Tempatan) Sdn Bhd
2,000,000 0.241
Etiqa Insurance Berhad (Life Par Fund)
29 Mayban Nominees (Tempatan) Sdn Bhd
2,000,000 0.241
Etiqa Insurance Berhad (Sharehldr’s FD)
Form of Proxy
30 Employees Provident Fund Board 1,800,000 0.216
Total 692,745,540 83.305
Mah Sing Group Berhad Annual Report 2010
169
Notice of Annual General Meeting
NOTICE IS HEREBY GIVEN THAT the Nineteenth Annual General Meeting of Mah Sing Group Berhad (“Mah Sing” or “the Company”)
will be held at Penthouse Suite 1, Wisma Mah Sing, No. 163, Jalan Sungai Besi, 57100 Kuala Lumpur on Thursday, 30 June 2011 at
10.00 a.m., for the following purposes:
AGENDA
As Ordinary Businesses:
1. To receive the Audited Financial Statements for the financial year ended 31 December 2010
together with the Directors’ and Auditors’ Reports thereon. (Resolution 1)
2. To approve the declaration of a first and final dividend of 7.6 sen per ordinary share of RM0.50
each, less Malaysian Income Tax of 25% in respect of the financial year ended 31 December 2010. (Resolution 2)
3. To approve the Directors’ fees for the financial year ended 31 December 2010. (Resolution 3)
4. To re-elect the following Directors who retire pursuant to Article 102 of the Company’s Articles of
Association:
(i) Ng Poh Seng (Resolution 4)
(ii) Leong Yuet Mei (Resolution 5)
5. To re-appoint Messrs. Deloitte KassimChan as Auditors of the Company for the financial year
ending 31 December 2011 and to authorise the Directors to fix their remuneration. (Resolution 6)
As Special Businesses:
6. To consider and if thought fit, to pass the following resolution pursuant to Section 129(6) of the
Companies Act, 1965:
“THAT Jen. Tan Sri Yaacob Bin Mat Zain (R) who is over the age of seventy years and retiring in
accordance with Section 129(2) of the Companies Act, 1965 be and is hereby re-appointed as a
Director of the Company and to hold office until the conclusion of the next Annual General Meeting
of the Company.” (Resolution 7)
To consider and if thought fit, to pass the following resolutions, with or without any modification, as
Ordinary Resolutions of the Company:
7. AUTHORITY TO ISSUE SHARES
“THAT subject always to the Companies Act, 1965, and the approval of the regulatory authorities,
the Directors be and are hereby empowered, pursuant to Section 132D of the Companies Act,
1965, to issue shares in the Company from time to time at such price, upon such terms and
conditions, for such purposes and to such person or persons whomsoever as the Directors may
deem fit provided that the aggregate number of shares issued pursuant to this resolution does not
exceed 10% of the issued share capital (excluding treasury shares) of the Company for the time
being AND THAT the Directors be and are also empowered to obtain the approval from Bursa
Malaysia Securities Berhad for listing of and quotation for the additional shares so issued AND
FURTHER THAT such authority shall continue to be in force until the conclusion of the next Annual
General Meeting of the Company.” (Resolution 8)
8. PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED
PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE AS SPECIFIED IN
SECTION 2.3.1 (a) AND (b) OF THE CIRCULAR TO SHAREHOLDERS DATED 7 JUNE 2011
(“CIRCULAR”)
“THAT subject always to the Main Market Listing Requirements of Bursa Malaysia Securities
Berhad, approval be and is hereby given to the Company and/or its subsidiaries (“Mah Sing
Group”) to enter into and give effect to specified recurrent related party transactions of a revenue
or trading nature of Mah Sing Group with specified classes of Related Parties (as defined in the
Main Market Listing Requirements of Bursa Malaysia Securities Berhad) as specified in Section
2.3.1 (a) and (b) of the Circular, which are necessary for the day-to-day operations of Mah Sing
Group provided that:
170
Core Facts
Notice of Annual General Meeting (Cont’d)
Messages
(a) the transactions are in the ordinary course of business and are carried out at arms’ length
basis on normal commercial terms of Mah Sing Group and on terms not more favourable to
the Related Parties than those generally available to the public and are not detrimental to the
minority shareholders of the Company; and
(b) disclosure is made in the Annual Report of the aggregate value of transactions conducted
Activities
pursuant to the shareholders’ mandate together with a breakdown of the aggregate value
of the transactions during the financial year based on the type of transactions, names of the
related parties and their relationship.
AND THAT such approval, shall continue to be in force until:
Governance
(a) the conclusion of the next Annual General Meeting (“AGM”) of the Company at which time it will
lapse, unless the authority is renewed by a resolution passed at a general meeting; or
(b) the expiration of the period within which the next AGM after that date is required to be held
pursuant to Section 143(1) of the Companies Act, 1965 (“Act”) (but shall not extend to such
extension as may be allowed pursuant to Section 143(2) of the Act); or
Financials
(c) revoked or varied by a resolution passed by the shareholders of the Company in a general
meeting;
whichever is earlier.
AND FURTHER THAT authority be and is hereby given to the Directors of the Company to complete
and do all such acts, deeds and things as they may consider expedient or necessary in the best
Information
Additional
interest of the Company (including executing all such documents as may be required) to give effect
to the transactions contemplated and/or authorised by this Ordinary Resolution.” (Resolution 9)
9. PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED
PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE AS SPECIFIED IN
SECTION 2.3.1 (c) OF THE CIRCULAR TO SHAREHOLDERS DATED 7 JUNE 2011
(“CIRCULAR”)
Notices
“THAT subject always to the Main Market Listing Requirements of Bursa Malaysia Securities
Berhad, approval be and is hereby given to the Company and/or its subsidiaries (“Mah Sing Group”)
to enter into and give effect to specified recurrent related party transactions of a revenue or trading
nature of Mah Sing Group with specified classes of Related Parties (as defined in the Main Market
Listing Requirements of Bursa Malaysia Securities Berhad) as specified in Section 2.3.1 (c) of the
Circular, which are necessary for the day-to-day operations of Mah Sing Group provided that:
Form of Proxy
(a) the transactions are in the ordinary course of business and are carried out at arms’ length
basis on normal commercial terms of Mah Sing Group and on terms not more favourable to
the Related Parties than those generally available to the public and are not detrimental to the
minority shareholders of the Company; and
(b) disclosure is made in the Annual Report of the aggregate value of transactions conducted
Mah Sing Group Berhad Annual Report 2010
pursuant to the shareholders’ mandate together with a breakdown of the aggregate value
of the transactions during the financial year based on the type of transactions, names of the
related parties and their relationship.
AND THAT such approval, shall continue to be in force until:
(a) the conclusion of the next Annual General Meeting (“AGM”) of the Company at which time it will
lapse, unless the authority is renewed by a resolution passed at a general meeting; or
171
Notice of Annual General Meeting (Cont’d)
(b) the expiration of the period within which the next AGM after that date is required to be held
pursuant to Section 143(1) of the Companies Act, 1965 (“Act”) (but shall not extend to such
extension as may be allowed pursuant to Section 143(2) of the Act); or
(c) revoked or varied by a resolution passed by the shareholders of the Company in a general
meeting;
whichever is earlier;
AND FURTHER THAT authority be and is hereby given to the Directors of the Company to complete
and do all such acts, deeds and things as they may consider expedient or necessary in the best
interest of the Company (including executing all such documents as may be required) to give effect
to the transactions contemplated and/or authorised by this Ordinary Resolution.” (Resolution 10)
10. PROPOSED RENEWAL OF SHARE BUY-BACK AUTHORITY
“THAT subject to the Companies Act, 1965, provisions of the Company’s Memorandum and
Articles of Association and the Main Market Listing Requirements of Bursa Malaysia Securities
Berhad (“Bursa Securities”) and any applicable laws, regulations and guidelines issued by other
regulatory authorities, and the approvals of all relevant governmental and/or regulatory authorities,
the Company be and is hereby authorised to purchase and/or hold such amount of its ordinary
shares on the market of Bursa Securities at any time upon such terms and conditions as the
Directors in their absolute discretion deem fit and expedient in the interest of the Company
(“Proposed Share Buy-Back”) provided that:
(a) the aggregate number of shares which may be purchased and/or held by the Company shall
not exceed ten percent (10%) of the total issued and paid-up ordinary share capital of the
Company;
(b) the maximum amount of funds to be allocated by the Company for the purpose of purchasing
its shares shall not exceed the retained profits and/or share premium account of the Company
based on the latest audited financial statements and/or the latest management accounts
(where applicable) available up to the transaction date of the Proposed Share Buy-Back;
(c) upon completion of the purchase(s) of the shares by the Company, the shares shall be dealt
with in the following manner:
(i) to cancel the shares so purchased; or
(ii) to retain the shares so purchased in treasury, either to be distributed as dividends to the
shareholders of the Company and/or to be resold on the market of Bursa Securities; or
(iii) to retain part of the shares so purchased as treasury shares and cancel the remainder; or
(iv) any combination of the three.
AND THAT the authority conferred by this resolution will be effective upon the passing of this
resolution and will continue to be in force until:
(a) the conclusion of the next Annual General Meeting (“AGM”) of the Company at which time it
will lapse, unless the authority is renewed by a resolution passed at a general meeting, either
unconditionally or subject to conditions; or
(b) the expiration of the period within which the next AGM after that date is required by law to be
held; or
(c) revoked or varied by ordinary resolution passed by the shareholders of the Company in a
general meeting;
whichever occurs first, but not as to prejudice the completion of purchase(s) by the Company before
the aforesaid expiry date, and in any event, in accordance with the provisions of the guidelines
issued by Bursa Securities or any other relevant authorities, relevant requirements and guidelines.
172
Core Facts
Notice of Annual General Meeting (Cont’d)
Messages
AND FURTHER THAT authority be and is hereby given to the Directors of the Company to do all
such acts, deeds and things as they may consider expedient or necessary in the best interest of
the Company (including executing all such documents as may be required) to give full effect to the
Proposed Share Buy-Back with full power to assent to any condition, variation, modification and/
or amendment as may be required by any relevant authorities and to deal with all matters relating
thereto and take all steps and do all acts and things in any manner as they may deem necessary
Activities
in connection with the Proposed Share Buy-Back in the interest of the Company.” (Resolution 11)
11. To transact any other business of which due notice shall have been given.
Governance
BY ORDER OF THE BOARD
YANG BAO LING (MAICSA 7041240)
KUAN HUI FANG (MIA 16876)
Company Secretaries
Financials
Kuala Lumpur
7 June 2011
Information
Additional
Notices
Form of Proxy
NOTES:
i A member entitled to attend and vote at this meeting is entitled to appoint a proxy or attorney or in the case of a corporation,
to appoint a duly authorised representative to attend and vote in his/her place. A proxy may but need not be a member of the
Mah Sing Group Berhad Annual Report 2010
Company and provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company.
ii The power of attorney or a notarially certified copy thereof or the Form of Proxy shall be in writing under the hand of the
appointor or of his/her attorney duly authorised in writing. If the appointor is a corporation, it must be executed under its seal
or under the hand of its officer or its attorney duly authorised on its behalf.
iii Where a member appoints more than one (1) proxy (subject always to a maximum of two (2) proxies of each meeting), the
appointment shall be invalid unless he/she specifies the proportions of his/her holdings to be represented by each proxy.
iv The Form of Proxy together with the power of attorney (if any) under which it is signed or a duly notarially certified copy thereof
must be deposited at the registered office of the Company at Penthouse Suite 1, Wisma Mah Sing, No. 163, Jalan Sungai
Besi, 57100 Kuala Lumpur not less than forty-eight (48) hours before the time for holding this meeting or any adjournment
thereof.
173
Notice of Annual General Meeting (Cont’d)
EXPLANATORY NOTES ON SPECIAL BUSINESSES
1. Resolution 7
The re-appointment of Jen. Tan Sri Yaacob Bin Mat Zain (R), a person over the age of 70 years as Director of the Company to
hold office until the conclusion of the next Annual General Meeting (“AGM”) of the Company shall take effect if the proposed
Resolution 7 has been passed by a majority of not less than three-fourths (¾) of such members as being entitled to vote in
person or, where proxies are allowed, by proxy, at a general meeting of which not less than 21 days’ notice specifying the
intention to propose the resolution has been duly given.
2. Resolution 8
The proposed Resolution 8 will give powers to the Directors to issue up to a maximum ten per centum (10%) of the issued
share capital of the Company for the time being for such purposes as the Directors would consider in the best interest of the
Company. This authority, unless revoked or varied by the Company at a general meeting, will expire at the next AGM of the
Company.
The general mandate sought for issue of securities is a renewal of the mandate that was approved by the shareholders at
the Eighteenth AGM held on 25 June 2010. As at the date of this notice, no new shares were issued pursuant to the general
mandate which was approved by the shareholders at the Eighteenth AGM.
The renewed mandate will enable the Directors to take swift action in case of a need for corporate exercises or in the event
business opportunities arise which involve the issue/placing of shares and to avoid delay and cost in convening general
meetings to approve such issue of shares.
3 Resolutions 9 and 10
The proposed Resolutions 9 and 10, if passed, will enable the Company and/or its subsidiaries to enter into recurrent
related party transactions of a revenue or trading nature with related parties which are necessary for the Group’s day-to-day
operations and are in the ordinary course of business carried out on an arm’s length basis on normal commercial terms and
on terms not more favourable to the related parties than those generally available to the public and are not detrimental to the
minority shareholders of the Company. The details of the proposals are set out in the Circular to Shareholders dated 7 June
2011 accompanying the Company’s Annual Report for the financial year ended 31 December 2010.
4 Resolution 11
The proposed Resolution 11, if passed, will empower the Directors of the Company to exercise the power of the Company
to purchase the Company’s shares up to ten percent (10%) of the total issued and paid-up share capital of the Company
by utilising the funds allocated which shall not exceed the retained profits and/or share premium account of the Company.
This authority will, unless revoked or varied at a general meeting, expire at the conclusion of the next AGM of the Company.
The details of the proposal are set out in the Share Buy-Back Statement dated 7 June 2011, accompanying the Company’s
Annual Report for the financial year ended 31 December 2010.
174
Core Facts
Notice of Dividend Entitlement and Payment
Messages
NOTICE IS HEREBY GIVEN THAT the first and final dividend of 7.6 sen per ordinary share of RM0.50 each, less Malaysian Income Tax
of 25% in respect of the financial year ended 31 December 2010, if approved at the Nineteenth Annual General Meeting, will be paid
on 28 September 2011 to Depositors of ordinary shares registered in the Record of Depositors on 15 September 2011.
A Depositor shall qualify for entitlement to the dividend only in respect of:
Activities
(a) Shares transferred into the Depositor’s Securities Account before 4.00 p.m. on 15 September 2011 in respect of transfers; and
(b) Shares bought on the Bursa Malaysia Securities Berhad up to 5.00 p.m. on 12 September 2011 i.e. on a cum entitlement basis
according to the Rules of Bursa Malaysia Securities Berhad.
Governance
BY ORDER OF THE BOARD
YANG BAO LING (MAICSA 7041240)
KUAN HUI FANG (MIA 16876)
Financials
Company Secretaries
Kuala Lumpur
7 June 2011
Information
Additional
Notices
Form of Proxy
Mah Sing Group Berhad Annual Report 2010
175
Statement Accompanying
Notice of Annual General Meeting
Pursuant to Paragraph 8.27 (2) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, there is no person
seeking election as Director of the Company at this Annual General Meeting.
176
FORM OF PROXY No. of ordinary shares held
(Before completing the form, please refer to notes below)
I/We ……………..……………..……………..……………..……………....…………………..… Telephone No……………..……………..……………
(FULL NAME IN CAPITAL LETTERS)
I.C. or Company No. ……………..……………..……………..……………..…………... CDS Account No……………..……………..……………
(NEW I.C. NO. OR COMPANY NO.)
of.……………..……………..……………..……………..…………....……………..……………..……………..……………..…………....……………..
(FULL ADDRESS)
being a member/members of MAH SING GROUP BERHAD hereby appoint* the Chairman of the Meeting or failing him
……………..……………..……………..……………..……………....……………..……………..…….I.C. No. ……………..……………..…………...
(FULL NAME IN CAPITAL LETTERS)
of.……………..……………..……………..……………..…………....……………..……………..……………..……………..…………....……………..
(FULL ADDRESS)
or failing him, …………..……………..……………..……………....……………..……………..…….I.C. No. ……………..……………..……………
(FULL NAME IN CAPITAL LETTERS)
of.……………..……………..……………..……………..…………....……………..……………..……………..……………..…………....……………..
(FULL ADDRESS)
as my/our proxy, to vote for me/us on my/our behalf, at the Nineteenth Annual General Meeting of the Company (“AGM”), to be held at Penthouse Suite
1, Wisma Mah Sing, No. 163, Jalan Sungai Besi, 57100 Kuala Lumpur on Thursday, 30 June 2011 at 10.00 a.m., or any adjournment thereof, on the
following resolutions referred to in the notice of the AGM:
My/our proxy is to vote as indicated below:
No. Resolution For Against
1 Receiving of the Audited Financial Statements and Reports
2 Declaration of first and final dividend
3 Payment of Directors’ fees
4 Re-election of Ng Poh Seng as Director
5 Re-election of Leong Yuet Mei as Director
6 Re-appointment of Deloitte KassimChan as Auditors
7 Re-appointment of Jen. Tan Sri Yaacob Bin Mat Zain (R) as Director
8 Authority to issue and allot shares pursuant to Section 132D of the Companies Act, 1965
9 Proposed renewal of Shareholders’ Mandate as specified in Sections 2.3.1 (a) and (b) of the Circular to
Shareholders dated 7June 2011
10 Proposed renewal of Shareholders’ Mandate as specified in Section 2.3.1 (c) of the Circular to
Shareholders dated 7 June 2011
11 Proposed renewal of share buy-back authority
(Please indicate with an “X” in the space provided whether you wish your votes to be cast for or against the resolutions. In the absence of specific direction,
your proxy will vote or abstain as he/she thinks fit.)
Dated this .................... day of .....................….…...... 2011 ………….………….………….
Signature: Shareholder or
Common Seal of Appointor
* Delete the words “the Chairman of the Meeting or” if you wish to appoint some other person to be your proxy.
Notes:
i) A member entitled to attend and vote at this meeting is entitled to appoint a proxy or attorney or in the case of a corporation, to appoint a duly authorised representative to attend and vote in his/
her place. A proxy may but need not be a member of the Company and provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company.
ii) The power of attorney or a notarially certified copy thereof or the Form of Proxy shall be in writing under the hand of the appointor or of his/her attorney duly authorised in writing. If the appointor is
a corporation, it must be executed under its seal or under the hand of its officer or its attorney duly authorised on its behalf.
iii) Where a member appoints more than one (1) proxy (subject always to a maximum of two (2) proxies at each meeting), the appointment shall be invalid unless he/she specifies the proportions of
his/her holdings to be represented by each proxy.
iv) The Form of Proxy together with the power of attorney (if any) under which it is signed or a duly notarially certified copy thereof must be deposited at the registered office of the Company at Penthouse
Suite 1, Wisma Mah Sing, No. 163, Jalan Sungai Besi, 57100 Kuala Lumpur not less than forty-eight (48) hours before the time appointed for holding this meeting or any adjournment thereof.
Fold this flap for sealing
First fold here
AFFIX
STAMP
THE COMPANY SECRETARY
MAH SING GROUP BERHAD
Penthouse Suite 1
Wisma Mah Sing
No. 163, Jalan Sungai Besi
57100 Kuala Lumpur
Then fold here
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