TRC SYNERGY BERHAD
(413192-D)
Annual Report 2008
TRC SYNERGY BERHAD
(413192-D)Wisma TRC, 217 & 218, Jalan Negara 2. Taman Melawati 53100 Ulu Klang, Selangor Darul Ehsan.
Tel : 03 4108 0105 / 06
Contents
02 • Chairman’s Statement
05 • Corporate Information
06 • Profi le of Directors
08 • Corporate Structure
09 • Statement on Corporate Governance
18 • Statement on Internal Control
20 • Audit Committee Report
25 • Financial Statements
84 • List of Properties
86 • Analysis of Shareholdings
89 • Analysis of ICULS Holdings
91 • Analysis of Warrant Holdings
93 • Notice of Twelfth Annual General Meeting
96 • Statement Accompanying Notice of Annual General Meeting
Proxy Form
Group Performance
For the year under review, the group recorded a double digit growth in profi t after tax for the third consecutive year. The group’s turnover increased to RM740.6 million from RM422.2 million in the preceding year, representing an increase of 75.4%. Likewise, the profi t after tax also registered a marked increase of 52.0% i.e. from RM30.0 million in the year 2007 to RM45.6 million in 2008. This stellar performance underscores the group’s capabilities and effi ciency in the implementation of major projects. It was also pertinent to note that the strong performance was achieved amid a very challenging local and global economic environment. With strong balance sheet and cash fl ow, it is our vision to capitalise on the current strength of the group to propel itself into the next phase of expansion in the near future.
Review of Operations
Construction
This division continued to be a major revenue contributor to the group.
During the year, the group’s main on-going projects like the Sapangar Bay Submarine Base (RM318 million), Kuala Terengganu Runway Extension P4 (RM202million),
Sibu Bawang Assam Road (RM222million) and IPD Dang Wangi (RM125million) were being implemented. In addition, the group managed to secure a project from Bintulu Port Sdn. Bhd. for the construction of warehouses in Bintulu (RM88.8million), a Turnkey project from Advance Air Traffi c Systems Sdn. Bhd. for the upgrading of Malaysia Air Traffi c Modernisation Program at Tawau and Sibu (RM11.6million) and an additional work for the Sapangar Bay Submarine Base project for its Umbilical Services (RM92.8million).
Subsequent to the close of the fi nancial year, the group received a letter of award to construct a maritime college in Kuantan, Pahang for RM218.0million from the Public Works Malaysia, elevating its orderbook to approximately RM1.5billion.
The current contracts in hand should be able to sustain the group well into 2011. We are also confi dent that with the proactive measures taken by the government, including the recently announced RM60 billion stimulus package, to revitalise the economy, the prospects for the group will continue to be bright in the coming years.
Dear Shareholders,
On behalf of the Board of Directors, I am pleased
to present the Annual Report and Audited Financial
Statement of TRC Synergy Berhad for the
Financial Year Ended 31 December 2008.
Chairman’s
Statement
(Cont’d)
Property Division
During the period under review, there was no new launches of project by the group’s property division. This has invariably resulted in its lackluster performance. On the future prospects, the group is planning to develop some residential properties on a piece of land measuring 8.6 acres in Ulu Kelang in the second half of 2009, if the economic situation permits. The gross development value for this project is expected to be in the range of RM50 million to RM60 million.
To boost the demand of this sector, the government has introduced various measures like, exemption in the Real Property Gains Tax (RPGT), a 50% stamp duty exemption as the instrument of transfer for purchases of housing unit below RM250,000.00 and allowing EPF contributors to make monthly withdrawal for housing loan repayments to ease financial burden. We believed with these measures, the future prospects for this sector will be positive.
Manufacturing
Contribution from this division continued to be insignificant. We do not foresee this division to have a significant impact on the group’s revenue and profitability in the immediate future.
Oil & Gas
The group’s associate company, Petrobru (B) Sdn. Bhd., had on 21 January 2008 entered into a Memorandum of Understanding with the Petroleum Unit, Ministry of
Energy, Brunei Darussalam in relation to a feasibility study for a proposed oil refinery and storage facility in Pulau Muara Besar, Brunei Darussalam (the project). Subsequent to the signing of the Memorandum of Understanding, the consultant, Wood Mackenzie, was engaged to conduct a pre economic feasibility study of the project. The results of the study were positive and following that the Brunei Government gave an official approval to the company to proceed with further works towards the realisation of the project. The detailed feasibility study for the project is currently in progress and should be completed by the first half of 2009. Barring unforeseen circumstances, we expect this project to commence within the next 1 to 2 years. We also expect this project to contribute positively to the group’s future profitability.
Corporate Development
During the year the company completed a Bonus Issue exercise by issuing 31,588,246 new ordinary shares of RM1.00 each on the basis of one new bonus share for every five existing ordinary shares of RM1.00 each. Consequential to the Bonus Issue, an additional 6,101,520 new Warrants 2007/2017 was issued pursuant to the adjustment in accordance with the provisions of the Deed Poll.
TRC SYNERGY BERHAD
05 06 07 08 REVENUE (RM’000) 141,769 225,677 422,220 740,663 05 06 07 08 SHAREHOLDERS’S FUND (RM’000) 121,344 131,872 222,590 266,867 05 06 07 08
NET TANGIBLE ASSETS PER SHARE (sen) 130 142 159 141 06 07 08 PROFIT/(LOSS) BEFORE TAXATION (RM’000) (4,810) 13,113 41,739 61,360 05
Chairman’s
Statement
(Cont’d)
Economic Outlook
The government, under the Economic Report 2008/2009, has projected the construction sector to grow by 3.1% driven by civil engineering sub-sector, with the further implementation of infrastructure projects under the 9MP. In addition, the faster pace of corridor developments is also expected to spur construction works. The announcement of the two stimulus packages by the government amounting to RM67 billion in November 2008 and March 2009 will also give the construction sector a positive outlook and boost its growth in the years to come.
With these developments, we are confident that the group will continue to perform well in the future.
Dividend
The Board has recommended a first and final gross dividend of 6 sen less income tax of 25% for the 2008 financial year amounting to RM8,530,986.00. This represents an increase of 46% over the financial year 2007.
Acknowledgement and Appreciation
We endeavour to ensure that whatever the group does will be for the benefit of all our stakeholders and the community in general. This would not be achieved without the invaluable support and contributions from the Board of Directors, staffs, clients, financiers and business associates.
On behalf of the Board of Directors, I would like to record our sincere appreciation to those who have contributed to the success of the group.
Dato’ Sri Sufri Bin Hj Mohd Zin
Board of Directors
Dato’ Sri Sufri bin Hj Mohd Zin
(Executive Chairman)Dato’ Abdul Aziz bin Mohamad
(Executive Director)General (R) Dato’ Seri Mohd
Shahrom Bin Dato’ Hj Nordin
(Independent Non-Executive Director)Noor Zilan bin Mohamed Noor
(Independent Non-Executive Director)Abdul Rahman bin Ali
(Independent Non-Executive Director)
Company Secretary
Abdul Aziz bin Mohamed
(LS 007370)
Registered Office /
Principal Place of Business
Wisma TRC, No. 217 & 218 Jalan Negara 2, Taman Melawati 53100 Ulu Klang, Selangor
Tel No. : 603-41080105 / 603-41080106 Fax No. : 603-41080104
E-mail : info@trc.com.my
Branch Office
Lot 3626, Block 16, KCLD
Taman Timberland, Lorong Rock 2 93200 Kuching, Sarawak Tel No. : 082-239998 Fax No. : 082-421998
Website
www.trc.com.myAuditors
Kumpulan Naga (AF-0024) Suit 1, 1st Floor, Wisma Leopad No. 5, Jalan Tun Sambanthan 50470 Kuala Lumpur
Share Registrar
Mega Corporate Services Sdn Bhd Level 15-2, Faber Imperial Court Jalan Sultan Ismail
50774 Kuala Lumpur Tel : 03-26924271
Fax : 03-27325388 & 03-27325399
Principal Bankers
EON Bank Berhad Malayan Banking Berhad Affin Bank Berhad RHB Bank Berhad
Solicitors
Messrs Noorzilan & Partners Messrs C.C. Choo & Co.
Stock Exchange Listing
Bursa Malaysia Securities Berhad (Main Board)
(Stock No. : 5054)
Corporate
Information
TRC SYNERGY BERHAD
Dato’ Sri Sufri Bin Hj Mohd Zin
Executive Chairman, 53 years of age – Malaysian
Dato’ Sri Sufri Bin Hj Mohd Zin is the founder of TRC Group. He was appointed as the Managing Director of TRC Synergy Berhad (“TRC” or “the Company”) on 29 March 2002 and presently he is the Executive Chairman of the Company and the Managing Director of its subsidiary Companies. He graduated from Institute of Teknologi MARA (“ITM”) in 1982 with a Diploma in Business Studies. He is also a master degree holder in Business Administration in Construction Management from Harvey International University, United States. Presently he is pursuing a bachelor degree in Jurisprudence International Law (External) at Universiti Malaya.
YBhg Dato’ Sri started his career as a banker with Bank Bumiputera Malaysia Bhd in 1982. His inherent perseverance and unique business acumen led him into the building and construction industry in 1984. During the Financial year ended 31 December 2008, he attended all four Board Meetings.
Dato’ Abdul Aziz Bin Mohamad
Executive Director, 50 years of age – Malaysian
Dato’ Abdul Aziz Bin Mohamad was appointed as an Executive Director of the Company on 29 March 2002. He joined TRC Group as a Senior Contract Executive in 1994 and was later promoted to Deputy General Manager (Contracts) in 1997. He graduated from Trent Polytechnic in Nottingham, England in 1983. He is a Quantity Surveyor by profession and a member of the Institution of Surveyors, Malaysia. He started his career as an Assistant Quantity Surveyor in England with Rider Hunt and Partners in 1982. He later joined Jabatan Kerja Raya (JKR) Kuala Lumpur in 1983 as a Quantity Surveyor where he administered the contractual aspects of projects. YBhg Dato’ Aziz attended all four Board Meetings held during the fi nancial year ended 31 December 2008. He does not have any personal interest in any business arrangement involving the Company.
Profi le of
Director’s
1
Profi le of
Director’s
(Cont’d)
General (R) Dato’ Seri Mohd Shahrom Bin Dato’ Hj Nordin
Independent, Non-Executive Director, 61 years of age – Malaysian
General (R) Dato’ Seri Mohd Shahrom Bin Dato’ Hj Nordin was appointed as a Director of the Company on 25 March 2004. After his secondary education, he was selected for Offi cer Cadet training at the Royal Military College, Sungai Besi in 1966 before being commissioned as a Second Lieutenant into the Royal Malay Regiment in 1968 and assigned as a Platoon Commander with the 2nd Battalion, Royal Malay Regiment. General (R) Dato’ Seri Mohd Shahrom has served in various appointments at command, staff, training and the diplomatic services levels and he was the Chief of the Malaysia Army from 1st January 2003 to 15 September 2003. Prior to that appointment he was the Chief of staff at the Armed Forces Headquarters. Currently he is the Senior Vice President Defence of the National Aerospace & Defence Industries Sdn Bhd (NADI). He is also the Chairman of SME Aerospace Sdn Bhd (SMEA) and Director of SME Ordnance Sdn Bhd (SMEO). Both SMEA and SMEO are subsidiary companies of the NADI Group of Companies. General (R) Dato’ Seri Mohd Shahrom is a member of the Audit Committee. During the fi nancial year ended 31 December 2008 he attended all the four Board Meetings held.
Noor Zilan Bin Mohamed Noor
Independent, Non–Executive Director, 49 years of age – Malaysian
Noor Zilan Bin Mohamed Noor was appointed as a Director of the Company on 13 May 2002. He graduated from ITM in 1983 with a Diploma in Law. He then joined United Malayan Banking Corporation as a Trainee Executive Offi cer before pursuing for further studies in the United Kingdom in 1984 and graduated from City of London Polytechnics with LLB (Hons) majoring in Business Law in 1987. Subsequently, he went on to read Law at Lincoln’s Inn and was called to the English Bar in 1988 and upon returning to Malaysia he was then called and admitted to the Malaysian Bar in 1989 as an Advocate & Solicitor. He then worked as a Legal Assistant before starting his own law fi rm in 1991 and is now a Senior Partner with an established law fi rm in Kuala Lumpur specializing in the area of Corporate Law, Banking, Building and Construction Law apart from civil & criminal litigation. En. Noor Zilan is the Chairman to the Audit Committee, Nomination Committee and Remuneration Committee. He attended all four Board Meetings held during the fi nancial year ended 31 December 2008.
Abdul Rahman Bin Ali
Independent, Non–Executive Director, 52 years of age – Malaysian
Abdul Rahman Bin Ali was appointed as a Director of the Company on 13 May 2002. He graduated from University of Malaya in 1982 with a Degree in Accounting. He is currently a Chartered Accountant of the Malaysian Institute of Accountants. He started his career as a credit offi cer with Bank Bumiputera Malaysia Berhad in 1982. He left the bank in 1986 to set up his own management consultancy company under the name of Advance Management Services in 1986 before becoming a Branch Manager with a public accounting fi rm, Sahir and Co. in 1990. In 1994, he set up his own accounting fi rm by the name A. Rahman & Associates and later became a partner of Omar Arif, A.Rahman & Associates in 1996. En. Abdul Rahman is a member of the Audit Committee, Nomination Committee and Remuneration Committee. He attended all the four Board Meetings held during the fi nancial year ended 31 December 2008.
3
4
5
Note:-Save as disclosed above, 1) none of the Directors
have:-i any famhave:-ily relathave:-ionshhave:-ip whave:-ith any dhave:-irector and/or substanthave:-ial shareholders of the Company; ii any confl ict of interest with the Company; and
iii any conviction for offences (other than traffi c offences) within the past ten (10) years. 2) none of the Directors holds directorship in other public companies.
2
4
5
1
3
TRC SYNERGY BERHAD
Trans Resources Corporation Sdn Bhd (120265 P) TRC Infra Sdn Bhd (645178 P) TRC Land Sdn Bhd (444162 W) TRC Energy Sdn Bhd (616448 K) TRC International Pte Ltd (LL04510) 100% TRC Construction (Sarawak) Sdn Bhd (621714 W) 100% TRC Concrete Industries Sdn Bhd (151401 V) 100% Liputan Sutera Sdn Bhd (637939-H) 100% Petrobru Build Sdn Bhd (incorporated in Brunei Darussalam) 60% 100% 100% TRC Development Sdn Bhd (309248 U) 100% 100% PetroBru (B) Sdn Bhd (incorporated in Brunei Darussalam) 26% 100%
Corporate
Structure
The Board of Directors of TRC Synergy Berhad (“the Board”) is always committed to uphold the highest standards of corporate governance as set out in the Malaysian Code on Corporate Governance (“The Code”) are practiced throughout the Company and its subsidiaries. These have been recognized by the Board as the Group’s key responsibilities in order to protect and enhance long term shareholder value and to safeguard the Group’s assets. The Board will continuously evaluate the Group’s corporate governance practices and procedures, and where appropriate will adopt and implement the best practices as enshrined in the Code. In accordance with paragraph 15.26 of the Bursa Malaysia’s Listing Requirements (“Listing Requirements”), the Board is pleased to provide the following statement detailing the manner the Group has applied the principles of corporate governance and the extent of compliance with the Best Practices.
DIRECTORS
The Board of Directors (“the Board”)
The Group is led and controlled by an effective Board of Directors headed by the Executive Chairman who has detailed knowledge and vast experience in the construction industry. The rest of the Board members possess a wide range of skill and experiences ranging from construction, finance, legal and general management discipline suitable for managing the Group businesses.
The Board has overall responsibility in the stewardship of the Group’s direction and its performance inclusive of corporate governance, strategic planning and maintaining effective control over financial and operational matters.
Board Composition and Balance
The Board currently consists of five (5) members comprising two (2) Executive Directors and three (3) Independent Non-Executive Directors. The Company complies with the criteria of having at least one-third (1/3) of the Board Members as Independent Non-Executive Directors. The profiles of the Directors are presented in this Annual Report on pages 6 and 7.
The Independent Non-Executive Directors provide broad, unbiased and balanced assessment on proposals initiated by the Executive Directors and the senior management of the Group. They also contribute by the exercise of independent judgment and objective participation in the proceeding and decision making process of the Board. In view of this composition, the Board of the view that the present members of the Board are considered sufficient in addressing the issues affecting the Group.
Statement on Corporate
Governance
TRC SYNERGY BERHAD
Statement on Corporate
Governance
(Cont’d)
Board Meeting
The Board convene a total of four (4) board meetings during the financial year ended 31 December 2008. In the meetings, the Board deliberated and considered matters relating to the Group’s financial performance, key business and operational issues and business plans. Details of attendance at the meeting are as
follows:-Name No. of Meeting Attended
Dato’ Sri Sufri bin Hj Mohd Zin 4/4
Dato’ Abdul Aziz bin Mohamad 4/4
Jen (B) Dato’ Sri Mohd Shahrom bin Dato Hj Nordin 4/4
Noor Zilan Bin Mohamed Noor 4/4
Abdul Rahman bin Ali 4/4
The Board has agreed to meet at least four (4) times a year with additional matters addressed by way of circular resolutions and additional meeting to be held as and when the need arises.
Supply of Information to the Board
All Directors have unrestricted access to all information within the Group as a full Board or in their individual capacity in carrying out their duties and responsibilities. The Chairman undertakes primary responsibility for organizing information to be distributed to the Board. They also have direct access to the advice and services of the Company Secretary, internal and external auditors and other independent professional at all times.
As for the Board meeting, the agenda and Board papers are distributed to the Board in advance before the meeting to ensure the Directors have sufficient time to appreciate the issues deliberated at the meetings. Senior officers of the Group are invited to clarify and explain the relevant matters tabled to the Board.
Appointment and Re-election of the Board
The Company has a formal and transparent procedure for the appointment of new Directors and re-election of Directors. These aspects are spelt out clearly in the Company’s Articles of Association. Besides, The Nomination Committee, comprising of two (2) Independent Non-Executive Directors, reviews and recommends any proposed appointments before the appointment are approved by the Board.
All the newly appointed Directors are subject to election by shareholders at the Annual General Meeting subsequent to their appointment.
As for the re-election of Directors, the Articles of Association of the Company provides at least one-third (1/3) of the Directors are required to retire by rotation at each financial year and are eligible to offer themselves for reelection at the Annual General Meeting. All Directors shall retire from office once at least in each three (3) years.
At the last Annual General Meeting held on 27 June 2008, En. Noor Zilan bin Mohamed Noor and En. Abdul Rahman bin Ali retired and were elected to the Board.
Statement on Corporate
Governance
(Cont’d)
Directors’ Training
All Directors have duly complied with the Listing Requirements in relation to the Mandatory Accreditation Programme. Subsequent to the repeal on the CEP Programme and the inception of the new requirement that requires the Board as a whole to evaluate the training needs for Directors, the Directors have principally agreed to attend at least one training programme every year. They will identify the relevant training programmes for Directors to ensure that they are updated with appropriate professional training to enhance their knowledge and professionalism in discharging their duties to the Group.
During the financial year ended 31 December 2008, the Directors attended a number of relevant programme to enhance their knowledge and expertise in the Group core business and on matters concerning their skills and professional fields. Amongst the training programme attended by the Directors were as
follows:-i Natfollows:-ional Tax Conference 2008; ii 2009 Budget Seminar;
iii 10th International Surveyors’ Congress; and
iv 11th Defence Exhibition and Conference Asia Services
The Executive Chairman did not attend any short course training as he was pursuing an external bachelor degree programme in Jurisprudence International Law at Universiti Malaya.
Apart from that, frequent visit to the operational projects sites and occasional trips to meet overseas suppliers and consultants and active participation on the relevant association have equipped the Executive Directors with the latest information and technologies in the industry.
Board Committees
As recommended by the Code, the Board has established the following committees to assist the Board in discharging its
duties:-i Audduties:-it Commduties:-ittee ii Nomination Committee iii Remuneration Committee
iv Employees’ and Directors’ Share Option Scheme (ESOS) Committee
Each of this committee has its own functions and responsibilities and they report to the Board.
DIRECTORS’ REMUNERATION
The Group has adopted the principle recommended by the Code whereby the level or remuneration of the Directors and senior management should reflect the level of responsibility and contributions toward the successful and efficient running of the Group’s activities.
TRC SYNERGY BERHAD
Procedure
To assist the Board in the discharge of its duties, the Board has established a Remuneration Committee. As at the date of the Annual Report, the composition of the Remuneration Committee is as
follows:-i Noor Zfollows:-ilan Bfollows:-in Mohamed Noor ii Abdul Rahman bin Ali
The Committee will review and recommend to the Board the remuneration package of the executive directors and senior management of the Group with the main aim of providing level of remuneration sufficient to attract and retain competent executives who can manage the Group effectively.
Disclosure
The aggregate remuneration of the Directors received and receivable from the Company and its subsidiaries during the financial year ended 31 December 2008 are as
follows:-Category Fees (RM) Salaries (RM) EPF & SOCSO (RM) Bonus
Executive Directors - 1,185,600.00 218,683.60 631,600.00
Non-Executive Director 105,000.00 - -
-Total 105,000.00 1,185,600.00 218,683.60 631,600.00
The remuneration paid to the Directors, analysed into the following bands, is as
follows:-Range of remuneration Number of Director Executive Non-Executive
Less than RM 50,000 - 3
RM50,001 – RM600,000* -
-RM600,001 – RM650,000 1
-RM651,001 – RM1,400,000* -
-RM1,400,001 – RM1,450,000 1
-* No Directors within this range of remuneration
RELATIONSHIP WITH INVESTORS AND SHAREHOLDER COMMUNICATION
The Board acknowledges the importance of communication and proper dissemination of all important issues and major development concerning the Company. In addition to the various announcements made during the year, the timely release of financial results on a quarterly basis provides shareholders with an overview of the Group’s performance and operations.
During the financial year ended 31 December 2008, the Company once again organized a number of meetings and briefings with financial analysts to establish better understanding of the Company’s objective and performance and to convey other information that may affect shareholders interest.
The Company also has a cordial relationship with reporters who have been playing a very effective role in conveying the Group’s information to the public, shareholders and investors. Press releases are also occasionally organized to clarify on certain matters related to the Company and its operating unit.
Besides, shareholders, investors and members of the public may also obtain updated information on the Group by accessing to the Company’s website at www.trc.com.my.
THE ANNUAL GENERAL MEETING
The company uses the Annual General Meeting as the primary channel of communication with its shareholders. They are encouraged to raise questions and participate in discussions pertaining the operation and financial aspects of the Group.
Shareholders who are unable to attend to the meeting can appoint their proxies who can vote on their behalf. Board of directors, senior management as well as the Company’s Auditors are present to answer any relevant questions raised at the meeting.
Statement on Corporate
Governance
(Cont’d)
TRC SYNERGY BERHAD
ACCOUNTABILITY AND AUDIT
Financial Reporting
In presenting the Company’s financial statements and quarterly results to shareholders and other interested parties, the Board aims to present a balanced and understandable assessment of the Group’s financial position and prospects. The financial statements of the Company and of the Group are prepared in accordance with the requirements of the applicable Approved Accounting Standards in Malaysia and the provisions of the Companies Act, 1965.
The Group’s annual financial statements and quarterly results are reviewed by the Audit Committee and approved by the Board before announcement to Bursa Malaysia for public release.
The Statement explaining the Directors’ responsibilities for preparing the annual audited financial statements pursuant to paragraph 15.27(a) of the Listing Requirements is set out on page 17 of the Annual Report.
Internal Control
The Board acknowledges and places strong emphasis in maintaining a sound system of internal control which is necessary to safeguard the Group’s assets and shareholders’ interest. Details of the Group’s internal control system is presented in the Statement on Internal Control and Audit Committee Report set out on pages 18 to 24.
Relationship with External Auditors
Through the Audit Committee, the Group has established a transparent and appropriate relationship with the Group’s external auditors in seeking their advice and towards ensuring compliance with the applicable Approved Accounting Standards. The external auditors are invited to attend the Audit Committee meeting and to the Board meeting on a need basis as and when deemed appropriate.
Corporate Social Responsibility (“CSR”)
The Board acknowledges the importance of the CSR, the framework of which has been launched by the Bursa Malaysia on 15 September 2006. The move by Bursa Malaysia is seems to be inline with the decent intention of the Government to inculcate the culture of corporate social responsibility among the public listed companies. Therefore, the Board had agreed to beef up the Company’s social activities with an intention to share the company’s profitability with the public in forms of contribution on social responsibility activities.
During the financial year ended 31 December 2008, TRC Group continued to support the community and the staffs by donating various amounts to various parties/bodies within the country. This included a contribution of RM50,000 for the construction of Dewan Maktab Sultan Abu Bakar, Johor. The contribution was presented to YM Tunku Mahkota Johor, Tunku Ibrahim Ismail Sultan Iskandar during a low-key function in Johor Bahru in July 2008.
During the year 2008, the Group had also contributed RM10,000 to National Press Club for their members to organise a four-day trip to Sabah which aimed at enhancing fraternal ties and the spirit of fellowship among members of the media industry.
STATEMENT OF COMPLIANCE WITH THE BEST PRACTICE OF THE MALAYSIAN
CODE ON CORPORATE GOVERNANCE (THE CODE)
Save as disclosed below, the group has substantially complied with the Best Practices in Corporate Governance set out in Part 2 of the
Code:-Provision of the Code Details Explanation
Part 2, AA II
Chairman and Chief Executive The Company is headed by an Executive Chairman and therefore, the roles of the Chairman and the Chief Executive Officer are not separate. The Board is of the opinion that the check and balance of power is undertaken by the strong presence of Independent Non-Executive Directors in the Board. Furthermore, the Chairman encourages all Directors to participate actively in all deliberation of issues that concern the Group.
Hence, the Board maintains the view that this combined arrangement will not hamper the Board from making fair decisions for the best interest of the Group.
Part 2, AA VII
Senior Independent Non-Executive Director to whom concerns may be conveyed
Presently all Board Members are accessible by the shareholders and public investors where they can relay their concerns over company matters. Therefore, the appointment of Senior Independent Non-Executive Director to assume such responsibilities is not timely necessary.
Statement on Corporate
Governance
(Cont’d)
TRC SYNERGY BERHAD
ADDITIONAL COMPLIANCE INFORMATION
In compliance with the Listing Requirements, the following information is
provided:-Utilization of proceeds
No proceed were raised by the Company from any corporate exercise during the financial year ended 31 December 2008.
Share buybacks
The Company has not undertaken any share buyback exercise during the financial year ended 31 December 2008.
Option, Warrants or Convertible Securities.
During the financial year, 292,400 new ordinary shares of RM1.00 each were issued by the Company pursuant to the exercise of warrants, 16,652,200 shares were issued by virtue of the conversion of ICULS and 1,241,500 shares were issued by the Company by virtue of the exercise of options pursuant to the Company’s ESOS.
American Depository Receipt (ADR) / Global Depository Receipt (GDR).
The Company has not sponsored any ADR or GDR Programme.Sanctions and / or penalties
There were no sanction and/or penalty imposed on the Company and its subsidiaries, Directors or Management by the relevant regulatory bodies during the financial year ended 31 December 2008.
Non-Audit Fees
The non-audit fees paid to external auditors amounting to RM19,350.00 for the financial year ended 31 December 2008.
Variation of Results
There were material variations in the disclosure of earning per share and weighted average number of shares between the 4th quarter announcement and the audited financial statements for the year ended 31 December 2008. The details are as
follows:-Unaudited as announced on 24 February 2009
As per the audited financial statements for the year ended 31 December 2008
Sen Sen
Basic 31.11 24.83
Diluted 31.02 24.81
The main reason for the
variation:-Inadvertently the disclosure as regarded to earning per share on Note 26 on the 4th quarter announcement was not updated resulting in the earning per share announced differs from actual computation and audited per share figures. However, the unaudited profit after tax does not reflect material variance compared with the audited profit after tax,. Save and except the above, there was no other material variation between the audited results for the financial year ended 31 December 2008 and the unaudited results announced.
Profit Guarantee
There was no profit guarantee given by the Company during the financial year ended 31 December 2008.
Material Contracts
There was no material contracts between the Company and its subsidiaries involving Directors and major shareholders’ interests during the financial year ended 31 December 2008.
Revaluation of landed properties
The Company does not adopt a policy of regular revaluation of its properties.
Recurrent Related Party Transaction
The Company did not enter into any recurrent related party transaction which requires the shareholders’ mandate during the financial year ended 31 December 2008.
STATEMENT OF DIRECTORS’ RESPONSIBILITY IN RELATION TO THE FINANCIAL
STATEMENTS
The Board is responsible to ensure that the financial statements are prepared in accordance with the provision of the Companies Act, 1965 and applicable approved accounting standards in Malaysia so as to ensure a true and fair view of the state of affairs of the Group and the Company as at the end of each financial year and of their results and their cash flows for that financial year then ended. The Board is also responsible to maintain accounting records that disclose with reasonable accuracy the financial position of the Group and the Company, and which enable them to ensure that the financial statements comply with the Companies Act, 1965.
The Directors have general responsibilities for taking such steps that are reasonably available to them to safeguard the assets of the Group, and to prevent and detect fraud and other irregularities.
The Directors are satisfied that in preparing the financial statements of the Group for the financial year ended 31 December 2008, the Group has adopted appropriate accounting policies and applied them prudently and consistently. They are also satisfied that reasonable and prudent judgments and estimates were made and all applicable Approved Accounting Standards in Malaysia have been followed accordingly.
Statement on Corporate
Governance
(Cont’d)
TRC SYNERGY BERHAD
The Malaysian Code on Corporate Governance stipulates that a listed company should maintain a sound system of internal control to safeguard shareholder’s investment and the company’s assets. The Board of Directors of TRC Synergy Berhad (“the Board”) is committed to maintaining a sound and effective System of Internal Control in the Group. Pursuant to paragraph 15.27(b) of the Bursa Malaysia’s Listing Requirements the Board is pleased to provide the following statement that outlines the nature and scope of internal control of the Group during the financial year ended 31 December 2008.
BOARD RESPONSIBILITY
The Board affirms its overall responsibility for the effectiveness of the Group’s systems of internal control and risk management, and for reviewing the adequacy and integrity of these systems. The internal control system involves the core business and its key management, including the Board, and is designed to meet the Group’s particular needs and to manage the risks to which it is exposed. The system of Internal Control aims to
:-i safeguard shareholders’ :-interest and the assets of the Group; ii ensure that proper accounting records are maintained; and
iii that the financial information used within the business and the publication to the public is reliable.
The Board is fully aware that this system, by its nature, can only provide reasonable, and not absolute, assurance against material misstatement, fraud end error. These systems are designed to manage and mitigate, rather than eliminate, the risk of failure to achieve business objectives of the Group.
INTERNAL CONTROL
The key elements of the Group’s internal control system are described
below:-Internal Audit Function
The Board is fully aware of the importance of the internal audit function and has established the Internal Audit Department for the Group on 20 August 2004. The main objective of this department is to review the key business processes and controls and to assists the Audit Committee in the discharge of its duties and responsibilities. Its role is to provide independent and objective reports on the organization, management, records, accounting policies and internal controls to the Audit Committee and the Board. As required by the Bursa Malaysia’s Listing Requirements, the Internal Auditors report directly to the Audit Committee. The presence of the internal audit function has provided the level of assurance as to the effectiveness of the operation and validity of the Group’s internal control system. The details of the Internal Audit activities are mentioned on page 23 of this Annual Report.
Quality Policy
There is clear and well documented Quality Policy in accordance with ISO 9001 : 2000 by a wholly-owned subsidiary of the Company which is undertaking the core business of the Group. This policy and the related procedures are communicated to the respective staff members. Amongst the salient features of the Quality Policy are as
follows:-i Internal Qualfollows:-ity Audfollows:-its are conducted at planned follows:-intervals to determfollows:-ine whether the Qualfollows:-ity Management System follows:-is effectively implemented and maintained and conforms to the established system requirements of Internal Standard, ISO 9001:2000.
ii On an annual basis, an overall Internal Quality Audit Plan is devised encompassing every departments and projects, taking into consideration the status and importance of relevant process, areas to be audited as well as results of previous audits.
Statement on
Internal Control
(Cont’d)
iii Qualified Internal Quality Auditors will be assigned with audit works in accordance with the Internal Quality Audit Plan where the reports shall be examined and analyzed and reported to the management during Management Review Board Meeting.iv As part of the Quality Management System, the management shall meet on monthly basis to discuss and deliberate all issues relating to the business of the Group.
v The Audit Committee is accessible to the relevant reports produced in relation to the Quality Management and if the need arise, the matter shall be further discussed in the Board Meeting.
Line of Reporting
Clearly defined delegation of responsibilities to committees of the Board and to operating units, including authorisation levels for all aspects of the business. This also includes detailed job description and specification provided to each employee of the Group which is further reiterated through a well defined organizational structure.
Dissemination of Information within the Group
Regular and comprehensive information is provided to Management covering financial performance and key business indicators, key operating statistics/ indicators, key business risks, legal, environmental and regulatory matters. Key matters affecting the Group are brought to the attention of the Audit Committee and are reported to the Board on a regular basis.
Detail Budgeting Process
A detailed budgeting process where operating units prepare budgets for every project for discussion in the Management Meeting. A monthly monitoring of results against budget, with major variances being followed up and management action taken, where necessary.
Risk Management Framework
The Group has in place an on-going process for identifying, evaluating, monitoring and managing the significant risks affecting the achievement of its business objectives. This is an on-going process, subject to regular review by the Board, and accords with the “Statement on Internal Control: Guidance for Directors of Public Listed Companies”.
The Group adopts a decentralised approach to risk management by encouraging participation of all employees in such a manner that the employees take ownership and responsibility for risks at their respective levels. The process of risk management and treatment is overseen by the senior management and report to the Board through the Audit Committee. The risk management framework is also embodied in the Quality Policy in accordance with ISO 9001 : 2000 practised by a wholly-owned subsidiary of the Company.
Audit Committee
The Audit Committee, on behalf of the Board, regularly reviews and holds discussions with the management on the matters relating to internal control, the external auditors and the management.
The Report on the Audit Committee set out on pages 20 to 24 of this Annual Report contains further details on the activities undertaken by the Audit Committee in 2008.
Board
The Board holds regular discussions with the Audit Committee, Management and external auditors and reads their reports on matters relating to internal controls and deliberates their recommendations for implementation.
The Directors have taken the necessary steps, as are reasonably open to them, to ensure that appropriate systems are in place for the assets of the Group to be adequately safeguarded through the prevention and detection of fraud and other irregularities and material misstatements.
The Directors believe that the system of internal control is considered appropriate to business operations, and that the risks taken are at an acceptable level within the context of the business environment of the Group.
The Board is not aware of significant weaknesses in the internal control system that will result in material losses. This statement is made in accordance with a resolution of the Board of Directors dated 28 April 2008.
TRC SYNERGY BERHAD
1. Composition of the Audit Committee
The Audit Committee of the Company was established in August 2002. Presently, the Committee comprises of the following members. All of them are Independent Non Executive Directors.
Chairman : Noor Zilan bin Mohamed Noor (Independent Non-Executive Director)
Member : i. General (R) Dato’ Seri Mohd Shahrom Bin Dato’ Hj Nordin (Independent Non-Executive Director)
Appointed as an Audit Committee Member on 28 August 2008 ii. Abdul Rahman Bin Ali
(Independent Non-Executive Director)
(Member of the Malaysian Institute of Accountants) Secretary : Abdul Aziz Bin Mohamed
(Company Secretary)
2. Terms of Reference
i. Composition
The Board of Directors shall elect an Audit Committee from amongst themselves (pursuant to a resolution of the Board of Directors) comprising of not less than three (3) members all of them must be Non-Executive Directors with a majority of them being Independent Directors.
The members of the Audit Committee shall elect a Chairman from amongst themselves. All members of the Audit Committee, including the Chairman, will hold office only so long as they serve as Directors of the Company. Should any member of the Audit Committee cease to be a Director of the Company, his membership in the Audit Committee would cease forthwith.
If the members of the Audit Committee for any reason be reduced to below three (3), the Board of Directors shall within three (3) months of that event, appoint such number of the new members as may be required to make up the minimum number of three (3) members.
Audit
Committee Report
(Cont’d)
ii. Objectives
The primary objectives of the Audit Committee are:
a. To provide assistance to the Board in fulfilling its fiduciary responsibilities particularly relating to business ethics, policies and practices and financial management and control.
b. To provide greater emphasis on the audit functions by increasing the objectivity and independence of external and internal auditors and providing a forum for discussion that is independent of the management.
c. To maintain through regularly scheduled meetings a direct line of communication between the Board and the external auditors, internal auditors and financial management.
iii. Duties and responsibilities
The duties and responsibilities of the Audit Committee shall be:
a. To consider the appointment of the external auditors, audit fee and any questions of resignation or dismissal. b. To discuss with the external auditor before the audit commences the nature and scope of the audit, and ensure
co-ordination where more than one audit firm is involved.
c. To review the quarterly results and year end financial statements before submission to the board, focusing particularly on:
i. any changes in accounting policies and practices ii. major judgmental areas
iii. significant adjustments resulting from the audit iv. the going concern assumption
v. compliance with accounting standards
vi. compliance with the stock exchange and legal requirements
d. To discuss problems and reservations arising from the interim and final audits, and any matters the auditor may wish to discuss (in the absence of management where necessary).
TRC SYNERGY BERHAD
Audit
Committee Report
(Cont’d)
e. To review the internal audit programme, consider the major findings of internal audit investigations and management’s response, and ensure co-ordination between the internal and external auditors.
f. To keep under review the effectiveness of the internal control systems, and in particular review the external auditor’s management letter and management’s response.
g. to review any related party transactions and conflict of interest situations that may arise within the Group including any transactions, procedure or course of conduct that raises questions of management integrity. h. To carry out such other functions as stipulated in the Bursa Securities Listing Requirements and other functions
as may be agreed to by the Audit Committee and the Board of Directors.
iv. Authority
The Committee is authorised by the Board to investigate any activity within the terms of reference. It is authorized to seek any information it requires from any employee and all employees are directed to co-operate with any request made by the Committee.
The Committee is empowered by the Board to retain persons having special competence as necessary to assist the Committee in fulfilling its responsibilities.
v. Meeting and Minutes
The Audit Committee shall not hold less than three (3) meetings a year and the quorum for each meeting shall be two (2) members.
Minutes of each meeting shall be kept and distributed to each member of the Committee and also to the other members of the Board. The Committee Chairman shall report on each meeting to the Board.
The Company Secretary shall act as the Secretary to the Audit Committee.
3. Summary of Activities of the Audit Committee.
During the financial year ended 31 December 2008, the Audit Committee met four (4) times. The Company Secretary acted as the secretary for the Committee at all the meetings held. Other Directors and senior management of the Group were also present at the meeting upon invitation. The details of the attendance of the members of the Audit Committee are as
follows:-No. Audit Committee Attendance
1 Noor Zilan bin Mohamed Noor 4/4
2 Dato’ Sri Sufri bin Hj Mohd Zin
(Resigned as an Audit Committee Member on 28 August 2008) 3/4
3 Abdul Rahman Bin Ali 4/4
4 General (R) Dato’ Seri Mohd Shahrom Bin Dato’ Hj Nordin
(Appointed as an Audit Committee Member on 28 August 2008) 1/4 During the financial year, the Audit Committee carried out the following review
:-- The quarterly management and annual audited financial statements to ensure compliance with statutory reporting requirements and appropriate resolution of all accounting and audit matters requiring significant judgment and where appropriate, made recommendations to the Board.
- The external auditors’ fees and to recommend their reappointment to the Board.
Audit
Committee Report
(Cont’d)
- The statement of Corporate Governance and Statement on Internal Controls which are prepared in accordancewith the provisions set out under the Malaysian Code on Corporate Governance, the extent of compliance with the said Code and recommend to the Board action plan to address further compliance matters.
- The revised terms of reference of Audit Committee to expend the function of the Audit Committee to include the review of the adequacy of the competence of the internal audit function.
4. Internal Audit Function
The Group’s internal audit function, which is carried out by the Internal Audit Department, reports directly to the Audit Committee. The principal objective of the Department is to provide independent and objective reports on the effectiveness of the system of internal control within the business units and projects of the Group. It also to ascertain that adequate internal control is maintained to safeguard the assets of the Group and the shareholders interest. Throughout the financial year, the Internal Audit Department has undertaken several independent audit assignments in accordance with the approved annual audit plan. Details of the activities performed by the Department during the financial year are as
follow:-• Examine the control over all significant Group operation and systems to ascertain reasonable assurance that the Group’s objective and goals are met efficiently and economically.
• Continuous follow up reviews on recommendation and outstanding issues to ensure both are implemented and resolved accordingly.
• To complement with the Quality Management System in accordance with ISO 9001:2000. • Prepared the annual audit plan for consideration by the Audit Committee.
• Reviewed the effectiveness of management of fixed assets within the Group.
From the internal audit findings, the Internal Audit Department will prepare independent opinion and reports accordingly to the Audit Committee on risks area, weaknesses identified and the relevant recommendations. All recommendations shall be reviewed and discussed accordingly and communicated to the management to rectify the identified weaknesses. The Department also established follow–up reviews to monitor and ensure that the recommendations agreed by the Audit Committee have been effectively implemented.
Going forward the Internal Audit Department will strengthen its capacity and efficiency for the better contribution to the Group pursuant to the Audit Charted and Internal Audit Plan which have been approved by the Audit Committee.
TRC SYNERGY BERHAD
Audit
Committee Report
(Cont’d)
5. Statement in relation to the allocation of Share Option Scheme
The Audit Committee noted that the Company had established Share Option Scheme for Employees and Directors (“The Scheme”) pursuant to the By-Laws which were approved by the shareholders at the Extraordinary General Meeting held on 30 April 2004. The Scheme shall remain in force for a duration of five (5) years commencing from 22 June 2004 and could be extended for another five (5) years at the discretion of Audit Committee. On 27 August 2008, the ESOS Committee had approved the extension of the Scheme for another five (5) years commencing from its expiry date of 21 June 2009. Therefore, the Scheme will expire on 20 June 2014.
The salient terms of the Scheme are as
follows:-i. the maximum number of the Company’s new shares to be made available under the Scheme shall not exceed fifteen percent (15%) of the issued and paid up capital of the Company;
ii. not more than fifty percent (50%) of the Company’s shares available under the Scheme shall be allocated to Directors and senior management;
iii. not more than ten percent (10%) of the Company’s shares available under the Scheme shall be allocated to individual Director or eligible employees, who either singly or collectively through person connected to them holds twenty percent (20%) or more of the issued and paid up capital of the Company;
iv. The eligible participants shall include eligible employees and Directors who as at the offer date have satisfied the following criteria
:-a) is a confirmed employee or appointed director within the Group; b) has attained at least age of eighteen (18);
c) is employed full time and on the payroll of the Group;
d) is under such category and of such criteria that the option committee may from time to time decide.
v. The Scheme shall remain in force for a duration of five (5) years from the effective date of the launch and could be extended for another five (5) years at the discretion of the ESOS Committee.
vi. The option price for each share shall be based on the weighted average market price (WAMP) of the Company’s share traded on the Exchange for the five (5) trading days preceding the date of offer with a discount if any, that does not exceed ten percent (10%) from the five (5) day of the Company’s shares.
The option under the Scheme was initially offered to the eligible employees and Directors at an offer price of RM1.70 per option share. Subsequently, consequent to the Rights Issue exercise which was completed on 31 January 2007, the exercise price of the Scheme was adjusted to RM1.47 per option share. During the financial year ended 31 December 2008, the exercise price was further adjusted to RM1.23 per option share in consequence to the Bonus Issue Exercise undertaken by the Company which was completed on 11 April 2008.
Financial Statements
26 • Directors’ Report
31 • Statement by Directors
31 • Statutory Declaration
32 • Auditors’ Report
34 • Income Statements
35 • Balance Sheets
37 • Statement of Changes in Equity - Group
38 • Statement of Changes in Equity - Company
39 • Cash Flow Statements
RM
5,822,247
Directors’
Report
The directors have pleasure in presenting their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 December 2008.
PRINCIPAL ACTIVITIES
The principal activities of the Company are investment holding, general contractors for supplying labour and provision of corporate, administrative and financial support services to its subsidiaries.
The principal activities of the subsidiaries are as disclosed in Note 17 to the financial statements. There have been no significant changes in the nature of the principal activities during the financial year.
RESULTS
Group RM
Company RM
Profit for the year 45,637,641 3,128,318
Attributable to:
Equity holders of the Company 45,637,641 3,128,318
Minority interest -
-45,637,641 3,128,318
RESERVES AND PROVISIONS
There were no material transfers to or from reserves or provisions during the financial year other than as disclosed in the financial statements.
In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature.
DIVIDENDS
The amount of dividends paid by the Company since 31 December 2007, were as follows :
In respect of the financial year ended 31 December 2007 as reported in the directors’ report of that year: Final dividend of 5 sen per share less 26% taxation, on 157,358,033 ordinary shares, paid on 18 July 2008.
At the forthcoming Annual General Meeting, a provisional dividend in respect of the financial year ended 31 December 2008, of 6 sen per share less 25% taxation on 189,577,479 ordinary shares amounting to a dividend payable of RM5,822,247 (4.5 sen net per ordinary share) will be proposed for shareholders’ approval. The financial statements for the current financial year do not reflect this proposed dividend. Such dividend, if approved by the shareholders, will be accounted for in equity as an appropriation of retained earnings in the financial year ending 31 December 2009.
DIRECTORS
The names of the directors of the Company in office since the date of the last report and at the date of this report are : Dato' Sri Sufri Bin Hj Mohd Zin
Dato' Abdul Aziz Bin Mohamad
Gen. (R) Dato' Seri Mohd Shahrom Bin Dato' Hj Nordin Abdul Rahman Bin Ali
Directors’
Report
(cont’d)
DIRECTORS’ BENEFITS
During and at the end of the financial year, no arrangements subsisted to which the Company is a party, with the object or objects of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate, other than those share options granted pursuant to the Employee Share Option Scheme.
Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than benefits included in the aggregate amount of emoluments received or due and receivable by the directors as shown in Note 9 of the financial statements or the fixed salary of a full time employee) by reason of a contract made by the Company or a related corporation with any director or with a firm of which he is a member, or with a company in which he has a substantial financial interest, as required by Section 169 (8) of the Companies Act, 1965.
DIRECTORS’ INTERESTS
According to the register of directors’ shareholdings, the interests of directors in office at the end of the financial year in shares in the Company and its related corporations during the financial year were as follows :
Number of Ordinary Shares of RM1 Each At
1.1.2008 Acquired Bonus Issue Sold 31.12.2008 At The Company
Direct Interest : Dato' Sri Sufri Bin
Hj Mohd Zin 17,191,666 155,500 3,438,333 (1,728,000) 19,057,499
Dato' Abdul Aziz Bin
Mohamad 441,070 88,214 - - 529,284
Deemed Interest : Dato' Sri Sufri Bin
Hj Mohd Zin* 48,640,000 9,728,000 - (9,170,000) 49,198,000
* Deemed interested by virtue of his substantial shareholdings in TRC Capital Sdn. Bhd. and Kolektif Aman Sdn. Bhd.
Number of Share Options At
1.1.2008 Granted Exercised 31.12.2008At The Company
Dato’ Sri Sufri Bin Hj Mohd Zin 900,000 - - 900,000
Dato’ Abdul Aziz Bin Mohamad 850,000 - - 850,000
Number of Warrants
At Bonus At
The Company 1.1.2008 Adjustments Sold 31.12.2008
Dato’ Sri Sufri Bin Hj Mohd Zin 4,206,333 841,266 - 5,047,599
TRC SYNERGY BERHAD
Dato’ Sri Sufri Bin Hj Mohd Zin and Dato’ Abdul Aziz Bin Mohamad by virtue of their interest in shares in the Company are also deemed interested in shares of all the Company’s subsidiaries to the extent the Company has an interest.
None of the other directors in office at the end of the financial year had any interest in shares in the Company or its related corporations during the financial year.
ISSUE OF SHARES
During the financial year, the Company increased its issued and paid-up ordinary share capital from RM139,803,133 to RM189,577,479 by way of :
(i) the issuance of 292,400 ordinary shares of RM1.00 each through exercise of 2007/2017 Warrants at an exercise
price of RM1.00 per share for cash;
(ii) the issuance of 16,652,200 ordinary shares of RM1.00 each converted at par value from conversion of Irredeemable
Convertible Unsecured Loan Stocks (“ICULS”) for additional working capital purpose; and
(iii) the issuance of 1,241,500 ordinary shares of RM1.00 each for cash pursuant to the Company’s Employee Share Options Scheme (“ESOS”) at an exercise price of RM1.47 per ordinary share.
(iv) the issuance of 31,588,246 ordinary shares of RM1.00 each through Bonus Issue on a basis of one new bonus share for every five ordinary shares of RM1.00 held by the shareholders on 8 August 2008.
The new ordinary shares issued during the financial year ranked pari passu in all respect with the existing ordinary shares of the Company.
WARRANTS 2007/2017
A total of 30,800,000 free warrants were issued by the Company in conjunction with the Rights Issue in 2007. Each warrant is convertible into one new ordinary share of RM1.00 each at the exercise price of RM1.00 per ordinary share. Consequential to the Bonus Issue, the Company had issued an additional 6,101,520 new Warrants 2007/2017 pursuant to the adjustments in accordance with the provision under the Deed Poll executed by the Company on 15 November 2006 constituting the Warrants (‘Deed Poll’).
A total of 292,400 warrants were exercised during the current financial year with a balance of 36,609,120 outstanding warrants as at 31 December 2008.
The warrants are valid for a period of ten years and shall expire on 21 January 2017.
EMPLOYEE SHARE OPTIONS SCHEME
The TRC Synergy Berhad Employee Share Options Scheme (“ESOS”) is governed by the by-laws approved by the shareholders at an Extraordinary General Meeting held on 30 April 2004. The ESOS was implemented on 22 June 2004 and is to be in force for a period of 5 years from the date of implementation. On 11 August 2008, the Board of Directors approved the extension of the duration of ESOS for another five years from the expiry date of the initial ESOS period. Consequent to the Bonus Issue Exercise, the exercise price of the Company’s Employees and Directors Share Options Scheme has been adjusted from RM1.47/share to RM1.23/share.
The salient features and other terms of the ESOS are disclosed in Note 33 to the financial statements.
The Company has been granted exemption by the Companies Commission of Malaysia from having to disclose the names of option holders, including directors, who have been granted option to subsrcibe for less than 850,000 ordinary shares of RM1 each. The names of option holders granted option to subscribe for 850,000 or more ordinary shares of RM1 each during the financial year are as follows
Name Grant Date Expiry Date ExercisePrice
Number of Share
Granted Exercised 31.12.2008
Abdul Aziz Bin
Mohamed 22.06.2004 21.06.2014 1.23 990,000 (133,000) 857,000
Khoo Teng San 22.06.2004 21.06.2014 1.23 850,000 - 850,000
Loh Leh Wong 22.06.2004 21.06.2014 1.23 850,000 - 850,000
Yeoh Sook Keng 22.06.2004 21.06.2014 1.23 850,000 - 850,000
Details of options granted to directors are disclosed in the section on Directors’ Interests in this report.
OTHER STATUTORY INFORMATION
(a) Before the income statements and balance sheets of the Group and of the Company were made out, the directors
took reasonable steps:
(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of
provision for doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate provision had been made for doubtful debts; and
(ii) to ensure that any current assets which were unlikely to realise their values as shown in the accounting records
in the ordinary course of business had been written down to an amount which they might be expected so to realise.
(b) At the date of this report, the directors are not aware of any circumstances which would render:
(i) the amount written off for bad debts or the amount of the provision for doubtful debts inadequate to any
substantial extent; and
(ii) the values attributed to the current assets in the financial statements of the Group and of the Company
misleading.
(c) At the date of this report, the directors are not aware of any circumstances which have arisen which would render
adherence to the existing methods of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.
(d) At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or the financial statements of the Group and of the Company which would render any amount stated in the financial statements misleading.
(e) As at the date of this report, there does not exist :
(i) any charge on the assets of the Group or of the Company which has arisen since the end of the financial year
which secures the liabilities of any other person; or
(ii) any contingent liability of the Group or of the Company which has arisen since the end of the financial year.
(f) In the opinion of the directors:
(i) no contingent liability or other liability has become enforceable or is likely to become enforceable within the
period of twelve months after the end of the financial year which will or may affect the ability of the Group or of the Company to meet their obligations when they fall due; and
(ii) no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the
financial year and the date of this report which is likely to affect substantially the results of the operations of the Group and of the Company for the financial year in which this report is made.
Directors’
Report
(cont’d)
TRC SYNERGY BERHAD
SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR AND EVENTS
SUBSEQUENT TO THE BALANCE SHEET DATE
The significant events during the financial year and events subsequent to the balance sheet date are disclosed in Note 40 and Note 41 to the financial statements respectively.
AUDITORS
The auditors, Kumpulan Naga, have expressed their willingness to continue in office.
Signed on behalf of the Board in accordance with a resolution of the directors dated 30 April 2009.
DATO’ SRI SUFRI BIN HJ MOHD ZIN DATO’ ABDUL AZIZ BIN MOHAMAD
Kuala Lumpur, Malaysia.
We, DATO’ SRI SUFRI BIN HJ MOHD ZIN and DATO’ ABDUL AZIZ BIN MOHAMAD, being the Directors of TRC SYNERGY BERHAD, state that, in the opinion of the Directors, the accompanying financial statements set out on pages 34 to 83 are drawn up in accordance with the provisions of the Companies Act, 1965 and the applicable Financial Reporting Standards in Malaysia so as to give a true and fair view of the financial position of the Company as at 31 December 2008 and of the results and the cash flows of the Company for the year then ended.
Signed on behalf of the Board in accordance with a resolution of the directors dated 30 April 2009.
DATO’ SRI SUFRI BIN HJ MOHD ZIN DATO’ ABDUL AZIZ BIN MOHAMAD
Kuala Lumpur, Malaysia.
Statutory
Declaration
Pursuant To Section 169(16) Of The Companies Act, 1965
I, DATO’ SRI SUFRI BIN HJ MOHD ZIN, being the Director primarily responsible for the financial management of TRC SYNERGY BERHAD, do solemnly and sincerely declare that the accompanying financial statements set out on pages 34 to 83 are in my opinion correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, l960.
Subscribed and solemnly declared by the
abovenamed DATO’ SRI SUFRI BIN HJ MOHD ZIN
at Kuala Lumpur in the Federal Territory on 30 April 2009.
DATO’ SRI SUFRI BIN HJ MOHD ZIN
Before me,
MOHAN A.S. MANIAM Commissioner for Oath No. W521
Statement
by Directors
pursuant to Section 169(15) of the Companies Act, 1965
TRC SYNERGY BERHAD
