ANNUAL REPORT 2011asb.listedcompany.com/misc/ar2011.pdf · 100% Alam Samudera Corporation Sdn Bhd...
Transcript of ANNUAL REPORT 2011asb.listedcompany.com/misc/ar2011.pdf · 100% Alam Samudera Corporation Sdn Bhd...
A D VA N C E S Y N E R G Y B E R H A D
A N N U A L R E P O R T 2 0 1 1
OUR VISION
To be premier global corporation.
OUR MISSION
To attain success as a socially responsible global corporation which excel in every undertaking.
OUR STRATEGY
We seek synergistic partnerships and alliances to achieve our mission.
WE ENSURE
• Entrepreneurshipexcellenceinallourpursuits.
• Sustainablegrowththroughidentificationandsatisfactionofcustomers’needs.
• Productivepartnershipswithbusinessassociates,suppliers,employeesandgovernments.
• Fairnessinallbusinessdealingswithpartners,customersandsuppliers.
OUR VALUES
• To Our Shareholders Weensureafairreturnsothatourshareholderswillvaluetheirinvestment.
• To Our Customers We value our customers by providing them with high quality products and services at competitive prices.
• To Our EmployeesWe care for our people by creating a conducivework environment, nurturing them to their fullest potential andrecognising their contribution.
• To Our Community Wehonouroursocialobligationsandcontributetotheeconomicandsocialwellbeingofeverycommunityinwhich
we operate.
Corporate Vision and Mission
Logo Rationale
Thislogo,circularinshape,comprisessymbolswhichrepresentthefire,water,andearthelementsinconstantinteraction.TheinteractionoftheseelementsreleasesfreeflowingenergywhichproducestheTREE,asymbolofalllifeonearth.Situatedatthecentreofthelogo,theTREErepresentsthefocusofthecompanygoalwhichisthecreationofwealthbenefitingshareholdersandsocietyatlarge.Thelogoholistically,symbolisessynergisticenergyinmotion.
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annual report 2011
Group Corporate Structure as at 4 May 2012 2
Notice of Annual General Meeting 4
Board of Directors & Corporate Information 8
Management Information 12
Statement on Corporate Governance 13
Additional Compliance Information 18
Audit Committee Report 19
Statement on Internal Control 23
Corporate Social Responsibility 25
Chairman’s Statement 27
Financial Statements
• Directors’Report 32
• StatementsofFinancialPosition 37
• StatementsofComprehensiveIncome 39
• StatementsofChangesinEquity 41
• StatementsofCashFlows 44
• NotestotheFinancialStatements 48
• SupplemantaryInformationonthe 146 DisclosureofRealisedandUnrealisedProfitsorLosses
• StatementbyDirectors 147
• StatutoryDeclaration 148
• IndependentAuditors’ReporttotheMembersofAdvanceSynergyBerhad 149
Statement on Directors’ Interests 151
Statistics on Shareholdings 152
StatisticsonICULSHoldings 154
ListofProperties 156
ProxyForm Enclosed
Contents
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annual report 2011
Group Corporate Structure as at 4 May 2012
Advance Synergy Berhad (1225-D)
HOTELS & RESORTSINVESTMENT
HOLDING
INFORMATION &COMMUNICATIONS
TECHNOLOGY
PROPERTYDEVELOPMENT
TRAVEL & TOURS OTHER DIVISIONS
OTHERSCARD &
PAYMENTSERVICES
TRADITIONALCHINESE
MEDICINE
COACHBUILDING
MANUFACTURING,MARKETING &DISTRIBUTION
100% Advance Synergy Capital Sdn Bhd ("ASC")
100% AESBI Power Systems Sdn Bhd
100% ASC Credit Sdn Bhd
100% ASC Equities Sdn Bhd
100% Triton Engineering Sdn Bhd
100% Triton Express Sdn Bhd
100% Triton-K Sdn Bhd
100% Triton Khidmat Sdn Bhd
20% Kumpulan Powernet Berhad
20% SIBB Berhad
100% Synergy Petroleum Incorporated
100% Advance synergy Realty Sdn Bhd
100% Sadong Development Sdn Bhd
95% Hotel Golden Dragon Sdn Bhd
100% Simpang Tiga Realty Sdn Bhd
61% Quality Bus & Coach (M) Sdn Bhd (Subsidiary of ASC)
50% Quality Bus & Coach Pty Ltd
100% Calmford Incorporated
100% Advansa Pty Ltd
100% Advansa Sdn Bhd
100% Home Cinema Studio Pty Ltd
100% Excellent Display Sdn Bhd
80% Dama TCM Sdn Bhd
100% Advance Synergy Timber Sdn Bhd
100% Ausborn Sawmill Sdn Bhd
100% Bornion Sawmill Sdn Bhd
100% Excellent Arch Sdn Bhd
100% Advance Synergy Furniture Sdn Bhd (In Liquidation)
81% Acrylic Synergy Sdn Bhd (Subsidiary of NMC)
100% Strategic Research & Consultancy Sdn Bhd
100% Synergy Gold Incorporated
100% Nagapura Management Corporation Sdn Bhd ("NMC")
100% Xgo Technik Sdn Bhd
70% Syarikat Fit and Weld Engineering (M) Sdn Bhd (In Liquidation)
100% Alangka-Suka Hotels & Resorts Sdn Bhd
100% Alor Setar Holiday Villa Sdn Bhd
100% Antara Holiday Villas Sdn Bhd
100% Asbina Hotel & Property Sdn Bhd
100% Asbina Hotel & Property (Cambodia) Pte Ltd
100% Cherating Holiday Villa Berhad
100% Holiday Villa Subang Sdn Bhd
100% Holiday Villa Travel & Tours Sdn Bhd
100% Langkawi Holiday Villa Sdn Bhd
30% M OOD Perfumes Sdn Bhd
100% Mayor Hotels Sdn Bhd
100% Super Leisure Sdn Bhd
49% Smile Integrated Solution Sdn Bhd
100% Alangka-Suka International Limited
100% Holiday Villa Makkah Limited
100% Interwell Management Limited
100% Larkswood Assets Limited
100% Asbina Shenzhen Limited
90% Grand Holiday Villa Khartoum Co. Ltd
90% P.T. Diwnagkara Holiday Villa Bali
100% Alangka-Suka Paris SAS
100% Holiday Villa Lafayette Paris SAS
100% Grand Hotel Sudan Limited
100% Holiday Villas International Limited
100% Holiday Villa (UK) Ltd
95% Holiday Villa China International Limited
100% Changshu Holiday Villa Hotel Management Co. Ltd
90% Holiday Villa Middle East Limited
100% Legenda de Malaisie SAS
40% Holiday Villa Hotels & Resorts Sdn Bhd
40% Holiday Villa Kuala Lumpur Sdn Bhd
100% Advance Synergy Properties Sdn Bhd
100% Best Alpha Investments Limited
100% Execellent Result Investments Limited
100% Synergy Realty Incorporated
100% Builderworks Pty Ltd
100% Worldwide Matrix Sdn Bhd
58.30% Unified Communications Holdings Limited
100% Mobilization Sdn Bhd
100% Unified Assets Sdn Bhd
100% Unified Communications Pte LId
100% AttrixTech Sdn Bhd
100% Unified Communications (Private) Limited
100% Unified Communications (VAS) Sdn Bhd
89% Unified (Thailand) Ltd
50% Unified Telecom Private Limited
100% Unified Communications Sdn Bhd
100% Ahead Mobile Sdn Bhd
100% Unified Communications (Tech) Pte Ltd (formerly known as Attrix Technology Pte Ltd)
100% Unified Communications (OSS) Sdn Bhd
51% GlobeOSS Sdn Bhd
100% GlobeOSS Pte LId
100% Unified Communications (OHQ) Sdn Bhd
10%
100% Alam Samudera Corporation Sdn Bhd
100% Synergy Tours (Borneo) Sdn Bhd
100% Diversified Gain Sdn Bhd
100% Orient Escape Travel Sdn Bhd
100% Synergy Tours Sdn Bhd
50% Le Indie Viaggi S.R.L
100% Marketing and Event Management Integrated Sdn Bhd
100% Motorsports Adventure Sdn Bhd
100% Orient Escape Travel (Penang) Sdn Bhd
51% iSynergy Sdn Bhd *
100% Cosmoscourt.com (Malaysia) Sdn Bhd
100% Datakey Sdn Bhd
100% Rewardstreet.com (Malaysia) Sdn Bhd
51% Synergy Cards Sdn Bhd * *
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*29%oftheequityinterestofthecompanyisheldbyASC.
**41%oftheequityinterestofthecompanyisheldbyASC.
Advance Synergy Berhad (1225-D)
HOTELS & RESORTSINVESTMENT
HOLDING
INFORMATION &COMMUNICATIONS
TECHNOLOGY
PROPERTYDEVELOPMENT
TRAVEL & TOURS OTHER DIVISIONS
OTHERSCARD &
PAYMENTSERVICES
TRADITIONALCHINESE
MEDICINE
COACHBUILDING
MANUFACTURING,MARKETING &DISTRIBUTION
100% Advance Synergy Capital Sdn Bhd ("ASC")
100% AESBI Power Systems Sdn Bhd
100% ASC Credit Sdn Bhd
100% ASC Equities Sdn Bhd
100% Triton Engineering Sdn Bhd
100% Triton Express Sdn Bhd
100% Triton-K Sdn Bhd
100% Triton Khidmat Sdn Bhd
20% Kumpulan Powernet Berhad
20% SIBB Berhad
100% Synergy Petroleum Incorporated
100% Advance synergy Realty Sdn Bhd
100% Sadong Development Sdn Bhd
95% Hotel Golden Dragon Sdn Bhd
100% Simpang Tiga Realty Sdn Bhd
61% Quality Bus & Coach (M) Sdn Bhd (Subsidiary of ASC)
50% Quality Bus & Coach Pty Ltd
100% Calmford Incorporated
100% Advansa Pty Ltd
100% Advansa Sdn Bhd
100% Home Cinema Studio Pty Ltd
100% Excellent Display Sdn Bhd
80% Dama TCM Sdn Bhd
100% Advance Synergy Timber Sdn Bhd
100% Ausborn Sawmill Sdn Bhd
100% Bornion Sawmill Sdn Bhd
100% Excellent Arch Sdn Bhd
100% Advance Synergy Furniture Sdn Bhd (In Liquidation)
81% Acrylic Synergy Sdn Bhd (Subsidiary of NMC)
100% Strategic Research & Consultancy Sdn Bhd
100% Synergy Gold Incorporated
100% Nagapura Management Corporation Sdn Bhd ("NMC")
100% Xgo Technik Sdn Bhd
70% Syarikat Fit and Weld Engineering (M) Sdn Bhd (In Liquidation)
100% Alangka-Suka Hotels & Resorts Sdn Bhd
100% Alor Setar Holiday Villa Sdn Bhd
100% Antara Holiday Villas Sdn Bhd
100% Asbina Hotel & Property Sdn Bhd
100% Asbina Hotel & Property (Cambodia) Pte Ltd
100% Cherating Holiday Villa Berhad
100% Holiday Villa Subang Sdn Bhd
100% Holiday Villa Travel & Tours Sdn Bhd
100% Langkawi Holiday Villa Sdn Bhd
30% M OOD Perfumes Sdn Bhd
100% Mayor Hotels Sdn Bhd
100% Super Leisure Sdn Bhd
49% Smile Integrated Solution Sdn Bhd
100% Alangka-Suka International Limited
100% Holiday Villa Makkah Limited
100% Interwell Management Limited
100% Larkswood Assets Limited
100% Asbina Shenzhen Limited
90% Grand Holiday Villa Khartoum Co. Ltd
90% P.T. Diwnagkara Holiday Villa Bali
100% Alangka-Suka Paris SAS
100% Holiday Villa Lafayette Paris SAS
100% Grand Hotel Sudan Limited
100% Holiday Villas International Limited
100% Holiday Villa (UK) Ltd
95% Holiday Villa China International Limited
100% Changshu Holiday Villa Hotel Management Co. Ltd
90% Holiday Villa Middle East Limited
100% Legenda de Malaisie SAS
40% Holiday Villa Hotels & Resorts Sdn Bhd
40% Holiday Villa Kuala Lumpur Sdn Bhd
100% Advance Synergy Properties Sdn Bhd
100% Best Alpha Investments Limited
100% Execellent Result Investments Limited
100% Synergy Realty Incorporated
100% Builderworks Pty Ltd
100% Worldwide Matrix Sdn Bhd
58.30% Unified Communications Holdings Limited
100% Mobilization Sdn Bhd
100% Unified Assets Sdn Bhd
100% Unified Communications Pte LId
100% AttrixTech Sdn Bhd
100% Unified Communications (Private) Limited
100% Unified Communications (VAS) Sdn Bhd
89% Unified (Thailand) Ltd
50% Unified Telecom Private Limited
100% Unified Communications Sdn Bhd
100% Ahead Mobile Sdn Bhd
100% Unified Communications (Tech) Pte Ltd (formerly known as Attrix Technology Pte Ltd)
100% Unified Communications (OSS) Sdn Bhd
51% GlobeOSS Sdn Bhd
100% GlobeOSS Pte LId
100% Unified Communications (OHQ) Sdn Bhd
10%
100% Alam Samudera Corporation Sdn Bhd
100% Synergy Tours (Borneo) Sdn Bhd
100% Diversified Gain Sdn Bhd
100% Orient Escape Travel Sdn Bhd
100% Synergy Tours Sdn Bhd
50% Le Indie Viaggi S.R.L
100% Marketing and Event Management Integrated Sdn Bhd
100% Motorsports Adventure Sdn Bhd
100% Orient Escape Travel (Penang) Sdn Bhd
51% iSynergy Sdn Bhd *
100% Cosmoscourt.com (Malaysia) Sdn Bhd
100% Datakey Sdn Bhd
100% Rewardstreet.com (Malaysia) Sdn Bhd
51% Synergy Cards Sdn Bhd * *
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NOTICE IS HEREBY GIVEN that the Eighty-Eighth ANNUAL GENERAL MEETING (“AGM”) of Advance Synergy BerhadwillbeheldattheAuditorium,Level4,ThePodium,WismaSynergy,No.72,PesiaranJubliPerak,Seksyen22,40000ShahAlam,SelangorDarulEhsanonTuesday,26June2012at10.30a.m.forthefollowingpurposes:
1. Toreceiveandadopttheauditedfinancialstatementsforthefinancialyearended31December2011andtheDirectors’andAuditors’reportsthereon.
Resolution 1
2. Todeclareafirstandfinalgrossdividendof0.50senperordinaryshareless25%incometaxinrespectofthefinancialyearended31December2011.
Resolution 2
3. ToapproveDirectors’feesforthefinancialyearended31December2011. Resolution 3
4. Tore-electthefollowingDirectors:
4.1 Dato’AbdulMuradBinKhalid Resolution 4
4.2ChimWaiKhuan Resolution 5
5. Tore-appointMessrsBakerTillyMonteiroHengasauditorsoftheCompanyandtoauthorisetheDirectorstofixtheirremuneration.
Resolution 6
6. As special business, to consider and, if thought fit, passwith orwithoutmodifications thefollowingresolutions:
Ordinary Resolution - Authority to allot and issue shares
“THAT subject always to the Companies Act, 1965 (“the Act”), Articles of Association oftheCompanyand/orapprovalsof therelevantauthorities, theDirectorsbeandareherebyauthorisedandempoweredpursuanttoSection132DoftheActtoallotandissuenewsharesintheCompany,fromtimetotimeanduponsuchtermsandconditions,forsuchpurposesandtosuchpersonorpersonswhomsoeverastheDirectorsmay,intheirabsolutediscretiondeemfit,provided that theaggregatenumberofshares issuedpursuant to this resolutiondoesnotexceed10%oftheissuedandpaid-upsharecapitaloftheCompanyforthetimebeingANDTHATtheDirectorsbeandareherebyempoweredtoobtaintheapprovalforthelisting of and quotation for the additional shares so issued on BursaMalaysia SecuritiesBerhad AND THAT such authority shall continue in force until the conclusion of the nextAnnualGeneralMeetingoftheCompany.”
Resolution 7
Special Resolution - Proposed Amendments to the Articles of Association
“THATtheproposedamendmentstotheArticlesofAssociationoftheCompanyascontainedin Appendix I of the Annual Report 2011 (“Proposed Amendments”) be and are herebyapproved and adoptedAND THAT theDirectors be and are hereby authorised to take allsuchstepsastheyshalldeemnecessaryandexpedienttoeffectandcompletetheProposedAmendments.”
Resolution 8
7. Totransactanyotherordinarybusinessofwhichduenoticeshallhavebeengiven.
Notice of Annual General Meeting
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NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT
NOTICE IS ALSO HEREBY GIVENthatsubjecttotheapprovaloftheshareholdersattheEighty-EighthAGM,afirstandfinalgrossdividendof0.50senperordinaryshareless25%incometaxinrespectofthefinancialyearended31December2011willbepaidon8August2012totheshareholderswhosenamesappearintheRecordofDepositorson12July2012.
Adepositorshallqualifyforentitlementonlyinrespectof:
a. SharestransferredtotheDepositor’sSecuritiesAccountbefore4.00p.m.on12July2012inrespectoftransfer;and
b. SharesboughtontheBursaMalaysiaSecuritiesBerhadonacumentitlementbasisaccordingtotheRulesofBursaMalaysiaSecuritiesBerhad.
BYORDEROFTHEBOARD
HO TSAE FENGSecretary
SelangorDarulEhsan4June2012
Notes:
1. Inrespectofdepositedsecurities,onlymemberswhosenamesappearintheRecordofDepositorson18June2012(GeneralMeetingRecordofDepositors)shallbeentitledtoattend,speakandvoteatthisEighty-EighthAGM.
2. AmemberoftheCompanyentitledtoattendandvoteatthegeneralmeetingisentitledtoappointatleastone(1)proxybutnotmorethantwo(2)proxiestoattendandvoteinhis/herstead.AproxyneednotbeamemberoftheCompany.
3. Amember of theCompanywho is an authorised nominee as defined under theSecurities Industry (CentralDepositories)Act,1991mayappointatleastone(1)proxybutnotmorethantwo(2)proxiesinrespectofeachsecuritiesaccountitholdswithsharesoftheCompanystandingtothecreditofthesaidsecuritiesaccount.
4. Theinstrumentappointingaproxyinthecaseofanindividualshallbesignedbytheappointerorhis/herattorneydulyauthorisedinwritingandinthecaseofacorporation,theinstrumentappointingaproxymustbeunderitscommonsealorunderthehandofanofficerorattorneydulyauthorised.
5. Theinstrumentappointingaproxyandthepowerofattorneyorotherauthority,ifany,underwhichitissigned(oranotariallycertifiedcopyofsuchpowerorauthority)shallbedepositedattheRegisteredOfficeoftheCompanyatLevel3,EastWing,WismaSynergy,No.72,PesiaranJubliPerak,Seksyen22,40000ShahAlam,SelangorDarulEhsannotlessthan48hoursbeforethetimeappointedforholdingthemeetingoranyotheradjournmentthereof.
EXPLANATORY NOTE ON ORDINARY BUSINESS
DetailsoftheDirectorsstandingforre-electionunderResolution4andResolution5arestatedinDirectors’profileonpages9to11of thisAnnualReport.Theirsecuritiesholdings in theCompanyarestatedonpage151of thisAnnualReport.
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EXPLANATORY NOTES ON SPECIAL BUSINESS
Resolution 7 - Authority to allot and issue shares
TheCompanyhad,attheEighty-SeventhAGMheldon29June2011,obtaineditsshareholders’approvalforthegeneralmandateforissuanceofsharespursuanttoSection132DoftheAct.TheCompanydidnotissueanynewsharespursuanttothismandateobtainedasatthedateofthisnotice.TheOrdinaryResolutionpursuanttoSection132Dof theAct isa renewalof thegeneralmandate for issuanceofsharesby theCompany.This resolution, ifpassed,willempowertheDirectors,fromthedateoftheEighty-EighthAGMuntilthenextAGMtoallotandissuenewsharesoftheCompanyuptoanamountnotexceedingintotal10%oftheissuedandpaid-upsharecapitaloftheCompanyforthetimebeingandforsuchpurposesastheDirectorsconsiderwouldbeinthebestinterestsoftheCompany.Thiswouldavoidanydelayandcostinvolvedinconveningageneralmeetingtospecificallyapprovetheaforesaid.Thisauthority, unless revokedor variedat ageneralmeeting,will expireat thenextAGMof theCompany.
Atthisjuncture,thereisnodecisiontoissuenewshares.Ifthereshouldbeadecisiontoissuenewsharesafterthegeneralmandateisobtained,theCompanywillmakeanannouncementinrespectofthepurposeandutilisationofproceedsarisingfromsuchissue.
Resolution 8 - Proposed Amendments to the Articles of Association
TheSpecialResolutionproposedunderResolution8 is to amend theCompany’sArticlesofAssociation tobein linewith the recentamendments to theMainMarketListingRequirements (“ListingRequirements”)ofBursaMalaysiaSecuritiesBerhad (“BursaSecurities”)mainly in relation to the appointment ofmultipleproxiesby anexemptauthorisednomineeandqualificationofproxy.
ThedetailsoftheProposedAmendmentsaresetoutinAppendixIonpage7ofthisAnnualReport.
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APPENDIX I
Special Resolution - Proposed Amendments to the Articles of Association
THATtheArticlesofAssociationoftheCompanybeamendedinthefollowingmanner:
Proposed Amendments to the Articles of Association
Articles Existing Articles Amended Articles
2* Interpretation Interpretation
Words Meanings Words Meanings
- - Exempt Authorised Nominee An authorised nominee defined under the Depositories Act which is exempted with the provisions of subsection 25A(1) of the Depositories Act.
- - Share Issuance Scheme Means a scheme involving a new issuance of shares to the employees.
4(3) No Director shall participate in any share scheme for employees unless the Members in general meeting have approved of the specific allotment to be made to suchDirector and unless the Director holds officeinandexecutivecapacityPROVIDEDALWAYSTHATaDirectornotholdingofficeinanexecutivecapacitymaysoparticipatein an issue of shares pursuant to a public issueorapublicoffer.
No Director shall participate in any Share Issuance Scheme share scheme for employeesunlesstheMembersingeneralmeetinghaveapprovedofthespecificallotmenttobemadetosuchDirectorandunlesstheDirectorholdsofficeinandexecutivecapacityPROVIDEDALWAYSTHATaDirectornotholdingofficeinanexecutivecapacitymaysoparticipateinanissueofsharespursuanttoapublicissueorapublicoffer.
42(1) Every sharewhich shall be forfeited shallthereupon become the property of the Company and may be either cancelled or soldorreallottedorotherwisedisposedof,eithertothepersonwhowasbeforesuchforfeiture the holder thereof or entitled thereto or to any person upon such terms and in such manner as the Directors deem fit.Atanytimebeforeasaleordisposition,the forfeiture may be cancelled on such termsastheDirectorsdeemfit.
EverysharewhichshallbeforfeitedshallthereuponbecomethepropertyoftheCompanyandmaybeeithercancelledorsoldorreallottedorotherwisedisposedof, either to the person who was before such forfeiture the holder thereof orentitled thereto or to any person upon such terms and in such manner as the Directorsdeemfit.Atanytimebeforeasaleordisposition,theforfeituremaybecancelledonsuchtermsastheDirectorsdeemfit.Any residue after the sale of the forfeited shares shall be remitted back to the previous holder (his executors, administrators or assignees or as he directs), net of unpaid calls on the forfeited share, accrued interest and expenses.
75(1) Votes may be given either personallyor by proxy. A proxy or attorney or aduly authorised representative need not be a Member of the Company and the provisions of Section 149(1)(b) of the Act shallnotapplytotheCompany.
Votesmaybegiveneitherpersonallyorbyproxy.A member of the Company entitled to attend and vote at a meeting of the Company, or at a meeting of any class of members of the Company, shall be entitled to appoint any person as his proxy to attend and vote instead of the member at the meeting. There shall be no restriction as to the qualification of the proxy. A proxy appointed to attend and vote at a meeting of the Company shall have the same rights as the member to speak at the meeting. Aproxyorattorneyor a duly authorised representative need not be a Member of the Company and theprovisionsofSection149(1)(b)oftheActshallnotapplytotheCompany.
75(2) WhereaMemberisanauthorisednomineeasdefinedundertheCentralDepositoriesAct, itmay appoint at least one (1) proxybut not more than two (2) proxies inrespect of each securities account it holdswithordinarysharesoftheCompanystanding to the credit of the said securities account.
Where a Member is an authorised nominee as defined under the CentralDepositoriesAct, itmay appoint at least one (1) proxybut notmore than two(2)proxiesinrespectofeachsecuritiesaccountitholdswithordinarysharesof the Company standing to the credit of the said securities account.Where a Member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.
Note:* theabovechangedwordsorexpressionsshallbeadoptedforusethroughouttheArticlesofAssociationandtheformerexpressionswhereverusedshallbeamendedtoreflectthenewwordsorexpressionsaccordinglywherevernecessarythroughoutthedocument,whichprecisechangesarenothighlighted.
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BOARD OF DIRECTORS : Dato’AhmadSebiBakar (ExecutiveChairman)
LeeSuNie (ExecutiveDirector/ChiefExecutiveOfficer)
Dato’AbdulMuradBinKhalid (IndependentNon-ExecutiveDirector)
DatinMasriKhawBintiAbdullah (Non-IndependentNon-ExecutiveDirector)
ChimWaiKhuan (IndependentNon-ExecutiveDirector)
YongTeckMing (IndependentNon-ExecutiveDirector)
SECRETARY : HoTsaeFeng
AUDITORS : BakerTillyMonteiroHeng Chartered Accountants Monteiro&HengChambers 22,JalanTunSambanthan3 50470KualaLumpur Tel :03-22748988 Fax :03-22601708
REGISTRARS : SectrarsServicesSdnBhd No.28-1,JalanTunSambanthan3 Brickfields,50470KualaLumpur Tel :03-22746133 Fax :03-22741016
REGISTERED OFFICE : Level3,EastWing,WismaSynergy No.72,PesiaranJubliPerak Seksyen22,40000ShahAlam SelangorDarulEhsan Tel :03-51928822 Fax :03-51928811
PRINCIPAL BANKER : AffinBankBerhad
STOCK EXCHANGE LISTING : MainMarketofBursaMalaysiaSecuritiesBerhad
WEBSITE : www.asb.com.my
Board of Directors & Corporate Information
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Directors
Dato’ Ahmad Sebi Bakar,64,aMalaysian,isaNon-IndependentDirectorandtheExecutiveChairmanofAdvanceSynergyBerhad.HewasappointedtotheBoardon9April1991.Dato’AhmadSebiBakarholdsaBachelorofArts(Hons)degreefromtheUniversityofMalaya,KualaLumpur,aDiplomainJournalismfromtheThomsonFoundation,UnitedKingdomandaMasterofArtsfromMichiganStateUniversity,UnitedStatesofAmerica.HewastheEditoroftheMalayMail,amemberoftheNewStraitsTimesPressGroupfrom1976to1982andsubsequentlytheGroupEditorofBeritaHarianfrom1983to1986.From1986to1989,hewastheManagingDirectorofSistemTelevisyenMalaysiaBhdandadirectoroftheNewStraitsTimesPressGroupfrom1988to1989.HewasalsotheNon-ExecutiveChairmanofUnifiedCommunicationsHoldingsLimited,anindirectsubsidiaryofAdvanceSynergyBerhadwhichislistedontheSingaporeExchangeSecuritiesTradingLimited,fromDecember2003toJune2006.
HewasconferredtheAhliMangkuNegara(A.M.N.)bytheYangDi-PertuanAgong,DYMMTuankuHajiAhmadShahAl-MustainBillahIbniAlmarhumSultanAbuBakarin1983,theJusticeofPeace(J.P.)byDYMMSultanAzlanMuhibbuddinShahIbniAlmarhumSultanYusoffIzzuddinShahGhafarullah,SultanofPerak,in1986andtheDato’SetiaDirajaKedah(D.S.D.K.)byDYMMTuankuAlhajAbdulHalimMu’adzamShahIbniAlmarhumSultanBadlishah,SultanofKedah,in1988.
Currently,hesitsontheBoardofvariouscompaniesincludingKumpulanPowernetBerhad,inwhichheholdsboththepositionsasExecutiveChairmanandManagingDirector.HeisactivelyinvolvedinsocialandcharitableworkandistheChairmanofseveralnon-profitorganisations,namely,theprivatelyfundedOrphanageFoundationofMalaysia(YATIM)andinthepasttheBosniaActionFront,Malaysia.HewasalsothePresidentoftheMalaysianNationalWritersAssociation(PENA)from1992to2008.
Dato’AhmadSebiBakardoesnothaveanyfamilyrelationshipwithanydirectorand/ormajorshareholderofAdvanceSynergyBerhad,norhasheanyconflictofinterestwithAdvanceSynergyBerhad,exceptthatheisalsoasubstantialshareholderofAdvanceSynergyBerhadandSuasanaDinamikSdnBhd,whichisalsoasubstantialshareholderofAdvanceSynergyBerhad.HissonisalsoadirectorofSuasanaDinamikSdnBhd.Hehashadnoconvictionsforanyoffenceswithinthepast10years.
Lee Su Nie,52,aMalaysian, isaNon-IndependentExecutiveDirectorandtheChiefExecutiveOfficerofAdvanceSynergyBerhad.Shewasappointed to theBoardon9July2007.MsLeeSuNieholdsaBachelorofCommerce(Accounting) degree from the University of Birmingham, United Kingdom and a Master of Science (BusinessAdministration) degree from theUniversity of Bath,UnitedKingdom. She is a FellowMember of TheAssociationofCharteredCertifiedAccountants,UnitedKingdom. In 1985, she joinedKassimChanManagementConsultantsSdn Bhd, where she providedmanagement consultancy services. She joined the Corporate Finance Departmentof RakyatMerchant Bankers Berhad in 1989. In 1991, she left RakyatMerchant Bankers Berhad to join PerdanaMerchantBankersBerhad.ShesubsequentlyleftherpositionasFirstVicePresident,CorporateFinanceoftheBankto joinAdvanceSynergyBerhad in1995asAssistantGeneralManagerofCorporatePlanning&Finance.ShewassubsequentlyappointedtheGroupGeneralManager,Operations,ofAdvanceSynergyBerhadpriortoherappointmentasChiefExecutiveOfficeron22April2004.
SheisaNon-IndependentNon-ExecutiveDirectorofUnifiedCommunicationsHoldingsLimited,anindirectsubsidiaryofAdvanceSynergyBerhadwhichislistedontheSingaporeExchangeSecuritiesTradingLimited.
Shedoesnothaveanyfamilyrelationshipwithanydirectorand/ormajorshareholderofAdvanceSynergyBerhad,norhassheanyconflictofinterestwithAdvanceSynergyBerhad.Shehashadnoconvictionsforanyoffenceswithinthepast10years.
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Dato’ Abdul Murad Bin Khalid, 58, aMalaysian, is an Independent Non-Executive Director of Advance SynergyBerhad.HewasappointedtotheBoardon9July2007.Dato’AbdulMuradBinKhalidholdsaBachelorofEconomics(Hons)andDiplomainAccountingfromtheUniversityofMalayaandisaMemberofMalaysianInstituteofCharteredPublicAccountants.
In1976,Dato’AbdulMuradBinKhalidjoinedBankNegaraMalaysiaasAdministrativeOfficerandwassubsequentlyappointedasAssistantGovernorin1994.InJanuary1999,heleftBankNegaraMalaysiatojoinRHBBankBerhadasExecutiveDirector.HeleftRHBBankBerhadinSeptember1999.
Dato’AbdulMuradBinKhalidcurrentlyholdsdirectorshipsinRexitBerhadandseveralprivatelimitedcompanies.Heisalsopresentlymanaginghisfamilybusiness.
Dato’AbdulMuradBinKhalidistheChairmanoftheRemunerationCommitteeofAdvanceSynergyBerhad.Heisalsoamember of theNominationCommittee,RiskManagementCommittee andAuditCommittee ofAdvanceSynergyBerhad.
Hedoesnothaveanyfamilyrelationshipwithanydirectorand/ormajorshareholderofAdvanceSynergyBerhad,norhasheanyconflictofinterestwithAdvanceSynergyBerhad.Hehashadnoconvictionsforanyoffenceswithinthepast10years.
Datin Masri Khaw Binti Abdullah,59,aMalaysian,isaNon-IndependentNon-ExecutiveDirectorofAdvanceSynergyBerhad.ShewasappointedtotheBoardon6January1995.DatinMasriKhawBintiAbdullahwasoneof thefirstAsianstocompletetheGeneralManager’sProgrammeattheHolidayInnUniversityinMemphis,USAin1976.In1982,shecompletedasummercourseonHotelDevelopment&DesignatCornellUniversity,USAandhadundergoneHoteltraininginSingaporeandCanada.ShewasawardedtheBestMarketingPersonoftheYearforHolidayInnHotelsAsiaPacificin1985.DatinMasriKhawBintiAbdullahplayedakeyrolewhenAntaraHolidayVillasSdnBhdgarneredseveralawardsnamely,theSpecialAwardforQualityManagementintheIndustryExcellenceAward1997(organisedbytheMinistryofInternationalTradeandIndustryandreceivedthisprestigiousawardfromtheformerPrimeMinisterTunDr.MahathirMohamadon18December1997),theNationalHRExcellenceAward2004andtheIndustryExcellenceAward2005-ExportExcellence(Services).Herexperienceinthehotelindustrydatesbackto1969andshehassincecontributedsignificantlytothedevelopmentofnewhotels.SheinitiatedtheHolidayVillachainin1987withtheopeningofHolidayVillaCherating.
SheispresentlytheManagingDirectorandChiefExecutiveOfficerofAntaraHolidayVillasSdnBhdandHolidayVillasInternationalLimited,subsidiariesofAdvanceSynergyBerhad.Shealsositson theBoardofothersubsidiariesofAdvanceSynergyBerhad,includingCheratingHolidayVillaBerhad,whichisanon-listedpubliccompany.
DatinMasriKhawBintiAbdullahisamemberoftheRemunerationCommitteeandNominationCommitteeofAdvanceSynergyBerhad.
Shedoesnothaveanyfamilyrelationshipwithanydirectorand/ormajorshareholderofAdvanceSynergyBerhad,norhassheanyconflictofinterestwithAdvanceSynergyBerhad.Shehashadnoconvictionsforanyoffenceswithinthepast10years.
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Chim Wai Khuan,61,aMalaysian, isan IndependentNon-ExecutiveDirectorofAdvanceSynergyBerhad.HewasappointedtotheBoardon12December2001.MrChimWaiKhuanisamemberoftheMalaysianInstituteofAccountants.Hehasvastexperienceinauditing,taxationandmanagementconsultancyserviceswhilehewasattachedtoseveralaccountingfirmsinMalaysiaandtheUnitedKingdomfrom1974to1985.Currently,hemanageshisownpracticeunderthenameWKCo.,anauditfirm.
Heisalsoanindependentnon-executivedirectorofUnitedU-LiCorporationBerhadandGabunganPAHoldingsBerhad.
MrChimWaiKhuanistheChairmanoftheNominationCommitteeaswellasamemberoftheAuditCommittee,RiskManagementCommitteeandRemunerationCommitteeofAdvanceSynergyBerhad.
Hedoesnothaveanyfamilyrelationshipwithanydirectorand/ormajorshareholderofAdvanceSynergyBerhad,norhasheanyconflictofinterestwithAdvanceSynergyBerhad.Otherthantrafficoffences,hehashadnoconvictionsforanyoffenceswithinthepast10years.
Yong Teck Ming,58,aMalaysian,wasappointedtotheBoardon9July2007.HeisanIndependentNon-ExecutiveDirector of Advance Synergy Berhad. He also serves as Chairman of the Audit Committee and RiskManagementCommittee.
HeholdsaBachelorofCommerceDegreefromtheUniversityofAuckland,NewZealand.HeisamemberoftheInstituteofCharteredAccountants,NewZealandandamemberof the InstituteofCharteredSecretariesandAdministrators,UnitedKingdom.
Mr Yong TeckMing started his career in New Zealand in 1973 andworked in several accounting positions beforereturningtoMalaysiainFebruary1979.FromMarch1979toJanuary1995,heservedinvariouspositionsintheBerjayaGroupofCompaniesincludingasGroupExecutiveDirectorfromFebruary1988untilJanuary1995.HecurrentlysitsontheBoardsofseveralprivatelimitedcompanies.
Hedoesnothaveanyfamilyrelationshipwithanydirectorand/ormajorshareholderofAdvanceSynergyBerhad,norhasheanyconflictofinterestwithAdvanceSynergyBerhad.Hehashadnoconvictionsforanyoffenceswithinthepast10years.
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Management Information
HEADS OF KEY GROUP DIVISIONS
ADVANCE SYNERGY BERHAD GROUPCORPORATE OFFICE
HOTELS & RESORTS
ALANGKA-SUKA HOTELS & RESORTS SDN BHDDato'AzmanShahHaronChairman
DatinMasriKhawBintiAbdullahManaging Director &ChiefExecutiveOfficer
INFORMATION & COMMUNICATIONS TECHNOLOGY
UNIFIED COMMUNICATIONS HOLDINGS LIMITEDWongTzeLengGroupExecutiveChairman
AntonSyaziDato’AhmadSebiGroupChiefExecutiveOfficer
INVESTMENT HOLDING
ADVANCE SYNERGY CAPITAL SDN BHDWongJoonHianManaging Director
PROPERTY DEVELOPMENT
ADVANCE SYNERGY REALTY SDN BHDSngNgiapKoonExecutiveDirector/ChiefOperatingOfficer
TRAVEL & TOURS
ORIENT ESCAPE TRAVELSDN BHDCheahPingHueyExecutiveDirector
SYNERGY TOURS SDN BHDFabio DelisiChiefExecutiveOfficer
COACH BUILDING
QUALITY BUS & COACH (M)SDN BHDDatoMatHassanBinEsaChairman
FrankMichaelTurrisiChiefExecutiveOfficer
MANUFACTURING,MARKETING & DISTRIBUTION
ADVANSA PTY LTDAntonSyaziDato’AhmadSebiExecutiveDirector
CARD & PAYMENT SERVICES
SYNERGY CARDS SDN BHDWongJoonHianManaging Director &ChiefExecutiveOfficer
REWARDSTREET.COM (MALAYSIA) SDN BHDSienToeKwokChiefExecutiveOfficer
TRADITIONALCHINESE MEDICINE
DAMA TCM SDN BHDYapCheeKongChiefExecutiveOfficer
LeeThiamHuatChiefOperatingOfficer
Dato’ Ahmad Sebi BakarExecutiveChairman
Lee Su NieExecutiveDirector/ChiefExecutiveOfficer
Anton Syazi Dato’ Ahmad SebiGeneral ManagerCorporate Development
Chan Kian HeoiGeneral ManagerCorporate Services
Tan Mui PingManagerFinance
Ho Tsae FengManagerSecretarial
Zuhaida ZainuddinManagerInternal Audit
Tengku Norzurin BintiTengku FathelManagerHumanResource
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Statement on Corporate Governance
TheBoardofDirectors(“Board”or“Directors”)fullysubscribestotherecommendationsoftheMalaysianCodeon Corporate Governance (“the Code”) and is committed in ensuring that the Company and its subsidiaries (“the Group”) practise the highest standard of Corporate Governance as a fundamental part of discharging its responsibilitiestoprotectandenhancelong-termshareholdervalueandthefinancialperformanceoftheGroup.
Thedisclosurestatementdescribesthemanner inwhichtheGrouphasappliedtheCode’sPrinciplesandtheextentofcompliancewiththebestpracticesadvocatedtherein.
BOARD OF DIRECTORS
ThedirectionandcontroloftheGrouprestfirmlywiththeBoardasiteffectivelyassumestheoverallresponsibilityfor corporate governance, strategic direction, formulation of policies and overseeing the investments andoperationsoftheGroup.Inaddition,thereisascheduleofmattersreservedspecificallyfortheBoard’sdecision.
Duringthefinancialyearended31December2011,three(3)BoardmeetingswereheldwhereitdeliberateduponandconsideredavarietyofmattersincludingtheGroup’scorporatedevelopments,financialresults,investmentsandstrategicdecisionsanddirectionsoftheGroup.AllproceedingsfromtheBoardmeetingsareminutedandsignedbytheChairmanofthemeeting.DetailsofattendanceofeachDirectoratBoardMeetingsheldduringthefinancialyearareasfollows:
Name of Directors No.ofMeetingsAttended
Dato’AhmadSebiBakar 3 / 3
LeeSuNie 3 / 3
Dato’AbdulMuradBinKhalid 3 / 3
DatinMasriKhawBintiAbdullah 3 / 3
ChimWaiKhuan 3 / 3
YongTeckMing 3 / 3
TheBoardhasestablishedthree(3)committees:anAuditCommittee,aNominationCommitteeandaRemunerationCommittee,thedetailsofwhicharesetout inthisStatementandAnnualReport.TheseCommitteeshavetheauthoritytoexamineparticular issuesandreportbacktotheBoardwiththeirrecommendations.Theultimateresponsibilityfordecisionsonallmatters,however,lieswiththeBoard.
BOARD BALANCE
TheBoardcurrentlyconsistsofanExecutiveChairman,anExecutiveDirector/ChiefExecutiveOfficerandfour(4)Non-ExecutiveDirectors, three (3) ofwhomare independent. The currentDirectors bring awide rangeofbusinessandfinancialexperience,skillsandknowledgenecessaryfortheeffectivestewardshipoftheGroup.ProfilesoftheDirectorsaresetoutonpages9to11ofthisAnnualReport.
TheExecutiveChairmanisentrustedwiththetaskofrunningthebusinessoftheGroupandimplementationofthepoliciesandstrategiesadoptedbytheBoard.
Thepresenceofthree(3)IndependentNon-ExecutiveDirectorsrepresenting50%ofthetotalnumberofDirectorsfulfils a pivotal role in ensuring that there is balance of power and authority. Although all theDirectors havean equal responsibility for theGroup’s operations, the role of these IndependentNon-ExecutiveDirectors isparticularlyimportantinensuringthatthestrategiesproposedbytheexecutivemanagementarefullydeliberatedupon,andtakeintoaccountthelongterminterestsoftheshareholders,employees,customers,suppliersandthemanycommunitiesinwhichtheGroupconductsitsbusiness.Together,theirrepresentationsontheBoardfairlyreflecttheinvestmentoftheminorityshareholdersoftheCompanyandinadditioncarrysufficientweightfordecisionmaking.
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BOARD BALANCE (continued)
TheBoardisoftheviewthatitisnotnecessarytonominateanindividualdirectortoassumetheroleofaSeniorIndependentNon-ExecutiveDirector towhomconcerns regarding theCompanymaybeconveyed, asall ourIndependentNon-ExecutiveDirectorsareaccessibleandtheybringindependentjudgementtobearonissueofstrategy,performanceandstandardofconduct.
SUPPLY OF INFORMATION
EachDirectorhasunrestrictedaccesstoseniormanagement,allinformationwithintheCompanyandisentitledtotheadviceandservicesoftheCompanySecretarywhoseappointmentandremovalshouldbeamatterfortheBoardasawhole.TheDirectorswhetherasfullBoardorintheirindividualcapacity,mayinfurtheranceoftheirduties,takeindependentprofessionaladviceattheCompany’sexpense,ifrequired.
PriortoBoardmeetings,theAgendaforeachmeetingtogetherwithreportsandpaperscontaininginformationrelevant to the business of themeetings (including information onmajor financial, operational and corporatemattersaswellasactivitiesandperformanceoftheGroupandminutesofCommitteesoftheBoardandBoardmeetings) are circulated to the Board members to provide time for the Board members to read and contemplate theissues.DuringBoardmeetings,managementprovidesfurtherdetailsoneachissueraisedfordiscussionorassupplementaryinformation.
APPOINTMENTS TO THE BOARD
With the establishment of the Nomination Committee, a formal transparent procedure is in place for theappointmentofnewDirectorstotheBoard.CandidatesfordirectorshipwillbeidentifiedandrecommendedtotheBoardbytheNominationCommittee.
Nomination Committee
TheNominationCommitteeconsistsofthree(3)Non-ExecutiveDirectors.MembersoftheNominationCommitteeare:
• ChimWaiKhuan (Chairman,IndependentNon-ExecutiveDirector)
• Dato’AbdulMuradBinKhalid (Member,IndependentNon-ExecutiveDirector)
• DatinMasriKhawBintiAbdullah (Member,Non-IndependentNon-ExecutiveDirector)
TheNominationCommittee is responsible formaking recommendationsonanynomination to theBoardandto Committees of the Board. In making these recommendations, due consideration is given to the requiredmixofskillsandexperiencethattheproposeddirectorsshouldbringtotheBoardandtotherespectiveBoardCommittees. The actual decision as to who shall be nominated is the responsibility of the full Board afterconsideringtheNominationCommittee’srecommendations.
TheNominationCommitteewillalsoassessannually,theeffectivenessoftheBoardasawhole,theCommitteesoftheBoardandthecontributionofeachindividualDirectorincludingIndependentNon-ExecutiveDirectors,aswellasChiefExecutiveOfficer.TheBoard,throughtheNominationCommittee,reviewsannuallyitsrequiredmixofskillsandexperienceandotherqualities,includingcorecompetencies,whichNon-ExecutiveDirectorsshouldbringtotheBoard.
TheCompanySecretaryisresponsibleforensuringthatallappointmentsareproperlymadeandallnecessaryinformation are obtained from Directors, for the Company’s own records and for purposes of meeting therequirementsoftheAct,ListingRequirementsofBursaSecuritiesandotherregulatoryrequirements.
TheNominationCommitteeshallmeetonceayearandadditionalmeetingscanbeschedulediftheChairmanoftheCommitteeconsidersnecessary.
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APPOINTMENTS TO THE BOARD (continued)
Nomination Committee (continued)
AllDirectorshaveattendedtheMandatoryAccreditationProgrammeasrequiredundertheListingRequirementsofBursaSecurities.Duringthefinancialyearended31December2011,theDirectorshaveattendedindividuallyand collectively various training programmes such as Sustainability Programme for Corporate Malaysia,GovernanceProgrammeonAssessingtheRiskandControlEnvironment,CSRProgrammeonBridgingaGapin Developing CSR Capacity, Key Components of Boardroom Effectiveness and Blue Ocean Strategy. TheDirectorshavealsobeenregularlyupdatedondevelopmentsincorporategovernance,relevantlaws,regulationsandbusinesspracticesasacontinuingefforttotrainandequipthemselvestoeffectivelydischargetheirduties.TheBoardshallevaluateanddeterminethetrainingneedsofitsmembersonacontinuousbasispursuanttotheListingRequirementsofBursaSecurities.
RE-ELECTION
InaccordancewiththeCompany’sArticlesofAssociation,one-third(1/3)oftheDirectorsretirefromofficeateachAGMbutshallbeeligibleforre-election.DirectorswhoareappointedbytheBoardduringeachfinancialyeararesubjecttoelectionbyshareholdersatthefirstAGMfollowingtheirappointments.TheArticlesofAssociationoftheCompanyprovidethatallDirectorsshallsubmitthemselvesforre-electionatleastonceeverythree(3)years.
AUDIT COMMITTEE
ThesummaryofthetermsofreferenceaswellasfurtherinformationontheAuditCommitteearesetoutonpages19to22ofthisAnnualReport.
DIRECTORS’ REMUNERATION
TheremunerationforallDirectorsaredeterminedatlevelssoastoensurethattheCompanyattractsandretainsthe rightcalibreofDirectorsneeded to run theGroupsuccessfully.TheRemunerationCommittee reviewsandrecommends to theBoard, theCompany’s remunerationpolicy forExecutiveDirectors to ensure that theyareappropriatelyrewardedfortheircontributiontotheGroup.
ThedeterminationoftheremunerationoftheNon-ExecutiveDirectorsisamatterfortheBoardasawhole.
NoDirectorshalltakepartindecisionspertainingtohisorherownremuneration.
Remuneration Committee
ThemembersoftheRemunerationCommitteeduringthefinancialyearended31December2011areasfollows:
• Dato’AbdulMuradBinKhalid (Chairman,IndependentNon-ExecutiveDirector)
• DatinMasriKhawBintiAbdullah (Member,Non-IndependentNon-ExecutiveDirector)
• ChimWaiKhuan (Member,IndependentNon-ExecutiveDirector)
TheRemunerationCommitteeshallmeetat leastonceayearandadditionalmeetingscanbescheduled if theChairmanoftheCommitteeconsidersnecessary.
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DIRECTORS’ REMUNERATION (continued)
Remuneration Committee (continued)
Details of the aggregate remuneration for the Directors of the Company (including remuneration earned as ExecutiveDirectorsofsubsidiaries)forthefinancialyearended31December2011areasfollows:
1. AggregateremunerationofDirectorscategorisedintoappropriatecomponents:ctor Fees Salaries &
Category of DirectorFees
RM’000Salaries & Bonus
RM’000Benefits-in-kind
RM’000Total
RM’000
Executive 187 768 30 985
Non-Executive 355 460 - 815
2. Rangeofaggregateremuneration:
Range of remuneration (RM)
Number of Directors
Executive Non-Executive
Below50,000 - 3
400,001-450,000 1 -
550,001-600,000 1 -
700,001-750,000 - 1
SHAREHOLDERS
TheBoardacknowledgestheimportanceofestablishingadirectlineofcommunicationwithshareholdersandinvestors through timely dissemination of information on the Group’s performance and operations via distribution ofannualreportsandrelevantcirculars,releaseofquarterlyfinancialresults,pressreleasesandannouncements.
TheAGMistheprincipalforumfordialoguewithshareholders.Thereisanopenquestionandanswersessioninwhichshareholdersmayposequestions regarding the resolutionsbeingproposedat themeetingandalsoonmatters relating to theGroup’s businesses and affairs. TheBoardmembers are in attendance to provideexplanationstoallshareholders’queriesandshareholdersareencouragedtoparticipateindiscussionsandtogivetheirviewstotheDirectors.
ToenhancethequalityandvalueoftheAGM,theBoardensuresthat,forre-electionofDirectors,theNoticeofAGMidentifiestheDirectorsstandingforre-electionorelectionwithabriefdescriptiontoincludematterssuchasage,relevantexperience,listofdirectorshipsinpubliccompanies,dateofappointmenttotheBoard,detailsofparticipationinBoardCommitteesandwhethertheparticularDirectorisindependent.Inaddition,eachitemofspecialbusinessincludedintheNoticeofAGMwillbeaccompaniedbyafullexplanationoftheeffectsofaproposedresolution.
ItisalsothepracticeoftheBoardtoholdapressconferencewithjournalistsuponrequestafteranAGM.
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FINANCIAL REPORTING
Inpresentingtheannualfinancialstatementsandquarterlyannouncementofresults,theBoardaimstopresentabalancedandunderstandableassessmentoftheGroup’spositionandprospects.Thisalsoappliestootherprice-sensitivepublicreportsandreportstoregulators.TheAuditCommitteeassiststheBoardinscrutinizingsuchreportstoensureaccuracyandadequacy.
Statement on Directors’ Responsibility for Preparing Financial Statements
TheDirectorsarerequiredbytheActtopreparefinancialstatementsforeachfinancialyearwhichhavebeenmadeoutinaccordancewithapplicableapprovedFinancialReportingStandardsinMalaysiaandgiveatrueandfairviewofthestateofaffairsoftheGroupandtheCompanyattheendofthefinancialyearandoftheresultsandcashflowsoftheGroupandtheCompanyforthefinancialyear.
Inpreparingthefinancialstatements,theDirectorshave:
• Selectedsuitableaccountingpoliciesandappliedthemconsistently;
• Madejudgmentsandestimatesthatarereasonableandprudent;
• EnsuredthatallapplicableFinancialReportingStandardshavebeenfollowed;and
• PreparedfinancialstatementsonangoingconcernbasisastheDirectorshaveareasonableexpectation,havingmadeenquiries,thattheGroupandtheCompanyhaveadequateresourcestocontinueinoperationalexistencefortheforeseeablefuture.
TheDirectorshavetheresponsibilityforensuringthattheCompanykeepsaccountingrecordswhichdisclosewithreasonableaccuracythefinancialpositionoftheGroupandtheCompanyandwhichenablethemtoensurethatthefinancialstatementscomplywiththeAct.
TheDirectorshaveoverallresponsibilitiesfortakingsuchstepsasarereasonablyopentothemtosafeguardtheassetsoftheGroupandtopreventanddetectfraudandotherirregularities.
INTERNAL CONTROL
TheBoardacknowledgesitsoverallresponsibilityformaintainingasoundsystemofinternalcontroltosafeguardshareholders’ investments, theCompany’sassets,and theneed to review theadequacyand integrityof thosesystemsregularly. Inestablishingandreviewing thesystemof internalcontrol, theDirectors recognise that thesystemof internal control canonlyprovide reasonablebutnot absoluteassuranceagainst the riskofmaterialmisstatement or loss. The effectiveness of theGroup’s system of internal controls is reviewed periodically bytheAuditCommitteeandsuchreviewcovers the financial,operationalandcompliancecontrolsaswellas riskmanagement.
TheStatementonInternalControlsassetoutonpages23to24ofthisAnnualReportprovidesanoverviewofthestateofinternalcontrolwithintheGroup.
RELATIONSHIP WITH AUDITORS
ThroughtheAuditCommittee,theBoardhasestablishedaformaltransparentandappropriaterelationshipwiththeCompany’sauditors.TheexternalauditorsareinvitedtoattendAuditCommitteeMeetingsatleasttwiceayeartodiscussthenatureandscopeoftheauditandproblemsandreservationsarisingfromthefinalaudit.
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Additional Compliance Information
1. OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES
On31January2008,the1,182,277,6662%10-YearIrredeemableConvertibleUnsecuredLoanStocksat100%ofthenominalvalueofRM0.15each(“ICULS”)issuedon29January2008bytheCompanypursuanttoarightsissuebytheCompanywerelistedontheMainMarketofBursaSecurities.Duringthefinancialyearended31December2011,atotalof31,413,000ICULSwereconvertedinto15,706,500newordinarysharesofRM0.30each of the Company by surrendering for cancellation two (2) ICULS for every one (1) new ordinary shareofRM0.30each in theCompany. Inaddition, a totalof525,000newordinary sharesofRM0.30eachof theCompanywereissuedconsequentialtoaconversionbysurrenderingforcancellationone(1)ICULSandcashpaymentofRM0.15forone(1)newordinaryshareofRM0.30eachintheCompany.
Saveasdisclosedabove,theCompanyhasnotissuedanyoptions,warrantsorconvertiblesecuritiesduringthefinancialyearended31December2011.
2. NON-AUDIT FEES PAID TO EXTERNAL AUDITORS
Non-statutoryauditfeespaidtotheexternalauditors,MessrsBakerTillyMonteiroHeng,bytheCompanyandtheGroupforthefinancialyearended31December2011amountedtoRM44,000andRM69,000respectively.
3. MATERIAL CONTRACTS INVOLVING DIRECTORS AND MAJOR SHAREHOLDERS
TherewerenomaterialcontractsenteredintobytheGroupwhichinvolveddirectors’andmajorshareholders’interestseitherstillsubsistingattheendofthefinancialyearended31December2011orenteredintosincetheendofthepreviousfinancialyear.Notwithstandingtheforegoing,Dato’AhmadSebiBakar(adirectorandmajorshareholderoftheCompany),witheffectfrom29October2010becametheultimateownerofthe100%equityinterestinacompanywhichownstheHolidayVillaHotel&SuitesLondon(“Hotel”),hasanindirectinterestinthefollowingsubsistingagreementsinrespectoftheHotel:
(a) LeaseAgreementdated16December2005enteredintobyHolidayVilla(UK)Ltd,awholly-ownedsubsidiaryoftheCompany[heldviaHolidayVillasInternationalLimited,awholly-ownedsubsidiaryofAlangka-SukaHotels&ResortsSdnBhd(“ASHR”),whichinturnisawholly-ownedsubsidiaryoftheCompany],inrelationtotheleaseoftheHotelforaperiodoften(10)years;and
(b) OptionAgreementdated16December2005enteredintobyAlangka-SukaInternationalLimited(“ASIL”),awholly-ownedsubsidiaryoftheCompany[heldviaASHR],inrelationtotheoptionforASILtobuybacktheHotelattheendoftheleaseassetoutinitem(a)above.
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MEMBERSHIP AND ATTENDANCE
ThemembersoftheAuditCommitteeduringthefinancialyearended31December2011anddetailsofattendanceofeachmemberatthefive(5)meetingsheldduringthefinancialyearareasfollows:
Name of Directors No.ofMeetingsAttended
YongTeckMingChairman/IndependentNon-ExecutiveDirector
5 / 5
Dato’AbdulMuradBinKhalidMember/IndependentNon-ExecutiveDirector
5 / 5
ChimWaiKhuanMember/IndependentNon-ExecutiveDirector
5 / 5
ACTIVITIES
TheAuditCommitteecarriedoutitsdutiesassetoutinthetermsofreferenceforactivitiesrelatedtotheyear2011.
INTERNAL AUDIT FUNCTION
The Board, with the assistance of the Audit Committee and Group Risk Management Committee, is activelymonitoringtheriskmanagementandinternalcontrolsoftheGroup.
TheAuditCommitteehasadoptedatopdown,riskbasedapproachtotheimplementationandmonitoringofinternalcontrolsoftheGroup.ThiswasachievedviathecriticalandindepthreviewanddeliberationofthemanagementreportsandrelevantissuespresentedduringtheAuditCommitteemeetings.Thistopdown,riskbasedapproachwillenabletheAuditCommitteetoidentifyanymajorbreakdownintheriskmanagementandinternalcontrolsoftheGroupandtomakethenecessaryrecommendationstoaddresstheissues.
TheAuditCommittee isassistedby internal audit function inmaintainingasoundsystemof internal control tosafeguard shareholders’ investment. The Internal Audit Department is responsible for undertaking regular andsystematicreviewsofthesystemofcontrolsandreportsdirectlyandindependentlytotheAuditCommittee.
Duringthefinancialyear,ourInternalAuditDepartmentcarriedoutvariousoperational,systemandriskassessmentreviewsinaccordancewiththeInternalAuditPlanapprovedbytheAuditCommittee.Follow-upauditswerealsoperformed by the Internal Audit Department to ensure that audit recommendations and corrective action plans were implemented accordingly. The cost incurred for the internal audit function of theGroup in respect of thefinancialyearended31December2011wasaboutRM210,000.
SUMMARY OF THE TERMS OF REFERENCE OF THE AUDIT COMMITTEE
MEMBERSHIP
TheAuditCommitteeshallbeappointedbytheBoardfromamongsttheDirectorsoftheCompanyandshallconsistofnotlessthanthree(3)members,allofwhomshallbeNon-ExecutiveDirectorsandamajorityshallbeIndependentDirectors.NoalternatedirectorshallbeappointedasamemberoftheAuditCommittee.
AllmembersoftheAuditCommitteeshallbefinanciallyliterateandatleastone(1)memberoftheAuditCommittee:
(i) MustbeamemberoftheMalaysianInstituteofAccountants;or
Audit Committee Report
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SUMMARY OF THE TERMS OF REFERENCE OF THE AUDIT COMMITTEE (continued)
MEMBERSHIP (continued)
(ii) Ifhe/sheisnotamemberoftheMalaysianInstituteofAccountants,he/shemusthaveatleastthree(3)yearsworkingexperienceand:
(a) He/shemusthavepassedtheexaminationsspecifiedinPartIofthe1stScheduleoftheAccountantsAct1967;
(b)He/shemustbeamemberofoneoftheassociationsofaccountantsspecifiedinPartIIofthe1stScheduleoftheAccountantsAct1967;or
(c) FulfilssuchotherrequirementsasprescribedorapprovedbyBursaSecurities.
TheChairmanoftheAuditCommitteeshallbeanIndependentNon-ExecutiveDirectorandshallbeappointedbytheBoard.
TheappointmentofanAuditCommitteememberterminateswhenthememberceasestobeaDirector.
MEETINGS
Aquorumshallbetwo(2)memberspresent,bothofwhommustbeIndependentDirectors.
TheAuditCommitteeshallmeetatleastfour(4)timesayear,ormorefrequentlyastheAuditCommitteeconsidersnecessary.TheAuditCommitteeshallmeetwiththeexternalauditorswithoutexecutiveBoardmemberspresentatleasttwiceayear.
TheHeadofFinance,HeadofInternalAuditandarepresentativeoftheexternalauditorsshallnormallybeinvitedtoattendthemeetings.OtherBoardmembersmayattendmeetingsupontheinvitationoftheAuditCommittee.TheSecretarytotheAuditCommitteeshallbetheCompanySecretary.
TheSecretary of theAuditCommitteewill prepare theminutes,which shall be signedby theChairmanof themeetinganddistributed toeachmemberof theAuditCommitteeandof theBoard.TheChairmanof theAuditCommitteeshallreportoneachmeetingtotheBoard.
AUTHORITY
TheAuditCommitteeisauthorisedbytheBoard:
(i) Toinvestigateanyactivitywithinitstermsofreference;
(ii) TohavetheInternalAuditFunctionreportdirectlytotheAuditCommittee;
(iii)Tohavetheresourcesrequiredtoperformitsduties;
(iv)TohavefullandunrestrictedaccesstoanyinformationpertainingtotheGroup;
(v) Tohavedirectcommunicationchannelswiththeinternalandexternalauditors;
(vi)Toobtainexternallegalorotherindependentadviceasnecessary;and
(vii)Toconvenemeetingswiththeexternalauditors,theinternalauditorsorboth,excludingtheattendanceofotherDirectorsandemployeesoftheCompany,wheneverdeemednecessary.
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SUMMARY OF THE TERMS OF REFERENCE OF THE AUDIT COMMITTEE (continued)
FUNCTIONS AND DUTIES
ThefunctionsanddutiesoftheAuditCommitteeshallbe:
(i) ToreporttotheBoardonthefollowing:
(a) thereviewwiththeexternalauditor,theauditplanandthenatureandscopeoftheaudit;
(b) thereviewwiththeexternalauditor,hisevaluationofthesystemofinternalcontrols;
(c) thereviewwiththeexternalauditor,hisauditreport;
(d) theassistancegivenbytheemployeesoftheGrouptotheexternalauditor;
(e) anyletterofresignationfromtheexternalauditorsoftheCompany;
(f) whether there is reason (supported by grounds) to believe that the external auditor is not suitable forreappointment;
(g) theexternalauditors’managementletterandmanagement’sresponse;
(h) theconsiderationandrecommendationstotheBoardontheappointmentofexternalauditorsandtheirfeeandanyquestionofresignationordismissal;
(i) thediscussionwiththeexternalauditorsonproblemsandreservationsarisingfromtheinterimandfinalaudits,theirevaluationofthesystemofinternalcontrols,andanymatterstheexternalauditormaywishtodiscuss(intheabsenceofmanagementwherenecessary);
(j) the quarterly results and year end financial statements prior to the approval by the Board, focusingparticularlyon:
- changesinorimplementationofmajoraccountingpolicyandpracticeschanges;
- significantandunusualevents;
- significantadjustmentsarisingfromtheaudit;
- thegoingconcernassumption;and
- compliancewithaccountingstandards,requirementsofBursaSecuritiesandotherlegalrequirements;
(k) anyrelatedpartytransactionandconflictof interestsituationthatmayarisewithintheCompanyortheGroup includingany transaction,procedureorcourseofconduct that raisesquestionsofmanagementintegrity;and
(l) theadequacyoftheRiskManagementpoliciesandprocedureoftheCompanyandtheGroup;
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SUMMARY OF THE TERMS OF REFERENCE OF THE AUDIT COMMITTEE (continued)
FUNCTIONS AND DUTIES (continued)
ThefunctionsanddutiesoftheAuditCommitteeshallbe(continued):
(ii) TodothefollowinginrelationtotheinternalauditfunctionandreportthesametotheBoard:
(a) reviewtheadequacyofthescope,functions,competencyandresourcesoftheinternalauditfunctionsandthatithasthenecessaryauthoritytocarryoutitswork;
(b) reviewtheinternalauditprogrammeandprocesses,theresultsoftheinternalauditprogramme,processesorinvestigationsundertakenandwhetherornotappropriateactionistakenontherecommendationsoftheinternalauditfunction;
(c) reviewanyappraisalorassessmentoftheperformanceofthemembersoftheinternalauditfunctions;
(d)approveanyappointmentorterminationofseniorstaffmembersoftheinternalauditfunctions;and
(e) takecognisanceofresignationsofinternalauditstaffmembersandprovidetheresigningstaffmemberanopportunitytosubmithisreasonsforresigning;
(iii)TopreparetheAuditCommitteeReportfortheannualreportasestablishedbyparagraph15.15oftheListingRequirementsofBursaSecurities;
(iv)WheretheAuditCommitteeisoftheviewthatanymatterreportedbyittotheBoardhasnotbeensatisfactorilyresolved resulting inabreachof theListingRequirementsofBursaSecurities, theAuditCommitteemustpromptlyreportsuchmatterstoBursaSecurities;
(v) ToconsiderthemajorfindingsofinternalinvestigationsauthorisedbytheBoardandmanagement’sresponse;and
(vi)TocarryoutanyotherfunctionthatmaybemutuallyagreeduponbytheAuditCommitteeandtheBoard.
TheChairmanoftheAuditCommitteeshallengageonacontinuousbasiswithseniormanagement,suchastheChairman,theChiefExecutiveOfficer,theHeadofFinance,theHeadofInternalAuditandtheexternalauditorsinordertobekeptinformedofmattersaffectingtheCompany.
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Statement on Internal Control
TheCodestipulatesthatalistedcompanyshallmaintainasoundsystemofinternalcontroltosafeguarditsshareholders’investmentanditsassets.
TheBoardispleasedtopresentitsStatementofInternalControlforthefinancialyearended31December2011whichismadepursuanttoParagraph15.26(b)oftheListingRequirementsofBursaSecuritiesandinaccordancewiththe“Standardof InternalControl-Guidance forDirectorsofPublicListedCompanies” issuedby the Instituteof InternalAuditorsandadoptedbyBursaSecurities.
ForthepurposeofthisStatement,theGroupmeanstheCompanyanditssubsidiaries,excludingtheassociates.ThisStatementdoesnotcoverassociatesastheCompanydoesnothavecontrolovertheoperations,managementandinternalcontrolsystemofthesecompanies.
BOARD RESPONSIBILITY
The Board acknowledges its ultimate responsibility for the Group’s system of internal control, which includes theestablishmentofanappropriatecontrolenvironmentandframeworkaswellasreviewing itsadequacyand integrityonaregularbasis.Inviewofthelimitationsthatareinherentinanysystemofinternalcontrol,theGroup’ssystemisdesignedtomanage,ratherthaneliminate,theriskoffailuretoachievecorporateobjectives.Accordingly,itcanonlyprovidereasonablebutnotabsoluteassuranceagainstmaterialmisstatement,operationalfailures,fraudorloss.TheGroup’ssystemofinternalcontrolcoversriskmanagementandfinancial,operationalandcompliancecontrols.Exceptforinsurableriskwhereinsurancecoversarepurchased,othersignificantrisksfacedbytheGrouparereportedtoandmanagedbytherespectiveBoardswithintheGroup.
GROUP RISK MANAGEMENT
TheGroupbelieves thatasound riskmanagement isessential toensuringsuccess inour risk-takingactivities.Weregularly reviewour riskmanagementapproaches toensure thatwe thoroughlyunderstand the risksweare takingandtoidentifyareasofsignificantrisksatanearlystage,aswellastoformulatetimelyandappropriaterisk-responsestrategies.
Themostimportantaspectofaneffectiveriskmanagementistheinculcationofariskawarenesscultureacrossalllevelsofstaffthrougheffectivecommunication,trainingandthecommitmentofallemployeestotheGroupRiskManagementFramework.
TheBoardestablishestheGroup’sriskappetiteandriskprinciples.TheRiskManagementCommitteeisresponsibleinoverseeingtheGroup’sriskmanagement.ItreviewsandapprovestheGroup’soverallriskmanagementpolicies,riskmanagement frameworksand riskmodels.TheRiskManagementCommitteealsooversees theestablishmentandoperationoftheriskmanagementsystemsandreceivesregularreviewsastotheireffectiveness.
INTERNAL AUDIT FUNCTION
The internalauditadoptsarisk-basedapproach indeveloping itsauditplanbasedontheGroup’skeyrisksprofile.Internal audit plan and the scope of the internal audit are presented and approved by the Audit Committee on a yearly basis.
Duringtheyear,InternalAuditDepartmenthasundertakenandcompletedauditassignmentsonallkeydepartmentsandsubsidiarieswithintheGroupinaccordancewiththeapprovedannualauditplan.TheinternalauditfunctionprovidesassuranceoftheeffectivenessofthesystemofinternalcontrolswithintheGroup.
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INTERNAL AUDIT FUNCTION (continued)
Internalauditperformsriskassessmentandoperationalandsystemreviewaspartoftheauditactivities.Theareasofauditcoveragearebasedonareasofhighriskthatareindependentlyassessed.Allauditfindingsaredeliberatedand resolved with the management. Follow-up reviews will subsequently be performed to ascertain the extent ofimplementationoftherecommendedcorrectiveactionforimprovements.TheAuditCommittee,onbehalfoftheBoard,reviewstheinternalcontrolissuesidentified,andrecommendationsmadebytheinternalauditorsonaregularbasisandrecommendationsmadebytheexternalauditorsduringtheannualstatutoryaudit.
Apartfrominternalauditandriskmanagement,theBoardhasputinplacethefollowingprocessestoprovideacertaindegreeofassurancetotheBoardastotheoperationandvalidityofthesystemoninternalcontrolwithintheGroup:
• RigorousreviewofthequarterlyfinancialresultsandreportsandevaluatingthereasonsforunusualvariancesnotedthereofbytheBoardandAuditCommittee;
• TheExecutiveDirectorcloselymonitors thebusinessandoperationsof theGroupandreports to theBoardonsignificantchangesinthebusinessandexternalenvironment,whichaffecttheoperationsoftheGroupatlarge;and
• TheBoardhasinplaceanorganisationalstructurewithformallydefinedlinesofresponsibility,propersegregationofdutiesanddelegationofauthority.Aprocessofhierarchicalreportinghasbeenestablishedwhichprovidesforadocumentedandauditabletrailofaccountability.Theproceduresincludetheestablishmentoflimitsofauthorityandpoliciesonhealthandsafety,traininganddevelopment,equalityofopportunity,staffperformanceandseriousmisconduct. These procedures are implemented across theGroup to provide continuous assurance to seniormanagementandfinallytotheBoard.
WEAKNESSES IN INTERNAL CONTROLS THAT RESULT IN MATERIAL LOSSES
Therewerenomateriallossesincurredduringthecurrentfinancialyearasaresultofweaknessesininternalcontrol.TheBoard,togetherwiththemanagement,continuestotakemeasurestostrengthenthecontrolenvironment.
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TheGroup acknowledges the importance of Corporate Social Responsibility (“CSR”) towards thewell-beingof its employees, community andenvironmentandviews it asanextensionof theGroup’seffort in fosteringastrongcorporategovernanceculture. InApril2010,theGroupparticipatedintheACHIEVECSRProgramme(“ACHIEVE”)whichaimedtopoolandfocustheeffortsandresourcesoftheGroupwithlike-mindedcorporationsthatsharethecommondesire tosupportand implementmeaningfulCSRactivities.TheACHIEVECommitteewas formedwith representatives fromvariousdivisionsofourGroupparticipatingascommitteemembers, tospearheadCSRactivitiesviasynergycollaborationwithidentifiedorganisations.
ENVIRONMENT
Werecognisetheimportanceofgoodenvironmentalmanagement/preservationpractices.Inourdailyoperations,theGroupcontinuestobecommittedonrecycling,energy-savingpracticesandundertakingmeasurestoreducewastages,pollutionandharmfulemissions.Wealsoencourageourstafftobeenvironmentalfriendly.
The“GoingGreen@HolidayVilla”campaignlaunchedbyourhotelsandresortsdivisionatalltheHolidayVillahotelsaimstocontributesignificantlytothepreservationofournationalhabitatandenvironment.Webelievethisstrategywillresultintheleastdisruptiontotheenvironmentandcontributetosustainabledevelopment.
Inourcoachbuildingdivision,allwastematerialsproducedaredepositedatdesignatedareasanddisposedofperiodicallyinanenvironmentallysafemanner,byourauthorisedwastedisposalagents.
COMMUNITY
Oneofourvaluesistohonouroursocialobligationsandcontributetotheeconomicandsocialwellbeingofeverycommunityinwhichweoperate.Wealsobelieveintheimportanceofprovidingopportunitiesespeciallytotheyoungergeneration,forthebettermentofoursociety.
In line with the above, the Group offers graduate placement programmes, industrial training and internshipin our hotels and resorts, property development, coach building aswell as information and communicationstechnologydivisions.Inaddition,ourhotelsandresortsdivisiongivesfirstpreferencetolocalworkforceinthelocationwhereitoperates.WealsoprovidetrainingopportunitiestoorphansunderthecareofYATIM(YayasanKebajikanAnak-AnakYatimMalaysia).
In our yearly programmes, our hotels and resorts divisionparticipated in various community projects for theunfortunate, such as contributing either financially or in-kind to various non-profit organisations, orphanagehomesandunder-privilegedfamilies.“Blooddonation”campaignisalsoanannualeventamongstourhotels.
MARKETPLACE
OurGroupaimsforsustainablegrowth,productivepartnershipsandfairnessinallbusinessdealings.
Inmaintaining transparency and accountability to our shareholders, we ensure thatmaterial information aredisseminated to the stock exchange in a timely manner and simultaneously released to the market via ourwebsite.Corporateinformationandkeyinformationonproductsandservicesareregularlyupdatedandpostedonourwebsite.
Our hotels and resorts division devotes considerable efforts towards cultivating excellent business ethicsandvalues,goodcorporategovernanceandstakeholderengagement,procurementsystems,andqualityandinnovativehospitalityproductsandservices.Theyregularlycarryouttheirreviewsonpoliciesandprocedures,internal control system, riskmanagement traininganddevelopmentprogrammes,process improvementsandqualityassuranceassessments,tocontinuouslyenhancethedeliveryoftheirhospitalityproductsandservices.Wealsogivepriorityandsupportforlocallyproducedproductssuchasusinglocallyproducedwaterboilersandtelevisionsatourhotelproperties.
Ourmanufacturingdivisionensuresthattheirsuppliers’productscomplywithapplicableandprevailingsafetyandenvironmentalprotectionrulesandregulationsandgoodmanufacturingpractices.
Corporate Social Responsibility
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WORKPLACE
TheGroupcontinuouslypromoteshumancapitaldevelopmentbyencouragingandsponsoringtheparticipationof our staff in training programmes and seminars to enhance their knowledge and skills while promoting amotivatedworkingteam.
OurGroupiscommittedtoprovideourstaffanenvironmentofequalopportunitytostrive.
TheGroup strives to forge a safeworking environment andpromotes healthywork practices for all levels ofstaff.ThewellbeingofourstaffiscriticaltotheGroup.Trainingcourseswerecarriedouttoensurecontinuousimprovementofsafetyandhealthpractices.
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Chairman’s Statement
OnbehalfoftheBoardofDirectors,IampleasedtopresenttheAnnualReportofAdvanceSynergyBerhadanditsgroupofcompanies(“theGroup”)forthefinancialyearended31December2011.
FINANCIAL RESULTS
Fortheyearended31December2011,theGroup’srevenueofRM222.3millionwasmarginallyhigherby0.20%fromRM221.9millionin2010.Despitethehigherrevenue,grossprofitfortheGroupwaslowerby3.4%atRM83.4million in 2011 compared to RM86.7million in 2010. Therewas also higher other operating income in 2010 atRM36.7millioncomparedtoRM25.0millionin2011arisingmainlyfromhigherwritebackofprovisions.TheGroupresultsthisyearwasalsoaffectedbythelowercontributionfromassociatedcompanies.
However,theoperatingexpensesin2011werealsolowerbyRM22.0millionfromRM120.5millionin2010mainlyduetoprovisionmadein2010forimpairmentlossonavailableforsaleinvestments.ThenetimpactoftheaboveresultedinahigherGroupprofitbeforetaxofRM8.9millioncomparedtoaprofitofRM7.4millionin2010.Thenetprofitaftertaxandnon-controllingintereststandsatRM4.2millionascomparedtoRM3.3millioninthepreviousyear.
TheGroup’searningspershareforthefinancialyearended31December2011was0.85sencomparedto0.70senforthepreviousyear.
GROUP OPERATIONS
Hotels and Resorts
TheGroup’shotelsandresortsdivision(undertheHolidayVillabrand)achievedatotalrevenueofRM76.2millioninfinancialyear2011.Thisrepresentsamarginal2.4%abovethetotalrevenueofprecedingyear.Inlinewiththeincreaseinrevenue,thegrossprofitofRM50.3millionis1.9%abovepreviousyear.
The areas that performed well in 2011 where the Holiday Villa hotels operate areMalaysia, Indonesia, UnitedKingdom, Qatar and Europe where the source of business is from the leisuremarket and business travellers.Meanwhile,thedivisioncontinuestofacechallengesinplaceslikeKhartoum,HalongBay,PhnomPenhandnearerhome,Cherating.
Thehotelsandresortsdivision’sprofitbeforetaxisloweratRM6.2millioncomparedtoaprofitbeforetaxofRM9.7millionin2010.Thelowerprofitin2011comparedtotheprecedingyear2010wasmainlyduetorealisationofforeignexchangelosses.
AgroundbreakingceremonyofficiatedbytheDatukBandarofKualaLumpurwasheldon22September2011fortheconstructionofabrandnew4-starthematicHolidayVillaKualaLumpurCityCentre.Thisprojectisdevelopedunderourassociatedcompany,HolidayVillaKualaLumpurSdnBhd.
InJune2011,ourhotelsand resortsdivisionsignedahotel licensingagreement fora4-star300-roomhotel inKotaKinabalu;inSeptember2011,ahotelmanagementagreementtomanagea322-roomcityhotelinJohorBaruwhichisexpectedtocommencebusinessin2014andinMarch2011,ahotelmanagementagreementtomanagea200-room4-starhotelinBahrain.
Thehotelsandresortsdivisionalsolauncheda“TreatForTwo”ContestfromNovember2010to30June2011atparticipatinghotelproperties.RoomguestsduringtheperiodweregivenanentryformforachancetowinaGrandPrizeofaholidaypackagetoEuropeorAsiawith2returnair-tickets,7days/6nightsstayatHolidayVillahotelsin London andParis (Europe Package) or at Holiday Villa hotels in Subang andCherating/DiwangkaraHolidayVillaBali(AsianPackage)withdailybreakfastandonesetdinnerfor2persons.Inaddition,ourhotelsandresortsdivision also awarded hotel vouchers for 5 Consolation Prizewinners andMonthly Prizewinners. The contestattractedover5,000entries.
Holiday Villa Group’s ranking in the September 2011 issue of ‘Hotels’ magazine, a leading international hotelindustrymagazine,hasmovedupfrom284to165initsOctober2010issue.
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GROUP OPERATIONS (continued)
Information and Communications Technology (“ICT”)
The Group’s ICT division’s revenue in the current year was lower by approximately RM9.1 million or 21.1%comparedto2010’srevenueofRM43.1million,mainlyduetolowersystemsalesrevenuerecordedbyallbusinessunits(“BU”)inallthree(3)regions(SouthEastAsia,SouthAsiaandMiddleEast-Africa).Thelowerrevenuefromsystemsales across allBUswashoweverpartlymitigatedby highermanaged services revenue recordedbyValue-added-ServicesalesBUinSouthAsia.
Gross profit achieved by our ICT division was also lower this year, in line with the lower revenue recorded.However,themagnitudeofthedeclinewaslowerthanthatofrevenue,fallingonlyby16%,asopposedtothedeclineinrevenueof21.1%.Thisreflectedthehigheraveragegrossprofitmarginfortheyearof54.4%,whichresultedfromthemorefavourablesalesmixfor2011,wherehighermarginmanagedservicecontractrevenuescomprised64%ofourICTdivisionfortheyear.
Profitbeforetaxfortheyeardeclineddisproportionatelylesscomparedtotherevenue–fallingbyapproximately10.5%toRM5.9million, fromprofitbefore taxachieved in theprecedingyearofRM6.6million.Thiswasdueto lowerotheroperatingexpensesincurredduringthecurrentyearandanimprovement inoverallgrossprofitmargin,aswellasafairvaluegainrecordedonthedivision’sinvestmentproperty.
AlthoughourICTdivisionhadadisappointingyearintermsoffailingtobettertheirfinancialresultsof2010,theyearwassignificantinthatitrepresentedtheICTdivisionfourthconsecutiveyearofprofitability.Midwaythrough2011theICTdivisionreceivedformalnotificationfromSingaporeExchangeSecuritiesTradingLimited(“SGX”)thatourapplicationtoberemovedfromtheWatchListpursuanttothealternativeexitcriteriaunderRule1314oftheListingRulesoftheSGXhadbeensuccessful.ThisalternativeexitcriteriawhichthedivisionhadbeenaimingtofulfilinordertoapplyforremovalfromtheWatchList,involvedtheachievementofaminimumcumulativepre-taxprofitofSGD7.5millionoverthree(3)consecutivefinancialyearsofpre-taxprofitability.
Property Development
TotalrevenueachievedbytheGroup’spropertydevelopmentdivision,representedprimarilybyAdvanceSynergyRealtySdnBhd(“ASR”)amountedtoRM5.8million,adecreaseof48.2%comparedtoRM11.2millionin2010.
In2011,ASRstartedthedevelopmentofMatangJayaIII,aprojectconsistingof36unitsresidentialhousesinMatangJaya,Kuching,Sarawak.Meanwhile,theconstructionofKennyHillVillasinKuching,Sarawak,aprojectconsistingof14unitsofthreestoreysemi–detachedluxuryhomeslocatedwithinthehighlydesirableKennyHillisinprogress.
The lower revenue in 2011wasattributablemainly to the slower thanexpectedprogress forKennyHill Villasprojectduetoshortageofskilledworkers.TheprojectwaslaunchedonlyinSeptember2011.
DespitethesubstantialdropinrevenuebyRM5.4millionforthefinancialyearended31December2011comparedto revenue in the preceding year, the profit before tax of the property divisionwasRM474,000 compared toRM736,000inthepreviousyearmainlyattributabletotheloweroverheadsin2011.
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GROUP OPERATIONS (continued)
Travel and Tours
TotalrevenueachievedbytheGroup’stravelandtoursdivision,representedprimarilybyOrientEscapeTravelSdnBhdandSynergyToursSdnBhdamountedtoRM81.9million,anincreaseof20.3%overthepreviousyear.
Thisincreaseinrevenuewasdrivenprimarilybysubstantialgrowthinticketingrevenuesfortheoutboundtravelandtoursbusiness.Ourcorporateticketingsectioncontinuestogrowfromstrengthtostrength.However,ourinboundtravelsectionhasbeenadverselyaffectedbytheongoingEuropeaneconomiccrisis.
Despitehigherrevenue,profitbeforetaxin2011iscomparabletotheprecedingyearmainlyduetothehigheroperatingexpensesin2011.
Others
TheGroup’sotherdivisionscomprisesmanufacturing,cardandpaymentservices,coachbuildingandtraditionalchinesemedicinedivisions.
TotalrevenueachievedbyotherdivisionsamountedtoRM23.5million,amarginaldecreaseof5.1%comparedto thepreviousyear.Highercontribution fromcardandpaymentservicesdivisionand revenue from thenewdivisionundertheGroup,traditionalchinesemedicinedivision,representedbyDamaTCMSdnBhd,wereoffsetbylowerrevenuefromourcoachbuildingandmanufacturingdivisions.
However, lower losses from other divisions by 33.6% compared to 2010, were mainly due to write back ofprovisionandloweroverheads.
Thenon-profitabledivisionshaveundergonesomerestructuringwherebywehaveselectivelyscaleddownthebusinessandhaveputinplaceplanstoturnaroundthedivisions.
THE PROSPECT
With the uncertainty in the global economic outlook, and the euro zone debt crisis coupledwith the risk oflowergrowthforChinaandmanyeconomies,theDirectorsexpecttheGroup’soperatingenvironmenttoremainchallengingforthefinancialyearending31December2012.
However, each business within the Group will continue to assess and execute their respective growth anddevelopment planswhichmay include geographical expansion, increasing distribution channels, andmarketandproductdevelopment.
Performance from our property development division is expected to improve for 2012 in anticipation of newlaunchesplannedfortheyear.
Ourhotels&resortsdivisioniscontinuouslyexpandingitsoperationsandinthisrespect,thedivisionismovingaggressively in securing hotel management and operating agreements and expects to open more hotels invariouscountriesin2012.Thedivisionwillcontinuewiththeirtradeshowsasithasproventobesuccessfulandto increase their brand presence for all hotels in various internet distribution systems and offer attractive early birddiscountsthroughourownon-linebookingsystem.
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THE PROSPECT (continued)
TheICTdivisionwillcontinuetodefenditsexistingbusinessesandtore-establishitsgrowthpathorganicallyandbywayofacquisitionofand/orstrategicinvestmentincomplementarybusinesses.Thedivisionisoptimisticofextendingitstrackrecordofprofitableperformance,butexpectstheyearaheadtocontinuetobechallengingduetofactorssuchasintensifiedcompetitionformanyofthedivision’smorematuredproductsandtechnologies,recruitmentandretentionissuesontalentstosupportgrowth,andchangesinmanagement,ownershipand/orstrategicemphasisoftheirexistingandprospectivecustomers.
Theinboundtravelandtoursbusinessmayexperiencevolatilityinitsoverseasmarket,buttheoutboundtravelandtoursbusinessisexpectedtoenjoystrongdemandfromthedomesticmarket.
DIVIDENDS
TheBoardofDirectorsofAdvanceSynergyBerhadispleasedtorecommendforshareholders’approval,afirstandfinalgrossdividendof0.50senpershareless25%taxforthefinancialyearended31December2011.
APPRECIATION
Toall shareholders,customersandassociates, Iextendourdeepestgratitude for theirconfidence, trustandcontinuedsupport.Totheregulatoryauthorities,ourappreciationfortheircontinuedguidanceandsupport,andtothemanagementandstaff,myappreciationforyourperseveranceanddedicationinhelpingachievethegoalsoftheGroup.
DATO’ AHMAD SEBI BAKAR
ExecutiveChairman
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Financial StatementsADVANCESYNERGYBERHAD
ANNUALREPORT2011
A D VA N C E S Y N E R G Y B E R H A D
A N N U A L R E P O R T 2 0 1 1
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TheDirectors hereby submit their report togetherwith the audited financial statements of theGroup and of theCompanyforthefinancialyearended31December2011.
PRINCIPAL ACTIVITIES
TheprincipalactivitiesoftheCompanyarethatofinvestmentholdingandtheprovisionoffullcorporateandfinancialsupporttoitssubsidiaries.TheprincipalactivitiesofthesubsidiariesarestatedinNote8tothefinancialstatements.
Therehavebeennosignificantchangesinthenatureoftheseprincipalactivitiesduringthefinancialyear.
RESULTS
GroupRM’000
CompanyRM’000
Netprofitforthefinancialyear 6,890 9,054
Attributableto:
Ownersoftheparent 4,227 9,054Non-controllinginterests 2,663 -
6,890 9,054
DIVIDENDS
NodividendhasbeenpaidordeclaredbytheCompanysincetheendofthepreviousfinancialyear.
AttheforthcomingAnnualGeneralMeeting,afinalgrossdividendof0.50senpershareless25%taxinrespectofthefinancialyearended31December2011willbeproposedforshareholders’approval.
Thefinancialstatementsforthecurrentfinancialyeardonotreflectthisproposeddividend.Suchdividend,ifapprovedby theshareholders,willbeaccounted for inequityasanappropriationof retainedearnings in thefinancialyearending31December2012.
RESERVES AND PROVISIONS
Allmaterialtransferstoandfromreservesandprovisionsduringthefinancialyearhavebeendisclosedinthefinancialstatements.
BAD AND DOUBTFUL DEBTS
BeforethestatementsofcomprehensiveincomeandstatementsoffinancialpositionoftheGroupandoftheCompanyweremadeout,theDirectorstookreasonablestepstoascertainthatactionhadbeentakeninrelationtothewritingoffofbaddebtsandthemakingofallowancefordoubtfuldebts,andhadsatisfiedthemselvesthatallknownbaddebtshadbeenwrittenoffandadequateallowancehadbeenmadefordoubtfuldebts.
Atthedateofthisreport,theDirectorsarenotawareofanycircumstancesthatwouldrendertheamountwrittenoffforbaddebtsortheamountoftheallowancefordoubtfuldebtsinthefinancialstatementsoftheGroupandoftheCompanyinadequatetoanysubstantialextent.
Directors’ Report
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CURRENT ASSETS
Before the statements of comprehensive income and statements of financial position of theGroup and of theCompanyweremadeout,theDirectorstookreasonablestepstoensurethatanycurrentassets,otherthandebts,whichwere unlikely tobe realised in theordinary courseof business, their values as shown in the accountingrecordsoftheGroupandoftheCompanyhadbeenwrittendowntoanamountthattheymightbeexpectedtoberealised.
Atthedateofthisreport,theDirectorsarenotawareofanycircumstancesthatwouldrenderthevaluesattributedtothecurrentassetsinthefinancialstatementsoftheGroupandoftheCompanymisleading.
VALUATION METHODS
At the date of this report, the Directors are not aware of any circumstances which have arisen which renderadherencetotheexistingmethodofvaluationofassetsorliabilitiesoftheGroupandoftheCompanymisleadingorinappropriate.
CONTINGENT AND OTHER LIABILITIES
Atthedateofthisreport,theredoesnotexist:
(i) anychargeontheassetsoftheGroupandoftheCompanythathasarisensincetheendofthefinancialyearwhichsecurestheliabilitiesofanyotherperson;or
(ii) any contingent liabilities in respect of the Group and of the Company that has arisen since the end of the financialyear,otherthanasdisclosedinNote29tothefinancialstatements.
IntheopinionoftheDirectors,nocontingentliabilitiesorotherliabilitiesoftheGroupandoftheCompanyhavebecomeenforceable,or is likely tobecomeenforceablewithin theperiodof twelvemonthsafter theendof thefinancial yearwhich,will ormaysubstantially affect theabilityof theGroupandof theCompany tomeet theirobligationsasandwhentheyfalldue.
CHANGE OF CIRCUMSTANCES
Atthedateofthisreport,theDirectorsarenotawareofanycircumstances,nototherwisedealtwithinthisreportorthefinancialstatementsoftheGroupandoftheCompanythatwouldrenderanyamountstatedinthefinancialstatementsmisleading.
ITEMS OF AN UNUSUAL NATURE
TheresultsoftheoperationsoftheGroupandoftheCompanyforthefinancialyearwerenot,intheopinionoftheDirectors,substantiallyaffectedbyanyitem,transactionoreventofamaterialandunusualnature.
Noitem,transactionoreventofamaterialandunusualnaturehasarisen inthe intervalbetweentheendofthefinancialyearandthedateofthisreportwhichislikelytoaffectsubstantiallytheresultsoftheoperationsoftheGroupandoftheCompanyforthefinancialyearinwhichthisreportismade.
ISSUE OF SHARES AND DEBENTURES
During the financial year ended31December2011, a total of 31,413,0002%10-Year IrredeemableConvertibleUnsecuredLoanStocksat100%ofthenominalvalueofRM0.15each(“ICULS”)wereconvertedinto15,706,500newordinarysharesofRM0.30eachoftheCompanybysurrenderingforcancellationtwo(2)ICULSforeveryone(1)newordinaryshareofRM0.30eachintheCompany.
Inaddition,atotalof525,000newordinarysharesofRM0.30eachwereissuedconsequentialtoaconversionbysurrenderingforcancellationone(1)ICULSofnominalvalueofRM0.15andcashpaymentofRM0.15forone(1)newordinaryshareofRM0.30eachintheCompany.
ThenewordinarysharesissuedduringthefinancialyearrankparipassuinallrespectswiththeexistingordinarysharesoftheCompany.
Directors’ Report (continued)
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OPTIONS GRANTED OVER UNISSUED SHARES
NooptionsweregrantedtoanypersontotakeupunissuedsharesoftheCompanyduringthefinancialyear.
DIRECTORS
ThenamesoftheDirectorsoftheCompanyinofficesincethedateofthelastreportandatthedateofthisreportare:
Dato’AhmadSebiBakarLeeSuNie Dato’AbdulMuradBinKhalid DatinMasriKhawBintiAbdullahChimWaiKhuanYongTeckMing
REMUNERATION COMMITTEE
TheRemunerationCommitteereviewsandrecommendstotheBoardofDirectors,theCompany’sremunerationpolicyforExecutiveDirectorstoensurethattheyareappropriatelyrewardedfortheircontributiontotheGroup.
ThemembersoftheRemunerationCommitteeduringthefinancialyearended31December2011areasfollows:
• Dato’AbdulMuradBinKhalid (Chairman,IndependentNon-ExecutiveDirector)• ChimWaiKhuan (Member,IndependentNon-ExecutiveDirector)• DatinMasriKhawBintiAbdullah (Member,Non-IndependentNon-ExecutiveDirector)
DIRECTORS’ INTERESTS
AccordingtotheRegisterofDirectors’ShareholdingskeptbytheCompanyunderSection134oftheCompaniesAct,1965, the interestsof thoseDirectorswhoheldofficeat theendof the financialyear in thesecuritiesofAdvance Synergy Berhad (“ASB”) and shares of its related corporations during the financial year ended 31 December2011areasfollows:
Number of ASB Ordinary Shares of RM0.30 each
At At
1.1.2011 Bought Sold 31.12.2011
Direct Interest
Dato’AhmadSebiBakar# 15,203,509 - - 15,203,509
ChimWaiKhuan 100,000 - (100,000) -
Indirect Interest
Dato’AhmadSebiBakar# *¹95,057,609 - - *¹95,057,609
DatinMasriKhawBintiAbdullah 5,000,000 - - 5,000,000
LeeSuNie *²365,000 - - *²365,000
ChimWaiKhuan - *³100,000 *³(100,000) -
Directors’ Report (continued)
35advance synergy berhad (1225-D)
annual report 2011
DIRECTORS’ INTERESTS (continued)
Number of ordinary shares At At
1.1.2011 Bought Sold 31.12.2011Subsidiary companyUnified Communications Holdings LimitedDeemed InterestLeeSuNie 200,000 - - 200,000
Number of ASB ICULS At At
1.1.2011 Bought Sold 31.12.2011Direct InterestDato’AhmadSebiBakar 123,212,999 - - 123,212,999YongTeckMing 500,000 - (500,000) -
Indirect InterestDato’AhmadSebiBakar *4149,602,489 - - *4149,602,489DatinMasriKhawBintiAbdullah 12,240,000 - - 12,240,000
# By virtue of his interest inASB,Dato’ AhmadSebiBakar is also deemed to be interested in the shares of all investeecompanies(includingsubsidiaries)totheextentthatASBhasaninterest.
*1 Thisincludeshisson’sinterestin6,000,000ordinarysharesofASBwhichshallbetreatedashisinterestintheordinarysharesofASBpursuanttoSection134(12)(c)oftheCompaniesAct,1965.
*2 Thisisherspouse’sinterestintheordinarysharesofASBwhichshallbetreatedasherinterestintheordinarysharesofASBpursuanttoSection134(12)(c)oftheCompaniesAct,1965.
*3 Thisishisdaughter’sinterestintheordinarysharesofASBwhichshallbetreatedashisinterestintheordinarysharesofASBpursuanttoSection134(12)(c)oftheCompaniesAct,1965.
*4 This includeshisson’s interest in48,934,000 ICULSofASBwhichshallbe treatedashis interest in the ICULSofASBpursuanttoSection134(12)(c)oftheCompaniesAct,1965.
Other thanasdisclosedabove, noneof theotherDirectors inoffice at theendof the financial year hadanyinterestinthesecuritiesoftheCompanyandsharesofitsrelatedcorporationsduringthefinancialyear.
DIRECTORS’ BENEFITS
Since theendof theprevious financial year, noDirectorof theCompanyhas receivedorbecomeentitled toreceive a benefit (other than benefits included in the aggregate amount of emoluments received or due and receivableby theDirectorsshown in the financialstatements)by reasonofacontractmadeby theCompanyorarelatedcorporationwiththeDirectororwithafirmofwhichtheDirectorisamember,orwithacompanyinwhichtheDirectorhasasubstantialfinancialinterest,exceptasdisclosedinNote32tothefinancialstatements.
NeitherduringnorattheendofthefinancialyearwastheCompanyapartytoanyarrangementwhoseobjectwastoenabletheDirectorstoacquirebenefitsbymeansoftheacquisitionofordinarysharesin,ordebenturesof,theCompanyoranyotherbodycorporate.
Directors’ Report (continued)
36advance synergy berhad (1225-D)
annual report 2011
SIGNIFICANT EVENTS
DetailsofthesignificanteventsaredisclosedinNote37tothefinancialstatements.
SIGNIFICANT SUBSEQUENT EVENTS
DetailsofthesignificantsubsequenteventsaredisclosedinNote38tothefinancialstatements.
AUDITORS
Theauditors,MessrsBakerTillyMonteiroHeng,haveexpressedtheirwillingnesstocontinueinoffice.
OnbehalfoftheBoard,
DATO’ AHMAD SEBI BAKAR YONG TECK MING Director Director
SelangorDarulEhsan24 April 2012
Directors’ Report (continued)
37advance synergy berhad (1225-D)
annual report 2011
Group Company31.12.2011 31.12.2010 31.12.2011 31.12.2010
Note RM’000 RM’000 RM’000 RM’000
ASSETS
Non-current assets
Property,plantandequipment 4 190,541 202,182 45 44
Investment property 5 8,870 - - -
Intangible assets 6 77,389 75,591 - -
Investment in subsidiaries 8 - - 473,748 484,398
Investment in associates 9 22,675 30,759 - -
Investment securities 11 31,866 32,673 4,900 4,900
Tradeandotherreceivables 12 2,574 6,400 - -
Deferredtaxassets 13 3,141 2,870 1,113 1,304
Total non-current assets 337,056 350,475 479,806 490,646
Current assets
Propertydevelopmentcosts 14 29,854 24,552 - -
Inventories 15 25,599 32,950 - -
Tradeandotherreceivables 12 57,131 54,002 98,102 98,156
Taxrecoverable 2,770 2,721 2,491 2,400
Investment securities 11 928 919 - -
Cashandbankbalances and short term deposits
16 191,686 110,670 5,196 668
Total current assets 307,968 225,814 105,789 101,224
Non-current assets classified as held for sale
17 8,038 114,955 - -
TOTAL ASSETS 653,062 691,244 585,595 591,870
Statements Of Financial Positionas at 31 December 2011
The accompanying notes form an integral part of these financial statements.
38advance synergy berhad (1225-D)
annual report 2011
Group Company31.12.2011 31.12.2010 31.12.2011 31.12.2010
Note RM’000 RM’000 RM’000 RM’000
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Share capital 18 151,318 146,448 151,318 146,448
Share premium 117,317 117,317 117,317 117,317
Other reserves 19 6,510 7,355 69 69
Retained earnings/(Accumulated losses) 19 74,643 70,416 (12,705) (21,759)
ICULS-equitycomponent 20 111,162 115,340 111,162 115,340
Shareholders’ funds 460,950 456,876 367,161 357,415
Non-controllinginterests 31,777 29,670 - -
Total equity 492,727 486,546 367,161 357,415
Non-current liabilities
Borrowings 21 75,940 81,469 - -
Deferredtaxliabilities 13 2,620 2,748 - -
Provisionforretirementbenefitobligations 22 876 747 - -
ICULS-liabilitycomponent 20 12,278 14,391 12,278 14,391
Total non-current liabilities 91,714 99,355 12,278 14,391
Current liabilities
Tradeandotherpayables 23 59,454 68,187 206,156 190,064
Borrowings 21 7,995 36,168 - 30,000
Taxpayable 1,172 988 - -
Total current liabilities 68,621 105,343 206,156 220,064
Total liabilities 160,335 204,698 218,434 234,455
TOTAL EQUITY AND LIABILITIES 653,062 691,244 585,595 591,870
Statements Of Financial Position as at 31 December 2011 (continued)
The accompanying notes form an integral part of these financial statements.
39advance synergy berhad (1225-D)
annual report 2011
Group Company2011 2010 2011 2010
Note RM’000 RM’000 RM’000 RM’000
Revenue 24 222,285 221,852 40,126 3,751
Cost of sales (138,547) (135,155) - -
Gross profit 83,738 86,697 40,126 3,751
Other operating income 25,041 36,680 - 31,022
Distribution costs (9,697) (10,241) - -
Administrativeexpenses (54,990) (48,877) (4,642) (2,859)
Otheroperatingexpenses (33,802) (61,410) (11,710) (28,051)
Operating profit 25 10,290 2,849 23,774 3,863
Finance costs 26 (8,216) (8,051) (5,473) (2,074)
Share of results of associates 6,835 12,633 - -
Profit before tax 8,909 7,431 18,301 1,789
Incometaxexpense 27 (2,019) (964) (9,247) (246)
Profit for the financial year 6,890 6,467 9,054 1,543
Other comprehensive income/(expenses) for the financial year, net of tax:
Foreign currency translation differences for foreign operations
(3,878) (11,184) - -
Realisation of revaluation and foreign exchangereserve
4,908 (4,583) - -
Realisationofavailable-for-salereserves (1,139) - - -
Fairvalueofavailable-for-salefinancialassets
(807) 1,929 - -
Share of other comprehensive income of associates,netoftax
12 987 - -
(904) (12,851) - -
Total comprehensive income for the financial year
5,986 (6,384) 9,054 1,543
Statements Of Comprehensive Income for the financial year ended 31 December 2011
The accompanying notes form an integral part of these financial statements.
40advance synergy berhad (1225-D)
annual report 2011
Group Company2011 2010 2011 2010
Note RM’000 RM’000 RM’000 RM’000
Profit attributable to:
Ownersoftheparent 4,227 3,327 9,054 1,543
Non-controllinginterests 2,663 3,140 - -
6,890 6,467 9,054 1,543
Total comprehensive income/(loss) attributable to:
Ownersoftheparent 3,382 (9,051) 9,054 1,543
Non-controllinginterests 2,604 2,667 - -
5,986 (6,384) 9,054 1,543
Earnings per ordinary share attributable to owners of the parent (sen)
-Basic 28 0.85 0.70
-Diluted 28 0.59 0.50
Statements Of Comprehensive Income for the financial year ended 31 December 2011 (continued)
The accompanying notes form an integral part of these financial statements.
41advance synergy berhad (1225-D)
annual report 2011
Statements of Changes in Equity for the financial year ended 31 December 2011
A
ttri
but
able
to
ow
ners
of
the
par
ent
No
n-D
istr
ibut
able
D
istr
ibut
able
Sha
reC
apit
al
ICU
LS-
Eq
uity
Co
mp
one
ntS
hare
P
rem
ium
Rev
alua
tio
nR
eser
ve
Exc
hang
e Tr
ansl
atio
nR
eser
ve
Ava
ilab
leFo
r-S
ale
Res
erve
Ret
aine
d
Ear
ning
sTo
tal
No
n-C
ont
rolli
ng
Inte
rest
s To
tal
Eq
uity
Gro
upR
M’0
00R
M’0
00R
M’0
00R
M’0
00R
M’0
00R
M’0
00R
M’0
00R
M’0
00R
M’0
00R
M’0
00
At1January2011
146,448115,340
117,317
12,767
(9,476)
4,064
70,416456,876
29,670
486,546
Netprofitforthefinancialyear
-
-
-
-
-
-4,227
4,227
2,663
6,890
Fairvalueofavailable-for-sale
financialassets
-
--
-
-
(807
)-
(80
7)-
(807
)
Realisationofavailable-for-
sal
e re
serv
e-
--
--
(1,139)
-(1,139)
-(1,139)
Sha
re o
f oth
er c
omp
rehe
nsiv
eincomeofassociates,netof
tax
-
--
--
12
-
12
-
1
2
Rea
lisat
ion
of fo
reig
n
exchangereserve
-
--
-
4,908
-
-
4,908
-4,908
Fore
ign
curr
ency
tra
nsla
tion
diff
eren
ces
for
fore
ign
op
erat
ions
-
--
2
(3,821)
-
-(3,819)
(59)
(3,878)
Totalcomprehensive
inc
ome/
(loss
) for
the
yea
r-
-
-
2
1,087
(1,934)
4,227
3,382
2,604
5,986
Tran
sact
ions
wit
h o
wne
rs:
Issueofnewordinaryshares
pur
suan
t to
the
con
vers
ion
ofICULS
4,791(4,178)-
-
-
--
613
-613
Issueofnewordinaryshares
79
--
--
--
79
-
79
Totaltransactionswithowners
4,870(4,178)-
-
-
--
692
-692
Div
iden
ds
pai
d t
onon-controllinginterestof
a s
ubsi
dia
ry-
-
-
-
-
-
-
-
(497
)
(4
97)
At
31 D
ecem
ber
201
1151,318111,162
117,317
12,769
(8,389)2,130
74,643460,950
31,777
492,727
42advance synergy berhad (1225-D)
annual report 2011
Statements of Changes in Equity for the financial year ended 31 December 2011 (continued)
A
ttri
but
able
to
ow
ners
of
the
par
ent
N
on-
Dis
trib
utab
le
Dis
trib
utab
le
Sha
reC
apit
al
ICU
LS-
Eq
uity
Co
mp
one
ntS
hare
P
rem
ium
Rev
alua
tio
nR
eser
ve
Exc
hang
e Tr
ansl
atio
nR
eser
ve
Ava
ilab
leFo
r-S
ale
Res
erve
Ret
aine
d
Ear
ning
sTo
tal
No
n-C
ont
rolli
ng
Inte
rest
s To
tal
Eq
uity
Gro
upR
M’0
00R
M’0
00R
M’0
00R
M’0
00R
M’0
00R
M’0
00R
M’0
00R
M’0
00R
M’0
00R
M’0
00
At1January2010
-aspreviouslystated
142,014
119,208
117,317
12,591
5,862
-
67,054
464,046
27,422
491,468
-effectofadoptingFRS139
-
-
-
-
-
1,280
35
1,315
-
1,315
At1January2010,restated
142,014
119,208
117,317
12,591
5,862
1,280
67,089
465,361
27,422
492,783
Netprofitforthefinancialyear
-
-
-
-
-
-
3,327
3,327
3,140
6,467
Fairvalueofavailable-for-sale
financialassets
-
-
-
-
-1,929
-
1,929
-
1,929
Sha
re o
f oth
er c
omp
rehe
nsiv
eincomeofassociates,netof
tax
-
-
--
132
8
55
-
987
-
987
Rea
lisat
ion
of r
eval
uatio
n an
d
foreignexchangereserve
-
-
--
(4,583)
-
-(4,583)-
(4,583)
Fore
ign
curr
ency
tra
nsla
tion
diff
eren
ces
for
fore
ign
op
erat
ions
-
-
-176
(10,887)
-
-(10,711)
(473
)(11,184)
Totalcomprehensive
inc
ome/
(loss
) for
the
yea
r-
-
-
176
(15,338)
2,784
3,327
(9,051)
2,667
(6,384)
Tran
sact
ions
wit
h o
wne
rs:
Issueofnewordinaryshares
pur
suan
t to
the
con
vers
ion
ofICULS
4,434
(3,868)
-
-
-
-
-
566
-
566
Totaltransactionswithowners
4,434
(3,868)
-
-
-
-
-
566
-
566
Div
iden
ds
pai
d t
o non-controllinginterestof
a s
ubsi
dia
ry-
-
-
-
-
-
-
-
(419
) (4
19)
At
31 D
ecem
ber
201
0146,448
115,340
117,317
12,767
(9,476)
4,064
70,416
456,876
29,670
486,546
43advance synergy berhad (1225-D)
annual report 2011
Attributable to owners of the Company Non-Distributable Distributable
Share
Capital
ICULS-Equity
ComponentShare
PremiumCapitalReserve
AccumulatedLosses Total
Company RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
At1January2010 142,014 119,208 117,317 69 (23,302) 355,306
Totalcomprehensiveincomeforthefinancialyear - - - -
1,543 1,543
Transactions with owners:
Issueofnewordinaryshares pursuant to the conversion ofICULS
4,434 (3,868) - - - 566
Totaltransactionswithowners 4,434 (3,868) - - - 566
At 31 December 2010 146,448 115,340 117,317 69 (21,759) 357,415
Totalcomprehensiveincomeforthefinancialyear - - - -
9,054 9,054
Transactions with owners:
Issueofnewordinaryshares pursuant to the conversion ofICULS
4,791 (4,178) - - - 613
Issueofnewordinaryshares 79 - - - - 79
Totaltransactionswithowners 4,870 (4,178) - - - 692
At 31 December 2011 151,318 111,162 117,317 69 (12,705) 367,161
Statements of Changes in Equity for the financial year ended 31 December 2011 (continued)
The accompanying notes form an integral part of these financial statements.
44advance synergy berhad (1225-D)
annual report 2011
Statements of Cash Flowsfor the financial year ended 31 December 2011
Group Company 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000 CASHFLOWSFROMOPERATINGACTIVITIES: Profitbeforetax 8,909 7,431 18,301 1,789 Adjustmentsfor: Allowanceforinventoriesobsolescence 15 86 - - Amortisation of intangible assets 1,715 1,482 - - Bad debts recovered (299) (46) - -Baddebtswrittenoff 574 765 - - Depreciation 7,176 7,428 23 30 Fair value gain on investment property (946) - - -Gainondisposalof: -property,plantandequipment (231) (189) - --non-currentassetsclassifiedasheldforsale (4,269) - - --asubsidiary (201) - - --anassociatedcompany (2,936) - - -
Gross dividend income (406) (432) (40,000) (3,724)Impairmentlosson: -goodwill 2 - - --loanandreceivables 164 1,116 - --developmentexpenditure - 1,057 - --heldfortradinginvestments 10 - - --investmentinsubsidiaries - - 10,650 --available-for-saleinvestmentsecurities - 27,274 - 27,274-property,plantandequipment - 1,736 - -Interestexpenses 8,216 8,051 5,473 2,074 Interest income (3,979) (2,340) (126) (26)(Gain)/Lossondisposalofheldfortradinginvestments (19) 25 - -Netunrealisedloss/onforeignexchange 53 2,202 36 12 Property,plantandequipmentwrittenoff 57 90 - -Provisionforretirementbenefitsobligations 156 136 - -Provisionforcontingenciesandcommitments 42 - - -Realisationofforeignexchangereserve 4,908 (4,583) - - Share of results in associates (6,835) (12,633) - -Writebackofimpairmentlosson: -loanandreceivables (171) (16,887) - --investmentinassociates - (3,414) - --investmentinsubsidiaries - - - (31,000)-heldfortradinginvestments - (191) - --property,plantandequipment (165) - - -Writebackofpayables (3,932) - - -
Operatingprofit/(loss)beforeworkingcapitalchanges 7,608 18,164 (5,643) (3,571)
45advance synergy berhad (1225-D)
annual report 2011
Statements of Cash Flows for the financial year ended 31 December 2011 (continued)
Group Company 2011 2010 2011 2010 Note RM’000 RM’000 RM’000 RM’000
ChangesInworkingcapital:
Propertydevelopmentcosts (5,302) (2,242) - -
Inventories 7,366 2,292 - -
Receivables 541 17,597 (111) 5,644
Investment securities - (188) - -
Payables (4,835) 1,441 16,275 970
Net cash generated from operations 5,378 37,064 10,521 3,043
Retirementbenefitspaid (27) (18) - -
Taxation(paid)/refunded (2,363) (3,983) 793 859
Net cash generated from operating activities 2,988 33,063 11,314 3,902
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisitionofintangibleassets (2,789) (3,647) - -
Acquisitionofheldfortradinginvestments (323) - - -
Acquisitionofasubsidiary,netofcashacquired 8(b)(iv) (568) - - -
Acquisitionofadditionalsharesinanassociate (25) 415 - -
Capital repayment from an associated company 10,906 - - -
Dividendincomereceived,netoftax 4,406 4,217 30,000 2,879
Interest received 3,979 2,340 126 26
Proceedsfromdisposalofheldfortradinginvestments 323 612 - -
Proceedsfromdisposalofnon-currentassetsclassifiedasheldforsale
118,071 - - -
Proceedsfromdisposalofproperty,plantandequipment 257 225 - -
Proceedsfromdisposalofsharesinanassociated company
2,985 - - -
Disposalofasubsidiary,netofcashdisposed 8(b)(iii) (4) - - -
Purchaseofproperty,plantandequipment* (6,678) (11,238) (24) (5)
Purchaseofinvestmentproperty (7,926) - - -
Net cash generated from/(used in) investing activities 122,614 (7,076) 30,102 2,900
46advance synergy berhad (1225-D)
annual report 2011
Statements of Cash Flowsfor the financial year ended 31 December 2011 (continued)
Group Company 2011 2010 2011 2010 Note RM’000 RM’000 RM’000 RM’000
CASHFLOWSFROMFINANCINGACTIVITIES:
Dividendspaidtonon-controllinginterestsofasubsidiary (497) (419) - -Drawdownofhirepurchase 114 120 - -Drawdownoftermloans 1,155 - - -Interest paid (9,509) (9,443) (6,967) (6,893)Paymentstohirepurchasepayables (234) (408) - -Placementofpledgeddeposits (2,759) (1,993) - -
Proceedsfromissuanceofsharecapital 79 - 79 -
Repayment of term loans (35,996) (4,788) (30,000) -
Netcash(usedin)financingactivities (47,647) (16,931) (36,888) (6,893)
Effectsofexchangeratechanges (386) (685) - - NETCHANGEINCASHANDCASHEQUIVALENTS 77,569 8,371 4,528 (91) CASHANDCASHEQUIVALENTSATTHE BEGINNINGOFTHEFINANCIALYEAR
As previously reported 83,747 77,967 668 781 Effectofexchangeratechanges (80) (2,591) - (22)
83,667 75,376 668 759
CASHANDCASHEQUIVALENTSATTHE
ENDOFTHEFINANCIALYEAR 161,236 83,747 5,196 668
ANALYSISOFCASHANDCASHEQUIVALENTS: Cashandbankbalances 16 40,051 46,535 96 68Short term deposits 16 151,635 64,135 5,100 600Bankoverdrafts 21 (768) - - -
190,918 110,670 5,196 668
Less:Depositplacedwithleasepayablesassecurity deposit for lease payments
16 (19,079) (18,298) - -
Less:Depositpledgedtolicensedbanks 16 (10,103) (8,139) - -Less:CashheldunderHousingDevelopmentAccount 16 (500) (486) - -
161,236 83,747 5,196 668
47advance synergy berhad (1225-D)
annual report 2011
Statements of Cash Flowsfor the financial year ended 31 December 2011 (continued)
NOTES TO THE STATEMENTS OF CASH FLOWS
* PURCHASEOFPROPERTY,PLANTANDEQUIPMENT
During the financialyear, theGroupacquiredproperty,plantandequipmentamounting toRM6.79million(2010:RM11.36million) ofwhichRM0.11million (2010:RM0.12million)was acquired under hire purchaseinstalmentplans.CashpaymentamountingtoRM6.68million(2010:RM11.24million)wasmadeduringthefinancialyear.
48advance synergy berhad (1225-D)
annual report 2011
Notes to the Financial Statements 31 December 2011
1. GENERAL INFORMATION
The principal activities of the Company during the financial year are that of investment holding and theprovisionoffullcorporateandfinancialsupporttoitssubsidiaries.TheprincipalactivitiesoftheCompany’ssubsidiariesarestatedinNote8tothefinancialstatements.Therehavebeennosignificantchangesinthenatureoftheseprincipalactivitiesduringthefinancialyear.
TheCompanyisapubliclimitedliabilitycompany,incorporatedanddomiciledinMalaysiaandlistedontheMainMarketofBursaMalaysiaSecuritiesBerhad(“BursaSecurities”).
TheregisteredofficeoftheCompanyislocatedatLevel3,EastWing,WismaSynergy,No.72,PesiaranJubliPerak,Seksyen22,40000ShahAlam,SelangorDarulEhsan.
TheprincipalplaceofbusinessoftheCompanyis locatedatLevel3,WestWing,WismaSynergy,No.72,PesiaranJubliPerak,Seksyen22,40000ShahAlam,SelangorDarulEhsan.
ThefinancialstatementsareexpressedinRinggitMalaysia(“RM”)andallvaluesareroundedtothenearestthousand(’000)exceptwhenotherwisestated.
Thefinancialstatementswereapprovedandauthorisedfor issuebytheBoardofDirectors inaccordancewitharesolutionoftheDirectorson24April2012.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of Preparation
ThefinancialstatementsoftheGroupandoftheCompanyhavebeenpreparedinaccordancewiththeFinancialReportingStandards(“FRS”)andtheprovisionsoftheCompaniesAct,1965inMalaysia.
ThefinancialstatementsoftheGroupandoftheCompanyhavebeenpreparedunderthehistoricalcostbasis,exceptasdisclosedinthesignificantaccountingpoliciesinNote2.4tothefinancialstatements.
The preparation of financial statements in conformity with FRS requires the use of certain criticalaccounting estimates and assumptions that affect the reported amounts of assets and liabilities and disclosuresofcontingentassetsandliabilitiesatthedateofthefinancialstatements,andthereportedamountsof the revenueandexpensesduring the reportedperiod. It also requires theDirectors’bestknowledgeofcurrenteventsandactions,andthereforeactualresultsmaydiffer.
The areas involving a higher degree of judgement or complexity, or areas where assumptions andestimatesaresignificanttothefinancialstatementsaredisclosedinNote3tothefinancialstatements.
Notes to the Financial Statements31 December 2011 (continued)
49advance synergy berhad (1225-D)
annual report 2011
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2.2 New and Revised FRSs, Amendments/Improvements to FRSs, New IC Interpretations (“IC Int”), Amendments to IC Int and New Malaysian Accounting Standards Board (“MASB”) Approved Accounting Standards, Malaysian Financial Reporting Standards (“MFRSs”)
(a) Adoption of Revised FRSs, Amendments/Improvements to FRSs, New IC Int and Amendments to IC Int
TheGroupandtheCompanyhadadoptedthefollowingrevisedFRSs,amendments/improvementstoFRSs,newICIntandamendmentstoICIntthataremandatoryforthecurrentfinancialyear:
Revised FRSsFRS 1 First-timeAdoptionofFinancialReportingStandardsFRS 3 Business CombinationsFRS 127 Consolidated and Separate Financial Statements
Amendments/Improvements to FRSsFRS 1 First-timeAdoptionofFinancialReportingStandardsFRS 2 Share-basedPaymentFRS 3 Business CombinationsFRS 5 Non-currentAssetsHeldforSaleandDiscontinuedOperationsFRS 7 FinancialInstruments:DisclosuresFRS 101 PresentationofFinancialStatementsFRS 121 TheEffectsofChangesinForeignExchangeRatesFRS 128 Investments in AssociatesFRS 131 InterestsinJointVenturesFRS 132 FinancialInstruments:PresentationFRS 134 Interim Financial ReportingFRS 138 Intangible AssetsFRS 139 FinancialInstruments:RecognitionandMeasurement
NewICIntIC Int 4 DeterminingWhetheranArrangementcontainsaLeaseIC Int 12 Service Concession ArrangementsICInt16 HedgesofaNetInvestmentinaForeignOperationIC Int 17 DistributionofNon-cashAssetstoOwnersIC Int 18 TransfersofAssetsfromCustomers
Amendments to IC IntIC Int 9 ReassessmentofEmbeddedDerivativesIC Int 13 CustomerLoyaltyProgrammes
Notes to the Financial Statements31 December 2011 (continued)
50advance synergy berhad (1225-D)
annual report 2011
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2.2 New and Revised FRSs, Amendments/Improvements to FRSs, New IC Interpretations (“IC Int”), Amendments to IC Int and New Malaysian Accounting Standards Board (“MASB”) Approved Accounting Standards, Malaysian Financial Reporting Standards (“MFRSs”) (continued)
(a) Adoption of Revised FRSs, Amendments/Improvements to FRSs, New IC Int and Amendments to IC Int (continued)
Themaineffectsof theadoptionof theaboverevisedFRSs,amendments/improvementstoFRSs,newICIntandamendmentstoICIntaresummarisedbelow:
FRS 3 Business Combinations (Revised)
TheadoptionoftheFRS3affectsthewayinwhichtheGroupaccountsforbusinesscombinations.Themainchangesmadeinthisrevisedstandardwere:
• All the acquisition-related costs incurred by the acquirer in connection with the businesscombinationshallberecognisedasexpenseintheprofitorlossintheperiodinwhichthecostsareincurred(ratherthanincludedingoodwill);
• Allconsiderationstransferredbytheacquirer,includingcontingentconsiderations,inabusinesscombinationshallbemeasuredatfairvalueasattheacquisitiondate.Subsequentchangesinthe fair value of contingent consideration classified as liabilities are recognised in accordance withFRS139,FRS137orotherFRSs,asappropriate(ratherthanbyadjustinggoodwill);
• Anacquirerisnolongerpermittedtorecognisecontingenciesacquiredinabusinesscombinationthatdonotmeetthedefinitionofaliability;
• For each business combination, the acquirer must measure any non-controlling interest inthe acquiree either at fair valueor at thenon-controlling interest’sproportionate shareof theacquiree’snetidentifiableassets.Previously,onlythelatterwaspermitted;
• Forabusinesscombinationachievedinstages,theequityinterestsheldbytheacquirerintheacquireeimmediatelybeforeachievingcontrolarere-measuredatitsacquisition-datefairvaluewithanycorrespondinggainorlossrecognisedinprofitorloss;and
• Goodwill arising from the business combination is measured as the difference between theaggregatefairvalueofconsiderationtransferred,anynon-controllinginterestintheacquiree,andthefairvalueatacquisitiondateofanypreviously-heldequity interest intheacquiree,andthefairvalueofidentifiableassetsacquiredandliabilitiesassumed(includingcontingentliabilities)atacquisitiondate.
ThisrevisedFRS3shallbeappliedprospectivelytobusinesscombinationsforwhichtheacquisitiondate is on or after the beginning of the first annual reporting period beginning on or after 1 July2010.ThereisnosignificantfinancialimpactonthefinancialstatementsoftheGroupforthecurrentfinancialyear.
FRS 127 Consolidated and Separate Financial Statements (Revised)
The revised FRS 127 requires that any changes in a parent’s ownership interest in a subsidiarycompanythatdonotresultinthelossofcontrolareaccountedforwithinequity.WhentheGrouploses control of a subsidiary company, any remaining interest retained in the former subsidiarycompanywillbemeasuredatfairvalueandanyresultinggainorlossisrecognisedinprofitorloss.Totalcomprehensiveincomewillbeproportionatelyallocatedtotheownersoftheparentandtothenon-controllinginterestsevenifitresultsinthenon-controllinginterestshavingadeficitbalance.
TherevisedFRS127shallbeappliedprospectivelytobusinesscombinationsforwhichtheacquisitiondateisonorafter1July2010.ThereisnosignificantfinancialimpactonthefinancialstatementsoftheGroupforthecurrentfinancialyear.
Notes to the Financial Statements31 December 2011 (continued)
51advance synergy berhad (1225-D)
annual report 2011
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2.2 New and Revised FRSs, Amendments/Improvements to FRSs, New IC Interpretations (“IC Int”), Amendments to IC Int and New Malaysian Accounting Standards Board (“MASB”) Approved Accounting Standards, Malaysian Financial Reporting Standards (“MFRSs”) (continued)
(a) Adoption of Revised FRSs, Amendments/Improvements to FRSs, New IC Int and Amendments to IC Int (continued)
Amendments to FRS 7 Financial Instruments: Disclosures
Disclosuresonfairvalueand liquidityhavebeenenhancedupontheadoptionofthisamendment.Inparticular,financialinstrumentsmeasuredatfairvaluearedisclosedbyclassinathree-levelfairvaluemeasurement hierarchy,with specific disclosures related to transfers between levels in thehierarchyanddetaileddisclosuresonlevelthreeofthefairvaluehierarchy.Certaindisclosuresonliquidityarealsomodified.TheadoptionofthisamendmentresultedinadditionaldisclosuresinthefinancialstatementsbutdidnothaveanyfinancialimpactontheGroupandtheCompany.
IC Int 4 Determining Whether an Arrangement Contains a Lease
ThisICIntclarifiesthatwhenthefulfilmentofanarrangementisdependentontheuseofaspecificasset and the arrangement conveys a right to use the asset, then the arrangement should beaccountedforasaleaseunderFRS117,eventhoughitdoesnottakethelegalformofalease.ThisinterpretationdidnothaveanyfinancialimpactontheGroupandtheCompany.
(b) New and Revised FRSs, Amendments/Improvements to FRSs, New IC Int and Amendments to IC Int that are issued, not yet effective and have not been adopted early
The Group and Company have not adopted the following new and revised FRSs, amendments/improvements toFRSs, IC Int andamendments to IC Int that havebeen issuedas at thedateofauthorisationofthesefinancialstatementsbutarenotyeteffectivefortheGroupandtheCompany:
Effective for financial periods beginning on
or afterNewFRSsFRS 9 Financial Instruments 1January2015FRS 10 Consolidated Financial Statements 1January2013FRS 11 JointArrangements 1January2013FRS 12 DisclosuresofInterestsinOtherEntities 1January2013FRS 13 FairValueMeasurement 1January2013
Revised FRSsFRS 119 EmployeeBenefits 1January2013FRS 124 RelatedPartyDisclosures 1January2012FRS 127 Separate Financial Statements 1January2013FRS 128 InvestmentsinAssociatesandJointVentures 1January2013
Amendments/Improvements to FRSsFRS 1 First-timeAdoptionofFinancialReportingStandards 1January2012FRS 7 FinancialInstruments:Disclosures 1January2012and
1January2013FRS 101 PresentationofFinancialStatements 1July2012FRS 112 IncomeTaxes 1January2012FRS 132 FinancialInstruments:Presentation 1January2014
Notes to the Financial Statements31 December 2011 (continued)
52advance synergy berhad (1225-D)
annual report 2011
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2.2 New and Revised FRSs, Amendments/Improvements to FRSs, New IC Interpretations (“IC Int”), Amendments to IC Int and New Malaysian Accounting Standards Board (“MASB”) Approved Accounting Standards, Malaysian Financial Reporting Standards (“MFRSs”) (continued)
(b) New and Revised FRSs, Amendments/Improvements to FRSs, New IC Int and Amendments to IC Int that are issued, not yet effective and have not been adopted early (continued)
Effective for financial periods beginning on
or afterNewICIntIC Int 19 ExtinguishingFinancialLiabilitieswithEquityInstruments 1July2011IC Int 20 StrippingCostsintheProductionPhaseofaSurfaceMine 1January2013
Amendments to IC IntIC Int 14 FRS119–TheLimitonaDefinedBenefitAsset,Minimum
FundingRequirementsandtheirInteraction1July2011
Abriefdiscussionon theabovesignificantnewand revisedFRSs,amendments/improvements toFRSs,newICIntandamendmentstoICIntaresummarisedbelow.Duetothecomplexityofthesenewstandards,thefinancialeffectsoftheiradoptionarecurrentlystillbeingassessedbytheGroupandtheCompany.
FRS 9 Financial Instruments
FRS9specifieshowanentityshouldclassifyandmeasurefinancialassetsandfinancialliabilities.
This standard requires all financial assets to be classified based on how an entity manages itsfinancialassets (itsbusinessmodel)and thecontractualcash flowcharacteristicsof the financialasset.Financialassetsare tobe initiallymeasuredat fairvalue.Subsequent to initial recognition,dependingonthebusinessmodelunderwhichtheseassetsareacquired,theywillbemeasuredateitherfairvalueoratamortisedcost.
Inrespectofthefinancialliabilities,therequirementsaregenerallysimilartooftheformerFRS139.However,thisstandardrequiresthatforfinancialliabilitiesdesignatedasatfairvaluethroughprofitorloss,changesinfairvalueattributabletothecreditriskofthatliabilityaretobepresentedinothercomprehensiveincome,whereastheremainingamountofthechangeinfairvaluewillbepresentedintheprofitorloss.
FRS 10 Consolidated Financial Statements and FRS 127 Separate Financial Statements (Revised)
FRS 10 replaces the consolidation part of the former FRS 127 Consolidated and Separate Financial Statements.TherevisedFRS127willdealonlywithaccountingforinvestmentinsubsidiaries, jointventuresandassociatesintheseparatefinancialstatementsofaninvestorandrequiretheentitytoaccountforsuchinvestmentseitheratcost,orinaccordancewithFRS9.
FRS10bringsaboutconvergencebetweenFRS127andSIC-12,whichinterpretstherequirementsofFRS10 inrelationtospecialpurposeentities.FRS10 introducesanewsinglecontrolmodel toidentifyaparent-subsidiary relationshipbyspecifying that “an investorcontrolsan investeewhentheinvestorisexposed,orhasrights,tovariablereturnsfromitsinvolvementwiththeinvesteeandhastheabilitytoaffectthosereturnsthroughitspowerovertheinvestee”.Itprovidesguidanceonsituationswhen control is difficult to assess such as those involvingpotential voting rights, or incircumstancesinvolvingagencyrelationships,orwheretheinvestorhascontroloverspecificassetsoftheentity,orwheretheinvesteeentityisdesignedinsuchamannerwherevotingrightsarenotthedominantfactorindeterminingcontrol.
Notes to the Financial Statements31 December 2011 (continued)
53advance synergy berhad (1225-D)
annual report 2011
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2.2 New and Revised FRSs, Amendments/Improvements to FRSs, New IC Interpretations (“IC Int”), Amendments to IC Int and New Malaysian Accounting Standards Board (“MASB”) Approved Accounting Standards, Malaysian Financial Reporting Standards (“MFRSs”) (continued)
(b) New and Revised FRSs, Amendments/Improvements to FRSs, New IC Int and Amendments to IC Int that are issued, not yet effective and have not been adopted early (continued)
FRS 11 Joint Arrangements
FRS11supersedestheformerFRS131InterestsinJointVentures.UnderFRS11,anentityaccountsfor its interest ina jointlycontrolledentitybasedon the typeof jointarrangement,asdeterminedbasedonanassessmentof itsrightsandobligationsarisingfromthearrangement.Therearetwotypesofjointarrangementnamelyjointventureorjointoperationasspecifiedinthisnewstandard.Ajointventurerecognisesitsinterestinthejointventureasaninvestmentandaccountforitsusingtheequitymethod.Theproportionateconsolidationmethodisdisallowedinsuchjointarrangement.Ajointoperatoraccountsfortheassets,liabilities,revenueandexpensesrelatedtoitsinterestdirectly.
FRS 12 Disclosures of Interests in Other Entities
FRS 12 is a single disclosure standard for interests in subsidiary companies, joint ventures,associatedcompaniesandunconsolidatedstructuredentities.Thedisclosurerequirements in thisFRS are aimed at providing standardised and comparable information that enable users of financial statementstoevaluatethenatureof,andrisksassociatedwith,theentity’sinterestsinotherentities,andtheeffectsofthoseinterestsonitsfinancialposition,financialperformanceandcashflows.
FRS 13 Fair Value Measurement
FRS 13 defines fair value and sets out a framework formeasuring fair value, and the disclosurerequirements about fair value. This standard is intended to address the inconsistencies in therequirements for measuring fair value across different accounting standards. As defined in thisstandard,fairvalueisthepricethatwouldbereceivedtosellanassetorpaidtotransferaliabilityinanorderlytransactionbetweenmarketparticipantsatthemeasurementdate.
Amendments to FRS 112 Income Taxes
This amendment to FRS 112 addresses the measurement approach for deferred tax assets andliabilities in respect of investment properties which are measured at fair value. The amendmentintroducesarebuttablepresumptionthattheinvestmentpropertyisrecoveredentirelythroughsale.Insuchcases,deferredtaxassetsorliabilitiesareprovidedattaxratesapplicablewhenrecoveringthepropertyentirely throughsale. If thispresumption isrebutted,deferredtaxassetsor liabilitiesare providedbased on tax rates applicablewhen consuming substantially the economic benefitsembodiedinthepropertyoveraperiodoftime(forexampleviarentalincome).
FRS 128 Investments in Associates and Joint Ventures (Revised)
ThisrevisedFRS128incorporatestherequirementsforaccountingforjointventuresintothesameaccountingstandardasthatforaccountingforinvestmentsinassociatedcompanies,astheequitymethodwasapplicableforbothinvestmentsinjointventuresandassociatedcompanies.However,therevisedFRS128exemptstheinvestorfromapplyingequityaccountingwheretheinvestmentintheassociatedcompanyorjointventureisheldindirectlyviaventurecapitalorganisationsormutualfundsandsimilarentities.Insuchcases,theentityshallmeasuretheinvestmentatfairvaluethroughprofitorloss,inaccordancewithFRS9.
Notes to the Financial Statements31 December 2011 (continued)
54advance synergy berhad (1225-D)
annual report 2011
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2.2 New and Revised FRSs, Amendments/Improvements to FRSs, New IC Interpretations (“IC Int”), Amendments to IC Int and New Malaysian Accounting Standards Board (“MASB”) Approved Accounting Standards, Malaysian Financial Reporting Standards (“MFRSs”) (continued)
(c) MASB Approved Accounting Standards, MFRSs
InconjunctionwiththeplannedconvergenceofFRSswithInternationalFinancialReportingStandardsasissuedbytheInternationalAccountingStandardsBoardon1January2012,theMASBhadon19November2011issuedanewMASBapprovedaccountingstandards,MFRSs(“MFRSsFramework”)forapplicationintheannualperiodsbeginningonorafter1January2012.
The MFRSs Framework is mandatory for adoption by all Entities Other Than Private Entities forannualperiodsbeginningonorafter1January2012,with theexceptionofentitiessubject to theapplication of MFRS 141 Agriculture and/or IC Int 15 Agreements for the Construction of Real Estate (“Transitioning Entities”).TheTransitioningEntitiesaregivenanoption todeferadoptionoftheMFRSsframeworkforanadditionaloneyear.TransitioningEntitiesalsoincludesthoseentitiesthatconsolidateorequityaccountorproportionatelyconsolidateanotherentitythathaschosentocontinuetoapplytheFRSsframeworkforannualperiodsbeginningonorafter1January2012.
Accordingly,theGroupandtheCompanywhicharenotTransitioningEntitiesarerequiredtoadopttheMFRSsframeworkforthenextfinancialyear,ie:forthefinancialyearending31December2012,beingthefirstsetoffinancialstatementspreparedinaccordancewiththeMFRSsframework.
As at 31 December 2011, all FRSs issued under the existing FRSs framework are equivalent tothe MFRSs issued under MFRSs framework except for differences in relation to the transitionalprovisions,theadoptionofMFRS141Agriculture and IC Int 15 Agreements for the Construction of Real Estateaswellasdifferences ineffectivedatescontained incertainof theexistingFRSs. Assuch,except thoseasdiscussedbelow, themaineffectsarising fromthe transition to theMFRSsFrameworkhasbeendiscussedinNote2.2(c)tothefinancialstatements.TheeffectisbasedontheGroup’s and theCompany’sbest estimates at reportingdate. The financial effectmaychangeoradditionaleffectsmaybeidentified,priortothecompletionoftheGroup’sandtheCompany’sfirstMFRSsbasedfinancialstatements.
Application of MFRS 1: First-time Adoption of Malaysian Financial Reporting Standards (“MFRS 1”)
MFRS1requirescomparativeinformationtoberestatedasiftherequirementsofMFRSseffectiveforannualperiodsbeginningonorafter1stJanuary2012havealwaysbeenapplied,exceptwhenMFRS 1 allows certain elective exemptions from such full retrospective application or prohibitsretrospective application of some aspects ofMFRSs. TheGroup and the Company are currentlyassessing the impactofadoptionofMFRS1, including identificationof thedifferences inexistingaccountingpoliciesascomparedtothenewMFRSsandtheuseofoptionalexemptionsasprovidedforinMFRS1.Asatthedateofauthorisationofissueofthefinancialstatements,accountingpolicydecisionsorelectionshavenotbeen finalised.Thus, the impactofadoptionofMFRS1cannotbedeterminedandestimatedreliablyuntiltheprocessiscompleted.
MFRS 141 Agriculture
MFRS141requiresabiologicalassetshallbemeasuredoninitialrecognitionandattheendofeachreportingperiodatitsfairvaluelesscoststosell,exceptwherethefairvaluecannotbemeasuredreliably.MFRS141also requiresagriculturalproduceharvested fromanentity’sbiological assetsshallbemeasuredatitsfairvaluelesscoststosellatthepointofharvest.Gainsorlossesarisingoninitial recognition of a biological asset and the agricultural produce at fair value less costs to sell and from a change in fair value less costs to sell of a biological asset shall be included in the profit or loss fortheperiodinwhichitarises.TheGroupdoesnotexpectanyimpactonthefinancialstatementsarisingfromtheadoptionofthisstandard.
Notes to the Financial Statements31 December 2011 (continued)
55advance synergy berhad (1225-D)
annual report 2011
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2.2 New and Revised FRSs, Amendments/Improvements to FRSs, New IC Interpretations (“IC Int”), Amendments to IC Int and New Malaysian Accounting Standards Board (“MASB”) Approved Accounting Standards, Malaysian Financial Reporting Standards (“MFRSs”) (continued)
(c) MASB Approved Accounting Standards, MFRSs (continued)
IC Int 15 Agreements for the Construction of Real Estate
ICInt15establishesthedeveloperwillhavetoevaluatewhethercontrolandsignificantrisksandrewardsof the ownership of work in progress, can be transferred to the buyer as construction progressesbeforerevenuecanberecognised.TheGroupiscurrentlyassessingtheimpactoftheadoptionofthisInterpretation.
2.3 Significant Changes in Accounting Policies
Except for the changes in accounting policies arising from the adoption of the revised FRS 3 and theamendmentstoFRS127asdetailedinNote2.2(a)tothefinancialstatementsaswellasthenewdisclosuresrequiredundertheAmendmentstoFRS7,theDirectorsexpectthattheadoptionoftheotherstandardsandinterpretationsabovewillhavenomaterial impactonthefinancialstatements intheperiodof initialapplication.
2.4 Significant Accounting Policies
Thefollowingaccountingpolicieshavebeenusedconsistentlyindealingwithitemswhichareconsideredmaterialinrelationtothefinancialstatements:
(a) Basis of Consolidation
The consolidated financial statements include the financial statements of the Company and itssubsidiariesmadeuptotheendofthefinancialyear.
Thefinancialstatementsoftheparentanditssubsidiariesarealldrawnuptothesamereportingdate.
Subsidiaries are consolidated using the acquisition method of accounting. Under the acquisitionmethodofaccounting,subsidiariesarefullyconsolidatedfromthedateonwhichcontrolistransferredtotheGroupandarede-consolidatedfromthedatethatcontrolceases.
Theconsiderationtransferredforacquisitionofasubsidiaryisthefairvaluesoftheassetstransferred,the liabilities incurred and the equity interests issued by the Group. The consideration transferredincludesthefairvalueofanyassetorliabilityresultingfromacontingentconsiderationarrangement.Acquisition related costs are expensed as incurred. Identifiable assets acquired and liabilities andcontingent liabilities assumed in a business combination are measured initially at their fair values at theacquisitiondate.
Inabusinesscombinationachievedinstages,previouslyheldequityinterestintheacquireeisre-measuredtofairvalueattheacquisitiondateandanycorrespondinggainorlossisrecognisedinprofitorloss.
TheexcessofthecostoftheacquisitionoverthenetfairvalueoftheGroup’sshareoftheidentifiablenet assets, liabilities and contingent liabilities represents goodwill. Thepolicy for the goodwill is inaccordancewithNote2.4(i)tothefinancialstatements.AnyexcessofthenetfairvalueoftheGroup’sshare of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition isrecognisedimmediatelyinprofitorloss.
Intra-grouptransactionsandbalances,andresultingunrealisedgainsareeliminatedonconsolidation.Unrealised losses resulting from intra-group transactions are also eliminated on consolidation tothe extent of the cost of the asset that canbe recovered. The extent of the costs that cannot berecoveredistreatedasimpairmentlossesasappropriate.Wherenecessary,adjustmentsaremadetothefinancialstatementsofthesubsidiariestoensureconsistencywiththeaccountingpoliciesadoptedbytheGroup.
Notes to the Financial Statements31 December 2011 (continued)
56advance synergy berhad (1225-D)
annual report 2011
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2.4 Significant Accounting Policies (continued)
(a) Basis of Consolidation (continued)
Non-controlling interests at the end of the reporting period, being the equity in a subsidiarynot attributable directly or indirectly to the equity holders of the Company, are presented in theconsolidated statement of financial position and statement of changes in equity within equity,separately fromequityattributable to theownersof theCompany.Non-controlling interests in theresults of the Group is presented in the consolidated financial statement of comprehensive income as anallocationoftheprofitorlossandthecomprehensiveincomefortheyearbetweennon-controllinginterests and the owners of theCompany. Losses applicable to the non-controlling interests in asubsidiaryareallocatedtothenon-controllinginterestsevenifthatresultsinadeficitbalance.
Foreachbusinesscombination,theGroupelectswhethertomeasurethenon-controllinginterestsintheacquireeattheacquisitiondateeitheratfairvalueorattheproportionateshareoftheacquiree’sidentifiablenetassets.
Changes in theGroup’s equity interest in a subsidiary that do not result in a loss of control areaccountedforasequitytransactions.Insuchcircumstances,thecarryingamountsofthecontrollingandnon-controllinginterestsareadjustedtoreflectthechangesintheirrespectiveinterestsinthesubsidiary.Anydifferencebetweentheamountbywhichthenon-controllinginterestisadjustedandthefairvalueoftheconsiderationpaidorreceivedisrecogniseddirectlyonshareholders’equity.
Upon the lossof control of a subsidiary, theGroupderecognises the assets and liabilities of thesubsidiary,anynon-controllinginterestsandtheothercomponentsofequityrelatedtothesubsidiary.Anygainorlossarisingonthelossofcontrolisrecognisedinprofitorloss.IftheGroupretainsanyinterestintheprevioussubsidiary,thensuchinterestismeasuredatfairvalueatthedatethecontrolis lost.Subsequently, it isaccountedforasanequity investeeorasanavailable forsale financialassetdependingonthelevelofinfluenceretained.
(b) Subsidiaries
SubsidiariesarethosecorporationsinwhichtheGrouphasthepowertoexercisecontroloverthefinancialandoperatingpoliciessoastoobtainbenefitsfromtheiractivities,generallyaccompanyinga shareholding of more than one half of the voting rights. The existence and effect of potentialvotingrightsthatarecurrentlyexercisableorconvertibleareconsideredwhenassessingwhethertheGrouphassuchpoweroveranotherentity.
In the Company’s separate financial statements, investments in subsidiaries are stated at costsless accumulated impairment losses, if any. The policy for the recognition and measurement ofimpairment losses is in accordance with Note 2.4(k) to the financial statements. On disposal ofsuch investments, thedifferencebetween thenetdisposalproceedsand theircarryingamount isrecognisedasgainorlossinprofitorloss.
IntheGroup’sconsolidatedfinancialstatements,thedifferencebetweenthenetdisposalproceedsand the Group’s share of the subsidiary’s net assets as of the date of disposal including the cumulative amount of any exchange differences that relate to the subsidiary is recognised in profit or lossattributabletotheparent.
Notes to the Financial Statements31 December 2011 (continued)
57advance synergy berhad (1225-D)
annual report 2011
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2.4 Significant Accounting Policies (continued)
(c) Associates
Associatesareentities,includingunincorporatedentities,inwhichtheGrouphassignificantinfluence,butnotcontrol,overthefinancialandoperatingpolicies.
Investments in associates, other than those for which there is a published price quotation, areaccountedfor in theCompany’sseparatefinancialstatementsatcost lessaccumulated impairmentlosses,ifany.ThepolicyfortherecognitionandmeasurementofimpairmentlossesisinaccordancewithNote2.4(k)tothefinancialstatements.
Investmentsinassociatesareaccountedforintheconsolidatedfinancialstatementsusingtheequitymethodofaccounting.Undertheequitymethod,investmentsinassociatesarestatedintheconsolidatedstatementoffinancialpositionatcostadjustedforpostacquisitionchangesintheGroup’sshareofnetassetsoftheassociates,lessdistributionreceivedandlessanyaccumulatedimpairmentlosses,ifany.ThepolicyfortherecognitionandmeasurementofimpairmentlossesisinaccordancewithNote2.4(k)tothefinancialstatements.
The consolidated statement of comprehensive income reflects the share of the associates’ resultsaftertax.Wheretherehasbeenachangerecogniseddirectly intheequityofassociates,theGrouprecognisesitsshareofsuchchanges.UnrealisedgainsorlossesontransactionsbetweentheGroupanditsassociatesareeliminatedtotheextentoftheGroup’sinterestinassociates.WhentheGroup’sshare of losses exceeds its interest in an associate, the Group does not recognise further lossesexcept to theextent that theGrouphas legalorconstructiveobligationsormadepaymentson thebehalfoftheassociate.
Goodwillrelatingtoanassociateisincludedinthecarryingamountoftheinvestment.AnyexcessoftheGroup’sshareofthenetfairvalueoftheassociate’sidentifiableassets,liabilitiesandcontingentliabilities over the cost of the investment is included as income in the determination of the Group’s shareoftheassociate’sprofitorlossintheperiodinwhichtheinvestmentisacquired.
Aftertheapplicationoftheequitymethod,theGroupdetermineswhetheritisnecessarytorecogniseanyimpairmentlosswithrespecttotheGroup’snetinvestmentintheassociate.TheGroupdeterminesateachreportingdatewhetherthereisanyobjectiveevidencethattheinvestmentintheassociateisimpaired.Inviewofthis,theGroupcalculatestheimpairmentasthedifferencebetweentherecoverableamountoftheassociateanditscarryingvalueandrecognisetheamountintheshareofprofitofanassociateintheprofitorloss.ThepolicyfortherecognitionandmeasurementofimpairmentlossesisinaccordancewithNote2.4(k)tothefinancialstatements.
TheassociateisequityaccountedforfromthedatetheGroupobtainssignificantinfluenceuntilthedatetheGroupceasestohavesignificant influenceovertheassociate.Uponlossofsignificant influenceovertheassociate,theGroupmeasuresandrecognisesanyretaininginvestmentatitsfairvalue.Anydifferencebetweenthecarryingamountoftheassociateuponlossofsignificantinfluenceandthefairvalueoftheretainedinvestmentandproceedsfromdisposalisrecognisedinprofitorloss.
ThemostrecentavailableauditedormanagementfinancialstatementsoftheassociatesareusedbytheGroupinapplyingtheequitymethod.WherethedatesoftheauditedfinancialstatementsusedarenotcoterminouswiththoseoftheGroup,theshareofresultsisarrivedatfromthelastauditedfinancialstatements available and management financial statements to the end of the accounting period.Uniformaccountingpoliciesareadoptedforliketransactionsandeventsinsimilarcircumstances.
On disposal of such investment, the differences between net disposals proceed and the carryingamountoftheinvestmentinanassociateisreflectedasagainorlossondisposalinprofitorloss.
Notes to the Financial Statements31 December 2011 (continued)
58advance synergy berhad (1225-D)
annual report 2011
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2.4 Significant Accounting Policies (continued)
(d) Joint Venture
A joint venture is a contractual arrangement whereby the Group and other parties undertake aneconomicactivity that issubject to jointcontrol,which iswhen thestrategicfinancialandoperatingpolicydecisionsrelatingtotheactivitiesrequiretheunanimousconsentofthepartiessharingcontrol.
InvestmentsinjointventureareaccountedforintheCompany’sseparatefinancialstatementsatcostlessimpairmentlosses,ifany.ThepolicyfortherecognitionandmeasurementofimpairmentlossesisinaccordancewithNote2.4(k)tothefinancialstatements.
WhereaGroupentityundertakes itsactivitiesunder jointventurearrangementsdirectly, theGroup’sshareofjointlycontrolledassetsandanyliabilitiesincurredjointlywithotherventurersarerecognisedinthefinancialstatementsoftherelevantentityandclassifiedaccordingtotheirnature.Liabilitiesandexpenses incurreddirectly inrespectof interests in jointlycontrolledassetsareaccountedforonanaccrualbasis.IncomefromthesaleoruseoftheGroup’sshareoftheoutputofjointlycontrolledassets,anditsshareofjointventureexpenses,arerecognisedwhenitisprobablethattheeconomicbenefitsassociatedwiththetransactionswillflowto/fromtheGroupandtheiramountcanbemeasuredreliably.
Jointventurearrangementsthatinvolvetheestablishmentofaseparateentityinwhicheachventurerhasan interest are referred toas jointly controlledentities. TheGroup reports its interests in jointlycontrolledentitiesusingproportionateconsolidation.TheGroup’sshareoftheassets,liabilities,incomeandexpensesofjointlycontrolledentitiesarecombinedwiththeequivalentitemsintheconsolidatedfinancialstatementsonaline-by-linebasis.ThejointventureisproportionatelyconsolidatedfromthedatetheGroupobtainsjointcontroluntilthedatetheGroupceasestohavejointcontroloverthejointventure.
AdjustmentsaremadeintheGroup’sconsolidatedfinancialstatementstoeliminatetheGroup’sshareofintragroupbalances,incomeandexpensesandunrealisedprofitsandlossesontransactionsbetweentheGroupanditsjointlycontrolledentities.UnrealisedprofitsareeliminatedtotheextentoftheGroup’sinterestinthejointventure.Unrealisedlossesareeliminatedinthesamewayasunrealisedgains,butonlytotheextentthatthereisnoimpairment.
ThefinancialstatementsofthejointventurearepreparedasofthesamereportingdateastheGroup.Wherenecessary,adjustmentsaremadetobringtheaccountingpoliciesinlinewiththoseoftheGroup.
Ondisposalofsuchinvestment,thedifferencesbetweennetdisposalsproceedandthecarryingamountoftheinvestmentinajointventureisreflectedasagainorlossondisposalinprofitorloss.
(e) Property, Plant and Equipment and Depreciation
All property, plant and equipmentwere initially stated at cost. Certain buildingswere subsequentlyshown at market value, based on valuations of external independent valuers, less subsequentaccumulateddepreciationand impairment losses, ifany.Allotherproperty,plantandequipmentarestatedathistoricalcostlessaccumulateddepreciationandimpairmentloss,ifany.Thepolicyfortherecognitionandmeasurementof impairment losses is inaccordancewithNote2.4(k) to thefinancialstatements.
Costincludesexpenditurethatisdirectlyattributabletotheacquisitionoftheasset.Whensignificantpartsofanitemofproperty,plantandequipmenthavedifferentusefullives,theyareaccountedforasseparateitemsofproperty,plantandequipment.
Thecostofreplacingpartofanitemofproperty,plantandequipmentisincludedintheasset’scarryingamount or recognised as a separate asset, as appropriate, onlywhen it is probable that the futureeconomicbenefitsassociatedwiththepartwillflowtotheGroupanditscostcanbemeasuredreliably.The carrying amount of the replaced part is derecognised. All other repairs and maintenance arechargedtoprofitorlossasincurred.
Notes to the Financial Statements31 December 2011 (continued)
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2.4 Significant Accounting Policies (continued)
(e) Property, Plant and Equipment and Depreciation (continued)
Freeholdlandsarenotdepreciatedasithasaninfinitelife.Systemsinprogressandconstructionworkinprogressarenotdepreciateduntilitisreadyforitsintendeduse.Uponcompletion,constructionworksinprogressaretransferredtocategoriesofproperty,plantandequipment,dependingonthenatureoftheassets.Depreciationonbusesunderrefurbishmentcommenceswhenthebussesarereadyfortheirintendeduse.
Allotherproperty,plantandequipmentaredepreciatedonastraightlinebasistowriteoffthecostofeachassettoitsresidualvalueovertheestimatedusefullivesoftheassetsconcerned.Theannualratesusedforthispurposeareasfollows:
Hotelproperties(buildings) 30-50yearsBuildings 0.5%-5%Plantandmachinery 10%-20%Motorvehicles 15%-20%Furniture,fittingsandequipment 2%-25%Renovation 10%-20%Computerequipmentandsoftware 20%-33.33%Buses in operation Over 7 yearsTelecommunications,researchanddevelopmentequipment 20%-33.33%
Crockery, glassware, cutleries, linen and kitchen utensils are capitalised at the minimum levelrequiredfornormaloperations.Replacementsarewrittenofftoprofitorlossinthefinancialyearinwhichtheyareincurred.
The residual valuesanduseful livesofproperty,plantandequipmentare reviewed,andadjustedifappropriate,atendofeachfinancialyear.Theeffectsofanyrevisionsoftheresidualvaluesandusefullivesareincludedinprofitorlossforthefinancialyearinwhichthechangesarise.
Ateachfinancialyearend,theGroupassesswhetherthereisanyindicationofimpairment.Ifsuchindicationsexist,ananalysisisperformedtoassesswhetherthecarryingamountoftheassetisfullyrecoverable.Awritedownismadeifthecarryingamountexceedstherecoverable.Thepolicyfortherecognitionandmeasurementof impairment loss is inaccordancewithNote2.4(k)tothefinancialstatements.
Fullydepreciatedassetsareretainedintheaccountsuntiltheassetsarenolongerinuse.
Anitemofproperty,plantandequipmentisderecognisedupondisposalorwhennofutureeconomicbenefitsareexpectedfromitsuseordisposal.Anygainorlossarisingonderecognitionoftheassetisincludedinprofitorlossinthefinancialyeartheassetisderecognised.
(f) Revaluation of Assets
Freehold land and buildings at valuation are revaluedwith sufficient regularity to ensure that thecarryingvaluesoftherevaluedlandandbuildingsdonotdiffermateriallyfromthatwhichwouldbedeterminedusingfairvalueatendofthefinancialyear.
Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amountoftheassetandthenetamountisrestatedtotherevaluedamountoftheasset.Anysurplusordeficit arising from the revaluationswillbedealtwith in theRevaluationReserveAccount.Anydeficitisset-offagainsttheRevaluationReserveAccountonlytotheextentofthesurpluscreditedfrom the previous revaluation of the land and buildings and the excess of the deficit is chargedto profit or loss. Upon disposal or retirement of an asset, any revaluation reserve relating to theparticularassetistransferreddirectlytoretainedearnings.
Notes to the Financial Statements31 December 2011 (continued)
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2.4 Significant Accounting Policies (continued)
(g) Investment Property
Investmentproperty,whichispropertyheldtoearnrentalsand/orforcapitalappreciation,ismeasuredinitiallyatitscost,includingtransactioncosts.Subsequenttoinitialrecognition,investmentpropertyismeasuredatfairvalue.Gainsorlossesarisingfromchangesinthefairvalueofinvestmentpropertyareincludedinprofitorlossfortheperiodinwhichtheyarise.
Investment property is subject to renovations or improvements at regular intervals. The costs ofmajorrenovationsandimprovementsarecapitalisedasadditionsandthecarryingamountsofthereplacedcomponentsarewrittenofftoprofitorloss.Thecostsofmaintenance,repairsandminorimprovementarechargedtoprofitorlosswhenincurred.
On disposal or retirement of an investment property, the difference between the net disposalproceedsandthecarryingamountoftheassetisrecognisedinprofitorloss.
(h) Leases and Hire Purchase
(i) Finance Leases and Hire Purchase
Assetsfinancedbyfinanceleasesandhirepurchasearrangementswhichtransfersubstantiallyall the risks and rewards of ownership to the Group are capitalised as property, plant andequipment,andthecorrespondingobligationsaretreatedasliabilities.Theassetssocapitalisedaredepreciatedinaccordancewiththeaccountingpolicyonproperty,plantandequipment.
Assetsacquiredbywayoffinanceleaseandhirepurchasearrangementsarestatedatanamountequaltotheloweroftheirfairvaluesandthepresentvalueofminimumleasepaymentsattheinceptionoftheleases,lessaccumulateddepreciationandimpairmentlosses,ifany.Thepolicyfor the recognition andmeasurement of impairment losses is in accordancewith Note 2.4(k)tothefinancialstatements.Thecorrespondingliabilityisincludedinthestatementoffinancialpositionasborrowings.Incalculatingthepresentvalueofminimumleasepayments,thediscountfactorusedistheinterestrateimplicitinthelease,whenitispracticabletodetermine;otherwise,theGroup’sincrementalborrowingrateisused.Property,plantandequipmentacquiredunderfinance leases and hire purchase are depreciated over the shorter of the estimated useful life of theassetandtheleaseterm.
Leasepaymentsareapportionedbetweenthefinancecostsandthereductionoftheoutstandingliability. Finance cost,which represent the difference between the total leasing commitmentsandthefairvalueoftheassetsacquired,arerecognisedasanexpenseinprofitorlossovertheterm of the relevant lease so as to produce a constant periodic rate of charge on the remaining balanceoftheobligationsforeachaccountingperiod.
(ii) Operating Leases
Anoperatingleaseisaleaseotherthanafinancelease.Leasepaymentsunderoperatingleasearerecognisedasanexpenseinprofitorlossonastraightlinebasisovertheleaseperiod.
(iii) Leases of Land and Buildings
Forleasesoflandandbuildings,thelandandbuildingselementsareconsideredseparatelyforthe purpose of lease classification and these leases are classified as operating or finance leases inthesamewayasleasesofotherassets.
Notes to the Financial Statements31 December 2011 (continued)
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2.4 Significant Accounting Policies (continued)
(h) Leases and Hire Purchase (continued)
(iii) Leases of Land and Buildings (continued)
Theminimum leasepayments includingany lump-sumupfrontpaymentsmade toacquire theinterestinthelandandbuildingareallocatedbetweenthelandandthebuildingelementsofthelease in proportion to the relative fair values for leasehold interest in the land element and the buildingelementoftheleaseattheinceptionofthelease.
Leaseholdlandthatnormallyhasanindefiniteeconomiclifeandwheretheleasedoesnottransfersubstantiallyalltherisksandrewardsincidentaltoownershipistreatedasanoperatinglease.The lump-sum upfront lease payment made on entering into or acquiring leasehold land areaccounted for as prepaid lease payments and are amortised over the lease term on a straight line basisexceptforleaseholdlandthatisclassifiedasanassetheldunderpropertydevelopment.Leaseholdlandwhichinsubstanceisafinanceleaseclassifiedasproperty,plantandequipment.
ThebuildingselementisclassifiedasafinanceoroperatingleaseinaccordancewithNote2.4(h)(i)and(h)(ii)tothefinancialstatements.Iftheleasepaymentcannotbeallocatedreliablybetweenthesetwoelements,theentireleaseisclassifiedasafinancelease,unlessitisclearthatbothelementsareoperatinglease,inwhichcasetheentireleaseisclassifiedasanoperatinglease.
Fora leaseof landandbuilding inwhichtheamount thatwould initiallyberecognised for thelandelementisimmaterial,thelandandbuildingsistreatedasasingleunitforthepurposeofleaseclassificationandisaccordinglyclassifiedasafinanceoroperatinglease.Insuchacase,theeconomiclifeofthebuildingsisrecognisedastheeconomiclifeoftheentireleasedassets.
(i) Intangible Assets
(i) Goodwill
GoodwillacquiredinabusinesscombinationisrecognisedasanassetattheacquisitiondateandisinitiallymeasuredatcostbeingtheexcessofthecostofbusinesscombinationovertheGroup’sinterestinthenetfairvalueoftheidentifiableassets,liabilitiesandcontingentliabilities.Afterinitialrecognition,goodwillismeasuredatcostlessaccumulatedimpairmentlosses,ifany.ThepolicyfortherecognitionandmeasurementofimpairmentlossesisinaccordancewithNote2.4(k) to the financialstatements.Goodwill isnotamortisedbut instead tested for impairmentannuallyormorefrequentlyifeventsorchangesincircumstancesindicatethatthecarryingvaluemaybeimpaired.
For the purpose of impairment testing, goodwill is allocated, at the acquisition date, to eachof the Group’s cash-generating units that are expected to benefit from the synergies of thecombination, irrespectiveofwhetherotherassetsor liabilitiesof theacquireeareassigned tothoseunits.Acash-generatingunittowhichgoodwillhasbeenallocatedistestedforimpairmentannually,andwheneverthere isan indicationthattheunitmaybe impaired,bycomparingthecarryingamountoftheunit,includingthegoodwill,withtherecoverableamountoftheunit.Animpairment loss is recognised foracash-generatingunitwhen the recoverableamountof theunitislessthanthecarryingamountoftheunit.Anyimpairmentlossrecognisedisfirstallocatedtoreducethecarryingamountofanygoodwillallocatedtotheunitandthen,totheotherassetsoftheunitwithinprorataonthebasisofthecarryingamountofeachapplicableassetintheunit.Anyimpairmentlossrecognisedforgoodwillisnotreversed.
Notes to the Financial Statements31 December 2011 (continued)
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2.4 Significant Accounting Policies (continued)
(i) Intangible Assets (continued)
(i) Goodwill (continued)
Wheregoodwillformspartofacash-generatingunitandpartoftheoperationwithinthatcash-generating-unitisdisposedof,thegoodwillassociatedwiththeoperationdisposedofisincludedin thecarryingamountof theoperationwhendetermining thegainor lossondisposal of theoperation. Goodwill disposed of in this circumstance is measured based on the relative fairvaluesoftheoperationdisposedofandtheportionofthecash-generatingunitretained.
Goodwillandfairvalueadjustmentsarisingfromtheacquisitionofforeignoperationsaretreatedas assets and liabilities of the foreign operations and are recorded in the functional currency of theforeignoperationsandtranslatedinaccordancewithNote2.4(aa)tothefinancialstatements.
(ii) Other Intangible Assets
Other intangible assets are recognised only when identifiable, control and economic benefitprobabilitycriteriaaremet.
The Group recognises at the acquisition date separately from goodwill, an intangible assetof the acquiree if the fair value can be measured reliably, irrespective of whether the assethad been recognised by the acquiree before the business combination. In-process researchand development projects acquired in such combinations are recognised as an asset even ifsubsequentexpenditure iswrittenoffbecause thecriteriaspecified in thepolicy for researchanddevelopmentisnotmet.
Intangible assets are initially measured at cost. The cost of intangible assets acquired in abusinesscombinationistheirfairvaluesasatthedateofacquisition.
Afterinitialrecognition,intangibleassetsarecarriedatcostlessaccumulatedamortisationandanyaccumulatedimpairmentlosses,ifany.ThepolicyfortherecognitionandmeasurementofimpairmentlossesisinaccordancewithNote2.4(k)tothefinancialstatements.Theusefullivesofintangibleassetsareassessedtobeeitherfiniteorindefinite.Intangibleassetswithfinitelivesare amortised on a straight line basis over the estimated economic useful lives and are assessed foranyindicationthattheassetmaybeimpaired.Ifanysuchindicationexists,theentityshallestimate the recoverable amount of the asset. The amortisation period and the amortisationmethodforanintangibleassetwithafiniteusefullifearereviewedatleastateachfinancialyearend.Theamortisationexpenseonintangibleassetswithfinitelivesisrecognisedinprofitorlossandisincludedwithintheotheroperatingexpenseslineitem.
An intangibleassethasan indefiniteuseful lifewhenbasedon theanalysisofall the relevantfactors;thereisnoforeseeablelimittotheperiodoverwhichtheassetisexpectedtogeneratenetcashinflowstotheGroup.Intangibleassetswithindefiniteusefullivesaretestedforimpairmentannually and whenever there is an indication that the carrying value may be impaired. Suchintangibleassetsarenotamortised.Theirusefullivesarereviewedannuallytodeterminewhethereventsandcircumstancescontinuetosupporttheindefiniteusefullifeassessmentfortheasset.Iftheydonot,thechangeintheusefullifeassessmentforindefinitetofiniteisaccountedforasachangeinaccountingestimateinaccordancewithFRS108AccountingPolicies,ChangesinAccountingEstimatesandErrors.
Expenditureonanintangibleitemthatisinitiallyrecognisedasanexpenseisnotrecognisedaspartofthecostofanintangibleassetatalaterdate.
Notes to the Financial Statements31 December 2011 (continued)
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2.4 Significant Accounting Policies (continued)
(i) Intangible Assets (continued)
(ii) Other Intangible Assets (continued)
Anintangibleassetisderecognisedondisposalorwhennofutureeconomicbenefitsareexpectedfromitsuse.Thegainorlossarisingfromthederecognitiondeterminedasthedifferencebetweenthenetdisposalproceeds,ifany,andthecarryingamountoftheassetisrecognisedinprofitorlosswhentheassetisderecognised.
Research and Development Expenditure
Expenditure on research activities is recognised as an expense in the period in which it isincurred.
An internally-generated intangible asset arising from development (or from the developmentphaseofaninternalproject)isrecognised,if,anyonlyif,allthefollowinghavebeendemonstrated:- thetechnicalfeasibilityofcompletingtheintangibleassetsothatitwillbeavailableforuse
orsale;- theintentiontocompletetheintangibleassetanduseorsellit;- theabilitytouseorselltheintangibleasset;- howtheintangibleassetwillgenerateprobablefutureeconomicbenefits;- the availability of adequate technical, financial and other resources to complete the
developmentandtouseorselltheintangibleassets;and- theabilitytomeasurereliablytheexpenditureattributabletotheintangibleassetduringits
development.
The amount initially recognised for internally-generated intangible assets is the sum of theexpenditureincurredfromthedatewhentheintangibleassetfirstmeetstherecognitioncriterialistedabove.Whereno internally generated intangible asset canbe recognised,developmentexpenditureischargedtoprofitorlossintheperiodinwhichitisincurred.
Subsequenttoinitialrecognition,internally-generatedintangibleassetsarereportedatcostlessaccumulatedamortisationandaccumulatedimpairmentlosses,onthesamebasisasintangibleassetsacquiredseparately.
Theamortisationperiodandamortisationmethodof intangibleassetsother thangoodwillarereviewedatleastatendofeachfinancialyear.Theeffectsofanyrevisionarerecognisedinprofitorlosswhenthechangesarise.
Intellectual Property
Expenditureonacquiredintellectualpropertyiscapitalisedandamortisedusingthestraightlinemethodovertheirexpectedbenefits,notexceedingaperiodoffive(5)years.
Subsequenttoinitialrecognition,acquiredintellectualpropertyisstatedatcostlessaccumulatedamortisationandaccumulatedimpairmentlosses,ifany.
ThepolicyfortherecognitionandmeasurementofimpairmentlossesisinaccordancewithNote2.4(k)tothefinancialstatements.
Notes to the Financial Statements31 December 2011 (continued)
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2.4 Significant Accounting Policies (continued)
(j) Financial Assets
Financial assets are recognised in the statement of financial position when, and only when, theGroupandtheCompanybecomeapartytothecontractualprovisionsofthefinancialinstrument.
Oninitialrecognition,financialassetsaremeasuredatfairvalue,plustransactioncostsforfinancialassetsnotat’fairvaluethroughprofitorloss’.
Effective interestmethod isamethodofcalculating theamortisedcostof financialassetsandofallocating the interest income over the relevant period. The effective interest rate is the rate thatexactlydiscountsestimatefuturecashreceiptsthroughtheexpectedlifeofthefinancialassetsorashorterperiodtothenetcarryingamountofthefinancialassets.
After initial recognition, financialassetsareclassified intooneof fourcategories: financialassetsat ‘fair value through profit or loss’, ‘held-to-maturity’ investments, loans and receivables and‘available-for-sale’financialassets.
(i) Financial Assets at Fair Value Through Profit or Loss
Fair value throughprofitor losscategorycomprises financialassets thatareheld for trading,includingderivatives(exceptforaderivativethatisafinancialguaranteecontractoradesignatedand effective hedging instrument) or financial assets that are specifically designated into this categoryuponinitialrecognition.
Derivatives that are linked to andmustbe settledbydeliveryof unquotedequity instrumentswhosefairvaluescannotbereliablymeasuredaremeasuredatcost.
Otherfinancialassetscategorisedasfairvaluethroughprofitorlossaresubsequentlymeasuredattheirfairvalueswiththegainorlossrecognisedinprofitorloss.
(ii) Loans and Receivables
Financialassetswithfixedordeterminablepaymentsthatarenotquotedinanactivemarketareclassifiedasloansandreceivables.
Subsequentto initialrecognition, loansandreceivablesaremeasuredatamortisedcostusingtheeffectiveinterestmethod.Gainsandlossesarerecognisedinprofitorlosswhentheloansandreceivablesarederecognisedorimpaired,andthroughtheamortisationprocess.
Loansandreceivablesareclassifiedascurrentassets,exceptforthosehavingmaturitydateslaterthan12monthsafterthereportingdatewhichareclassifiedasnon-current.
(iii) Held-to-Maturity Investments
FinancialassetswithfixedordeterminablepaymentsandfixedmaturityareclassifiedasheldtomaturitywhentheGrouphasthepositiveintentionandabilitytoholdtheinvestmenttomaturity.
Subsequenttoinitialrecognition,held-to-maturityinvestmentsaremeasuredatamortisedcostusing the effective interest method. Gains and losses are recognised in profit or loss whenthe held-to-maturity investments are derecognised or impaired, and through the amortisationprocess.
Held-to-maturity investments are classified as non-current assets, except for those havingmaturitywithin12monthsafterthereportingdatewhichareclassifiedascurrent.
Notes to the Financial Statements31 December 2011 (continued)
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2.4 Significant Accounting Policies (continued)
(j) Financial Assets (continued)
(iv) Available-for-Sale Financial Assets
Available-for-salefinancialassetsarefinancialassetsthataredesignatedasavailableforsaleorarenotclassifiedinanyofthethreeprecedingcategories.
Afterinitialrecognition,available-for-salefinancialassetsaremeasuredatfairvalue.Anygainsorlosses fromchanges in fairvalueof thefinancialassetsare recognised inothercomprehensiveincome,exceptthatimpairmentlosses,foreignexchangegainsandlossesonmonetaryinstrumentsand interestcalculatedusing theeffective interestmethodare recognised inprofitor loss.Thecumulativegainorlosspreviouslyrecognisedinothercomprehensiveincomeisreclassifiedfromequitytoprofitorlossasareclassificationadjustmentwhenthefinancialassetisderecognised.Interest income calculated using the effective interest method is recognised in profit or loss.Dividendsonavailable-for-saleequityinstrumentarerecognisedinprofitorlosswhentheGroup’sandtheCompany’srighttoreceivepaymentisestablished.
Investmentsinequityinstrumentswhosefairvaluecannotbereliablymeasuredaremeasuredatcostlessaccumulatedimpairmentloss,ifany.
Available-for-salefinancialassetsareclassifiedasnon-currentassetsunlesstheyareexpectedtoberealisedwithin12monthsafterthereportingdate.
Afinancialassetisderecognisedwherethecontractualrighttoreceivecashflowsfromtheassetshasexpired.Onderecognitionofafinancialassetinitsentirety,thedifferencebetweenthecarryingamount and the sum of the consideration received and any cumulative gain or loss that had been recognisedinothercomprehensiveincomeisrecognisedinprofitorloss.
Regularwaypurchasesor salesarepurchasesor salesof financial assets that requiredeliveryofassetswithin theperiodgenerallyestablishedbyregulationorconvention in themarketplaceconcerned.Allregularwaypurchasesandsalesoffinancialassetsarerecognisedandderecognisedon the tradedate i.e. thedate that theGroupand theCompanycommit topurchaseorsell theasset.
(k) Impairment
(i) Impairment of Financial Assets
All financial assets (except for financial assets categorised as fair value through profit or loss,investment insubsidiariesandassociates)areassessedateachreportingdatewhetherthere isanyobjectiveevidenceofimpairmentasaresultofoneormoreeventshavinganimpactontheestimatedfuturecashflowsoftheasset.Lossesexpectedasaresultoffutureevents,nomatterhowlikely,arenotrecognised.Foranequityinstrument,asignificantorprolongeddeclineinthefairvaluebelowitscostisanobjectiveevidenceofimpairment.
An impairment loss in respect of loans and receivables and held-to-maturity investments isrecognisedinprofitorlossandismeasuredasthedifferencebetweentheasset’scarryingamountandthepresentvalueofestimatedfuturecashflowsdiscountedat theasset’soriginaleffectiveinterestrate.Thecarryingamountoftheassetisreducedthroughtheuseofanallowanceaccount.
An impairment loss in respectofavailable-for-salefinancialassets is recognised in theprofitorlossandismeasuredasthedifferencebetweentheasset’sacquisitioncost(netofanyprincipalrepaymentandamortisation)andtheasset’scurrentfairvalue,lessanyaccumulatedimpairmentloss previously recognised. Where a decline in the fair value of an available-for-sale financialasset has been recognised in the other comprehensive income, the cumulative loss in othercomprehensiveincomeisreclassifiedfromequityandrecognisedtoprofitorloss.
Notes to the Financial Statements31 December 2011 (continued)
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2.4 Significant Accounting Policies (continued)
(k) Impairment (continued)
(i) Impairment of Financial Assets (continued)
Animpairmentlossinrespectofunquotedequityinstrumentthatiscarriedatcostisrecognisedinprofitorlossandismeasuredasthedifferencebetweentheasset’scarryingamountandthepresentvalueof estimated future cash flowsdiscountedat the currentmarket rateof return for a similarfinancialasset.
Impairment losses recognised in profit or loss for an investment in an equity instrument is notreversedthroughtheprofitorloss.
If, ina subsequentperiod, the fair valueofadebt instrument increasesand the increasecanbeobjectivelyrelatedtoaneventoccurringaftertheimpairmentlosswasrecognisedinprofitorloss,the impairment loss is reversed, to the extent that the asset’s carrying amountdoes not exceedwhatthecarryingamountwouldhavebeenhadtheimpairmentnotbeenrecognisedatthedatetheimpairmentisreversed.Theamountofthereversalisrecognisedintheprofitorloss.
(ii) Impairment of Non-Financial Assets
Thecarryingamountsofnon-financialassets(exceptforinventories,assetsarisingfromconstructioncontract, deferred tax asset, assets arising from employee benefits, investment property that ismeasured at fair value and non-current assets (or disposal groups) classified as held for sale)are reviewedat theendof each reportingperiod todeterminewhether there is any indicationofimpairment.
Ifanysuchindicationexists,thentheasset’srecoverableamountisestimated.Forthepurposeofimpairment testing,assetsaregrouped together into thesmallestgroupofassets thatgeneratescashinflowsfromcontinuingusethatarelargelyindependentofthecashinflowsofotherassetsorgroupsofassets.Thegoodwillacquiredinabusinesscombination,forthepurposeofimpairmenttesting,isallocatedtocashgeneratingunits(“CGU”)thatareexpectedtobenefitfromthesynergiesofthecombination.
TherecoverableamountofanassetorCGUisthegreaterofitsvalueinuseanditsfairvaluelesscosts to sell. In assessing value in use, the estimated future cash flows are discounted to theirpresent valueusingapre-taxdiscount rate that reflects currentmarket assessmentsof the timevalueofmoneyandtherisksspecifictotheasset.
AnimpairmentlossisrecognisedifthecarryingamountofanassetoritsCGUexceedsitsrecoverableamount.
Impairmentlossesarerecognisedinprofitorloss.Impairmentlossesrecognisedinrespectofcash-generatingunitsareallocatedfirst toreducethecarryingamountofanygoodwillallocatedtotheunits and then to reduce the carrying amount of the other assets in the unit groups of units on a pro ratabasis.
An impairment loss in respectofgoodwill isnot reversed. In respectofotherassets, impairmentlosses recognised in prior periods are assessed at the end of each reporting period for any indications thatthelosshasdecreasedornolongerexists.Animpairmentlossisreversediftherehasbeena change in the estimates used to determine the recoverable amount since the last impairment losswas recognised. An impairment loss is reversedonly to theextent that theasset’scarryingamountdoesnotexceedthecarryingamountthatwouldhavebeendetermined,netofdepreciationor amortisation, if no impairment loss had been recognised. Reversals of impairment losses arecreditedtoprofitorlossintheyearinwhichthereversalsarerecognised.
Notes to the Financial Statements31 December 2011 (continued)
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2.4 Significant Accounting Policies (continued)
(l) Property Development Activities
(i) Land Held for Property Development
Land held for property development consists of development costs on which no significantdevelopmentworkhasbeenundertakenorwheredevelopmentactivitiesarenotexpectedtobecompletedwithinthenormaloperatingcycle.Suchlandisclassifiedasnon-currentassetandisstatedatcostlessanyaccumulatedimpairmentlosses,ifany.ThepolicyfortherecognitionandmeasurementofimpairmentlossesisinaccordancewithNote2.4(k)tothefinancialstatements.
Cost comprises the cost of land and all related costs incurred on activities necessary to prepare the landfor its intendeduse.WheretheGrouphadpreviouslyrecordedthe landatarevaluedamount,itcontinuestoretainthisamountasitssurrogatecostasallowedbyFRS201PropertyDevelopmentActivities.
Landheldforpropertydevelopmentistransferredtopropertydevelopmentcostsandincludedunder current assets when development activities have commenced and are expected to becompletedwithinthenormaloperatingcycle.
(ii) Property Development Costs
Propertydevelopmentcostscompriseallcoststhataredirectlyattributabletothedevelopmentactivitiesor thatcanbeallocatedona reasonablebasis tosuchactivities.Theycomprise thecosts of land under development, construction costs and other related development costscommontothewholeprojectincludingborrowingcosts.
Propertydevelopmentcostsonwhichdevelopmentactivitieshavecommencedorwhereitcanbedemonstratedthatthedevelopmentactivitiescanbecompletedwithinthenormaloperatingcycleareclassifiedascurrentassets.
When the financial outcome of a development activity can be estimated reliably, propertydevelopmentrevenueandexpensesarerecognisedinprofitorlossbyreferencetothestageofcompletionofdevelopmentactivityattheendofthefinancialyear.Thestageofcompletionisdeterminedbytheproportionthatpropertydevelopmentcosts incurredforworkperformedtodatebeartotheestimatedtotalpropertydevelopmentcosts.
Whenthefinancialoutcomeofadevelopmentactivitycannotbereliablyestimated,thepropertydevelopment revenue shall be recognised only to the extent the property development costsincurredthatisprobabletoberecovered.Propertydevelopmentcostsonthedevelopmentunitssoldarerecognisedasexpensesintheperiodinwhichtheyareincurred.
Any expected lossonadevelopmentproject, including costs tobe incurredover thedefectsliabilityperiod,isrecognisedasanexpenseimmediately.
Propertydevelopmentcostsnotrecognisedasanexpensearerecognisedasanasset,whichismeasuredatthelowerofcostandnetrealisablevalue.
Whenrevenuerecognisedinprofitorlossexceedsprogressbillingstopurchasers,thebalancesis shown as accrued billings under current assets. When progress billings exceed revenuerecognisedinprofitorloss,thebalanceisshownasprogressbillingsundercurrentliabilities.
Notes to the Financial Statements31 December 2011 (continued)
68advance synergy berhad (1225-D)
annual report 2011
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2.4 Significant Accounting Policies (continued)
(m) Contract Work-In-Progress
Where the outcome of a construction contract can be estimated reliably, revenue and costs arerecognised by reference to the stage of completion of the contract activity at the end of the financial year (“percentage-of-completionmethod”), except where this would not be representative of thestageofcompletion.Variationsincontractwork,claimsandincentivepaymentsareincludedtotheextentthattheyhavebeenagreedwiththecustomer.
Where the outcome of a construction contract cannot be estimated reliably, contract revenue isrecognisedtotheextentofcontractcostsincurredthatarelikelytoberecoverable.Contractcostsarerecognisedasexpensesintheperiodinwhichtheyareincurred.Whenitisprobablethattotalcontractcostswill exceed totalcontract revenue, theexpected loss is recognisedasanexpenseimmediately.
Attheendofthefinancialyear,theaggregatedcostsincurredplusrecognisedprofit(lessrecognisedloss) on each contract is compared against the progress billings.Where costs incurred plus therecognisedprofits (less recognised losses) exceedprogressbillings, thebalance ispresentedonthe face of the statement of financial position as “Amount due from contract customers”.Whereprogressbillingsexceedcostsincurredplusrecognisedprofits(lessrecognisedlosses),thebalanceispresentedas“Amountsduetocontractcustomers”.
Progressbillingsnotyetpaidbycustomersandretentionsare includedwithin“Amountsduefromcontractcustomers”.
(n) Inventories
Inventoriesarestatedatthelowerofcostandnetrealisablevalue.
Costoftheinventoriesisdeterminedonthefollowingbasis:
(i) Finishedgoods,foodandbeverages,operatingsuppliesforHotelsandResortssegment-First-in,first-outbasis.
(ii) Completedunitsofunsolddevelopedproperties–Specificidentificationbasis.
(iii) Finishedgoods, consumablegoods,operating supplieswork-in-progress –Weightedaveragebasis.
Thecostofrawmaterials,foodandbeverageandoperatingsuppliescomprisesallcostofpurchaseplusthecostofbringingthe inventoriestotheirpresent locationandcondition.Thecostofwork-in-progressand finishedgoods includes thecostof rawmaterials,direct labourandaproportionofproductionoverheadsbasedonnormaloperatingcapacityoftheproductionfacilities.Thecostofcompletedpropertiesheldforsalecomprisescostassociatedwiththeacquisitionofland,directcostsandappropriateproportionofcommoncosts.
Net realisable value is the estimated selling price in the ordinary course of business, less theestimatedcostsofcompletionandtheestimatedcostsnecessarytomakethesale.
(o) Cash and Cash Equivalents
Forthepurposeofcashflowstatements,cashandcashequivalentscomprisecashinhand,bankbalances,fixeddeposits,demanddepositsandshorttermhighlyliquidinvestments,thatarereadilyconvertibletoknownamountsofcashwhicharesubjecttoaninsignificantriskofchangesinvalue,netofbankoverdraftsanddepositspledgedtofinancialinstitutions.
Notes to the Financial Statements31 December 2011 (continued)
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2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2.4 Significant Accounting Policies (continued)
(p) Non-Current Assets Classified as Held for Sale
Non-currentassetsareclassifiedasheldforsaleiftheircarryingamountwillberecoveredprincipallythroughasaletransactionratherthancontinuinguse.Thisconditionisregardedasmetonlywhenthe sale is highly probable and the asset is available for immediate sale in its present condition subjectonlytothetermsthatareusualandcustomary.
Immediately before classification as held for sale, themeasurement of the non-current assets isbrought up-to-date in accordancewith applicableFRSs.Then,on initial classification asheld forsale,non-currentassets(otherthaninvestmentproperties,deferredtaxassets,employeebenefitsassets,financialassetsandinventories)aremeasuredinaccordancewithFRS5thatisatthelowerofthecarryingamountandfairvaluelesscoststosell.Anydifferencesarerecognisedinprofitorloss.
(q) Equity Instruments
Ordinarysharesarerecordedatthenominalvalueandtheconsiderationinexcessofnominalvalueofsharesissued,ifany,isaccountedforassharepremium.Bothordinarysharesandsharepremiumareclassifiedasequity.
Dividends on ordinary shares are recognised as liabilitieswhen proposed or declared before thefinancial year end. A dividend proposed or declared after the financial year end, but before thefinancialstatementsareauthorisedforissue,isnotrecognisedasaliabilityatthefinancialyearend.
Cost incurred directly attributable to the issuance of the shares are accounted for as a deduction fromsharepremium,ifany,otherwiseitischargedtoprofitorloss.Equitytransactioncostscompriseonly those incremental external costs directly attributable to the equity transaction which wouldotherwisehavebeenavoided.
(r) ICULS
ICULSwithfixedcouponratesareregardedascompoundinstrumentsconsistingpredominantlyanequitycomponentandaliabilitycomponent.
(s) Financial Liabilities
Financial liabilities are classified according to the substance of the contractual arrangements entered intoandthedefinitionsofafinancialliability.
Financialliabilities,withinthescopeofFRS139,arerecognisedinthestatementoffinancialpositionwhen,andonlywhen,theGroupandtheCompanybecomeapartytothecontractualprovisionsofthe financial instrument.Financial liabilitiesareclassifiedaseither financial liabilitiesat fair valuethroughprofitorlossorotherfinancialliabilities.
(i) Financial Liabilities at Fair Value Through Profit or Loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading andfinancialliabilitiesdesignateduponinitialrecognitionasatfairvaluethroughprofitorloss.
Financial liabilities held for trading include derivatives entered into by the Group and the Company thatdonotmeetthehedgeaccountingcriteria.Derivativeliabilitiesareinitiallymeasuredatfairvalueandsubsequentlystatedatfairvalue,withanyresultedgainsorlossesrecognisedinprofitorloss.Netgainsorlossesonderivativesincludeexchangedifferences.
TheGroupandtheCompanyhavenotdesignatedanyfinancialliabilitiesasatfairvaluethroughprofitorloss.
Notes to the Financial Statements31 December 2011 (continued)
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annual report 2011
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2.4 Significant Accounting Policies (continued)
(s) Financial Liabilities (continued)
(ii) Other Financial Liabilities
TheGroup’sandtheCompany’sotherfinancialliabilitiesincludetradepayables,otherpayablesandloansandborrowings.
Tradeandotherpayablesarerecognisedinitiallyatfairvalueplusdirectlyattributabletransactioncostsandsubsequentlymeasuredatamortisedcostusingtheeffectiveinterestmethod.
Loansandborrowingsarerecognisedinitiallyatfairvalue,netoftransactioncostsincurred,andsubsequentlymeasuredatamortisedcostusingtheeffective interestmethod.Borrowingsareclassified as current liabilities unless the Group has an unconditional right to defer the settlement oftheliabilityforatleast12monthsafterthereportingdate.
Forotherfinancialliabilities,gainsandlossesarerecognisedinprofitorlosswhentheliabilitiesarederecognised,andthroughtheamortisationprocess.
Afinancialliabilityisderecognisedwhentheobligationundertheliabilityisextinguished.Whenanexistingfinancialliabilityisreplacedbyanotherfromthesamelenderonsubstantiallydifferentterms,orthetermsofanexisting liabilityaresubstantiallymodified,suchanexchangeormodification istreated as a derecognition of the original liability and the recognition of a new liability, and thedifferenceintherespectivecarryingamountsisrecognisedinprofitorloss.
(t) Financial Guarantee Contracts
Afinancialguaranteecontractisacontractthatrequirestheissuertomakespecifiedpaymentstoreimbursetheholderforalossitincursbecauseaspecifieddebtorfailstomakepaymentwhendue.
Financial guaranteecontracts are recognised initially as a liability at fair value, netof transactioncosts.Subsequenttoinitialrecognition,financialguaranteecontractsarerecognisedasincomeinprofitorlossovertheperiodoftheguarantee.IfthedebtorfailstomakepaymentrelatingtofinancialguaranteecontractwhenisdueandtheGroup,astheissuer,isrequiredtoreimbursetheholderfortheassociated loss, the liability ismeasuredat thehigherof thebestestimateof theexpenditurerequiredtosettlethepresentobligationatthereportingdateandtheamountinitiallyrecognisedlesscumulativeamortisation.
(u) Provisions for Liabilities
ProvisionforliabilitiesarerecognisedwhentheGrouphasapresentobligationasaresultofapastevent,whenitisprobablethatanoutflowofresourcesembodyingeconomicbenefitswillberequiredtosettletheobligation,andareliableestimateoftheamountcanbemade.WheretheGroupexpectsaprovisiontobereimbursed,thereimbursement isrecognisedasaseparateassetbutonlywhenthe reimbursement is virtually certain. Provisions are not recognised for future operating losses.Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate.Wheretheeffectof thetimevalueofmoney ismaterial,provisionsarediscountedusingacurrentpre-taxratethatreflects,whereappropriate,therisksspecifictotheliability.Wherediscountingisused,theincreaseintheprovisionduetothepassageoftimeisrecognisedasfinancecost.
Notes to the Financial Statements31 December 2011 (continued)
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annual report 2011
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2.4 Significant Accounting Policies (continued)
(v) Government Grant
Governmentgrantsarerecognisedattheir fairvaluewherethere isreasonableassurancethatthegrantwillbereceivedandallattachingconditionswillbecompliedwith.Wherethegrantrelatestoanasset,thefairvalueisrecognisedasdeferredcapitalgrantonthestatementoffinancialpositionandisamortisedtoprofitorlossovertheexpectedusefullifeoftherelevantassetbyequalannualinstalment.
Singapore
TheSingaporegovernmentintroducedacashgrantknownastheJobsCreditSchemeinitsBudgetfor2009inabidtohelpbusinessespreservejobsintheeconomicdownturn.Theamountsreceivedfor jobs credit are to be paid to eligible employers in 2009 in four payments and the amount anemployercanreceivewoulddependonthefulfillmentoftheconditionsasstatedintheScheme.
InOctober2009,theGovernmentannouncedthattheJobsCreditSchemewouldbeextendedforhalfayearwithanother2paymentsatstepped-downratesinMarchandJune2010basedon6%ofwagestobepaidinMarch2010and3%ofwagestobepaidinJune2010.
TheGrouprecognisestheamountsreceivedforjobscreditattheirfairvalueasotherincomeinthemonthofreceiptofthesegrantsfromthegovernment.
Malaysia
In2009, a subsidiary inMalaysiawasapprovedagrantofRM767,764 for thedevelopmentof theGlobeOssRoamingAssuranceProjectunderMSCMalaysiaResearch&DevelopmentGrantScheme.
(w) Revenue Recognition
Revenue is measured at the fair value of the consideration received or receivable for the sale of goodsandrenderingofservicesintheordinarycourseoftheGroup’sactivities.
Revenue is recognised to theextent that it isprobable that theeconomicbenefitswill flow to theGroupand the revenuecanbe reliablymeasured.The followingspecific recognitioncriteriamustalsobemetbeforerevenueisrecognised.
(i) Revenue from the Sale of Goods
Revenue from the sale of goods is measured at the fair value of the consideration received or receivable,netof returnsandallowances, tradediscountsandvolume rebates.Revenue isrecognisedwhen the significant risks and rewardsof ownership havebeen transferred to thebuyer, recovery of the consideration is probable, the associated costs andpossible return ofgoodscanbeestimatedreliably,andthere isnocontinuingmanagement involvementwiththegoods.
(ii) Revenue from Services
Revenue in respect of the rendering of services is recognised based on the stage of completion at the financial year end andwhen the cost incurred can be reliablymeasured. The stage ofcompletion is determined by the services performed to date as a percentage of total services to beperformed.
Notes to the Financial Statements31 December 2011 (continued)
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annual report 2011
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2.4 Significant Accounting Policies (continued)
(w) Revenue Recognition (continued)
(iii) Hotel and Resort Services
Revenue represents income from the rental of rooms, sale of food and beverages and otherrelatedservices.
Revenueisrecognisedasfollows:- roomrevenueisrecogniseduponactualoccupancybyguest;- foodandbeveragerevenueisrecogniseduponservicing;and- otherrelatedservicesarerecogniseduponrenderingofservices.
(iv) Information and Communications Technology Related Services
(a) Revenue from service contracts
Revenue and profit from contracts are recognised on an individual contract basis using the percentageof completionmethod,when the stageof contract completioncanbe reliablydetermined,coststodatecanbeclearlyidentified,andthetotalrevenuetobereceivedandcoststocompletecanbereliablyestimated.Thepercentageofcompletionisestimatedbymanagementwithreferencetothestageofcompletionoftheobligationsunderthecontractwiththecustomer.Whereitisprobablethatalosswillarisefromacontract,theexcessoftotalestimatedcostsoverrevenueisrecognisedasanexpenseimmediately.
(b) Revenue from maintenance contract is recognised on a straight line basis over the period of therespectivecontracts.
(v) Coach Building
Revenue from sale of buses is recognisedwhen significant risk and rewards of ownership ofthebuseshasbeentransferredtothecustomerandwheretheGroupretainsneithercontinuingmanagerialinvolvementoverthebuses,whichcoincideswithdeliveryofbusesandservicesandacceptancebycustomers.
(vi) Property Development
Revenue represents sales value of completed development properties sold and proportionate salesvalueofdevelopmentpropertiestostageofcompletion.
Propertydevelopmentrevenueisrecognisedinrespectofalldevelopmentunitsthathavebeensold.Revenuerecognitioncommenceswhenthesaleofthedevelopmentunitiseffected,uponthecommencementofdevelopmentandconstructionactivitiesandwhenthefinancialoutcomecanbereliablyestimated.Theattributableportionofpropertydevelopmentcostisrecognisedas an expense in the period inwhich the related revenue is recognised. The amount of suchrevenue and expenses recognised is determined by reference to the stage of completion ofdevelopmentactivityat theendof the financialyear.Thestageofcompletion ismeasuredbyreferencetotheproportionthatpropertydevelopmentcostsincurredforworkperformedtodatebeartotheestimatedtotalpropertydevelopmentcost.
Whenthefinancialoutcomeofadevelopmentactivitycannotbereliablyestimated,thepropertydevelopmentrevenue isrecognisedonly totheextentofpropertydevelopmentcosts incurredthat is probable to be recoverable and the property development costs on the development units soldarerecognisedasanexpenseintheperiodinwhichtheyareincurred.
Anyexpectedlossonadevelopmentprojectisrecognisedasanexpenseimmediately,includingcoststobeincurredoverthedefectsliabilityperiod.
Notes to the Financial Statements31 December 2011 (continued)
73advance synergy berhad (1225-D)
annual report 2011
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2.4 Significant Accounting Policies (continued)
(w) Revenue Recognition (continued)
(vii) Rental Income
Rentalincomeisaccountedforonastraightlinebasisovertheleasetermsonongoingleases.Theaggregatecostofincentivesprovidedtolesseesisrecognisedasareductionofrentalincomeovertheleasetermonastraightlinebasis.
(viii) Travel and Tours
Revenuefrominvoicedvalueofticketssoldisrecognisedinprofitorlossuponissuanceofthetickets.
Revenue from travel and tour is recognised in profit or loss based on accrual basis uponperformanceofservices.
Revenue from foreign currencies exchange is recognised in profit or loss upon customer’sacceptance.
(ix) Interest Income
Interestincomeisrecognisedasitaccrues,usingtheeffectiveinterestmethodunlesscollectabilityisindoubt.
(x) Dividend Income
Dividendincomeisrecognisedinprofitorlossonreceiptbasis.
(xi) Card and Payment Services
Joiningfeesisrecogniseduponissuanceofcardstoapprovedmembers.Cashadvancefeesisrecogniseduponbillingstocardmembers.Discountrevenueandinterchangefeesarerecognisedupon the billing to/bymerchants and inter-member banks. Interest income from line of creditfacilitiesgrantedisrecognisedonanaccrualbasis.
(xii) Traditional Chinese Medicine Services
RevenuefromtraditionalChinesemedicineservices isrecognisedwhenservicesarerenderedandgoodsaredelivered,netofdiscountandrebates.
(x) Borrowing Costs
Borrowingcostsarecapitalisedaspartofthecostsofaqualifyingassetiftheyaredirectlyattributabletotheacquisition,constructionorproductionofthatasset.Capitalisationofborrowingcostscommenceswhentheactivitiestopreparetheassetforitsintendeduseorsalesareinprogressandtheexpendituresandborrowingcostsare incurred.Borrowingcostsarecapitaliseduntil theassetsaresubstantiallycompleted for their intendeduseorsale.Capitalisationofborrowingcostswillbesuspendedwhentheassetsarecompletedorduringtheperiodinwhichdevelopmentandconstructionareinterrupted.
The amount of borrowing costs eligible for capitalisation is the actual borrowings incurred on thatborrowing during the period less any investment income on the temporary investment of fundsdrawdownfromthoseborrowingfacilities.
Allotherborrowingcostsarerecognisedasanexpenseinprofitorlossintheperiodinwhichtheyareincurred.BorrowingcostsconsistofinterestandothercoststhattheGroupandtheCompanyincurredinconnectionwiththeborrowingoffunds.
Notes to the Financial Statements31 December 2011 (continued)
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annual report 2011
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2.4 Significant Accounting Policies (continued)
(y) Income Taxes
Thetaxexpenseinprofitorlossrepresentstheaggregateamountofcurrenttaxanddeferredtax.Currenttaxistheexpectedamountofincometaxespayableinrespectofthetaxableprofitfortheyearandismeasuredusingthetaxratesthathavebeenenactedatthereportingdate.
Deferred tax isprovided for, using the liabilitymethod,on temporarydifferencesat the reportingdate between the tax bases of assets and liabilities and their carrying amounts in the financialstatements.Inprinciple,deferredtaxliabilitiesarerecognisedforalltaxabletemporarydifferencesanddeferredtaxassetsarerecognisedforalldeductibletemporarydifferences,unusedtaxlossesandunusedtaxcreditstotheextentthat it isprobablethattaxableprofitwillbeavailableagainstwhich the deductible temporary differences, unused tax losses and unused tax credits can beutilised.Deferredtaxisnotrecognisedifthetemporarydifferencearisesfromgoodwillornegativegoodwillorfromtheinitialrecognitionofanassetorliabilityinatransactionwhichisnotabusinesscombinationandattimeofthetransaction,affectsneitheraccountingprofitnortaxableprofit.
Deferredtaxismeasuredatthetaxratesthatareexpectedtoapplyintheperiodwhentheassetisrealisedortheliabilityissettled,basedontaxratesthathavebeenenactedorsubstantivelyenactedatthereportingdate.Deferredtaxisrecognisedintheprofitor loss,exceptwhenitarisesfromatransactionwhichisrecogniseddirectlyinequity,inwhichcasethedeferredtaxisalsochargedorcrediteddirectly inequity,orwhen itarises fromabusinesscombinationthat isanacquisition, inwhichcasethedeferredtaxisincludedintheresultinggoodwillortheamountofanyexcessoftheacquirer’sinterestinthenetfairvalueoftheacquiree’sidentifiableassets,liabilitiesandcontingentliabilitiesoverthecostofthecombination.
(z) Employee Benefits
(i) Short Term Employee Benefits
Wages,salaries,bonusesandsocialsecuritycontributionsare recognisedasexpenses in theyear in which the associated services are rendered by employees of the Group. Short termaccumulatingcompensatedabsencessuchaspaidannualleavearerecognisedwhenservicesarerenderedbyemployeesthatincreasetheirentitlementtofuturecompensatedabsences,andshort termnon-accumulatingcompensatedabsencessuchassick leavearerecognisedwhentheabsencesoccur.
(ii) Defined Contribution Plans
TheGroupcontributestotheEmployeesProvidentFund,thenationaldefinedcontributionplan.The contributions are charged to profit or loss in the period to which they relate. Once thecontributionshavebeenpaid,theGrouphasnofurtherpaymentobligations.
(iii) Defined Benefits Plans
Certainsubsidiariesoperateanunfundedretirementbenefitsplanforrankandfileemployeesinaccordancewithanarticlecontainedinthecollectiveunionagreement.Theliabilitiesinrespectof the retirement benefits plan are determined by an actuarial valuation for its defined benefit obligationsundertheProjectedUnitCreditMethod.Underthismethod,thecurrentservicecostiscalculatedasthepresentvalueofbenefitsthatwillaccrueonvaluationdate(byreferencetothenumberofemployeesproviding theservice in thatyearandprojected final salaries). Theliabilitieswillberecognisedimmediatelyintheyeartheyareincurred.
Notes to the Financial Statements31 December 2011 (continued)
75advance synergy berhad (1225-D)
annual report 2011
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2.4 Significant Accounting Policies (continued)
(aa) Foreign Currencies
(i) Functional and Presentation Currency
Items included in the financial statements of each entity in the Group are measured using the currency of the primary economic environment inwhich the entity operates (“the functionalcurrency”). The financial statements are presented in RM, which is the Group’s functionalcurrencyandpresentationcurrency.
(ii) Transactions and Balances
TransactionsinforeigncurrenciesaremeasuredintherespectivefunctionalcurrenciesoftheCompany and its subsidiaries and are recorded on initial recognition in the functional currencies at exchange rates approximately those ruling at the transactiondates.Monetary assets andliabilitiesdenominatedinforeigncurrenciesaretranslatedattherateofexchangerulingatthereportingdate.Non-monetary itemsdenominated in foreigncurrencies thataremeasuredathistoricalcostaretranslatedusingtheexchangeratesatthedatesoftheinitialtransactions.Non-monetary itemsdenominated in foreigncurrenciesmeasuredat fairvalueare translatedusingtheexchangeratesatthedatewhenthefairvaluewasdetermined.
Exchangedifferencesarisingonthesettlementofmonetaryitemsorontranslatingmonetaryitems at the reporting date are recognised in profit or loss except for exchange differencesarising inmonetary items that formpartof theGroup’snet investment in foreignoperations,whicharerecognisedinitially inothercomprehensive incomeandaccumulatedunderforeigncurrencytranslationreserveinequity.TheforeigncurrencytranslationreserveistransferredtoprofitorlossoftheGroupondisposaloftheforeignoperation.
Exchangedifferencesarisingonthetranslationofnon-monetaryitemscarriedatfairvalueareincludedinprofitorlossfortheperiodexceptforthedifferencesarisingonthetranslationonnon-monetary items in respect of which gains and losses are recognised directly in equity.Exchange differences arising from such non-monetary items are also recognised directly inequity.
(iii) Foreign Operations
TheassetsandliabilitiesofforeignoperationsaretranslatedintoRMattherateofexchangerulingatthereportingdateandincomeandexpensesaretranslatedatexchangeratesatthedatesofthetransactions.Theexchangedifferencesarisingonthetranslationaretakendirectlyto other comprehensive income.On disposal of a foreign operation, the cumulative amountrecognisedinothercomprehensiveincomeandaccumulatedinequityunderforeigncurrencytranslation reserve relating to that particular foreign operation us recognised in the profit or loss.
Goodwillandfairvalueadjustmentsarisingontheacquisitionofforeignoperationsaretreatedas assets and liabilities of the foreign operations and are recorded in the functional currency of theforeignoperationsandtranslatedattheclosingrateatthereportingdate.
(ab) Earnings per Ordinary Share
TheGrouppresentsbasicanddilutedearningspershare(“EPS”)foritsordinaryshares.
BasicEPS iscalculatedbydividing theprofitor lossattributable toordinaryshareholdersof theCompanybytheweightedaveragenumberofordinarysharesoutstandingduringtheperiod.
Notes to the Financial Statements31 December 2011 (continued)
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annual report 2011
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
2.4 Significant Accounting Policies (continued)
(ab) Earnings per Ordinary Share (continued)
Diluted earnings/(loss) per share of the Group is calculated by dividing the profit/(loss) for the financial year attributable to equity holders of the Company by the adjusted weighted averagenumberofordinarysharesinissueduringthefinancialyear.TheadjustedweightedaveragenumberofordinarysharesinissueisarrivedatassumingfullconversionoftheICULSwhichrepresentsthedilutivepotentialoftheordinaryshares.
(ac) Contingencies
A contingent liability or asset is a possible obligation or asset that arises from past events and whoseexistencewillbeconfirmedonlybytheoccurrenceornon-occurrenceofuncertaineventsnotwhollywithinthecontroloftheGroup.
Contingent liabilities and assets are not recognised in the statement of financial position of the Group.
(ad) Operating Segments
Inthepreviousyears,asegmentwasdistinguishablecomponentoftheGroupthatwasengagedeither inprovidingproductsorservices (businesssegment),or inprovidingproductsorserviceswithinaparticulareconomicenvironment(geographicalsegment)whichwassubjecttorisksandrewardsthatweredifferentfromthoseofothersegments.
FollowingtheadoptionofFRS8OperatingSegments,anoperatingsegmentisacomponentoftheGroup thatengages inbusinessactivities fromwhich itmayearn revenuesand incurexpenses,including revenues and expenses that relate to transactions with any of the Group’s othercomponents.Anoperatingsegment’soperatingresultsarereviewedregularlybythemanagement,tomakedecisionsaboutresourcestobeallocatedtothesegmentandassessitsperformance,andforwhichdiscretefinancialinformationisavailable.
3. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS
ThepreparationoftheGroup’sfinancialstatementsrequiresmanagementtomakejudgements,estimatesand assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and thedisclosureofcontingentliabilitiesatthereportingdate.However,uncertaintyabouttheseassumptionsandestimatescouldresultinoutcomesthatcouldrequireamaterialadjustmentstothecarryingamountoftheassetorliabilityaffectedinthefuture.
3.1 Judgements Made in Applying Accounting Policies
In the process of applying the Group’s accounting policies, management has made the followingjudgements, apart from those involving estimations, which have the most significant effect on theamountsrecognisedinthefinancialstatements:
(a) Classification of Financial Assets
TheGrouphasclassifiedcertainofitsfinancialassetsasavailable-for-saleinvestments.Inapplyingtheaccountingpolicy,theGroupassessesitsnatureandtheintention.Shouldthecircumstanceschangeinthefuture,theclassificationofthesefinancialassetsasavailable-for-salemaynolongerbeappropriate.
(b) Leases
TheGrouphasreassessedandjudgedthattheleaseholdlandoftheGroupwhichareinsubstancearefinanceleasesandhasreclassifiedtheleaseholdlandtoproperty,plantandequipment.
Notes to the Financial Statements31 December 2011 (continued)
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annual report 2011
3. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)
3.2 Key Source of Estimation Uncertainty
(a) Useful Lives of Property, Plant and Equipment
TheGroup estimates the useful lives of property, plant and equipment based on the period overwhichtheassetsareexpectedtobeavailableforuse.Theestimatedusefullivesofproperty,plantand equipment are reviewed periodically and are updated if expectations differ from previousestimatesduetophysicalwearandtear,technicalorcommercialobsolescenceandlegalorotherlimitson theuseof the relevantassets. Inaddition, theestimationof theuseful livesofproperty,plantandequipmentarebasedoninternaltechnicalevaluationandexperiencewithsimilarassets.It is possible, however, that future results of operations could bematerially affected by changesintheestimatesbroughtaboutbychanges infactorsmentionedabove.Theamountandtimingofrecordedexpensesforanyperiodwouldbeaffectedbychangesinthesefactorsandcircumstances.A reduction in theestimateduseful livesof theproperty,plantandequipmentwould increase therecordedexpensesanddecreasethenon-currentassets.
(b) Useful Lives of Other Intangible Assets
TheGroupestimatestheusefullifetoamortiseotherintangibleassetsbasedonthefutureperformanceof the assets acquired andmanagement’s judgement of the period overwhich economic benefitwill bederived from the asset. The estimated useful lives of other intangible assets are reviewedperiodically,takingintoconsiderationfactorssuchaschangesintechnology.Itispossible,however,that future results of operations could be materially affected by changes in the estimates brought aboutbychanges in factorsmentionedabove.Theamountsand timingof recordedexpenses foranyperiodwouldbe affectedby changes in these factors andcircumstances.A reduction in theestimated useful lives of the other intangible assets would increase the recorded expenses anddecreasethenon-currentassets.
(c) Impairment of Intangible assets-Goodwill
TheGroupdetermineswhethergoodwill is impairedat leastonanannualbasis. This requiresanestimation of the value-in-use of CGU to which goodwill is allocated. Estimating a value-in-useamount requiresmanagement tomake an estimation of the expected future cash flows from theCGU and also to choose a suitable discount rate in order to calculate the present value of those cash flows.Thecarryingamountofgoodwillasat31December2011wasRM59.86million(2010:RM59.42million)asdisclosedinNote7tothefinancialstatements.
(d) Impairment of Investment in Subsidiaries and Recoverability of Amount Owing by Subsidiaries
TheGrouptestsinvestmentinsubsidiariesforimpairmentannuallyinaccordancewithitsaccountingpolicy.Moreregularreviewsareperformedifeventsindicatethatthisisnecessary.Theassessmentofthenettangibleassetsofthesubsidiariesaffectstheresult of the impairment test. Costs ofinvestments in subsidiarieswhich have ceased operationswere impaired up to net assets of thesubsidiaries.Theimpairmentmadeoninvestmentinsubsidiariesentailsanimpairmentofreceivablestobemadetotheamountowingbythesesubsidiaries.
Significantjudgementisrequiredintheestimationofthepresentvalueoffuturecashflowsgeneratedbythesubsidiaries,whichinvolveuncertaintiesandaresignificantlyaffectedbyassumptionsusedand judgement made regarding estimates of future cash flows and discount rates. Changes inassumptions could significantly affect the results of the Group’s tests for impairment of investment insubsidiaries.
Notes to the Financial Statements31 December 2011 (continued)
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annual report 2011
3. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)
3.2 Key Source of Estimation Uncertainty (continued)
(e) Impairment of Investment in Associates and Recoverability of Amount Owing by Associates
TheGrouptestsinvestmentinassociatesfor impairmentannuallyinaccordancewithitsaccountingpolicy.Moreregularreviewsareperformedifeventsindicatethatthisisnecessary.Theassessmentofthenettangibleassetsoftheassociatesaffectstheresultoftheimpairmenttest.Costsofinvestmentsinassociateswhichhaveceasedoperationswereimpaireduptoshareofnetassetsoftheassociates.Theimpairmentmadeoninvestmentinassociatesentailsanimpairmentofassociatestobemadetotheamountowingbytheseassociates.
Significantjudgementisrequiredintheestimationofthepresentvalueoffuturecashflowsgeneratedbytheassociates,whichinvolveuncertaintiesandaresignificantlyaffectedbyassumptionsusedandjudgementmaderegardingestimatesoffuturecashflowsanddiscountrates.ChangesinassumptionscouldsignificantlyaffecttheresultsoftheGroup’stestsfor impairmentof investment inassociates.Inaddition,theassessmentofthenettangibleassetsoftheassociatesandthemarketvalueoftheassociates(forthosequotedshares)alsoaffectstheresultoftheimpairmenttest.
(f) Impairment on Investment Securities- Available for Sale Financial Assets
The Group tests investment in unquoted shares for impairment annually in accordance with itsaccountingpolicy.Significant judgement is required in theestimationof thepresentvalueof futurecash flows generated by the investment in unquoted shares, which involve uncertainties and aresignificantlyaffectedbyassumptionsusedand judgementmaderegardingestimatesof futurecashflowsanddiscountrates.ChangesinassumptionscouldsignificantlyaffecttheresultsoftheGroup’stestsforimpairmentofinvestmentinunquotedshares.
(g) Allowances for Impairment –Trade and Other Receivables
The Group makes allowances for impairment based on an assessment of the recoverability ofreceivables. Allowances for impairment are applied to receivables where events or changes incircumstances indicatethatthecarryingamountsmaynotberecoverable.Managementspecificallyanalysedhistoricalbaddebts,customerconcentrations,customercreditworthiness,currenteconomictrendsandchangesincustomerpaymenttermswhenmakingajudgementtoevaluatetheadequacyof theallowance for impairmentof receivables.Where theexpectation isdifferent from theoriginalestimate,suchdifferencewillimpactthecarryingvalueofreceivables.
(h) Classification of equity and liability component on ICULS
TheGrouphasrecognisedthecompoundinstrumentsconsistingofanequityandliabilitycomponent.Attheissuedate,thevalueoftheliabilitycomponentisdeterminedusingaprevailingmarketinterestrate.The judgment ismadeon themarket interest rateused forclassificationofequityand liabilitycomponent.
(i) Income Taxes
TheGroupissubjecttoincometaxesinnumerousjurisdictions.Significantjudgementisrequiredindeterminingthecapitalallowancesanddeductibilityofcertainexpensesduringtheestimationoftheprovisionfor incometaxes.Therearemanytransactionsandcalculationsforwhichtheultimatetaxdetermination is uncertain during the ordinary course of business.Where the final tax outcome ofthesemattersisdifferentfromtheamountsthatwereinitiallyrecorded,suchdifferenceswill impacttheincometaxanddeferredincometaxprovisionsintheperiodinwhichsuchdeterminationismade.
Notes to the Financial Statements31 December 2011 (continued)
79advance synergy berhad (1225-D)
annual report 2011
3. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (continued)
3.2 Key Source of Estimation Uncertainty (continued)
(j) Deferred Tax Assets
Deferredtaxassetsarerecognisedforallunutilisedtaxlossesandunabsorbedcapitalallowancestotheextentthatitisprobablethattaxableprofitwillbeavailableagainstwhichthelossesandcapitalallowancescanbeutilised.Significantmanagementjudgementisrequiredtodeterminetheamountofdeferredtaxassetsthatcanberecognised,baseduponthelikelytimingandleveloffuturetaxableprofit together with future tax planning strategies. The total carrying values of the unrecogniseddeductible/(taxable) temporary differences, tax losses and capital allowances of the Group wasRM261.36million(2010:RM267.69million)asdisclosedinNote13tothefinancialstatements.
(k) Allowance for Inventories
Reviewsaremadeperiodicallybymanagementondamaged,obsoleteandslow-movinginventories.Thesereviewsrequirejudgementandestimates.Possiblechangesintheseestimatescouldresultinrevisionstothevaluationofinventories.
(l) Property Development Projects
TheGrouprecognisespropertydevelopmentprojectsinprofitorlossbyusingthestageofpercentageofcompletionmethod,whichisthestandardforsimilarindustries.
Thestageofcompletionisdeterminedbytheproportionthatpropertydevelopmentandcontractscosts incurred forwork performed to date bear to the estimated total property development andcontract costs. Estimated losses are recognised in full when determined. Property developmentprojectsandexpensesestimatesarereviewedandrevisedperiodicallyasworkprogressesandasvariationordersareapproved.
Significantjudgementisrequiredindeterminingthestageofcompletion,theextentofthepropertydevelopmentprojectsincurred,theestimatedtotalpropertydevelopmentandcontractrevenueandcosts,aswellastherecoverabilityoftheprojectsundertaken.Inmakingthejudgement,theGroupevaluatesbasedonpastexperienceandbyrelyingontheworkofspecialists.IftheGroupwouldnotrecogniseanyprofitbeforeacontractiscompleted,butwouldrecognisealossassoonasthelossbecomesevident.
Adjustmentsbasedonthepercentageofcompletionmethodarereflectedinpropertydevelopmentandcontractrevenueinthereportingperiod.Totheextentthattheseadjustmentsresultinareductionor elimination of previously reported property development and contract revenue and costs, theGrouprecognisesachargeorcreditagainstcurrentearningsandamountsinpriorperiods, ifany,arenotrestated.
Note2.4(w)(vi)tothefinancialstatements,describestheGroup’spolicytorecogniserevenuefromsalesofpropertiesusing thepercentageofcompletionmethod.Propertydevelopment revenue isrecognisedinrespectofalldevelopmentunitsthathavebeensold.
(m) Contract Work-In-Progress
Revenueandcostsassociatedwithaprojectarerecognisedasrevenueandexpensesrespectivelyby reference to the management’s estimated stage of completion of a project at the end of thefinancialyear.Thisestimationofrevenueandcostsarebasedonthepresumptionthattheoutcomeofaprojectcanbeestimatedreliably.Managementhasperformedthecostreviewforcontractwork-in-progresstakingintoaccountthecoststodateandcoststocompleteeachprojectandhasalsoreviewedthestatusofsuchprojectsindeterminingthevalueofcontractwork-in-progressasat31December2011asdisclosedinNote12tothefinancialstatements.
Notes to the Financial Statements31 December 2011 (continued)
80advance synergy berhad (1225-D)
annual report 2011
4.
PR
OP
ER
TY, P
LA
NT A
ND
EQ
UIP
ME
NT
Gro
up
Free
hold
land
Le
aseh
old
land
Hot
el
prop
ertie
s-F
reeh
old
land
Hot
el
prop
ertie
s-B
uild
ings
B
uild
ings
Pla
nt a
nd
mac
hine
ry
Furn
iture
, fit
tings
and
eq
uipm
ent
Ren
ovat
ion
Mot
or
vehi
cles
Com
pute
r eq
uipm
ent
and
soft
war
e
Cro
cker
ies,
gl
assw
are,
cu
tleri
es,
linen
and
ki
tche
n ut
ensi
ls
Tele
com
-m
unic
atio
ns
and
rese
arch
and
de
velo
pmen
t eq
uipm
ent
Cons
truc
tion
wor
k-in
- pr
ogre
ss
Tot
al
2011
RM
’000
R
M’0
00 R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’00
0 R
M’0
00
RM
’00
0 R
M’0
00
RM
’00
0
Co
st/V
alu
ati
on
At1January2011
43,875
1,906
27,886
105,104
11,658
9,149
54,838
12,710
5,337
16,792
4,741
26,800
98 320,894
Ad
diti
ons
-
--
54 1,272
1,089
2,388
2
94
298
17
9 -
1,217
-6,791
Acquisitionofa
sub
sid
iary
-
---
-
-
160
90
-
114
--
-364
Dis
po
sals
-
---
-
-
(5)
-
(1,008)
(6)
-(36)
-(1,055)
Dis
po
sal o
f a
sub
sid
iary
-
---
-
-
(4)
-
-
(38)
-(5
18)
-(560)
Writtenoff
-
---
-
-
(563)
(30)
-
--
--
(593
)
Reclassification
-
--
105
(7
9)(65)
(29
0)(26)
-
--
(426)
-
(7
81)
Reclassificationas
non-currentassets
held
fo
r sa
le(7,791)
---
-
-
-
-
-
--
--
(7,791)
Foreignexchange
translationadjustment
-
38
-
(4,267)
4
2 36
(995
)
4
2
(23)
75
(328
)22
7 -
(5,153)
At
31 D
ecem
ber
201
136,0841,944
27,886
100,996
12,89310,209
55,529
13,080
4,604
17,116
4,413
27,264
98
312,116
Representing:
Co
st36,084
---
12,89310,209
55,529
13,080
4,604
17,116
4,413
27,264
98 181,290
Valuation
-
1,944
27,886
100,996
-
-
-
-
-
--
--
130,826
Total
36,0841,944
27,886
100,996
12,89310,209
55,529
13,080
4,604
17,116
4,413
27,264
98
312,116
Notes to the Financial Statements31 December 2011 (continued)
81advance synergy berhad (1225-D)
annual report 2011
4.
PR
OP
ER
TY, P
LA
NT A
ND
EQ
UIP
ME
NT (conti
nued)
Gro
up
Free
hold
land
Le
aseh
old
land
Hot
el
prop
ertie
s-F
reeh
old
land
Hot
el
prop
ertie
s-B
uild
ings
B
uild
ings
Pla
nt a
nd
mac
hine
ry
Furn
iture
, fit
tings
and
eq
uipm
ent
Ren
ovat
ion
Mot
or
vehi
cles
Com
pute
r eq
uipm
ent
and
soft
war
e
Cro
cker
ies,
gl
assw
are,
cu
tleri
es,
linen
and
ki
tche
n ut
ensi
ls
Tele
com
-m
unic
atio
ns
and
rese
arch
and
de
velo
pmen
t eq
uipm
ent
Cons
truc
tion
wor
k-in
- pr
ogre
ss
Tot
al
2011
RM
’000
R
M’0
00 R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’00
0 R
M’0
00
RM
’00
0 R
M’0
00
RM
’00
0
Ac
cu
mu
late
dD
ep
rec
iati
on
At1January2011
-664-
13,990
1,369
7,524
43,623
4,731
4,753
16,056
1,468
16,405
-110,583
Acquisitionofa
sub
sid
iary
-
---
-
-
39
42
-
30
-
-
-
1
11
Dep
reci
atio
n fo
rthefinancialyear
-
88 -
2,017
27
9
243
2,573
7
19
272
22
2
-
763
-
7,176
Dis
po
sals
-
---
-
-
(4)
-
(1,008)
(2)
-(16)
-(1,030)
Dis
po
sal o
f a s
ubsi
dia
ry-
---
-
-
(3)
-
-
(36)
-(4
38)
-
(4
77)
Writtenoff
-
---
-
-
(520
)(16)
-
--
--
(536)
Reclassification
-
--
86
(9
8)
(21)
(77
)
1
7
(
15)
--
(320
)-
(428
)
Cap
italis
atio
n to
in
tang
ible
ass
ets
-
---
-
-
43
32
-
37
-
147
-
259
Foreignexchange
translationadjustment
-
14 -
(1,069)
1
4
53
(8
80)
14
(28
)
78
(19
9)
60
-
(1,943)
At
31 D
ecem
ber
201
1-
766
-
15,0241,564
7,799
44,794
5,539
3,974
16,385
1,269
16,601
-113,715
Ac
cu
mu
late
dIm
pa
irm
en
t L
oss
At1January2011
-
--
1,621
-
-
807
3,017
-
--
2,684
-8,129
Writebackofimpairment
lossforthefinancial
year
-
---
-
-
-
-
-
-
-(165)
-
(165)
Dis
po
sal o
f a s
ubsi
dia
ry-
---
-
-
-
-
-
--
(64)
-(64)
Reclassification
-
---
-
-
-
-
-
--
(82)
-(8
2)
Foreignexchange
translationadjustment
-
---
-
-
-
-
-
-
-
42
-
4
2
At
31 D
ecem
ber
201
1-
--
1,621
-
-
807
3,017
-
--
2,415
-7,860
Ca
rryi
ng
Am
ou
nt
at
31 D
ec
em
be
r 20
1136,0841,178
27,886
84,351
11,329
2,410
9,928
4,524
630
731
3,144
8,248
98
190,541
Representing:
Co
st36,084
---
11,329
2,410
9,928
4,524
630
731
3,144
8,248
98
77,126
Valuation
-
1,178
27,886
84,351
-
-
-
-
-
--
--
113,415
Total
36,0841,178
27,886
84,351
11,329
2,410
9,928
4,524
630
731
3,144
8,248
98 190,541
Notes to the Financial Statements31 December 2011 (continued)
82advance synergy berhad (1225-D)
annual report 2011
4.
PR
OP
ER
TY, P
LA
NT A
ND
EQ
UIP
ME
NT (conti
nued)
Gro
up
Free
hold
land
Le
aseh
old
land
Hot
el
prop
ertie
s-F
reeh
old
land
Hot
el
prop
ertie
s-B
uild
ings
B
uild
ings
Pla
nt a
nd
mac
hine
ry
Furn
iture
, fit
tings
and
eq
uipm
ent
Ren
ovat
ion
Mot
or
vehi
cles
Com
pute
r eq
uipm
ent
and
soft
war
e
Cro
cker
ies,
gl
assw
are,
cu
tleri
es,
linen
and
ki
tche
n ut
ensi
ls
Tele
com
-m
unic
atio
ns
and
rese
arch
and
de
velo
pmen
t eq
uipm
ent
Cons
truc
tion
wor
k-in
- pr
ogre
ss
Tot
al
2010
RM
’000
R
M’0
00 R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’00
0 R
M’0
00
RM
’00
0 R
M’0
00
RM
’00
0
Co
st/V
alu
ati
on
At1January2010
43,875
3,120
27,886
127,285
9,327
7,767
54,404
11,324
5,641
16,660
5,261
24,575
98
337,223
Ad
diti
ons
-
--
-
2,322
920
3,103
1,819
335
3
87
-
2,471
-
11,357
Dis
po
sals
-
--
-
-
-
(14)
(10)
(618)
(30)
-
(45)
-
(717
)
Writtenoff
-
--
-
-
-
(1,140)
(19)
-
(126)
-
-
-
(1,285)
Reclassification
-
(1,041)
-
(9,649)
266
582
496
(266)
-
(21)
-
76
-
(9,557)
Foreignexchange
translationadjustment
-
(173
)-
(12,532)
(257
) (1
20)
(2,011)
(138
) (2
1) (7
8) (5
20)
(277
)-
(16,127)
At
31 D
ecem
ber
201
043,875
1,906
27,886
105,104
11,658
9,149
54,838
12,710
5,337
16,792
4,741
26,800
98
320,894
Representing:
Co
st43,875
-
-
-11,658
9,149
54,838
12,710
5,337
16,792
4,741
26,800
98
185,998
Valuation
-
1,906
27,886
105,104
-
-
-
-
-
-
-
-
-
134,896
Total
43,875
1,906
27,886
105,104
11,658
9,149
54,838
12,710
5,337
16,792
4,741
26,800
98
320,894
Notes to the Financial Statements31 December 2011 (continued)
83advance synergy berhad (1225-D)
annual report 2011
4.
PR
OP
ER
TY, P
LA
NT A
ND
EQ
UIP
ME
NT (conti
nued)
Gro
up
Free
hold
land
Le
aseh
old
land
Hot
el
prop
ertie
s-F
reeh
old
land
Hot
el
prop
ertie
s-B
uild
ings
B
uild
ings
Pla
nt a
nd
mac
hine
ry
Furn
iture
, fit
tings
and
eq
uipm
ent
Ren
ovat
ion
Mot
or
vehi
cles
Com
pute
r eq
uipm
ent
and
soft
war
e
Cro
cker
ies,
gl
assw
are,
cu
tleri
es,
linen
and
ki
tche
n ut
ensi
ls
Tele
com
-m
unic
atio
ns
and
rese
arch
and
de
velo
pmen
t eq
uipm
ent
Cons
truc
tion
wor
k-in
- pr
ogre
ss
Tot
al
2010
RM
’000
R
M’0
00 R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’000
R
M’0
00
RM
’00
0 R
M’0
00
RM
’00
0 R
M’0
00
RM
’00
0
Ac
cu
mu
late
dD
ep
rec
iati
on
At1January2010
-
713
-
12,882
1,218
7,258
44,318
4,071
5,078
15,979
1,724
15,351
-
108,592
Dep
reci
atio
n fo
rthefinancialyear
-
107
-
2,552
198
3
71
2,049
669
304
206
12
960
-
7,428
Dis
po
sals
-
--
-
-
-
(14)
(10)
(583
) (2
7)
-
(16)
-
(650)
Writtenoff
-
--
-
-
-
(1,134)
-
-
(61)
-
-
-
(1,195)
Reclassification
-
(110
)-
-
18
-
54
23
-
41
-
214
-
240
Foreignexchange
translationadjustment
-
(46)
-
(1,444)
(65)
(105
)(1,650)
(22)
(46)
(82)
(268)
(104
)-
(3,832)
At
31 D
ecem
ber
201
0-
664
-
13,990
1,369
7,524
43,623
4,731
4,753
16,056
1,468
16,405
-
110,583
Ac
cu
mu
late
dIm
pa
irm
en
t L
oss
At1January2010
-
-
-
1,621
-
-
807
3,017
-
-
-
979
-
6,424
Imp
airm
ent
loss
fo
r thefinancialyear
-
-
-
-
-
-
-
-
-
-
-
1,736
-
1,736
Dis
po
sals
-
-
-
-
-
-
-
-
-
-
-
(18)
-
(18)
Foreignexchange
translationadjustment
-
-
-
-
-
-
-
-
-
-
-
(13)
-
(13)
At
31 D
ecem
ber
201
0-
-
-
1,621
-
-
807
3,017
-
-
-
2,684
-
8,129
Ca
rryi
ng
Am
ou
nt
at
31 D
ec
em
be
r 20
1043,875
1,242
27,886
89,493
10,289
1,625
10,408
4,962
584
736
3,273
7,711
98
202,182
Representing:
Co
st43,875
-
-
-10,289
1,625
10,408
4,962
584
736
3,273
7,711
98
83,561
Valuation
-
1,242
27,886
89,493
-
-
-
-
-
-
-
-
-
118,621
Total
43,875
1,242
27,886
89,493
10,289
1,625
10,408
4,962
584
736
3,273
7,711
98
202,182
Notes to the Financial Statements31 December 2011 (continued)
84advance synergy berhad (1225-D)
annual report 2011
4. PROPERTY, PLANT AND EQUIPMENT (continued)
Computer equipment
Motor vehicles
Furniture,fittings andequipment Total
RM’000 RM’000 RM’000 RM’000Company2011
Cost
At1January2011 83 5 131 219 Additions 5 - 19 24
At 31 December 2011 88 5 150 243
Accumulated Depreciation
At1January2011 72 5 98 175 Depreciationforthefinancialyear 9 - 14 23
At 31 December 2011 81 5 112 198
Carrying Amount at 31 December 2011 7 - 38 45
Company2010
Cost
At1January2010 79 5 909 993 Additions 4 - 1 5 Writtenoff - - (779) (779)
At 31 December 2010 83 5 131 219
Accumulated Depreciation
At1January2010 55 5 864 924 Depreciationforthefinancialyear 17 - 13 30 Writtenoff - - (779) (779)
At 31 December 2010 72 5 98 175
Carrying Amount at 31 December 2010 11 - 33 44
(a) Includedinproperty,plantandequipmentoftheGroupareassetsacquiredunderhirepurchaseinstalmentplanswiththefollowingcarryingamounts:
Group 2011 2010 RM’000 RM’000
Motor vehicles 383 536
Notes to the Financial Statements31 December 2011 (continued)
85advance synergy berhad (1225-D)
annual report 2011
4. PROPERTY, PLANT AND EQUIPMENT (continued)
(b) Included in property, plant and equipment of theGroup are assets pledged to the licensedbanks tosecurecreditfacilitiesgrantedtotheCompanyanditssubsidiarieswiththefollowingcarryingamounts:
Group 2011 2010 RM’000 RM’000
Freehold land 16,707 16,707Hotelproperties 45,075 45,912Buildings 1,345 1,355
63,127 63,974
(c) ThehotelpropertiesoftheGroupstatedatvaluationarebasedonindependentprofessionalvaluationcarriedoutonanopenmarketbasis.
Had the revalued assets been carried at cost less accumulated depreciation, the carrying amountswouldhavebeenasfollows:
Group Cost Accumulateddepreciation
Carrying amount
2011 RM’000 RM’000 RM’000
Hotelproperties-freeholdland 20,234 - 20,234-buildings 87,800 (14,864) 72,936
108,034 (14,864) 93,170
2010 Hotelproperties -freeholdland 20,234 - 20,234-buildings 91,291 (14,056) 77,235
111,525 (14,056) 97,469
(d) Included inproperty,plantandequipmentof theGroupareassetsunder saleand finance leasebackarrangementsasfollows:
Group 2011 2010 RM’000 RM’000
Freehold land 17,220 17,220Hotelproperties 15,653 15,857
32,873 33,077
(e) Inpreviousfinancialyear,animpairmentlossofRM1.74million,beingtheexcessofthecarryingvalueofequipmentsoveritsrecoverableamount,wasrecognisedintheGroupduetoitsexpectedrealisablevaluebeinglowerthanitscost.
Notes to the Financial Statements31 December 2011 (continued)
86advance synergy berhad (1225-D)
annual report 2011
5. INVESTMENT PROPERTY
Group 2011 2010 RM’000 RM’000
Atfairvalue:
At1January - -
Additions 7,926 -
Fairvaluegainrecognisedtoprofitorloss 946 -
Foreign currency translation differences (2) -
At 31 December 8,870 -
ThefairvalueoftheGroup’sinvestmentpropertyasat31December2011wasdeterminedbyanindependentprofessional valuer with recent experience in the location and category of the investment property. Thevaluationwasarrivedatbyreferencetomarketevidence,beingtheestimatedamountforwhichapropertycouldbeexchangedonthedateofvaluationbetweenawillingbuyerandawillingsellerinanarm’slengthtransactions.
DetailsofGroup’sinvestmentpropertyareasfollows:
Descriptions Location Existing use
FreeholdShopoffice Lot3A-5-1,5thfloor,block3A,PlazaSentral,KualaLumpur,Malaysia
Generate rental income
Thefollowingamountsarerecognisedintheprofitorloss:
Group 2011 2010 RM’000 RM’000
Rental income 610 -
Directoperatingexpensesarisingfrominvestmentpropertythatgeneraterentalincome (120) -
Notes to the Financial Statements31 December 2011 (continued)
87advance synergy berhad (1225-D)
annual report 2011
6. INTANGIBLE ASSETS
Goodwill on consolidation
*Purchasedgoodwill
**Intellectual property
Software development expenditure
Total
Group RM’000 RM’000 RM’000 RM’000 RM’0002011 (Note 7)
CostAt1January2011 59,424 9,643 5,250 13,993 88,310Additions - - - 2,789 2,789
Capitalisationofdevelopmentequipment - - - 259 259
Acquisitionofasubsidiary 439 - - - 439
At 31 December 2011 59,863 9,643 5,250 17,041 91,797
Accumulated Amortisation and Impairment At1January2011 1 1,346 5,250 6,122 12,719Amortisationforthefinancialyear - 3 - 1,712 1,715Impairmentlossforthefinancialyear 2 - - - 2 Foreignexchangetranslationdifference - (38) - 10 (28)
At 31 December 2011 3 1,311 5,250 7,844 14,408
Carrying Amount at 31 December 2011 59,860 8,332 - 9,197 77,389
Group2010
CostAt1January2010 59,424 1,346 5,250 9,439 75,459Additions - - - 4,626 4,626
Disposal - - - (72) (72)
Reclassification - 8,297 - - 8,297
At 31 December 2010 59,424 9,643 5,250 13,993 88,310
Accumulated Amortisation and Impairment At1January2010 1 1,346 5,250 3,525 10,122Amortisationforthefinancialyear - - - 1,482 1,482Impairmentlossforthefinancialyear - - - 1,057 1,057Foreignexchangetranslationdifference - - - 58 58
At 31 December 2010 1 1,346 5,250 6,122 12,719
Carrying Amount at 31 December 2010 59,423 8,297 - 7,871 75,591
Included in intangibleassetsof theGroupareassetspledgedto licensedbankstosecurecredit facilitiesgrantedtoasubsidiarywiththefollowingcarryingamounts:
Group 2011 2010 RM’000 RM’000
Purchasedgoodwill 8,332 8,297
Notes to the Financial Statements31 December 2011 (continued)
88advance synergy berhad (1225-D)
annual report 2011
6. INTANGIBLE ASSETS (continued)
* Purchasedgoodwillincludesthepurchaseofahotelbusinesswhichcomprisesthefollowing:
a. therelatedclienteleandgoodwill;
b. theclassificationcertificateasathreestarhotel;
c. licencetoservebeverageandalcohol;
d. therighttotheleaseswherethehotelbusinessiscarriedout;
e. thelistofclients;
f. therighttotransferthetelephoneline;
g. aswellasanyelementsbeingpartofthehotelbusiness,nodescriptionbeingnecessary.
** Intellectualpropertycomprisesrightsandtitlesrelatingtomobilesoftware,theamortisationofwhichisrecognisedascostofsalesinprofitorloss.
7. GOODWILL ON CONSOLIDATION
Group 2011 2010 RM’000 RM’000
At1January 59,423
59,423
Acquisitionofasubsidiary 439 -Impairmentlossforthefinancialyear (2) -
At 31 December 59,860 59,423
ThecarryingamountsofgoodwillallocatedtotheGroup’sCGUareasfollows:
Group 2011 2010 RM’000 RM’000
Informationandcommunicationstechnology–CGU1 53,138 53,138Others 6,722 6,285
59,860 59,423
TherecoverableamountofCGU1isbasedonitsvalueinuse.
CGU 1
The5-yearcashflowprojectionsforthefinancialyearsending31December2012to2016arepreparedbasedonavailableinformationandanticipatedprojects.Thegrowthrateusedtoextrapolatecashflowprojectionsrangefrom7%to22%overtheperiod.Thebudgetedgrossprofitmarginusedrangefrom55%to66%overtheperiod.Adiscountfactorof10.4%hasbeenappliedinarrivingatthepresentvalueoffuturecashflows.
ThevaluesassignedtotheabovekeyassumptionsrepresentDirectors’assessmentoffuturetrendsintheindustryandarebasedonbothexternalsourcesandinternalsourceofinformation.
Basedonthesensitivityanalysisperformed,DirectorsbelievethatnoreasonablypossiblechangeinbasecasekeyassumptionswouldcausethecarryingvaluesoftheCGUtoexceeditsrecoverableamounts.
Notes to the Financial Statements31 December 2011 (continued)
89advance synergy berhad (1225-D)
annual report 2011
8. INVESTMENT IN SUBSIDIARIES
Company 2011 2010 RM’000 RM’000
Unquotedshares-atcost
702,579702,579
Less:Impairmentlosses (228,831) (218,181)
473,748 484,398
(a) CertainsharesofquotedsubsidiariesandunquotedsubsidiariesintheGroupwiththecarryingamountof RM10.28million (2010: RM10.28million) andRM61.94million (2010: RM63.52million) respectively,havebeenchargedtofinancialinstitutionsforcreditfacilitiesgrantedtotheGroup.
(b) Duringthefinancialyear,thefollowingtransactionsweretransacted:
(i) On 10 February 2011, the Company announced that Triton Feeder Services Sdn Bhd (“TFS”), awholly-ownedsubsidiaryofAdvanceSynergyCapitalSdnBhd (“ASC”),which in turn isawholly-ownedsubsidiaryoftheCompany,hadon10February2011receivedanoticepursuanttoSection308(4)oftheCompaniesAct,1965fromSuruhanjayaSyarikatMalaysiainformingthatTFShasbeenstruckofffromtheregisteroftheRegistrarofCompanies.
(ii) On2November 2011, theCompanyannounced that a notice from theAccounting andCorporateRegulatoryAuthority,Singaporewasreceivedon2November2011informingthatthenameofTritonExpress(S)Pte.Ltd.,anindirectwholly-ownedsubsidiaryofASC,wasstruckofftheRegisteron14October2011.
(iii) On 31 May 2011, the Company announced that Unified Communications Pte. Ltd. (“UCPL”), awholly-owned subsidiary of Unified Communications Holdings Limited (“UCHL”), which in turn isa58.3%-ownedsubsidiaryof theCompany (held viaWorldwideMatrixSdnBhd, awholly-ownedsubsidiaryoftheCompany)haddisposedits51%equityinterestinUnifiedCommunicationsLimited(“UCL”),asubsidiary incorporated inHongKong, toaDirectorandmanagementstaffofUCL,Mr.ChingMingWai.
FollowingthecompletionofthedisposalofUCLshares,UCLceasedtobeasubsidiaryofUCPLandtheCompany.ThesummaryoftheeffectsonthedisposalofUCLsharesareasfollows:
2011 RM’000
Property,plantandequipment 9 Inventories 11 Receivables 24 Cashandbankbalances 6Payables (249)
Net liabilities deemed disposed (199)Less:Netproceedsfromdisposal 2
Gain on disposal of a subsidiary (201)
Net proceeds from disposal 2 Less:Cashandcashequivalentsofasubsidiarydisposed (6)
Netcashoutflow (4)
Notes to the Financial Statements31 December 2011 (continued)
90advance synergy berhad (1225-D)
annual report 2011
8. INVESTMENT IN SUBSIDIARIES (continued)
(b)Duringthefinancialyear,thefollowingtransactionsweretransacted(continued):
(iv)On15September2011,theCompanyannouncedthatitswholly-ownedsubsidiary,ExcellentDisplaySdn Bhd (“EDSB”), had entered into an agreement for the acquisition of 100% equity interest inDamaTCMSdnBhd(“DamaTCM”)comprising380,000issuedandfullypaid-upordinarysharesofRM1.00eachforacashconsiderationofRM600,000.00(“AcquisitionofDamaTCM”).ConcurrentlywiththecompletionoftheAcquisitionofDamaTCM,EDSBwillenterintoaservicecontractwithLeeThiamHuattoappointhimastheChiefOperatingOfficerofDamaTCM.Toincentiviseandensurealongtermcommitment,20%oftheenlargedsharecapitalofDamaTCMwillbetransferredtoLeeThiamHuatatanominalvalueofRM1.00(“ProposedTransfer”).UponcompletionoftheProposedTransfer,EDSB’sequityinterestinDamaTCMwillbereducedto80%.PleaserefertoNote38(c)tothefinancialstatementsforthecompletionoftheProposedTransfersubsequenttotheendofthefinancialyear.On7December2011,theCompanyannouncedthattheAcquisitionofDamaTCMhasbeencompletedandaccordingly,DamaTCMbecameawholly-ownedsubsidiaryofEDSBandtheCompany.ThesummaryoftheeffectsontheacquisitionofDamaTCMsharesareasfollows:
2011 RM’000
Property,plantandequipment 249 Receivables 40 Inventories 43 Cashandbankbalances 32 Payables (203)
Shareofnetassetsacquired 161Goodwillonconsolidation 439
Totalpurchaseconsideration 600
Totalpurchaseconsideration 600Less:Cashandcashequivalentsofasubsidiaryacquired (32)
Netcashoutflow 568
(v) On26September2011,ASCacquired186,074ordinarysharesofRM1.00each representing10%equityinterestinQualityBus&Coach(M)SdnBhd(“QBC”)fromQualityBus&CoachPty.Ltd.foratotalcashconsiderationofRM1.00onlypursuanttoaninternalreorganisationandconsequentialthereto,QBCbecamea61%-ownedsubsidiaryofASC.
(vi) On 25October 2011, theCompany announced that the disposal of SuntopCorporation SdnBhd(“Suntop”)(as detailed in Note 9(b) to the financial statements) was completed and accordingly,SuntopceasedtobeasubsidiaryoftheCompany.
(vii)On13December2011,theCompanyannouncedthattheshareholdersofAlangka-SukaAustraliaPty.Ltd.(“ASAPL”)andHolidayVillaAustraliaPty.Ltd.(“HVAPL”),bothindirectwholly-ownedsubsidiariesof theCompany [held viaLarkswoodAssetsLimited,awholly-ownedsubsidiaryofAlangka-SukaInternationalLimited,whichisinturnawholly-ownedsubsidiaryofAlangka-SukaHotels&ResortsSdn Bhd, a wholly-owned subsidiary of the Company] have respectively passed a resolution tovoluntaryderegisterASAPLandHVAPL.PleaserefertoNote38(d)tothefinancialstatementsforthederegistrationofASAPLandHVAPLsubsequenttotheendofthefinancialyear.
Notes to the Financial Statements31 December 2011 (continued)
91advance synergy berhad (1225-D)
annual report 2011
8. INVESTMENT IN SUBSIDIARIES (continued)
(b)Duringthefinancialyear,thefollowingtransactionsweretransacted(continued):
(viii) On22December2011,theCompanyannouncedthatAdvanceSynergyPropertiesSdnBhd(“ASP”),awholly-ownedsubsidiaryoftheCompany,acquired100%equityinterestintwoshelfcompaniesincorporatedinHongKong,namelyExcellentResultInvestmentsLimited(“ExcellentResult”)andBestAlphaInvestmentsLimited(“BestAlpha”),eachcomprising1issuedandfullypaid-upordinaryshare of HKD1.00 each (“Acquisition”). Excellent Result and Best Alpha became wholly-ownedsubsidiariesofASPandtheCompanyaftertheacquisition.
(c) Duringthefinancialyear,theGrouprecognisedthefollowingimpairmentlosses:
ImpairmentlossofRM10.65millionforinvestmentinsubsidiarieswasrecognisedbasedontheestimatedrecoverableamount.
Inthepreviousfinancialyear,theCompanyhadwrittenbackimpairmentlossoninvestmentinsubsidiariesofRM31.00millioninviewthattheunderlyingfairvalueoftheinvestmentinsubsidiariesmainlyinrespectofthelandandbuildingsvalueofthesubsidiarieswashigherthanthecarryingamount.
(d) Thedetailsofthesubsidiariesareasfollows:
Effective
Equity Interest Country of 2011 2010 Name of Company Incorporation % % Principal Activities
Direct subsidiaries
AdvanceSynergyCapitalSdn.Bhd. Malaysia 100 100 Investment holding and provision of management services
AdvanceSynergyPropertiesSdn.Bhd. Malaysia 100 100 Investment holding
*AdvanceSynergyRealtySdn.Bhd. Malaysia 100 100 Propertydevelopment
AdvanceSynergyTimberSdn.Bhd. Malaysia 100 100 Dormant
AlamSamuderaCorporationSdn.Bhd. Malaysia 100 100 Investment holding
Alangka-SukaHotels&ResortsSdn.Bhd.
Malaysia 100 100 Investment holding
*AusbornSawmillSdn.Bhd. Malaysia 100 100 Inactive
*BornionSawmillSdn.Bhd. Malaysia 100 100 Inactive
Calmford Incorporated BritishVirginIslands
100 100 Investment holding
DiversifiedGainSdn.Bhd. Malaysia 100 100 Investment holding
ExcellentArchSdn.Bhd. Malaysia 100 100 Investment holding
ExcellentDisplaySdn.Bhd. Malaysia 100 100 Investment holding
**iSynergySdn.Bhd. Malaysia 80 80 Provisionofpaymentrelatedproducts and services
Nagapura Management Corporation Sdn.Bhd.
Malaysia 100 100 Provisionofmanagementservices
Notes to the Financial Statements31 December 2011 (continued)
92advance synergy berhad (1225-D)
annual report 2011
8. INVESTMENT IN SUBSIDIARIES (continued)
(d) Thedetailsofthesubsidiariesareasfollows(continued):
Effective
Equity Interest Country of 2011 2010 Name of Company Incorporation % % Principal Activities
Direct subsidiaries (continued)
SadongDevelopmentSdn.Bhd. Malaysia 100 100 Propertydevelopment,management and rental of properties
Strategic Research &ConsultancySdn.Bhd.
Malaysia 100 100 Inactive
#SynergyCardsSdn.Bhd. Malaysia 92 92 Provisionofdesignatedpaymentinstruments and products
Synergy Gold Incorporated BritishVirginIslands
100 100 Inactive
SynergyPetroleumIncorporated BritishVirginIslands
100 100 Investment holding
WorldwideMatrixSdn.Bhd. Malaysia 100 100 Investment holding
Indirect subsidiaries held throughAdvance Synergy Capital Sdn. Bhd.
AESBIPowerSystemsSdn.Bhd. Malaysia 100 100 Propertyinvestmentandmanagement services
ASCCreditSdn.Bhd. Malaysia 100 100 Credit and leasing
ASCEquitiesSdn.Bhd. Malaysia 100 100 Investment holding and venture capital
QualityBus&Coach(M)Sdn.Bhd. Malaysia 61 61 Designing,buildingandfabrication of coaches
TritonEngineeringSdn.Bhd. Malaysia 100 100 Inactive
TritonExpressSdn.Bhd. Malaysia 100 100 Inactive
TritonFeederServicesSdn.Bhd. Malaysia - 100 Struckoffanddissolvedon 21 February 2011
Triton-KSdn.Bhd. Malaysia 100 100 Management services
TritonKhidmatSdn.Bhd. Malaysia 100 100 Inactive
Indirect subsidiary held throughTriton Express Sdn. Bhd.
*TritonExpress(S)Pte.Ltd. Singapore - 100 Struckoffanddissolvedon 14 October 2011
Notes to the Financial Statements31 December 2011 (continued)
93advance synergy berhad (1225-D)
annual report 2011
8. INVESTMENT IN SUBSIDIARIES (continued)
(d) Thedetailsofthesubsidiariesareasfollows(continued):
Effective Equity
Interest Country of 2011 2010 Name of Company Incorporation % % Principal Activities
Indirect subsidiary held throughAdvance Synergy PropertiesSdn. Bhd.
^BestAlphaInvestmentsLimited HongKong 100 - Dormant
^ExcellentResultInvestmentsLimited HongKong 100 - Dormant
Synergy Realty Incorporated BritishVirginIslands
100 100 Inactive
Indirect subsidiary held through Synergy Realty Incorporated
*BuilderworksPty.Ltd. Australia 100 100 Inactive
Indirect subsidiary held through Alam Samudera Corporation Sdn. Bhd.
SynergyTours(Borneo)Sdn.Bhd. Malaysia 100 100 Travelandtouragent
Indirect subsidiaries held throughAlangka-Suka Hotels & ResortsSdn. Bhd.
Alangka-SukaInternationalLimited BritishVirginIslands
100 100 Investment holding
AlorSetarHolidayVillaSdn.Bhd. Malaysia 100 100 OperatesHolidayVillaHotel& Suites Alor Setar
AntaraHolidayVillasSdn.Bhd. Malaysia 100 100 Provisionofhotelmanagement services
AsbinaHotel&PropertySdn.Bhd. Malaysia 100 100 LeaseholdownerofHolidayVillaHotel&SuitesPhnomPenh
CheratingHolidayVillaBerhad Malaysia 100 100 OperatesHolidayVillaBeach Resort Cherating
GrandHotelSudanLimited BritishVirginIslands
100 100 LeaseholdownerofGrandHolidayVillaHotel&SuitesKhartoum
HolidayVillaSubangSdn.Bhd. Malaysia 100 100 Dormant
HolidayVillaTravel&ToursSdn.Bhd. Malaysia 100 100 Hiringoflimousines
HolidayVillasInternationalLimited BritishVirginIslands
100 100 Hotelmanagementservices
LangkawiHolidayVillaSdn.Bhd. Malaysia 100 100 OperatesHolidayVillaBeach Resort & Spa Langkawi
MayorHotelsSdn.Bhd. Malaysia 100 100 OwnsandoperatesCityVillaKualaLumpur
Notes to the Financial Statements31 December 2011 (continued)
94advance synergy berhad (1225-D)
annual report 2011
8. INVESTMENT IN SUBSIDIARIES (continued)
(d) Thedetailsofthesubsidiariesareasfollows(continued):
Effective
Equity Interest Country of 2011 2010Name of Company Incorporation % % Principal Activities
Indirect subsidiaries held throughAlangka-Suka Hotels & ResortsSdn. Bhd. (continued)
SuperLeisureSdn.Bhd. Malaysia 100 100 Investment holding
*Alangka-SukaParisSAS France 100 100 OwnstherealestateofHolidayVillaLafayetteParis
*LagendadeMalaisieSAS France 100 100 Operation and management of restaurants
Indirect subsidiaries held throughAlangka-Suka International Limited
AsbinaShenzhenLimited BritishVirginIslands
90 90 Dormant
*GrandHolidayVillaKhartoumCo.Ltd. Republic of Sudan
100 100 OperatesGrandHolidayVillaHotel&SuitesKhartoum
HolidayVillaMakkahLimited(formerlyknownasLauncestonDevelopmentsLimited)
BritishVirginIslands
100 100 Inactive
*InterwellManagementLimited EnglandandWales
100 100 Dormant
LarkswoodAssetsLimited BritishVirginIslands
100 100 Investment holding
*P.T.DiwangkaraHolidayVillaBali Republic of Indonesia
90 90 Operates and manages DiwangkaraHolidayVillaBeachResortBali&HolidayVillaHotelWinaKuta
Indirect subsidiary held through Asbina Hotel & Property Sdn. Bhd.
AsbinaHotel&Property(Cambodia)Pte.Ltd.
KingdomofCambodia
100 100 OperatesHolidayVillaHotel&SuitesPhnomPenh
Indirect subsidiaries held through Holiday Villas International Limited
HolidayVillaChinaInternationalLimited BritishVirginIslands
95 95 Hotelmanagementservices
HolidayVillaMiddleEastLimited BritishVirginIslands
90 90 Hotelmanagementservices
*HolidayVilla(UK)Ltd. EnglandandWales
100 100 OperatesHolidayVillaHotel&SuitesLondon
Notes to the Financial Statements31 December 2011 (continued)
95advance synergy berhad (1225-D)
annual report 2011
8. INVESTMENT IN SUBSIDIARIES (continued)
(d) Thedetailsofthesubsidiariesareasfollows(continued):
Effective
Equity Interest Country of 2011 2010Name of Company Incorporation % % Principal Activities
Indirect subsidiary held throughHoliday Villa China InternationalLimited
*ChangshuHolidayVillaHotelManagementCo.Ltd.
People’sRepublic of
China
95 95 Hotelmanagementservices
Indirect subsidiary held through Alangka-Suka Paris SAS
*HolidayVillaLafayetteParisSAS France 100 100 Ownsandoperatestheon-goingbusinessofHolidayVillaLafayetteParis
Indirect subsidiaries held through Larkswood Assets Limited
*Alangka-SukaAustraliaPty.Ltd. Australia 100 100 Voluntaryderegisteredon16February2011
*HolidayVillaAustraliaPty.Ltd. Australia 100 100 Voluntaryderegisteredon16February2011
Indirect subsidiaries held through Calmford Incorporated
*AdvansaPty.Ltd. Australia 100 100 Manufacturingandmarketingof builderhardwareproducts
AdvansaSdn.Bhd. Malaysia 100 100 Provisionofmanagementservices
*HomeCinemaStudioPty.Ltd. Australia 100 100 Inactive
Indirect subsidiary held through Diversified Gain Sdn. Bhd.
OrientEscapeTravelSdn.Bhd. Malaysia 100 100 Travelandtouragent,licensedmoney changer and the provision of travel related services
Indirect subsidiaries held through Orient Escape Travel Sdn. Bhd.
MarketingandEventManagementIntegratedSdn.Bhd.
Malaysia 100 100 Inactive
MotorsportsAdventureSdn.Bhd. Malaysia 100 100 Inactive
OrientEscapeTravel(Penang)Sdn.Bhd. Malaysia 100 100 Inactive
SynergyToursSdn.Bhd. Malaysia 100 100 Travelandtouragent
Notes to the Financial Statements31 December 2011 (continued)
96advance synergy berhad (1225-D)
annual report 2011
8. INVESTMENT IN SUBSIDIARIES (continued)
(d) Thedetailsofthesubsidiariesareasfollows(continued):
Effective
Equity Interest Country of 2011 2010Name of Company Incorporation % % Principal Activities
Indirect subsidiary held through Excellent Arch Sdn. Bhd.
AdvanceSynergyFurnitureSdn.Bhd. Malaysia 100 100 Inliquidation
Indirect subsidiary held through Excellent Display Sdn. Bhd.
DamaTCMSdn.Bhd. Malaysia 100 - Engagedinthebusinessof traditional Chinese medicine services
Indirect subsidiaries held through iSynergy Sdn. Bhd.
Cosmocourt.com(Malaysia)Sdn.Bhd. Malaysia 80 80 Inactive
Rewardstreet.com(Malaysia)Sdn.Bhd. Malaysia 80 80 Inactive
DatakeySdn.Bhd. Malaysia 80 80 Dormant
Indirect subsidiaries held through Nagapura Management Corporation Sdn. Bhd.
AcrylicSynergySdn.Bhd. Malaysia 81 81 Inactive
SyarikatFitandWeldEngineering(M)Sdn.Bhd. Malaysia 70 70 Inliquidation
XgoTechnikSdn.Bhd. Malaysia 100 100 Inactive
Indirect subsidiary held through Sadong Development Sdn. Bhd.
HotelGoldenDragonSdn.Bhd. Malaysia 95 95 Propertydevelopment
Indirect subsidiary held through Hotel Golden Dragon Sdn. Bhd.
SimpangTigaRealtySdn.Bhd. Malaysia 95 95 Propertydevelopment
Indirect subsidiary held through Worldwide Matrix Sdn. Bhd.
*UnifiedCommunicationsHoldingsLimited Singapore 58.30 58.30 Investment holding and the provision of management services
Indirect subsidiaries held throughUnified Communications Holdings Limited
*MobilizationSdn.Bhd. Malaysia 58.30 58.30 Creation and operation ofnext-generationmobile applications and mobilemedia-basedservices including mobile advertising services and such mobile media value-added-servicesthat operate on an advertisement-supportedoradvertisement-fundedrevenue model
Notes to the Financial Statements31 December 2011 (continued)
97advance synergy berhad (1225-D)
annual report 2011
8. INVESTMENT IN SUBSIDIARIES (continued)
(d) Thedetailsofthesubsidiariesareasfollows(continued):
Effective
Equity Interest Country of 2011 2010 Name of Company Incorporation % % Principal ActivitiesIndirect subsidiaries held through
Unified Communications Holdings Limited (continued)
*UnifiedAssetsSdn.Bhd. Malaysia 58.30 58.30 Investment holding
*UnifiedCommunications(OHQ)Sdn.Bhd. Malaysia 58.30 58.30 Provisionofmanagementservices
*UnifiedCommunications(OSS)Sdn.Bhd. Malaysia 58.30 58.30 Investment holding
*UnifiedCommunicationsPte.Ltd. Singapore 58.30 58.30 Distribution of telecommunications products,thedesignanddevelopment of telecommunications solutions,projectmanagement,andmaintenance and support services for the telecommunications industry
*UnifiedCommunicationsSdn.Bhd. Malaysia 58.30 58.30 Researchanddevelopment,softwareengineering,systemintegration,projectmanagement,andmaintenance and support services for the telecommunications industry
Indirect subsidiary held through Unified Communications (OSS) Sdn. Bhd.
*GlobeOSSSdn.Bhd. Malaysia 29.73 29.73 Provisionofglobalroamingqualityofservice management solutions
Indirect subsidiary held through GlobeOSS Sdn. Bhd.
*GlobeOSSPte.Ltd. Singapore 29.73 29.73 Provisionofglobalroamingqualityofservice management solutions
Indirect subsidiaries held through Unified Communications Pte. Ltd.
*AttrixTechSdn.Bhd. Malaysia 58.30 58.30 Distribution of information technology and telecommunications products
*UnifiedCommunicationsLimited HongKong - 29.73 Distribution of telecommunications products,thedesignand development of telecommunicationssolutions,projectmanagement,andmaintenance and support services for the telecommunications industry
*UnifiedCommunications(Private)Limited
Pakistan 58.30 58.30 Provisionoftelecommunicationsproducts,technologyandcustomised solutions to telecommunicationsoperators,service providers and enterprises
Notes to the Financial Statements31 December 2011 (continued)
98advance synergy berhad (1225-D)
annual report 2011
8. INVESTMENT IN SUBSIDIARIES (continued)
(d) Thedetailsofthesubsidiariesareasfollows(continued):
Effective
Equity Interest Country of 2011 2010 Name of Company Incorporation % % Principal Activities
Indirect subsidiaries held through Unified Communications Pte. Ltd. (continued)
*UnifiedCommunications(VAS)Sdn.Bhd.
Malaysia 58.30 58.30 Provisionoftelecommunicationsproducts,technologyandcustomised solutions to telecommunicationsoperators,service providers and enterprises
*Unified(Thailand)Limited Thailand 51.89 51.89 Distribution of telecommunications products,thedesignand development of telecommunicationssolutions,projectmanagement,andmaintenance and support services for the telecommunications industry
Indirect subsidiaries held through Unified Communications Sdn. Bhd.
*UnifiedCommunications(Tech)Pte.Ltd.(formerlyknownasAttrixTechnologyPte.Ltd.)
Singapore 58.30 58.30 Distribution of information technology and telecommunications products
*UnifiedCommunications(Shenzhen)Pte.Ltd.
People’sRepublic of
China
58.30 58.30 Distribution of telecommunications products,developementoflocalisedtelecommunications solutions and maintenance and support services for the telecommunications industry
* CompaniesauditedbyanotherfirmsotherthanBakerTillyMonteiroHeng.
** 29%oftheequityinterestofthesecompaniesareheldbyAdvanceSynergyCapitalSdn.Bhd.,awholly-ownedsubsidiaryoftheCompany.
# 41%oftheequityinterestofthesecompaniesareheldbyAdvanceSynergyCapitalSdn.Bhd.,awholly-ownedsubsidiaryoftheCompany.
^ The companieswere acquired on 22December 2011 and therewere no audited financial statements for theperiodended31December2011.
Notes to the Financial Statements31 December 2011 (continued)
99advance synergy berhad (1225-D)
annual report 2011
9. INVESTMENT IN ASSOCIATES
Group 2011 2010 Note RM’000 RM’000
Atcost:
Quotedshares 12,758 12,758Less:Allowanceforimpairmentloss (450) (450)
12,308 12,308
Unquotedshares 21,219 63,930Less:Allowanceforimpairmentloss - -
21,219 63,930
Shareofpost-acquisitionreserve,netofdividendsreceived (10,852) 68,545
22,675 144,783Reclassifiedtonon-currentassetsclassifiedasheldforsale 17 - (114,024)
22,675 30,759
Marketvalueofquotedshares 3,157 4,961
Thetransactionsinvolvingassociatesduringthefinancialyearareasfollows:
(a) On2February2011,theCompanyannouncedthattheBoardofDirectorsoftheCompanyhadresolvedtoseektheapprovalfromitsshareholdersfortheproposeddisposalbyASCofitsentireshareholdingof49,000,000ordinarysharesofRM1.00eachrepresenting49%ofthetotalissuedandpaid-upsharecapitalinACESynergyInsuranceBerhad(“ASIB”)toACEINAInternationalHoldingsLtd.(“ACEINA”)foratotalcashconsiderationofRM117.0million(“DisposalofASIB”).
ASIB ceased to be an associated company of ASC subsequent to the Disposal of ASIB which wasdeemedcompletedon14June2011.
(b) On17March2011, theCompanyannounced thatAlangka-SukaHotels&ResortsSdnBhd (“ASHR”),hadacquiredanadditional30%equityinterestinSuntopcomprising61,500ordinarysharesofRM1.00each(“AcquisitionofSuntop”).Consequentially,ASHR’sequity interest inSuptopincreasedfrom40%to70%aftertheAcquisitionofSuntop.On7July2011,theCompanyannouncedthatitswholly-ownedsubsidiary,ASHR,hadenteredintoanagreementforthedisposalofitsentireshareholdingof143,500sharesrepresenting70%equityinterestinSuntopforacashconsiderationofRM3,269,000(“DisposalofSuntop”).On25October2011,theCompanyannouncedthattheDisposalofSuntopwascompletedandaccordingly,SuntopceasedtobeanassociateoftheCompany.
(c) On12December2011,SuperLeisureSdnBhd (“SuperLeisure”),an indirectwholly-ownedsubsidiaryof theCompany [held viaASHRwhich iswholly-ownedby theCompany], subscribed for 24,500newordinarysharesofRM1.00eachrepresenting49%equityinterestinSmileIntegratedSolutionSdnBhd(“SmileIntegratedSolution”)atanissuepriceofRM1.00pernewordinaryshare.Consequentialthereto,SmileIntegratedSolutionbecameanassociatecompanyofSuperLeisureandtheCompany.
(d) On14October2011,theCompanyannouncedthatUnifiedCommunicationsSdnBhd(“UCSB”),awholly-ownedsubsidiaryofUCHL,hadenteredintoanagreementfortheacquisitionoftheremaining228,000ordinarysharesofRM1.00eachrepresenting60%equityinterestinAheadMobileSdnBhd(“AMSB”)notalreadyownedbyUCSBforatotalcashconsiderationofuptoRM22.5million(“AcquisitionofAMSB”).Please refer to Note 38(a) to the financial statements for the completion of the Acquisition of AMSBsubsequenttotheendofthefinancialyear.
Notes to the Financial Statements31 December 2011 (continued)
100advance synergy berhad (1225-D)
annual report 2011
9. INVESTMENT IN ASSOCIATES (continued)
Thesummarisedfinancialinformationoftheassociatesareasfollows:
Group 2011 2010 RM’000 RM’000
Results Revenue 27,087 30,034Profitforthefinancialyear 22,859 6,223
Assets and Liabilities Totalassets 105,021 151,455Totalliabilities 6,489 10,462
Thedetailsoftheassociatesareasfollows:
Effective Equity Interest
Country of 2011 2010 Name of Company Incorporation % % Principal Activities
Indirect associates held through Advance Synergy Capital Sdn. Bhd.
*ACESynergyInsuranceBerhad Malaysia - 49 Underwritingofgeneralinsurancebusiness
KumpulanPowernetBerhad Malaysia 20 20 Investment holding
*QualityBus&CoachPty.Ltd. Australia 50 50 Designing,buildingandfabricationofcoaches
*SIBB Berhad Malaysia 20 20 Investment dealing
Indirect associates held through Alangka-Suka Hotels & Resorts Sdn. Bhd.
SuntopCorporationSdn.Bhd. Malaysia - 40 Investment holding
HolidayVillaHotels&ResortsSdn.Bhd. Malaysia 40 40 Dormant
HolidayVillaKualaLumpurSdn.Bhd. Malaysia 40 40 Investment holding
Indirect associate held through Langkawi Holiday Villa Sdn. Bhd.
MOODPerfumesSdn.Bhd. Malaysia 30 30 Perfumesretailer
Indirect associate held through Super Leisure Sdn. Bhd.
SmileIntegratedSolutionSdn.Bhd. Malaysia 49 - ProvidestotalsolutionforhotelindustryconcentratinginmarketingofSMILEHospitalitySystem,providing training and maintenance ofsoftware.
Indirect associates held through Unified Communications Sdn. Bhd.
*AheadMobileSdn.Bhd. Malaysia 23.32 23.32 Softwareengineering,systemintegration,projectmanagement,and maintenance and support services for the telecommunications industry
* CompaniesauditedbyanotherfirmsotherthanBakerTillyMonteiroHeng.
Notes to the Financial Statements31 December 2011 (continued)
101advance synergy berhad (1225-D)
annual report 2011
10. INVESTMENT IN JOINT VENTURE
Thedetailsofthejointventureareasfollows:
Effective Equity Interest
Country of 2011 2010 Name of Company Incorporation % % Principal Activities
Indirect joint venture held through Unified Communications Pte. Ltd.
*UnifiedTelecomPrivateLimited India 29.15 29.15 Provisionoftelecommunicationsproducts,servicesandcustomisedsolutions
* CompaniesauditedbyanotherfirmsotherthanBakerTillyMonteiroHeng.
The following amounts represent theGroup’s 29.15%share of the assets and liabilities, and income andexpensesof the joint venturewhichare included in theconsolidatedstatementsof financialpositionandstatementsofcomprehensiveincomeoftheGroupusingtheline-by-lineformatofproportionateconsolidation.
The Group’s aggregate share of the current assets, non-current assets, current liabilities, non-currentliabilities,incomeandexpensesofthejointlycontrolledentitiesareasfollows:
Group 2011 2010 RM’000 RM’000
Results
Revenue - 149 Lossforthefinancialyear (339) (255)
Assets
-Currentassets 100 158 -Non-currentassets 44 60
144 218
Liabilities
-Currentliabilities 108 237
Operatingcashoutflows (437) (50)Investingcashoutflows - (19)Financingcashinflows 361 149
Notes to the Financial Statements31 December 2011 (continued)
102advance synergy berhad (1225-D)
annual report 2011
11. INVESTMENT SECURITIES
Group Company 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000 Non-Current:Available-for-sale financial assets Quoted securitiesIn Malaysia-Equityinstruments 20,284 20,284 - --Less:Allowanceforimpairmentloss (9,825) (9,018) - -
10,459 11,266 - -
Available-for-sale financial assets
Unquoted securities
In Malaysia
-Equityinstruments,atcost 52,662 52,662 52,658 52,658-Less:Allowanceforimpairmentloss (47,757) (47,757) (47,758) (47,758)
4,905 4,905 4,900 4,900
Outside Malaysia
-Equityinstruments,atcost 16,502 16,502 - -
21,407 21,407 4,900 4,900
Total non-current investment securities 31,866 32,673 4,900 4,900
Current:Financial assets at fair value through profit and loss:Held for trading investmentsQuoted securitiesIn Malaysia-Equityinstruments 928 919 - -
Total current investment securities 928 919 - -
Total investment securities 32,794 33,592 4,900 4,900
Market value of quoted investments 11,387 12,185 - -
Inthepreviousfinancialyear,theGrouprecognisedanimpairmentlossofRM27.3millionforunquotedequityinstrumentsclassifiedasavailable-for-salefinancialassetswhichwasrecognisedbasedontheestimatedrecoverableamountoftheinvestments.
Notes to the Financial Statements31 December 2011 (continued)
103advance synergy berhad (1225-D)
annual report 2011
12. TRADE AND OTHER RECEIVABLES
Group Company 2011 2010 2011 2010 Note RM’000 RM’000 RM’000 RM’000 Non-Current:Trade Tradereceivables 2,150 6,400 - -
2,150 6,400 - -
Less : Allowance for impairmentTradereceivables - - - -
- - - -
Total non-current receivables 2,150 6,400 - -
Non-Trade Other assets 424 - - -
424 - - -
Total non-current receivables 2,574 6,400 - -
Current: Trade Tradereceivables (a) 34,860 36,961 - -Amountowingfromcustomersforcontractwork (b) 1,068 5,341 - - Accrued billings (c) 265 1,225 - -
36,193 43,527 - -
Less : Allowance for impairment
Tradereceivables (2,342) (7,694) - -
33,851 35,833 - -
Current:Non-Trade Other receivables 12,537 7,299 426 66 Deposits 2,551 1,290 5 5 Prepayments 8,709 9,611 - -Amountsowingfromassociates (d) 429 953 12 42 Amountsowingfromsubsidiaries (e) - - 97,659 98,043
24,226 19,153 98,102 98,156
Less : Allowance for impairment
Other receivables (946) (984) - -
(946) (984) - -
23,280 18,169 98,102 98,156
Total current receivables 57,131 54,002 98,102 98,156
Total trade and other receivables 59,705 60,402 98,102 98,156
Add: Cash and bank balances and short term deposits (Note 16) 191,686 110,670 5,196 668
Total loan and receivables 251,391 171,072 103,298 98,824
Notes to the Financial Statements31 December 2011 (continued)
104advance synergy berhad (1225-D)
annual report 2011
12. TRADE AND OTHER RECEIVABLES (continued)
(a) Trade receivables
Trade receivables are non-interest bearing and normal credit terms offered by theGroup range from30to90days(2010:30to90days).Othercredittermsareassessedandapprovedonacasebycasebasis.Theyarerecognisedat theiroriginal invoiceamountswhichrepresent their fairvalueson initialrecognition.
Thecarryingamountsoftradeandotherreceivablesapproximatetheirfairvalues.
TheageinganalysisoftheGroup’stradereceivablesisasfollows:Group
2011 2010 RM’000 RM’000
Neither past due nor impaired 19,341 19,955Pastdue0to3months 9,477 9,001Pastdue3to9months 3,501 4,309Pastdueover9months 2,349 2,402
15,327 15,712Impaired-Individually 1,977 7,328Impaired-Collectively 365 366
37,010 43,361
Receivables that are neither past due nor impaired
TradeandotherreceivablesthatareneitherpastduenorimpairedarecreditworthydebtorswithgoodpaymentrecordswiththeGroup.
Receivables that are past due but not impaired
Included in the Group’s trade and other receivable balances are receivables with carrying values ofRM15.3million(2010:RM15.7million)whicharepastduebutnotimpairedattheendofthefinancialyear.TheGrouphasnotmadeanyallowancesforimpairmentforthesereceivablessincetherehasnotbeenasignificantchangeinthecreditqualityofthesereceivablesandtheamountsowingarestillconsideredasrecoverable.
In determining the recoverability of a trade receivable, theGroup considers any change in the creditqualityofthetradereceivablesfromthedatethecreditwasinitiallygranteduptothereportingdate.TheGrouphaspoliciesinplacetoensurethatcreditisextendedonlytocustomerswithacceptablecredithistoryand/orpaymenttrackrecords.AllowancesforimpairmentaremadeonspecifictradereceivableswhenthereisobjectiveevidencethattheGroupwillnotbeabletocollectallamountsdue.Includedincurrentyearprovisionsaremainlyspecificallowancesforimpairment.
Receivables that are impaired
TheGroup’stradereceivablesthatareimpairedatthereportingdateandthemovementinallowanceaccountsusedtorecordtheimpairmentareasfollows:
Notes to the Financial Statements31 December 2011 (continued)
105advance synergy berhad (1225-D)
annual report 2011
12. TRADE AND OTHER RECEIVABLES (continued)
(a) Trade receivables (continued)
Receivables that are impaired (continued)
Movementinallowanceaccounts:
Group 2011 2010 RM’000 RM’000
At1January 7,694 8,679Chargeforthefinancialyear 135 435 Disposal of a subsidiary (64) -Writtenoff (5,284) (934)Reversal of impairment loss (172) (436)Exchangedifferences 33 (50)At 31 December 2,342 7,694
Tradereceivablesthatareindividuallydeterminedtobeimpairedatthereportingdaterelatetoreceivablesthatareinsignificantfinancialdifficultiesandhavedefaultedonpayments.
Inthepreviousfinancialyear,theGrouphasreversedimpairmentlossesonotherreceivablesofRM16.89millionafterthereassessmentoftherecoverabilityofotherreceivablesbythemanagement.
(b) Amount Owing From/(To) Customers from Customers for Contract Work
Group 2011 2010 RM’000 RM’000
Aggregatecostsincurredtodateandattributableprofitsrecognisedtodate 28,921 11,074Less:Progressbillings (28,165) (5,783)
756 5,291Analysedasfollows:Amountowingtocustomersforcontractwork (312) (50)Amountowingfromcustomersforcontractwork 1,068 5,341
756 5,291
(c) Accrued Billings
Group 2011 2010 RM’000 RM’000
Aggregate costs incurred to date 4,596 8,280Add:Attributableprofits 1,138 1,283
5,734 9,563Less:Progressbillings (5,469) (8,338)
265 1,225
Notes to the Financial Statements31 December 2011 (continued)
106advance synergy berhad (1225-D)
annual report 2011
12. TRADE AND OTHER RECEIVABLES (continued)
(d) Amount Owing from Associates
The amount owing from associates are unsecured, interest-free and are repayable on demand.
(e) Amount Owing from Subsidiaries
Company 2011 2010 RM’000 RM’000
Amount owing from subsidiaries 207,869 211,915 Less : Allowance for impairment (110,210) (113,872)
97,659 98,043
The amount owing from subsidiaries are unsecured, interest-free and are repayable on demand.
In 2009, 2010 and 2011, the Group implemented an intercompany loan restructuring exercise to address and re-align the intercompany balances within the Group through a method not involving any substantial cash payment, write back or write off.
13. DEFERRED TAX
(a) Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred taxes relate to the same tax authority. The amounts of deferred tax assets and liabilities, after appropriate offsetting, are as follows:
Group Company 2011 2010 2011 2010 Note RM’000 RM’000 RM’000 RM’000
At 1 January (122) (443) (1,304) (1,493)Recognised in profit or loss 27 (461) 256 130 131 Recognised directly in equity 20 61 58 61 58 Foreign exchange translation adjustment 1 7 - - At 31 December (521) (122) (1,113) (1,304)
Presented after appropriate offsetting:Deferred tax asset, net (3,141) (2,870) (1,113) (1,304)
Deferred tax liabilities, net 2,620 2,748 - -
(521) (122) (1,113) (1,304)
The deferred tax assets of the Company are in relation to the ICULS.
Notes to the Financial Statements31 December 2011 (continued)
107advance synergy berhad (1225-D)
annual report 2011
13. DEFERRED TAX (continued)
(b) Thecomponentandmovementsofdeferredtaxassetsand liabilitiesduringthe financialyearprior tooffsettingareasfollows:
Deferred tax liabilities of the Group Property, Plant and
Equipment Others Total RM’000 RM’000 RM’000
At1January2011 2,788 (40) 2,748Recognisedinprofitorloss (109) (19) (128)
At 31 December 2011 2,679 (59) 2,620
At1January2010 2,919 (38) 2,881
Recognisedinprofitorloss (131) (2) (133)
At 31 December 2010 2,788 (40) 2,748
Deferred tax assets of the Group
Unutilised tax losses
and unabsorbed
capital allowances Others Total
RM’000 RM’000 RM’000
At1January2011 1,886 984 2,870Recognisedinprofitorloss 440 (169) 271
At 31 December 2011 2,326 815 3,141
At1January2010 1,476 1,848 3,324Recognisedinprofitorloss 410 (864) (454)
At 31 December 2010 1,886 984 2,870
(c) The amount of temporary differences forwhich no deferred tax assets have been recognised are asfollows:
Group 2011 2010 RM’000 RM’000
Deductible/(taxable)temporarydifferences 19,190 (618)Unutilisedtaxlosses 221,005 227,561Unabsorbedcapitalallowances 21,168 40,749
261,363 267,692
Theunutilisedtaxlossesanddeductibletemporarydifferencesdonotexpireundercurrenttaxlegislation.
Notes to the Financial Statements31 December 2011 (continued)
108advance synergy berhad (1225-D)
annual report 2011
14. PROPERTY DEVELOPMENT COSTS
Leasehold land
Leasehold land Development
- at cost - at valuation costs Total RM’000 RM’000 RM’000 RM’000
Group2011
Cumulative property development costs
At1January2011 15,453 1,426 8,437 25,316Incurredduringthefinancialyear 2,250 - 2,714 4,964
At 31 December 2011 17,703 1,426 11,151 30,280
Cumulative costs recognisedin profit or lossAt1January2011 (352) (35) (377) (764)Recognisedduringthefinancialyear (28) - 366 338
At 31 December 2011 (380) (35) (11) (426)
Carrying Amount at 31 December 2011 17,323 1,391 11,140 29,854
Group2010
Cumulative property development costs
At1January2010 16,117 1,426 5,510 23,053Incurredduringthefinancialyear - - 8,711 8,711Transferredtoinventories - - (363) (363)Completed properties (664) - (5,421) (6,085)
At 31 December 2010 15,453 1,426 8,437 25,316
Cumulative costs recognisedin profit or loss
At1January2010 (1,016) (35) 308 (743)Recognisedduringthefinancialyear - - (6,107) (6,107)Completedprojects 664 - 5,422 6,086
At 31 December 2010 (352) (35) (377) (764)
Carrying Amount at 31 December 2010 15,101 1,391 8,060 24,552
Includedinpropertydevelopmentcostsarethefollowingchargesincurredduringthefinancialyear:
Group 2011 2010 RM’000 RM’000
Interestexpenses 185 182
Notes to the Financial Statements31 December 2011 (continued)
109advance synergy berhad (1225-D)
annual report 2011
14. PROPERTY DEVELOPMENT COSTS (continued)
CertainleaseholdlandoftheCompanywererevaluedbytheDirectorsin1993aftertakingintoconsiderationthevaluationcarriedoutby independentprofessionalfirmsofvaluerson27February1992andsince then,therevaluationhasnotbeenupdated.TherevaluationresultedinasurplusofRM6.17millionwhichhasbeentransferred to the asset revaluation reserve. The asset revaluation reserve is transferred to retainedprofitsupondevelopmentandsaleofsuchland.AtotalamountofRM5.86millionhasbeentransferredtoretainedprofitsasat31December2011.
CertainleaseholdlandheldunderdevelopmentwithcarryingamountofRM14.48million(2010:RM14.19million)havebeenchargedtofinancialinstitutionsforcreditfacilitiesgrantedtoasubsidiaryasdisclosedinNote21tothefinancialstatements.
15. INVENTORIES
Group 2011 2010 RM’000 RM’000
Atcost/netrealisablevalue: Completed development properties 14,071 18,837Rawmaterials 606 636Work-in-progress 498 1,793 Finished goods 6,432 7,459 Food and beverages 313 614 Operating supplies 3,679 3,611
25,599 32,950
CertainunitsofcompleteddevelopmentpropertieswithcarryingamountofRM0.69million(2010:RM0.69million) of theGrouphavebeenpledged to licensedbanks for credit facilitiesgranted to a subsidiary asdisclosedinNote21tothefinancialstatements.
16. CASH AND BANK BALANCES AND SHORT TERM DEPOSITS
Group Company 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000
Cashandbankbalances 40,051 46,535 96 68Short term deposits 151,635 64,135 5,100 600
191,686 110,670 5,196 668
IncludedintheshorttermdepositsoftheGroupare:
(a) anamountofRM10.10million(2010:RM8.14million)chargedtolicensedbanksassecurityforbankingfacilitiesgrantedtocertainsubsidiariesasdisclosedinNote21tothefinancialstatements.
(b) IncludedindepositswithlicensedbanksoftheGroupattheendofthereportingperiodwasanamountof RM0.50 million (2010: RM0.49 million) held under the Housing Development Account pursuant toSection7AoftheHousingDevelopment(ControlandLicensing)Act,1966andthereforerestrictedfromuseinotheroperations.
(c) anamountofRM19.08million(2010:RM18.30million)placedwithleasepayablesassecuritydepositsforleasepaymentsasdisclosedinNote21tothefinancialstatements.
Notes to the Financial Statements31 December 2011 (continued)
110advance synergy berhad (1225-D)
annual report 2011
17. NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE
Theassetsandliabilitiesofthenon-currentassetsclassifiedasheldforsaleareasfollows:
Group 2011 2010 Note RM’000 RM’000
InvestmentinASIB-atcarryingamount* 9 - 114,024Property,plantandequipment-atcarryingamount# 8,038 931
8,038 114,955
* Assetout inNote9(a)tothefinancialstatements,ASIBceasedtobeanassociatedcompanyofASCconsequentialtothedisposalbyASCofitsentireshareholdingof49,000,000ordinarysharesofRM1.00eachrepresenting49%ofthetotalissuedandpaid-upsharecapitalinASIBtoACEINAforatotalcashconsiderationofRM117.0millionwhichwasdeemedcompletedon14June2011.
# Inthepreviousfinancialyear,theGroupenteredintosaleandpurchaseagreementtodisposeapieceofleaseholdland.ThedisposalwascompletedinDecember2011.
On18April2011andon20Dec2011,theGroupenteredintosaleandpurchaseagreementtodisposeacondominiumandapieceoffreeholdland.
18. SHARE CAPITAL
2011 2010
Number of
Shares
Number of Shares
’000 RM’000 ’000 RM’000
Authorised:At1January/31December 3,000,000 900,000 3,000,000 900,000
Issued and fully paid:At1January 488,160 146,448 473,379 142,014ArisingfromconversionofICULS(Note20) 15,970 4,791 14,781 4,434Issueofnewordinaryshares 263 79 - -
At 31 December 504,393 151,318 488,160 146,448
For the financial year ended 31 December 2011, a total of 31,413,000 ICULS have been converted into15,706,500newordinarysharesofRM0.30eachof theCompanybysurrendering forcancellation two (2)ICULS for everyone (1) newordinary shareofRM0.30each in theCompany, anda total of 525,000newordinarysharesofRM0.30eachwereissuedconsequentialtoaconversionbysurrenderingforcancellationone (1) ICULSofnominalvalueofRM0.15andcashpaymentofRM0.15 forone (1)newordinaryshareofRM0.30eachintheCompany.
Warrants 2000/2010
Asattheexpirydateon27August2010,noneofthe168,896,809warrantsissuedbytheCompany(“ASBWarrants”)on29August2000hadbeenexercised.TheASBWarrantshavebeenremovedfromtheOfficialListofBursaSecuritieswitheffectfrom9.00a.m.onMonday,30August2010.
Notes to the Financial Statements31 December 2011 (continued)
111advance synergy berhad (1225-D)
annual report 2011
19. RESERVES
Group Company 2011 2010 2011 2010 Note RM’000 RM’000 RM’000 RM’000
Non-distributableAvailable for sale reserve (a) 2,130 4,064 - -Capital reserve - - 69 69Foreignexchangetranslationreserve (b) (8,389) (9,476) - -Revaluation reserve (c) 12,769 12,767 - -
6,510 7,355 69 69Share premium 117,317 117,317 117,317 117,317
123,827 124,672 117,386 117,386
Distributable Retained earnings/ (Accumulated losses) (d) 74,643 70,416 (12,705) (21,759)
198,470 195,088 104,681 95,627
(a) Available for Sale Reserve
The available for sale reserve represents the fair value reserve relating to the fair valuation of financialassetscategorisedasavailableforsaleandshareofavailableforsalereserveofassociates.
(b) Foreign Exchange Translation Reserve
Theforeignexchangetranslationreserveisusedtorecordforeigncurrencyexchangedifferencesarisingfrom the translation of the financial statements of foreign operations whose functional currencies aredifferentfromthatoftheGroup’spresentationcurrency.Itisalsousedtorecordtheexchangedifferencesarisingfrommonetary itemswhichformpartoftheGroup’snet investment inforeignoperations,wherethe monetary item is denominated in either the functional currency of the reporting entity or the foreign operationandshareofforeignexchangetranslationreserveofassociates.
(c) Revaluation Reserve
TherevaluationreserverepresentsthesurplusontherevaluationofcertainhotelpropertiesoftheGroupandshareofrevaluationreserveofassociates.
(d) Retained Earnings
TheFinanceAct,2007 introducedasingletiercompany incometaxsystemwitheffect fromtheyearofassessment2008.However,thereisatransitionalperiodofsixyears,expiringon31December2013,toallowcompaniestopayfrankeddividendstotheirshareholderunderlimitedcircumstances.CompaniesalsohaveanirrevocableoptiontodisregardtheSection108taxcreditandopttopaydividendsunderthesingletiersystem.ThechangeinthetaxlegislationalsoprovidesfortheSection108taxcreditbalancetobefrozenasat31December2007inaccordancewithSection39oftheFinanceAct,2007.
TheCompanydidnotelectfortheirrevocableoptiontodisregardtheSection108taxcredit.Accordingly,duringthetransitionalperiod,theCompanymayutilisethetaxcreditunderSection108asat31December2011todistributecashdividendpaymentstoordinaryshareholders(whohaveheldthesharesfor90dayspriortothepayout)asdefinedundertheFinanceAct,2007.
Notes to the Financial Statements31 December 2011 (continued)
112advance synergy berhad (1225-D)
annual report 2011
20. ICULS
On29January2008,theCompanyissued1,182,277,666ICULS.
TheICULSareconstitutedbyaTrustDeeddated10December2007andaSupplementalTrustDeeddated4August2008(“TrustDeed”).TheICULShaveatenureoften(10)yearsfromthedateof issueandarenotredeemableincash.Unlessconverted,alloutstandingICULSwillbemandatorilyconvertedbytheCompanyintonewordinarysharesoftheCompany(“ASBShares”)at theconversionpriceapplicableonthematuritydate(i.e.26January2018).
TheICULSmaybeconvertedintonewASBSharesby:
(a) surrenderingtheICULSwithanaggregatenominalvalueequivalenttoRM0.30foreveryone(1)newASBShare(subjecttoadjustmentsinaccordancewiththeprovisionsoftheTrustDeed)(“ConversionPrice”);or
(b) surrenderingone(1)ICULStogetherwiththenecessarycashpaymentconstitutingthedifferencebetweentheConversionPriceand thenominal valueof the ICULSsurrendered, forone (1) newASBShare.Foravoidanceofdoubt, for everyone (1) ICULSsurrendered togetherwith the requiredcashpayment, theholderwillonlybeentitledtosubscribeforone(1)newASBShare
The new ASB Shares to be issued upon conversion of the ICULSwill, upon allotment and issuance, rankparipassuinallrespectswiththethenexistingissuedASBSharessavethattheywillnotbeentitledforanydividends, rights, allotments and/or other distributions, the entitlement date ofwhich is before the date ofallotmentofthenewASBSharespursuanttotheconversionoftheICULS.
The interest on the ICULS at the rate of 2%per annumon the nominal value of the outstanding ICULS ispayableannually inarrears,onthe lastdayofeachoftheten(10)successiveperiodsoftwelve(12)monthscalculatedfromtheissuedatewiththelastinterestpaymentdatefallingonthematuritydateoftheICULS.
TheICULSisrecognisedinthestatementsoffinancialpositionoftheGroupandoftheCompanyasfollows:
Group and Company
Note
Equity Component
Liability Component Total
RM’000 RM’000 RM’000
2011 Nominal value
At1January2011 115,340 18,574 133,914Deferredtaxassets 13 - (61) (61)Convertedtoordinarysharesduringthefinancialyear 18 (4,178) (613) (4,791)
At 31 December 2011 111,162 17,900 129,062
Expenserecognisedinprofitorloss: At1January2011 - 3,794 3,794Recognisedduringthefinancialyear-ICULSinterest - 1,116 1,116
At 31 December 2011 - 4,910 4,910
Interestpaid/accrued: At1January2011 - (7,977) (7,977)Paid/accruedduringthefinancialyear - (2,555) (2,555)
At 31 December 2011 - (10,532) (10,532)
At 31 December 2011 111,162 12,278 123,440
Notes to the Financial Statements31 December 2011 (continued)
113advance synergy berhad (1225-D)
annual report 2011
20. ICULS (continued)
Group and Company
Note
Equity Component
Liability Component Total
RM’000 RM’000 RM’000
2010 Nominal valueAt1January2010 119,208 19,198 138,406Deferredtaxassets 13 - (58) (58)Convertedtoordinarysharesduringthefinancialyear 18 (3,868) (566) (4,434)
At 31 December 2010 115,340 18,574 133,914
Expenserecognisedinprofitorloss: At1January2010 - 2,577 2,577Recognisedduringthefinancialyear-ICULSinterest - 1,217 1,217
At 31 December 2010 - 3,794 3,794
Interestpaid/accrued: At1January2010 - (5,298) (5,298)Paid/accruedduringthefinancialyear - (2,679) (2,679)
At 31 December 2010 - (7,977) (7,977)
At 31 December 2010 115,340 14,391 129,731
InterestexpenseontheICULSiscalculatedbasedontheeffectiveyieldbyapplyingtheeffective interestrateof7%foranequivalentnon-convertibleloanstocktotheliabilitycomponentoftheICULS.
21. BORROWINGS
Group Company 2011 2010 2011 2010 Note RM’000 RM’000 RM’000 RM’000
Current liabilities
Bankoverdrafts (a) 768 - - -Finance lease payable (b) 1,548 1,540 - -Hirepurchasepayables (c) 91 115 - -Termloans (d) 5,588 34,513 - 30,000
7,995 36,168 - 30,000Non-current liabilities
Finance lease payable (b) 21,132 21,019 - -Hirepurchasepayables (c) 92 81 - -Termloans (d) 54,716 60,369 - -
75,940 81,469 - -
83,935 117,637 - 30,000Total liabilities
Bankoverdrafts (a) 768 - - -Finance lease payable (b) 22,680 22,559 - -Hirepurchasepayables (c) 183 196 - -Termloans (d) 60,304 94,882 - 30,000
83,935 117,637 - 30,000
Notes to the Financial Statements31 December 2011 (continued)
114advance synergy berhad (1225-D)
annual report 2011
21. BORROWINGS (continued)
(a) Bank OverdraftsGroup
2011 2010 RM’000 RM’000
Bankoverdrafts:-secured 768 -
Thebankoverdraftsaresecuredbywayof:
(i) apledgeofshorttermdeposits;and
(ii) aguaranteeandanindemnityfromtheCompanyanditssubsidiaries.
TheeffectiveinterestrateofthebankoverdraftisdisclosedinNote35(c)tothefinancialstatements.
(b) Finance Lease Payable
Group 2011 2010 RM’000 RM’000
Minimumleasepayments:-notlaterthanoneyear 1,661 1,652-laterthanoneyearbutnotlaterthanfiveyears 28,712 6,694-laterthanfiveyears - 23,679
30,373 32,025Less:Futurefinanceleaseinterest (7,693) (9,466)
Presentvalueoffinanceleaseliabilities 22,680 22,559
Representedby:Current -notlaterthanoneyear 1,548 1,540Non-current-laterthanoneyearbutnotlaterthanfiveyears 21,132 5,240-laterthanfiveyears - 15,779
22,680 22,559
Finance lease payable represents obligation arising from the finance lease for a hotel property pursuant tosaleandleasebackagreementsenteredintoinyear2006.
TheGrouphasanoptiontobuybackthehotelpropertyatRM23millionattheendoftheleaseterm,whichisforaperiodoften(10)yearswithanoptiontoextendforanotherperiodoffive(5)years.
TheeffectiveinterestrateofthefinanceleasepayableisdisclosedinNote35(c)tothefinancialstatements.
Thefinanceleasepayableissecuredbywayofapledgeofshorttermdeposit.
Notes to the Financial Statements31 December 2011 (continued)
115advance synergy berhad (1225-D)
annual report 2011
21. BORROWINGS (continued)
(c) Hire Purchase Payables
Group 2011 2010 RM’000 RM’000
Minimumhirepurchasepayments:-notlaterthanoneyear 100 121 -laterthanoneyearbutnotlaterthanfiveyears 99 82
199 203 Less:Futurehirepurchaseinterest (16) (7)
Presentvalueofhirepurchaseliabilities 183 196
Representedby:Current -notlaterthanoneyear 91 115 Non-current-laterthanoneyearbutnotlaterthanfiveyears 92 81
183 196
The effective interest rate of the hire purchase payable is disclosed in Note 35(c) to the financialstatements.
(d) Term Loans
Group Company 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000
Termloans-secured 54,055 88,815 - 30,000-unsecured 6,249 6,067 - -
60,304 94,882 - 30,000
Representedby:Current -notlaterthanoneyear 5,588 34,513 - 30,000Non-current
-laterthanoneyearbutnotlaterthanfiveyears 47,261 51,919 - --laterthanfiveyears 7,455 8,450 - -
54,716 60,369 - -
60,304 94,882 - 30,000
Notes to the Financial Statements31 December 2011 (continued)
116advance synergy berhad (1225-D)
annual report 2011
21. BORROWINGS (continued)
(d) Term Loans (continued)
Thetermloansaresecuredbywayof:
(i) fixedchargesoverthefreeholdlandandcertainhotelandotherpropertiesoftheGroup;
(ii) theentireissuedandpaidupsharecapitalofcertainsubsidiaries;
(iii) certainsharesofquotedsubsidiariesandunquotedsubsidiariesatcarryingamountsofRM10.28million(2010:RM10.28million)andRM61.94million(2010:RM63.52million)respectively;
(iv) certainassetsbeneficiallyownedbyaDirectoroftheCompany;
(v) fixedandfloatingchargesovertheassetsofcertainsubsidiaries;and
(vi) acorporateguaranteebytheCompany.
TheeffectiveinterestrateofthetermloansisdisclosedinNote35(c)tothefinancialstatements.
22. PROVISION FOR RETIREMENT BENEFIT OBLIGATIONS
TheGroupoperatesunfundeddefinedretirementbenefitplansforsomeofitsemployees.
Thetotalamountrecognisedinthestatementsoffinancialpositionareasfollows:
Group 2011 2010 RM’000 RM’000
Presentvalueofunfundeddefinedbenefitsobligations 1,107 935 Unrecognised actuarial gain (231) (188)
876 747
Thetotalexpensesrecognisedinprofitorlossareasfollows:
Group 2011 2010 RM’000 RM’000
Current service cost 90 77 Interest cost 60 48 Amortisation of net loss 6 11
Expensesrecognisedintheprofitorlossunderadministrativeexpenses 156 136
Notes to the Financial Statements31 December 2011 (continued)
117advance synergy berhad (1225-D)
annual report 2011
22. PROVISION FOR RETIREMENT BENEFIT OBLIGATIONS (continued)
Themovementsduringthefinancialyearontheamountrecognisedinthestatementoffinancialpositioninrespectoftheretirementbenefitsplansareasfollows:
Group 2011 2010 RM’000 RM’000
At1January 747 629Provisionmadeinthecurrentfinancialyear 156 136Paidduringthefinancialyear (27) (18)
At 31 December 876 747
Theprincipalactuarialassumptionsusedareasfollows:Group
2011 2010 % %
Discount rate 6.5 6.0Expectedrateofsalaryincrease 6.0 6.0
23. TRADE AND OTHER PAYABLES Group Company
2011 2010 2011 2010 Note RM’000 RM’000 RM’000 RM’000
Current:Trade Amountowingtocustomersforcontractwork 12(b) 312 50 - -Tradepayables (a) 13,697 19,178 - -
14,009 19,228 - -
Current:Non-Trade Accruals 22,540 22,825 679 828 Accrued interest 2,356 2,488 2,356 2,488Amountowingtoassociates (b) 51 163 - -Amountowingtosubsidiaries (c) - - 203,092 186,719 Deposits received 1,735 1,335 - - Other payables 18,763 22,148 29 29
45,445 48,959 206,156 190,064
Total trade and other payables 59,454 68,187 206,156 190,064
(a) Trade Payables
Tradepayablesarenon-interestbearingandthenormalcredittermsgrantedtotheGrouprangefrom30to90days(2010:30to90days).
(b) Amount Owing to Associates
Theamountowingtoassociatesisunsecured,interest-freeandisrepayableondemand.
(c) Amount Owing to Subsidiaries
Theamountowingtosubsidiariesisunsecured,interest-freeandisrepayableondemand.
Notes to the Financial Statements31 December 2011 (continued)
118advance synergy berhad (1225-D)
annual report 2011
24. REVENUE
Group Company 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000
Sales of goods 33,438 35,182 - -
Hotelsandresortsservices 59,705 56,951 - -
Coach building 2,896 3,844 - -
Information,communicationstechnologyandrelatedservice 34,019 43,087 - -
Travelandtours 81,584 67,606 - -
Card and payment services 3,422 2,734 - -
Interestandfinancingincome 126 55 126 27
Propertydevelopment 5,734 11,063 - -
Rental income 1,361 1,330 - -
Gross dividend income - - 40,000 3,724
222,285 221,852 40,126 3,751
25. OPERATING PROFIT
Operatingprofithasbeenarrivedat:
Group Company 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000
After charging:
Amortisation of intangible assets 1,715 1,482 - -
Auditors’ remuneration
-statutory:
-holdingcompany 84 80 84 80
-subsidiaries 803 722 - -
-under/(over)accrualinprioryears 27 (27) 9 4
-non-statutory:
-holdingcompany 44 4 44 4
-subsidiaries 35 80 - -
Baddebtswrittenoff 574 765 - -
Depreciation 7,176 7,428 23 30
Directors’remuneration:
-fees 542 611 254 254
-otheremoluments 1,228 1,089 536 478
Notes to the Financial Statements31 December 2011 (continued)
119advance synergy berhad (1225-D)
annual report 2011
25. OPERATING PROFIT (continued)
Operatingprofithasbeenarrivedat(continued):
Group Company 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000
After charging:
Impairmentlosson:
-developmentexpenditure - 1,057 - -
-goodwill 2 - - -
-available-for-saleinvestmentsecurities - 27,274 - 27,274
-heldfortradinginvestments 10 - - -
-investmentinsubsidiaries - - 10,650 -
-inventories 15 86 - -
-loanandreceivables 164 1,116 - -
-property,plantandequipment - 1,736 - -
Leaserental 10,122 10,078 - -
Lossonforeignexchange:
-realised - 181 - -
-unrealised 53 2,202 36 12
Lossondisposalofheldfortradinginvestments - 25 - -
Property,plantandequipmentwrittenoff 57 90 - -
Provisionforretirementbenefitsplan 156 136 - -
Provisionforcontingenciesandcommitments 42 - - -
Realisationofforeignexchangereserve 4,908 - - -
Rentalexpenses:
-equipment 98 137 - -
-premises 2,862 3,099 438 243
-others 22 23 - -
Staffcost:
-salariesandwages 36,443 33,939 2,115 1,914
-definedcontributionplan 4,008 3,622 344 325
-otheremployeebenefits 4,432 4,292 (60) 33
Notes to the Financial Statements31 December 2011 (continued)
120advance synergy berhad (1225-D)
annual report 2011
25. OPERATING PROFIT (continued)
Operatingprofithasbeenarrivedat(continued):
Group Company 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000
And crediting:
Bad debts recovered 299 46 - -
Fair value gain on investment property 946 - - -
Gainondisposalofproperty,plantandequipment 231 189 - -
Gainondisposalofnon-currentassetsclassifiedas held for sale
4,269 - - -
Gain on disposal of a subsidiary 201 - - -
Gain on disposal of an associated company 2,936 - - -
Gain on disposal of held for trading investments 19 - - -
Realisedgainonforeignexchange 1,408 2,277 - 22
Grossdividendincomefrom:
Available-for-salefinancialassets
-Malaysia:
-quotedsecurities 403 429 - -
-unquotedsecurities 3 3 - -
Interestincome:
-Shorttermdeposits 3,579 1,802 - -
-Loanandreceivables 274 483 - -
Rental income 1,899 1,094 - -
Realisationofforeignexchangereserve - 4,583 - -
Writebackofimpairmentlosson:
-investmentinassociates - 3,414 - -
-investmentinsubsidiaries - - - 31,000
-heldfortradinginvestments - 191 - -
-loanandreceivables 171 16,887 - -
-property,plantandequipment 165 - - -
Writebackofpayables 3,932 - - -
Notes to the Financial Statements31 December 2011 (continued)
121advance synergy berhad (1225-D)
annual report 2011
26. FINANCE COSTS
Group Company 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000
Interestexpenses
-advancesfromsubsidiaries - - - (3,321)
-bankoverdrafts 167 23 110 -
-financelease 1,652 1,644 - -
-hirepurchases 8 39 - -
-ICULS 1,116 1,217 1,116 1,217
-termloans 5,223 5,128 940 983
-others 50 - 3,307 3,195
8,216 8,051 5,473 2,074
27. INCOME TAX EXPENSE
Group Company 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000
In Malaysia:
Incometax
-currentyear 2,501 1,210 9,156 48
-prioryears (263) (1,030) (39) 67
Deferredtax(Note13)
-currentyear (459) 202 - -
-prioryears (2) 54 130 131
1,777 436 9,247 246
Outside Malaysia:
Incometax 242 528 - -
2,019 964 9,247 246
Theincometaxiscalculatedatthestatutoryrateof25%(2010:25%)oftheestimatedassessableprofitfortheyear.
Two subsidiaries of the Company, Unified Communications Sdn Bhd and GlobeOSS Sdn Bhd had beengranted pioneer status asMultimedia Super Corridor (“MSC”) status under the Promotion of InvestmentAct,1986.ThebenefitstoacompanyhavingMSCstatusincludeafiveyearpioneerstatustaxexemptiononprofitsgeneratedfromtheMSCqualifyingactivitiesduringthesameperiod.TheMSCstatusofUnifiedCommunicationsSdnBhd,afterbeingextendedonce,hadexpiredon20December2010.TheMSCstatusofGlobeOSSSdnBhd,ontheotherhand,commencedfrom15January2007andwillexpireon14January2012. GlobeOSS Sdn Bhd’s MSC status is in the midst of being renewed for a further five year periodcommencingon15January2012to14January2017,ofwhichaformalapplicationhasbeensubmittedon20December2011totheMultimediaDevelopmentCorporation(“MDC”),theMalaysianbodythatoverseesthedevelopmentofMSC.
Notes to the Financial Statements31 December 2011 (continued)
122advance synergy berhad (1225-D)
annual report 2011
27. INCOME TAX EXPENSE (continued)
Ontheotherhand,anothersubsidiaryoftheCompany,UnifiedCommunications(OHQ)SdnBhdhasbeengranted Operational Headquarters (“OHQ”) status under the Malaysia Industrial Development Authority(“MIDA”).ThebenefitstoacompanyhavingOHQstatusincludetenyearspioneerstatustaxexemptiononprofitsgeneratedfromtheOHQqualifyingactivitiesduringthesameyear.TheOHQstatusofthecompanycommencedon27October2009andwillexpireon26October2019.
Areconciliationofincometaxexpenseapplicabletoprofit/(loss)beforetaxationatthestatutoryincometaxratetoincometaxexpenseattheeffectiveincometaxrateoftheGroupandoftheCompanyareasfollows:
Group Company 2011 2010 2011 2010 % % % %
Applicabletaxrate 25 25 25 25
Taxeffectsarisingfrom
-Nonallowableexpenses 59 163 25 408
-Nontaxableincome (55) (158) - (433)
-Utilisationofpreviouslyunrecognisedtaxlossesandcapitalallowances
(9) (11) - -
-Deferredtaxassetsnotrecognisedintheyear 18 36 - -
-Differenttaxrateinforeignjurisdiction 7 5 - -
-Reversalofdeferredtaxasset - 9 - -
-Taxincentivesandallowances - (1) - -
-Shareoftaxofassociatesincludedinshareofprofitofassociates
(19) (43) - -
26 25 50 -
-(over)/underaccrualinprioryears (3) (12) - 14
Averageeffectivetaxrate 23 13 50 14
ThetaxsavingsoftheGroupandoftheCompanyareasfollows:
Group Company 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000
Arising from utilisation of previouslyunutilisedtaxlosses 802 821 - -
Notes to the Financial Statements31 December 2011 (continued)
123advance synergy berhad (1225-D)
annual report 2011
28. EARNINGS PER ORDINARY SHARE
(a) Basic earnings per ordinary share
Group 2011 2010 RM’000 RM’000
Consolidatedprofitattributabletoownersoftheparent 4,227 3,327
2011 2010 ’000 ’000
Weightedaveragenumberofordinarysharesinissue 499,899 476,205
2011 2010 Sen Sen
Basic earnings per share 0.85 0.70
(b) Diluted earnings per ordinary share
Diluted earnings per share of the Group is calculated by dividing the profit/(loss) for the financial year attributabletoownersoftheparentbytheadjustedweightedaveragenumberofordinarysharesinissueduringthefinancialyear.TheadjustedweightedaveragenumberofordinarysharesinissueisarrivedatassumingfullconversionoftheICULSwhichrepresentsthedilutivepotentialoftheordinaryshares.
Group 2011 2010 RM’000 RM’000
Consolidatedprofitattributabletoownersoftheparent 4,227 3,327
InterestexpensesonICULS(netoftax) 1,246 1,349
ProfitaftermandatoryconversionofICULS 5,473 4,676
2011 2010 ’000 ’000
Weightedaveragenumberofordinarysharesinissue 499,899 476,205
AdjustmentforordinarysharesdeemedconvertedfromICULS 429,253 452,728
WeightedaveragenumberofordinarysharesinissueafterdeemedconversionofICULS
929,152 928,933
2011 2010 Sen Sen
Diluted earnings per share 0.59 0.50
Notes to the Financial Statements31 December 2011 (continued)
124advance synergy berhad (1225-D)
annual report 2011
29. CONTINGENT LIABILITIES
Corporate Guarantee
Group Company 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000
Unsecured:
Corporateguaranteegiventobankfor credit facilities granted to subsidiaries - - 41,979 42,511
At the end of the reporting period, it was not probable that the counterparty to the financial guaranteecontractwillclaimunderthecontract.Consequently,thefairvalueforthecorporateguaranteeisRMNil.
30. MATERIAL LITIGATION
(a) ACEINAfirstcommencedlegalproceedingsagainstASCregardingtheCallOption(i.e.thecalloptionnoticeissuedbyACEINAovertheremaining49,000,000ordinarysharesofRM1.00eachinASIBheldbyASC)whenon3November2009ACEINAissuedanOriginatingSummons(“OS”)attheHighCourtKualaLumpurvideOriginatingSummonsNo.D-24NCC-72-2009seekinginter-aliaanordertocompelASCtofurnishitswrittenconsentforACEINAtoapplytoBankNegaraMalaysia(“BNM”)fortheapprovaloftheMinisterofFinance(“MOF”)underSection67oftheInsuranceAct,1996forthedisposalandacquisitionofASC’s49%equityinterestinASIB.
On12May2010,theHighCourtmadeanorderinthe1stOSforASCtogiveitswrittenconsent(“1stOSCourtOrder”).
By a letter dated 9 September 2010, BNM informed ASC of MOF approval under Section 67 of theInsurance Act, 1996 for the disposal and acquisition of ASC’s 49% equity interest in ASIB (“MOFApproval”).
Subsequentlyon22September2010,theCompanyannouncedthatASChadreceivedaletterdated20September2010fromthesolicitorsofACEINA(“ACEINASolicitors”)notifyingASCthatACEINAhasacceptedthetermsoftheaforesaidMOFApproval.Inthesaidletter,ACEINASolicitorsinformedASCthattherelevantsaleandpurchaseagreementfortheProposedDisposalmustbeexecutedbyASCandtheCompanywithin3daysfromthedateof the letter, failingwhichtheagreement isdeemedtohavebecome effective andbinding onASCand theCompany. ACE INASolicitors also informedASC thatcompletionoftheProposedDisposalshalloccuron28September2010.
On8October2010,ACEINAcommencedproceedingsagainstASCattheHighCourtKualaLumpurinOriginatingSummonsNo.D-24NCC-332-2010(“2ndOS”)seekingorderstocompelASCtogiveeffecttotheProposedDisposal.
On29November2010,theHighCourtKualaLumpurmadeordersforASCtoimplementtheDisposalofASIB(“2ndOSCourtOrder”).
Notes to the Financial Statements31 December 2011 (continued)
125advance synergy berhad (1225-D)
annual report 2011
30. MATERIAL LITIGATION (continued)
(a) ThefollowinglegalproceedingsbetweenASCandACEINAinconnectionwiththe2ndOSCourtOrder/DisposalofASIBhavebeendismissedonthefollowingdates:
(i) 8 April 2011
• ASC’smotiontotheFederalCourtforanOrderthat:
(a) the Order made by the Federal Court on 8 November 2010 dismissing the ASC’s motion in the FederalCourtforLeavetoAppealtotheFederalCourtagainstthedecisionoftheCourtofAppealmadeon9July2010dismissingASC’sAppealagainstthe1stOSCourtOrdermadeintheOriginatingSummonson12May2010,besetaside;and
(b) in thealternative,Leavebegranted toAppealagainst thedecisionof theCourtofAppealgivenon9July2010.
• ASC’smotion forLeave forAppeal to theFederalCourtagainst thedismissalby theCourtofAppeal on16February 2011ofASC’s InterventionAppeal arising from the InterventionOrdergrantedtoACEINAintheJudicialReviewProceedings.
(ii) 19 April 2011
• ASC’sappealagainstthe2ndOSCourtOrder.
(iii) 21 April 2011
• ASC’sApplication forLeave forJudicialReviewat theHighCourtandconsequently,noorderwasmadeonASC’sapplicationtostaytheMOFApprovalfortheDisposalofASIB.
ACEINAcommencedcommittalproceedingsagainstASC,theCompanyandtheirDirectorsforallegeddisobedienceofthe2ndOSOrder.TheCourthason20May2011delivereditsdecisionandissuedordersforcommittalagainstASC,theCompanyandtheirDirectors.On20May2011,theCompanydispatchedthecirculartoshareholdersinrelationtotheDisposalofASIBandthenoticeofanextraordinarygeneralmeeting of the Company (“EGM”) held on 6 June 2011 to procure its shareholders’ approval for theDisposalofASIB.
AttheEGMheldon6June2011,shareholdersoftheCompanyapprovedtheDisposalofASIB.On13June2011,theCompanyandtheDirectorsofASCandtheCompanyweredischargedfromthecommittalorder dated 20May 2011.On 14 June 2011, theCompany announced that theDisposal of ASIBwasdeemedcompletedfollowingthereceiptbyASCofthecashproceedarisingfromtheDisposalofASIB.
Theonlypendingappeal istheappealbyASCtotheCourtofAppealofMalaysiaagainsttheorderoftheHighCourtdated21April2011refusingleaveforjudicialreviewagainsttheMOFApprovalinrespectof theDisposalofASIBvideCivilAppealNo.:W-01-283-2011.Theappeal ispendingdisposalandnohearinghasyetbeenfixedinrespectofthesame.
(b) TheCompanyhadon14 June2004 instituted legal action againstPKNK to recover its investment ofRM52,500,000representing70%equityinterestinKMSBtogetherwithothersums,damages,interestsand costs. The Company’s solicitors have obtained the signed and sealed copy of the Judgment inDefaultofAppearancedated1August2004(“DefaultJudgment”)fromtheHighCourtofAlorSetarforthesumofRM52,500,000,interestthereonattherateof8%perannumfromthedateofjudgmenttothedateofrealisationandcostofRM225.On10November2004,PKNKappliedtothecourt tosetasidetheDefault Judgment.On3August 2005, the court had allowedPKNK’s application to set aside theDefaultJudgment.Asaproceduralsteptoprogressthesuittoatrial,theCompany’ssolicitorhadon29December2005forwardedtothecourtforfilingoftheNoticetoAttendPre-TrialCaseManagementandthePre-TrialCaseManagementwasfixedforhearingon17May2006.
Notes to the Financial Statements31 December 2011 (continued)
126advance synergy berhad (1225-D)
annual report 2011
30. MATERIAL LITIGATION (continued)
(b) Due to a change in PKNK’s solicitors, PKNK’s new solicitors had asked for an adjournment on thegroundsthattheyrequiretimetotaketheirclient’sinstructionsandthereisalikelihoodforanapplicationtoamendtheStatementofDefence.ThecourthadfixedthePre-TrialCaseManagement(“PTCM”)formentionon21November2006.PKNK’snewsolicitorsfiledanapplicationtoamendPKNK’sStatementofDefenceandtheapplicationwasalsofixedforhearingon21November2006.On21November2006,thecourtgrantedleavetoPKNKtoamendtheirStatementofDefence.
Sincethen,thecasewasfixedforcasemanagement,mentionandPTCMonvariousdatesandthelastdatefixedforfurtherPTCMwason2November2010.
Atthehearingon13January2011forPKNK’sapplicationforthedeterminationofpointsorissuesoflawforthedisposalofthecase,theCourtwasoftheviewthattheCompany’sclaimistime-barredunderthePublicAuthoritiesProtectionAct(“PAPA”)orevenifnotunderPAPA,thenitistime-barredundertheLimitationActandassuch,theCompany’sclaimagainstPKNKwasdismissedwithcosts.
TheCompany’ssolicitorsareoftheviewthatthelearnedJudicialCommissionererredindecidingthattheCompany’sclaimistime-barredandhaveappealedthedecisionof13January2011totheCourtofAppealofMalaysiavideCivilAppealNo.K-01-85-2011.Theappealispendingdisposalandhasnotbeenfixedforhearing.
31. COMMITMENTS
(a) Capitalcommitmentsinrespectof:
Group 2011 2010 RM’000 RM’000
Capitalexpenditure:-authorisedandcontractedfor 1,780 7,055
Analysedasfollows:-purchaseofproperty,plantandequipment 1,780 7,055-constructionofhotelbuildings * *
1,780 7,055
* Asubsidiaryhadentered intoa leaseagreementon31January1996with theMunicipalityCouncilofPhnomPenhwhich stipulated that the subsidiary has anobligation to construct a newhotel buildingandcarryoutrenovationandrefurbishmentworksontheexistinghotelbuilding.Theexpecteddateofcompletioniswithin36monthsfrom1October1999.TheamountcontractedshallnotbelessthanUSD3million forbothbuildings.Anextensionof timehasbeengranted for thesubsidiary tocommence theconstructionofthenewhotelbuildingnotlaterthan1October2002andtobecompletedby1October2004.Therefurbishmentworkontheexistinghotelbuildinghassincebeencompletedbutconstructionofthenewhotelbuildinghasnotbegunasattodate.
Thesubsidiarywasgrantedapprovalfromthemunicipalityforafurtherdefermentonthecommencementoftheconstructionofthenewbuildingto2007.InMarch2008,thesubsidiaryhasdecidedtoproceedwiththeconstructionofthenewhotelbuilding.ThebuildingplanshavebeensubmittedtotheMunicipalityCouncilofPhnomPenhonMarch2008andcurrentlyarependingitsapproval.
Notes to the Financial Statements31 December 2011 (continued)
127advance synergy berhad (1225-D)
annual report 2011
31. COMMITMENTS (continued)
(b) TheGrouphasleasecommitmentsundernon-cancellableoperatingleases,whicharepayableasfollows:
Group 2011 2010 RM’000 RM’000
Not later than one year 10,826 10,506Laterthanoneyearbutnotlaterthanfiveyears 36,484 42,275Laterthanfiveyears 27,659 30,659
74,969 83,440
32. SIGNIFICANT RELATED PARTY DISCLOSURES
(a) Identification of related parties
PartiesareconsideredtoberelatedtotheCompanyiftheCompanyhastheability,directlyorindirectly,to control theparty or exercise significant influence over theparty inmaking financial andoperatingdecisions,orviceversa,orwheretheCompanyandthepartyaresubjecttocommoncontrolorcommonsignificantinfluence.Relatedpartiesmaybeindividualsorotherentities.
TheCompanyhascontrollingrelatedpartyrelationshipwithitsdirectandindirectsubsidiaries.
(b) Significant related party transactions and balances
Significantrelatedpartytransactionsotherthanthosedisclosedelsewhereinthefinancialstatementsareasfollows:
Group Company 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000
Income
(i) Interest receivable from a subsidiary
-iSynergySdn.Bhd.(“iSynergy”) - - - 3,321
(ii) Rental receivable from an associate-KumpulanPowernetBerhad 106 111 - -
Expenses(i) Rental payable to a subsidiaryAESBIPowerSystemsSdn.Bhd. - - 438 243
(ii)PurchaseofgoodsandservicesfromasubsidiaryOrientEscapeTravelSdn.Bhd. - - 153 144
(iii)Leaserentalpayabletoacompanyofwhichadirectorhasdeemedinterest:
-LeedsPropertyLimited 3,694 631 - -
(iv)Directors’emoluments:-fees 542 611 254 254 -salariesandbonuses 1,228 1,089 536 478 -benefit-in-kind 30 30 23 23
Notes to the Financial Statements31 December 2011 (continued)
128advance synergy berhad (1225-D)
annual report 2011
32. SIGNIFICANT RELATED PARTY DISCLOSURES (continued)
(b) Significant related party transactions and balances (continued)
Therelatedpartytransactionsdescribedabovewereenteredintointheordinarycourseofbusinessandhavebeenestablishedundernegotiatedterms.
Individually significant outstanding balances arising during the financial year from transactions other thannormaltradetransactionswithrelatedpartiesareasfollows:
Company 2011 2010 RM’000 RM’000
Amountowingbyasubsidiary-Interestreceivable-iSynergy - 3,321
(c) Compensation of key management personnel
The remunerationofDirectorsandotherkeymanagementpersonnelduring the finanacialyearareasfollows:
Group Company 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000
Fees 608 704 254 254
Shorttermemployeebenefits 3,443 3,237 833 780 Contributionstodefinedcontributionplan 359 348 100 94
4,410 4,289 1,187 1,128
Benefit-in-kind 39 73 30 30
Theestimatedmonetaryvalueofotherbenefits,not included in theabove, receivedbyDirectorsandotherkeymanagementpersonneloftheCompanyanditssubsidiarieswereRM29,900(2010:RM29,900)fortheCompanyandRM39,320(2010:RM72,725)fortheGroup.
IncludedintheemployeebenefitsoftheGroupandoftheCompanyareExecutiveDirectors’remunerationamountingRM1,228,420(2010:RM1,089,220)andRM535,920(2010:RM477,520)respectively.
33. SEGMENT INFORMATION
Inthepreviousfinancialyear,theGroupadoptedFRS8OperatingSegments.FRS8requirestheidentificationofoperatingsegmentsonthebasisofinternalreportsthatareregularlyreviewedbythemanagementinordertoallocateresourcestothesegmentsandassesstheirperformance.Nevertheless,thereplacedFRS114 2004 requiredtheidentificationoftwosetsofsegments-onebasedonrelatedproductsandservices,andtheotherongeographicalareas.FRS114 2004 regarded one set as primary segments and the other as secondary segments.TheGroupconcludedthatthereportableoperatingsegmentsdeterminedinaccordancewithFRS8arethesameasthebusinesssegmentspreviouslyidentifiedunderFRS114.
Notes to the Financial Statements31 December 2011 (continued)
129advance synergy berhad (1225-D)
annual report 2011
33. SEGMENT INFORMATION (continued)
The Group’s operating segments are as follows:
Investment holding : Investment holding and providing full corporate and financial support to the Group.
Property development : Development of residential and commercial properties.
Hotels and resorts : Operate and manage hotels and resorts and other related services.
Information andcommunications technology
: Design and development of telecommunications software applications and systems and the provision of solutions and services for the telecommunications industry.
Travel and tours : Travel and tour agent, licensed money changer and provision of travel related services.
Others : Businesses involving manufacturing and marketing of builder hardware products, design, building and fabrication of coaches and bus maintenance and related services, trading, card and payment related services and traditional Chinese medicine services.
The following table provides an analysis of the Group’s revenue, results, assets, liabilities and other information by operating segment:
Invest-ment
holding
Property develop-
ment
Hotelsand
resorts
Informa-tion and commu-nicationstechno-
logy
Traveland
tours
Others
Elimi-nation
Total 2011 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Revenue
External 1,132 5,784 76,236 34,019 81,584 23,530 - 222,285
Inter-segment 728 8 - - 363 - (1,099) -
1,860 5,792 76,236
34,019 81,947 23,530 (1,099) 222,285
Results
Segment results (5,139) 474 6,268 3,411 797 (4,528) 791 2,074
Share of results of associates 4,385 - (43) 2,493 - - - 6,835
Consolidated profit before tax (754) 474 6,225 5,904 797 (4,528) 791 8,909
Tax expense (2,019)
Net profit for the financial year 6,890
Attributable to;
Non-controlling interests 2,663
Owners of the parent 4,227
Notes to the Financial Statements31 December 2011 (continued)
130advance synergy berhad (1225-D)
annual report 2011
33. SEGMENT INFORMATION (continued)
The following table provides an analysis of the Group’s revenue, results, assets, liabilities and otherinformationbyoperatingsegment:(continued)
Invest-ment
holding
Property develop-
ment
Hotelsand
resorts
Informa-tion and commu-nicationstechno-
logy
Traveland
tours
Others
Elimi-nation
Total 2011 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Other information
Segments assets 150,032 55,588 223,369 135,513 13,943 37,993 - 616,438Investment in associates 16,767 - 3,958 1,950 - - - 22,675Non-currentassetsheldforsale 7,791 247 - - - - - 8,038Unallocated corporate assets 5,911
Totalassets 653,062
Segment liabilities 17,454 6,179 96,510 9,171 5,022 22,207 -156,543Unallocated corporate liabilities 3,792
Totalliabilities 160,335
Capitalexpenditure-Property,plantandequipment 346 1 4,681 1,546 43 174 - 6,791-investmentproperty - - - 7,926 - - - 7,926
-Softwaredevelopmentexpenditure - - - 2,789 - - - 2,789
Amortisation of intangible assets - - 3 1,712 - - - 1,715Depreciation 545 41 4,824 1,203 207 356 - 7,176Interest Income 1,857 133 812 1,001 86 102 (12) 3,979Finance cost 5,501 - 2,307 - 70 750 (412) 8,216Impairmentlosson:-heldoftradinginvestments - - 10 - - - - 10 -inventories - - - 15 - - - 15 -loanandreceivables 30 - 11 51 - 72 - 164
Writebackofimpairmentlosson:-loanandreceivables - - - 131 - 40 - 171 -Property,plantandequipment - - - 165 - - - 165Non-cashexpensesotherthan
depreciation and amortisation and impairment loss - - 200 4 570 13 - 787
Notes to the Financial Statements31 December 2011 (continued)
131advance synergy berhad (1225-D)
annual report 2011
33. SEGMENT INFORMATION (continued)
The following table provides an analysis of the Group’s revenue, results, assets, liabilities and otherinformationbyoperatingsegment(continued):
Invest-ment
holding
Property develop-
ment
Hotelsand
resorts
Informa-tion and commu-nicationstechno-
logy
Traveland
tours
Others
Elimi-nation
Total 2010 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Revenue
External 903 11,158 74,457 43,087 67,606 24,641 - 221,852
Inter-segment 4,593 14 - - 526 155 (5,288) -
5,496 11,172 74,457 43,087 68,132 24,796 (5,288) 221,852
Results
Segment results (10,827) 736 9,695 3,884 783 (6,824) (2,649) (5,202)
Share of results of associates 9,940 - (17) 2,710 - - - 12,633
Consolidatedprofitbeforetax (887) 736 9,678 6,594 783 (6,824) (2,649) 7,431
Taxexpense (964)
Netprofitforthefinancialyear 6,467
Attributableto;
Non-controllinginterests 3,140
Ownersoftheparent 3,327
Other information
Segments assets 72,496 58,386 221,000 134,702 11,986 41,369 - 539,939
Investment in associates 27,934 - - 2,825 - - - 30,759
Non-currentassetsheldforsale 114,955 - - - - - - 114,955
Unallocated corporate assets 5,591
Totalassets 691,244
Segment liabilities 50,351 8,132 99,467 14,661 4,283 24,068 - 200,962
Unallocated corporate liabilities 3,736
Totalliabilities 204,698
Notes to the Financial Statements31 December 2011 (continued)
132advance synergy berhad (1225-D)
annual report 2011
33. SEGMENT INFORMATION (continued)
The following table provides an analysis of the Group’s revenue, results, assets, liabilities and otherinformationbyoperatingsegment(continued):
Invest-ment
holding
Property develop-
ment
Hotelsand
resorts
Informa-tion and commu-nicationstechno-
logy
Traveland
tours
Others
Elimi-nation
Total 2010 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Other information (continued)
Capitalexpenditure
-Property,plantandequipment 1,434 1 6,049 3,093 339 441 - 11,357
-Softwaredevelopmentexpenditure - - - 4,626 - - - 4,626
Depreciation 620 85 4,908 1,350 187 278 - 7,428
Interest Income 279 128 849 981 43 60 - 2,340
Finance cost 2,119 - 2,233 3 35 4,366 (705) 8,051
Amortisation of intangible assets - - - 1,482 - - - 1,482
Impairmentlosson:
-property,plantandequipment - - - 1,736 - - - 1,736
-investmentsecurities 27,274 - - - - - - 27,274
-inventories - - - 86 - - - 86
-developmentexpenditure - - - 1,057 - - - 1,057
-loanandreceivables 611 - 297 193 - 15 - 1,116
Writebackofimpairmentlosson:
-investmentinassociates 3,414 - - - - - - 3,414
-heldoftradinginvestments 90 - 98 - 3 - - 191
-loanandreceivables 16,341 - - 546 - - - 16,887
Non-cashexpensesotherthandepreciation and amortisation and impairment loss 634 - 919 195 281 78 - 2,107
Notes to the Financial Statements31 December 2011 (continued)
133advance synergy berhad (1225-D)
annual report 2011
33. SEGMENT INFORMATION (continued)
Geographical Information
The Group operates mainly in Malaysia, Singapore, Africa and Middle East, Europe and Australia. Indetermining the geographical segments of theGroup, revenue is basedon the geographical locations ofcustomers.Segmentassetsandcapitalexpenditurearebasedonthegeographicallocationoftheassets.Thecompositionofeachgeographicalsegmentisasfollows:
Malaysia : InvestmentholdingandprovidingfullcorporateandfinancialsupporttotheGroup,propertydevelopment,ownerandoperatorofhotelsandresorts,travelandtoursrelated services, card and payment related services, design and developmentof telecommunications software applications and systems and the provision ofsolutionsandservices for the telecommunications industry,design,buildingandfabricationofcoaches,andbusmaintenanceandrelatedservicesandtraditionalChinesemedicineservices.
Singapore : Designanddevelopmentoftelecommunicationssoftwareapplicationsandsystemsand theprovisionofsolutionsandservices for the telecommunications industry,provisionofmanagementandinvestmentholdings.
AfricaandMiddleEast : Operate and manage hotels and resorts, design and development oftelecommunications software applications and systems and the provision ofsolutionsandservicesforthetelecommunicationsindustry.
Europe : Operateandmanagehotelsandresorts.
Australia : Manufacturing,andmarketingofbuilderhardwareproducts.
Others : Operate and manage hotels and resorts, design and development oftelecommunications software applications and systems and the provision ofsolutionsandservicesforthetelecommunicationsindustry.
ThefollowingtableprovidesananalysisoftheGroup’srevenue,segmentassetsandcapitalexpenditurebygeographicalsegment:
Revenue Segment assets Capital expenditure2011 2010 2011 2010 2011 2010
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Malaysia 157,568 153,941 465,877 390,109 13,653 9,953
Singapore 1,708 1,842 5,970 7,546 - 963
Africa&MiddleEast 15,018 16,542 42,885 43,690 163 1,829
Europe 18,923 16,793 41,207 41,232 3,283 1,994
Australia 17,185 18,218 22,609 21,302 36 255
Others 11,883 14,516 37,890 36,060 371 989
222,285 221,852 616,438 539,939 17,506 15,983
Notes to the Financial Statements31 December 2011 (continued)
134advance synergy berhad (1225-D)
annual report 2011
34. FAIR VALUE OF FINANCIAL INSTRUMENTS
(a) (Financial instruments that are not carried at fair value and whose carrying amounts are not reasonably approximated to fair value:
Thefollowingareclassesoffinancial instrumentsthatarenotcarriedatfairvalueandwhosecarryingamountsarenotreasonableapproximationoffairvalue:
Group Company
Carrying amount
Fair
value
Carrying amount
Fair
value Note RM’000 RM’000 RM’000 RM’000
2011
Financial Assets
Investmentinsecurities: 11
-unquotedsecuritiesinMalaysia 4,905 * 4,900 *
-unquotedsecuritiesoutsideMalaysia 16,502 * - -
2010
Financial Assets
Investmentinsecurities: 11
-unquotedsecuritiesinMalaysia 4,905 * 4,900 *
-unquotedsecuritiesoutsideMalaysia 16,502 * - -
* It is not practical to estimate the fair value of the unquoted investment in securities due to thelackofcomparablequotedmarketprocessandtheinabilitytoestimatefairvaluewithoutincurringexcessivecost.
(b) Financial instruments that are not carried at fair value and whose carrying amounts are reasonably approximated to fair value
Thefollowingareclassesoffinancial instrumentsthatarenotcarriedatfairvalueandwhosecarryingamountsarereasonableapproximationoffairvalue:
Note
Financial AssetsTradeandotherreceivables 12Cashandbankbalancesandshorttermdeposits 16
Financial LiabilitiesTradeandotherpayables 23Borrowings 21ICULS 20
Thecarryingamountofthesefinancialassetsandliabilitiesisreasonableapproximationsoffairvalues,eitherduetotheirshort-termnatureorthattheyarefloatingrateinstrumentsthatarere-pricedtomarketinterestratesonornearthereportingdate.
Notes to the Financial Statements31 December 2011 (continued)
135advance synergy berhad (1225-D)
annual report 2011
34. FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)
(b) Financial instruments that are not carried at fair value and whose carrying amounts are reasonably approximated to fair value (continued)
Thecarryingamountofthecurrentportionofborrowingsisreasonableapproximationsoffairvaluesduetotheinsignificantimpactofdiscounting.
Thefairvalueofcurrentloansandborrowingsareestimatedbydiscountingexpectedfuturecashflowsatmarketincrementallendingrateforsimilartypesoflendingorborrowingarrangementsatthereportingdate.
Thefairvaluesofamountsduefrom/tosubsidiaries,amountsduefrom/toassociatesandfixedratebankborrowingsareestimatedbydiscountingexpectedfuturecashflowsatmarketincrementallendingrateforsimilartypesoflendingorborrowingarrangementsatthereportingdate.
ThefairvalueoftheliabilitycomponentandtheequitycomponentweredeterminedattheissuanceofICULS.
(c) Fair value hierarchy
Thefollowingareclassesoffinancialinstrumentsthatarecarriedatfairvalue,byvaluationmethod.Thedifferentlevelshavebeendefinedasfollows:
(i) Level1–Unadjustedquotedpricesinactivemarketforidenticalfinancialinstruments
(ii) Level2–InputsotherthanquotedpricesincludedwithinLevel1thatareobservableeitherdirectly orindirectly.
(iii) Level3–Inputthatarenotbasedonobservablemarketdata
Comparativefigureshavenotbeenpresentedfor31December2010byvirtueofparagraph44GofFRS7.
Level 1RM’000
Group2011
Non-Current:Financial AssetsInvestmentinsecurities:-Available-for-salefinancialassets 10,459-Heldfortradinginvestments 928
TheGroupdoesnot have any financial assetsor financial liabilitiesmeasuredat Level 2 andLevel 3hierarchy.
35. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
TheoperationsoftheGroupandoftheCompanyaresubjecttoavarietyoffinancialrisks,includingcreditrisk,liquidityrisk,interestraterisk,foreigncurrencyriskandmarketpricerisk.TheGroupandtheCompanyhaveformulatedafinancialriskmanagementframeworkwhoseprincipalobjectiveistominimisetheGroup’sand theCompany’sexposure to risksand/orcostsassociatedwith the financing, investingandoperatingactivitiesoftheGroupandoftheCompany.
The following sectionsprovidedetails regarding theGroup’s and theCompany’s exposure to the above-mentionedfinancialrisksandtheobjectives,policiesandprocessesforthemanagementoftheserisks.
Notes to the Financial Statements31 December 2011 (continued)
136advance synergy berhad (1225-D)
annual report 2011
35. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
(a) Credit Risk
Creditriskistheriskoflossthatmayariseonoutstandingfinancialinstrumentsshouldacounterpartydefaulton itsobligation.TheGroup’sandtheCompany’sexposuretocredit riskarisesprimarily fromtradeandotherreceivables.ItistheGroup’sandtheCompany’spolicytomonitorthefinancialstandingof these receivables on an ongoing basis to ensure that the Group and the Company is exposed tominimalcreditrisk.
Cashdepositsandtradereceivablesmaygiverisetocreditriskwhichrequiresthelosstoberecognisedifacounterpartyfailstoperformascontracted.ItistheGroup’sandthecompany’spolicytomonitorthefinancial standing of these receivables on an ongoing basis to ensure that the Group and the Company isexposedtominimalcreditrisk.
Exposure to credit risk
Asatendoffinancialyear,theGroupandtheCompanyhavenosignificantconcentrationofcreditriskother thananamountowing fromadebtorofRM10.25million (2010:RM12.14million).TheGroupandthe Company does not anticipate the carrying amounts as at the end of financial year to be significantly differentfromthevaluesthatwouldeventuallybereceived.
Themaximumexposurestocreditriskarerepresentedbythecarryingamountsofthefinancialassetsinthestatementoffinancialposition.
Credit risk concentration profile
TheGroupdetermines concentrations of credit riskby industry sector profile of its trade receivableson an ongoing basis. The credit risk concentration profile of the Group’s and the Company’s tradereceivablesatthereportingdateareasfollows:
Group 2011 2010 RM’000 % of total RM’000 % of total
By industry sectors:
Investment holding 114 0.3% 21 0.1%
Propertydevelopment 2,214 6.4% 3,441 9.6%
Hotelsandresorts 9,332 26.9% 8,537 23.9%
Information and communications technology 14,066 40.6% 15,004 42.1%
Travelandtours 5,415 15.6% 4,663 13.1%
Others 3,527 10.2% 4,001 11.2%
34,668 100% 35,667 100%
Financial assets that are neither past due nor impaired
Information regarding trade receivables that are neither past due nor impaired is disclosed in Note 12 to thefinancialstatements.Depositswithbanksandotherfinancialinstitutions,investmentsecuritiesandderivativesareplacedwithorentered intowithreputablefinancial institutionsorcompanieswithhighcreditratingsandnohistoryofdefault.
Financial assets that are either past due or impaired
Information regarding financial assets that are past due or impaired is disclosed in Note 12 to the financial statements.
Notes to the Financial Statements31 December 2011 (continued)
137advance synergy berhad (1225-D)
annual report 2011
35. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
(a) Credit Risk (continued)
Inter company balances
TheCompanyprovidesunsecuredloansandadvancestosubsidiaries.TheCompanymonitorstheresultsofthesubsidiariesregularly.
Asattheendofthereportingperiod,themaximumexposuretocreditriskisrepresentedbytheircarryingamountsinthestatementoffinancialposition.
Financial guarantees
The Company provides unsecured financial guarantees to banks in respect of banking facilities grantedto certain subsidiaries. TheCompanymonitors on an ongoing basis the results of the subsidiaries andrepaymentsmadebythesubsidiaries.
ThemaximumexposuretocreditriskamountstoRM41.98million(2010:RM42.51million)representingtheoutstandingbankingfacilitiesofthesubsidiariesasattheendofthereportingperiod.
Asattheendofthereportingperiod,therewasnoindicationthatanysubsidiarywoulddefaultonrepayment.
Thefinancialguaranteeshavenotbeenrecognisedsincethefairvalueoninitialrecognitionwasnotmaterial.
(b) Liquidity Risk
LiquidityriskistheriskthattheGroupandtheCompanywillnotbeabletomeetitsfinancialobligationsasthey falldue.TheGroup’sand theCompany’sexposure to liquidity riskarisesprincipally from itsvariouspayables,loansandborrowings.
TheGroupand theCompanymaintainsa levelof cashandcashequivalentsandbank facilitiesdeemedadequatebythemanagement toensure,as faraspossible, that itwillhavesufficient liquidity tomeet itsliabilitieswhentheyfalldue.
Maturity analysis
ThetablebelowsummarisesthematurityprofileoftheGroup’sandtheCompany’sliabilitiesatthereportingdatebasedoncontractualundiscountedrepaymentobligations.
Within1 Year
1 - 5Years
More than5 Years Total
Note RM’000 RM’000 RM’000 RM’000
2011Group
Financial LiabilitiesTradeandotherpayables 23 59,454 - - 59,454Finance lease payable 21(b) 1,548 21,132 - 22,680Hirepurchasepayables 21(c) 91 92 - 183 Bankoverdrafts 21(a) 768 - - 768Termloans 21(d) 5,588 47,261 7,455 60,304ICULS 20 - - 123,440 123,440
CompanyTradeandotherpayables 23 206,156 - - 206,156ICULS 20 - - 123,440 123,440
Notes to the Financial Statements31 December 2011 (continued)
138advance synergy berhad (1225-D)
annual report 2011
35. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
(b) Liquidity Risk (continued)
ThetablebelowsummarisesthematurityprofileoftheGroup’sandtheCompany’sliabilitiesatthereportingdatebasedoncontractualundiscountedrepaymentobligations(continued).
Within1 Year
1 - 5Years
More than5 Years Total
Note RM’000 RM’000 RM’000 RM’000
2010
Group
Financial LiabilitiesTradeandotherpayables 23 68,187 - - 68,187Finance lease payable 21(b) 1,540 5,240 15,779 22,559Hirepurchasepayables 21(c) 115 81 - 196Termloans 21(d) 34,513 51,919 8,450 94,882ICULS 20 - - 129,731 129,731
Company
Tradeandotherpayables 23 190,064 - - 190,064Termloans 21(d) 30,000 - - 30,000ICULS 20 - - 129,731 129,731
(c) Interest Rate Risk
Interest rate risk is the risk that the fair valueor futurecash flowsof theGroup’sand theCompany’sfinancialinstrumentswillfluctuatebecauseofchangesinmarketinterestrates.
TheGroup’sincomeandoperatingcashflowsaresubstantiallyindependentofchangesinmarketinterestrates.InterestrateexposurearisesfromtheGroup’sborrowingsandismanagedthroughtheuseoffixedandfloatingratedebts.TheGroupdoesnotusederivativefinancialinstrumentstohedgeitsrisk.
TheCompanymanages thenetexposure to interest rate risksbymaintainingsufficient linesofcredittoobtainacceptablelendingcostsandbymonitoringtheexposuretosuchrisksonanongoingbasis.Management does not enter into interest rate hedging transactions since it considers that the cost of suchinstrumentsoutweighthepotentialriskofinterestratefluctuation.
Notes to the Financial Statements31 December 2011 (continued)
139advance synergy berhad (1225-D)
annual report 2011
35. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
(c) Interest Rate Risk (continued)
The interest rate profile of the Group’s and the Company’s significant interest-bearing financialinstruments,basedoncarryingamountsasattheendofthereportingperiodwere:
2011 2010 Weighted average
Effective Interest Rate
Weighted average Effective
Interest Rate Note % RM’000 % RM’000
Fixed Rate
Group
Financial LiabilitiesFinance lease payable 21(b) 7.32 22,680 7.32 22,559Hirepurchasepayables 21(c) 2.60 183 3.27 196Termloans 21(d) 6.22 12,431 6.18 12,617
35,294 35,372ICULS 20 2.00 123,440 2.00 129,731
158,734 165,103
Company
ICULS 20 2.00 123,440 2.00 129,731
Floating Rate
Group
Financial AssetsShort term deposits 16 2.81 151,635 3.02 64,135
Financial LiabilitiesBankoverdrafts 21(a) 7.78 768 - -Termloans 21(d) 7.39 47,873 4.94 82,265
48,641 82,265
Company
Financial AssetsShort term deposits 16 2.00 5,100 1.75 600
Financial LiabilitiesTermloans 21(d) - - 3.54 30,000
Sensitivity analysis for interest rate risk
(i) Fair value sensitivity analysis for fixed rate instruments
TheGroupandtheCompanydonotaccountforanyfixedratefinancialassetsatfairvaluethroughprofitorlossandequity.Thereforeachangeininterestratesatthereportingdatewouldnotaffectprofitorlossandequity.
Notes to the Financial Statements31 December 2011 (continued)
140advance synergy berhad (1225-D)
annual report 2011
35. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
(c) Interest Rate Risk (continued)
Sensitivity analysis for interest rate risk (continued)
(ii) Cash flow sensitivity analysis for variable rate instruments
Atthereportingdate,ifinterestrateshadbeen100basispointslower/higher,withallothervariablesheldconstant,theGroup’sandtheCompany’sprofitnetoftaxwouldhavebeenRM0.78millionandRM0.04millionhigher/lowerrespectively,arisingmainlyasaresultoflower/higherinterestexpenseon floating rate loans and borrowings and higher/lower interest income from floating rate fixeddeposits.Theassumedmovementinbasispointsforinterestratesensitivityanalysisisbasedonaprudentestimateofthecurrentmarketenvironment.
(d) Foreign Currency Risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument willfluctuatebecauseofchangesinforeignexchangerates.
TheGrouphastransactionalcurrencyexposuresarisingfromsalesorpurchasesthataredenominatedinacurrencyotherthantherespectivefunctionalcurrenciesofGroupentities,primarilyRM,SingaporeDollar(“SGD”)andUSDollar(“USD”).TheforeigncurrenciesinwhichthesetransactionsaredenominatedaremainlyUSDollar(“USD”)andEuro.
TheGroupandtheCompanyensurethatthenetexposuretothisriskiskepttoanacceptablelevelbybuyingorselling foreigncurrenciesatspot rateswherenecessary toaddressshort-term imbalances.Management does not enter into currency hedging transactions since it considers that the cost of such instrumentsoutweighthepotentialriskofexchangeratefluctuations.
Theunhedgedfinancialassetsand liabilitiesof theGroupthatarenotdenominated intheir functionalcurrenciesareasfollows:
Functional currencies
GroupRinggit
Malaysia Australia
Dollar US
Dollar Singapore
DollarHK
Dollar Thai Baht Total
2011 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Financial assets and liabilitiesnot held in functional currency
Investment securities
US Dollar 14,809 - - - - - 14,809Renminbi - - 1,693 - - - 1,693
Trade receivables
Brunei Dollar 440 - - - - - 440 Euro 40 - - - - - 40 Sudanese Dinar - - 86 - - - 86US Dollar 1,229 - - 3,250 - - 4,479
1,709 - 86 3,250 - - 5,045
Notes to the Financial Statements31 December 2011 (continued)
141advance synergy berhad (1225-D)
annual report 2011
35. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
(d) Foreign Currency Risk (continued)
Theunhedgedfinancialassetsand liabilitiesof theGroupthatarenotdenominated intheir functionalcurrenciesareasfollows:(continued)
Functional currencies
GroupRinggit
Malaysia Australia
Dollar US
Dollar Singapore
DollarHK
Dollar Thai Baht Total
2011 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Financial assets and liabilitiesnot held in functional currency
Other receivables Australia Dollar 370 - - - - - 370 Singapore Dollar 7 - - - - - 7 US Dollar 279 - - 56 - - 335 Euro 54 - - 54 - - 108 Others - - - 100 - 20 120
710 - - 210 - 20 940
Cash and bank balancesAustralia Dollar 24 - - - - - 24 Euro 39 - - - - - 39 HongKongDollar 28 - - - - - 28 PoundSterling 21 - 31 - - - 52 Renminbi 19 - - - - - 19 Singapore Dollar 74 - - - - - 74 US Dollar 3,484 - - 1,415 - - 4,899Others 11 - - - - - 11
3,700 - 31 1,415 - - 5,146
Trade payables US Dollar 413 396 - 1,757 - - 2,566Singapore Dollar 100 - - - - - 100 Australia Dollar 5 - - - - - 5 Euro 2,834 - - 24 - - 2,858Sudanese Dinar - - 113 - - - 113 Others - - 22 443 - 5 470
3,352 396 135 2,224 - 5 6,112
Group 2010
Financial assets and liabilitiesnot held in functional currency
Investment securitiesUS Dollar 14,809 - - - - - 14,809Renminbi - - 1,693 - - - 1,693
Notes to the Financial Statements31 December 2011 (continued)
142advance synergy berhad (1225-D)
annual report 2011
35. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
(d) Foreign Currency Risk (continued)
Theunhedgedfinancialassetsand liabilitiesof theGroupthatarenotdenominated intheir functionalcurrenciesareasfollows:(continued)
Functional currencies
GroupRinggit
Malaysia Australia
Dollar US
Dollar Singapore
DollarHK
Dollar Thai Baht Total
2010 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Financial assets and liabilitiesnot held in functional currency
Trade receivables Australia Dollar 83 - - - - - 83 Brunei Dollar 471 - - 48 - - 519 Euro 1,054 - - - - - 1,054Sudanese Dinar - - 366 - - - 366US Dollar 3,172 - - 1,511 92 - 4,775
4,780 - 366 1,559 92 - 6,797
Other receivables Australia Dollar 617 - - - - - 617Singapore Dollar 69 - - - - - 69US Dollar 290 - - 77 - - 367Euro 133 - - - - - 133 Others - - - - - 19 19
1,109 - - 77 - 19 1,205
Cash and bank balancesAustralia Dollar 52 - - - - - 52 Euro 168 - - - - - 168HongKongDollar 1 - - - - - 1 PoundSterling 24 - 49 - - - 73 Renminbi 13 - - - - - 13 Singapore Dollar 7,136 - - - - - 7,136US Dollar 3,560 - - 1,657 110 - 5,327Others 844 - - - - 2 846
11,798 - 49 1,657 110 2 13,616
Trade payables US Dollar 1,793 592 - 1,859 203 - 4,447Singapore Dollar 339 - - - - - 339 Australia Dollar 9 - - - - - 9 Euro 1,386 - - - - - 1,386Brunei Dollar 36 - - - - - 36Sudanese Dinar - - 133 - - - 133 Others - - 27 433 - 6 466
3,563 592 160 2,292 203 6 6,816
Notes to the Financial Statements31 December 2011 (continued)
143advance synergy berhad (1225-D)
annual report 2011
35. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
(d) Foreign Currency Risk (continued)
Sensitivity analysis for foreign currency risk
ThefollowingtabledemonstratesthesensitivityoftheGroup’sprofitnetoftaxtoareasonablypossiblechangeintheUSD,andEUROexchangerateagainsttherespectivefunctionalcurrenciesoftheGroupentities,withallothervariablesheldconstant.
Group2011
RM’000Profit/lossfortheyear
USD/RM -strengthened10% 458
-weekened10% (458)
USD/SGD -strengthened10% 296
-weekened10% (296)
EURO/RM -strengthened10% (270)
-weekened10% 270
(e) Market Price Risk
MarketpriceriskistheriskthatthefairvalueorfuturecashflowsoftheGroup’sfinancialinstrumentswillfluctuatebecauseofchangesinmarketprices(otherthaninterestorexchangerates).
TheGroupisexposedtoequitypriceriskarisingfromitsinvestmentinquotedequityinstruments.ThequotedequityinstrumentsinMalaysiaarelistedonBursaSecurities.Theseinstrumentsareclassifiedasheldfortradingoravailable-for-salefinancialassets.TheGroupdoesnothaveexposuretocommoditypricerisk.
Sensitivity analysis for equity price risk
ThisanalysisassumesthatallothervariablesremainconstantandtheGroup’sequityinvestmentsmovedincorrelationwithFTSEBursaMalaysiaKLCI(FBMKLCI).
A10percentstrengtheninginFBMKLCIattheendofthereportingperiodwouldhaveincreasedequitybyRM1.14millionandpost taxprofitor lossbyRM0.09million.A10percentweakening inFBMKLCIwouldhavehadequalbutoppositeeffectonequityandprofitorlossrespectively.
36. CAPITAL MANAGEMENT
TheGroupactivelyandregularlyreviewsandmanagesitscapitalstructurewiththeobjectivesofensuringthattheGroupwillbeabletocontinueasagoingconcernwhilemaximisingthereturntostakeholders.ThesereviewstakeintoconsiderationfuturecapitalrequirementsoftheGroup,prevailingandprojectedprofitability,projectedoperatingcashflows,projectedcapitalexpendituresandstrategicinvestmentopportunities.
The capital structure of theGroup consists of debtwhich includes borrowings (Note 21), cash and cashequivalents(Note16),andequityattributabletoequityholdersoftheCompany.
Notes to the Financial Statements31 December 2011 (continued)
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36. CAPITAL MANAGEMENT (continued)
TheGroup’soverallcapitalmanagementstrategyremainsunchangedfrom2010andthisincludesmaintainingahealthygearingratiotakingintoconsiderationtheobjectivesoftheGroup.Asatreportingdate,thegearingratiocalculatedastotalborrowingsdividedbytotalequityisasfollows:
Group 2011 2010 RM’000 RM’000
Totalborrowings
83,935117,637
Less:Cashandcashequivalents (161,236) (83,747)
Net debt (77,301) 33,890
Totalequity 492,727 486,546
Debt-to-equityratio (0.16) 0.07
TherewerenochangesintheGroup’sapproachtocapitalmanagementduringtheyear.
TheGroupisalsorequiredtocomplywiththedisclosureandnecessarycapitalrequirementsasprescribedintheMainMarketListingRequirementsofBursaSecurities.
37. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR
(a) ASIBceased tobeanassociatedcompanyofASCconsequential to theDisposalofASIBwhichwasdeemedcompletedon14June2011.PleaserefertoNote9(a)andNote30(a)tothefinancialstatementsforfurtherdetailsontheDisposalofASIB.
(b) On14October2011, theCompanyannouncedtheAcquisitionofAMSB.Pleaserefer toNote9(d)andNote38(a)tothefinancialstatementsforfurtherdetailsontheAcquisitionofAMSB.
(c) On7December2011,theCompanyannouncedthattheAcquisitionofDamaTCMhasbeencompletedandaccordingly,DamaTCMbecameawholly-ownedsubsidiaryofEDSBandtheCompany.PleaserefertoNote8(b)(iv)tothefinancialstatementsforfurtherdetailsontheAcquisitionofDamaTCM.
38. SIGNIFICANT SUBSEQUENT EVENTS
(a) SubsequenttotheCompany’sannouncementon14October2011concerningtheAcquisitionofAMSBassetout inNote9(d) tothefinancialstatements.On16January2012,theCompanyannouncedthattheAcquisitionofAMSBwascompletedandaccordingly,AMSBbecameawholly-ownedsubsidiaryofUCSB.
(b) On 16 January 2012, Synergy Tours SdnBhd (“Synergy Tours”), an indirectwholly-owned subsidiaryoftheCompany[heldviaOrientEscapeTravelSdnBhd,whichinturnisawholly-ownedsubsidiaryofDiversifiedGainSdnBhd,awholly-ownedsubsidiaryoftheCompany]hadincorporateda50%-ownedcompany in Italy,namelyLe IndieViaggiS.R.L. toconductall typesofoutboundand incoming travelbusinesses for distribution through internet with a share capital of £100,000 through subscription inequalamountsbythetwoshareholderswith£50,000each.Consequentialthereto,LeIndieViaggiS.R.L.becamea50%-ownedassociatecompanyofSynergyToursandtheCompany.
(c) On31January2012, theProposedTransfer inDamaTCM (asdetailed inNote8(b)(iv) to the financialstatements)wascompletedandaccordingly,DamaTCMbecamean80%-ownedsubsidiaryofEDSBandtheCompany.
Notes to the Financial Statements31 December 2011 (continued)
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38. SIGNIFICANT SUBSEQUENT EVENTS (continued)
(d) FurthertotheresolutionpassedbytheshareholdersofASAPLandHVAPLtovoluntaryderegisterASAPLandHVAPL as announced by the Company on 13 December 2011 (as set out in Note 8(b)(vii) to thefinancial statements), pursuant to a notice dated 16 February 2012 from the Australian Securities &InvestmentsCommission,ASAPLandHVAPLwerederegisteredon16February2012.
(e) On 22 March 2012, the Company announced that Unified Communications (Shenzhen) Pte. Ltd., awholly-ownedsubsidiaryofUCHLinthePeople’sRepublicofChina,hadbeenvoluntarilywoundupon20March2012.
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SUPPLEMENTARY INFORMATION ON THE DISCLOSURE OF REALISED AND UNREALISED PROFITS OR LOSSES
On25March2010,BursaSecuritiesissuedadirectivetoalllistedissuerspursuanttoParagraphs2.06and2.23ofMainMarketListingRequirementsofBursaSecurities.Thedirectiverequiresalllistedissuerstodisclosethebreakdownoftheretainedprofitsoraccumulatedlossesasattheendofthereportingperiod,intorealisedandunrealisedprofitsandlosses.
On20December2010,BursaSecuritiesfurtherissuedguidanceonthedisclosureandtheformatrequired.
Pursuanttothedirective,theamountsofrealisedandunrealisedprofitsorlossesincludedintheretainedprofitsoftheGroupandtheCompanyasat31December2011areasfollows:
Group Company 2011 2010 2011 2010 RM’000 RM’000 RM’000 RM’000
Totalretainedearnings/(accumulatedlosses)oftheCompanyanditssubsidiaries:-Realised (378,264) (448,054) (12,973) (22,228)
-Unrealised (18,542) (22,948) 268 469
(396,806) (471,002) (12,705) (21,759)
Totalshareofretainedearnings/(accumulatedlosses)fromassociatedcompanies:-Realised (1,193) 65,586 - --Unrealised 212 (658) - -
Totalshareofretainedearnings/(accumulatedlosses)fromjointlycontrolledentities:-Realised (634) (289) - --Unrealised - - - -
(398,421) (406,363) (12,705) (21,759)Less:Consolidationadjustments 473,064 476,779 - -
Totalgroupretainedearnings/(accumulatedlosses)asperstatementsoffinancialposition
74,643 70,416 (12,705) (21,759)
Thedeterminationof realisedandunrealisedprofitsor losses isbasedonGuidanceofSpecialMatterNo.1,Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants on 20December2010.
The disclosure of realised and unrealised profits or losses above is solely for complyingwith the disclosurerequirementsstipulatedinthedirectiveofBursaSecuritiesandshouldnotbeappliedforanyotherpurposes.
147advance synergy berhad (1225-D)
annual report 2011
Statement By Directors
We, DATO’ AHMAD SEBI BAKAR and YONG TECK MING, being two of the Directors of ADVANCE SYNERGY BERHAD, do hereby state that in the opinion of the Directors, the accompanying financial statements set out on pages 37 to 145 are properly drawn up in accordance with the Financial Reporting Standards and the provisions of 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 at 31 December 2011 and of the results and cash flows of the Group and of the Company for the financial year ended on that date.
The supplementary information set out on page 146 has been prepared in accordance with the 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, issued by the Malaysian Institute of Accountants.
Signed on behalf of the board in accordance with a resolution of the Directors,
DATO’ AHMAD SEBI BAKAR Director
YONG TECK MINGDirector
Selangor Darul Ehsan24 April 2012
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I,LEE SU NIE,being theDirectorprimarily responsible for the financialmanagementofADVANCESYNERGYBERHAD,dosolemnlyandsincerelydeclarethattothebestofmyknowledgeandbelief,thefinancialstatementssetoutonpages37to145andthesupplementaryinformationsetoutonpage146arecorrect,andImakethissolemndeclarationconscientiouslybelievingthesametobetrue,andbyvirtueoftheprovisionsoftheStatutoryDeclarationsAct,l960.
LEE SU NIE
SubscribedandsolemnlydeclaredbytheabovenamedatKualaLumpurintheFederalTerritoryon24April2012.
Beforeme,ARSHAD ABDULLAHNo.W550Commissioner for OathsMalaysia
Statutory Declaration
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Report on the Financial Statements
Wehaveaudited the financialstatementsofADVANCESYNERGYBERHAD,whichcomprise thestatementsoffinancialpositionasat31December2011oftheGroupandoftheCompany,andthestatementsofcomprehensiveincome,statementsofchangesinequityandstatementsofcashflowsoftheGroupandoftheCompanyforthefinancialyearthenended,andasummaryofsignificantaccountingpoliciesandotherexplanatoryinformation,assetoutonpages37to145.
Directors’ Responsibility for the Financial Statements
TheDirectorsoftheCompanyareresponsibleforthepreparationoffinancialstatementsthatgiveatrueandfairviewinaccordancewiththeFinancialReportingStandardsandtheCompaniesAct,1965inMalaysia,andforsuchinternal controls as the Directors determine are necessary to enable the preparation of financial statements that arefreefrommaterialmisstatement,whetherduetofraudorerror.
Auditors’ Responsibility
Ourresponsibilityistoexpressanopiniononthesefinancialstatementsbasedonouraudit.Weconductedouraudit inaccordancewithapprovedstandardsonauditing inMalaysia.Thosestandardsrequire thatwecomplywith ethical requirements and plan and perform the audit to obtain reasonable assurance about whether thefinancialstatementsarefreefrommaterialmisstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financialstatements.Theproceduresselecteddependonourjudgement,includingtheassessmentoftherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror.Inmakingthoseriskassessments,weconsiderinternalcontrolsrelevanttotheCompany’spreparationoffinancialstatementsthatgiveatrueandfairviewinordertodesignauditproceduresthatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheCompany’sinternalcontrols.Anauditalsoincludesevaluatingthe appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors,aswellasevaluatingtheoverallpresentationofthefinancialstatements.
Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopinion.
Opinion
Inouropinion,thefinancialstatementshavebeenproperlydrawnupinaccordancewiththeFinancialReportingStandardsandtheCompaniesAct,1965inMalaysiasoastogiveatrueandfairviewofthefinancialpositionoftheGroupandoftheCompanyasat31December2011andoftheirfinancialperformanceandcashflowsforthefinancialyearthenended.
Report on Other Legal and Regulatory Requirements
InaccordancewiththerequirementsoftheCompaniesAct,1965inMalaysia,wealsoreportthefollowing:
(a) In our opinion, the accounting and other records and the registers required by the Companies Act, 1965inMalaysiatobekeptbytheCompanyand itssubsidiariesofwhichwehaveactedasauditorshavebeenproperlykeptinaccordancewiththeprovisionsoftheCompaniesAct,1965inMalaysia.
(b) Wehaveconsideredthefinancialstatementsandtheauditors’reportsofallthesubsidiariesofwhichwehavenotactedasauditors,whichareindicatedinNote8tothefinancialstatements.
(c) WearesatisfiedthatthefinancialstatementsofthesubsidiariesthathavebeenconsolidatedwiththeCompany’sfinancial statements are in form and content appropriate and proper for the purposes of the preparation of the financialstatementsoftheGroupandwehavereceivedsatisfactoryinformationandexplanationsrequiredbyusforthosepurposes.
Independent Auditors’ Report to the Members of Advance Synergy Berhad
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Report on Other Legal and Regulatory Requirements (continued)
In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following(continued):
(d) Theauditors’reportsonthefinancialstatementsofthesubsidiariesdidnotcontainanyqualificationoranyadversecommentmadeunderSection174(3)oftheCompaniesAct,1965inMalaysia.
Other Reporting Responsibilities
The supplementary information set out on Page 146 is disclosed to meet the requirement of BursaMalaysiaSecuritiesBerhadand isnotpartof the financialstatements.TheDirectorsare responsible for thepreparationof the supplementary information in accordancewith theGuidance onSpecialMatterNo. 1,Determination ofRealised andUnrealisedProfits or Losses in theContext ofDisclosurePursuant toBursaMalaysia SecuritiesBerhad Listing Requirements, as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and thedirectiveofBursaMalaysiaSecuritiesBerhad. Inouropinion, thesupplementary information isprepared, inallmaterialrespects,inaccordancewiththeMIAGuidanceandthedirectiveofBursaMalaysiaSecuritiesBerhad.
Other Matters
This report ismadesolely to themembersof theCompany,asabody, inaccordancewithSection174of theCompaniesAct,1965inMalaysiaandfornootherpurpose.Wedonotassumeresponsibilitytoanyotherpersonforthecontentofthisreport.
Baker Tilly Monteiro Heng Heng Ji KengNo.AF0117 No.578/05/12(J/PH)CharteredAccountants Partner
KualaLumpur24 April 2012
Independent Auditors’ Report to the Members of Advance Synergy Berhad (continued)
151advance synergy berhad (1225-D)
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Statement on Directors’ Interests in the Company and related corporations as at 4 May 2012
Ordinary shares of RM0.30 eachDirect Interest in the Company Number Percentage
Dato’AhmadSebiBakar* 15,203,509 2.99
Indirect Interest in the Company
Dato’AhmadSebiBakar* 95,057,609 1 18.68DatinMasriKhawBintiAbdullah 5,000,000 0.98LeeSuNie 365,000 2 0.07
Ordinary sharesDirect Interest in related corporation Number Percentage
Unified Communications Holdings Limited
LeeSuNie 200,000 0.06
ICULS**Direct Interest in the Company Number Percentage
Dato’AhmadSebiBakar 123,212,999 14.66
Indirect Interest in the Company
Dato’AhmadSebiBakar 149,602,489 3 17.80DatinMasriKhawBintiAbdullah 12,240,000 1.46
* ByvirtueofhisinterestintheCompany,Dato’AhmadSebiBakarisalsodeemedtobeinterestedinthesharesofallinvesteecompanies(includingsubsidiaries)totheextentthattheCompanyhasaninterest.
** 2%10-YearIrredeemableConvertibleUnsecuredLoanStocksat100%ofthenominalvalueofRM0.15each.
Notes:
1 This includeshisson’s interest in6,000,000ordinarysharesoftheCompanywhichshallbetreatedashis interest intheordinarysharesoftheCompanypursuanttoSection134(12)(c)oftheCompaniesAct,1965.
2 This isherspouse’s interest in theordinarysharesof theCompanywhichshallbetreatedasher interest in theordinarysharesoftheCompanypursuanttoSection134(12)(c)oftheCompaniesAct,1965.
3 Thisincludeshisson’sinterestin48,934,000ICULSoftheCompanywhichshallbetreatedashisinterestintheICULSoftheCompanypursuanttoSection134(12)(c)oftheCompaniesAct,1965.
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annual report 2011
AUTHORISEDSHARECAPITAL :RM900,000,000dividedinto3,000,000,000ordinarysharesofRM0.30each.
ISSUEDANDFULLYPAID-UPCAPITAL :RM152,645,664.00dividedinto508,818,880ordinarysharesofRM0.30each.
VOTINGRIGHT :1voteperordinaryshare.
ANALYSIS OF SHAREHOLDINGS
Size of shareholdings No. ofshareholders
% ofshareholders
No. ofshares held
% of issuedshare capital
Lessthan100shares 255 1.16 6,756 negligible
100-1,000shares 5,546 25.31 5,174,344 1.021,001-10,000shares 11,847 54.07 50,931,276 10.0110,001-100,000shares 3,745 17.09 124,643,775 24.50100,001-lessthan5%ofissuedshares 515 2.35 250,544,130 49.245% and above of issued shares 1 negligible 77,518,599 15.23
21,909 100.00 508,818,880 100.00
LIST OF TOP 30 SHAREHOLDERS
No. Name No. of shares held Percentage
1. SJSecNominees(Tempatan)SdnBhdSuasanaDinamikSdnBhd
77,518,599 15.23
2. Dato’AhmadSebiBakar 15,203,509 2.99
3. SJSecNominees(Tempatan)SdnBhdBrightExistenceSdnBhd
11,539,010 2.27
4. PMNominees(Tempatan)SdnBhdMalpac Management Sdn Bhd
9,874,361 1.94
5. TanPakNang 6,320,000 1.24
6. SJSecNominees(Tempatan)SdnBhdEighthReview(M)SdnBhd
6,000,000 1.18
7. HoKatSin 5,561,100 1.09
8. ChewLeeHwa 5,492,000 1.08
9. MaybankNominees(Asing)SdnBhdPledgedSecuritiesAccountforSanTuanSam
5,343,300 1.05
10. OSKNominees(Tempatan)SdnBerhadPledgedSecuritiesAccountforHeeYuenSang
5,300,000 1.04
11. ASHHoldingsSdnBhd 5,000,000 0.98
12. BerjayaSOMPOInsuranceBerhad 5,000,000 0.98
13. CIMSECNominees(Tempatan)SdnBhdCIMBBankforChanSaiKim
4,593,000 0.90
Statistics on Shareholdings as at 4 May 2012
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LIST OF TOP 30 SHAREHOLDERS (continued)
No. Name No. of shares held Percentage
14. TayTeckHo 3,655,000 0.72
15. Goh Boon Seng 2,975,000 0.58
16. ChokSuSang 2,882,500 0.57
17. CIMSECNominees(Tempatan)SdnBhdCIMBBankforLeeYoonSing
2,625,650 0.52
18. GohGeokChoo 2,398,600 0.47
19. HSBCNominees(Asing)SdnBhdCoutts&CoLtdSGforQuekLengChye
2,216,500 0.44
20. MaybankSecuritiesNominees(Tempatan)SdnBhdUOBKayHianPrivateLimitedforLingFookKwang
2,175,500 0.43
21. TanKimWah 2,072,000 0.41
22. ChanLian 2,051,000 0.40
23. PublicNominees(Tempatan)SdnBhdPledgedSecuritiesAccountforLeeYokKoon
1,940,400 0.38
24. TanSongMo 1,926,000 0.38
25. PublicNominees(Tempatan)SdnBhdPledgedSecuritiesAccountforTeeKimHew
1,616,000 0.32
26. WongTenAn 1,530,000 0.30
27. LimChinSean 1,450,000 0.29
28. MaybankNominees(Tempatan)SdnBhdPledgedSecuritiesAccountforLiewPauShin@JimmyLiew
1,400,000 0.27
29. OoiBinKeong 1,203,000 0.24
30. LohSiewHooi 1,200,000 0.24
198,062,029 38.93
SUBSTANTIAL SHAREHOLDERS
Name of substantial shareholders No. of shares held % of issued share capital
Direct Indirect Direct Indirect
Dato’AhmadSebiBakar 15,203,509 89,057,609 2.99 17.50
SuasanaDinamikSdnBhd 77,518,599 - 15.23 -
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NO.OFICULSINISSUE :840,602,144VOTINGRIGHT :1voteperICULSinrespectofICULSholders’Meeting.
ANALYSIS OF ICULS HOLDINGS
Size of shareholdings No. of ICULSHolders
% of ICULSHolders
No. ofICULS held
% of ICULSHoldings
Lessthan100ICULS 11 0.25 472 negligible
100-1,000ICULS 80 1.79 29,297 negligible
1,001-10,000ICULS 1,492 33.33 8,642,144 1.0310,001-100,000ICULS 2,288 51.12 82,785,805 9.85100,001-lessthan5%oftheICULSinissue 600 13.40 374,299,092 44.535%andaboveoftheICULSinissued 5 0.11 374,845,334 44.59
4,476 100.00 840,602,144 100.00
LIST OF TOP 30 ICULS HOLDERS
No. Name No. of ICULS held Percentage
1. Dato’AhmadSebiBakar 123,212,999 14.66
2. SJSecNominees(Tempatan)SdnBhdBrightExistenceSdnBhd
94,105,835 11.20
3. LimHongLiang 57,381,700 6.83
4. Citigroup Nominees (Asing) Sdn BhdExemptAnforCitibankNA,Singapore
51,210,800 6.09
5. SJSecNominees(Tempatan)SdnBhdEighthReview(M)SdnBhd
48,934,000 5.82
6. ChewLeeHwa 28,728,000 3.42
7. SJSecNominees(Tempatan)SdnBhdPledgedSecuritiesAccountforChanSaiKim
27,361,300 3.25
8. Malpac Capital Sdn Bhd 22,538,300 2.68
9. MaybankSecuritiesNominess(Tempatan)SdnBhdPledgedSecuritiesAccountforMalpacCapitalSdnBhd
20,000,000 2.38
10. ASHHoldingsSdnBhd 12,240,000 1.46
11. CIMSECNominees(Tempatan)SdnBhdCIMBBankforChanSaiKim
8,611,050 1.02
12. GohGeokChoo 6,703,400 0.80
13. SJSecNominees(Tempatan)SdnBhdSuasanaDinamikSdnBhd
6,562,654 0.78
14. LohSiewHooi 6,000,000 0.71
Statistics on ICULS Holdings as at 4 May 2012
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LIST OF TOP 30 ICULS HOLDERS (continued)
No. Name No. of ICULS held Percentage
15. MaybankNominess(Tempatan)SdnBhdLayManWan@LaiMunWan
5,223,000 0.62
16. OnnKokPuay 4,495,000 0.53
17. ChuahKimSeng 4,345,700 0.52
18. Goh Boon Seng 4,112,500 0.49
19. SJSecuritiesSdnBhd 3,783,500 0.45
20. WongTenAn 3,575,000 0.42
21. RHBCapitalNominees(Tempatan)SdnBhdPledgedSecuritiesAccountforHiewKatKee
3,168,100 0.38
22. NgFaai@NgYokePei 3,076,600 0.37
23. OngSheokKheng 3,000,000 0.36
24. RHBCapitalNominees(Tempatan)SdnBhdPledgedSecuritiesAccountforSuMingKeat
2,775,000 0.33
25. MohdJamelBinAbdulMunin 2,278,000 0.27
26. LeeWeiGia 2,100,000 0.25
27. ECMLNominees(Tempatan)SdnBhdPledgedSecuritiesAccountforLimAiLeng
2,000,000 0.24
28. LohSayBeeSdnBerhad 2,000,000 0.24
29. NgSwan 2,000,000 0.24
30 OliveLimSweeLian 1,945,000 0.23
563,467,438 67.03
156advance synergy berhad (1225-D)
annual report 2011
List of Properties
Thetop10propertiesoftheGroupasat31December2011areasfollows:
Location Description Landarea
Approx.age of
building (Years)
Tenure Carrying Amount (RM’000)
Date of last revaluation /acquistion
*GM1126Lot1301,GM424Lot1302,GM857Lot1303,GM405Lot1305,HS(M)1096PT1300&HS(M)1082PT1303MukimSungaiKarangCheratingPahangDarulMakmur
Landwithhotelbuilding,recreationalfacilities,restaurantsand apartmentblock
15 acres
181/2-24 Freehold 32,873 28.03.2005
72,PesiaranJubliPerak,Seksyen2240000 Shah AlamSelangorDarulEhsan
Industrial land and buildings
61,492sq.m.
18 Freehold 32,029 03.06.2003
Geran85,Lot203469,JalanHajiHussein50300KualaLumpur
18 storey hotel building
3,214sq.m.
36 Freehold 29,491 25.03.2005
Nile AvenueKhartoumSudan
Landwithhotelbuilding,recreationalfacilities and restaurants
30,550sq.m.
> 99 Leaseholdexpiringin
2039
22,229 30.12.2005
89,MonivongBlvd.SangkatMonoromKhan7MakaraPhnomPenhCambodia
Hotelbuilding 750sq.m.
12 Leaseholdexpiringin2066
14,084 30.12.2005
Lot4,46ruedeTrévise,75009Paris,France
Hotelbuilding 510sq.m.
>101 Freehold 13,388 28.10.2009
e d at
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annual report 2011
Thetop10propertiesoftheGroupasat31December2011areasfollows(continued):
Location Description Landarea
Approx.age of
building (Years)
Tenure Carrying Amount (RM’000)
Date of last revaluation /acquistion
Geran 25343LotNo.3787MukimTebrauDaerahJohorBahruJohorDarulTakzim
Industrial landand bus depot
39,242sq.m.
6 Freehold 8,916 26.04.2005
Lot3A-5-1,5thfloorBlock3A,PlazaSentralKualaLumpur
ShopOffice 8,060sq.m.
8 Freehold 8,870 12.01.2011
Geran 25342LotNo.3786MukimTebrauDaerahJohorBahruJohorDarulTakzim
Industrial land 38,388sq.m.
- Freehold 7,791 26.04.2005
Lot3,46ruedeTrévise,75009Paris,France
Shop 152sq.m.
>101 Freehold 3,398 28.07.2010
*Hotelpropertyunderfinancelease.
Thispagehasbeenintentionallyleftblank.
A D VA N C E S Y N E R G Y B E R H A D
Proxy FormADVANCESYNERGYBERHAD
ANNUALREPORT2011
A D VA N C E S Y N E R G Y B E R H A D
A N N U A L R E P O R T 2 0 1 1
Thispagehasbeenintentionallyleftblank.
I/We ContactNo. (fullnameinblockletters)
NRIC/CompanyNo. orCDSAccountNo. (for nominee companies only)
of (full address)
beingashareholder/shareholdersofADVANCESYNERGYBERHAD,herebyappoint
NRICNo. (fullnameinblockletters)
of (full address)
orfailinghim/her, NRICNo. (fullnameinblockletters)
of (full address)
orfailinghim/her,THECHAIRMANOFTHEMEETINGasmy/ourproxytovoteforme/usandonmy/ourbehalfattheEighty-EighthAnnualGeneralMeetingoftheCompanytobeheldattheAuditorium,Level4,ThePodium,WismaSynergy,No.72,PesiaranJubliPerak,Seksyen22,40000ShahAlam,SelangorDarulEhsanonTuesday,26June2012at10.30a.m.andatanyadjournmentthereofandthereattovoteasindicatedbelow:
Pleaseindicatewith( )howyouwishtocastyourvote.Ifneither“FOR” nor “AGAINST”isindicated,theproxywillvoteorabstainfromvotingathis/herdiscretion.
NO. RESOLUTION FOR AGAINST
1. AdoptionoftheAuditedFinancialStatementsforthefinancialyearended31December2011andtheDirectors’andAuditors’reportsthereon.
2. Declarationoffirstandfinaldividend.
3. ApprovalofthepaymentofDirectors’fees.
4. Re-electionofDato’AbdulMuradBinKhalidasDirector.
5. Re-electionofChimWaiKhuanasDirector.
6. Re-appointmentofMessrsBakerTillyMonteiroHengasauditorsoftheCompanyandauthorisationfortheDirectorstofixtheirremuneration.
7. Authorisation for Directors to allot and issue new shares pursuant toSection132DoftheCompaniesAct,1965.
8. AmendmentstotheArticlesofAssociation.
Dated this day of 2012 Number of shares held Signature
Notes:
(1)Inrespectofdepositedsecurities,onlymemberswhosenamesappearintheRecordofDepositorson18June2012(GeneralMeetingRecordofDepositors)shallbeentitledtoattend,speakandvoteatthisEighty-EighthAGM.
(2) AmemberoftheCompanyentitledtoattendandvoteatthegeneralmeetingisentitledtoappointatleastone(1)proxybutnotmorethantwo(2)proxiestoattendandvoteinhis/herstead.AproxyneednotbeamemberoftheCompany.
(3)AmemberoftheCompanywhoisanauthorisednomineeasdefinedundertheSecuritiesIndustry(CentralDepositoriesAct),1991mayappointatleastone(1)proxybutnotmorethantwo(2)proxiesinrespectofeachsecuritiesaccountitholdswithsharesoftheCompanystandingtothecreditofthesaidsecuritiesaccount.
(4) Theinstrumentappointingaproxyinthecaseofanindividualshallbesignedbytheappointerorhis/herattorneydulyauthorisedinwritingandinthecaseofacorporation,theinstrumentappointingaproxymustbeunderitscommonsealorunderthehandofanofficerorattorneydulyauthorised.
(5) Theinstrumentappointingaproxyandthepowerofattorneyorotherauthority,ifany,underwhichitissigned(oranotariallycertifiedcopyofsuchpowerorauthority)shallbedepositedattheRegisteredOfficeoftheCompanyatLevel3,EastWing,WismaSynergy,No.72,PesiaranJubliPerak,Seksyen22,40000ShahAlam,SelangorDarulEhsannotlessthan48hoursbeforethetimeappointedforholdingthemeetingoranyotheradjournmentthereof.
ADVANCE SYNERGY BERHAD (CompanyNo:1225-D) Proxy Form
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THESECRETARY
ADVANCE SYNERGY BERHADLevel3,EastWing,WismaSynergyNo.72,PesiaranJubliPerakSeksyen2240000 Shah AlamSelangorDarulEhsan
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ADVANCE SYNERGY BERHAD (1225-D)Level 3, East Wing, Wisma SynergyNo. 72, Pesiaran Jubli PerakSeksyen 22, 40000 Shah AlamSelangor Darul Ehsan Malaysia