- Bu i ld ing the C i t y o f Tomor row
Annual Report 2012
w w w . p r e s s m e t a l . c o m
PRESS METAL BERHAD 153208-W
Aluminium is the world's second most
used metal. It is the metal of choice for
designers, architects and engineers
who require a material which is both
functional and cost-effective yet
possesses extraordinary strength and
versatility.
In today's world however, innovative
form is nothing without sustainable
potential.
Aluminium is also one of the world's
greenest metals. At Press Metal, we call
it an 'energy bank' because aluminium
can be recycled infinitely. The metal can
be recycled again and again without
any loss of its inherent properties.
Unlike the 'cradle-to-grave' sequence
of most products, the life cycle of an
aluminium product is a renewable
'cradle-to-cradle' one.
2 PRESS METAL BERHAD 153208 W
From strong yet lightweight shapes
to high-tech electronic components,
aluminium plays an essential part in
our modern lifestyles.
3ANNUAL REPORT 2012
2012 Overview
ContentsPress Metal at a Glance
Chairman’s Statement
Review of Operations by Group CEO
Event Highlights
Corporate Structure
Corporate Information
Profile of Directors
Group Financial Highlights
Corporate Social Responsibilities
Statement
Corporate Governance Statement
Additional Compliance Information
Audit Committee Report
Statement on Risk Management
and Internal Control
Financial Statements
List of Properties
Analysis of Shareholdings
Analysis of RCSLS Holdings
Analysis of Warrant Holdings
Notice of Annual General Meeting
Form of Proxy
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06
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4 PRESS METAL BERHAD 153208 W
PRESS METAL at aPRESS METAL at aPPPPPPPPRRRRRRREEEEEESSSSSSSSSSS MMMMMMMMEEEEEEETTTTTTAAAAALLLLLLLL aaaaaatttttt aaaaPPPPPRRRREEEESSSSSSS MMMMMEEEEETTTTAAAALLLL aaaatttt aaaPRESS METAL at a
MALAYSIA
Press Metal is the leading aluminium extruder in Malaysia with a 40,000 tonne production
capacity per annum, completes with in-house tool and dies shop offering customers quick
turnaround services. In addition, our plant is also equipped with modern surface finishing
facilities that provide an extensive range of surface finishes – anodize, powder coat or bright
dip.
Backed by our experience and expertise in the aluminium industry of about 30 years, Press
Metal ventured into the upstream activities in 2007 and has subsequently in 2009 successfully
built a new smelter in Mukah, Sarawak – the first-ever aluminium smelting plant in Malaysia.
To continue on this successful expansion path, Press Metal has continued with the development
of Phase 2 of our smelting project in Samalaju Industrial Park, Bintulu, Sarawak.
The Samalaju smelter has a larger production capacity of 300,000 tonne per annum, employing
the latest smelting technology, namely the 400kA technology. The technology will be more
energy efficient, enabling a higher production output with lower energy consumption.
Press Metal strives to put Malaysia at the forefront as a leading primary aluminium producer in
this region, employing the latest and most environmental-friendly technology complying with
the world best standards.
5ANNUAL REPORT 2012
Press Metal Berhad is a Malaysian-based aluminium company with extensive
global presence. From our modest beginning as a private-owned local
aluminium extrusion company in 1986, Press Metal has come a long way to
becoming a globally integrated aluminium player today – with 420,000 tonne
smelting capacity and 190,000 tonne extrusion capacity per annum.
PRESS METAL AT A GLANCE
CHINA
In China, our subsidiary in Foshan, Press Metal International Limited, is one of the biggest
exporters of aluminium products in China, with a production capacity of 120,000 tonne per
annum.
Further, the Group also established an extrusion facility in Hubei, China, with a production
capacity of 30,000 tonne per annum.
GLOBAL NETWORK
The overseas operations of Press Metal have firmly carved a niche in the global market and
continue to expand. From our initial operational base established in the United Kingdom
and Australia, our distribution centres have now extended to include the North America and
the Middle East. Thanks to such solid local presence, we have been able to build strong
relationship with our customers and cater for their needs and requirements with various
solutions instantly.
6 PRESS METAL BERHAD 153208 W
CHAIRMAN’S STATEMENT
On behalf of the Board of
Directors of Press Metal Berhad
(Press Metal), I am pleased to
present to you the Annual
Report and Audited Financial
Statements of Press Metal and
its Group for the financial year
ended 31 December 2012.
7ANNUAL REPORT 2012 7ANNUAL REPORT 2012
FINANCIAL PERFORMANCE
The year 2012 remained challenging. A global economic
recovery has proved harder to realise than originally expected,
with a number of challenges standing in the recovery path
including sovereign debt crisis in the Eurozone, weaker
recovery in the US economy, declining demand for Chinese
products and economic sensitivity in emerging economies.
The Group registered revenue of RM2.38 billion in the year
2012, a slight increase of 5 per cent compared to RM2.27
billion in year 2011. The increase is mainly contributed by the
higher output from the Mukah smelting operation which had
achieved full operation capacity, as well as the commencement
of operations of the Samalaju smelting plant.
Affected by the softened metal price and higher financing
costs, the Pre-tax profit of the Group had however, declined
by 30 per cent, from RM143.9 million in the year 2011 to
RM100.1 million in 2012.
CORPORATE DEVELOPMENT & PROSPECT
The initial phase of our smelting project in Samalaju Industrial
Park, Bintulu, Sarawak has been successfully commissioned
during the second half of year 2012, running at the initial
capacity of 100,000 MT per annum. We are hopeful that
the Samalaju plant will achieve full production capacity of
300,000 MT per annum by the second half of 2013 and
continue to contribute positively to the Group.
DIVIDENDS
The following interim dividends were declared and paid
during the year 2012:
i) First interim tax-exempt dividend of 1 sen per ordinary
share amounting to RM4,776,000; and
ii) Second interim tax-exempt dividend of 1 sen per
ordinary share amounting to RM5,072,000.
A third interim tax-exempt dividend of 1 sen per ordinary
share amounting to RM5,078,000 were declared and paid
subsequent to the financial year end. In view thereof, the
Board has not recommended a final dividend for the year.
APPRECIATION & ACKNOWLEDGEMENT
On behalf of the Board of Directors, I would like to take
this opportunity to extend our sincere appreciation to our
shareholders, customers, business associates, suppliers,
the financiers, the government agencies and regulatory
authorities for their continued support to our Group.
To the management team and members of staff, thank you
for your dedication and commitment to the Group.
DATO’ (DR.) MEGAT ABDUL RAHMAN
BIN MEGAT AHMAD
Chairman
May 2013
8 PRESS METAL BERHAD 153208 W
REVIEW OF OPERATIONS BY GROUP CEO
2012 REVIEW
Since 2009 the world is dealing with
one crisis after another crisis
although happened in different
regions, yet all have global impact on
the economies all around the world.
Following the America’s financial
crisis, the world was grabbed by the
Eurozone’s huge debt burden with
the constant debate on Greece’s
European Union membership,
remaining or exiting. After rounds of
high tension negotiation among the
EU member countries, the European
Central Bank finally managed to put
together trillions of dollar of
financing packages for the banking
sector as well as member countries
which faced sovereign debt default.
The cost for such financial aides is very high, not just on the cost of the funding but the austerity measures that the governments have to adopt to tackle their fiscal deficits. As predicted, the consequence of such harsh measure has slowed the economy growth to a halt, with unemployment shooting up in many of these Eurozone countries.
Further to the above, the world’s biggest commodities consumer, namely China also faced a different set of challenges, slowing export sales and high inflation cost. The policy to curb the increase in property prices has also dampened the investment in the property sector, thus lowered commodities consumption.
The consequence of the above factors have brought commodity prices to a much lower level in the second half of the year before recovering some ground towards the end of the year. Aluminium in particular, reached a low of US$1,793 per MT as compared to previous year low of US$1,945 per MT.
2012 GROUP PERFORMANCE
Press Metal’s upstream expansion, aluminium smelting, is on track making major progress after year-long of hard work to complete the initial phase of construction. The Samalaju smelter commenced the initial production in October and first metal was cast in the same month and first commercial quality ingots were subsequently delivered to a regional customer.
The demand in this region remained strong for the year, with premium doubling from the beginning of the year from US$120 per MT to US$240 per MT.
For the year 2012, the Group managed to achieve a turnover of RM2.38 billion as compared to RM2.27 billion the previous year, an increase of 5 per cent. However, with lower aluminium price and higher initial expenses relating to the upstream expansion incurred by Press Metal Bintulu, profit before tax was lower, decreasing from RM144 million in year 2011 to RM100 million. Meanwhile, after tax profit had increased from previous year’s RM123 million to RM222 million, mainly attributable to the recognition of deferred tax asset of RM150 million.
LOOKING FORWARD TO 2013
Some of the challenges faced in year 2012 remain to be the tough issues to be overcome this year. The Eurozone has yet to work out a comprehensive sustainable solution for some of the weaker member countries and the recent Cyprus bailed out is another case proving the complication that the Eurozone is dealing with.
Further, with austerity measures being implemented, different degrees of adoption by different member countries are expecting to yield different results for each country. The obvious result for now is the increase in unemployment and economy is in stagnation mode for the time period. Hopefully this pain will result in longer term gain for the whole Eurozone.
China with its new government in place in March this year is now focusing on getting the country back to its growth path. However, the priority of this new government may be different from the previous government and many economists are predicting that China may not be seeing the old double digit growth but a high single digit.
As such, commodities consumption especially coal and iron ore may also slow down albeit still increasing. This is also reflected in the commodity prices across the spectrum, with crude oil, cooper and other base metals coming off since the beginning of the year.
The use of aluminium however will continue to increase and is expected to be at a healthy rate. The contributing factor is that the use of aluminium per capita will continue to increase for developing countries such as China and India. A good example is the sales of passenger cars in China, the number continues to increase as household income increases and car production will bring about higher aluminium consumption.
To cope with our rapid expansion of operations, the Management has kick-started the implementation of SAP Solutions for our Malaysian downstream operations in 2012. The same system has been implemented by our China downstream operations and has proven to have enhanced our efficiency particularly in resource planning and production lead time. We will continue with the implementation of the system on group-wide basis and are confident that the day-to-day management of our Group operations will be further strengthened and improved.
In view of the above and coupled with the good going in America, we are cautiously optimistic with the current year prospects. We are also looking forward to the completion of our upstream expansion and the contribution thereof.
APPRECIATION
I hereby would like to express my sincere appreciation to the government agencies and regulatory authorities for their support, guidance and assistance. To our customers, financiers and business associates, I would like to thank you for your continuous support over the years.
On behalf of the Management team, I would like to thank our Board of Directors for their guidance and support, which are essential for us to achieve continuous growth amidst this challenging environment. To all our employees, thank you for your dedication and hard work throughout the year.
Let us all continue to strive forward to make Press Metal a well-known brand in the aluminium business.
DATO’ KOON POH KEONGGroup Chief Executive OfficerMay 2013
10 PRESS METAL BERHAD 153208 W
EVENT HIGHLIGHTS
The extrusion division of Press Metal Malaysia
has kick-started the implementation of SAP
Solutions in 2012. The implementation of the
system is expected to further enhance our
core competitiveness with higher efficiency in
resource planning and production lead time.
Mr. Lim Heng Kam was appointed the Chief Operating
Officer of Press Metal Malaysia’s extrusion operations in
February 2012, in addition to his role as the General
Manager of the Group’s China extrusion operations. Mr.
Lim has vast experience in the extrusion industry and
has played a pivotal role in the rapid growth of our China
extrusion division. His appointment is expected to
further enhance the competitiveness of the Malaysian
operations and in the meantime, bring synergy to both
the Malaysian and China extrusion operations.
The Phase 2 development of Press Metal’s smelting project in Samalaju, Sarawak
has been successfully commissioned during the fourth quarter of 2012, running
at the initial capacity of 100,000mt per annum. The Samalaju smelter which
employs the latest 400kA smelting technology, is expected to contribute
positively to the employment market and economy of the State.
The Phase 2 development of Press Metal’s smelting project in Samalaju
11ANNUAL REPORT 2012
Press Metal sees its employees
as its vital assets. Four annual
gala dinners were held for 2012
to gather our employees at
different parts of the world, also
as an appreciation for their efforts
devoted towards the Group.
As part of its development moving towards
producing more value-added products, Press
Metal International Ltd (PMI) has developed a
30,000m2 production facility comprising
amongst others, the state-of-the-art
heavy-duty robotic arm, multi-head and
auto-feed saw cutting machines, as well as
CNC machines.
The initial operation of these new facilities had
commenced in June 2012 and is expected to
run at its full capacity in June 2013.
12 PRESS METAL BERHAD 153208 W
At Press Metal, we always encourage our employees to interact with the local
communities to propel better kinship and understanding. Amongst other
activities, our employees in Sarawak visited the long houses and celebrated the
Gawai and Christmas festivals with the local residents.
Press Metal continued its tradition of
supporting and contributing to a broad array
of charities in 2012, with primary focus on
education and aiding the underprivileged.
Press Metal continued its tradition of
supporting and contributing to a broad array
of charities in 2012, with primary focus on
education and aiding the underprivileged.
EVENT HIGHLIGHTScont’d
13ANNUAL REPORT 2012
CORPORATE STRUCTURESCORPORATE S
PRESS METAL BERHADPPRREESSSS MMEETTAALL BBEERRHHAADDTTTTPRESS METAL BERHAD
100% PRESS METAL UK LIMITED
100% ANGKASA JASA SDN. BHD.
100% BI-PMB WASTE MANAGEMENT SDN. BHD.
100% PMB RECYCLING MANAGEMENT SDN. BHD.
100% PMS MARKETING SDN. BHD.
100% PRESS METAL BINTULU SDN. BHD.
100% PRESS METAL NORTH AMERICA LLC.
100% WESAMA SDN. BHD.
100% ACE EXTRUSION SDN. BHD.
100% PMB MARKETING SDN. BHD.
100% PMB MARKETING (H.K.) LTD
80% PRESS METAL SARAWAK SDN. BHD.
100% PMB DEVELOPMENT SDN. BHD.
60% PMB SPECTRUM SDN. BHD.
90% HUBEI PRESS METAL HUASHENG ALUMINIUM & ELECTRIC CO. LTD.
100% PRESS METAL INTERNATIONAL (HUBEI) LTD.
100% PMH ELECTRIC ENGINEERING CO. LTD.
100% PRESS METAL (HK) LIMITED
100% PRESS METAL INTERNATIONAL LIMITED
100% PRESS METAL INTERNATIONAL TRADING LTD
100% PRESS METAL INTERNATIONAL TECHNOLOGY LTD
70% PMIT SOLAR PTY LTD
70% PRESS METAL ALUMINIUM (AUSTRALIA) PTY. LTD.
14 PRESS METAL BERHAD 153208 W
CORPORATE INFORMATION
BOARD OF DIRECTORS
Dato’ (Dr.) Megat Abdul Rahman Bin Megat Ahmad
Independent Non-Executive Chairman
Koon Poh Ming
Executive Vice Chairman
Dato’ Koon Poh Keong
Group Chief Executive Officer
Dato’ Koon Poh Tat
Executive Director
Koon Poh Weng
Executive Director
Koon Poh Kong
Executive Director
Tuan Haji Mohamad Faiz Bin Abdul Hamid
Independent Non-Executive Director
Loo Lean Hock
Independent Non-Executive Director
Tan Heng Kui
Independent Non-Executive Director
COMPANY SECRETARIES
Tai Yit Chan (MAICSA 7009143)
Tan Ai Ning (MAICSA 7015852)
SHARE REGISTRAR
Tricor Investor Services Sdn. Bhd.
Level 17, The Gardens North Tower
Mid Valley City
Lingkaran Syed Putra
59200 Kuala Lumpur, Malaysia
Tel : +603-2264 3883
Fax : +603-2282 1886
CORPORATE OFFICE
Lot 6464, Batu 5 ¾, Jalan Kapar
Sementa, 42100 Klang
Selangor Darul Ehsan, Malaysia
Tel : +603-3291 3188
Fax : +603-3291 3637
Website : www.pressmetal.com
REGISTERED OFFICE
Lot 6.05, Level 6
KPMG Tower, 8 First Avenue
Bandar Utama, 47800 Petaling Jaya
Selangor Darul Ehsan, Malaysia
Tel : +603-7720 1188
Fax : +603-7720 1111
PRINCIPAL BANKERS
Alliance Bank Malaysia Berhad
Malayan Banking Berhad
RHB Bank Berhad
Standard Chartered Bank Malaysia Berhad
AUDITORS
KPMG
Firm No. AF 0758
(Chartered Accountants)
Level 10, KPMG Tower, 8 First Avenue
Bandar Utama, 47800 Petaling Jaya
Selangor Darul Ehsan, Malaysia
STOCK EXCHANGE LISTING
Main Market of Bursa Malaysia Securities Berhad
15ANNUAL REPORT 2012
PROFILE OF DIRECTORS
Dato’ (Dr.) Megat Abdul Rahman Bin Megat Ahmad, DSDKIndependent Non-Executive Chairman
Malaysian, 74 years of age
Dato’ (Dr.) Megat Abdul Rahman was appointed as the Non-Independent Non-
Executive Director of the Company on 25 May 1995 and elected Chairman on
the same day. On 29 May 2007, he was re-designated as the Independent Non-
Executive Chairman of the Board. He is also the Chairman of the Remuneration
and Nomination Committees and attended all four Board Meetings held during
the financial year.
Dato’ (Dr.) Megat Abdul Rahman graduated with a Bachelor of Commerce
degree from University of Melbourne, Australia. He is a fellow of the Institute
of Chartered Accountants in Australia, a life member and past president of the
Malaysian Institute of Certified Public Accountants, as well as a member of
the Malaysian Institute of Accountants. He had served as Executive Director
in Kumpulan Guthrie Berhad from 1983-1994, and was a Partner/Managing
partner of KPMG Desa Megat & Co from 1973 to 1983. Currently, he is also
a director of Boustead Holdings Berhad, Yayasan Tenaga Nasional and also
serves as member on the Boards of University Kebangsaan Malaysia and Pusat
Perubatan Universiti Kebangsaan Malaysia.
Dato’ (Dr.) Megat Abdul Rahman has no conflict of interest with the Group, and
has no family relationship with any other director and/or substantial shareholder
of the Group. He maintains a clean record with regard to convictions for
offences.
Koon Poh MingExecutive Vice Chairman
Malaysian, 57 years of age
Mr. Koon Poh Ming has been a director of the Company since its incorporation
on 13 May 1986. He is also a member of the Remuneration Committee and
attended all four Board Meetings held during the financial year.
After graduating with a degree in Civil Engineering from the University of Wales in
United Kingdom, he started his career with an international consulting engineering
firm based in Kuala Lumpur. He is currently a professional engineer registered
with the Board of Engineers and The Institute of Engineers, Malaysia.
While in Press Metal, Mr. Koon Poh Ming has been actively involved in the
management and business development of the Company. Currently, he also
holds the position of Chief Executive Officer of PMB Technology Berhad.
He is the brother to Dato’ Koon Poh Keong, Koon Poh Kong, Koon Poh Weng
and Dato’ Koon Poh Tat. He maintains a clean record with regard to convictions
for offences.
16 PRESS METAL BERHAD 153208 W
Dato’ Koon Poh KeongGroup Chief Executive Officer
Malaysian, 52 years of age
Dato’ Koon Poh Keong is one of the founding members of the Company and
has been the Group Chief Executive Officer since the Company’s listing on
Bursa Malaysia Securities Berhad in 1993. He attended all four Board meetings
held during the financial year.
Dato’ Koon Poh Keong graduated with a Bachelor of Science degree in Electrical
Engineering from The University of Oklahoma, United States of America, in 1986.
He has more than 20 years of experience in the aluminium industry. Currently, he
is also the Executive Chairman of PMB Technology Berhad.
He is the brother to Koon Poh Ming, Koon Poh Kong, Koon Poh Weng and
Dato’ Koon Poh Tat. He maintains a clean record with regard to convictions for
offences.
Dato’ Koon Poh TatExecutive Director
Malaysian, 54 years of age
Dato’ Koon Poh Tat has been appointed as the Executive Director of the
Company since 7 June 1999 and has attended all four Board meetings held
during the financial year.
Dato’ Koon Poh Tat is a co-founder of Press Metal Berhad and has been actively
involved in the Company’s operations including forming up new business outlets
both domestic and overseas to enlarge the Company’s networking and market
share. His hard work and dedication has led the Company to be the pioneer
in the aluminium industry. Currently, he is also an Executive Director of PMB
Technology Berhad.
He is the brother to Koon Poh Ming, Dato’ Koon Poh Keong, Koon Poh Kong
and Koon Poh Weng. He maintains a clean record with regard to convictions
for offences.
PROFILE OF DIRECTORScont’d
17ANNUAL REPORT 2012
Koon Poh WengExecutive Director
Malaysian, 58 years of age
Mr. Koon Poh Weng has been appointed as the Executive Director of the
Company since 13 May 1986 and has attended all four Board meetings held
during the financial year.
Being a key founder of the Company, Mr. Koon Poh Weng continually strives
on the changing and creative ideas to meet today’s complex and advanced
technical skills to all aspects of aluminium and glazing industry.
Mr. Koon Poh Weng has also widely involved himself in the management of
major projects both locally and overseas. He has been responsible for the
design, engineering and development of cost-effective, innovative and versatile
system solutions and in producing satisfactory results on large variety of projects
ranging from commercial buildings, government complexes to prominent hotels.
He is also an Executive Director of PMB Technology Berhad and Managing
Director of Angkasa Jasa Sdn Bhd, a company within the Group involved in
contracting and fabrication of aluminium and glazing works, as well as stainless
steel products.
He is the brother to Koon Poh Ming, Dato’ Koon Poh Keong, Koon Poh Kong
and Dato’ Koon Poh Tat. He maintains a clean record with regard to convictions
for offences.
Koon Poh KongExecutive Director
Malaysian, 60 years of age
Mr. Koon Poh Kong was appointed as the Executive Director of the Company
on 13 May 1986. He attended all four Board Meetings held during the financial
year.
As a key founder of the Company, his experiences include the management of
major projects throughout the country. He has been responsible for all aspects
of the management and for producing satisfactory results on large variety of
projects ranging from government complexes to prominent hotels. Currently,
he is the Executive Director of Angkasa Jasa Sdn Bhd, a company within the
Group involved in contracting and fabrication of aluminium and stainless steel
products.
He is the brother to Koon Poh Ming, Dato’ Koon Poh Keong, Koon Poh Weng
and Dato’ Koon Poh Tat. He maintains a clean record with regard to convictions
for offences.
PROFILE OF DIRECTORScont’d
18 PRESS METAL BERHAD 153208 W
PROFILE OF DIRECTORScont’d
Tuan Haji Mohamad Faiz Bin Abdul HamidIndependent Non-Executive Director
Malaysian, 73 years of age
Tuan Haji Mohamad Faiz was appointed as a director of the Company on 7
May 1993. He is the Chairman of the Audit Committee and a member of the
Remuneration Committee and the Nomination Committee. He attended all four
Board Meetings held during the financial year.
Tuan Haji Mohamad Faiz is a Fellow of the Royal Institution of Chartered
Surveyors England and the Royal Institution of Surveyors Malaysia since 1981.
He was a consultant quantity surveyor since 1968 and was the past President of
the Royal Institution of Surveyors, Malaysia. Currently, he is also an Independent
Director of PMB Technology Berhad.
He has no conflict of interest with the Group and has no family relationship with
any director and/ or substantial shareholder of the Group. He maintains a clean
record with regard to convictions for offences.
Loo Lean HockIndependent Non-Executive Director
Malaysian, 54 years of age
Mr. Loo Lean Hock was appointed as an Independent Non-Executive Director of
the Company on 14 September 2001. He is a member of the Audit Committee
and the Nomination Committee and has attended three out of four Board
meetings held during the financial year.
Mr. Loo is a Chartered Accountant of the Malaysian Institute of Accountants,
a practising member of Malaysian Institute of Certified Public Accountants, a
Fellow of CPA Australia and an associate member of Chartered Tax Institute of
Malaysia and Malaysian Institute of Management. He obtained his Master of
Business Administration from University of Bath, United Kingdom in 1992. He
started his professional career in Coopers & Lybrand from 1980 to 1990. He
joined Press Metal Berhad in 1990 as the Financial Controller. Thereafter, he
joined The Crown Princess Kuala Lumpur (a hotel division of Asia Pacific Land
Berhad) as the Financial Controller. He set up his own auditing firm, L.H. Loo &
Co. in July 1993 as the sole practitioner. He is also a Director of LH Loo Taxation
Services Sdn. Bhd., Executive Director of STX Precision Corporation Sdn. Bhd.
and its group of companies, an Independent Non-Executive Director of PMB
Technology Berhad and Ge-Shen Corporation Berhad.
He has no conflict of interest with the Group and has no family relationship with
any director and/ or substantial shareholder of the Group. He maintains a clean
record with regard to convictions for offences.
19ANNUAL REPORT 2012
PROFILE OF DIRECTORScont’d
Tan Heng KuiIndependent Non-Executive Director
Malaysian, 56 years of age
Mr. Tan Heng Kui has been a director of the Company since 26 December
2001. He is also a member of the Audit Committee. He attended all four Board
meetings held in the financial year.
Mr. Tan obtained his Bachelor of Science Honours in Civil Engineering from The
University of Wales, United Kingdom. He was a Vice President for The Institution
of Engineers, Malaysia from 2000 to 2004, and was a member of the Professional
Practice Committee, Board of Engineers Malaysia. He set up his own consulting
firm, Perunding Pertama Consulting Engineers in 1988. He is also the Executive
Director of Kumpulan IKRAM (Sabah) Sdn. Bhd. since 1997.
He has also been appointed as Non-Independent and Non-Executive Director
of Protasco Berhad on 10 December 2012.
He has no conflict of interest with the Group and has no family relationship with
any director and/ or substantial shareholder of the Group. He maintains a clean
record with regard to convictions for offences.
20 PRESS METAL BERHAD 153208 W
GROUP FINANCIAL HIGHLIGHTS
2,3
84,4
20,
, 2
,384
,420
2,2
68
,75
1 2
,26
8 2
,26
8
1,6
98
,83
9
1,1
60
,71
3
,69
8,8
1,1
60
,71
3
1,6
98
,
,,
1,1
33
,18
1
REVENUE(RM’000)
1211100908
1,2
38,8
52
93
0,9
11
70
1,6
23
1211100908
70
6,9
16
72
2,2
61
NET TANGIBLE ASSETS(RM’000)
6.0
4.0
4.0
3.5
3.5
DIVIDENDS PER SHARE(%)
1211100908
183
,899
10
9,6
02
83
,49
3
10
,47
6
27
,47
6
PROFIT ATTRIBUTABLE TO SHAREHOLDERS(RM’000)
1211100908
1,25
3,07
7
94
4,2
91
71
4,8
10
71
9,6
68
73
5,3
76
SHAREHOLDERS’ FUNDS(RM’000)
1211100908
FYE 31 December
2012 2011 2010 2009 2008
RM‘000 RM‘000* RM‘000* RM‘000 RM‘000
REVENUE 2,384,420 2,268,751 1,698,839 1,133,181 1,160,713
PROFIT BEFORE TAX 100,144 143,947 103,315 40,125 34,745
PROFIT AFTER TAX 221,828 122,855 89,610 28,695 8,537
PROFIT ATTRIBUTABLE TO
SHAREHOLDERS 183,899 109,602 83,493 27,476 10,476
SHAREHOLDERS’ FUNDS 1,253,077 944,291 714,810 735,376 719,668
NET TANGIBLE ASSETS (RM) 1,238,852 930,911 701,623 722,261 706,916
NET EARNINGS PER SHARE (SEN) 40 25 22 8 3
GROSS DIVIDEND (%) 6.0 4.0 4.0 3.5 3.5
* Certain comparatives have been changed due to adoption of MFRS during the year.
21ANNUAL REPORT 2012
CORPORATE SOCIAL RESPONSIBILITIES STATEMENTCORPORATE SOCIAL RESPONSIBILITIES STATEMENT
At Press Metal, the sense of duty to give back to the
society has always been a conscientious commitment
we have kept close to our hearts. Such is the principle of
Press Metal, as we firmly believe that it was these values
that helped us grow from a single press producer to
become a leading integrated aluminium specialist in Asia.
We are always mindful of our responsibilities towards our
employees, the stakeholders, the community, as well as
the environment as we build up our corporate values and
ensure sustainable growth in tandem with society.
WITH OUR COMMUNITIES & SOCIETY
As a global company built on local relationships, we believe that responsible corporate citizen is essential to the vitality of our communities. We encourage volunteer activities and actively create opportunities for interaction with the local communities, emphasizing on continuity to establish our roots firmly with them.
Press Metal has been supporting and will continue to contribute to a broad array of charities, with a primary focus directed in aiding the underprivileged. Besides regular donations, we also encourage our employees to pay visits together with their own families to old folks home, orphanages and local communities, to promote better kinship and social awareness.
By strongly supporting our employees’ involvement in the community, we aim to inculcate such essential values upon them. Hence, we will continue to actively pursue more activities that will match the sentiments of our local communities – because they are our strong foundation that will help propel mutual growth and success.
WITH OUR PEOPLE & WORKPLACE
At Press Metal, our employees are our vital assets. We believe in nurturing the personal growth of our employees, as they are the wheels that drive Press Metal. In keeping with good employment practices, we strive to create a stable and healthy working environment that promotes mutual respect, productivity and diversity. By regularly conducting high-performance trainings for our employees, we ensure that they maximize their potential and deliver exceptional value to our customers.
We also designed various teambuilding activities and awards for our employees to foster their relationships and to boost their morale.
Press Metal also emphasizes in maintaining a safe and healthy working environment for our employees. Having successfully secured the OHSAS 18001 award for our occupational safety and health management system in 2001, our smelting plant in Hubei and extrusion plant in Foshan, China have also successfully passed the similar authentication. We also conduct frequent occupational and safety awareness programmes to educate better awareness, and continuously improve on equipment safety measures.
22 PRESS METAL BERHAD 153208 W
CORPORATE SOCIAL RESPONSIBILITIES STATEMENTcont’d
WITH OUR MARKET PLACE
Throughout the years, Press Metal has built a reputation
as a manufacturer of quality products. Not only we are
the first aluminium extruder in Malaysia to be awarded
the internationally recognized ISO 9001 certification
in 1993, but both our extrusion plants in Foshan and
Hubei, China as well as our smelting plant in Mukah,
Sarawak, have also been accredited with ISO 9001
respectively.
Quality remained the main emphasis in all our production
and management systems. Stringent control system is
carried out right from the initial raw material stage until
the final stage before the products are delivered – such
is our commitment to providing only the best to our
customers.
WITH OUR GLOBAL ENVIRONMENT
It is our aim to seek to maintain harmony with
nature. We constantly monitor the environmental
impact of every facet in our operations and apply
cost-efficient means of reducing the use of natural
resources.
In 1998, Press Metal was awarded with the
ISO 14001 certification for our environmental
management system, now similarly awarded to
our smelting plant in Hubei, China. In 2010, our
operations in Foshan, China have also achieved the
said certification. On top of the above, Press Metal
was also the first company in Malaysia to acquire
the Swedish technology to use aluminium sludge
(S204), a scheduled waste from anodizing and
wastewater treatment plants, for the manufacturing
of Polyaluminium Chloride (PAC), a water treatment
chemical. We also operate a Common Waste Water
Treatment Plant that provides treatment for a wide
range of electroplating waste at a lower cost.
Today, our campaign continues. While the path to
eco-preservation may be long and arduous, we
will remain steadfast to our commitment to Mother
Nature – simply because we believe in investing in
a greener future.
23ANNUAL REPORT 2012
CORPORATE GOVERNANCE STATEMENT
The Board of Directors (“the Board”) of Press Metal Berhad (“the Company”) is committed to exercise good corporate
governance by supporting and applying the Principles and Recommendations set out in the Malaysian Code on Corporate
Governance 2012 (“the Code”). In addition, the Board follows global developments of internationally recognised best governance
practices, and though complying in many respects already, continually reviews the Company and its subsidiaries’ (“the Group”)
corporate governance processes and makes adjustments as may be appropriate. The key intent is to adopt the substance
behind good governance and not merely the form, with the aim of ensuring Board’s effectiveness in enhancing shareholders’
value. The Board is pleased to provide a statement on how the Group has applied the Principles and Recommendations of the
Code during the financial year ended 31 December 2012.
ESTABLISH CLEAR ROLES AND RESPONSIBILITIES OF THE BOARD AND MANAGEMENT
1.1 Clear functions of the Board and Management
The Group recognises the important role played by the Board in the stewardship of its direction and operations, and
ultimately, the enhancement of long-term shareholders’ value. To fulfill this role, the Board is responsible for the overall
corporate governance of the Group, including its strategic direction, establishing goals for management and monitoring
the achievement of these goals.
The Board has a formal schedule of matters reserved for decision, which includes the overall Group’s strategy and
direction, acquisition and divestment policy, approval of major capital expenditure projects and significant financial
matters.
Beyond the matters reserved for the Board’s decision, the Board has delegated the authority to achieve the corporate
objective to the Group Chief Executive Officer (“Group CEO”). The Group CEO remains accountable to the Board for the
authority that is delegated to him, and for the performance of the Group.
The Board monitors the decisions and actions of the Group CEO and the performance of the Group to gain assurance
that progress is being made towards the corporate objectives.
1.2 Clear roles and responsibilities
The Board is constantly mindful of safeguarding the interest of the Group’s customers, investors and all other stakeholders
in discharging its stewardships.
To ensure the effective discharge of its function and responsibilities, the Board has established and delegates certain
responsibilities to the Board Committees, as follows:-
Board Committee Key Functions
Audit Committee Explained on pages 34 to 39 of this Annual Report
Remuneration Committee Explained on pages 26 to 27 of this Annual Report
Nomination Committee Explained on pages 25 to 26 of this Annual Report
The Board Committees are entrusted with specific responsibilities to oversee the Company’s affairs, in accordance
with their respective written Terms of References and operating procedures and the Board receives reports of their
proceedings and deliberations. The Chairman of the respective committees will report to the Board the outcome of these
meetings and such reports are incorporated into the Minutes of the Board meetings. These committees were formed
in order to enhance business and operational efficiency as well as efficacy. The Board remains fully responsible for the
direction and control of the Company and the Group.
In line with the recommendations of the Code, the Board will formalise its roles and responsibilities in a Board Charter.
24 PRESS METAL BERHAD 153208 W
CORPORATE GOVERNANCE STATEMENTcont’d
ESTABLISH CLEAR ROLES AND RESPONSIBILITIES OF THE BOARD AND MANAGEMENT cont’d
1.3 Formalised ethical standards through Code of Ethics
The Board acknowledges the importance of establishing a corporate culture which engenders ethical conduct that
permeates throughout the Company.
The Board will formalise a Code of Ethics for the Board as well as a Code of Conduct for Directors, and the management
of the Group.
1.4 Strategies promoting sustainability
The Group recognises the importance of sustainability and its increasing impact to the business. The Group is committed
to understanding and implementing sustainable practices and exploring the benefits to the business whilst attempting to
achieve the right balance between the needs of the wider community, the requirements of shareholders and stakeholders
and economic success.
The Company’s activities on sustainability agenda for the year under review are set out in pages 21 and 22 of the
Corporate Social Responsibility of this Annual Report.
1.5 Access to information and advice
The Board recognises that the decision making process is highly contingent on the strength of information furnished. As
such, Directors have unrestricted access to any information pertaining to the Company.
The Chairman plays a key role in ensuring that all Directors have full and timely access to information with Board papers
circulated at least five (5) working days in advance of Board meetings. This ensures that Directors have sufficient time
to appreciate issues deliberated at the Board meetings and expedites the decision making process. A comprehensive
balance of financial and non-financial information is encapsulated in the papers covering strategic, operational, regulatory,
marketing and human resource issues.
There is also a formal procedure sanctioned by the Board, whether as the Board as a whole or in their individual capacity,
for Directors to obtain independent professional advice at the Company’s expense.
Detailed periodic briefings on the industry outlook and Company performance are also conducted for the Directors to
ensure that the Board is well informed on the latest market and industry trends.
1.6 Qualified and competent Company Secretaries
The Company Secretaries ensure the flow of information to the Board and its Committees. They ensure that Board
procedures are complied with and advise the Board on governance matters.
The Board is regularly updated and advised by the Company Secretaries who are qualified, experienced and competent
on new statutory and regulatory requirements, and the resultant implications to the Company and Directors in relation to
their duties and responsibilities. The Company Secretaries, who oversee adherence with board policies and procedures,
brief the Board on the proposed contents and timing of material announcements to be made to regulators. The Company
Secretaries attend all Board and Audit Committee meetings and ensure that meetings are properly convened, and that
accurate and proper records of the proceedings and resolutions passed are taken and maintained accordingly.
The removal of Company Secretaries, if any, is a matter for the Board, as a whole, to decide. Every Director has also
unhindered access to the advice and services of the Company Secretary.
1.7 Board Charter
The Board will formalise a Board Charter and publish it on the Company’s website. The Board will also review the Board
Charter periodically to achieve the objectives of transparency, accountability and effective performance for the Group
and the enhancement of corporate governance standards with the aim of enshrining the concepts of good governance
as promulgated in the Code.
25ANNUAL REPORT 2012
CORPORATE GOVERNANCE STATEMENTcont’d
STRENGTHEN COMPOSITION OF THE BOARD
2.1 Nomination Committee
The Nomination Committee comprised the following members during the financial year ended 31 December 2012:
Name of Director Membership Directorship
Dato’ (Dr.) Megat Abdul Rahman Bin Megat Ahmad Chairman Independent Non-Executive Director
Tuan Haji Mohamad Faiz Bin Abdul Hamid Member Independent Non-Executive Director
Loo Lean Hock Member Independent Non-Executive Director
The Nomination Committee consists entirely of Independent Non-Executive Directors. The Nomination Committee is
empowered by the Board and its Terms of Reference to bring to the Board recommendations as to the appointment
of new Directors. The Nomination Committee reviews the required mix of skills, experience and other qualities of the
Director, including core competencies. The Nomination Committee also systematically assesses the effectiveness of the
Board, its Board Committees, the Group CEO and the contribution and performance of each individual Director on an
annual basis.
The Nomination Committee also keeps under review the Board’s structure, size and composition.
The Nomination Committee held one (1) meeting during the financial year ended 31 December 2012 and all the members
registered full attendance.
The Board as a policy will select candidate as a Director who will best serve the Company regardless of gender and
thus do not consider it necessary to set any target nor undertake any specific measures to recruit women candidates
specifically. The Nomination Committee will consider female candidates as new Director of the Company as and when
the opportunity arises.
2.2 Develop, maintain and review criteria for recruitment processes and annual assessment of Directors
Appointment process
The Board through the Nomination Committee’s annual appraisal believes that the current composition of the Board
brings the required mix of skills and core competencies required for the Board to discharge its duties effectively.
The Board appoints its members through a formal and transparent selection process, which is consistent with the Articles
of Association of the Company. This process has been reviewed, approved and adopted by the Board. New appointees
will be considered and evaluated by the Nomination Committee. The Nomination Committee will then recommend the
candidates to be approved and appointed by the Board. The Company Secretaries will ensure that all appointments are
properly made, and that legal and regulatory obligations are met.
Re-election of Directors
The Articles of Association of the Company provide that all Directors shall retire at least once in every three (3) years. The
Directors to retire in each year are the Directors who have been longest in office since their appointment or re-election.
A retiring Director is eligible for re-election. This provides an opportunity for shareholders to renew their mandates. The
re-election of each Director is voted on separate resolution during the Annual General Meeting (“AGM”) of the Company.
To assist shareholders in their decision, sufficient information such as personal profile, meeting attendance and the
shareholdings in the Group of each Director standing for re-election are furnished in the Profile on Board of Directors
contained in the annual report.
Also, Directors over seventy (70) years of age are required to retire and offer themselves for re-appointment annually in
accordance with Section 129 (6) of the Companies Act, 1965.
26 PRESS METAL BERHAD 153208 W
CORPORATE GOVERNANCE STATEMENTcont’d
STRENGTHEN COMPOSITION OF THE BOARD cont’d
2.2 Develop, maintain and review criteria for recruitment processes and annual assessment of Directors cont’d
Board Evaluation
The Board regularly evaluates its performance and the governance processes that support the Board’s work with the aim of improving individual contributions, effectiveness of the Board and its committees and the Company’s performance.
During the financial year under review, the Nomination Committee had reviewed and assessed the mix of skills and experience and size of the Board, contribution of each Director and effectiveness of the Board and Board Committees and also reviewed the retirement of Directors by rotation eligible for re-election.
2.3 Remuneration policies and procedures
Remuneration Committee
The Remuneration Committee comprised two (2) Independent Non-Executive Directors and one (1) Executive Director with Dato’ (Dr.) Megat Abdul Rahman Bin Megat Ahmad as the Chairman. The Committee is responsible for recommending the remuneration framework for Directors as well as the remuneration packages of Executive Directors to the Board. None of the Executive Directors participated in any way in determining their individual remuneration.
Non-Executive Directors’ remuneration will be a matter to be decided by the Board as a whole with the Director concerned abstaining from deliberations and voting on decisions in respect of his individual remuneration.
The members of the Remuneration Committee are as follows:-
Name of Director Membership Directorship
Dato’ (Dr.) Megat Abdul Rahman Bin Megat Ahmad Chairman Independent Non-Executive Director
Tuan Haji Mohamad Bin Abdul Hamid Member Independent Non-Executive Director
Koon Poh Ming Member Executive Director
The Remuneration Committee held one (1) meeting during the financial year ended 31 December 2012 and all the members registered full attendance.
Remuneration Package
The aggregate Directors’ remuneration paid or payable or otherwise made available to all Directors of the Company who served during the financial year ended 31 December 2012 are as follows:
Category Fees Salaries
(RM’000) (RM’000)
Executive Directors - 2,837
Non-Executive Directors 187 -
Breakdown of Directors’ remuneration for the financial year ended 31 December 2012, by category and in each successive band of RM50,000, is as follows:-
Executive Non-Executive
RM50,000 and below - 3
RM50,001 – RM100,000 - 1
RM500,001 – RM550,000 3 -
RM550,001 – RM600,000 - -
RM600,001 – RM650,000 2 -
Total 5 4
27ANNUAL REPORT 2012
CORPORATE GOVERNANCE STATEMENTcont’d
STRENGTHEN COMPOSITION OF THE BOARD cont’d
2.3 Remuneration policies and procedures cont’d
The Company does not disclose each Director’s remuneration separately as such information is considered highly
sensitive and confidential in nature.
REINFORCE OF INDEPENDENCE
3.1 Annual Assessment of Independence
The Board recognises the importance of independence and objectivity in the decision-making process. The
Independent Directors bring their respective knowledge and experience to the Board. The Board is committed in
ensuring that Independent Directors are capable and willing to make decisions in the best interests of the Company
and the shareholders free from interest or influence and are independent of the Management.
The Independent Directors namely, Dato’ (Dr.) Megat Abdul Rahman Bin Megat Ahmad, Tuan Haji Mohamad Faiz Bin
Abdul Hamid, Mr Tan Heng Kui and Mr Loo Lean Hock fulfilled the criteria of “Independence” as prescribed under the
Listing Requirements. The Board composition complies with the Listing Requirements which requires that at least two
(2) Directors or one-third (1/3) of the Board of the Company, whichever is the higher, to be independent Directors.
3.2 Tenure of Independent Directors
In line with the Code, the tenure of an independent Director should not exceed a cumulative term of nine (9) years.
However, an Independent Director may continue to serve on the Board subject to the Director’s re-designation as a
Non-Independent Director. In exceptional cases and subject to assessment by the Nomination Committee, the Board
may recommend for an Independent Non-Executive Director who has served a consecutive or cumulative term of nine
(9) years to remain as an Independent Non-Executive Director subject to shareholders’ approval.
3.3 Separation of positions of the Chairman and Group CEO
The Board recognises the importance of having a clearly accepted division of power and responsibilities. There is a clear
division of responsibilities at the head of the Group to ensure a balance of authority and power. The Board is led by Dato’
(Dr.) Megat Abdul Rahman Bin Megat Ahmad, an Independent Non-Executive Chairman and the executive management
of the Group is led by Dato’ Koon Poh Keong, the Group CEO.
The roles of the Chairman and the Group CEO are clearly defined in their individual position descriptions. The Chairman
is responsible for running the Board and ensures that all Directors receive sufficient relevant information on financial and
non-financial matters to enable them to participate actively in the Board’s decisions. The Group CEO is responsible
for the day-to-day management of the business as well as the implementation of Board’s policies and decisions. Tuan
Haji Mohamad Faiz Bin Abdul Hamid is the Senior Independent Non-Executive Director designated to clarify matters or
enquiries that may be raised by shareholders or investors.
3.4 Board Composition and Balance
As at the date of this Statement, the Board consists of an Independent Non-Executive Chairman, an Executive Vice
Chairman, a Group CEO, three (3) Executive Directors and three (3) Independent Non-Executive Directors. A brief profile
of each Director is presented on pages 15 to 19 of this Annual Report.
The Non-Executive Directors contribute significantly in areas such as policy and strategy, performance monitoring,
allocation of resources as well as improving governance and controls. Together with the Executive Directors who have
in-depth knowledge of the business, the Board constituted of individuals who are committed to business coupled with
integrity and professionalism in all its activities.
The Board is satisfied that the current Board composition fairly reflects the interests of minority shareholders in the
Company.
28 PRESS METAL BERHAD 153208 W
CORPORATE GOVERNANCE STATEMENTcont’d
FOSTER COMMITMENT
4.1 Time Commitment
The Board meets at least four (4) times a year at quarterly intervals with additional meetings convened when urgent and
important decisions need to be taken between the scheduled meetings. During the financial year ended 31 December
2012, the Board met on four (4) occasions, where it deliberated upon and considered a variety of matters including the
financial results, major investments, strategic decisions, the business plan and direction of the Group.
The Board receives documents on matters requiring its consideration prior to and in advance of each meeting. The
Board papers are comprehensive and encompass both quantitative and qualitative factors so that informed decisions
are made. All proceedings from the Board meetings are minuted and signed by the Chairman of the meeting.
Procedures are in place for Directors to seek both independent professional advice at the Company’s expense and have
access to the Company Secretary in order to fulfill their duties and specific responsibilities.
The Board members are required to notify the Board’s Chairman prior to their acceptance of new directorships in other
companies.
Details of Directors’ attendance at Board Meetings held during the financial year ended 31 December 2012 are as follows:
Name of Directors Number of Meetings
Held Attended
Dato’ (Dr.) Megat Abdul Rahman Bin Megat Ahmad
Independent Non-Executive Chairman
4 4
Koon Poh Ming
Executive Vice Chairman
4 4
Dato’ Koon Poh Keong
Group Chief Executive Officer
4 4
Koon Poh Weng
Executive Director
4 4
Koon Poh Kong
Executive Director
4 4
Dato’ Koon Poh Tat
Executive Director
4 4
Tuan Haji Mohamad Faiz Bin Abdul Hamid
Independent Non-Executive Director
4 4
Loo Lean Hock
Independent Non-Executive Director
4 3
Tan Heng Kui
Independent Non-Executive Director
4 4
29ANNUAL REPORT 2012
CORPORATE GOVERNANCE STATEMENTcont’d
FOSTER COMMITMENT cont’d
4.2 Directors’ training
The Directors have participated in numerous training programmes, seminars, conferences and briefings to ensure that
they are kept abreast with the latest market development, relevant new laws and regulations, financial reporting and
other issues relevant requirements to the Company. All the Directors have completed the Mandatory Accreditation
Programme (“MAP”) prescribed by Bursa Malaysia Securities Berhad.
Among the training programmes, seminars and briefings attended by the Directors during the financial year are as
follows:-
The Senior Management had also briefed the Directors on general economic, industry and technical developments from
time to time.
The Directors will continue to attend relevant training courses to further enhance their skills and knowledge to enable
them to discharge their responsibilities more effectively.
The Company Secretaries circulate the relevant guidelines on statutory and regulatory requirements from time to time
for the Board’s reference and brief the Board quarterly on these updates at Board meetings. The External Auditors also
briefed the Board members on any changes to the Malaysian Financial Reporting Standards that affect the Group’s
financial statements during the year.
UPHOLD INTEGRITY IN FINANCIAL REPORTING
5.1 Compliance with applicable financial reporting standards
Financial Reporting
The Board aims to provide and present a balanced and meaningful assessment of the Group’s financial performance
and prospects at the end of the financial year, primarily through the annual financial statements and quarterly results to
shareholders as well as the Chairman’s Statement and review of operations in the Annual Report. The Board is assisted
by the Audit Committee to oversee the Group’s financial reporting processes and the quality of its financial reporting.
Directors’ responsibility statement in respect of the preparation of the audited financial statements
The Board is responsible for ensuring that the financial statements of the Group give a true and fair view of the state of
affairs of the Group and of the Company as at the end of the accounting period and of their results and cash flows for the
period then ended. In preparing the financial statements, the Directors have ensured that applicable approved Financial
Reporting Standard (“FRS”) in Malaysia and the provisions of the Companies Act, 1965 have been applied with and
reasonable and prudent judgement and estimates have been made.
In preparing the financial statements, the Directors have selected and applied consistently suitable accounting policies
and made reasonable and prudent judgements and estimates.
30 PRESS METAL BERHAD 153208 W
UPHOLD INTEGRITY IN FINANCIAL REPORTING cont’d
5.1 Compliance with applicable financial reporting standards cont’d
Directors’ responsibility statement in respect of the preparation of the audited financial statements cont’d
The Directors also have a general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.
The Board is satisfied that it has met its obligation to present a balanced and understandable assessment of the Company’s position and prospects in the Directors’ Report and the Financial Statements of this annual report.
Related Party Transactions
An internal compliance framework exists to ensure that the Group meets its obligations relating to related party transactions under the Listing Requirements. The Board, through its Audit Committee, reviews all material related party transactions involved. A Director who has an interest in a transaction must abstain from deliberation and voting on the relevant resolution in respect of such transaction at the Board and at any general meeting convened to consider such matters.
Further details of these transactions are set out in the Recurrent Related Party Transactions’ Circular to Shareholders dated 29 May 2013.
5.2 Assessment of sustainability and independence of external auditors
Key features underlying the relationship of the Audit Committee with the External Auditors are included in the Audit Committee’s terms of reference as detailed on pages 34 to 36 of the Annual Report.
A summary of the activities of the Audit Committee during the year, including the evaluation of the independent audit process, are set out in the Audit Committee Report on page 37 of the Annual Report.
The External Auditors provide mainly audit-related services to the Company. Due to the strong knowledge of the Company, the External Auditors also undertake certain non-audit services such as interim reviews, regulatory reviews and reporting, and other services.
The Board upholds the integrity of financial reporting by the Company and as such, the External Auditors have confirmed to the Board their independence in providing both audit and non-audit services up to the date of this statement.
The external auditors attended two (2) out of four (4) of the Audit Committee meetings held to review the Quarterly Results and the financial statements.
RECOGNISE AND MANAGE RISKS
6.1 Sound framework to manage risks
The Board has ultimate responsibility for reviewing the Company’s risks, approving the risk management framework and policy and overseeing the Company’s strategic risk management and internal control framework.
The key features of the Risk Management Framework are set out in the Statement on Risk Management and Internal Control of the Company as set out on page 40 of this Annual Report.
6.2 Internal audit function
The Board has established an internal audit function within the Company, which is led by the Head of Internal Audit who reports directly to the AC. The Statement on Risk Management and Internal Control furnished on pages 40 to 41 of the
Annual Report provides an overview on the state of internal controls within the Group, in an effort to manage risk.
CORPORATE GOVERNANCE STATEMENTcont’d
31ANNUAL REPORT 2012
ENSURE TIMELY AND HIGH QUALITY DISCLOSURE
7.1 Corporate Disclosure Policy
Information Disclosure
The Board acknowledges the importance to disclose information in a timely manner and will ensure the compliance of
the disclosure requirements under the Listing Requirements and other applicable laws.
7.2 Leverage on information technology for effective dissemination of information
Investor Relations and shareholder’ communication
The Company’s website, www.pressmetal.com provides an avenue for information, such as dedicated sections on
corporate information, including financial information, share price history, announcements and press releases. The
website is continuously updated to ensure that the information contained within is current.
STRENGTHEN RELATIONSHIP BETWEEN COMPANY AND SHAREHOLDERS
8.1 Encourage shareholder participation at general meetings
The Board acknowledges the need for the shareholders to be informed of all material business matters affecting the
Company. In addition to various announcements made, the timely release of financial results on a quarterly basis provides
shareholders with an overview of the Group’s performance and operations.
The Annual General Meeting (“AGM”) is the principal forum for dialogue with shareholders. Notice of AGM together with
a copy of the Company’s Annual Report will be sent to shareholders at least twenty-one (21) days before the meeting.
Members of the Board as well as the external auditors will be present to answer questions relevant to the resolution being
proposed, the financial performance, business operations or corporate governance of the Company and other matters
affecting the Company’s shareholders’ interests.
8.2 Effective Communication and Proactive Engagement
In accordance with the Listing Requirements, the Board will conduct poll voting for resolutions relating to related party
transactions or as may be demanded by the shareholders respectively.
The Board is encouraged to put substantive resolution to vote by way of poll at the general meetings. The Chairman
will inform the shareholders of the Company of their right to demand for a poll vote at the commencement of a general
meeting.
CORPORATE GOVERNANCE STATEMENTcont’d
32 PRESS METAL BERHAD 153208 W
ADDITIONAL COMPLIANCE INFORMATION
1. MATERIAL CONTRACTS
There were no material contracts entered into by the Company and its subsidiaries involving Directors and substantial
shareholders during the financial year ended 31 December 2012.
2. OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES
(i) Employee Share Option Scheme (“ESOS”)
There were no options granted pursuant to ESOS 2007/2012 during the financial year ended 31 December 2012.
The said ESOS has expired in June 2012 and a total of 3,298,000 options had been exercised during the financial
year.
(ii) 8-year 6% Redeemable Convertible Secured Loan Stocks at 100% of its nominal value with free
detachable warrants (“warrants”)
During the financial year, a total of 65,001,000 warrants C were converted into Ordinary Shares of RM0.50 each.
3. SANCTIONS AND/OR PENALTIES IMPOSED
There were no sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or management by
the relevant regulatory bodies during the financial year.
4. NON-AUDIT FEES
The non-audits fees paid to the Company’s external auditors, Messrs KPMG during the financial year ended 31 December
2012 amounted to RM130,000.
5. SHARE BUY-BACKS
The Company did not implement any share buy-back scheme.
6. RECURRENT RELATED PARTY TRANSACTIONS (“RRPTs”) OF REVENUE OR TRADING NATURE
The RRPTs of the Group have been entered into in the normal course of business. Further details of the RRPT of a
revenue or trading nature conducted during the financial year are disclosed in Note 31 to the financial statements on
Pages 132 to 133 of the Annual Report.
Please refer to section 2.2 of the Circular to Shareholders dated 29 May 2013 on the name of the related parties and the
Company’s relationship with the related parties.
7. PROFIT GUARANTEE
There were no profit guarantee issued by the Company during the financial year ended 31 December 2012.
8. VARIATION IN RESULTS
There were no variation of 10% or more between the profits announced in the audited and unaudited results of the Group
for the financial year ended 31 December 2012.
33ANNUAL REPORT 2012
ADDITIONAL COMPLIANCE INFORMATIONcont’d
9. DEPOSITORY RECEIPT PROGRAMME
During the financial year, the Group did not sponsor any depository receipt programme.
10. UTILISATION OF PROCEEDS
During the financial year, approximately RM143.0 million raised from the exercise of warrants have been utilised as
working capital of the Group, amongst others, includes the phase 2 expansion of the aluminium smelting operation plant
located at Samalaju Industrial Park, Bintulu, Sarawak.
34 PRESS METAL BERHAD 153208 W
AUDIT COMMITTEE REPORT
MEMBER OF THE AUDIT COMMITTEE
The Audit Committee comprises three (3) members, all of whom are Independent Non-Executive Directors.
The members of the Audit Committee are as follow:-
Tuan Haji Mohamad Faiz Bin Abdul Hamid (Chairman)Independent Non-Executive Director
Loo Lean Hock Independent Non-Executive Director; Member of the Malaysian Institute of Accountants
Tan Heng KuiIndependent Non-Executive Director
ATTENDANCE OF MEETINGS The details of attendance of each member at the Audit Committee meetings held during the financial year ended 2012 are as follows:-
Name of Audit Committee Members
Number of Audit Committee
Meetings
Held Attended
Tuan Haji Mohamad Faiz Bin Abdul Hamid 4 4
Loo Lean Hock 4 3
Tan Heng Kui 4 4
TERMS OF REFERENCE
i. Composition of the Audit Committee
The Audit Committee shall be appointed by the Board of Directors from among their number (pursuant to a resolution of the Board of Directors), which fulfills the following requirements:-
a) The Audit Committee must be composed of no fewer than 3 members;
b) All members of the Audit Committee must be Non-Executive Directors;
c) A majority of the Audit Committee must be Independent Directors;
d) All members of the Audit Committee should be financially literate and at least one member of the Audit Committee:-
i) must be a member of the Malaysian Institute of Accountants; or
ii) if he is not a member of the Malaysian Institute of Accountants, he must have at least 3 years’ working experience and:-
he must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act, 1967;
he must be a member of one of the associations of accountants specified in Part II of the 1st Schedule of the Accountants Act, 1967;
iii) fulfills such other requirements as prescribed or approved by Bursa Malaysia Securities Berhad and/or other
relevant authorities from time to time.
35ANNUAL REPORT 2012
AUDIT COMMITTEE REPORTcont’d
TERMS OF REFERENCE cont’d
i. Composition of the Audit Committee cont’d
e) No Alternate Director of the Board shall be appointed as a member of the Committee.
The members of the Audit Committee shall elect a Chairman from among their member who shall be an Independent
Director.
In the event of any vacancy in the Audit Committee resulting in the non-compliance of items (a) to (d) above, the vacancy
must be filled within 3 months of that event.
The Board of Directors must review the term of office and performance of the Audit Committee and each of its members
at least once every 3 years to determine whether the Audit Committee and members have carried out their duties in
accordance with the terms of reference.
ii. Objectives
The objective of the Audit Committee is to assist the Board of Directors in meeting its responsibilities relating to
accounting and reporting practices of the Company and its subsidiary companies.
In addition, the Audit Committee shall:-
a) Oversee and appraise the quality of the audits conducted both by the Company’s internal and external auditors;
b) Maintain open lines of communication between the Board of Directors, the internal auditors and the external auditors
for the exchange of views and information, as well as to confirm their respective authority and responsibilities;
and
c) Determine the adequacy of the Group’s administrative, operating and accounting controls.
iii. Functions
The functions of the Audit Committee are as follow:-
(a) To review the following and report the same to the Board of Directors:-
i) with the external auditors, the audit plan;
ii) with the external auditors, his evaluation of the system of internal controls;
iii) with the external auditors, his audit report;
iv) the assistance given by the Company’s employees to the external auditors; and
v) any related party transaction and conflict of interest situation that may arise within the Company or the Group
including any transaction, procedure or course of conduct that raises questions of management integrity.
(b) To consider the appointment of the external auditors, the audit fee and any questions of resignation or dismissal
and the letter of resignation from the external auditors if applicable;
(c) To discuss with the external auditors before the audit commences, the nature and scope of the audit and to ensure
co-ordination where more than one audit firm are involved;
(d) To review the quarterly and year-end financial statements of the Company, focusing particularly on:-
36 PRESS METAL BERHAD 153208 W
AUDIT COMMITTEE REPORTcont’d
TERMS OF REFERENCE cont’d
iii. Functions cont’d
(e) To discuss problems and reservations arising from the interim and final audits, and any matter the external auditor
may wish to discuss (in the absence of management where necessary);
(f) To review the external auditors’ management letter and the management’s response;
(g) To do the following, in relation to the internal audit function:-
that it has the necessary authority to carry out its work;
that appropriate actions are taken on the recommendations of the internal audit function;
opportunity to submit his reasons for resigning.
(h) To consider the major findings of internal investigations and the management’s response;
(i) To ensure the internal audit function is independent of the activities it audits and the head of internal audit reports
directly to the Audit Committee. The head of internal audit will be responsible for the regular review and/or appraisal
of the effectiveness of the risk management, internal control, and governance processes within the Company.
(j) To consider other areas as defined by the Board or as may be prescribed by Bursa Malaysia Securities Berhad or
any other relevant authority from time to time.
RIGHTS OF THE AUDIT COMMITTEE
The Audit Committee shall, wherever necessary and reasonable for the Company to perform of its duties, in accordance with
a procedure to be determined by the Board of Directors and at the cost of the Company:-
a) Have authority to investigate any matter within its terms of reference;
b) Have the resources which are required to perform its duties;
c) Have full and unrestricted access to any information pertaining to the Company and Group;
d) Have direct communication channels with the external auditors and person(s) carrying out the internal audit function or
activity;
e) Be able to convene meeting with the external auditors, internal auditors or both excluding the attendance of other
Directors and employee of the Company;
f) Be able to obtain independent professional or other advice;
The Chairman of the Audit Committee should engage on a continuous basis with senior management, such as the Chairman,
the Chief Executive Officer, the Finance Director, the head of internal audit and the external auditors in order to be kept
informed of matters affecting the Company.
37ANNUAL REPORT 2012
AUDIT COMMITTEE REPORTcont’d
MEETINGS
The Audit Committee shall meet at least 4 times a year and such additional meetings as the Chairman shall decide in order to
fulfill its duties. However, at least twice a year the Audit Committee shall meet with the external auditors without the presence
of the executive Board members and the Management.
In addition, the Chairman may call a meeting of the Audit Committee at the request of any committee member, the Company’s
Chief Executive Officer, or the internal or external auditors.
The Company Secretary or other appropriate senior official shall act as Secretary of the Audit Committee and shall be
responsible, in conjunction with the Chairman, for drawing up the agenda and circulating it, supported by explanatory
documentation to committee members prior to each meeting.
The Secretary shall also be responsible for keeping the minutes of meetings of the Audit Committee, and circulating them to
committee members and to the other members of the Board of Directors.
A quorum shall consist of a majority of Independent Directors.
By invitation of the Audit Committee, the Company must ensure that other Directors and employees attend any particular Audit
Committee meeting specific to the relevant meeting.
ACTIVITIES OF THE COMMITTEE
There were four (4) Audit Committee meetings held during the financial year ended 31 December 2012.
The activities of the Audit Committee during the financial year were summarised as below:-
(i) Reviewed the unaudited quarterly results/announcements of the Group and made recommendations to the Board of
Directors for approval prior to the release of the results to Bursa Malaysia Securities Berhad;
(ii) Reviewed with the External Auditors:
(a) Scope of work and annual audit plan;
(b) The audited financial statements of the Group and the Company prior to submission to the Board of Directors for
consideration and approval; and
(c) Problems and reservation arising from the interim and final audits.
(iii) Reviewed findings on the internal audit reports which were tabled during the year, the audit recommendations made as
well as the management response’s to these recommendations and the implementation of agreed action plan;
(iv) Reviewed and approved the Internal Audit Plan for year 2012 to ensure adequate scope and comprehensive coverage
over the activities of the Company and the Group;
(v) Reviewed related party transactions and conflict of interest situation that may arise within the Company or the Group,
including any transactions, procedure or course of conduct that raises questions of management integrity;
(vi) Considered and recommended to the Board of Directors on the appointment and annual re-appointment of the external
auditors and their audit fee, after taking into consideration the independence and objectivity of the external auditors and
the cost effectiveness of their audit;
(vii) Met with the external auditors twice during the financial year without the presence of any executive Board members and
employees of the Group; and
(viii) Reviewed the Audit Committee Report, Corporate Governance Statement and Statement of Internal Control for the
financial year ended 31 December 2012 and recommended the same for adoption to the Board of Directors.
38 PRESS METAL BERHAD 153208 W
AUDIT COMMITTEE REPORTcont’d
INTERNAL AUDIT FUNCTION
The primary role of the internal audit function is to undertake regular and systematic review of the systems of internal control
so as to provide sufficient assurance that the Group has sound system of internal control and that established policies and
procedures are adhered to.
The Company has been engaging an independent external audit firm (“outsourced Internal Auditors”) to carry out the internal
audit function for the Group and the Company. A summary of the activities of the internal audit function is as follows:
and to make recommendations for improvement where weaknesses exist.
Management.
The outsourced Internal Auditors were present at all Audit Committee meetings to present their Internal Audit reports to the
Audit Committee.
The total cost incurred for the outsourced internal audit function of the Group for the financial year ended 31 December 2012
was RM45,000.00
STATEMENT ON EMPLOYEE SHARE SCHEME BY THE AUDIT COMMITTEE
The Audit Committee has verified that the options granted were made in accordance with the By-Laws of the ESOS.
There is only one (1) share issuance scheme i.e. ESOS 2007-2012 in existence during the financial year ended (“FYE”) 31
December 2012. Details of the ESOS are as follows:-
Since
Commencement
of the ESOS
Scheme (2007)
From FYE
2008-2011
During the
FYE 31
December
2012
As at 31
December
2012
‘000 ‘000 ‘000 ‘000
Total number of options granted 17,892 - - 17,892
Total number of options exercised (28) (11,504) (3,298) (14,830)
Total number of options lapsed - (1,109) (1,953) (3,062)
Total number of options outstanding 17,864 - - -
39ANNUAL REPORT 2012
AUDIT COMMITTEE REPORTcont’d
STATEMENT ON EMPLOYEE SHARE SCHEME BY THE AUDIT COMMITTEE cont’d
Granted to the Directors and Chief Executive
Since
Commencement
of the ESOS
Scheme (2007)
From FYE
2008-2011
During the
FYE 31
December
2012
As at 31
December
2012
‘000 ‘000 ‘000 ‘000
Total number of options granted 7,750 - - 7,750
Total number of options exercised - (6,160) (890) (7,050)
Total number of options lapsed - - (700) (700)
Total number of options outstanding 7,750 - - -
Pursuant to the Company’s ESOS By-Laws, not more than 50% of the options available under the scheme would be allocated,
in aggregate, to Directors and senior management. Since the commencement of the scheme, 43.31% of the options granted
under the scheme have been granted to Directors.
The aforesaid ESOS which was previously approved by the shareholders of the Company at the EGM held on 26 June 2007
had expired in June 2012.
40 PRESS METAL BERHAD 153208 W
STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL
INTRODUCTION
In accordance with Paragraph 15.26(b) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the
Board of Directors of public listed companies are required to include in their annual report a statement about the state of
internal control of the listed issuer as a group. The Malaysian Code on Corporate Governance requires listed companies to
maintain a sound system of internal control to safeguard shareholders’ investments and the group’s assets. Set out below is
the Board’s Statement on Risk Management and Internal Control, which has been prepared in accordance with the “Statement
on Risk Management and Internal Control: Guidelines for Directors of Listed Issuers” (the “Guidelines”).
BOARD RESPONSIBILITY
The Board is committed to maintaining both a sound system of risk management and internal control and the proper
management of risks throughout the operations of the Group in order to safeguard shareholders’ investment and assets of
the Group.The Board acknowledges that it is ultimately responsible for the Group’s system of internal control which main
features include the establishment of an appropriate control environment and framework, including financial, operational and
compliance controls and risk management.
The Board is responsible in identifying, evaluating and managing the significant risks of the Group, as well as reviewing the
adequacy and effectiveness of the risk management and internal control system on an ongoing basis. This process has been
in place for the financial year under review and up to the date of approval of this statement for inclusion in the annual report.
The Board believes the risk management and internal control system in place is adequate and effective to manage the risk of
the Group. Nevertheless, it should be noted that due to the inherent limitations in any system, such systems are designed to
manage rather than eliminate the risk of failure to achieve business objectives. In addition, it should be noted that any system
can provide only reasonable, and not absolute assurance against material misstatement or loss.
INTERNAL AUDIT FUNCTION AND RISK MANAGEMENT FRAMEWORK
The Board delegates the responsibility of monitoring the system of risk management and internal control to the Audit Committee.
The Audit Committee has in turn engaged the services of external consultants to assess the adequacy and effectiveness of
the internal control system. The same external consultants have also been appointed to assist in the development of a risk
management framework and the risk management framework was completed back in 2005. The Audit Committee is kept
informed of the internal audit process, from the annual audit plan up to the audit findings and reporting. The details on the
Internal Audit function are further explained on page 38 of this Annual Report.
During the financial year, the internal audit function conducted internal audits in accordance with the approved internal audit
plan for the purposes of assessing the adequacy and effectiveness of the internal control systems. The results of the audit and
recommendations for improvement co-developed with Management were presented at the Audit Committee Meetings, and
subsequently approved by the Board.
WEAKNESSES
A few internal control weaknesses were identified during the period, all of which have been, or are being addressed. None of
these weaknesses have resulted in any material error and losses, contingencies or uncertainties that would require mention in
the Group’s annual report.
41ANNUAL REPORT 2012
STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROLcont’d
OTHER KEY ELEMENTS OF INTERNAL CONTROL
Apart from risk management and internal audit, the other key elements of the Group’s internal control systems are described
below:
units;
Press Metal Berhad ISO 14001:2004 on Environmental Management System
ISO 9001:2008 on Quality Management System
OHSAS 18001:2007 on Occupational Health & Safety Management
System
Press Metal International Limited ISO 9001:2008 on Quality Management System
Hubei Press Metal Huasheng
Aluminium-Electric Co., Ltd.
ISO 14001:2004 on Environmental Management System
ISO 9001:2008 on Quality Management System
GB/T 28001:2011 on Occupational Health & Safety Management
System
Press Metal International (Hubei) Ltd. ISO 9001:2008 on Quality Management System
Press Metal Sarawak Sdn. Bhd. ISO 9001:2008 on Quality Management System
approval by the Board of Directors;
key performance indicators, such as cash flow performance, product sales analysis and operating cost analysis. These
performance reports are benchmarked against budget;
and
Committee, and Remuneration Committee.
ASSURANCE PROVIDED BY THE GROUP CHIEF EXECUTIVE OFFICER AND CHIEF FINANCIAL OFFICER
In line with the Guidelines, the Group Chief Executive Officer and Chief Financial Officer have provided assurance to the Board
stating that the Group’s risk management and internal control system has operated adequately and effectively, in all material
aspects, to meet the Group’s objectives during the financial year under review.
42 PRESS METAL BERHAD 153208 W
FinancialStatementsDirectors’ Report 44
Statements of Financial Position 51
Statements of Profit or Loss
and Other Comprehensive Income 53
Consolidated Statement of Changes in Equity 54
Statement of Changes in Equity 56
Statements of Cash Flows 57
Notes to the Financial Statements 60
Statement by Directors 142
Statutory Declaration 142
Independent Auditors’ Report 143
43ANNUAL REPORT 2012
44 PRESS METAL BERHAD 153208 W
DIRECTORS’ REPORT for the year ended 31 December 2012
The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the financial year ended 31 December 2012.
PRINCIPAL ACTIVITIES
The Company is principally engaged in the manufacturing and marketing of aluminium products, whilst the principal activities of the subsidiaries are as stated in Note 6 to the financial statements. There has been no significant change in the nature of these activities during the financial year.
RESULTS
Group Company
RM’000 RM’000
Profit for the year attributable to:
Owners of the Company 183,899 15,082
Non-controlling interests 37,929 -
221,828 15,082
RESERVES AND PROVISIONS
There were no material transfers to or from reserves and provisions during the financial year under review except as disclosed in the financial statements.
DIVIDENDS
Since the end of the previous financial year, the Company paid:
i) a final tax exempt ordinary dividend of 1 sen per ordinary share totalling RM4,428,000 in respect of the financial year ended 31 December 2011 on 27 July 2012.
ii) a first interim tax exempt ordinary dividend of 1 sen per ordinary share totalling RM4,776,000 in respect of the financial year ended 31 December 2012 on 10 October 2012.
iii) a second interim tax exempt ordinary dividend of 1 sen per ordinary share totalling RM5,072,000 in respect of the financial year ended 31 December 2012 on 20 December 2012.
Subsequent to the financial year end, the Directors declared a third interim tax exempt ordinary dividend of 1 sen per ordinary share totalling RM5,078,000 in respect of the financial year ended 31 December 2012 paid on 10 April 2013. The Directors do not recommend any final dividend to be paid for the financial year under review.
DIRECTORS OF THE COMPANY
Directors who served since the date of the last report are:
Dato’ Megat Abdul Rahman bin Megat Ahmad Dato’ Koon Poh KeongDato’ Koon Poh TatKoon Poh MingKoon Poh KongKoon Poh WengTuan Haji Mohamad Faiz bin Abdul Hamid Loo Lean Hock
Tan Heng Kui
45ANNUAL REPORT 2012
DIRECTORS’ REPORT
for the year ended 31 December 2012 cont’d
DIRECTORS’ INTERESTS IN SHARES
The interests and deemed interests in the shares, redeemable convertible secured loan stocks (“RCSLS”) together with free
warrants and options over shares of the Company and of its related corporations (other than wholly-owned subsidiaries)
of those who were Directors at financial year end (including the interests of the spouses or children of the Directors who
themselves are not Directors of the Company) as recorded in the Register of Directors’ Shareholdings are as follows:
Number of ordinary shares of RM0.50 each
At
1.1.2012 Bought Sold
At
31.12.2012
Interest in the Company:
Dato’ Megat Abdul Rahman bin Megat Ahmad
- own 14,856,692 30,000 (194,700) 14,691,992
- spouse 280,000 - (35,000) 245,000
Dato’ Koon Poh Keong
- own 94,771,906 - - 94,771,906
- spouse 10,229,700 - - 10,229,700
Dato’ Koon Poh Tat
- own 13,327,400 1,200,600 - 14,528,000
- spouse 399,522 - - 399,522
- child - 100,000 - 100,000
Koon Poh Ming
- own 27,333,439 - - 27,333,439
- spouse 11,000,000 - - 11,000,000
Koon Poh Kong
- own 11,281,194 260,000 - 11,541,194
- spouse 3,000 - - 3,000
Koon Poh Weng
- own 12,920,048 3,001,000 - 15,921,048
- spouse 570,600 6,000,000 - 6,570,600
- child 6,000 - - 6,000
Tuan Haji Mohamad Faiz bin Abdul Hamid 142,398 50,000 - 192,398
Loo Lean Hock - 10,000 - 10,000
Tan Heng Kui 109,000 10,000 - 119,000
Deemed interest in the Company:
Dato’ Megat Abdul Rahman bin Megat Ahmad # 542,000 - - 542,000
Dato’ Koon Poh Keong * - 65,000,000 - 65,000,000
Koon Poh Ming * - 65,000,000 - 65,000,000
46 PRESS METAL BERHAD 153208 W
DIRECTORS’ INTERESTS IN SHARES cont’d
In accordance with Section 134(12)(c) of the Companies Act, 1965, the interest of the spouses and children of the Directors in the shares of the Company shall be treated as the interest of the Directors.
# Deemed interested by virtue of the Director’s interest in JOEM Sdn. Bhd.
* Deemed interested by virtue of the Directors’ interests in Alpha Milestone Sdn. Bhd.
By virtue of their interests in the shares of the Company, Dato’ Koon Poh Keong, Dato’ Koon Poh Tat, Koon Poh Ming, Koon Poh Kong and Koon Poh Weng are also deemed interested in the shares of the subsidiaries during the financial year to the extent that Press Metal Berhad has an interest.
Number of RCSLS together with one free warrant
per one RCSLS of RM2.20 each
At date
1.1.2012 Bought Exercised
At
31.12.2012
RCSLS
Interest in the Company:
Dato’ Koon Poh Tat
- spouse 133,174 - - 133,174
Koon Poh Ming
- spouse 1,000,000 - - 1,000,000
Koon Poh Kong
- spouse 151,000 - - 151,000
Koon Poh Weng
- spouse 190,000 - - 190,000
- child 2,000 - - 2,000
Tuan Haji Mohamad Faiz bin Abdul Hamid 47,466 - - 47,466
Tan Heng Kui 37,000 - - 37,000
Deemed interest in the Company:
Dato’ Koon Poh Keong * 105,319,860 - - 105,319,860
Koon Poh Ming * 105,319,860 - - 105,319,860
Warrants
Interest in the Company:
Dato’ Koon Poh Tat
- spouse 133,174 - - 133,174
Koon Poh Ming
- spouse 1,000,000 - - 1,000,000
Koon Poh Kong
- spouse 151,000 - - 151,000
Koon Poh Weng
- spouse 190,000 - - 190,000
- child 2,000 - - 2,000
DIRECTORS’ REPORT
for the year ended 31 December 2012 cont’d
47ANNUAL REPORT 2012
DIRECTORS’ INTERESTS IN SHARES cont’d
Number of RCSLS together with one free warrant
per one RCSLS of RM2.20 each
At date
1.1.2012 Bought Exercised
At
31.12.2012
Warrants cont’d
Interest in the Company: cont’d
Tuan Haji Mohamad Faiz bin Abdul Hamid 47,466 - - 47,466
Tan Heng Kui 37,000 - - 37,000
Deemed interest in the Company:
Dato’ Koon Poh Keong * 105,319,860 - (65,000,000) 40,319,860
Koon Poh Ming * 105,319,860 - (65,000,000) 40,319,860
* Deemed interested by virtue of the Directors’ interests in Alpha Milestone Sdn. Bhd.
Number of options over ordinary shares of
RM0.50 each
At
1.1.2012 Exercised Lapsed
At
31.12.2012
Interest in the Company:
Dato’ Koon Poh Keong 350,000 - (350,000) -
Koon Poh Ming 350,000 - (350,000) -
Dato’ Koon Poh Tat 260,000 (260,000) - -
Koon Poh Kong 260,000 (260,000) - -
Koon Poh Weng 260,000 (260,000) - -
Tuan Haji Mohamad Faiz bin Abdul Hamid 50,000 (50,000) - -
Dato’ Megat Abdul Rahman bin Megat Ahmad 30,000 (30,000) - -
Loo Lean Hock 10,000 (10,000) - -
Tan Heng Kui 10,000 (10,000) - -
DIRECTORS’ BENEFITS
Since the end of the previous financial year, no Director of the Company has received nor become entitled to receive any benefit
(other than a benefit included in the aggregate amount of emoluments received or due and receivable by Directors as shown
in the financial statements) by reason of a contract made by the Company or a related corporation with the Director or with a
firm of which the Director is a member, or with a company in which the Director has a substantial financial interest, other than a
Director who has significant financial interests in a company which received rental income from certain companies in the Group
in the ordinary course of business as disclosed in Note 31 to the financial statements.
There were no arrangements during and at the end of the financial year which had the object 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 apart from the issue of RCSLS together with free warrants and the Employees’ Share Option Scheme (“ESOS”).
DIRECTORS’ REPORT
for the year ended 31 December 2012 cont’d
48 PRESS METAL BERHAD 153208 W
ISSUE OF SHARES AND DEBENTURES
There were no changes in the authorised capital of the Company during the financial year.
During the financial year, the Company issued:
a) 3,298,000 new ordinary shares of RM0.50 each for cash arising from the exercise of employees’ share options at an
exercise price of RM1.50 per ordinary share.
b) 65,001,000 new ordinary shares of RM0.50 each for cash arising from the exercise of warrants at an exercise price of
RM2.20 per ordinary share.
There were no other changes in the issued and paid-up capital of the Company during the financial year.
There were no debentures issued during the financial year.
OPTIONS GRANTED OVER UNISSUED SHARES
No options were granted to any person to take up unissued shares of the Company during the financial year.
RCSLS together with free warrants
At the extraordinary general meeting held on 29 June 2011, the Company’s shareholders approved a proposed renounceable
rights issue of up to RM323,735,042 nominal value of 8 year 6% RCSLS at 100% of its nominal value together with up to
147,152,292 free warrants on the basis of one RM2.20 nominal value of RCSLS together with one warrant for every three
existing ordinary shares of RM0.50 each held in the Company.
On 26 August 2011, the Company issued 145,684,940 RCSLS together with 145,684,940 free detachable warrants for cash
of RM320,506,868. The RCSLS are convertible into 145,684,940 ordinary shares of RM0.50 each from the first anniversary
of the issue date of the RCSLS up to 22 August 2019 at the option of the holder, which is at a rate of one ordinary share of
RM0.50 each for every one RCSLS held; unconverted RCSLS will be entitled to receive a coupon of 6% per annum based on
the nominal value of RCSLS held.
The warrants are in registered form and constituted by a deed poll. The registered holders are entitled to subscribe for one
new ordinary share of RM0.50 in the Company at a price of RM2.20 per ordinary share for every warrant held. The conversion
ratio is subject to the aforesaid deed poll and can be exercised at any time during the eight-year subscription period up to 22
August 2019.
As at 31 December 2012, 65,001,000 warrants have been exercised by the registered holders while no RCSLS has been
exercised.
ESOS
At the extraordinary general meeting held on 26 June 2007, the Company’s shareholders approved the establishment of a
new ESOS of not more than 10% of the issued share capital of the Company to eligible Directors and employees of the Group
(“New ESOS”), subsequent to the expiry of the former ESOS on 5 June 2007.
In June 2012, the New ESOS has also expired.
The salient features of the New ESOS are, inter alia, as follows:
(i) any employee of the Group shall be eligible to participate in the New ESOS, if at the date of offer, the employee:-
(a) has attained the age of eighteen (18) years; and
(b) is a Malaysian and employed by any company within the Group (other than a company which is dormant).
DIRECTORS’ REPORT
for the year ended 31 December 2012 cont’d
49ANNUAL REPORT 2012
OPTIONS GRANTED OVER UNISSUED SHARES cont’d
ESOS cont’d
(ii) the option price shall be based on the weighted average market price of the Company’s ordinary shares for the five (5)
market days preceding the date of offer, with a discount of not more than ten per cent (10%), if deemed appropriate
(subject to such adjustments in accordance with rules, terms and conditions of the New ESOS), or the par value of the
Company’s ordinary shares, whichever is higher.
(iii) the New ESOS shall be in force for a period of five (5) years from the date of offer and may be extended to a duration of
ten (10) years or such longer duration as permitted by the relevant authorities.
(iv) the options granted may be exercised according to the following scale based on the discretion of the ESOS
committee:
Percentage of options exercisable
Number of options granted Year 1 Year 2 Year 3 Year 4 Year 5
17,891,754 20% 20% 20% 20% 20%
Options exercisable in a particular year but not exercised could be carried forward to the subsequent years subject to
the time limit of the New ESOS.
The options offered to take up unissued ordinary shares of RM0.50 each and the exercise price are as follows:
Date of offer
Exercise
price
At
1.1.2012 Granted Exercised Lapsed
At
31.12.2012
RM ’000 ’000 ’000 ’000 ’000
26.6.2007 1.50 5,251 - (3,298) (1,953) -
OTHER STATUTORY INFORMATION
Before the financial statements of the Group and of the Company were made out, the Directors took reasonable steps to
ascertain that:
i) all known bad debts have been written off and adequate provision made for doubtful debts, and
ii) any current assets which were unlikely to be realised in the ordinary course of business have been written down to an
amount which they might be expected so to realise.
At the date of this report, the Directors are not aware of any circumstances:
i) that would render the amount written off for bad debts, or the amount of the provision for doubtful debts, in the Group
and in the Company inadequate to any substantial extent, or
ii) that would render the value attributed to the current assets in the financial statements of the Group and of the Company
misleading, or
iii) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of
the Company misleading or inappropriate, or
iv) not otherwise dealt with in this report or the financial statements, that would render any amount stated in the financial
statements of the Group and of the Company misleading.
DIRECTORS’ REPORT
for the year ended 31 December 2012 cont’d
50 PRESS METAL BERHAD 153208 W
OTHER STATUTORY INFORMATION cont’d
At the date of this report, there does not exist:
i) any charge on the assets of the Group or of the Company that has arisen since the end of the financial year and which
secures the liabilities of any other person, or
ii) any contingent liability in respect of the Group or of the Company that has arisen since the end of the financial year.
No contingent liability or other liability of any company in the Group has become enforceable, or is likely to become enforceable
within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may
substantially affect the ability of the Group and of the Company to meet their obligations as and when they fall due.
In the opinion of the Directors, except for the realised and unrealised foreign exchange differences as disclosed in Note 21 to
the financial statements and the recognition of deferred tax benefits from the Investment Tax Allowance (“ITA”) obtained by a
subsidiary as disclosed in Note 22 to the financial statements, the financial performance of the Group and of the Company for
the financial year ended 31 December 2012 have not been substantially affected by any item, transaction or event of a material
and unusual nature nor has any such item, transaction or event occurred in the interval between the end of that financial year
and the date of this report.
SIGNIFICANT EVENTS DURING THE YEAR
i) In February 2012, Press Metal International Ltd., a wholly-owned subsidiary of the Company, acquired a new 70%-owned
subsidiary, PMIT Solar Pty. Ltd., a company incorporated in Australia, with an issued and paid-up capital of AUD100 for
a purchase consideration of AUD70.
ii) In May 2012, Press Metal Bintulu Sdn. Bhd., a wholly-owned subsidiary of the Company, obtained a RM350 million
syndicated term loan facility for the construction of a new aluminium smelting plant in Samalaju, Sarawak. As at the end
of the current financial year, Press Metal Bintulu Sdn. Bhd. has fully drawn down the term loan.
iii) In July 2012, the Company acquired a new wholly-owned subsidiary, Press Metal North America LLC., a company
incorporated in the United States of America, with an issued and paid-up capital of USD500 for a purchase consideration
of USD500. Subsequently, the Company subscribed for an additional 949,000 new ordinary shares of USD1.00 each at
par, for a total purchase consideration of USD949,000.
iv) In July 2012, Press Metal Sarawak Sdn. Bhd., an 80%-owned subsidiary of the Company, obtained the approval from
the Malaysian Investment Development Authority (“MIDA”) providing the subsidiary with an ITA of 100% on capital
expenditures incurred towards the production of aluminium products over a period of 5 years from 24 January 2008 to
23 January 2013.
Pursuant to the approval, the subsidiary is qualified to claim ITA of approximately RM600 million, resulting in the recognition
of deferred tax assets of approximately RM150 million by the Group.
AUDITORS
The auditors, Messrs KPMG, have indicated their willingness to accept re-appointment.
Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:
DATO’ KOON POH KEONG DATO’ KOON POH TAT
Petaling Jaya, Selangor
25 April 2013
DIRECTORS’ REPORT
for the year ended 31 December 2012 cont’d
51ANNUAL REPORT 2012
STATEMENTS OF FINANCIAL POSITIONas at 31 December 2012
Group Company
Note 31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Assets
Property, plant and
equipment 3 2,788,887 1,873,003 1,333,894 129,015 132,304 134,292
Intangible assets 4 14,225 13,380 13,187 - - -
Investment properties 5 5,351 5,634 5,797 - - -
Investments in
subsidiaries 6 - - - 533,949 531,601 485,751
Investment in an
associate 7 34,466 32,298 28,003 11,812 11,812 11,812
Other investments 8 1,803 6,837 6,477 750 750 750
Deferred tax assets 9 98,424 1,598 1,042 - - -
Trade and other
receivables 10 - - - 62,965 62,841 -
Total non-current assets 2,943,156 1,932,750 1,388,400 738,491 739,308 632,605
Inventories 11 419,007 375,225 327,165 32,576 29,285 21,225
Trade and other
receivables 10 944,149 812,203 704,052 1,221,898 678,780 543,205
Current tax assets 4,256 7,259 2,520 - - -
Cash and cash
equivalents 12 271,770 369,977 201,211 22,995 188,382 67,694
1,639,182 1,564,664 1,234,948 1,277,469 896,447 632,124
Assets classified as held
for sale 13 203,160 - - - - -
Total current assets 1,842,342 1,564,664 1,234,948 1,277,469 896,447 632,124
Total assets 4,785,498 3,497,414 2,623,348 2,015,960 1,635,755 1,264,729
52 PRESS METAL BERHAD 153208 W
STATEMENTS OF FINANCIAL POSITION
as at 31 December 2012cont’d
Group Company
Note 31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Equity
Share capital 253,890 219,740 215,031 253,890 219,740 215,031
Share premium 166,533 17,110 3,982 166,533 17,110 3,982
Reserves 63,560 108,859 (1,935) 56,762 92,952 5,166
Retained earnings 769,094 598,582 497,732 227,206 225,511 219,245
Total equity attributable
to owners of the
Company 1,253,077 944,291 714,810 704,391 555,313 443,424
Non-controlling interests 151,448 113,896 100,643 - - -
Total equity 14 1,404,525 1,058,187 815,453 704,391 555,313 443,424
Liabilities
Trade and other payables,
including derivatives 15 51,997 120,228 106,049 - - 103,423
Loans and borrowings 16 1,112,632 642,944 396,125 228,440 232,362 69,820
Deferred tax liabilities 9 69,633 117,578 74,639 37,959 43,246 16,996
Total non-current
liabilities 1,234,262 880,750 576,813 266,399 275,608 190,239
Trade and other payables,
including derivatives 15 505,572 303,544 262,394 504,792 293,061 112,392
Loans and borrowings 16 1,479,671 1,248,332 964,938 533,244 508,208 516,834
Current tax payables 12,786 6,601 3,750 7,134 3,565 1,840
1,998,029 1,558,477 1,231,082 1,045,170 804,834 631,066
Liabilities classified as held
for sale 13 148,682 - - - - -
Total current liabilities 2,146,711 1,558,477 1,231,082 1,045,170 804,834 631,066
Total liabilities 3,380,973 2,439,227 1,807,895 1,311,569 1,080,442 821,305
Total equity and liabilities 4,785,498 3,497,414 2,623,348 2,015,960 1,635,755 1,264,729
The notes on pages 60 to 141 are an integral part of these financial statements.
53ANNUAL REPORT 2012
The notes on pages 60 to 141 are an integral part of these financial statements.
STATEMENTS OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME for the year ended 31 December 2012
Group Company
Note 2012 2011 2012 2011
RM’000 RM’000 RM’000 RM’000
Revenue 18 2,384,420 2,268,751 685,539 788,599
Cost of sales (1,985,358) (1,870,630) (608,890) (696,617)
Gross profit 399,062 398,121 76,649 91,982
Other income 18,837 13,807 9,371 3,844
Distribution expenses (96,979) (79,399) (4,541) (4,217)
Administrative expenses (87,192) (77,381) (10,180) (10,288)
Other expenses (30,648) (36,874) (10,118) (24,887)
Results from operating activities 203,080 218,274 61,181 56,434
Finance income 19 2,658 4,246 19,230 8,907
Finance costs 20 (108,406) (82,868) (58,827) (43,156)
Net finance costs (105,748) (78,622) (39,597) (34,249)
Share of profits of equity-accounted investee, net
of tax 2,812 4,295 - -
Profit before tax 21 100,144 143,947 21,584 22,185
Tax expense 22 121,684 (21,092) (6,502) (7,167)
Profit for the year 221,828 122,855 15,082 15,018
Other comprehensive (expense)/income, net
of tax
Items that may be reclassified subsequently
to profit or loss
Foreign currency translation differences for foreign
operations (9,486) 23,008 - -
Other comprehensive (expense)/income for
the year (9,486) 23,008 15,082 15,018
Total comprehensive income for the year 212,342 145,863 15,082 15,018
Profit attributable to:
Owners of the Company 183,899 109,602 15,082 15,018
Non-controlling interests 37,929 13,253 - -
Profit for the year 221,828 122,855 15,082 15,018
Total comprehensive income attributable to:
Owners of the Company 174,790 132,610 15,082 15,018
Non-controlling interests 37,552 13,253 - -
Total comprehensive income for the year 212,342 145,863 15,082 15,018
Basic earnings per ordinary share (sen) 23 40.29 25.15
Diluted earnings per ordinary share (sen) 23 N/A 24.85
54 PRESS METAL BERHAD 153208 W
CONSOLIDATED STATEMENT OF CHANGES IN EQUITYfor the year ended 31 December 2012
Attributable to owners of the Company
Non-distributable Distributable
Group Note
Share
capital
Share
premium
Translation
reserve
Share
option
reserve
RCSLS
reserve
Warrants
reserve
Retained
earnings Total
Non-
controlling
interests
Total
equity
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
At 1 January 2011 215,031 3,982 (7,101) 5,166 - - 497,732 714,810 100,643 815,453
Foreign currency
translation
differences for
foreign operations - - 23,008 - - - - 23,008 - 23,008
Total other
comprehensive
income for the year - - 23,008 - - - - 23,008 - 23,008
Profit for the year - - - - - - 109,602 109,602 13,253 122,855
Total
comprehensive
income for the
year - - 23,008 - - - 109,602 132,610 13,253 145,863
Contributions by
and distributions
to owners of the
Company
- Share options
exercised 14 4,709 9,419 - - - - - 14,128 - 14,128
- Issue of RCSLS, net
of tax 16 - - - - 14,408 - - 14,408 - 14,408
- Issue of warrants 16 - - - - - 76,475 - 76,475 - 76,475
- Share-based
payment
transactions 17 - - - 645 - - - 645 - 645
- Dividends to owners
of the Company 24 - - - - - - (8,785) (8,785) - (8,785)
Total transactions
with owners of the
Company 4,709 9,419 - 645 14,408 76,475 (8,785) 96,871 - 96,871
Transfer to retained
earnings for share
options lapsed - - - (33) - - 33 - - -
Transfer to share
premium for share
options exercised - 3,709 - (3,709) - - - - - -
At 31 December
2011 219,740 17,110 15,907 2,069 14,408 76,475 598,582 944,291 113,896 1,058,187
55ANNUAL REPORT 2012
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2012cont’d
Attributable to owners of the Company
Non-distributable Distributable
Group Note
Share
capital
Share
premium
Translation
reserve
Share
option
reserve
RCSLS
reserve
Warrants
reserve
Retained
earnings Total
Non-
controlling
interests
Total
equity
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
At 1 January 2012 219,740 17,110 15,907 2,069 14,408 76,475 598,582 944,291 113,896 1,058,187
Foreign currency
translation
differences for
foreign operations - - (9,109) - - - - (9,109) (377) (9,486)
Total other
comprehensive
expense for the
year - - (9,109) - - - - (9,109) (377) (9,486)
Profit for the year - - - - - - 183,899 183,899 37,929 221,828
Total
comprehensive
income for the
year - - (9,109) - - - 183,899 174,790 37,552 212,342
Contributions by
and distributions
to owners of the
Company
- Conversion of
warrants 14 32,501 110,502 - - - - - 143,003 - 143,003
- Share options
exercised 14 1,649 3,298 - - - - - 4,947 - 4,947
- Share-based
payment
transactions 17 - - - 322 - - - 322 - 322
- Dividends to
owners of the
Company 24 - - - - - - (14,276) (14,276) - (14,276)
Total transactions
with owners of
the Company 34,150 113,800 - 322 - - (14,276) 133,996 - 133,996
Transfer to retained
earnings for share
options lapsed - - - (889) - - 889 - - -
Transfer to share
premium for share
options exercised - 1,502 - (1,502) - - - - - -
Transfer to
share premium
for warrants
exercised - 34,121 - - - (34,121) - - - -
At 31 December
2012 253,890 166,533 6,798 - 14,408 42,354 769,094 1,253,077 151,448 1,404,525
The notes on pages 60 to 141 are an integral part of these financial statements.
56 PRESS METAL BERHAD 153208 W
STATEMENT OF CHANGES IN EQUITYfor the year ended 31 December 2012
Non-distributable Distributable
Company Note
Share
capital
Share
premium
Share
option
reserve
RCSLS
reserve
Warrants
reserve
Retained
earnings
Total
equity
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
At 1 January 2011 215,031 3,982 5,166 - - 219,245 443,424
Profit and total comprehensive
income for the year - - - - - 15,018 15,018
Contributions by and distributions
to owners of the Company
- Share options exercised 14 4,709 9,419 - - - - 14,128
- Issue of RCSLS, net of tax 16 - - - 14,408 - - 14,408
- Issue of warrants 16 - - - - 76,475 - 76,475
- Share-based payment
transactions 17 - - 645 - - - 645
- Dividends to owners of the
Company 24 - - - - - (8,785) (8,785)
Total transactions with owners
of the Company 4,709 9,419 645 14,408 76,475 (8,785) 96,871
Transfer to retained earnings for
share options lapsed - - (33) - - 33 -
Transfer to share premium for
share options exercised - 3,709 (3,709) - - - -
At 31 December 2011 219,740 17,110 2,069 14,408 76,475 225,511 555,313
1 January 2012 219,740 17,110 2,069 14,408 76,475 225,511 555,313
Profit and total comprehensive
income for the year - - - - - 15,082 15,082
Contributions by and distributions
to owners of the Company
Conversion of warrants 14 32,501 110,502 - - - - 143,003
Share options exercised 14 1,649 3,298 - - - - 4,947
Share-based payment
transactions 17 - - 322 - - - 322
Dividends to owners of the
Company 24 - - - - - (14,276) (14,276)
Total transactions with owners
of the Company 34,150 113,800 322 - - (14,276) 133,996
Transfer to retained earnings for
share options lapsed - - (889) - - 889 -
Transfer to share premium for
share options exercised - 1,502 (1,502) - - - -
Transfer to share premium for
warrants exercised - 34,121 - - (34,121) - -
At 31 December 2012 253,890 166,533 - 14,408 42,354 227,206 704,391
The notes on pages 60 to 141 are an integral part of these financial statements.
57ANNUAL REPORT 2012
STATEMENTS OF CASH FLOWSfor the year ended 31 December 2012
Group Company
2012 2011 2012 2011
RM’000 RM’000 RM’000 RM’000
Cash flows from operating activities
Profit before tax 100,144 143,947 21,584 22,185
Adjustments for:
Depreciation of investment properties 121 112 - -
Depreciation of property, plant and equipment 113,396 98,092 15,970 15,608
Derivative loss - 2,994 - 2,994
Deposits written off 1,448 - 1,448 -
Dividend income - - (644) (322)
Equity settled share-based payment transactions 322 645 322 645
Finance costs 108,406 82,868 58,827 43,156
Finance income (2,658) (3,535) (19,230) (8,196)
Gain on disposal on investment properties (1) - - -
(Gain)/Loss on disposal of property, plant and equipment (991) 250 (174) 126
Impairment loss on investments in subsidiaries - - 554 4,200
Impairment loss on investment properties - 51 - -
Impairment loss on property, plant and equipment 45 257 - -
Patents written off 193 - - -
Property, plant and equipment written off 111 3,704 - -
Share of profits of equity-accounted investee, net of tax (2,812) (4,295) - -
Unrealised foreign exchange differences (3,848) 2,847 (2,941) 2,937
Waiver of amount due from a subsidiary - - - 3,503
Operating profit before changes in working capital 313,876 327,937 75,716 86,836
Change in inventories (100,053) (48,060) (3,291) (8,060)
Change in trade and other payables 258,772 3,907 (37,563) 33,689
Change in trade and other receivables (481,594) (430,194) 270,105 (43,468)
Cash (used in)/generated from operations (8,999) (146,410) 304,967 68,997
Tax paid (15,210) (12,951) (8,220) (6,911)
Tax refunded 109 - - -
Net cash (used in)/from operating activities (24,100) (159,361) 296,747 62,086
Cash flows from investing activities
Acquisition of patents - (193) - -
Acquisition of property, plant and equipment (802,675) (236,999) (11,943) (12,660)
Acquisition of subsidiaries, net of cash and cash
equivalents acquired (Note 32) 47 - - -
Dividends received from an associate 644 322 644 322
Increase in investments in subsidiaries - - (2,902) -
Interest received from fixed deposits 2,658 3,535 - 1,294
Proceeds from disposal of investment properties 163 - - -
Proceeds from disposal of property, plant and equipment 10,898 1,682 280 150
Proceeds from government grant obtained - 4,480 - -
Net cash used in investing activities (788,265) (227,173) (13,921) (10,894)
58 PRESS METAL BERHAD 153208 W
Group Company
2012 2011 2012 2011
RM’000 RM’000 RM’000 RM’000
Cash flows from financing activities
Dividends paid to owners of the Company (14,276) (8,785) (14,276) (8,785)
Drawdown of bankers’ acceptances 193,600 171,443 38,946 28,843
Drawdown of revolving credits 44,055 93,304 - -
Increase in amounts due from subsidiaries - - (563,697) (173,630)
Increase in amount due to an associate 119 2,107 - 1,948
Interest paid on loans and borrowings (93,007) (78,434) (41,491) (38,222)
Interest received from loan to a subsidiary - - 19,230 6,902
Net proceeds from RCSLS together with free warrants - 313,688 - 313,688
Placement of deposits pledged with licensed banks (7,723) (4,373) - -
Proceeds from issue of shares via ESOS 4,947 14,128 4,947 14,128
Proceeds from issue of shares via warrants conversion 143,003 - 143,003 -
Proceeds from/(Repayment of) term loans 456,368 44,353 (37,713) (82,321)
Repayment of finance lease liabilities (13,211) (7,534) (787) (991)
Net cash from/(used in) financing activities 713,875 539,897 (451,838) 61,560
Net (decrease)/increase in cash and cash
equivalents (98,490) 153,363 (169,012) 112,752
Effect of exchange rate fluctuations on cash held 5,979 2,970 - -
Cash and cash equivalents at 1 January 353,973 197,640 180,446 67,694
Cash and cash equivalents at 31 December 261,462 353,973 11,434 180,446
Cash and cash equivalents
Cash and cash equivalents included in the statements of cash flows comprise the following statements of financial position
amounts:
Group Company
Note 2012 2011 2012 2011
RM’000 RM’000 RM’000 RM’000
Deposits (excluding deposits pledged) 12 86,923 68,410 391 391
Cash and bank balances:
- cash and cash equivalents 12 169,227 293,670 22,604 187,991
- disposal group held for sale 13 17,249 - - -
Bank overdrafts 16 (11,937) (8,107) (11,561) (7,936)
261,462 353,973 11,434 180,446
STATEMENTS OF CASH FLOWS
for the year ended 31 December 2012cont’d
59ANNUAL REPORT 2012
STATEMENTS OF CASH FLOWS
for the year ended 31 December 2012cont’d
Acquisition of property, plant and equipment
During the year, the Group and the Company acquired property, plant and equipment with an aggregate cost of
RM1,153,899,000 (2011: RM623,583,000) and RM12,787,000 (2011: RM13,896,000) respectively, as follows:
Group Company
2012 2011 2012 2011
RM’000 RM’000 RM’000 RM’000
Satisfied by cash 802,675 236,999 11,943 12,660
By means of finance leases 15,837 21,363 844 1,236
Reclassified from deposits 335,387 322,024 - -
Payable to Sarawak government in future years - 43,197 - -
1,153,899 623,583 12,787 13,896
The notes on pages 60 to 141 are an integral part of these financial statements.
60 PRESS METAL BERHAD 153208 W
NOTES TO THE FINANCIAL STATEMENTS
Press Metal Berhad is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Market
of Bursa Malaysia Securities Berhad. The addresses of the principal place of business and registered office of the Company
are as follows:
PRINCIPAL PLACE OF BUSINESS
Lot 6464 Batu 5 ¾
Jalan Kapar, Sementa
42100 Klang
Selangor Darul Ehsan
REGISTERED OFFICE
Lot 6.05, Level 6
KPMG Tower
8 First Avenue, Bandar Utama
47800 Petaling Jaya
Selangor Darul Ehsan
The consolidated financial statements of the Company as at and for the financial year ended 31 December 2012 comprise
the Company and its subsidiaries (together referred to as the “Group” and individually referred to as “Group entities”) and the
Group’s interest in an associate. The financial statements of the Company as at and for the financial year ended 31 December
2012 do not include other entities.
The Company is principally engaged in the manufacturing and marketing of aluminium products, whilst the principal activities
of the subsidiaries are as stated in Note 6.
These financial statements were authorised for issue by the Board of Directors on 25 April 2013.
1. BASIS OF PREPARATION
(a) Statement of compliance
The financial statements of the Group and the Company have been prepared in accordance with Malaysian
Financial Reporting Standards (“MFRSs”), International Financial Reporting Standards and the Companies Act,
1965 in Malaysia. These are the Group and the Company’s first financial statements prepared in accordance with
MFRSs and MFRS 1, First-time Adoption of Malaysian Financial Reporting Standards has been applied.
In the previous financial years, the financial statements of the Group and of the Company were prepared in
accordance with Financial Reporting Standards (“FRSs”) in Malaysia. The financial impacts on transition to MFRSs
are disclosed in Note 34.
The Group and the Company have early adopted the amendments to MFRS 101, Presentation of Financial
Statements – Presentation of Items of Other Comprehensive Income which is effective for annual periods
beginning on or after 1 July 2012. The early adoption of the amendments to MFRS 101 has no impact on the
financial statements other than the presentation format of the statement of profit or loss and other comprehensive
income.
The following are accounting standards, amendments and interpretations of the MFRS framework that have been
issued by the Malaysian Accounting Standards Board (“MASB”) but have not been adopted by the Group and by
the Company:
MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January
2013
Consolidated Financial Statements
Joint Arrangements
Disclosure of Interests in Other Entities
Fair Value Measurement
61ANNUAL REPORT 2012
NOTES TO THE FINANCIAL STATEMENTScont’d
1. BASIS OF PREPARATION cont’d
(a) Statement of compliance cont’d
MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January
2013 cont’d
Employee Benefits (2011)
Separate Financial Statements (2011)
Investments in Associates and Joint Ventures (2011)
Stripping Costs in the Production Phase of a Surface Mine
Financial Instruments: Disclosures – Offsetting Financial Assets and Financial Liabilities
First-time Adoption of Malaysian Financial Reporting Standards – Government Loans
First-time Adoption of Malaysian Financial Reporting Standards (Annual Improvements
2009-2011 Cycle)
Presentation of Financial Statements (Annual Improvements 2009-2011 Cycle)
Property, Plant and Equipment (Annual Improvements 2009-2011 Cycle)
Financial Instruments: Presentation (Annual Improvements 2009-2011 Cycle)
Interim Financial Reporting (Annual Improvements 2009-2011 Cycle)
Consolidated Financial Statements: Transition Guidance
Joint Arrangements: Transition Guidance
Disclosure of Interests in Other Entities: Transition Guidance
MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January
2014
Consolidated Financial Statements: Investment Entities
Disclosure of Interests in Other Entities: Investment Entities
Separate Financial Statements (2011): Investment Entities
Financial Instruments: Presentation – Offsetting Financial Assets and Financial
Liabilities
MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January
2015
Financial Instruments (2009)
Financial Instruments (2010)
Financial Instruments: Disclosures – Mandatory Effective Date of MFRS 9 and
Transition Disclosures
The Group and the Company plan to apply the abovementioned standards, amendments and interpretations:
that are effective for annual periods beginning on or after 1 January 2013, except for IC Interpretation 20
which is not applicable to the Group and to the Company.
that are effective for annual periods beginning on or after 1 January 2014.
that are effective for annual periods beginning on or after 1 January 2015.
62 PRESS METAL BERHAD 153208 W
NOTES TO THE FINANCIAL STATEMENTScont’d
1. BASIS OF PREPARATION cont’d
(a) Statement of compliance cont’d
Material impact of initial application of a standard, an amendment or an interpretation, which will be applied
retrospectively, is discussed below:
MFRS 10, Consolidated Financial Statements
MFRS 10 introduces a new single control model to determine which investees should be consolidated. MFRS 10
supersedes MFRS 127, Consolidated and Separate Financial Statements and IC Interpretation 112, Consolidation
– Special Purpose Entities. There are three elements to the definition of control in MFRS 10: (i) power by investor
over an investee, (ii) exposure, or rights, to variable returns from investor’s involvement with the investee, and (iii)
investor’s ability to affect those returns through its power over the investee.
The Group is in the process of re-evaluating its involvement with its investee to assess the impact of MFRS 10.
The initial application of other standards, amendments and interpretations is not expected to have any material
financial impacts to the current and prior periods financial statements of the Group and of the Company upon their
first adoption.
(b) Basis of measurement
The financial statements have been prepared on the historical cost basis other than as disclosed in Note 2.
(c) Functional and presentation currency
These financial statements are presented in Ringgit Malaysia (“RM”), which is the Company’s functional currency.
All financial information is presented in RM and has been rounded to the nearest thousand, unless otherwise
stated.
(d) Use of estimates and judgements
The preparation of the financial statements in conformity with MFRSs requires management to make judgements,
estimates and assumptions that affect the application of accounting policies and the reported amounts of assets,
liabilities, income and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimates are revised and in any future periods affected.
There are no significant areas of estimation uncertainty and critical judgements in applying accounting policies that
have significant effect on the amounts recognised in the financial statements other than those disclosed in the
following notes:
63ANNUAL REPORT 2012
NOTES TO THE FINANCIAL STATEMENTScont’d
2. SIGNIFICANT ACCOUNTING POLICIES
The accounting policies set out below have been applied consistently to the periods presented in these financial
statements, and in preparing the opening MFRS statements of financial position of the Group and of the Company at 1
January 2011 (the transition date to MFRS framework), unless otherwise stated.
(a) Basis of consolidation
(i) Subsidiaries
Subsidiaries are entities, including unincorporated entities, controlled by the Company. The financial
statements of subsidiaries are included in the consolidated financial statements from the date that control
commences until the date that control ceases. Control exists when the Company has the ability to exercise
its power to govern the financial and operating policies of an entity so as to obtain benefits from its activities.
In assessing control, potential voting rights that presently are exercisable are taken into account.
Investments in subsidiaries are measured in the Company’s statement of financial position at cost less any
impairment losses, unless the investment is classified as held for sale or distribution. The cost of investments
includes transaction costs.
(ii) Business combinations
Business combinations are accounted for using the acquisition method from the acquisition date, which is
the date on which control is transferred to the Group.
Acquisitions on or after 1 January 2011
For acquisitions on or after 1 January 2011, the Group measures the cost of goodwill at the acquisition date
as:
acquiree; less
assumed.
When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.
For each business combination, the Group elects whether it measures the non-controlling interests in the
acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets at the
acquisition date.
Transaction costs, other than those associated with the issue of debt or equity securities, that the Group
incurs in connection with a business combination are expensed as incurred.
Acquisitions before 1 January 2011
As part of its transition to MFRS, the Group elected not to restate those business combinations that occurred
before the date of transition to MFRSs, i.e. 1 January 2011. Goodwill arising from acquisitions before 1
January 2011 has been carried forward from the previous FRS framework as at the date of transition.
(iii) Associates
Associates are entities, including unincorporated entities, in which the Group has significant influence, but
not control, over the financial and operating policies.
64 PRESS METAL BERHAD 153208 W
NOTES TO THE FINANCIAL STATEMENTScont’d
2. SIGNIFICANT ACCOUNTING POLICIES cont’d
(a) Basis of consolidation cont’d
(iii) Associates cont’d
Investments in associates are accounted for in the consolidated financial statements using the equity method less any impairment losses. The cost of the investment includes transaction costs. The consolidated financial statements include the Group’s share of the profit or loss and other comprehensive income of the associates, after adjustments if any, to align the accounting policies with those of the Group, from the date that significant influence commences until the date that significant influence ceases.
When the Group’s share of losses exceeds its interest in an associate, the carrying amount of that interest including any long-term investments is reduced to zero, and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the associate.
When the Group ceases to have significant influence over an associate, it is accounted for as a disposal of the entire interest in that associate, with a resulting gain or loss being recognised in profit or loss. Any retained interest in the former associate at the date when significant influence is lost is re-measured at fair value and this amount is regarded as the initial carrying amount of a financial asset.
When the Group’s interest in an associate decreases but does not result in a loss of significant influence, any retained interest is not re-measured. Any gain or loss arising from the decrease in interest is recognised in profit or loss. Any gains or losses previously recognised in other comprehensive income are also reclassified proportionately to profit or loss.
Investment in an associate is measured in the Company’s statement of financial position at cost less any impairment losses. The cost of the investment includes transaction costs.
(iv) Non-controlling interests
Non-controlling interests at the end of the reporting period, being the equity in a subsidiary not attributable directly or indirectly to the equity holders of the Company, are presented in the consolidated statement of financial position and statement of changes in equity within equity, separately from equity attributable to the owners of the Company. Non-controlling interests in the results of the Group is presented in the consolidated statement of profit or loss and other comprehensive income as an allocation of the profit or loss and the comprehensive income for the year between non-controlling interests and owners of the Company.
Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance.
(v) Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements.
Unrealised gains arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the Group’s interest in the investees. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.
(b) Foreign currency
(i) Foreign currency transactions
Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies at the end of the reporting period are
retranslated to the functional currency at the exchange rate at that date.
65ANNUAL REPORT 2012
NOTES TO THE FINANCIAL STATEMENTScont’d
2. SIGNIFICANT ACCOUNTING POLICIES cont’d
(b) Foreign currency cont’d
(i) Foreign currency transactions cont’d
Non-monetary assets and liabilities denominated in foreign currencies are not retranslated at the end of the
reporting date except for those that are measured at fair value are retranslated to the functional currency at
the exchange rate at the date that the fair value was determined.
Foreign currency differences arising on retranslation are recognised in profit or loss, except for differences arising
on the retranslation of available-for-sale equity instruments, which are recognised in other comprehensive
income.
(ii) Operations denominated in functional currencies other than Ringgit Malaysia
The assets and liabilities of operations denominated in functional currencies other than RM, including goodwill
and fair value adjustments arising on acquisition, are translated to RM at exchange rates at the end of the
reporting period, except for goodwill and fair value adjustments arising from business combinations before 1
January 2011 which are treated as assets and liabilities of the Company. The income and expenses of foreign
operations are translated to RM at exchange rates at the dates of the transactions.
Foreign currency differences are recognised in other comprehensive income and accumulated in the foreign
currency translation reserve (“FCTR”) in equity. However, if the operation is a non-wholly-owned subsidiary,
then the relevant proportionate share of the translation difference is allocated to the non-controlling interests.
When a foreign operation is disposed of such that control, significant influence or joint control is lost, the
cumulative amount in the FCTR related to that foreign operation is reclassified to profit or loss as part of the
profit or loss on disposal.
When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation, the
relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the Group
disposes of only part of its investment in an associate or joint venture that includes a foreign operation while
retaining significant influence or joint control, the relevant proportion of the cumulative amount is reclassified
to profit or loss.
In the consolidated financial statements, when settlement of a monetary item receivable from or payable to
a foreign operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses
arising from such a monetary item are considered to form part of a net investment in a foreign operation and
are recognised in other comprehensive income, and are presented in the FCTR in equity.
(c) Financial instruments
(i) Initial recognition and measurement
A financial asset or a financial liability is recognised in the statement of financial position when, and only
when, the Group or the Company becomes a party to the contractual provisions of the instrument.
A financial instrument is recognised initially, at its fair value plus, in the case of a financial instrument not at fair
value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the
financial instrument.
An embedded derivative is recognised separately from the host contract and accounted for as a derivative if,
and only if, it is not closely related to the economic characteristics and risks of the host contract and the host
contract is not categorised at fair value through profit or loss. The host contract, in the event an embedded
derivative is recognised separately, is accounted for in accordance with policy applicable to the nature of the
host contract.
66 PRESS METAL BERHAD 153208 W
NOTES TO THE FINANCIAL STATEMENTScont’d
2. SIGNIFICANT ACCOUNTING POLICIES cont’d
(c) Financial instruments cont’d
(ii) Financial instrument categories and subsequent measurement
The Group and the Company categorise financial instruments as follows:
Financial assets
(a) Loans and receivables
Loans and receivables category comprises debt instruments that are not quoted in an active market.
Financial assets categorised as loans and receivables are subsequently measured at amortised cost
using the effective interest method.
(b) Available-for-sale financial assets
Available-for-sale category comprises investment in equity instruments that are not held for trading.
Investments in equity instruments that do not have a quoted market price in an active market and
whose fair value cannot be reliably measured are measured at cost.
All financial assets are subject to review for impairment (see Note 2(k)(i)).
Financial liabilities
All financial liabilities are subsequently measured at amortised cost other than those categorised as fair value
through profit or loss.
Fair value through profit or loss category comprises financial liabilities that are derivatives (except for a
derivative that is a financial guarantee contract).
Derivatives that are linked to and must be settled by delivery of unquoted equity instruments whose fair
values cannot be reliably measured are measured at cost.
Other derivatives are subsequently measured at their fair values with the gain or loss recognised in profit or
loss.
(iii) Financial guarantee contracts
A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse
the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with
the original or modified terms of a debt instrument.
Financial guarantee contracts are classified as deferred income and are amortised to profit or loss using a
straight-line method over the contractual period or, when there is no specified contractual period, recognised
in profit or loss upon discharge of the guarantee. When settlement of a financial guarantee contract becomes
probable, an estimate of the obligation is made. If the carrying value of the financial guarantee contract is
lower than the obligation, the carrying value is adjusted to the obligation amount and accounted for as a
provision.
(iv) Regular way purchase or sale of financial assets
A regular way purchase or sale is a purchase or sale of a financial asset under a contract whose terms
require delivery of the asset within the time frame established generally by regulation or convention in the
marketplace concerned.
67ANNUAL REPORT 2012
NOTES TO THE FINANCIAL STATEMENTScont’d
2. SIGNIFICANT ACCOUNTING POLICIES cont’d
(c) Financial instruments cont’d
(iv) Regular way purchase or sale of financial assets cont’d
A regular way purchase or sale of financial assets is recognised and derecognised, as applicable, using trade
date accounting. Trade date accounting refers to:
(a) the recognition of an asset to be received and the liability to pay for it on the trade date, and
(b) derecognition of an asset that is sold, recognition of any gain or loss on disposal and the recognition
of a receivable from the buyer for payment on the trade date.
(v) Derecognition
A financial asset or part of it is derecognised when, and only when the contractual rights to the cash flows
from the financial asset expire or the financial asset is transferred to another party without retaining control or
substantially all risks and rewards of the asset. On derecognition of a financial asset, the difference between
the carrying amount and the sum of the consideration received (including any new asset obtained less any
new liability assumed) and any cumulative gain or loss that had been recognised in equity is recognised in
profit or loss.
A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract
is discharged or cancelled or expires. On derecognition of a financial liability, the difference between the
carrying amount of the financial liability extinguished or transferred to another party and the consideration
paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.
(d) Property, plant and equipment
(i) Recognition and measurement
Freehold land and capital work-in-progress are measured at cost. Other items of property, plant and equipment
are measured at cost less any accumulated depreciation and any accumulated impairment losses.
Cost includes expenditures that are directly attributable to the acquisition of the asset and any other costs
directly attributable to bringing the asset to working condition for its intended use, and the costs of dismantling
and removing the items and restoring the site on which they are located. The cost of self-constructed assets
also includes the cost of materials and direct labour. For qualifying assets, borrowing costs are capitalised in
accordance with the accounting policy for borrowing costs.
Purchased software that is integral to the functionality of the related equipment is capitalised as part of that
equipment.
The cost of property, plant and equipment recognised as a result of a business combination is based on
fair value at acquisition date. The fair value of property is the estimated amount for which a property could
be exchanged between knowledgeable willing parties in an arm’s length transaction after proper marketing
wherein the parties had each acted knowledgeably, prudently and without compulsion. The fair value of other
items of plant and equipment is based on the quoted market prices for similar items when available and
replacement cost when appropriate.
When significant parts of an item of property, plant and equipment have different useful lives, they are
accounted for as separate items (major components) of property, plant and equipment.
The gain or loss on disposal of an item of property, plant and equipment is determined by comparing the
proceeds from disposal with the carrying amount of property, plant and equipment and is recognised net
within “other income” or “other expenses” respectively in profit or loss.
68 PRESS METAL BERHAD 153208 W
NOTES TO THE FINANCIAL STATEMENTScont’d
2. SIGNIFICANT ACCOUNTING POLICIES cont’d
(d) Property, plant and equipment cont’d
(ii) Subsequent costs
The cost of replacing a component of an item of property, plant and equipment is recognised in the carrying
amount of the item if it is probable that the future economic benefits embodied within the component will flow
to the Group or the Company, and its cost can be measured reliably. The carrying amount of the replaced
component is derecognised to profit or loss. The costs of the day-to-day servicing of property, plant and
equipment are recognised in profit or loss as incurred.
(iii) Depreciation
Depreciation is based on the cost of an asset less its residual value. Significant components of individual
assets are assessed, and if a component has a useful life that is different from the remainder of that asset,
then that component is depreciated separately.
Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each
component of an item of property, plant and equipment. Leased assets are depreciated over the shorter of
the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the
end of the lease term. Freehold land is not depreciated. Property, plant and equipment under construction
are not depreciated until the assets are ready for their intended use.
The estimated useful lives for the current and comparative periods are as follows:
Depreciation methods, useful lives and residual values are reviewed at the end of the reporting period and
adjusted as appropriate.
(e) Leased assets
(i) Finance lease
Leases in terms of which the Group or the Company assumes substantially all the risks and rewards of
ownership are classified as finance leases. Upon initial recognition, the leased asset is measured at an
amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent
to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that
asset.
Minimum lease payments made under finance leases are apportioned between the finance expense and the
reduction of the outstanding liability. The finance expense is allocated to each period during the lease term
so as to produce a constant periodic rate of interest on the remaining balance of the liability. Contingent lease
payments are accounted for by revising the minimum lease payments over the remaining term of the lease
when the lease adjustment is confirmed.
Leasehold land which in substance is a finance lease is classified as property, plant and equipment or
investment properties as appropriate.
69ANNUAL REPORT 2012
NOTES TO THE FINANCIAL STATEMENTScont’d
2. SIGNIFICANT ACCOUNTING POLICIES cont’d
(e) Leased assets cont’d
(ii) Operating lease Leases, where the Group or the Company does not assume substantially all the risks and rewards of
ownership are classified as operating leases and, the leased assets are not recognised in the statement of financial position.
Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognised in profit or loss as an integral part of the total lease expense, over the term of the lease. Contingent rentals are charged to profit or loss in the reporting period in which they are incurred.
(f) Intangible assets
(i) Goodwill
Goodwill arises on business combinations is measured at cost less any accumulated impairment losses.
(ii) Patents
Patents that are acquired by the Group, which have indefinite useful lives, are measured at cost less any accumulated impairment losses.
(iii) Subsequent expenditure
Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific assets to which it relates. All other expenditure is recognised in profit or loss as incurred.
(iv) Amortisation
Goodwill and intangible assets with indefinite useful lives are not amortised but are tested for impairment annually and whenever there is an indication that they may be impaired.
(g) Investment properties
(i) Investment properties carried at cost
Investment properties are properties which are owned to earn rental income or for capital appreciation or for both. These include freehold land, leasehold land and buildings which in substance are finance leases held for a currently undetermined future use or leased to third parties. Properties that are occupied by the companies in the Group are accounted for as owner-occupied rather than as investment properties. Investment properties initially and subsequently measured at cost are accounted for similarly to property, plant and equipment.
(ii) Determination of fair value
For the purpose of disclosure, the Directors estimate the fair values of the Group’s investment properties without involvement of independent valuers.
The fair values are based on market values, being the estimated amount for which a property could be exchanged on the date of the valuation between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably.
The Directors adopted the comparison method in arriving at the market value. The comparison method entails critical analyses of recent evidences of values of comparable properties in the neighbourhood and making adjustment for differences such as differences in location, size and shape of land, age and condition
of building, tenure, title restrictions if any and other relevant characteristics.
70 PRESS METAL BERHAD 153208 W
NOTES TO THE FINANCIAL STATEMENTScont’d
2. SIGNIFICANT ACCOUNTING POLICIES cont’d
(h) Inventories
Inventories are measured at the lower of cost and net realisable value.
The cost of inventories is measured based on first-in-first-out formula, and includes expenditure incurred in acquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existing location and condition. In the case of work-in-progress and finished goods, cost includes an appropriate share of production overheads based on normal operating capacity.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale.
The fair value of inventories acquired in a business combination is determined based on the estimated selling price in the ordinary course of business less the estimated costs of completion and sale, and a reasonable profit margin based on the effort required to complete and sell the inventories.
(i) Disposal group held for sale
Disposal group comprising assets and liabilities that are expected to be recovered primarily through sale rather than through continuing use, are classified as held for sale.
Immediately before classification as held for sale, the components of a disposal group, are remeasured in accordance with the Group’s accounting policies. Thereafter generally the components of the disposal group are measured at the lower of their carrying amount and fair value less costs to sell.
Any impairment loss on a disposal group is first allocated to goodwill, and then to remaining assets and liabilities on pro rata basis, except that no loss is allocated to inventories, financial assets, deferred tax assets, employee benefit assets and investment property, which continue to be measured in accordance with the Group’s accounting policies. Impairment losses on initial classification as held for sale and subsequent gains or losses on remeasurement are recognised in profit or loss. Gains are not recognised in excess of any cumulative impairment loss.
Property, plant and equipment once classified as held for sale are not amortised or depreciated.
(j) Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, balances and deposits with banks. For the purpose of the statement of cash flows, cash and cash equivalents are presented net of bank overdrafts and pledged deposits.
(k) Impairment
(i) Financial assets
All financial assets (except for investments in subsidiaries and investment in an associate) are assessed at each reporting date whether there is any objective evidence of impairment as a result of one or more events having an impact on the estimated future cash flows of the asset. Losses expected as a result of future events, no matter how likely, are not recognised. For an investment in an equity instrument, a significant or prolonged decline in the fair value below its cost is an objective evidence of impairment. If any such objective evidence exists, then the financial asset’s recoverable amount is estimated.
An impairment loss in respect of loans and receivables is recognised in profit or loss and is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the asset’s original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account.
An impairment loss in respect of unquoted equity instrument that is carried at cost is recognised in profit or loss and is measured as the difference between the financial asset’s carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset.
Impairment losses recognised in profit or loss for an investment in an equity instrument classified as available
for sale is not reversed through profit or loss.
71ANNUAL REPORT 2012
NOTES TO THE FINANCIAL STATEMENTScont’d
2. SIGNIFICANT ACCOUNTING POLICIES cont’d
(k) Impairment cont’d
(ii) Other assets
The carrying amounts of other assets (except for inventories, deferred tax asset and disposal group classified
as held for sale) are reviewed at the end of each reporting period to determine whether there is any indication
of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. For goodwill,
and intangible assets that have indefinite useful lives, the recoverable amount is estimated each period at the
same time.
For the purpose of impairment testing, assets are grouped together into the smallest group of assets that
generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or
cash-generating units. Subject to an operating segment ceiling test, for the purpose of goodwill impairment
testing, cash-generating units to which goodwill has been allocated are aggregated so that the level at which
impairment testing is performed reflects the lowest level at which goodwill is monitored for internal reporting
purposes. The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated
to group of cash-generating units that are expected to benefit from the synergies of the combination.
The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value
less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present
value using a pre-tax discount rate that reflects current market assessments of the time value of money and
the risks specific to the asset or cash-generating unit.
An impairment loss is recognised if the carrying amount of an asset or its related cash-generating unit
exceeds its estimated recoverable amount.
Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of cash-generating
units are allocated first to reduce the carrying amount of any goodwill allocated to the cash-generating unit
(group of cash-generating units) and then to reduce the carrying amount of the other assets in the cash-
generating unit (groups of cash-generating units) on a pro rata basis.
An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses
recognised in prior periods are assessed at the end of each reporting period for any indications that the loss
has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates
used to determine the recoverable amount since the last impairment loss was recognised. An impairment
loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that
would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.
Reversals of impairment losses are credited to profit or loss in the financial year in which the reversals are
recognised.
(l) Equity instruments
Instruments classified as equity are measured at cost on initial recognition and are not remeasured subsequently.
(i) Issue expenses
Costs directly attributable to the issue of instruments classified as equity are recognised as a deduction from
equity.
(ii) Ordinary shares
Ordinary shares are classified as equity.
72 PRESS METAL BERHAD 153208 W
NOTES TO THE FINANCIAL STATEMENTScont’d
2. SIGNIFICANT ACCOUNTING POLICIES cont’d
(m) Compound financial instrument
A compound financial instrument is a non-derivative financial instrument that contains both a liability and equity
component.
Compound financial instruments issued by the Group comprise RCSLS that can be converted to share capital at
the option of the holder, when the number of shares to be issued does not vary with changes in their fair value.
The liability component of a compound financial instrument is recognised initially at fair value of a similar liability that
does not have an equity conversion option. The equity component is recognised initially at the difference between
the fair value of the compound financial instrument as a whole and the fair value of the liability component. Any
directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial
carrying amounts.
Subsequent to initial recognition, the liability component of a compound financial instrument is measured at
amortised cost using the effective interest method. The equity component of a compound financial instrument is
not remeasured subsequent to initial recognition.
Interest and losses and gains relating to the financial liability are recognised in profit or loss. On conversion, the
financial liability is reclassified to equity; no gain or loss is recognised on conversion.
(n) Employee benefits
(i) Short-term employee benefits
Short-term employee benefit obligations in respect of salaries, annual bonuses, paid annual leave and sick
leave are measured on an undiscounted basis and are expensed as the related service is provided.
A liability is recognised for the amount expected to be paid under short-term cash bonus or profit-sharing
plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service
provided by the employee and the obligation can be estimated reliably.
(ii) State plans
The Group’s contributions to statutory pension funds are charged to profit or loss in the financial year to
which they relate. Once the contributions have been paid, the Group has no further payment obligations.
(iii) Share-based payment transactions
The grant date fair value of share-based payment granted to employees is recognised as an employee
expense, with a corresponding increase in equity, over the period that the employees unconditionally become
entitled to the awards. The amount recognised as an expense is adjusted to reflect the number of awards for
which the related service and non-market vesting conditions are expected to be met, such that the amount
ultimately recognised as an expense is based on the number of awards that meet the related service and
non-market performance conditions at the vesting date.
The fair value of employee share options is measured using a Black Scholes model. Measurement inputs
include share price on measurement date, exercise price of the instrument, expected volatility (based on
weighted average historic volatility adjusted for changes expected due to publicly available information),
weighted average expected life of the instruments (based on historical experience and general option holder
behaviour), expected dividends, and the risk-free interest rate (based on government bonds). Service and
non-market performance conditions attached to the transactions are not taken into account in determining
fair value.
73ANNUAL REPORT 2012
NOTES TO THE FINANCIAL STATEMENTScont’d
2. SIGNIFICANT ACCOUNTING POLICIES cont’d
(o) Revenue and other income
(i) Goods sold
Revenue from the sale of goods in the course of ordinary activities is measured at fair value of the consideration received or receivable, net of returns and allowances, trade discount and volume rebates. Revenue is recognised when persuasive evidence exists, usually in the form of an executed sales agreement, that the significant risks and rewards of ownership have been transferred to the customer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, and there is no continuing management involvement with the goods, and the amount of revenue can be measured reliably. If it is probable that discounts will be granted and the amount can be measured reliably, then the discount is recognised as a reduction of revenue as the sales are recognised.
(ii) Services
Revenue from services rendered is recognised in profit or loss when the services are provided.
(iii) Rental income
Rental income from property is recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives granted are recognised as an integral part of the total rental income, over the term of the lease.
(iv) Government grants
Government grants that compensate the Group for the cost of an asset are recognised initially as deferred income at fair value when there is reasonable assurance that they will be received and that the Group will comply with the conditions associated with the grant and are then recognised in profit or loss as other income on a systematic basis over the useful life of the asset.
(v) Dividend income
Dividend income is recognised in profit or loss on the date that the Group’s or the Company’s right to receive payment is established, which in the case of quoted securities is the ex-dividend date.
(vi) Interest income
Interest income is recognised as it accrues using the effective interest method in profit or loss except for interest income arising from temporary investment of borrowings taken specifically for the purpose of obtaining a qualifying asset which is accounted for in accordance with the accounting policy on borrowing costs.
(p) Borrowing costs
Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective interest method.
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as part of the cost of those assets.
The capitalisation of borrowing costs as part of the cost of a qualifying asset commences when expenditure for the asset is being incurred, borrowing costs are being incurred and activities that are necessary to prepare the asset for its intended use or sale are in progress. Capitalisation of borrowing costs is suspended or ceases when substantially all the activities necessary to prepare the qualifying assets for its intended use or sale are interrupted or completed.
Investment income earned on the temporary investment of specific borrowings pending their expenditure on
qualifying assets is deducted from the borrowing costs eligible for capitalisation.
74 PRESS METAL BERHAD 153208 W
NOTES TO THE FINANCIAL STATEMENTScont’d
2. SIGNIFICANT ACCOUNTING POLICIES cont’d
(q) Income tax
Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognised in profit or
loss except to the extent that it relates to a business combination or items recognised directly in equity or other
comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates
enacted or substantively enacted by the end of the reporting period, and any adjustment to tax payable in respect
of previous financial years.
Deferred tax is recognised using the liability method, providing for temporary differences between the carrying
amounts of assets and liabilities in the statement of financial position and their tax bases. Deferred tax is not
recognised for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets
or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit
or loss. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences
when they reverse, based on the laws that have been enacted or substantively enacted by the end of the reporting
period.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and
assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different
tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities
will be realised simultaneously.
A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against
which the temporary difference can be utilised. Deferred tax assets are reviewed at the end of each reporting
period and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.
Unutilised investment tax allowance, being tax incentives that is not a tax base of an asset, is recognised as
a deferred tax asset to the extent that it is probable that the future taxable profits will be available against the
unutilised tax incentive can be utilised.
(r) Earnings per ordinary share
The Group presents basic and diluted earnings per share data for its ordinary shares (“EPS”).
Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the
weighted average number of ordinary shares outstanding during the period.
Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted
average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which
comprise RCSLS, warrants and share options granted to employees.
(s) Operating segments
An operating segment is a component of the Group that engages in business activities from which it may earn
revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s
other components. An operating segment’s operating results are reviewed regularly by the chief operating decision
maker, which in this case is the Chief Executive Officer of the Group, to make decisions about resources to be
allocated to the segment and to assess its performance, and for which discrete financial information is available.
75ANNUAL REPORT 2012
NOTES TO THE FINANCIAL STATEMENTScont’d
2. SIGNIFICANT ACCOUNTING POLICIES cont’d
(t) Contingencies
Contingent liabilities
Where it is not probable that an outflow of economic benefits will be required, or the amount cannot be estimated
reliably, the obligation is not recognised in the statements of financial position and is disclosed as a contingent
liability, unless the probability of outflow of economic benefits is remote. Possible obligations, whose existence
will only be confirmed by the occurrence or non-occurrence of one or more future events, are also disclosed as
contingent liabilities unless the probability of outflow of economic benefits is remote.
3. PROPERTY, PLANT AND EQUIPMENT
Group Land
Buildings
and
renovation
Plant
and
machinery
Office
equipment
Motor
vehicles
Furniture
and
fittings
Moulds
and dies
Capital
work-
in-
progress Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Cost
At 1 January 2011 286,151 566,723 644,888 34,120 31,384 5,961 139,274 26,761 1,735,262
Additions 65,883 39,295 318,808 3,630 27,354 298 34,178 134,137 623,583
Government grant obtained - - (4,480) - - - - - (4,480)
Disposals - - (1,352) (12) (1,706) - - - (3,070)
Write off - - (8,360) (217) (13) - - - (8,590)
Transfers - 23,933 3,393 - - - - (27,326) -
Effect of movements in
exchange rates 4,900 16,905 13,304 1,197 513 10 5,038 1,806 43,673
At 31 December 2011/1
January 2012 356,934 646,856 966,201 38,718 57,532 6,269 178,490 135,378 2,386,378
Additions 97 21,331 76,885 5,865 12,809 1,384 20,400 1,015,128 1,153,899
Acquisition through business
combinations (Note 32) - - - - - 82 - - 82
Disposals - - (15,801) (232) (1,814) - - - (17,847)
Write off - - (145) (99) - - - - (244)
Transfers - 363,708 340,583 - - - - (704,291) -
Transfer to disposal group
held for sale (Note 13) (1,590) (108,929) (106,471) (4,084) (3,782) - - (19,912) (244,768)
Effect of movements in
exchange rates (4,712) (5,660) (5,877) (422) (185) - (1,832) (594) (19,282)
At 31 December 2012 350,729 917,306 1,255,375 39,746 64,560 7,735 197,058 425,709 3,258,218
76 PRESS METAL BERHAD 153208 W
NOTES TO THE FINANCIAL STATEMENTScont’d
3. PROPERTY, PLANT AND EQUIPMENT cont’d
Group Land
Buildings
and
renovation
Plant
and
machinery
Office
equipment
Motor
vehicles
Furniture
and
fittings
Moulds
and dies
Capital
work-
in-
progress Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Depreciation and
impairment loss
At 1 January 2011 2,718 43,798 227,656 15,298 10,723 1,991 99,184 - 401,368
Depreciation for the year 4,787 16,635 34,857 2,692 4,689 348 34,084 - 98,092
Impairment loss for the year - 257 - - - - - - 257
Disposals - - (123) (3) (1,012) - - - (1,138)
Write off - - (4,698) (175) (13) - - - (4,886)
Effect of movements in
exchange rates 190 3,585 11,412 362 230 4 3,899 - 19,682
At 31 December 2011/
1 January 2012 7,695 64,275 269,104 18,174 14,617 2,343 137,167 - 513,375
Depreciation for the year 5,287 19,240 55,780 4,773 5,333 419 22,564 - 113,396
Impairment loss for the year - - - 9 - 36 - - 45
Disposals - - (6,868) (68) (1,004) - - - (7,940)
Write off - - (59) (74) - - - - (133)
Transfer to disposal group
held for sale (Note 13) (147) (31,222) (106,030) (3,664) (1,952) - - - (143,015)
Effect of movements in
exchange rates (134) (1,070) (3,555) (130) (79) - (1,429) - (6,397)
At 31 December 2012 12,701 51,223 208,372 19,020 16,915 2,798 158,302 - 469,331
Carrying amounts
At 1 January 2011 283,433 522,925 417,232 18,822 20,661 3,970 40,090 26,761 1,333,894
At 31 December 2011/
1 January 2012 349,239 582,581 697,097 20,544 42,915 3,926 41,323 135,378 1,873,003
At 31 December 2012 338,028 866,083 1,047,003 20,726 47,645 4,937 38,756 425,709 2,788,887
77ANNUAL REPORT 2012
NOTES TO THE FINANCIAL STATEMENTScont’d
3. PROPERTY, PLANT AND EQUIPMENT cont’d
Company Land Buildings Renovation
Plant
and
machinery
Office
equipment
Motor
vehicles
Furniture
and
fittings
Moulds
and dies Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Cost
At 1 January 2011 25,300 31,292 2,502 131,308 10,149 5,345 873 80,520 287,289
Additions - - 1,443 4,531 817 1,362 - 5,743 13,896
Disposals - - - (40) - (345) - - (385)
At 31 December 2011/1
January 2012 25,300 31,292 3,945 135,799 10,966 6,362 873 86,263 300,800
Additions - 1,620 464 4,111 515 893 585 4,599 12,787
Disposals - - - (4,141) - (403) - - (4,544)
At 31 December 2012 25,300 32,912 4,409 135,769 11,481 6,852 1,458 90,862 309,043
Depreciation
At 1 January 2011 - 5,544 703 75,877 8,360 2,949 494 59,070 152,997
Depreciation for the year - 626 329 7,047 534 449 15 6,608 15,608
Disposals - - - (17) - (92) - - (109)
At 31 December 2011/1
January 2012 - 6,170 1,032 82,907 8,894 3,306 509 65,678 168,496
Depreciation for the year - 653 417 7,265 566 540 21 6,508 15,970
Disposals - - - (4,119) - (319) - - (4,438)
At 31 December 2012 - 6,823 1,449 86,053 9,460 3,527 530 72,186 180,028
Carrying amounts
At 1 January 2011 25,300 25,748 1,799 55,431 1,789 2,396 379 21,450 134,292
At 31 December 2011/1
January 2012 25,300 25,122 2,913 52,892 2,072 3,056 364 20,585 132,304
At 31 December 2012 25,300 26,089 2,960 49,716 2,021 3,325 928 18,676 129,015
3.1 Impairment loss
During the financial year, the Group assessed certain assets for impairment and recognised an impairment loss of
RM45,000 (2011: RM257,000) as these assets no longer generate future economic benefits to the Group.
3.2 Leased plant and machinery and motor vehicles
At 31 December 2012, the net carrying amounts of plant and machinery and motor vehicles of the Group and
the Company under lease arrangements amounted to RM46,916,000 (31.12.2011: RM36,027,000; 1.1.2011:
RM18,944,000) and RM2,315,000 (31.12.2011: RM3,230,000; 1.1.2011: RM2,554,000), respectively.
78 PRESS METAL BERHAD 153208 W
NOTES TO THE FINANCIAL STATEMENTScont’d
3. PROPERTY, PLANT AND EQUIPMENT cont’d
3.3 Borrowing costs
Included in property, plant and equipment under construction of the Group is interest capitalised for the financial
year amounting to RM49,040,000 (31.12.2011: RM16,779,000; 1.1.2011: RM12,389,000) as follows:
Group
31.12.2012 31.12.2011 1.1.2011
RM’000 RM’000 RM’000
Fixed rate of 6.00% - 6.16% per annum 37,963 10,389 -
Floating rate of 1.75% - 2.25% per annum above the
Financiers’ Islamic Cost of Funds 6,026 6,276 12,389
Others 5,051 114 -
49,040 16,779 12,389
3.4 Security
Property, plant and equipment of the Group with a carrying amount of RM2,163,046,000 (31.12.2011:
RM1,148,181,000; 1.1.2011: RM626,431,000) have been pledged as security and as fixed and floating charges
for bank facilities granted to certain subsidiaries (see Note 16).
3.5 Land
Included in the carrying amounts of land are:
Group Company
31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Freehold land 25,300 25,300 25,300 25,300 25,300 25,300
Leasehold land with
unexpired period of
less than 50 years 3,308 3,452 - - -
Leasehold land with
unexpired period of
more than 50years 309,420 320,487 258,133 - - -
338,028 349,239 283,433 25,300 25,300 25,300
3.6 Capital work-in-progress
Included in the carrying amounts of capital work-in-progress are:
Group
31.12.2012 31.12.2011 1.1.2011
RM’000 RM’000 RM’000
Plant and machinery-in-progress 317,944 - -
Building-in-progress 107,765 135,378 26,761
425,709 135,378 26,761
79ANNUAL REPORT 2012
NOTES TO THE FINANCIAL STATEMENTScont’d
3. PROPERTY, PLANT AND EQUIPMENT cont’d
3.7 Leasehold land premium
During the financial year, included in additions of leasehold land of the Group are leasehold land premiums paid/
payable to the state government of Sarawak amounting to Nil (31.12.2011: RM62,384,000; 1.1.2011: Nil).
3.8 Government grant
In 2011, a subsidiary obtained a government grant of RM4,480,000, which had an effect of reducing the depreciation
expense of the Group for 2011 by RM403,000. The subsidiary has complied with all conditions attached to the
government assistance recognised.
4. INTANGIBLE ASSETS
Group Note Goodwill Patents Total
RM’000 RM’000 RM’000
Cost
At 1 January 2011 13,737 - 13,737
Additions - 193 193
At 31 December 2011/1 January 2012 13,737 193 13,930
Acquisition through business combinations 32 1,038 - 1,038
Write off - (193) (193)
At 31 December 2012 14,775 - 14,775
Impairment loss
At 1 January 2011/31 December 2011/1 January 2012/
31 December 2012 550 - 550
Carrying amounts
At 1 January 2011 13,187 - 13,187
At 31 December 2011/1 January 2012 13,187 193 13,380
At 31 December 2012 14,225 - 14,225
4.1 Patents
The patents have indefinite useful lives and are assessed for impairment annually. During the financial year, the
patents have been written off as they no longer generate future economic benefits to the Group.
4.2 Impairment testing for cash-generating units containing goodwill
For the purpose of impairment testing, goodwill is allocated to the Group’s business units acquired, which represent
the lowest level within the Group at which the goodwill is monitored for internal management purposes.
80 PRESS METAL BERHAD 153208 W
NOTES TO THE FINANCIAL STATEMENTScont’d
4. INTANGIBLE ASSETS cont’d
4.2 Impairment testing for cash-generating units containing goodwill cont’d
The aggregate carrying amounts of goodwill allocated to each unit are as follows:
Group
31.12.2012 31.12.2011 1.1.2011
RM’000 RM’000 RM’000
Press Metal International Ltd. 9,219 9,219 9,219
Press Metal Aluminium (Australia) Pty. Ltd. 3,968 3,968 3,968
Press Metal North America LLC. 1,038 - -
14,225 13,187 13,187
The recoverable amounts of the business units were based on value in use and were determined by management.
Value in use was determined by discounting the future cash flows expected to be generated from the continuing
use of the units and was based on the following key assumptions:
period were projected using a constant growth rate of 5% (31.12.2011: 5%; 1.1.2011: 5%) per annum.
5%).
1.1.2011: 5%).
amount of the units.
The values assigned to the key assumptions represent management’s assessment of future trends in the business
units’ principal activities and are based on internal sources (historical data).
The above estimates are not sensitive in relation to the carrying amounts of goodwill.
5. INVESTMENT PROPERTIES
Group
RM’000
Cost
At 1 January 2011/31 December 2011/1 January 2012 6,912
Disposal (525)
At 31 December 2012 6,387
81ANNUAL REPORT 2012
NOTES TO THE FINANCIAL STATEMENTScont’d
5. INVESTMENT PROPERTIES cont’d
Group
RM’000
Depreciation and impairment loss
At 1 January 2011 1,115
Depreciation for the year 112
Impairment loss for the year 51
At 31 December 2011/1 January 2012 1,278
Depreciation for the year 121
Disposal (363)
At 31 December 2012 1,036
Carrying amounts
At 1 January 2011 5,797
At 31 December 2011/1 January 2012 5,634
At 31 December 2012 5,351
Fair values
At 1 January 2011 8,329
At 31 December 2011/1 January 2012 11,306
At 31 December 2012 12,720
Group
31.12.2012 31.12.2011 1.1.2011
RM’000 RM’000 RM’000
Included in the above are:
Freehold land 812 812 812
Leasehold land with unexpired lease period of more than 50 years 569 575 583
Buildings 3,970 4,247 4,402
5,351 5,634 5,797
Investment properties comprise of freehold land, leasehold land and a number of residential properties and commercial
properties that are leased to third parties or vacant.
The fair values of all investment properties are determined based on market values, being the estimated amount for
which a property could be exchanged on the date of the valuation between a willing buyer and a willing seller in an arm’s
length transaction after proper marketing wherein the parties had each acted knowledgeably.
82 PRESS METAL BERHAD 153208 W
NOTES TO THE FINANCIAL STATEMENTScont’d
5. INVESTMENT PROPERTIES cont’d
Impairment loss
In 2011, the Group assessed the investment properties for impairment and recognised an impairment loss of RM51,000
as a result of a significant decline in market value of a building of a subsidiary.
The following are recognised in profit or loss in respect of investment properties:
Group
2012 2011
RM’000 RM’000
Rental income 252 340
Direct operating expenses:
- income generating investment properties (158) (166)
- non-income generating investment properties (13) (13)
6. INVESTMENTS IN SUBSIDIARIES
Company
31.12.2012 31.12.2011 1.1.2011
RM’000 RM’000 RM’000
Unquoted shares, at cost 541,143 538,241 488,191
Less: Impairment loss (7,194) (6,640) (2,440)
533,949 531,601 485,751
The movements of investments in subsidiaries are as follows:
Company
2012 2011
RM’000 RM’000
At 1 January 531,601 485,751
Subscription of additional shares 2,902 50,050
Impairment loss during the year (554) (4,200)
At 31 December 533,949 531,601
Satisfied by cash 2,902 -
Net settled against balance due to a subsidiary - 50,050
Total consideration paid for subscription of additional shares 2,902 50,050
83ANNUAL REPORT 2012
NOTES TO THE FINANCIAL STATEMENTScont’d
6. INVESTMENTS IN SUBSIDIARIES cont’d
Details of the subsidiaries are as follows:
Name of subsidiary
Country of
incorporation Principal activities Effective ownership interest
31.12.2012 31.12.2011 1.1.2011
% % %
Angkasa Jasa Sdn. Bhd. Malaysia Contracting and fabrication
of aluminium and stainless
steel products
100 100 100
PMB Recycling Management
Sdn. Bhd.
Malaysia Dormant 100 100 100
PMB Development Sdn. Bhd. Malaysia Investment holding 100 100 100
and its subsidiary,
PMB Spectrum Sdn. Bhd. Malaysia Dormant 60 60 60
Wesama Sdn. Bhd. Malaysia Investment holding 100 100 100
and its subsidiary,
Ace Extrusion Sdn. Bhd. Malaysia Manufacturing and trading of
aluminium products
100 100 100
PMB Marketing Sdn. Bhd. # Malaysia Dormant 100 100 100
and its subsidiary,
PMB Marketing (H.K.)
Limited *
Hong Kong Trading of garments and
accessories
100 100 100
BI-PMB Waste Management
Sdn. Bhd
Malaysia Provision of a common
waste water treatment plant
to treat toxic waste
100 100 100
PMS Marketing Sdn. Bhd. Malaysia Purchasing agent of Press
Metal Sarawak Sdn. Bhd.
and Press Metal Bintulu Sdn.
Bhd.
100 100 100
Press Metal Sarawak Sdn.
Bhd.
Malaysia Manufacturing and trading of
aluminium products
80 80 80
Press Metal Bintulu Sdn.
Bhd. +
Malaysia Manufacturing and trading of
aluminium products
100 100 100
84 PRESS METAL BERHAD 153208 W
NOTES TO THE FINANCIAL STATEMENTScont’d
6. INVESTMENTS IN SUBSIDIARIES cont’d
Name of subsidiary
Country of
incorporation Principal activities Effective ownership interest
31.12.2012 31.12.2011 1.1.2011
% % %
Press Metal Aluminium
(Australia) Pty. Ltd. *
Australia Marketing of aluminium
products
70 70 70
Press Metal UK Limited * United
Kingdom
Marketing of aluminium
products
100 100 100
Press Metal Hong Kong
Limited *
Hong Kong Investment holding 100 100 100
and its subsidiary,
Press Metal International
Ltd. ~
China Manufacturing and trading of
aluminium products
100 100 100
and its subsidiary,
Press Metal International
Technology Ltd. **, ^
China Dormant 100 100 -
Press Metal International
Trading Ltd. **, i
China Purchasing agent of Press
Metal Bintulu Sdn. Bhd.
100 100 -
PMIT Solar Pty. Ltd. **, ii Australia Dormant 70 - -
Hubei Press Metal Huasheng
Aluminium-Electric Co,.
Ltd. *
China Manufacturing and trading of
aluminium products
90 90 90
and its subsidiaries,
Press Metal International
(Hubei) Ltd. *
China Manufacturing and trading of
aluminium products
90 90 90
PMH Electric Engineering
Co,. Ltd. *
China Dormant 90 90 90
Press Metal North America
LLC. **, @
United States
of America
Trading of aluminium
products
100 - -
~ Audited by member firms of KPMG International
* Not audited by member firms of KPMG International
** Consolidated based on management accounts
# In June 2011, the Company subscribed for an additional 50,000 new ordinary shares of RM1.00 each at par for a total cash
consideration of RM50,000 in PMB Marketing Sdn. Bhd., a wholly-owned subsidiary of the Company.
+ In June 2011 and August 2011, the Company subscribed for an additional 1,049,998 and 48,950,000 new ordinary shares of
RM1.00 each at par respectively, for a total cash consideration of RM49,999,998 in Press Metal Bintulu Sdn. Bhd., a wholly-
owned subsidiary of the Company.
85ANNUAL REPORT 2012
NOTES TO THE FINANCIAL STATEMENTScont’d
6. INVESTMENTS IN SUBSIDIARIES cont’d
^ In March 2011, Press Metal International Ltd., a wholly-owned subsidiary of the Company, incorporated a new wholly-owned
subsidiary in the People’s Republic of China, Press Metal International Technology Ltd., with an issued and paid-up capital of
RMB20,000,000.
i In June 2011, Press Metal International Ltd., a wholly-owned subsidiary of the Company, incorporated a new wholly-owned
subsidiary in the People’s Republic of China, Press Metal International Trading Ltd., with an issued and paid-up capital of
RMB2,000,000.
ii In February 2012, Press Metal International Ltd., a wholly-owned subsidiary of the Company, acquired a new 70%-owned
subsidiary, PMIT Solar Pty. Ltd., a company incorporated in Australia, with an issued and paid-up capital of AUD100 for a
purchase consideration of AUD70.
@ In July 2012, the Company acquired a new wholly-owned subsidiary, Press Metal North America LLC., a company incorporated
in the United States of America, with an issued and paid-up capital of USD500 for a purchase consideration of USD500.
Subsequently, the Company subscribed for an additional 949,000 new ordinary shares of USD1.00 each at par respectively,
for a purchase consideration of USD949,000.
7. INVESTMENT IN AN ASSOCIATE
Group Company
31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Quoted shares in
Malaysia, at cost 11,812 11,812 11,812 11,812 11,812 11,812
Share of post-
acquisition
reserves 22,654 20,486 16,191 - - -
34,466 32,298 28,003 11,812 11,812 11,812
Market value:
Quoted shares in
Malaysia 12,027 10,094 16,751 12,027 10,094 16,751
The summarised financial information of the associate incorporated in Malaysia, not adjusted for the percentage
ownership held by the Group are as follows:
Effective
ownership
interest
Revenue
(100%)
Profit
(100%)
Total
assets
(100%)
Total
liabilities
(100%)
RM’000 RM’000 RM’000 RM’000
31 December 2012
PMB Technology Berhad 28% 284,705 10,145 284,951 165,734
31 December 2011
PMB Technology Berhad 28% 311,848 15,496 291,054 178,583
1 January 2011
PMB Technology Berhad 28% 219,436 7,194 244,064 146,821
86 PRESS METAL BERHAD 153208 W
NOTES TO THE FINANCIAL STATEMENTScont’d
8. OTHER INVESTMENTS
Group Company
31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Available-for-sale
financial assets
At cost:
Unquoted shares in
Malaysia 1,803 1,803 1,803 750 750 750
Unquoted shares
outside Malaysia - 5,034 4,674 - - -
1,803 6,837 6,477 750 750 750
9. DEFERRED TAX ASSETS/(LIABILITIES)
Recognised deferred tax assets/(liabilities)
Deferred tax assets and liabilities are attributable to the following:
Assets Liabilities Net
31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011
Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Property,
plant and
equipment - - - (177,397) (123,832) (92,846) (177,397) (123,832) (92,846)
Provisions 3,038 3,356 591 - - - 3,038 3,356 591
Tax loss
carry-
forwards - 6,817 236 - - - - 6,817 236
Capital
allowance
carry-
forwards 74,992 23,895 18,702 - - - 74,992 23,895 18,702
ITA carry-
forwards 149,992 - - - - - 149,992 - -
Other items 987 987 380 (61) (593) (660) 926 394 (280)
RCSLS - - - (22,760) (26,610) - (22,760) (26,610) -
Tax assets/
(liabilities) 229,009 35,055 19,909 (200,218) (151,035) (93,506) 28,791 (115,980) (73,597)
Set off (130,585) (33,457) (18,867) 130,585 33,457 18,867 - - -
Net tax
assets/
(liabilities) 98,424 1,598 1,042 (69,633) (117,578) (74,639) 28,791 (115,980) (73,597)
87ANNUAL REPORT 2012
NOTES TO THE FINANCIAL STATEMENTScont’d
9. DEFERRED TAX ASSETS/(LIABILITIES) cont’d
Recognised deferred tax assets/(liabilities) cont’d
Assets Liabilities Net
31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011
Company RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Property,
plant and
equipment - - - (15,947) (16,636) (16,336) (15,947) (16,636) (16,336)
Other items 748 - - - - (660) 748 - (660)
RCSLS - - - (22,760) (26,610) - (22,760) (26,610) -
748 - - (38,707) (43,246) (16,996) (37,959) (43,246) (16,996)
Movement in temporary differences during the year
At
1.1.2011
Recognised
in profit
or loss
(Note 22)
Recognised
directly in
equity
Effect of
movement
in
exchange
rates
At
31.12.2011
Recognised
in profit
or loss
(Note 22)
Effect of
movement
in
exchange
rates
At
31.12.2012
Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Property, plant and
equipment (92,846) (26,351) - (4,635) (123,832) (59,197) 5,632 (177,397)
Provisions 591 2,765 - - 3,356 (318) - 3,038
Tax loss carry-forwards 236 6,581 - - 6,817 (6,817) - -
Capital allowance
carry-forwards 18,702 5,193 - - 23,895 51,097 - 74,992
ITA carry-forwards - - - - - 149,992 - 149,992
Other items (280) 674 - - 394 532 - 926
RCSLS - 1,109 (27,719) - (26,610) 3,850 - (22,760)
(73,597) (10,029) (27,719) (4,635) (115,980) 139,139 5,632 28,791
At
1.1.2011
Recognised
in profit
or loss
(Note 22)
Recognised
directly in
equity
At
31.12.2011
Recognised
in profit
or loss
(Note 22)
At
31.12.2012
Company RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Property, plant and
equipment (16,336) (300) - (16,636) 689 (15,947)
Other items (660) 660 - - 748 748
RCSLS - 1,109 (27,719) (26,610) 3,850 (22,760)
(16,996) 1,469 (27,719) (43,246) 5,287 (37,959)
The deferred tax portion of the RCSLS amounting to Nil (2011: RM27,719,000) was charged to the equity component
of the RCSLS and recognised in equity. Following the accretion of RCSLS, there was a reduction in deferred tax liabilities
amounting to RM3,850,000 (2011: RM1,109,000) recognised in profit or loss.
88 PRESS METAL BERHAD 153208 W
NOTES TO THE FINANCIAL STATEMENTScont’d
9. DEFERRED TAX ASSETS/(LIABILITIES) cont’d
Unrecognised deferred tax assets
Deferred tax assets have not been recognised in respect of the following items (stated at gross):
Group
31.12.2012 31.12.2011 1.1.2011
RM’000 RM’000 RM’000
Other taxable temporary differences (125) (3,151) (3,972)
Tax loss carry-forwards 19,621 18,105 15,325
Capital allowance carry-forwards 32,601 32,654 49,381
52,097 47,608 60,734
Deferred tax assets are only recognised to the extent that it is probable that taxable profits will be available against which these assets can be utilised. Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable profits will be available against which the Group entities can utilise the benefits there from.
10. TRADE AND OTHER RECEIVABLES
Group Company
Note 31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Non-current
Non-trade
Amounts due from
subsidiaries 10.1 - - - 62,965 62,841 -
Current
Trade
Trade receivables 351,451 356,449 295,080 42,617 45,679 46,861
Less: Individual
impairment
allowance (6,857) (7,699) (4,711) (325) (325) (411)
344,594 348,750 290,369 42,292 45,354 46,450
Amounts due from
subsidiaries 10.1 - - - 261,252 213,354 173,738
Amount due from an
associate 10.1 12,244 22,718 11,345 11,376 18,169 10,995
356,838 371,468 301,714 314,920 276,877 231,183
Non-trade
Amounts due from
subsidiaries 10.1 - - - 901,689 393,907 298,278
Other receivables 48,884 77,929 14,412 1,008 2,026 1,589
Deposits 10.2 509,968 345,933 337,830 1,936 3,251 10,046
Prepayments 28,459 16,873 50,096 2,345 2,719 2,109
587,311 440,735 402,338 906,978 401,903 312,022
944,149 812,203 704,052 1,221,898 678,780 543,205
944,149 812,203 704,052 1,284,863 741,621 543,205
89ANNUAL REPORT 2012
NOTES TO THE FINANCIAL STATEMENTScont’d
10. TRADE AND OTHER RECEIVABLES cont’d
10.1 Related party balances
The trade balances due from subsidiaries and an associate are subject to normal trade terms. The non-trade
balances due from subsidiaries are subject to the following terms:
Company
31.12.2012 31.12.2011 1.1.2011
RM’000 RM’000 RM’000
Non-current
Interest free and repayable in more than a year 62,965 9,500 -
Repayable in more than a year and subject to interest at
6.00% per annum - 53,341 -
62,965 62,841 -
Current
Interest free and repayable on demand 581,182 393,907 298,278
Subject to interest at 6.00% per annum and repayable on
demand 320,507 - -
901,689 393,907 298,278
10.2 Deposits
Included in deposits of the Group are deposits paid to contractors in relation to the construction of aluminium
smelting plants and procurement of plant and machinery for those plants as follows:
Group
31.12.2012 31.12.2011 1.1.2011
RM’000 RM’000 RM’000
Samalaju 502,662 335,387 -
Mukah - - 322,024
502,622 335,387 322,024
10.3 Estimation uncertainty and critical judgements
The Group and the Company make impairment of receivables based on assessment of recoverability. Whilst
management’s judgement is guided by past experiences, judgement is made about the future recovery of debts.
90 PRESS METAL BERHAD 153208 W
NOTES TO THE FINANCIAL STATEMENTScont’d
11. INVENTORIES
Group Company
31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Raw materials 200,661 160,501 129,541 14,694 17,668 11,800
Work-in-progress 78,653 77,191 49,468 6,062 5,002 3,518
Finished goods 139,203 136,314 147,838 11,714 6,485 5,613
Consumable parts 490 1,219 318 106 130 294
419,007 375,225 327,165 32,576 29,285 21,225
Carrying amount
of inventories
pledged as
security for bank
borrowings (see
Note 16) 154,214 136,951 94,650 - - -
Recognised in
profit or loss:
Inventories
recognised as
cost of sales 1,911,999 1,791,485 608,890 696,617
Write down to
net realisable
value 1,065 330 - -
The write down is included in cost of sales.
12. CASH AND CASH EQUIVALENTS
Group Company
31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Deposits placed
with licensed
banks 102,543 76,307 5,915 391 391 391
Cash and bank
balances 169,227 293,670 195,296 22,604 187,991 67,303
271,770 369,977 201,211 22,995 188,382 67,694
Included in deposits placed with licensed banks of the Group is RM15,620,000 (31.12.2011: RM7,897,000; 1.1.2011:
RM3,524,000) pledged as security for term loans granted to certain subsidiaries (see Note 16).
91ANNUAL REPORT 2012
NOTES TO THE FINANCIAL STATEMENTScont’d
13. DISPOSAL GROUP HELD FOR SALE
At 31 December 2012, the assets and liabilities of Hubei Press Metal Huasheng Aluminium-Electric Co., Ltd. (“PMH”) are
presented as a disposal group held for sale following the commitment of the Company to dispose of its entire 90%-equity
interest in PMH. Efforts to sell the disposal group have commenced during the current financial year. At 31 December
2012, the assets and liabilities of the disposal group are as follows:
Group
Note 2012
RM’000
Assets classified as held for sale
Property, plant and equipment a 101,753
Other investments 2,454
Inventories b 56,271
Trade and other receivables c 24,231
Current tax assets 1,202
Cash and bank balances 17,249
203,160
Liabilities classified as held for sale
Trade and other payables 133,958
Loans and borrowings 14,724
148,682
Note a
Property, plant and equipment held for sale comprise the following:
Cost 244,768
Accumulated depreciation (143,015)
101,753
Note b
The inventories held for sale comprise raw materials, work-in-progress and finished goods and are carried at cost.
Note c
Receivables are carried at cost less an impairment loss of RM1,773,000.
The disposal group is not presented as a discontinued operation as PMH does not represent a separate major line of
business or geographical area of operations of the Group and contributed a loss after tax of RM10,241,000 to the Group
for the current financial year.
92 PRESS METAL BERHAD 153208 W
NOTES TO THE FINANCIAL STATEMENTScont’d
14. CAPITAL AND RESERVES
Share capital
Group and Company Number Number Number
Amount of shares Amount of shares Amount of shares
31.12.2012 31.12.2012 31.12.2011 31.12.2011 1.1.2011 1.1.2011
RM’000 ’000 RM’000 ’000 RM’000 ’000
Ordinary share of
RM0.50 each:
Authorised 500,000 1,000,000 500,000 1,000,000 500,000 1,000,000
Issued and fully
paid:
At 1 January 219,740 439,479 215,031 430,060
Issued for cash
via conversion
of warrants 32,501 65,001 - -
Issued for cash
under ESOS 1,649 3,298 4,709 9,419
At 31 December 253,890 507,778 219,740 439,479
Ordinary shares
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote
per share at meetings of the Company.
Capital reserve
The Group’s and the Company’s capital reserves consist of RCSLS reserve and warrants reserve, which comprise the
equity portion of RCSLS issued together with free warrants attached (see Note 16).
Translation reserve
The translation reserve comprises all foreign currency differences arising from the translation of the financial statements
of foreign operations.
Share option reserve
The share option reserve comprises the cumulative value of employee services received for the issue of share options.
When the option is exercised, the amount from the share option reserve is transferred to share premium. When the share
options expire, the amount from the share option reserve is transferred to retained earnings. The details of the share
option are disclosed in Note 17.
Tax exempt income
Subject to agreement by the Inland Revenue Board, the Company has tax exempt income to frank and distribute
approximately RM156,313,000 (31.12.2011: RM170,589,000; 1.1.2011: RM173,385,000) of its retained earnings at 31
December 2012 if paid out as dividends.
93ANNUAL REPORT 2012
NOTES TO THE FINANCIAL STATEMENTScont’d
15. TRADE AND OTHER PAYABLES, INCLUDING DERIVATIVES
Group Company
Note 31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Non-current
Trade
Trade payables - - 9,487 - - -
Amount due to an
associate 15.1 - - 6,890 - - 2,955
- - 16,377 - - 2,955
Non-trade
Amount due to a
subsidiary 15.1 - - - - - 100,468
Other payables 15.2 51,997 120,228 89,672 - - -
51,997 120,228 89,672 - - 100,468
51,997 120,228 106,049 - - 103,423
Current
Trade
Trade payables 120,507 134,859 134,101 2,312 2,290 4,680
Amounts due to
subsidiaries 15.1 - - - 249,484 131,815 92,356
Amount due to an
associate 15.1 11,511 12,216 4,248 2,902 3,639 -
132,018 147,075 138,349 254,698 137,744 97,036
Non-trade
Amounts due to
subsidiaries 15.1 - - - 82,004 135,858 -
Amount due to an
associate 15.1 2,249 2,130 23 1,948 1,948 -
Amount due to a
Director 15.1 - 125 - - - -
Other payables 15.2 261,028 56,742 96,080 156,529 3,494 8,513
Accrued expenses 15.3 107,283 94,478 25,819 6,619 11,023 4,720
Financial liabilities at
fair value through
profit or loss:
- Derivatives 2,994 2,994 2,123 2,994 2,994 2,123
373,554 156,469 124,045 250,094 155,317 15,356
505,572 303,544 262,394 504,792 293,061 112,392
557,569 423,772 368,443 504,792 293,061 215,815
94 PRESS METAL BERHAD 153208 W
NOTES TO THE FINANCIAL STATEMENTScont’d
15. TRADE AND OTHER PAYABLES, INCLUDING DERIVATIVES cont’d
15.1 Related party balances
The trade balances due to subsidiaries and an associate are subject to normal trade terms, except for amounts
due to an associate of RM6,890,000 and RM2,955,000 of the Group and of the Company, respectively, on 1
January 2011, which were repayable in more than a year.
The non-trade balances due to subsidiaries, an associate and a Director are unsecured, interest free and are
repayable on demand, except for an amount due to a subsidiary amounting to RM100,468,000 on 1 January
2011, which was repayable in more than a year.
15.2 Other payables
Included in other payables of the Group are:-
(i) the remaining 30% purchase consideration payable for the acquisition of PMH amounting to Nil (31.12.2011:
RM67,657,000; 1.1.2011: RM62,819,000).
(ii) amounts payable to contractors in relation to the construction of aluminium smelting plants as follows:
Group
31.12.2012 31.12.2011 1.1.2011
RM’000 RM’000 RM’000
Samalaju 66,162 13,797 -
Mukah - - 17,378
66,162 13,797 17,378
(iii) amount payable to a company with a common Director amounting to RM26,505,000 (31.12.2011:
RM15,721,000; 1.1.2011: Nil) which is unsecured, interest free and is repayable in more than a year.
(iv) leasehold land premium payable to the state government of Sarawak amounting to RM35,983,000
(31.12.2011: RM43,197,000; 1.1.2011: Nil).
Included in other payables of the Group and of the Company at 31 December 2012 are advance payments
received from a customer amounting to RM152,900,000 (31.12.2011: Nil; 1.1.2011: Nil) in relation to forward sale
agreements entered between the customer and the Company.
15.3 Accrued expenses
Included in accrued expenses of the Group are electricity charges accrued amounting to RM48,780,000
(31.12.2011: RM34,773,000; 1.1.2011: RM845,000).
95ANNUAL REPORT 2012
NOTES TO THE FINANCIAL STATEMENTScont’d
16. LOANS AND BORROWINGS
Group Company
Note 31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Non-current
Bank loans
- unsecured 16.3 12,232 41,561 87,748 12,232 31,728 68,929
Bank loans
- secured 16.3 869,281 386,675 301,331 - - -
Finance lease
liabilities 16.4 16,200 15,188 7,046 1,289 1,114 891
RCSLS 16.5 214,919 199,520 - 214,919 199,520 -
1,112,632 642,944 396,125 228,440 232,362 69,820
Current
Bank loans
- unsecured 16.3 215,516 224,391 209,271 19,294 37,304 82,731
Bank loans
- secured 16.3 106,211 94,372 104,592 - - -
Bankers’
acceptances
- unsecured 16.1 862,757 683,881 512,438 456,902 417,363 388,520
Revolving credits
- unsecured 16.2 234,336 178,243 131,265 45,000 45,000 45,000
Revolving credits
- secured 16.2 37,366 49,404 3,078 - - -
Bank overdrafts
- unsecured 11,937 8,107 47 11,561 7,936 -
Finance lease
liabilities 16.4 11,548 9,934 4,247 487 605 583
1,479,671 1,248,332 964,938 533,244 508,208 516,834
2,592,303 1,891,276 1,361,063 761,684 740,570 586,654
16.1 Bankers’ acceptances
The bankers’ acceptances of the Group amounting to RM137,930,000 (31.12.2011: RM12,000,000; 1.1.2011:
RM11,500,000) are guaranteed by the Company.
16.2 Revolving credits
The revolving credits of the Group amounting to RM37,366,000 (31.12.2011: RM49,404,000; 1.1.2011:
RM3,078,000) are secured by way of irrevocable Standby Letter of Credit issued by a bank and fixed and floating
charges of a subsidiary’s property, plant and equipment while RM162,359,000 (31.12.2011: RM98,875,000;
1.1.2011: Nil) are guaranteed by the Company.
96 PRESS METAL BERHAD 153208 W
NOTES TO THE FINANCIAL STATEMENTScont’d
16. LOANS AND BORROWINGS cont’d
16.3 Bank loans
Group Company
31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Loans of the Company:
Loan 1 - unsecured - 12,674 30,855 - 12,674 30,855
Loan 2 - unsecured 11,417 21,783 34,600 11,417 21,783 34,600
Loan 3 - unsecured 1,761 9,227 16,193 1,761 9,227 16,193
Loan 4 - unsecured 18,348 25,348 30,855 18,348 25,348 30,855
Loan 5 - unsecured - - 39,157 - - 39,157
Loans of subsidiaries:
Loan 6 - secured 321 344 351 - - -
Loan 7 - secured 215,000 301,000 387,000 - - -
Loan 8 - unsecured - 6,344 12,340 - - -
Loan 9 - unsecured 3,400 6,977 9,703 - - -
Loan 10 - unsecured 139,325 126,211 69,567 - - -
Loan 11 - unsecured - - 14,020 - - -
Loan 12 - secured 20,186 8,349 18,572 - - -
Loan 13 - unsecured 19,632 15,102 14,022 - - -
Loan 14 - unsecured 19,632 27,687 25,707 - - -
Loan 15 - secured 395,598 171,354 - - - -
Loan 16 - unsecured 9,816 10,068 - - - -
Loan 17 - unsecured 4,417 4,531 - - - -
Loan 18 - secured 344,387 - - - - -
1,203,240 746,999 702,942 31,526 69,032 151,660
Securities and guarantees
Loans 1 and 2 Negative pledge by the Company
Loan 3 Negative pledge and guaranteed by a subsidiary, Press Metal International Ltd.
Loans 4 and 5 No securities nor guarantees
Loan 6 Secured over a building of a subsidiary with a carrying amount of RM912,000 (31.12.2011:
RM937,000; 1.1.2011: RM964,000) and guaranteed by the Company
Loan 7 Secured over a leasehold land of a subsidiary with a carrying amount of RM33,708,000
(31.12.2011: RM34,040,000; 1,1,2011: RM22,202,000), floating charges on other property,
plant and equipment, deposits pledged with a licensed bank of RM5,100,000 (31.12.2011:
RM5,100,000; 1.1.2011: RM3,524,000) and guaranteed by the Company
Loans 8 to 11 Guaranteed by the Company
Loan 12 Secured over the inventories of a subsidiary
Loans 13 and 14 Guaranteed by a subsidiary, PMH
Loans 15 and 18 Secured over a leasehold land of a subsidiary with a carrying amount of RM49,065,000
(31.12.2011: RM49,806,000; 1.1.2011: Nil), floating charges on other property, plant
and equipment, deposits pledged with a licensed bank of RM10,520,000 (31.12.2011:
RM2,797,000; 1.1.2011: Nil) and guaranteed by the Company
Loan 16 Guaranteed by subsidiaries, PMH and Press Metal International Ltd.
Loan 17 Negative pledge by a subsidiary, Press Metal International (Hubei) Ltd.
97ANNUAL REPORT 2012
NOTES TO THE FINANCIAL STATEMENTScont’d
16. LOANS AND BORROWINGS cont’d
16.4 Finance lease liabilities
Finance lease liabilities are payable as follows:
Future
minimum
lease
payments
31.12.2012
Interest
31.12.2012
Present
value of
minimum
lease
payments
31.12.2012
Future
minimum
lease
payments
31.12.2011
Interest
31.12.2011
Present
value of
minimum
lease
payments
31.12.2011
Future
minimum
lease
payments
1.1.2011
Interest
1.1.2011
Present
value of
minimum
lease
payments
1.1.2011
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Group
Less than one
year 13,040 (1,492) 11,548 11,117 (1,183) 9,934 4,821 (574) 4,247
Between one and
five years 18,177 (2,116) 16,061 17,333 (2,259) 15,074 8,037 (1,028) 7,009
More than five
years 173 (34) 139 139 (25) 114 48 (11) 37
31,390 (3,642) 27,748 28,589 (3,467) 25,122 12,906 (1,613) 11,293
Company
Less than one
year 600 (113) 487 698 (93) 605 668 (85) 583
Between one and
five years 1,483 (198) 1,285 1,257 (191) 1,066 1,019 (128) 891
More than five
years 13 (9) 4 60 (12) 48 - - -
2,096 (320) 1,776 2,015 (296) 1,719 1,687 (213) 1,474
16.5 RCSLS
Group and Company
2012 2011
RM’000 RM’000
Proceeds from issue of 145,684,940 RCSLS and free warrants 320,507 320,507
Transaction costs (6,819) (6,819)
Net proceeds 313,688 313,688
Amount classified as equity:
- RCSLS reserve (see Note 14) (14,408) (14,408)
- Warrants reserve (76,475) (76,475)
Amount classified as deferred tax liabilities (27,719) (27,719)
Accreted interest 19,007 4,216
Amortisation of transaction costs 826 218
Carrying amount at 31 December 214,919 199,520
98 PRESS METAL BERHAD 153208 W
NOTES TO THE FINANCIAL STATEMENTScont’d
16. LOANS AND BORROWINGS cont’d
16.5 RCSLS cont’d
The amounts of the RCSLS classified as equity and the warrants amounting to RM14,408,000 and RM76,475,000 respectively, are net of attributable transaction costs of RM1,956,000.
On 26 August 2011, the Company issued 145,684,940 RCSLS together with 145,684,940 free detachable warrants for cash of RM320,506,868. The RCSLS are convertible into 145,684,940 ordinary shares of RM0.50 each from the first anniversary of the issue date of the RCSLS up to 22 August 2019 at the option of the holder, which is at a rate of one ordinary share of RM0.50 each for every one RCSLS held; unconverted RCSLS will be entitled to receive a coupon of 6% per annum based on the nominal value of RCSLS held.
RCSLS will be redeemed by the Company in accordance to the following redemption schedule:
End of year
% of issue size
redeemed
1 -
2 -
3 10
4 15
5 15
6 20
7 20
8 20
100
16.6 Significant covenants
In connection with the significant term loan facilities of certain subsidiaries, Press Metal Sarawak Sdn. Bhd. (Loan 7), and Press Metal Bintulu Sdn. Bhd. (Loans 15 and 18), the subsidiaries and the Group, have agreed on the following significant covenants with the lenders:
Press Metal Sarawak Sdn. Bhd.
i) Debt-to-Equity ratio of the subsidiary to be maintained below the ratio of 70:30; equity is defined to include all subordinated debts and shareholders advances;
ii) minimum Finance Service Cover Ratio (“FSCR”) of 1.25 times, where FSCR equals to the subsidiary’s net operating cash flows for the year plus opening cash balance divided by total facility payment due for the current year;
iii) no material change in the business plan of the subsidiary and of the Group; and
iv) the Company shall maintain its shareholdings in the subsidiary more than or equivalent to 80% throughout the tenure of the facility.
Press Metal Bintulu Sdn. Bhd.
i) Debt-to-Equity ratio of the subsidiary to be maintained below the ratio of 70:30; equity is defined to include all subordinated debts and shareholders advances;
ii) minimum Debt Service Cover Ratio (“DSCR”) of 1.25 times, where DSCR equals to the subsidiary’s net operating cash flows for the year plus opening cash balance divided by total facility payment due for the current year; and
iii) to provide further security when required by the security agent.
99ANNUAL REPORT 2012
NOTES TO THE FINANCIAL STATEMENTScont’d
16. LOANS AND BORROWINGS cont’d
16.6 Significant covenants
Waiver of loan covenants
For the financial year ended 31 December 2012, the lenders for the term loan facilities of Press Metal Bintulu Sdn.
Bhd., have via their letter dated 21 September 2012, waived Press Metal Bintulu Sdn. Bhd. from complying with
the DSCR covenant as at 31 December 2012. Press Metal Bintulu Sdn. Bhd. is only required to comply with the
DSCR covenant from the financial year ending 31 December 2013 onwards.
17. EMPLOYEE BENEFITS
Share-based payments arrangement
Share option programme (equity settled)
At an extraordinary general meeting held on 26 June 2007, the Company’s shareholders approved the establishment of
a new ESOS of not more than 10% of the issued share capital of the Company to eligible Directors and employees of the
Group (“New ESOS”), subsequent to the expiry of the former ESOS on 5 June 2007.
In June 2012, the new ESOS has also expired.
The number and exercise price of share options are as follows:
Exercise
price
2012
Number
of
options
2012
Exercise
price
2011
Number
of
options
2011
RM ’000 RM ’000
Outstanding at 1 January 1.50 5,251 1.50 14,754
Exercised during the year 1.50 (3,298) 1.50 (9,419)
Lapsed during the year 1.50 (1,953) 1.50 (84)
Outstanding at 31 December - - 1.50 5,251
Exercisable at 31 December - - 1.50 5,251
The options outstanding at 31 December 2011 had an exercise price of RM1.50 (1.1.2011: RM1.50) and a weighted
average contractual life of 0.5 years (1.1.2011: 1.5 years).
During the financial year, 3,298,000 (2011: 9,419,000) share options were exercised. The weighted average share price
at the date of exercise for the financial year was RM1.90 (2011: RM2.29).
100 PRESS METAL BERHAD 153208 W
NOTES TO THE FINANCIAL STATEMENTScont’d
17. EMPLOYEE BENEFITS cont’d
Share-based payments arrangement cont’d
Share option programme (equity settled) cont’d
The fair value of services received in return of share options granted is based on the fair value of share options granted,
measured using a Black Scholes model, with the following inputs:
Fair value of share options and assumptions
2012 2011
Fair value at grant date RM0.09 RM0.18
Weighted average share price RM1.85 RM2.11
Exercise price RM1.50 RM1.50
Expected volatility (weighted average volatility) 25.97% 37.82%
Option life (expected weighted average life) - 0.5 years
Expected dividends 2% 2%
Risk-free interest rate (based on Malaysian government bonds) 3.21% 3.28%
Value of employee services received for issue of share options
2012 2011
RM’000 RM’000
Expense recognised as share-based payments 322 645
18. REVENUE
Group Company
2012 2011 2012 2011
RM’000 RM’000 RM’000 RM’000
Sale of goods 2,297,688 2,174,994 685,539 788,599
Contracting and fabrication 85,704 92,834 - -
Services 1,028 923 - -
2,384,420 2,268,751 685,539 788,599
101ANNUAL REPORT 2012
NOTES TO THE FINANCIAL STATEMENTScont’d
19. FINANCE INCOME
Group Company
2012 2011 2012 2011
RM’000 RM’000 RM’000 RM’000
Interest income of financial assets that are not at fair
value through profit or loss:
- loan to a subsidiary - - 19,230 6,902
- fixed deposits 2,658 3,535 - 1,294
- amortisation of savings on finance costs of a term loan - 711 - 711
2,658 4,246 19,230 8,907
20. FINANCE COSTS
Group Company
2012 2011 2012 2011
RM’000 RM’000 RM’000 RM’000
Interest expense of financial liabilities that are not at
fair value through profit or loss:
- bank overdrafts 363 403 321 335
- bank loans 71,775 39,968 863 10,589
- bankers’ acceptances 31,241 24,347 16,034 15,389
- discounting of non-current amounts due from
subsidiaries - - 1,937 500
- finance lease liabilities 1,803 891 99 86
- revolving credits 8,015 16,726 2,345 2,209
- RCSLS:
- accretion of RCSLS 14,791 4,216 14,791 4,216
- amortisation of transaction costs 608 218 608 218
- coupon payment 19,230 6,902 19,230 6,902
147,826 93,671 56,228 40,444
Other finance costs 9,620 5,976 2,599 2,712
157,446 99,647 58,827 43,156
Recognised in profit or loss 108,406 82,868 58,827 43,156
Capitalised on qualifying assets:
- property, plant and equipment 49,040 16,779 - -
157,446 99,647 58,827 43,156
102 PRESS METAL BERHAD 153208 W
NOTES TO THE FINANCIAL STATEMENTScont’d
21. PROFIT BEFORE TAX
Group Company
2012 2011 2012 2011
RM’000 RM’000 RM’000 RM’000
Profit before tax is arrived after charging:
Auditors’ remuneration:
- Audit fees
KPMG Malaysia 507 339 220 150
Overseas affiliate of KPMG Malaysia 191 285 - -
Other auditors 426 343 - -
- Non-audit fees
KPMG Malaysia 148 135 130 135
Bad debts written off 2,517 312 - -
Depreciation on investment properties 121 112 - -
Depreciation on property, plant and equipment 113,396 98,092 15,970 15,608
Deposits written off 1,448 - 1,448 -
Derivative loss - 2,994 - 2,994
Impairment loss:
- Investments in subsidiaries - - 554 4,200
- Investment properties - 51 - -
- Property, plant and equipment 45 257 - -
- Trade receivables 1,063 3,917 - -
Inventories written down 1,065 330 - -
Loss on disposal of property, plant and equipment - 250 - 126
Patents written off 193 - - -
Personnel expenses (including key management
personnel):
- Contributions to Employees’ Provident Fund 4,057 3,219 1,738 1,357
- Share-based payments 322 645 322 645
- Wages, salaries and others 121,858 126,335 24,029 18,996
Property, plant and equipment written off 111 3,704 - -
Realised foreign exchange loss 6,043 - - 3,588
Rental expense in respect of:
- Property 7,140 7,638 751 416
- Equipment and machinery 6,127 3,602 354 298
Unrealised foreign exchange loss - 2,847 - 2,937
Waiver of amount due from a subsidiary - - - 3,503
103ANNUAL REPORT 2012
NOTES TO THE FINANCIAL STATEMENTScont’d
21. PROFIT BEFORE TAX cont’d
Group Company
2012 2011 2012 2011
RM’000 RM’000 RM’000 RM’000
and after crediting:
Bad debts recovered 5 - - -
Dividend income from an associate - - 644 322
Gain on disposal on investment properties 1 - - -
Gain on disposal of property, plant and equipment 991 - 174 -
Realised foreign exchange gain - 4,855 2,333 -
Rental income from property 252 489 - -
Reversal of impairment loss of trade receivables 10 242 - 86
Unrealised foreign exchange gain 3,848 - 2,941 -
22. TAX EXPENSE
Recognised in profit or loss
Group Company
2012 2011 2012 2011
RM’000 RM’000 RM’000 RM’000
Income tax expense (121,684) 21,092 6,502 7,167
Share of tax of equity-accounted investee 641 403 - -
Total income tax expense (121,043) 21,495 6,502 7,167
Current tax expense
Malaysian - current year 10,551 9,514 10,139 9,102
- prior year 1,920 (610) 1,650 (466)
Overseas - current year 4,379 4,299 - -
- prior year 605 (2,140) - -
Total current tax recognised in profit or loss 17,455 11,063 11,789 8,636
Deferred tax expense
Origination and reversal of temporary differences (134,837) 14,076 (3,543) (2,499)
(Over)/Under provision in prior year (4,302) (4,047) (1,744) 1,030
Total deferred tax recognised in profit or loss (139,139) 10,029 (5,287) (1,469)
Share of tax of equity-accounted investee 641 403 - -
Total income tax expense (121,043) 21,495 6,502 7,167
104 PRESS METAL BERHAD 153208 W
NOTES TO THE FINANCIAL STATEMENTScont’d
22. TAX EXPENSE cont’d
Group Company
2012 2011 2012 2011
RM’000 RM’000 RM’000 RM’000
Reconciliation of tax expense
Profit before tax 100,785 144,350 21,584 22,185
Income tax calculated using Malaysian tax rate of
25% 25,196 36,088 5,396 5,546
Effect of tax rates in foreign jurisdictions (272) 133 - -
Non-deductible expenses 8,530 1,296 5,050 2,166
Tax exempt income - (4,834) - -
Tax incentives * (149,992) - - -
Recognition of previously unrecognised deferred tax
assets - (3,282) - -
Effect of deferred tax assets not recognised 1,122 - - -
Effect of accretion of RCSLS (3,850) (1,109) (3,850) (1,109)
(Over)/Under provision in prior years (1,777) (6,797) (94) 564
(121,043) 21,495 6,502 7,167
* In July 2012, Press Metal Sarawak Sdn. Bhd., an 80%-owned subsidiary of the Company, obtained the approval from the MIDA
for an ITA of 100% on capital expenditures incurred towards the production of aluminium products over a period of 5 years from
24 January 2008 to 23 January 2013.
23. EARNINGS PER ORDINARY SHARE
Basic earnings per ordinary share
The calculation of basic earnings per ordinary share at 31 December 2012 was based on the profit attributable to
ordinary shareholders and a weighted average number of ordinary shares outstanding, calculated as follows:
Group
2012 2011
RM’000 RM’000
Profit attributable to ordinary shareholders 183,899 109,602
105ANNUAL REPORT 2012
NOTES TO THE FINANCIAL STATEMENTScont’d
23. EARNINGS PER ORDINARY SHARE cont’d
Basic earnings per ordinary share
Weighted average number of ordinary shares:
Group
2012 2011
RM’000 RM’000
Issued ordinary shares at 1 January 439,479 430,060
Effect of ordinary shares issued during the year 16,976 5,806
Weighted average number of ordinary shares for the year 456,455 435,866
Group
2012 2011
Sen Sen
Basic earnings per ordinary share 40.29 25.15
Diluted earnings per ordinary share
As at 31 December 2012, the share options have expired while the effects of the warrants and RCSLS remain anti-
dilutive. Hence, for the financial year ended 31 December 2012, diluted EPS is not presented as the Group has no shares
or other instruments with potential dilutive effects.
The calculation of diluted earnings per ordinary share for the financial year ended 31 December 2011 was based on profit
attributable to ordinary shareholders and a weighted average number of ordinary shares outstanding after adjustments
for the effects of all dilutive potential ordinary shares, calculated as follows:
Group
2011
RM’000
Profit attributable to ordinary shareholders 109,602
Weighted average number of ordinary shares (diluted):
Group
2011
’000
Weighted average number of ordinary shares (basic) 435,866
Effect of share options on issue 5,251
Weighted average number of ordinary shares (diluted) at 31 December 2011 441,117
The average market value of the Company’s shares for purpose of calculating the dilutive effect of share options was
based on quoted market prices for the period during which the options were outstanding.
The effects of the warrants and RCSLS are anti-dilutive.
106 PRESS METAL BERHAD 153208 W
NOTES TO THE FINANCIAL STATEMENTScont’d
23. EARNINGS PER ORDINARY SHARE cont’d
Diluted earnings per ordinary share cont’d
Group
2011
Sen
Diluted earnings per ordinary share 24.85
24. DIVIDENDS
Dividends recognised by the Company:
Sen per
share
(tax exempt)
Total
amount
RM’000
Date of
payment
2012
Final 2011 ordinary 1.00 4,428 27 July 2012
First interim 2012 ordinary 1.00 4,776 10 October 2012
Second interim 2012 ordinary 1.00 5,072 20 December 2012
Total amount 14,276
2011
Final 2010 ordinary 1.00 4,392 28 July 2011
Interim 2011 ordinary 1.00 4,393 28 October 2011
Total amount 8,785
After the reporting period, the following dividend was declared by the Directors and paid on 10 April 2013. This dividend
will be recognised in subsequent financial period. The Directors do not recommend any final dividend to be paid for the
financial year under review.
Sen per
share
(tax exempt)
Total
amount
RM’000
Third interim 2012 ordinary 1.00 5,078
25. OPERATING SEGMENTS
The Group has two reportable segments, as described below, which are the Group’s strategic business units. The
strategic business units offer different products and services, and are managed separately because they require different
technology and marketing strategies. For each of the strategic business units, the Group’s Chief Executive Officer (the
chief operating decision maker) reviews internal management reports at least on a quarterly basis. The following summary
describes the operations in each of the Group’s reportable segments:
Manufacturing and trading. Includes manufacturing and marketing of aluminium products and garments and
accessories.
Contracting and fabrication. Includes contracting and fabrication of aluminium and stainless steel products.
107ANNUAL REPORT 2012
NOTES TO THE FINANCIAL STATEMENTScont’d
25. OPERATING SEGMENTS cont’d
Other non-reportable segments comprise operations related to property development, waste management, investment
holding and dormant companies.
There are varying levels of integration between reportable segments, the Manufacturing and Trading, and Contracting
and Fabrication reportable segments. This integration includes transfers of raw materials and shared distribution services,
respectively. Inter-segment pricing is determined on negotiated basis.
Performance is measured based on segment profit before tax, interest and depreciation, as included in the internal
management reports that are reviewed by the Group’s Chief Executive Officer (the chief operating decision maker).
Segment profit is used to measure performance as management believes that such information is the most relevant in
evaluating the results of certain segments relative to other entities that operate within these industries.
Segment assets
The total of segment assets is measured based on all assets (including goodwill) of a segment, as included in the internal
management reports that are reviewed by the Group’s Chief Executive Officer. Segment total assets are used to measure
the return on assets of each segment.
Segment liabilities
Segment liabilities information is neither included in the internal management reports nor provided regularly to the Group’s
Chief Executive Officer. Hence, no disclosure is made on segment liabilities.
Segment capital expenditure
Segment capital expenditure is the total cost incurred during the financial year to acquire property, plant and equipment,
investment properties, and intangible assets other than goodwill.
Manufacturing
and trading
Construction and
fabrication Total
2012 2011 2012 2011 2012 2011
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Segment profit 197,152 218,852 1,974 1,986 199,126 220,838
Included in the measure of
segment profit are:
Revenue from external
customers 2,297,444 2,175,463 85,055 92,365 2,382,499 2,267,828
Inter-segment revenue 5,109 3,543 649 469 5,758 4,012
Impairment of property,
plant and equipment 45 257 - - 45 257
Impairment of investment
properties - - - 51 - 51
Depreciation 110,836 96,087 1,775 1,475 112,611 97,562
Segment assets 7,147,064 5,091,739 82,533 77,479 7,229,597 5,169,218
108 PRESS METAL BERHAD 153208 W
NOTES TO THE FINANCIAL STATEMENTScont’d
25. OPERATING SEGMENTS cont’d
Manufacturing
and trading
Construction and
fabrication Total
2012 2011 2012 2011 2012 2011
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Included in the measure of
segment assets are:
Investment in an associate 34,466 32,298 - - 34,466 32,298
Additions to non-current
assets other than financial
instruments and deferred
tax assets 1,137,887 618,311 2,600 1,820 1,140,487 620,131
Reconciliation of reportable segment revenues, profit or loss, assets and other material items
2012 2011
RM’000 RM’000
Revenue
Total external revenue for reportable segments 2,382,499 2,267,828
Other non-reportable segments 1,921 923
Consolidated revenue for the year 2,384,420 2,268,751
Profit or loss
Total profit for reportable segments 199,126 220,838
Other non-reportable segments (394) (3,375)
Elimination of inter-segment losses 4,348 1,690
Finance income 2,658 4,246
Finance costs (108,406) (82,868)
Share of profits of an associate not included in reportable segments 2,812 4,295
Tax expense 121,684 (21,971)
Consolidated profit for the year 221,828 122,855
Total assets
Total assets for reportable segments 7,229,597 5,169,218
Other non-reportable segments 291,716 588,139
Elimination of inter-segment balances (2,735,815) (2,259,943)
Consolidated assets for the year 4,785,498 3,497,414
109ANNUAL REPORT 2012
NOTES TO THE FINANCIAL STATEMENTScont’d
25. OPERATING SEGMENTS cont’d
Reconciliation of reportable segment revenues, profit or loss, assets and other material items
2012 2011
RM’000 RM’000
Depreciation
Total depreciation for reportable segments 112,611 97,562
Other non-reportable segments 906 642
Consolidated depreciation for the year 113,517 98,204
Additions to non-current assets
Total additions to non-current assets for reportable segments 1,140,487 620,131
Other non-reportable segments 13,412 3,645
Consolidated additions to non-current assets for the year 1,153,899 623,776
Geographical segments
The Manufacturing and Trading, and Contracting and Fabrication segments are managed on a worldwide basis, but
operate manufacturing facilities and sales offices mainly in Malaysia, Asia region which includes Singapore, Hong Kong
and China, Australia for the Oceania region, United Kingdom for the Europe region and United States of America for the
North America region.
In presenting information on the basis of geographical segments, segment revenue is based on geographical location of
customers. Segment assets are based on the geographical location of the assets.
Geographical information
Revenue Non-current assets
2012 2011 2012 2011
RM’000 RM’000 RM’000 RM’000
Malaysia 1,330,315 1,024,179 2,470,647 1,338,745
Asia region 738,911 913,546 456,790 578,697
Oceania region 67,761 78,118 6,512 5,773
Europe region 220,836 243,780 8,878 9,535
North America region 26,597 9,128 329 -
2,384,420 2,268,751 2,943,156 1,932,750
Major customers
The Group does not have any customers contributing to equal or more than 10% of the Group’s total revenue for the
current and previous financial years.
110 PRESS METAL BERHAD 153208 W
NOTES TO THE FINANCIAL STATEMENTScont’d
26. FINANCIAL INSTRUMENTS
26.1 Categories of financial instruments
The table below provides an analysis of financial instruments categorised as follows:
(a) Loans and receivables (“L&R”);
(b) Fair value through profit or loss (“FVTPL”):
- Held for trading (“HFT”);
(c) Available-for-sale financial assets (“AFS”);
(d) Financial liabilities measured at amortised cost (“FL”).
Carrying
amount L&R/(FL) FVTPL- HFT AFS
31 December 2012 RM’000 RM’000 RM’000 RM’000
Financial assets
Group
Other investments 1,803 - - 1,803
Trade and other receivables 944,149 944,149 - -
Cash and cash equivalents 271,770 271,770 - -
1,217,722 1,215,919 - 1,803
Company
Other investments 750 - - 750
Trade and other receivables 1,284,863 1,284,863 - -
Cash and cash equivalents 22,995 22,995 - -
1,308,608 1,307,858 - 750
Financial liabilities
Group
Loans and borrowings (2,592,303) (2,592,303) - -
Trade and other payables, including derivatives (557,569) (554,575) (2,994) -
(3,149,872) (3,146,878) (2,994) -
Company
Loans and borrowings (761,684) (761,684) - -
Trade and other payables, including derivatives (504,792) (501,798) (2,994) -
(1,266,476) (1,263,482) (2,994) -
111ANNUAL REPORT 2012
NOTES TO THE FINANCIAL STATEMENTScont’d
26. FINANCIAL INSTRUMENTS cont’d
26.1 Categories of financial instruments cont’d
Carrying
amount L&R/(FL) FVTPL- HFT AFS
31 December 2011 RM’000 RM’000 RM’000 RM’000
Financial assets
Group
Other investments 6,837 - - 6,837
Trade and other receivables 812,203 812,203 - -
Cash and cash equivalents 369,977 369,977 - -
1,189,017 1,182,180 - 6,837
Company
Other investments 750 - - 750
Trade and other receivables 741,621 741,621 - -
Cash and cash equivalents 188,382 188,382 - -
930,753 930,003 - 750
Financial liabilities
Group
Loans and borrowings (1,891,276) (1,891,276) - -
Trade and other payables, including derivatives (423,772) (420,778) (2,994) -
(2,315,048) (2,312,054) (2,994) -
Company
Loans and borrowings (740,570) (740,570) - -
Trade and other payables, including derivatives (293,061) (290,067) (2,994) -
(1,033,631) (1,030,637) (2,994) -
112 PRESS METAL BERHAD 153208 W
NOTES TO THE FINANCIAL STATEMENTScont’d
26. FINANCIAL INSTRUMENTS cont’d
26.1 Categories of financial instruments cont’d
Carrying
amount L&R/(FL) FVTPL- HFT AFS
i January 2011 RM’000 RM’000 RM’000 RM’000
Financial assets
Group
Other investments 6,477 - - 6,477
Trade and other receivables 704,052 704,052 - -
Cash and cash equivalents 201,211 201,211 - -
911,740 905,263 - 6,477
Company
Other investments 750 - - 750
Trade and other receivables 543,205 543,205 - -
Cash and cash equivalents 67,694 67,694 - -
611,649 610,899 - 750
Financial liabilities
Group
Loans and borrowings (1,361,063) (1,361,063) - -
Trade and other payables, including derivatives (368,443) (366,320) (2,123)
(1,729,506) (1,727,383) (2,123) -
Company
Loans and borrowings (586,654) (586,654) - -
Trade and other payables, including derivatives (215,815) (213,692) (2,123) -
(802,469) (800,346) (2,123) -
26.2 Net losses arising from financial instruments
Group Company
2012 2011 2012 2011
RM’000 RM’000 RM’000 RM’000
Net gains/(losses) on:
Fair value through profit or loss:
- Held for trading - (2,994) - (2,994)
Loans and receivables (11,490) 272 17,258 4,737
Financial liabilities measured at amortised cost (101,466) (80,873) (53,029) (51,922)
(112,956) (83,595) (35,771) (50,179)
113ANNUAL REPORT 2012
NOTES TO THE FINANCIAL STATEMENTScont’d
26. FINANCIAL INSTRUMENTS cont’d
26.3 Financial risk management
The Group and the Company have exposure to the following risks from their use of financial instruments:
26.4 Credit risk
Credit risk is the risk of a financial loss to the Group and the Company if a customer or counterparty to a financial
instrument fails to meet its contractual obligations. The Group’s exposure to credit risk arises principally from its
receivables from customers and deposits paid to contractors working on the construction of the aluminium smelting
plant of Press Metal Bintulu Sdn. Bhd. in Samalaju, Sarawak and suppliers supplying the plant and machinery of
the plant. The Company’s exposure to credit risk arises principally from its receivables from customers, loans and
advances to subsidiaries and financial guarantees given to banks for credit facilities granted to subsidiaries.
Receivables
Risk management objectives, policies and processes for managing the risk
Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Credit
evaluations are performed on customers requiring credit over a certain amount. In relation to deposits paid to
contractors and suppliers, most of these parties have been previously involved in the provision of services for the
construction of the aluminium smelting plant of Press Metal Sarawak Sdn. Bhd.. Hence, management is confident
of their credibility and does not expect any significant credit risk to arise from the deposits paid.
Exposure to credit risk, credit quality and collateral
As at the end of the reporting period, the maximum exposure to credit risk arising from receivables is represented
by the carrying amounts in the statement of financial position.
Management has taken reasonable steps to ensure that receivables that are neither past due nor impaired are
stated at their realisable values. A significant portion of these receivables are regular customers that have been
transacting with the Group and the Company. The Group and the Company use ageing analysis to monitor the
credit quality of the receivables. Any receivables having significant balances past due more than 150 days, which
are deemed to have higher credit risk, are monitored individually.
The exposure of credit risk for trade receivables as at the end of the reporting period by geographic region was:
Group Company
31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Domestic 119,772 125,059 105,625 36,054 26,638 36,337
Asia region 152,029 142,323 106,370 6,238 5,379 8,453
Oceania region 12,533 11,023 19,435 - - -
Europe region 50,447 57,008 57,279 - - -
North America
region 9,813 13,337 1,660 - 13,337 1,660
344,594 348,750 290,369 42,292 45,354 46,450
114 PRESS METAL BERHAD 153208 W
NOTES TO THE FINANCIAL STATEMENTScont’d
26. FINANCIAL INSTRUMENTS cont’d
26.4 Credit risk cont’d
Receivables cont’d
Impairment losses
The Group and the Company maintain an ageing analysis in respect of trade receivables only. The ageing of trade
receivables as at the end of the reporting period was:
Gross
Individual
impairment Net
Group RM’000 RM’000 RM’000
31 December 2012
Not past due 209,036 - 209,036
Past due 1 - 150 days 106,374 (356) 106,018
Past due more than 150 days 36,041 (6,501) 29,540
351,451 (6,857) 344,594
31 December 2011
Not past due 209,362 - 209,362
Past due 1 - 150 days 110,937 (296) 110,641
Past due more than 150 days 36,150 (7,403) 28,747
356,449 (7,699) 348,750
1 January 2011
Not past due 194,662 - 194,662
Past due 1 - 150 days 63,402 (1,283) 62,119
Past due more than 150 days 37,016 (3,428) 33,588
295,080 (4,711) 290,369
115ANNUAL REPORT 2012
NOTES TO THE FINANCIAL STATEMENTScont’d
26. FINANCIAL INSTRUMENTS cont’d
26.4 Credit risk cont’d
Receivables cont’d
Impairment losses cont’d
Gross
Individual
impairment Net
Company RM’000 RM’000 RM’000
31 December 2012
Not past due 25,256 - 25,256
Past due 1 - 150 days 16,601 - 16,601
Past due more than 150 days 760 (325) 435
42,617 (325) 42,292
31 December 2011
Not past due 31,267 - 31,267
Past due 1 - 150 days 13,773 - 13,773
Past due more than 150 days 639 (325) 314
45,679 (325) 45,354
1 January 2011
Not past due 32,651 - 32,651
Past due 1 - 150 days 12,510 - 12,510
Past due more than 150 days 1,700 (411) 1,289
46,861 (411) 46,450
No allowance for impairment losses of trade receivables has been made for the remaining past due receivables as
the Group and the Company monitor the results and repayments of these customers regularly and are confident
of the ability of the customers to repay the balances owing.
The movements in the allowance for impairment losses of trade receivables during the financial year were:
Group Company
2012 2011 2012 2011
RM’000 RM’000 RM’000 RM’000
At 1 January 7,699 4,711 325 411
Impairment loss recognised 1,063 3,917 - -
Impairment loss reversed (10) (242) - (86)
Impairment loss written off - (792) - -
Effect of movements in exchange rates (122) 105 - -
Transfer to disposal group held for sale (1,773) - - -
At 31 December 6,857 7,699 325 325
116 PRESS METAL BERHAD 153208 W
NOTES TO THE FINANCIAL STATEMENTScont’d
26. FINANCIAL INSTRUMENTS cont’d
26.4 Credit risk cont’d
Receivables cont’d
Impairment losses cont’d
The allowance account in respect of trade receivables is used to record impairment losses. Unless the Group and the Company are satisfied that recovery of the amount is possible, the amount considered irrecoverable is written off against the receivable directly.
Financial guarantees
Risk management objectives, policies and processes for managing the risk
The Company provides unsecured financial guarantees to banks in respect of banking facilities granted to certain subsidiaries. The Company monitors on an ongoing basis the results of the subsidiaries and repayments made by the subsidiaries.
Exposure to credit risk, credit quality and collateral
The maximum exposure to credit risk amounts to RM1,398,320,000 (31.12.2011: RM723,105,000; 1.1.2011: RM504,481,000) representing the outstanding banking facilities of the subsidiaries as at the end of the reporting period.
As at the end of the reporting period, there was no indication that any subsidiary would default on repayment.
The financial guarantees have not been recognised since the fair value on initial recognition was not material.
Inter company loans and advances
Risk management objectives, policies and processes for managing the risk
The Group and the Company provide unsecured loans and advances to an associate and subsidiaries. The Group and the Company monitor the results of the associate and subsidiaries regularly.
Exposure to credit risk, credit quality and collateral
As at the end of the reporting period, the maximum exposure to credit risk is represented by their carrying amounts in the statement of financial position.
Impairment losses
As at the end of the reporting period, there was no indication that the loans and advances to the associate and subsidiaries are not recoverable. The Group and the Company do not specifically monitor the ageing of advances to the associate and subsidiaries.
26.5 Liquidity risk
Liquidity risk is the risk that the Group and the Company will not be able to meet their financial obligations as they fall due. The Group’s and the Company’s exposure to liquidity risk arises principally from their various payables, loans and borrowings.
The Group and the Company maintain a level of cash and cash equivalents and bank facilities deemed adequate by management to ensure, as far as possible, that they will have sufficient liquidity to meet their liabilities when they fall due.
It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at
significantly different amounts.
117ANNUAL REPORT 2012
NOTES TO THE FINANCIAL STATEMENTScont’d
26. FINANCIAL INSTRUMENTS cont’d
26.5 Liquidity risk cont’d
Maturity analysis
The table below summarises the maturity profile of the Group’s financial liabilities as at the end of the reporting
period based on undiscounted contractual payments:
Carrying
amount
Contractual
interest rate
Contractual
cash flows
Under 1
year
1 - 2
years
2 - 5
years
More than
5 years
Group RM’000 % RM’000 RM’000 RM’000 RM’000 RM’000
31 December 2012
Non-derivative
financial liabilities
Trade and other
payables,
excluding
derivatives 554,575 - 554,575 502,578 39,448 12,549 -
Bank loans 1,203,240 * 1,446,882 389,421 240,845 458,296 358,320
Revolving credits 271,702 3.36 - 7.28 271,702 271,702 - - -
Bankers’
acceptances 862,757 2.15 - 5.38 862,757 862,757 - - -
Bank overdrafts 11,937 7.10 - 7.85 11,937 11,937 - - -
Finance lease
liabilities 27,748 2.29 - 8.68 31,390 13,040 8,612 9,565 173
RCSLS with
warrants (initial
proceeds) 320,507 6.00 394,543 51,281 65,383 209,932 67,947
3,252,466 3,573,786 2,102,716 354,288 690,342 426,440
Derivative financial
liabilities
Derivatives 2,994 - 2,994 2,994 - - -
3,255,460 3,576,780 2,105,710 354,288 690,342 426,440
* Loans 1, 2, 3, 6, 7, 8, 9, 10, 12, 13, 14, 16, 17 and 18 - Represents lenders’ cost of funds rate plus a fixed rate ranging
from 1.00% - 2.25% per annum.
Loans 4 and 5 - Interest is chargeable at a rate pegged against London Metal Exchange commodity prices. Contractual
cash flows as at 31 December 2012 are estimated based on coupon rate stipulated in the respective agreements.
Loans 11 and 15 - Fixed rate ranging from 6.03% to 6.16% per annum.
118 PRESS METAL BERHAD 153208 W
NOTES TO THE FINANCIAL STATEMENTScont’d
26. FINANCIAL INSTRUMENTS cont’d
26.5 Liquidity risk cont’d
Maturity analysis cont’d
Carrying
amount
Contractual
interest rate
Contractual
cash flows
Under 1
year
1 - 2
years
2 - 5
years
More than
5 years
Group RM’000 % RM’000 RM’000 RM’000 RM’000 RM’000
31 December 2011
Non-derivative
financial liabilities
Trade and other
payables,
excluding
derivatives 420,778 - 420,778 300,550 90,110 30,118 -
Bank loans 746,999 * 830,284 351,914 133,234 328,405 16,731
Revolving credits 227,647 2.25 - 7.81 227,647 227,647 - - -
Bankers’
acceptances 683,881 1.95 - 5.40 683,881 683,881 - - -
Bank overdrafts 8,107 7.10 - 7.60 8,107 8,107 - - -
Finance lease
liabilities 25,122 2.28 - 11.03 28,588 11,117 8,214 9,118 139
RCSLS with
warrants (initial
proceeds) 320,507 6.00 435,407 19,337 19,337 180,158 216,575
2,433,041 2,634,692 1,602,553 250,895 547,799 233,445
Derivative financial
liabilities
Derivatives 2,994 - 2,994 2,994 - - -
2,436,035 2,637,686 1,605,547 250,895 547,799 233,445
* Loans 1, 2, 3, 6, 7, 8, 9, 10, 12, 13, 14, 16 and 17 - Represents lenders’ cost of funds rate plus a fixed rate ranging from
1.00% - 1.84% per annum.
Loans 4 and 5 - Interest is chargeable at a rate pegged against London Metal Exchange commodity prices. Contractual
cash flows as at 31 December 2011 are estimated based on coupon rate stipulated in the respective agreements.
Loans 11 and 15 - Fixed rate ranging from 5.56% to 6.16% per annum.
119ANNUAL REPORT 2012
NOTES TO THE FINANCIAL STATEMENTScont’d
26. FINANCIAL INSTRUMENTS cont’d
26.5 Liquidity risk cont’d
Maturity analysis cont’d
Carrying
amount
Contractual
interest rate
Contractual
cash flows
Under 1
year
1 - 2
years
2 - 5
years
More than
5 years
Group RM’000 % RM’000 RM’000 RM’000 RM’000 RM’000
1 January 2011
Non-derivative
financial liabilities
Trade and other
payables,
excluding
derivatives 366,320 - 366,320 260,271 106,049 - -
Bank loans 702,942 * 763,640 344,306 154,516 264,519 299
Revolving credits 134,343 2.78 - 7.06 134,343 134,343 - - -
Bankers’
acceptances 512,438 1.92 - 5.05 512,438 512,438 - - -
Bank overdrafts 47 - 47 47 - - -
Finance lease
liabilities 11,293 2.28 - 9.67 12,906 4,821 4,014 4,023 48
1,727,383 1,789,694 1,256,226 264,579 268,542 347
Derivative financial
liabilities
Derivatives 2,123 - 2,123 2,123 - - -
1,729,506 1,791,817 1,258,349 264,579 268,542 347
* Loans 1, 2, 3, 6, 7, 8, 9, 10, 12, 13 and 14 - Represents lenders’ cost of funds rate plus a fixed rate ranging from 0.50%
- 1.75% per annum.
Loans 4 and 5 - Interest is chargeable at a rate pegged against London Metal Exchange commodity prices. Contractual
cash flows as at 1 January 2011 are estimated based on coupon rate stipulated in the respective agreements.
Loan 11 - Fixed rate ranging from 2.54% to 6.10% per annum.
120 PRESS METAL BERHAD 153208 W
NOTES TO THE FINANCIAL STATEMENTScont’d
26. FINANCIAL INSTRUMENTS cont’d
26.5 Liquidity risk cont’d
Maturity analysis cont’d
The table below summarises the maturity profile of the Company’s financial liabilities as at the end of the reporting
period based on undiscounted contractual payments:
Carrying
amount
Contractual
interest rate
Contractual
cash flows
Under 1
year
1 - 2
years
2 - 5
years
More than
5 years
Company RM’000 % RM’000 RM’000 RM’000 RM’000 RM’000
31 December 2012
Non-derivative
financial liabilities
Trade and other
payables,
excluding
derivatives 501,798 - 501,798 501,798 - - -
Bank loans 31,526 * 33,288 20,321 6,606 6,361 -
Revolving credits 45,000 6.05 - 6.13 45,000 45,000 - - -
Bankers’
acceptances 456,902 2.15 - 5.38 456,902 456,902 - - -
Bank overdrafts 11,561 7.10 - 7.85 11,561 11,561 - - -
Finance lease
liabilities 1,776 2.29 - 4.81 2,096 600 554 929 13
RCSLS 320,507 6.00 394,543 51,281 65,383 209,932 67,947
1,369,070 1,445,188 1,087,463 72,543 217,222 67,960
Derivative financial
liabilities
Derivatives 2,994 - 2,994 2,994 - - -
1,372,064 1,448,182 1,090,457 72,543 217,222 67,960
* Loans 1, 2 and 3 - Represents base lending rate plus 1.50% per annum.
Loans 4 and 5 - Interest is chargeable at a rate pegged against London Metal Exchange commodity prices. Contractual cash
flows as at 31 December 2012 are estimated based on coupon rate stipulated in the respective agreements.
121ANNUAL REPORT 2012
NOTES TO THE FINANCIAL STATEMENTScont’d
26. FINANCIAL INSTRUMENTS cont’d
26.5 Liquidity risk cont’d
Maturity analysis cont’d
Carrying
amount
Contractual
interest rate
Contractual
cash flows
Under 1
year
1 - 2
years
2 - 5
years
More than
5 years
Company RM’000 % RM’000 RM’000 RM’000 RM’000 RM’000
31 December 2011
Non-derivative
financial liabilities
Trade and other
payables,
excluding
derivatives 290,067 - 290,067 290,067 - - -
Bank loans 69,032 * 72,404 39,006 19,964 13,434 -
Revolving credits 45,000 6.05 - 6.22 45,000 45,000 - - -
Bankers’
acceptances 417,363 1.95 - 3.98 417,363 417,363 - - -
Bank overdrafts 7,936 7.10 - 7.60 7,936 7,936 - - -
Finance lease
liabilities 1,719 2.29 - 4.81 2,015 698 460 797 60
RCSLS with
warrants (initial
proceeds) 320,507 6.00 435,407 19,337 19,337 180,158 216,575
1,151,624 1,270,192 819,407 39,761 194,389 216,635
Derivative financial
liabilities
Derivatives 2,994 - 2,994 2,994 - - -
1,154,618 1,273,186 822,401 39,761 194,389 216,635
* Loans 1, 2 and 3 - Represents base lending rate plus 1.50% per annum.
Loans 4 and 5 - Interest is chargeable at a rate pegged against London Metal Exchange commodity prices. Contractual
cash flows as at 31 December 2011 are estimated based on coupon rate stipulated in the respective agreements.
122 PRESS METAL BERHAD 153208 W
NOTES TO THE FINANCIAL STATEMENTScont’d
26. FINANCIAL INSTRUMENTS cont’d
26.5 Liquidity risk cont’d
Maturity analysis cont’d
Carrying
amount
Contractual
interest rate
Contractual
cash flows
Under 1
year
1 - 2
years
2 - 5
years
More than
5 years
Company RM’000 % RM’000 RM’000 RM’000 RM’000 RM’000
1 January 2011
Non-derivative
financial liabilities
Trade and other
payables,
excluding
derivatives 213,692 - 213,692 110,269 103,423 - -
Secured bank loans 151,660 * 162,173 89,916 39,092 33,165 -
Revolving credits 45,000 4.72 - 6.00 45,000 45,000 - - -
Bankers’
acceptances 388,520 1.92 - 4.64 388,520 388,520 - - -
Finance lease
liabilities 1,474 2.29 - 4.81 1,687 668 423 596 -
800,346 811,072 634,373 142,938 33,761 -
Derivative financial
liabilities
Derivatives 2,123 - 2,123 2,123 - - -
802,469 813,195 636,496 142,938 33,761 -
* Loans 1, 2 and 3 - Represents base lending rate plus 1.50% per annum.
Loans 4 and 5 - Interest is chargeable at a rate pegged against London Metal Exchange commodity prices. Contractual
cash flows as at 1 January 2011 are estimated based on coupon rate stipulated in the respective agreements.
26.6 Market risk
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and other prices
that will affect the Group’s and the Company’s financial position or cash flows.
26.6.1 Currency risk
The Group and the Company are exposed to foreign currency risk on sales, purchases, cash and cash
equivalents and borrowings that are denominated in a currency other than the respective functional currencies
of Group entities and the functional currency of the Company. The currencies giving rise to this risk are
primarily Australian Dollar (AUD), Great Britain Pound (GBP), Singapore Dollar (SGD), U.S. Dollar (USD), Euro
(EUR), Renminbi (RMB) and Hong Kong Dollar (HKD).
Risk management objectives, policies and processes for managing the risk
The Group and the Company actively monitor their exposure to foreign currency risk and use forward
exchange contracts to mitigate the risk when the need arises.
123ANNUAL REPORT 2012
NOTES TO THE FINANCIAL STATEMENTScont’d
26. FINANCIAL INSTRUMENTS cont’d
26.6 Market risk
26.6.1 Currency risk
Exposure to foreign currency risk
The Group’s and the Company’s exposure to foreign currency (a currency which is other than the functional
currency of the Group entities and the Company) risk, based on carrying amounts as at the end of the
reporting period was:
Group
Trade and
other
receivables
Cash and
cash
equivalents
Loans
and
borrowings
Trade
and other
payables
Net
exposure
31 December 2012 RM’000 RM’000 RM’000 RM’000 RM’000
Functional
currency
Foreign
currency
RM AUD - 34 - - 34
RM GBP - 1,715 (50,987) - (49,272)
RM SGD 5,386 846 - - 6,232
RM USD 32,429 81,084 (51,668) (19,232) 42,613
RM EUR - 10 - (8) 2
RMB USD 63,276 7,189 (12,957) (6,657) 50,851
RMB EUR 2,699 3 - (113) 2,589
RMB GBP - 3,861 (56,293) (164) (52,596)
GBP USD - 40 - - 40
GBP EUR - 198 - - 198
HKD USD - - (2,298) - (2,298)
31 December 2011
RM AUD - 35 - - 35
RM GBP - 287 (33,790) - (33,503)
RM RMB 281,795 - - (617) 281,178
RM SGD 5,196 1,090 - - 6,286
RM USD 46,038 26,334 (77,381) (334) (5,343)
RM EUR 2,919 14 - (461) 2,472
RMB USD 173,121 9,710 (99,210) (2,155) 81,466
RMB SGD 2 - - - 2
RMB EUR 1,210 9 - - 1,219
RMB JPY - - - (6) (6)
HKD USD - 42 (9,511) - (9,469)
124 PRESS METAL BERHAD 153208 W
NOTES TO THE FINANCIAL STATEMENTScont’d
26. FINANCIAL INSTRUMENTS cont’d
26.6 Market risk cont’d
26.6.1 Currency risk cont’d
Exposure to foreign currency risk cont’d
Group
Trade and
other
receivables
Cash and
cash
equivalents
Loans
and
borrowings
Trade
and other
payables
Net
exposure
1 January 2011 RM’000 RM’000 RM’000 RM’000 RM’000
Functional
currency
Foreign
currency
RM AUD - 34 - - 34
RM GBP - 2,469 (24,593) - (22,124)
RM SGD 7,082 1,378 - (6,096) 2,364
RM USD 31,280 57,217 (170,232) (16,363) (98,098)
RM EUR - 1 - - 1
RMB USD 187,084 - (79,135) (1,773) 106,176
RMB SGD 5 - - - 5
RMB EUR 552 - - - 552
RMB HKD - 23 - - 23
HKD USD - - (12,340) - (12,340)
Company
31 December 2012
RM AUD 40,016 34 - - 40,050
RM GBP 75,952 1,666 (50,987) - 26,631
RM HKD - - - (1,946) (1,946)
RM RMB 238 - - (239,918) (239,680)
RM SGD 5,248 668 - - 5,916
RM USD 13,525 10,512 (31,526) (1) (7,490)
RM EUR 1,586 5 - (26) 1,565
RM JPY - - - (8) (8)
125ANNUAL REPORT 2012
NOTES TO THE FINANCIAL STATEMENTScont’d
26. FINANCIAL INSTRUMENTS cont’d
26.6 Market risk cont’d
26.6.1 Currency risk cont’d
Exposure to foreign currency risk cont’d
Company
Trade and
other
receivables
Cash and
cash
equivalents
Loans
and
borrowings
Trade
and other
payables
Net
exposure
31 December 2011 RM’000 RM’000 RM’000 RM’000 RM’000
Functional
currency
Foreign
currency
RM AUD 39,490 35 - - 39,525
RM GBP 91,039 237 (33,790) - 57,486
RM HKD - - - (1,946) (1,946)
RM RMB - - - (194,832) (194,832)
RM SGD 4,916 410 - - 5,326
RM USD 21,585 10,941 (69,032) (1,045) (37,551)
RM EUR 2,656 7 - - 2,663
1 January 2011
RM AUD 47,962 34 - - 47,996
RM GBP 115,760 2,469 (24,593) - 93,636
RM HKD - - - (1,946) (1,946)
RM RMB 10,600 - - (148,256) (137,656)
RM SGD 6,096 673 - (6,096) 673
RM USD 16,363 57,174 (151,660) (16,363) (94,486)
RM EUR - 1 - - 1
Currency risk sensitivity analysis
Foreign currency risk mainly arises from RMB. The exposure to other currencies is not material and hence,
sensitivity analysis is not presented.
A 10% (2011: 10%) strengthening of RM against RMB at the end of the reporting period would have
increased (decreased) post-tax profit or loss by the amounts shown below. This analysis is based on foreign
currency exchange rate variances that the Group and the Company considered to be reasonably possible
at the end of the reporting period. This analysis assumes that all other variables, in particular interest rates,
remained constant and ignores any impact of forecasted sales and purchases.
126 PRESS METAL BERHAD 153208 W
NOTES TO THE FINANCIAL STATEMENTScont’d
26. FINANCIAL INSTRUMENTS cont’d
26.6 Market risk cont’d
26.6.1 Currency risk cont’d
Currency risk sensitivity analysis cont’d
Group Company
Profit or loss Profit or loss
2012 2011 2012 2011
RM’000 RM’000 RM’000 RM’000
RMB - (21,088) 17,976 14,612
A 10% (2011: 10%) weakening of RM against RMB at the end of the reporting period would have had
equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other
variables remained constant.
26.6.2 Interest rate risk
The Group’s and the Company’s fixed rate borrowings are exposed to a risk of change in their fair value
due to changes in interest rates. The Group’s and the Company’s variable rate borrowings are exposed to
a risk of change in cash flows due to changes in interest rates. Investments in equity securities and short
term receivables and payables are not significantly exposed to interest rate risk.
Risk management objectives, policies and processes for managing the risk
Interest rate exposure arising from the Group’s and the Company’s borrowings is managed through the use
of fixed and floating rate debts. The Group and the Company will consider entering into derivative financial
instruments where necessary to achieve an appropriate mix of fixed and floating rate exposure within the
Group’s policy.
Exposure to interest rate risk
The interest rate profile of the Group’s and the Company’s significant interest-bearing financial instruments,
based on carrying amounts as at the end of the reporting period were:
Group Company
31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Fixed rate
instruments
Financial assets 102,543 76,307 5,915 320,507 53,341 391
Financial
liabilities (1,772,724) (1,307,524) (741,661) (718,597) (663,602) (434,994)
(1,670,181) (1,231,217) (735,746) (398,090) (610,261) (434,603)
127ANNUAL REPORT 2012
NOTES TO THE FINANCIAL STATEMENTScont’d
26. FINANCIAL INSTRUMENTS cont’d
26.6 Market risk cont’d
26.6.2 Interest rate risk cont’d
Exposure to interest rate risk cont’d
Group Company
31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Floating rate
instruments
Financial
liabilities (819,579) (583,752) (619,355) (43,087) (76,968) (151,660)
Interest rate risk sensitivity analysis
(a) Fair value sensitivity analysis for fixed rate instruments
The Group and the Company do not account for any fixed rate financial assets and liabilities at fair
value through profit or loss, and the Group and the Company do not designate derivatives as hedging
instruments under a fair value hedge accounting model. Therefore, a change in interest rates at the
end of the reporting period would not affect profit or loss.
(b) Cash flow sensitivity analysis for variable rate instruments
A change of 30 basis points (“bp”) in interest rates at the end of the reporting period would have
increased (decreased) post-tax profit or loss by the amounts shown below. This analysis assumes
that all other variables, in particular foreign currency rates, remained constant.
Profit or loss
30 bp
increase
30 bp
decrease
Group RM’000 RM’000
2012
Floating rate instruments (1,844) 1,844
2011
Floating rate instruments (1,313) 1,313
Company
2012
Floating rate instruments (97) 97
2011
Floating rate instruments (173) 173
128 PRESS METAL BERHAD 153208 W
NOTES TO THE FINANCIAL STATEMENTScont’d
26. FINANCIAL INSTRUMENTS cont’d
26.6 Market risk cont’d
26.6.3 Other price risk
Other price risk arises from price fluctuation risk mainly on aluminium related products. The Group and
the Company mitigate their risk to the price volatility through establishing a fixed price level that the Group
and the Company consider acceptable and where deemed prudent, entering into commodity fixed price
contracts.
26.7 Fair value of financial instruments
The carrying amounts of cash and cash equivalents, short term receivables and payables and short term borrowings
approximate fair values due to the relatively short term nature of these financial instruments.
It was not practicable to estimate the fair value of the Group’s and the Company’s investment in unquoted shares
due to the lack of comparable quoted market prices and the inability to estimate fair value without incurring
excessive costs.
The fair values of other financial assets and liabilities, together with the carrying amounts shown in the statement
of financial position, are as follows:
31.12.2012 31.12.2011 1.1.2011
Carrying
amount
Fair
value
Carrying
amount
Fair
value
Carrying
amount
Fair
value
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Group
Trade and other
payables
- non-current (51,997) (50,136) (120,228) (118,907) (99,159) (94,748)
Amount due to an
associate
- non-current - - - - (6,890) (6,584)
Forward exchange
contracts:
Liabilities (2,994) (2,994) (2,994) (2,994) (2,123) (2,123)
Bank loans (1,203,240) (1,203,240) (746,999) (747,532) (702,942) (705,261)
Finance lease liabilities (27,748) (27,748) (25,122) (25,122) (11,293) (11,293)
RCSLS - liability
component (214,919) (218,956) (199,520) (204,165) - -
129ANNUAL REPORT 2012
NOTES TO THE FINANCIAL STATEMENTScont’d
26. FINANCIAL INSTRUMENTS cont’d
26.7 Fair value of financial instruments cont’d
31.12.2012 31.12.2011 1.1.2011
Carrying
amount
Fair
value
Carrying
amount
Fair
value
Carrying
amount
Fair
value
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Company
Amounts due from
subsidiaries
- non-current 62,965 62,965 62,841 62,841 - -
Amount due to an
associate
- non-current - - - - (2,955) (2,824)
Amounts due to
subsidiaries
- non-current - - - - (100,468) (96,000)
Forward exchange
contracts:
Liabilities (2,994) (2,994) (2,994) (2,994) (2,123) (2,123)
Bank loans (31,526) (31,526) (69,032) (67,907) (151,660) (154,565)
Finance lease liabilities (1,776) (1,776) (1,719) (1,719) (1,474) (1,474)
RCSLS - liability
component (214,919) (218,956) (199,520) (204,165) - -
The following summarises the methods used in determining the fair value of financial instruments reflected in the
above table.
Derivatives
The fair value of forward exchange contracts is determined by reference to statements provided by the respective
financial institutions these contracts were entered into with.
Non-derivative financial liabilities
Fair value, which is determined for disclosure purposes, is calculated based on the present value of future principal
and interest cash flows, discounted at the market rate of interest at the end of the reporting period. In respect of
the liability component of RCSLS, the market rate of interest is determined by reference to similar liabilities that do
not have a conversion option. For finance leases, the market rate of interest is determined by reference to similar
lease agreements.
130 PRESS METAL BERHAD 153208 W
NOTES TO THE FINANCIAL STATEMENTScont’d
26. FINANCIAL INSTRUMENTS cont’d
26.7 Fair value of financial instruments cont’d
Interest rates used to determine fair value
The interest rates used to discount estimated cash flows, when applicable, are as follows:
Group Company
31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011
Related party balances - - 4.00% 4.00% 4.00% 4.00%
Trade and other
payables
- non-current 6.00% 6.65% 4.00% - - -
Bank loans 5.79% 5.87% 4.60% 3.97% 3.34% 3.44%
Finance leases 3.39% 3.50% 3.78% 3.33% 3.36% 3.31%
RCSLS 6.00% 6.00% - 6.00% 6.00% -
26.7.1 Fair value hierarchy
The table below analyses financial instruments carried at fair value, by valuation method. The different levels
have been defined as follows:
or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
inputs).
Level 1 Level 2 Level 3
Group and Company RM’000 RM’000 RM’000
Financial liabilities
31 December 2012
Derivatives - 2,994 -
31 December 2011
Derivatives - 2,994 -
1 January 2011
Derivatives - 2,123 -
131ANNUAL REPORT 2012
NOTES TO THE FINANCIAL STATEMENTScont’d
27. CAPITAL MANAGEMENT
The Group’s and the Company’s objectives when managing capital are to maintain a strong capital base and safeguard
their ability to continue as going concerns, so as to maintain investor, creditor and market confidence and to sustain
future development of the business. The Directors monitor and are determined to maintain an optimal debt-to-equity
ratio that complies with debt covenants and regulatory requirements.
The debt-to-equity ratios at 31 December 2012, 31 December 2011 and 1 January 2011 were as follows:
Group Company
Note 31.12.2012 31.12.2011 1.1.2011 31.12.2012 31.12.2011 1.1.2011
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Total loans and
borrowings
(including disposal
group) 13,16 2,607,027 1,891,276 1,361,063 761,684 740,570 586,654
Less: Cash and
cash equivalents
(including disposal
group) 12,13 (289,019) (369,977) (201,211) (22,995) (188,382) (67,694)
Net debt 2,318,008 1,521,299 1,159,852 738,689 552,188 518,960
Total equity 1,404,525 1,058,187 815,453 704,391 555,313 443,424
Debt-to-equity ratio 1.7 1.4 1.4 1.0 1.0 1.2
There was no change in the Group’s and the Company’s approach to capital management during the financial year.
The high debt-to-equity ratio is due to significant investments in property, plant and equipment as the Group and the
Company continue to expand their businesses.
Under the requirement of Bursa Malaysia Practice Note No. 17/2005, the Company is required to maintain a consolidated
shareholders’ equity equal to or not less than the 25 percent of the issued and paid-up capital (excluding treasury shares)
and such shareholders’ equity is not less than RM40 million. The Company has complied with this requirement.
28. OPERATING LEASES
Leases as lessee
Non-cancellable operating lease rentals are payable as follows:
Group
31.12.2012 31.12.2011 1.1.2011
RM’000 RM’000 RM’000
Less than one year 2,457 2,055 3,193
Between one and five years 6,335 653 2,568
8,792 2,708 5,761
The Group leases properties under operating leases. The leases typically run for a period of less than 5 years, with an
option to renew the lease after that date. None of the leases includes contingent rentals.
132 PRESS METAL BERHAD 153208 W
NOTES TO THE FINANCIAL STATEMENTScont’d
29. CAPITAL COMMITMENTS
Group
31.12.2012 31.12.2011 1.1.2011
RM’000 RM’000 RM’000
Capital expenditure commitments
Property, plant and equipment
Contracted but not provided for 160,271 548,998 343,185
The capital commitments mainly relate to the construction of the aluminium smelting plants in Samalaju and Mukah.
30. CONTINGENCIES
The Directors are of the opinion that provisions are not required in respect of these matters, as it is not probable that a
future sacrifice of economic benefits will be required or the amount is not capable of reliable measurement.
Company
31.12.2012 31.12.2011 1.1.2011
RM’000 RM’000 RM’000
Guarantees given to financial institutions for facilities granted to
subsidiaries 1,398,320 723,105 504,481
31. RELATED PARTIES
Identity of related parties
For the purposes of these financial statements, parties are considered to be related to the Group if the Group or the
Company has the ability, directly or indirectly, to control or jointly control the party or exercise significant influence over
the party in making financial and operating decisions, or vice versa, or where the Group or the Company and the party
are subject to common control. Related parties may be individuals or other entities.
Related parties also include key management personnel defined as those persons having authority and responsibility
for planning, directing and controlling the activities of the Group either directly or indirectly. Key management personnel
include all the Directors of the Group.
The Group has related party relationship with its subsidiaries, associate and key management personnel.
Significant related party transactions
Related party transactions have been entered into in the normal course of business under negotiated terms. The
significant related party transactions of the Group and the Company are shown below. The balances related to the below
transactions are shown in Note 10 and 15.
133ANNUAL REPORT 2012
NOTES TO THE FINANCIAL STATEMENTScont’d
31. RELATED PARTIES cont’d
Significant related party transactions cont’d
Group Company
2012 2011 2012 2011
RM’000 RM’000 RM’000 RM’000
A. Subsidiaries
Sale of goods - - 265,874 295,462
Purchase of goods - - (377,515) (469,612)
Interest income on loan - - 19,230 6,902
B. Associate
Sale of goods 125,500 139,177 67,658 106,509
Purchase of goods (15,409) (48,347) (13,585) (47,949)
Dividend income - - 644 322
C. Company with a common Director
Rental expense on properties (720) (690) - -
D. Key management personnel
Directors
- Fees 187 187 187 187
- Remuneration 3,673 3,131 2,813 2,331
Total short-term employee benefits 3,860 3,318 3,000 2,518
Share-based payments 322 645 322 645
4,182 3,963 3,322 3,163
32. BUSINESS COMBINATIONS
2012
32.1 Acquisition of subsidiaries
i) In February 2012, the Group acquired 70% equity interest in PMIT Solar Pty. Ltd. (“PMIT”) for AUD70 satisfied
in cash. The company is currently dormant. The acquisition of PMIT is intended to further expand the Group’s
operation into Australia. In the 11 months to 31 December 2012, the subsidiary did not contribute any
revenue as it was still dormant and contributed a loss of RM463,000.
ii) In July 2012, the Group acquired all the shares of Press Metal North America LLC. (“PMNA”) for USD500
satisfied in cash. The company is involved in the trading of aluminium products. The acquisition of PMNA
has further expanded the Group’s operation into North America. In the 6 months to 31 December 2012,
the subsidiary contributed revenue of RM26,597,000 and profit of RM530,000. Based on management
accounts, if the acquisition had occurred on 1 January 2012, consolidated revenue would have been higher
by RM25,219,000 and consolidated profit for the year would have been higher by RM792,000.
134 PRESS METAL BERHAD 153208 W
NOTES TO THE FINANCIAL STATEMENTScont’d
32. BUSINESS COMBINATIONS
2012 cont’d
32.1 Acquisition of subsidiaries cont’d
The following summarises the major classes of consideration transferred, and the recognised amounts of assets
acquired and liabilities assumed at the acquisition date:
Group
2012
RM’000
Fair value of consideration transferred
Cash and cash equivalents 2
Identifiable assets acquired and liabilities assumed
Property, plant and equipment 82
Trade and other receivables 11,848
Cash and cash equivalents 49
Trade and other payables (13,015)
Total identifiable net liabilities (1,036)
Net cash inflow arising from acquisition of subsidiaries
Purchase consideration settled in cash and cash equivalents (2)
Cash and cash equivalents acquired 49
47
Goodwill
Goodwill was recognised as a result of the acquisitions as follows:
Total consideration transferred 2
Fair value of identifiable net liabilities 1,036
Goodwill 1,038
2011
32.2 Incorporation of new subsidiaries
i) In March 2011, Press Metal International Ltd., a wholly-owned subsidiary of the Company, incorporated a
new wholly-owned subsidiary in the People’s Republic of China, Press Metal International Technology Ltd.,
with an issued and paid-up capital of RMB20,000,000. In the 9 months ended 31 December 2011, the
subsidiary did not contribute any profit to the Group.
ii) In June 2011, Press Metal International Ltd., a wholly-owned subsidiary of the Company, incorporated a
new wholly-owned subsidiary in the People’s Republic of China, Press Metal International Trading Ltd., with
an issued and paid-up capital of RMB2,000,000. In the 7 months ended 31 December 2011, the subsidiary
contributed a profit of RM507,000 to the Group.
135ANNUAL REPORT 2012
NOTES TO THE FINANCIAL STATEMENTScont’d
33. SUBSEQUENT EVENT
In April 2013, the Company entered into a Memorandum of Understanding (“MOU”) with a third party with a view to
dispose of 20% of its equity interest in its wholly-owned subsidiary, Press Metal Bintulu Sdn. Bhd.. The MOU is valid for
a period of 6 months.
34. EXPLANATION OF TRANSITION TO MFRSs
As stated in Note 1(a), these are the first financial statements of the Group and of the Company prepared in accordance
with MFRSs.
The accounting policies set out in Note 2 have been applied in preparing the financial statements of the Group and of
the Company for the financial year ended 31 December 2012, the comparative information presented in these financial
statements for the financial year ended 31 December 2011 and in the preparation of the opening MFRS statement of
financial position at 1 January 2011 (the Group’s date of transition to MFRSs).
In preparing the opening consolidated statement of financial position at 1 January 2011, the Group and the Company
have adjusted amounts reported previously in financial statements prepared in accordance with previous FRSs. An
explanation of how the transition from previous FRSs to MFRSs has affected the Group’s and the Company’s financial
position, financial performance and cash flows is set out as follows:
34.1 Reconciliation of financial position
Group 1.1.2011 31.12.2011
Note FRSs
Effect of
transition
to MFRSs MFRSs FRSs
Effect of
transition
to MFRSs MFRSs
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Assets
Property, plant and
equipment a 1,476,086 (142,192) 1,333,894 2,020,204 (147,201) 1,873,003
Intangible assets b 13,187 - 13,187 13,549 (169) 13,380
Investment properties 5,797 - 5,797 5,634 - 5,634
Investment in an
associate 28,003 - 28,003 32,298 - 32,298
Other investments 6,477 - 6,477 6,837 - 6,837
Deferred tax assets 1,042 - 1,042 1,598 - 1,598
Total non-current
assets 1,530,592 (142,192) 1,388,400 2,080,120 (147,370) 1,932,750
Inventories 327,165 - 327,165 375,225 - 375,225
Trade and other
receivables 704,052 - 704,052 812,203 - 812,203
Current tax assets 2,520 - 2,520 7,259 - 7,259
Cash and cash
equivalents 201,211 - 201,211 369,977 - 369,977
Total current assets 1,234,948 - 1,234,948 1,564,664 - 1,564,664
Total assets 2,765,540 (142,192) 2,623,348 3,644,784 (147,370) 3,497,414
136 PRESS METAL BERHAD 153208 W
NOTES TO THE FINANCIAL STATEMENTScont’d
34. EXPLANATION OF TRANSITION TO MFRSs cont’d
34.1 Reconciliation of financial position cont’d
Group 1.1.2011 31.12.2011
Note FRSs
Effect of
transition
to MFRSs MFRSs FRSs
Effect of
transition
to MFRSs MFRSs
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Equity
Share capital 215,031 - 215,031 219,740 - 219,740
Share premium 3,982 - 3,982 17,110 - 17,110
Reserves (1,935) - (1,935) 134,907 (26,048) 108,859
Retained earnings d 584,286 (86,554) 497,732 665,825 (67,243) 598,582
Total equity
attributable to
owners of the
Company 801,364 (86,554) 714,810 1,037,582 (93,291) 944,291
Non-controlling interests 126,210 (25,567) 100,643 137,025 (23,129) 113,896
Total equity 927,574 (112,121) 815,453 1,174,607 (116,420) 1,058,187
Liabilities
Trade and other
payables, including
derivatives 106,049 - 106,049 120,228 - 120,228
Loans and borrowings 396,125 - 396,125 642,944 - 642,944
Deferred tax liabilities a 104,710 (30,071) 74,639 148,528 (30,950) 117,578
Total non-current
liabilities 606,884 (30,071) 576,813 911,700 (30,950) 880,750
Trade and other
payables, including
derivatives 262,394 - 262,394 303,544 - 303,544
Loans and borrowings 964,938 - 964,938 1,248,332 - 1,248,332
Current tax payables 3,750 - 3,750 6,601 - 6,601
Total current
liabilities 1,231,082 - 1,231,082 1,558,477 - 1,558,477
Total liabilities 1,837,966 (30,071) 1,807,895 2,470,177 (30,950) 2,439,227
Total equity and
liabilities 2,765,540 (142,192) 2,623,348 3,644,784 (147,370) 3,497,414
137ANNUAL REPORT 2012
NOTES TO THE FINANCIAL STATEMENTScont’d
34. EXPLANATION OF TRANSITION TO MFRSs cont’d
34.1 Reconciliation of financial position cont’d
Company 1.1.2011 31.12.2011
Note FRSs
Effect of
transition
to MFRSs MFRSs FRSs
Effect of
transition
to MFRSs MFRSs
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Assets
Property, plant and
equipment a 114,902 19,390 134,292 112,914 19,390 132,304
Investments in subsidiaries 485,751 - 485,751 531,601 - 531,601
Investment in an associate 11,812 - 11,812 11,812 - 11,812
Other investments 750 - 750 750 - 750
Trade and other receivables - - - 62,841 - 62,841
Total non-current assets 613,215 19,390 632,605 719,918 19,390 739,308
Inventories 21,225 - 21,225 29,285 - 29,285
Trade and other receivables 543,205 - 543,205 678,780 - 678,780
Cash and cash equivalents 67,694 - 67,694 188,382 - 188,382
Total current assets 632,124 - 632,124 896,447 - 896,447
Total assets 1,245,339 19,390 1,264,729 1,616,365 19,390 1,635,755
Equity
Share capital 215,031 - 215,031 219,740 - 219,740
Share premium 3,982 - 3,982 17,110 - 17,110
Reserves 5,166 - 5,166 92,952 - 92,952
Retained earnings d 199,855 19,390 219,245 206,121 19,390 225,511
Total equity 424,034 19,390 443,424 535,923 19,390 555,313
Liabilities
Trade and other payables,
including derivatives 103,423 - 103,423 - - -
Loans and borrowings 69,820 - 69,820 232,362 - 232,362
Deferred tax liabilities a 16,996 - 16,996 43,246 - 43,246
Total non-current
liabilities 190,239 - 190,239 275,608 - 275,608
Trade and other payables,
including derivatives 112,392 - 112,392 293,061 - 293,061
Loans and borrowings 516,834 - 516,834 508,208 - 508,208
Current tax payables 1,840 - 1,840 3,565 - 3,565
Total current liabilities 631,066 - 631,066 804,834 - 804,834
Total liabilities 821,305 - 821,305 1,080,442 - 1,080,442
Total equity and
liabilities 1,245,339 19,390 1,264,729 1,616,365 19,390 1,635,755
138 PRESS METAL BERHAD 153208 W
NOTES TO THE FINANCIAL STATEMENTScont’d
34. EXPLANATION OF TRANSITION TO MFRSs cont’d
34.2 Reconciliation of profit or loss and other comprehensive income for the year ended 31 December 2011
Group Note FRSs
Effect of
transition to
MFRSs MFRSs
RM’000 RM’000 RM’000
Revenue 2,268,751 - 2,268,751
Cost of sales a (1,895,015) 24,385 (1,870,630)
Gross profit 373,736 24,385 398,121
Other income 13,807 - 13,807
Distribution expenses (79,399) - (79,399)
Administrative expenses (77,381) - (77,381)
Other expenses a (33,359) (3,515) (36,874)
Results from operating activities 197,404 20,870 218,274
Finance income 4,246 - 4,246
Finance costs (82,868) - (82,868)
Net finance costs (78,622) - (78,622)
Share of profits of equity-accounted investee, net of tax 4,295 - 4,295
Profit before tax 123,077 20,870 143,947
Tax expense a,c (21,971) 879 (21,092)
Profit for the year 101,106 21,749 122,855
Other comprehensive income, net of tax
Items that may be reclassified subsequently to
profit or loss
Foreign currency translation differences for foreign
operations 49,056 (26,048) 23,008
Other comprehensive income for the year 49,056 (26,048) 23,008
Total comprehensive income for the year 150,162 (4,299) 145,863
There is no impact to the profit or loss and other comprehensive income of the Company for the financial year
ended 31 December 2011.
34.3 Material adjustments to the statements of cash flows for 2011
There are no material differences between the statement of cash flows presented under MFRSs and the statement
of cash flows presented under FRSs.
139ANNUAL REPORT 2012
NOTES TO THE FINANCIAL STATEMENTScont’d
34. EXPLANATION OF TRANSITION TO MFRSs cont’d
34.4 Notes to reconciliations
(a) Property, plant and equipment – Deemed cost exemption – fair value
The Group and the Company elected to apply the optional exemption to measure certain property, plant and equipment at fair value at the date of transition to MFRSs and use that fair value as deemed cost under MFRSs.
The aggregate fair value of these property, plant and equipment of the Group and of the Company at 1 January 2011 was determined to be RM277,373,000 and RM25,300,000, respectively compared to the then carrying amount of RM419,565,000 and RM5,910,000 respectively under FRSs.
The impact arising from the change is summarised as follows:
Group Company
2011 2011
RM’000 RM’000
Consolidated statement of profit or loss and other
comprehensive income
Cost of sales - depreciation 24,385 -
Other expenses - depreciation (3,515) -
Adjustment before tax 20,870 -
Group Company
1.1.2011 31.12.2011 1.1.2011 31.12.2011
RM’000 RM’000 RM’000 RM’000
Consolidated statement of financial
position
Property, plant and equipment (142,192) (147,201) 19,390 19,390
Related tax effect 30,071 30,950 - -
Adjustment to equity (112,121) (116,251) 19,390 19,390
(b) Business combinations – foreign exchange on fair value adjustments and goodwill
Under FRSs, assets and liabilities of foreign operations were translated to Ringgit Malaysia at closing rate at the end of reporting period, except for goodwill and fair value adjustments arising from business combinations occurred before 1 January 2006 which were reported using the historical rate at the date of acquisition.
Upon transition to MFRSs, the Group has not applied MFRS 121, The Effect of Changes in Foreign Exchange Rates retrospectively to fair value adjustments and goodwill from business combinations that occurred before 1 January 2011. Such fair value adjustments and goodwill are treated as assets and liabilities of the Company rather than as assets and liabilities of the acquiree, and are reported using the exchange rate applied immediately prior to the date of transition.
Group
31.12.2011
RM’000
Consolidated statement of financial position
Goodwill (169)
Adjustment to foreign currency translation reserve 169
140 PRESS METAL BERHAD 153208 W
NOTES TO THE FINANCIAL STATEMENTScont’d
34. EXPLANATION OF TRANSITION TO MFRSs cont’d
34.4 Notes to reconciliations cont’d
(c) Income tax
The changes that affected the deferred tax liabilities are as follows:
Group
Note 1.1.2011 31.12.2011
RM’000 RM’000
Property, plant and equipment a (30,071) (30,950)
Decrease in deferred tax liabilities (30,071) (30,950)
The effect on the statement of profit or loss and other comprehensive income for the financial year ended 31
December 2011 was to decrease the previously reported tax charge of the Group for the financial year by
RM879,000.
(d) Retained earnings
The changes that affected the retained earnings are as follows:
Group Company
Note 1.1.2011 31.12.2011 1.1.2011 31.12.2011
RM’000 RM’000 RM’000 RM’000
Property, plant and equipment a (86,554) (67,243) 19,390 19,390
(Decrease)/Increase in
retained earnings (86,554) (67,243) 19,390 19,390
141ANNUAL REPORT 2012
NOTES TO THE FINANCIAL STATEMENTScont’d
35. SUPPLEMENTARY FINANCIAL INFORMATION ON THE BREAKDOWN OF REALISED AND UNREALISED
PROFITS AND LOSSES
The breakdown of the retained earnings of the Group and of the Company as at 31 December, into realised and
unrealised profits, pursuant to Paragraphs 2.06 and 2.23 of Bursa Malaysia Main Market Listing Requirements, are as
follows:
Group Company
2012 2011 2012 2011
RM’000 RM’000 RM’000 RM’000
Total retained earnings of the Company and its
subsidiaries
- realised 677,811 646,047 239,464 245,084
- unrealised 55,399 (92,217) (12,258) (19,573)
733,210 553,830 227,206 225,511
Total share of retained earnings of an associate
- realised 22,654 20,486 - -
755,864 574,316 227,206 225,511
Less: Consolidation adjustments 13,230 24,266 - -
Total retained earnings 769,094 598,582 227,206 225,511
The determination of realised and unrealised profits is based on the Guidance of Special Matter No.1, Determination of
Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad
Listing Requirements, issued by the Malaysian Institute of Accountants on 20 December 2010.
142 PRESS METAL BERHAD 153208 W
STATEMENT BY DIRECTORS pursuant to Section 169(15) of the Companies Act, 1965
STATUTORY DECLARATION pursuant to Section 169(16) of the Companies Act, 1965
In the opinion of the Directors, the financial statements set out on pages 51 to 140 are drawn up in accordance with Malaysian
Financial Reporting Standards, International Financial Reporting Standards and the requirements 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 of 31 December 2012
and of their financial performance and cash flows for the financial year then ended.
In the opinion of the Directors, the information set out in Note 35 on page 141 to the financial statements has been compiled
in accordance with the Guidance on Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the
Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute
of Accountants, and presented based on the format prescribed by Bursa Malaysia Securities Berhad.
Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:
DATO’ KOON POH KEONG DATO’ KOON POH TAT
Petaling Jaya, Selangor
25 April 2013
I, Loo Tai Choong, the officer primarily responsible for the financial management of Press Metal Berhad, do solemnly and
sincerely declare that the financial statements set out on pages 51 to 141 are, to the best of my knowledge and belief, correct
and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the
Statutory Declarations Act, 1960.
Subscribed and solemnly declared by the above named in Kuala Lumpur in the Federal Territory on 25 April 2013.
LOO TAI CHOONG
Before me:
LEE CHIN HIN W493
Commissioner for Oaths
Kuala Lumpur
143ANNUAL REPORT 2012
REPORT ON THE FINANCIAL STATEMENTS
We have audited the financial statements of Press Metal Berhad, which comprise the statements of financial position as at
31 December 2012 of the Group and of the Company, and the statements of profit or loss and other comprehensive income,
changes in equity and cash flows of the Group and of the Company for the financial year then ended, and a summary of
significant accounting policies and other explanatory information, as set out on pages 51 to 140.
Directors’ Responsibility for the Financial Statements
The Directors of the Company are responsible for the preparation of financial statements so as to give a true and fair view in
accordance with Malaysian Financial Reporting Standards (“MFRS”), International Financial Reporting Standards (“IFRS”) and
the requirements of the Companies Act, 1965 in Malaysia. The Directors are also responsible for such internal control as the
Directors determine is necessary to enable the preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in
accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.
The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s
preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit
also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates
made by the Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company as
of 31 December 2012 and of their financial performance and cash flows for the financial year then ended in accordance with
MFRS, IFRS and the requirements of the Companies Act, 1965 in Malaysia.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:
(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its
subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.
(b) We have considered the accounts and the auditors’ reports of all the subsidiaries of which we have not acted as auditors,
which are indicated in Note 6 to the financial statements.
(c) We are satisfied that the accounts of the subsidiaries that have been consolidated with the Company’s financial statements
are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the
Group and we have received satisfactory information and explanations required by us for those purposes.
(d) The audit reports on the accounts of the subsidiaries did not contain any qualification or any adverse comment made
under Section 174(3) of the Act.
INDEPENDENT AUDITORS’ REPORT to the members of Press Metal Berhad
(Company No. 153208 W) (Incorporated in Malaysia)
144 PRESS METAL BERHAD 153208 W
OTHER REPORTING RESPONSIBILITIES
Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The information set
out in Note 35 on page 141 to the financial statements has been compiled by the Company as required by the Bursa Malaysia
Securities Berhad Listing Requirements and is not required by the MFRS or IFRS. We have extended our audit procedures
to report on the process of compilation of such information. In our opinion, the information has been properly compiled, in all
material respects, in accordance with the Guidance on Special Matter No.1, Determination of Realised and Unrealised Profits
or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the
Malaysian Institute of Accountants and presented based on the format prescribed by Bursa Malaysia Securities Berhad.
OTHER MATTERS
As stated in Note 1(a) to the financial statements, Press Metal Berhad adopted MFRS and IFRS on 1 January 2012 with a
transition date of 1 January 2011. These standards were applied retrospectively by the Directors to the comparative information
in these financial statements, including the statements of financial position as at 31 December 2011 and 1 January 2011, and
the statements of profit or loss and other comprehensive income, changes in equity and cash flows for the financial year ended
31 December 2011 and related disclosures. We were not engaged to report on the comparative information that is prepared in
accordance with MFRS and IFRS, and hence it is unaudited. Our responsibilities as part of our audit of the financial statements
of the Group and of the Company for the financial year ended 31 December 2012 have, in these circumstances, included
obtaining sufficient appropriate audit evidence that the opening balances as at 1 January 2012 do not contain misstatements
that materially affect the financial position as of 31 December 2012 and financial performance and cash flows for the financial
year then ended.
This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies
Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this
report.
KPMG FOONG MUN KONG
Firm Number: AF 0758 Approval Number: 2613/12/14(J)
Chartered Accountants Chartered Accountant
Petaling Jaya, Selangor
25 April 2013
INDEPENDENT AUDITORS’ REPORT
to the members of Press Metal Berhad (Company No. 153208 W) (Incorporated in Malaysia)
cont’d
145ANNUAL REPORT 2012
LIST OF PROPERTIESheld by the Group as at 31 December 2012
Proprietor Location
Description/
Age (Year)
Existing
Use Tenure
Area
(Square
feet)
Net Book
Value as at
31/12/2012
RM‘000
Press Metal
Sarawak Sdn
Bhd
Lot 211 & 212
Block 293
Mukah Land District
Mukah, Sarawak
Leasehold
land and
buildings
5 years
Factory cum
office
Leasehold
for 99
years
44,913,337 390,460
Press Metal
Bintulu Sdn
Bhd
Lot 36, Block 1
Kemena Land District
Samalaju Industrial Park
Bintulu, Sarawak
Leasehold
land and
buildings
2 years
Factory cum
office (under
construction)
Leasehold
for 60
years
20,946,570 404,107
Press Metal
International
Limited
Area C
Sanshui Industrial Park
Sanshui District
Foshan City, Guangdong
Province, China
Leasehold
land and
buildings
7 years
Factory cum
office
Leasehold
for 50
years
5,092,976 228,811
Press Metal
Berhad
Lot 6486, Mukim Kapar
Daerah Klang
Selangor Darul Ehsan
Freehold
land and
buildings
19 years
Factory cum
office
Freehold 417,348 31,835
Press Metal
Berhad
Lot 6464, Mukim Kapar
Daerah Klang
Selangor Darul Ehsan
Freehold
land and
buildings
19 years
Factory cum
office
Freehold 217,000 16,552
Angkasa Jasa
Sdn Bhd
Pt 7649, Cheras Jaya
Mukim Cheras
Daerah Ulu Langat
Selangor Darul Ehsan
Leasehold
land and
building
24 years
Factory cum
office
Leasehold
for 99
years
expiring 14
May 2088
44,584 3,477
Angkasa Jasa
Sdn Bhd
Pantai Plaza, APH 20
Menara Atlas
Kuala Lumpur
Commercial
office suite
13 years
Tenanted
Freehold 5,339 2,545
Press Metal
Berhad
HS (D) 85856, PTD 48284
Mukim Plentong
Daerah Johor Bahru
Johor Darul Takzim
Factory land
and building
1 year
Warehouse
Freehold
849 1,593
Angkasa Jasa
Sdn Bhd
Pantai Plaza, Tower 5
Suite No. 1002
Kuala Lumpur
Commercial
office suite
14 years
Vacant
Freehold 1,392 870
Angkasa Jasa
Sdn Bhd
Lot 73803, Mukim Klang
Selangor Darul Ehsan
Factory land
and building
7 years
Tenanted
Freehold 6,628 669
146 PRESS METAL BERHAD 153208 W
ANALYSIS OF SHAREHOLDINGSas at 29 April 2013
Authorised Share Capital : RM500,000,000
Issued and Paid-Up Share Capital : RM253,889,438.50
Class of Shares : Ordinary Shares of RM0.50 each
Voting Rights : One vote per share
Size of Holdings
No. of
Shareholders/
Depositors
% of
Shareholders/
Depositors
No. of Shares
Held
% of Issued
Capital
Less than 100 37 0.96 1,178 0.00
100 to 1,000 345 8.97 295,857 0.06
1,001 to 10,000 2,219 57.68 11,395,859 2.24
10,001 to 100,000 1,005 26.13 30,300,791 5.97
100,001 to less than 5% of issued shares 237 6.16 339,242,047 66.81
5% and above of issued shares 4 0.10 126,543,145 24.92
Total 3,847 100.00 507,778,877 100.00
DIRECTORS’ SHAREHOLDINGS
as at 29 April 2013
Direct Indirect
Name
No. of Shares
Held
% of Issued
Capital
No. of Shares
Held
% of Issued
Capital
Dato’ (Dr.) Megat Abdul Rahman
Bin Megat Ahmad 14,691,992 2.89 787,000 ^^ 0.15
Koon Poh Ming 27,333,439 5.38 76,000,000 * 14.97
Dato’ Koon Poh Keong 104,771,906 20.63 75,229,700 # 14.82
Tuan Haji Mohamad Faiz Bin Abdul Hamid 192,398 0.04 0 0.00
Koon Poh Weng 15,921,048 3.13 6,576,600 ^ 1.30
Koon Poh Kong 11,541,194 2.27 3,000 + 0.00
Dato’ Koon Poh Tat 14,038,000 2.76 499,522 ** 0.10
Loo Lean Hock 10,000 0.00 0 0.00
Tan Heng Kui 119,000 0.02 0 0.00
^^ Deemed interested in the shares by virtue of his interest in JOEM Sendirian Berhad and shares held by his spouse, Datin Johariah
Binti Abdullah Khalid
* Deemed interested in the shares held by his spouse, Ong Soo Fan and his direct interest in Alpha Milestone Sdn Bhd pursuant to
Section 6A of the Companies Act, 1965# Deemed interested in the shares held by his spouse, Datin Khoo Ee Pheng and his direct interest in Alpha Milestone Sdn Bhd
pursuant to Section 6A of the Companies Act, 1965^ Deemed interested in the shares held by his spouse, Chan Poh Choo and daughter, Koon Sim Ee+ Deemed interested in the shares held by his spouse, Lee Sook Ching
** Deemed interested in the shares held by his spouse, Datin Chan Hean Heoh and son, Koon Pak Soon
147ANNUAL REPORT 2012
ANALYSIS OF SHAREHOLDINGS
as at 29 April 2013cont’d
SUBSTANTIAL SHAREHOLDERS
as per Register of Substantial Shareholders as at 29 April 2013
Direct Indirect
Name
No. of Shares
Held
% of Issued
Capital
No. of Shares
Held
% of Issued
Capital
Dato’ Koon Poh Keong 104,771,906 20.63 75,229,700 # 14.82
Koon Poh Ming 27,333,439 5.38 76,000,000 * 14.97
Datin Khoo Ee Pheng 10,229,700 2.01 104,771,906 @ 20.63
Ong Soo Fan 11,000,000 2.17 27,333,439 + 5.38
Alpha Milestone Sdn Bhd 65,000,000 12.80 0 0.00
# Deemed interested in the shares held by his spouse, Datin Khoo Ee Pheng and his direct interest in Alpha Milestone Sdn Bhd
pursuant to Section 6A of the Companies Act, 1965
* Deemed interested in the shares held by his spouse, Ong Soo Fan and his direct interest in Alpha Milestone Sdn Bhd pursuant to
Section 6A of the Companies Act, 1965@ Deemed interested in the shares held by her spouse, Dato’ Koon Poh Keong+ Deemed interested in the shares held by her spouse, Koon Poh Ming
THIRTY LARGEST SHAREHOLDERS
as at 29 April 2013
No. Name of Shareholders
No. of Shares
Held
% of Issued
Capital
1 MAYBANK NOMINEES (TEMPATAN) SDN BHD
Pledged Securities Account for Dato’ Koon Poh Keong
37,500,000 7.39
2 RHB NOMINEES (TEMPATAN) SDN BHD
Pledged Securities Account for Alpha Milestone Sdn Bhd
36,181,818 7.13
3 KENANGA NOMINEES (TEMPATAN) SDN BHD
Pledged Securities Account for Dato’ Koon Poh Keong
26,811,327 5.28
4 KENANGA NOMINEES (TEMPATAN) SDN BHD
Pledged Securities Account for Alpha Milestone Sdn Bhd
26,050,000 5.13
5 RHB CAPITAL NOMINEES (TEMPATAN) SDN BHD
Pledged Securities Account for Dato’ Koon Poh Keong
19,500,000 3.84
6 RHB NOMINEES (TEMPATAN) SDN BHD
Pledged Securities Account for Koon Yun Hong @ Koon Pow Shyang
16,000,000 3.15
7 MAYBANK SECURITIES NOMINEES (TEMPATAN) SDN BHD
Pledged Securities Account for Loh Kwi Yong
15,225,150 3.00
8 DATO’ (DR.) MEGAT ABDUL RAHMAN BIN MEGAT AHMAD 14,691,992 2.89
9 AMSEC NOMINEES (TEMPATAN) SDN BHD
Pledged Securities Account for Dato’ Koon Poh Keong
11,173,926 2.20
10 KOON POH MING 10,000,000 1.97
11 RHB NOMINEES (TEMPATAN) SDN BHD
Pledged Securities Account for Datin Khoo Ee Pheng
10,000,000 1.97
12 ONG SOO FAN 9,000,000 1.77
13 KENANGA NOMINEES (TEMPATAN) SDN BHD
Pledged Securities Account for Koon Pui Lan
7,924,324 1.56
148 PRESS METAL BERHAD 153208 W
ANALYSIS OF SHAREHOLDINGS
as at 29 April 2013cont’d
THIRTY LARGEST SHAREHOLDERS
as at 29 April 2013 cont’d
No. Name of Shareholders
No. of Shares
Held
% of Issued
Capital
14 KOON POH WENG 7,900,000 1.56
15 KOON POH MING 7,444,590 1.47
16 CHAN POH CHOO 6,531,000 1.29
17 ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHD
Pledged Securities Account for Koon Poh Weng
6,400,000 1.26
18 ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHD
Pledged Securities Account for Dato’ Koon Poh Tat
6,001,800 1.18
19 DOITBEST HOLDINGS SDN. BHD. 5,355,610 1.05
20 KENANGA NOMINEES (TEMPATAN) SDN BHD
Pledged Securities Account for Loo Seow Hwai
5,315,100 1.05
21 HLB NOMINEES (TEMPATAN) SDN BHD
Pledged Securities Account for Dato’ Tan Ting Wong
5,292,000 1.04
22 EB NOMINEES (TEMPATAN) SENDIRIAN BERHAD
Pledged Securities Account for Koon Poh Kong
5,170,398 1.02
23 KOON POH MING 5,144,000 1.01
24 TAN MEW LAN 4,753,460 0.94
25 RHB NOMINEES (TEMPATAN) SDN BHD
Pledged Securities Account for Dato’ Koon Poh Tat
4,700,200 0.93
26 CHAN POH LENG 4,569,600 0.90
27 EB NOMINEES (TEMPATAN) SENDIRIAN BERHAD
Pledged Securities Account for Dato’ Koon Poh Keong
4,500,000 0.88
28 ECML NOMINEES (ASING) SDN. BHD.
United Forest Limited
4,500,000 0.88
29 CHAN YAT WAI 4,484,800 0.88
30 MAYBANK SECURITIES NOMINEES (TEMPATAN) SDN BHD
Pledged Securities Account for Koon Yun Hong @ Koon Pow Shyang
4,220,950 0.83
TOTAL 332,342,045 65.45
149ANNUAL REPORT 2012
ANALYSIS OF REDEEMABLE CONVERTIBLE
SECURED LOAN STOCKS (“RCSLS”) HOLDINGSas at 29 April 2013
Total number of RCSLS issued : 145,684,940
Total number of Outstanding RCSLS : 145,684,940
Issued Price of RCSLS : RM2.20
Size of RCSLS Holdings
No. of RCSLS
Holders/
Depositors
% of RCSLS
Holders/
Depositors
No. of
RCSLS Held
% of Issued
RCSLS
Less than 100 21 2.23 794 0.00
100 to 1,000 160 17.02 126,402 0.09
1,001 to 10,000 457 48.62 1,991,650 1.37
10,001 to 100,000 223 23.72 7,963,719 5.46
100,001 to less than 5% of issued RCSLS 75 7.98 30,282,515 20.79
5% and above of issued RCSLS 4 0.43 105,319,860 72.29
Total 940 100.00 145,684,940 100.00
DIRECTORS’ RCSLS HOLDINGS
as per Register of Directors’ RSCLS Holdings as at 29 April 2013
Direct Indirect
Name
No. of
RCSLS Held
% of Issued
RCSLS
No. of
RCSLS Held
% of Issued
RCSLS
Dato’ (Dr.) Megat Abdul Rahman Bin
Megat Ahmad 0 0.00 0 0.00
Koon Poh Ming 0 0.00 106,319,860 * 72.98
Dato’ Koon Poh Keong 0 0.00 105,319,890 # 72.29
Tuan Haji Mohamad Faiz Bin Abdul Hamid 47,466 0.03 0 0.00
Koon Poh Weng 0 0.00 192,000 ^ 0.13
Koon Poh Kong 0 0.00 151,000 + 0.10
Dato’ Koon Poh Tat 0 0.00 133,174 ** 0.09
Loo Lean Hock 0 0.00 0 0.00
Tan Heng Kui 37,000 0.02 0 0.00
* Deemed interested in the RCSLS held by his spouse, Ong Soo Fan and by virtue of his direct interest in Alpha Milestone Sdn Bhd pursuant to Section 6A of the Companies Act, 1965
# Deemed interested in the RCSLS by virtue of his direct interest in Alpha Milestone Sdn Bhd pursuant to Section 6A of the Companies Act, 1965
^ Deemed interested in the RCSLS held by his spouse, Chan Poh Choo and daughter, Koon Sim Ee + Deemed interested in the RCSLS held by his spouse, Lee Sook Ching
** Deemed interested in the RCSLS held by his spouse, Datin Chan Hean Heoh
150 PRESS METAL BERHAD 153208 W
ANALYSIS OF REDEEMABLE CONVERTIBLE
SECURED LOAN STOCKS (“RCSLS”) HOLDINGS
as at 29 April 2013cont’d
THIRTY LARGEST RCSLS HOLDERS
as at 29 April 2013
No. Name of RCSLS Holders
No. of RCSLS
Held
% of Issued
RCSLS
1 MAYBANK NOMINEES (TEMPATAN) SDN BHD
Pledged Securities Account for Alpha Milestone Sdn Bhd
52,659,929 36.15
2 ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHD
Pledged Securities Account for Alpha Milestone Sdn. Bhd.
21,545,622 14.79
3 ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHD
Pledged Securities Account for Alpha Milestone Sdn. Bhd.
18,181,818 12.48
4 ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHD
Pledged Securities Account For Alpha Milestone Sdn. Bhd.
12,932,491 8.88
5 HLB NOMINEES (TEMPATAN) SDN BHD
Pledged Securities Account for Dato’ Tan Ting Wong
2,171,000 1.49
6 TOH EAN HAI 2,095,100 1.44
7 KENANGA NOMINEES (TEMPATAN) SDN BHD
Pledged Securities Account for Loo Seow Hwai
1,335,000 0.92
8 TAN MEW LAN 1,200,000 0.82
9 ECML NOMINEES (TEMPATAN) SDN. BHD
Pledged Securities Account for Dato’ Tan Ting Wong
1,067,000 0.73
10 ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHD
Pledged Securities Account for Tan Lam Kiew
1,000,000 0.69
11 ONG SOO FAN 1,000,000 0.69
12 CASATECHNIC SDN BHD 841,000 0.58
13 ONN PING LAN 787,300 0.54
14 ONG SOW YONG 738,400 0.51
15 CHAN YAT WAI 724,000 0.50
16 AMBANK (M) BERHAD
Pledged Securities Account for Tee Keng Kok
710,000 0.49
17 AIBB NOMINEES (TEMPATAN) SDN BHD
Pledged Securities Account for Tan Mew Lan
700,000 0.48
18 CIMSEC NOMINEES (TEMPATAN) SDN BHD
CIMB Bank For Khoo Chai Pek
689,700 0.47
19 DATO’ TAN TING WONG 685,000 0.47
20 CHUA SENG SAM 640,000 0.44
21 EOM SYSTEMS SDN. BHD. 633,000 0.43
22 MAYBANK NOMINEES (TEMPATAN) SDN BHD
Pledged Securities Account for Ravindra A/L Panchalingam
610,000 0.42
23 PUBLIC NOMINEES (TEMPATAN) SDN BHD
Pledged Securities Account for Dato’ Tan Ting Wong
552,000 0.38
24 EU MUI @ EE SOO MEI 551,000 0.38
25 LUCKY STAR PTE.LTD. 458,200 0.31
151ANNUAL REPORT 2012
ANALYSIS OF REDEEMABLE CONVERTIBLE
SECURED LOAN STOCKS (“RCSLS”) HOLDINGS
as at 29 April 2013cont’d
THIRTY LARGEST RCSLS HOLDERS
as at 29 April 2013 cont’d
No. Name of RCSLS Holders
No. of RCSLS
Held
% of Issued
RCSLS
26 KOON FHO YIN 424,000 0.29
27 LUCKY STAR PTE.LTD. 423,200 0.29
28 RHB CAPITAL NOMINEES (TEMPATAN) SDN BHD
Pledged Securities Account for Tan Boon Seng
417,566 0.28
29 GINA GAN 412,300 0.28
30 CHAN YUE LENG 359,000 0.24
TOTAL 126,543,626 86.86
152 PRESS METAL BERHAD 153208 W
ANALYSIS OF WARRANT HOLDINGSas at 29 April 2013
Total number of Warrants C issued : 145,684,940
Total number of Outstanding Warrants C : 80,683,940
Exercise Price of Warrants C : RM2.20
Size of Warrant Holdings
No. of Warrant
Holders/
Depositors
% of Warrant
Holders/
Depositors
No. of
Warrants Held
% of Issued
Warrants
Less than 100 25 3.05 1,148 0.00
100 to 1,000 145 17.66 116,920 0.14
1,001 to 10,000 396 48.23 1,747,086 2.17
10,001 to 100,000 184 22.41 7,546,305 9.35
100,001 to less than 5% of issued warrants 66 8.04 25,662,021 31.81
5% and above of issued warrants 5 0.61 45,610,460 56.53
Total 821 100.00 80,683,940 100.00
DIRECTORS’ WARRANT HOLDINGS
as per Register of Directors’ Warrants Holdings as at 29 April 2013
Direct Indirect
Name
No. of
Warrants Held
% of Issued
Warrants
No. of
Warrants Held
% of Issued
Warrants
Dato' (Dr.) Megat Abdul Rahman
Bin Megat Ahmad 0 0.00 0 0.00
Koon Poh Ming 0 0.00 41,319,860 * 51.21
Dato' Koon Poh Keong 0 0.00 40,319,860 # 49.98
Tuan Haji Mohamad Faiz Bin Abdul Hamid 47,466 0.06 0 0.00
Koon Poh Weng 0 0.00 192,000 ^ 0.24
Koon Poh Kong 0 0.00 151,000 + 0.18
Dato' Koon Poh Tat 0 0.00 133,174 ** 0.17
Loo Lean Hock 0 0.00 0 0.00
Tan Heng Kui 37,000 0.05 0 0.00
* Deemed interested in the warrants held by his spouse, Ong Soo Fan and by virtue of his direct interest in Alpha Milestone Sdn Bhd pursuant to Section 6A of the Companies Act, 1965
# Deemed interested in the warrants by virtue of his direct interest in Alpha Milestone Sdn Bhd pursuant to Section 6A of the Companies Act, 1965
^ Deemed interested in the warrants held by his spouse, Chan Poh Choo and daughter, Koon Sim Ee + Deemed interested in the warrants held by his spouse, Lee Sook Ching ** Deemed interested in the warrants held by his spouse, Datin Chan Hean Heoh
153ANNUAL REPORT 2012
ANALYSIS OF WARRANT HOLDINGS
as at 29 April 2013cont’d
THIRTY LARGEST WARRANT HOLDERS
as at 29 April 2013
No. Name of Warrant Holders
No. of Warrant
Held
% of Issued
Warrant
1 MAYBANK NOMINEES (TEMPATAN) SDN BHD
Pledged Securities Account for Alpha Milestone Sdn Bhd
12,659,929 15.69
2 ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHD
Pledged Securities Account for Alpha Milestone Sdn. Bhd.
10,907,815 13.52
3 ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHD
Pledged Securities Account for Alpha Milestone Sdn. Bhd.
9,204,835 11.41
4 ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHD
Pledged Securities Account for Alpha Milestone Sdn. Bhd.
6,547,281 8.11
5 KENANGA NOMINEES (TEMPATAN) SDN BHD
Pledged Securities Account for Loo Seow Hwai
6,290,600 7.80
6 MAYBANK NOMINEES (TEMPATAN) SDN BHD
Maybank Trustees Berhad for CIMB-Principal Strategic Bond Fund
1,579,400 1.96
7 RHB CAPITAL NOMINEES (TEMPATAN) SDN BHD
Pledged Securities Account for Tan Boon Seng
1,110,000 1.38
8 ECML NOMINEES (TEMPATAN) SDN. BHD
Pledged Securities Account for Dato’ Tan Ting Wong
1,067,000 1.32
9 HLB NOMINEES (TEMPATAN) SDN BHD
Pledged Securities Account for Dato’ Tan Ting Wong
1,044,000 1.29
10 CASATECHNIC SDN BHD 1,038,100 1.29
11 ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHD
Pledged Securities Account for Tan Lam Kiew
1,000,000 1.24
12 ONG SOO FAN 1,000,000 1.24
13 ALPHA MILESTONE SDN BHD 931,818 1.15
14 LAU SIE KUONG 888,800 1.10
15 TAN MEW LAN 830,200 1.03
16 AIBB NOMINEES (TEMPATAN) SDN BHD
Pledged Securities Account for Tan Mew Lan
700,000 0.87
17 DATO’ TAN TING WONG 685,000 0.85
18 KHOE BOON HUAT 650,000 0.81
19 ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHD
Pledged Securities Account for Koon Fho Yin
639,000 0.79
20 EOM SYSTEMS SDN. BHD. 633,000 0.78
21 RHB CAPITAL NOMINEES (TEMPATAN) SDN BHD
Pledged Securities Account for Ng Chee Teong
628,700 0.78
22 NG TEA HOO @ HWANG CHOW HERK 600,700 0.74
23 PUBLIC NOMINEES (TEMPATAN) SDN BHD
Pledged Securities Account for Dato’ Tan Ting Wong
552,000 0.68
154 PRESS METAL BERHAD 153208 W
ANALYSIS OF WARRANT HOLDINGS
as at 29 April 2013cont’d
THIRTY LARGEST WARRANT HOLDERS
as at 29 April 2013 cont’d
No. Name of Warrant Holders
No. of Warrant
Held
% of Issued
Warrant
24 CIMSEC NOMINEES (TEMPATAN) SDN BHD
CIMB Bank for Ng Swee Sing @ Eng Swee Sing
540,000 0.67
25 BERNADETTE MARGARET LAU 522,000 0.65
26 LYE THAI SANG 496,900 0.62
27 CHAN YUE LENG 473,000 0.59
28 HLIB NOMINEES (TEMPATAN) SDN BHD
Hong Leong Bank Bhd for Lau Sie Kuong
368,000 0.46
29 LEE TEK MOOK @ LEE TEH MOH 333,333 0.41
30 TEO YONG FONG 301,000 0.37
TOTAL 64,222,411 79.60
155ANNUAL REPORT 2012
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN THAT the Twenty-Seventh Annual General Meeting of Press Metal Berhad will be held at Room 8, Level 6, Best Western Premier Dua Sentral, 8, Jalan Tun Sambanthan, 50470 Kuala Lumpur on Thursday, 20 June 2013 at 10:30 a.m.
AGENDA
As Ordinary Business
1. To receive the Audited Financial Statements for the financial year ended 31 December 2012 together with the Reports of the Directors and Auditors thereon.
2. To approve the payment of Directors’ Fees for the financial year ended 31 December 2012.
3. To re-elect the following Directors retiring pursuant to Article 92 of the Articles of Association of the Company:
(i) Koon Poh Ming
(ii) Koon Poh Kong
4. To consider and, if thought fit, to pass the following resolution pursuant to Section 129(6) of the Companies Act, 1965:
“That pursuant to Section 129(6) of the Companies Act, 1965, Dato’ (Dr.) Megat Abdul Rahman Bin Megat Ahmad be re-appointed as Director to hold office until the conclusion of the next Annual General Meeting of the Company.”
5. To consider and, if thought fit, to pass the following resolution pursuant to Section 129(6) of the Companies Act, 1965:
“That pursuant to Section 129(6) of the Companies Act, 1965, Tuan Haji Mohamad Faiz Bin Abdul Hamid be re-appointed as Director to hold office until the conclusion of the next Annual General Meeting of the Company.”
6. To re-appoint Messrs KPMG as Auditors of the Company and to authorise the Directors to fix their remuneration.
As Special Business
To consider and, if thought fit, to pass the following resolutions:
7. Authority under Section 132D of the Companies Act, 1965 for the Directors to allot and issue shares
“THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and are hereby authorised to allot and issue shares in the Company at any time until the conclusion of the next Annual General Meeting and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fit provided that the aggregate number of shares to be issued does not exceed ten per centum (10%) of the issued share capital of the Company for the time being, subject always to the approval of all relevant regulatory bodies being obtained for such allotment and issue.”
8. Authority for Tuan Haji Mohamad Faiz Bin Abdul Hamid to continue in office as Independent Non-Executive Director
“THAT authority be and is hereby given to Tuan Haji Mohamad Faiz Bin Abdul Hamid who has served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine (9) years, to continue to act as an Independent Non-Executive Director of the Company until the conclusion of the next Annual General Meeting in accordance with the
Malaysian Code of Corporate Governance 2012.”
Ordinary Resolution 1
Ordinary Resolution 2
Ordinary Resolution 3
Ordinary Resolution 4
Ordinary Resolution 5
Ordinary Resolution 6
Ordinary Resolution 7
Ordinary Resolution 8
156 PRESS METAL BERHAD 153208 W
NOTICE OF ANNUAL GENERAL MEETINGcont’d
9. Authority for Loo Lean Hock to continue in office as Independent Non-Executive
Director
“THAT authority be and is hereby given to Loo Lean Hock who has served as an Independent
Non-Executive Director of the Company for a cumulative term of more than nine (9) years, to
continue to act as an Independent Non-Executive Director of the Company until the conclusion
of the next Annual General Meeting in accordance with the Malaysian Code of Corporate
Governance 2012.”
10. Authority for Tan Heng Kui to continue in office as Independent Non-Executive
Director
“THAT authority be and is hereby given to Tan Heng Kui who has served as an Independent
Non-Executive Director of the Company for a cumulative term of more than nine (9) years, to
continue to act as an Independent Non-Executive Director of the Company until the conclusion
of the next Annual General Meeting in accordance with the Malaysian Code of Corporate
Governance 2012.”
11. Proposed Renewal of Shareholders’ Mandate and Proposed New Shareholders’
Mandate for Press Metal Berhad and its subsidiaries to enter into Recurrent Related
Party Transactions of a Revenue or Trading Nature (“Proposed Shareholders’
Mandate”)
“THAT approval be and is hereby given to the Company and its subsidiaries (“PMB Group”)
to enter into recurrent related party transactions of a revenue or trading nature as set out
in Section 2.3 (i) of the Circular to Shareholders dated 29 May 2013 (“Circular”) which are
necessary for the PMB Group’s day-to-day operations subject to the following:-
a) the transactions are in the ordinary course of business and on normal commercial terms
which are not more favourable to the related parties than those generally available to the
public and are not to the detriment of the minority shareholders of the Company; and
b) the disclosure will be made in the Annual Report of the breakdown of the aggregate
value of the recurrent related party transactions conducted pursuant to the Proposed
Shareholders’ Mandate during the financial year on the type of recurrent related party
transactions made, the names of the related parties involved in each type of recurrent
related party transactions and their relationships with the Company.
THAT the authority conferred shall continue to be in force until:-
i) the conclusion of the next Annual General Meeting (“AGM”) of the Company following
the forthcoming AGM at which the Proposed Shareholders’ Mandate is approved, at
which time it will lapse, unless by a resolution passed at the AGM, the mandate is again
renewed;
ii) the expiration of the period within which the next AGM of the Company is required to be
held pursuant to Section 143(1) of the Companies Act, 1965 (“Act”) (but shall not extend
to such extension as may be allowed pursuant to Section 143(2) of the Act); or
iii) revoked or varied by resolution passed by the shareholders in general meeting,
whichever is the earlier.
AND THAT the Directors of the Company be and are hereby authorised to complete and
do all such acts and things (including executing all such documents as may be required)
as they may consider expedient or necessary to give effect to the Proposed Shareholders’
Mandate.”
Ordinary Resolution 9
Ordinary Resolution 10
Ordinary Resolution 11
157ANNUAL REPORT 2012
NOTICE OF ANNUAL GENERAL MEETINGcont’d
BY ORDER OF THE BOARD
TAI YIT CHAN (MAICSA 7009143)
TAN AI NING (MAICSA 7015852)
Company Secretaries
Selangor Darul Ehsan
29 May 2013
NOTES:
1. A member of the Company entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies to attend and vote in his stead. A proxy may but need not be a member of the Company and the provision of Section 149(1)(b) of the Companies Act, 1965 shall not apply.
2. Where a member appoints two (2) or more proxies, the appointments shall be invalid unless he specifies the proportion of his shareholdings to be represented by each proxy.
3. Where a member is an Exempt Authorised Nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”) as defined under the Securities Industry (Central Depositories) Act, 1991, there is no limit to the number of proxies which the Exempt Authorised Nominee may appoint in respect of each omnibus account it holds.
4. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation, either under its Common Seal or signed by an officer or attorney so authorised.
5. The instrument appointing a proxy or proxies and the power of attorney or other authority (if any) under which it is signed or a notarially certified copy of such power or authority, must be deposited at the Share Registrar’s office of the Company at Level 17, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur, not less than 48 hours before the time set for holding the meeting or at any adjournment thereof.
6. In respect of deposited securities, only members whose names appear on the Record of Depositors on 10 June 2013 (General Meeting Record of Depositors) shall be eligible to attend the meeting or appoint proxy(ies) to attend and/or vote on his behalf.
EXPLANATORY NOTES ON SPECIAL BUSINESS
Ordinary Resolution 7- Authority under Section 132D of the Companies Act, 1965 for the Directors to allot and issue shares
The Company had, during its Twenty-Sixth Annual General Meeting held on 28 June 2012, obtained its shareholders’ approval for the general mandate for issuance of shares pursuant to Section 132D of the Companies Act, 1965 (“the Act”). The Company did not issue any shares pursuant to this mandate obtained.
The Ordinary Resolution 7 proposed under item 7 of the Agenda is a renewal of the general mandate for issuance of shares by the Company under Section 132D of the Act. The mandate, if passed, will provide flexibility for the Company and empower the Directors to allot and issue new shares speedily in the Company up to an amount not exceeding in total 10% of the issued share capital of the Company for purpose of funding the working capital or strategic development of the Group. This would eliminate any delay arising from and cost involved in convening a general meeting to obtain approval of the shareholders for such issuance of shares. This authority, unless revoked or varied by the Company at a general meeting, will expire at the next AGM.
At this juncture, there is no decision to issue new shares. If there should be a decision to issue new shares after the general mandate is sought, the Company will make an announcement in respect thereof.
Ordinary Resolution 8 - Authority for Tuan Haji Mohamad Faiz Bin Abdul Hamid to continue in office as Independent Non-Executive Director
The Board of Directors has via the Nomination Committee conducted an annual performance evaluation and assessment of Tuan Haji Mohamad Faiz Bin Abdul Hamid who has served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine (9) years and recommended him to continue to act as Independent Non-Executive Director of the Company. Tuan Haji Mohamad Faiz Bin Abdul Hamid fullfilled the criteria under the definition on Independent Directors as stated in the Main Market Listing Requirements of Bursa Malaysia Securities Berhad. Tuan Haji Mohamad Faiz Bin Abdul Hamid has been with the Company for more than nine years, he therefore understands the Company’s business operations which enable him to participate actively and contribute during deliberations and discussions at Audit Committee, Remuneration Committee, Nomination Committee and Board meetings without compromising his independent and
objective judgement.
158 PRESS METAL BERHAD 153208 W
Ordinary Resolution 9
- Authority for Loo Lean Hock to continue in office as Independent Non-Executive Director
The Board of Directors has via the Nomination Committee conducted an annual performance evaluation and assessment of Loo Lean
Hock who has served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine (9) years and
recommended him to continue to act as Independent Non-Executive Director of the Company. Loo Lean Hock fullfilled the criteria under the
definition on Independent Directors as stated in the Main Market Listing Requirements of Bursa Malaysia Securities Berhad. His experience
in the audit and accounting indutries enables him to provide the Board with a diverse set of experience, expertise, skills and competence. As
he has been with the Company for more than nine years, he therefore understands the Company’s business operations which enable him
to participate actively and contribute during deliberations and discussions at Audit Committee, Nomination Committee and Board meetings
without compromising his independent and objective judgement.
Ordinary Resolution 10
- Authority for Tan Heng Kui to continue in office as Independent Non-Executive Director
The Board of Directors has via the Nomination Committee conducted an annual performance evaluation and assessment of Tan Heng Kui who
has served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine (9) years and recommended
him to continue to act as Independent Non-Executive Director of the Company. Tan Heng Kui fullfilled the criteria under the definition on
Independent Directors as stated in the Main Market Listing Requirements of Bursa Malaysia Securities Berhad. Tan Heng Kui has been with
the Company for more than nine years, he therefore understands the Company’s business operations which enable him to participate actively
and contribute during deliberations and discussions at Audit Committee and Board meetings without compromising his independent and
objective judgement.
Ordinary Resolution 11
- Proposed Renewal of Shareholders’ Mandate and Proposed New Shareholders’ Mandate for Press Metal Berhad and its
subsidiaries to enter into Recurrent Related Party Transactions of a Revenue or Trading Nature (“Proposed Shareholders’
Mandate”)
For further information on Ordinary Resolution 11, please refer to the Circular to Shareholders dated 29 May 2013 accompanying the Annual
Report of the Company for the financial year ended 31 December 2012.
NOTICE OF ANNUAL GENERAL MEETINGcont’d
PROXY FORM
PRESS METAL BERHAD(Company No. 153208-W)
(Incorporated in Malaysia)
I/We (name of shareholder as per NRIC, in capital letters)
IC No./ID No./Company No. (new) (old)
of (full address)
being a member of PRESS METAL BERHAD, hereby appoint
(name of proxy as per NRIC, in capital letters) IC No. (new) (old)
of (full address)
or failing him/her, (name of proxy as per NRIC, in capital letters)
IC No. (new) (old) of
(full address)
or failing him/her, the *Chairman of the Meeting as my/our proxy to vote for me/us on my/our behalf at the Twenty-Seventh
Annual General Meeting of the Company to be held at Room 8, Level 6, Best Western Premier Dua Sentral, 8, Jalan Tun
Sambanthan, 50470 Kuala Lumpur on Thursday, 20 June 2013 at 10:30 a.m. or at any adjournment thereof.
My/our proxy is to vote as indicated below.
RESOLUTIONS FOR AGAINST
1. Approval of Directors’ Fees Ordinary Resolution 1
2. Re-election of Koon Poh Ming as Director Ordinary Resolution 2
3. Re-election of Koon Poh Kong as Director Ordinary Resolution 3
4. Re-appointment of Dato’ (Dr.) Megat Abdul Rahman Bin Megat Ahmad as Director
Ordinary Resolution 4
5. Re-appointment of Tuan Haji Mohamad Faiz Bin Abdul Hamid as Director Ordinary Resolution 5
6. Re-appointment of Messrs KPMG as Auditors of the Company Ordinary Resolution 6
7. Authority under Section 132D of the Companies Act, 1965 for the Directors to allot and issue shares
Ordinary Resolution 7
8. Authority for Tuan Haji Mohamad Faiz Bin Abdul Hamid to continue in office as Independent Non-Executive Director
Ordinary Resolution 8
9. Authority for Loo Lean Hock to continue in office as Independent Non-Executive Director
Ordinary Resolution 9
10. Authority for Tan Heng Kui to continue in office as Independent Non-Executive Director
Ordinary Resolution 10
11. Proposed Renewal of Shareholders’ Mandate and Proposed New Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature
Ordinary Resolution 11
(Please indicate with an “X” in the spaces provided on how you wish your vote to be cast. If you do not do so, the proxy will vote or abstain
from voting at his/her discretion.)
Signature/Common Seal
Number of shares held :
Date :
NOTES:
1. A member of the Company entitled to attend and vote at the meeting is entitled to appoint a proxy or proxies to attend and vote in his stead. A proxy may but need not be a member of the Company and the provision of Section 149(1)(b) of the Companies Act, 1965 shall not apply.
2. Where a member appoints two (2) or more proxies, the appointments shall be invalid unless he specifies the proportion of his shareholdings to be represented by each proxy.
3. Where a member is an Exempt Authorised Nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”) as defined under the Securities Industry (Central Depositories) Act, 1991, there is no limit to the number of proxies which the Exempt Authorised Nominee may appoint in respect of each omnibus account it holds.
4. The instrument appointing a proxy shall be in writing under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation, either under its Common Seal or signed by an officer or attorney so authorised.
5. The instrument appointing a proxy or proxies and the power of attorney or other authority (if any) under which it is signed or a notarially certified copy of such power or authority, must be deposited at the Share Registrar’s office of the Company at Level 17, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur, not less than 48 hours before the time set for holding the meeting or at any adjournment thereof.
6. In respect of deposited securities, only members whose names appear on the Record of Depositors on 10 June 2013 (General Meeting Record of Depositors) shall be eligible to attend the meeting or appoint proxy(ies) to attend and/or vote on his behalf.
For appointment of two proxies, percentage of shareholdings to be represented by the proxies:
No. of Shares Percentage
Proxy 1 %
Proxy 2 %
Total 100%
CDS account number of holder
Affix
Stamp
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The Share Registrar
PRESS METAL BERHAD (Company No. 153208-W)
Level 17, The Gardens North Tower
Mid Valley City, Lingkaran Syed Putra
59200 Kuala Lumpur
Malaysia
Press MetalGroup Directory
PRESS METAL BERHAD(Company No. 153208-W)
Lot 6464, Batu 5 ¾, Jalan Kapar, Sementa, 42100 Klang, Selangor Darul Ehsan, Malaysia
Tel: +603 3291 3188 Fax: +603 3291 3637
Website: www.pressmetal.com
MALAYSIA
ANGKASA JASA SDN BHD(Company No. 110854-M)
27, Jalan 3A, Kawasan MIEL Balakong
Taman Cheras Jaya, 42200 Cheras
Selangor Darul Ehsan, Malaysia
Tel : +603 9075 2136
Fax : +603 9075 2139
E-mail : [email protected]
PMS MARKETING SDN BHD (Company No. 204138-X)
Lot 6464, Batu 5 ¾, Jalan Kapar
Sementa, 42100 Klang
Selangor Darul Ehsan, Malaysia
Tel : +603 3291 3188
Fax : +603 3291 3785
PRESS METAL BINTULU SDN BHD(Company No. 918822-X)
Lot 36, Block 1
Samalaju Industrial Park
Kemena Land District
97000 Samalaju, Sarawak, Malaysia
Tel : +6086 253 119
Fax : +6086 253 219
PRESS METAL SARAWAK
SDN BHD(Company No.767704-M)
Lot 211 & 212, Block 293
Mukah Land District
KM38, Jalan Mukah-Balingian
96400 Mukah, Sarawak, Malaysia
Tel : +6086 855 199
Fax : +6086 855 050
WESAMA SDN BHD(Company No. 196057-W)
Lot 1797, Jalan Balakong
Bukit Belimbing, 43300
Seri Kembangan
Selangor Darul Ehsan, Malaysia
Tel : +603 8961 8355
Fax : +603 8961 8357
E-mail : [email protected]
CHINA
PRESS METAL INTERNATIONAL
LIMITED
Area C, Sanshui Industrial Park
Sanshui District
Foshan City
Guangdong Province, 528137 China
Tel : +86 757 8736 3333
Fax : +86 757-8736 3980
Website : www.pressmetal.com.cn
E-mail : [email protected]
PRESS METAL INTERNATIONAL
(HUBEI) LTD
No.1, Qili Road
Zhangjin Town, Qianjiang City
Hubei Province, 433140 China
Tel : +86 728 664 1446
Fax : +86 728 664 4228
Website : www.pressmetal.com.cn
Email : [email protected]
AUSTRALIA
PRESS METAL ALUMINIUM
(AUSTRALIA) PTY. LTD. (ACN 085 370 010)
Website : www.pmaa.net.au
1012-1016 Canley Vale Road
Wetherill Park
New South Wales, 2164 Australia
Tel : +612 9756 5555
Fax : +612 9756 5499
Email : [email protected]
2/22 Eastern Service Road
Stapylton
Queensland, 4207 Australia
Tel : +617 3382 6640
Fax : +617 3382 6244
Email : [email protected]
37-39, Gaine Rd, Dandenong
South Victoria, 3175 Australia
Tel : +613 9793 7911
Fax : +613 9793 9077
Email : [email protected]
NORTH AMERICA
PRESS METAL NORTH AMERICA LLC
2450 Atlanta Hwy Ste 1803
Cumming, Georgia 30040
United States of America
Tel : +678 4568 618
Fax : +866 5397 197
Email : [email protected]
UNITED KINGDOM
PRESS METAL UK LIMITED(Company No. 3653082)
Beldray Road, Bilston
West Midlands, WV14 7NH
United Kingdom
Tel : +44 1902 498867
Fax : +44 1902 495567
Email : [email protected]