wellcall holdings berhad · leong hon chong (non-independent executive director) chew chee chek...
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T H E W O R L D I SO U R M A R K E T
WELLCALL HOLDINGS BERHAD(Company No: 707346-W)
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WELLCALL HOLDINGS BERHAD(Company No. 707346-W)
Plot 48, Jalan Johan 2/5, Kawasan Perindustrian Pengkalan IIFasa II, 31500 Lahat, Ipoh, Perak Darul Ridzuan
Tel: 605 3668805 / 3668806 / 3668807 / 3668808 Fax: 605 3668768Website: www.wellcall.com.myEmail: [email protected]
ANNUALREPORT2007
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� WELLCALL HOLDINGS BERHAD (Co. No. 707346-W) ANNUAL REPORT 2007
contents 2 CorporateInformation
3 CorporateStructure
4 FiveYearGroupFinancialReview
6 Chairman’sStatement
9 Directors’Profile
19 StatementonCorporateGovernance
24 StatementonInternalControl
25 AuditCommitteeReport
29 OtherInformation
31 FinancialStatements
68 AnalysisofShareholdings
71 SummaryofLandedPropertiesandBuildings
72 NoticeofAnnualGeneralMeeting
FormofProxy
2WELLCALL HOLDINGS BERHAD (Co. No. 707346-W) ANNUAL REPORT 2007
BOARD OF DIRECTORS
Datuk Ng Peng Hong @ Ng Peng Hay(Non-Independent Non-Executive Chairman)
Huang Sha(Non-Independent Managing Director)
Leong Hon Chong(Non-Independent Executive Director)
Chew Chee Chek(Non-Independent Executive Director)
Tan Kang Seng(Non-Independent Non-Executive Director)
YB Dato’ Haji Mohtar bin Nong(Non-Independent Non-Executive Director)
Mat Zaid bin Ibrahim(Alternate Director to YB Dato’ Haji Mohtar bin Nong)
Razmi bin Alias(Independent Non-Executive Director)
Yang Chong Yaw, Alan(Independent Non-Executive Director)
Mohd Khasan bin Ahmad(Independent Non-Executive Director)
PRINCIPAL PLACE OF BUSINESS
Plot48,JalanJohan2/5KawasanPerindustrianPengkalanIIFasaII31500LahatIpohPerakDarulRidzuanTel : 05-3668805Fax : 05-3668768
REGISTERED OFFICE
UnitC-6-5,6thFloor,BlockCMeganAvenueIINo.12,JalanYapKwanSeng50450KualaLumpurTel : 03-21611000Fax : 03-21663322
AUDIT COMMITTEE
Razmi bin AliasChairman(Independent Non-Executive Director)
Yang Chong Yaw, AlanMemberofthecommittee(Independent Non-Executive Director)
Chew Chee ChekMemberofthecommittee(Non-Independent Executive Director)
REMUNERATION COMMITTEE
Razmi bin AliasChairman(Independent Non-Executive Director)
Yang Chong Yaw, AlanMemberofthecommittee(Independent Non-Executive Director)
Chew Chee ChekMemberofthecommittee(Non-Independent Executive Director)
NOMINATION COMMITTEE
Datuk Ng Peng Hong @ Ng Peng HayChairman(Non-Independent Non-Executive Chairman)
Razmi bin AliasMemberofthecommittee(Independent Non-Executive Director)
Yang Chong Yaw, AlanMemberofthecommittee(Independent Non-Executive Director)
AUDITORS
ONG & WONG Chartered Accountants UnitC-20-5,20thFloor,BlockCMeganAvenueIINo.12,JalanYapKwanSeng50450KualaLumpurTel : 03-21611000Fax : 03-21669131
REGISTRARS
SYMPHONY SHARE REGISTRARS SDN BHD26thFloor,MenaraMulti-PurposeCapitalSquareNo.8,JalanMunshiAbdullah50100KualaLumpurTel : 03-27212222Fax : 03-27212530
PRINCIPAL BANKERS
MALAYAN BANKING BERHADHSBC BANK MALAYSIA BERHAD
COMPANY SECRETARIES
WongShanMay(LS0008582)ChinWoonLi(MAICSA7008636)
STOCK EXCHANGE LISTING
Second BoardBursa Malaysia Securities BerhadStockName : WellcalStockCode : 7231Sector : IndustrialProducts
Corporate Information
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Corporate Structure
SUBSIDIARY COMPANY
WellcallHose(M)SdnBhd
PRINCIPAL ACTIVITIES
Manufacturingofrubberhoseandrelatedproducts
�WELLCALL HOLDINGS BERHAD (Co. No. 707346-W) ANNUAL REPORT 2007
Five Year Group Financial Review
10,882
2,037
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RM’000
RM’000
2,0004,0006,0008,00010,00012,00014,00016,000
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Five Year Group Financial Review (Cont’d)
Financial year ended 30 September 2003 2004 2005 2006N3 2007 RM’000 RM’000 RM’000 RM’000 RM’000 (Restated)
Revenue 33,191 40,155 54,154 67,423 91,392
Earningsbeforeinterest, depreciationandtaxation 8,272 9,255 12,953 12,172 19,068
Interestexpenses 0 (135) (169) (200) (246)
Interestincome 79 128 326 522 604
Depreciation (1,712) (1,106) (1,431) (1,608) (2,796)
Profitbeforetax 6,639 8,142 11,679 12,037 16,630
Taxation (1,332) (1,858) (2,588) (1,155) (1,424)
Profitattributableto equityholders 5,307 6,284 9,091 10,882 15,206
NetAssets 19,126 23,460 32,551 54,428 66,169
NetEPS 8.15 9.65 13.96 17.52 18.10
Netdividendrate(taxexempt)(%) 3.99 5.99 0.00 17.48 19.00
Numberofsharesinissue(‘000) 65,102 65,102 65,102 68,664 83,999
ParValueofOrdinaryShare(RM) 0.50 0.50 0.50 0.50 0.50
Netassetspershare(RM) 29.38 36.04 50.00 79.27 78.77
Note:
1. The figures for financial years ended 30 September 2003, 2004, 2005 and 2006 are prepared based on a proforma consolidated basis on the assumption that the current structure of the Group has been in existence since financial year ended 30 September 2003.
2. Issuance of 17,098,400 ordinary shares pursuant to the public issue was completed on 18 July 2006.
3. During the financial year 2007, the Group change its accounting policy in compliance with Financial Reporting Standards 2 (Share-based Payment). The comparative amount in the financial year ended 30 September 2006 have been reinstated.
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Chairman’s Statement
It is my pleasure to now present, the annual report of the Wellcall Holdings Berhad (“Wellcall” or “Company”) and its subsidiary company (“Group”) for the financial year ended 30 September 2007 on behalf of the Board of Directors.
PERFORMANCE REVIEW
Forthefinancialyearended30September2007,ourGroupachievedanotheryearofstrongearningsgrowth.TheGrouprecordedarevenueofRM91.39million,representinganincreaseofRM23.97millionorapproximately35.6%comparedto RM67.42 million* achieved in the previous financial period ended 30 September 2006 (“FPE 2006”).The increase inrevenuewasattributabletotheincreaseinsalesinallproductrange,whichismainlydrivenbytheincreaseinexportsalestoAustralia/NewZealandandcountriesinEurope,SouthAmerica,AsiaandtheMiddleEast.Theaforesaidexportmarketshaverecordeddoubledigitgrowthinturnoverrangingfrom28%to72%comparedtoFPE2006.
TheGroupreportedaprofitaftertaxationofRM15.21millionforthecurrentquarterended30September2007comparedtoRM10.9million*recordedinthepreviousFPE2006,representinganincreaseofRM4.31millionor39.5%.TheincreaseinPATwashigherinproportiontotheincreaseinturnoverandwasmainlyattributabletoalowerstaffcost(share-basedcompensationarisingfromemployees’shareoptionscheme)amountedtoRM0.279millioncomparedtoRM1.151millionincurredinFPE2006. * Assuming that the acquisition of its wholly-owned subsidiary, namely Wellcall Hose (M) Sdn Bhd (“WHSB”) has been in effect
throughout the financial period of 12 months ended 30 September 2006 on a proforma basis and after the reinstatement of profit for comparative purpose arising from the change in accounting policy by the Group to comply with Financial Reporting Standards 2 (share-based compensation) amounted to RM1.151 million
OPERATIONS REVIEW
The principal activity ofWellcall is investment holding, while the principal activity of our wholly-owned subsidiary ismanufacturingindustrialrubberhoseforcustomerswhoaremainlyinthebusinessofdistributingrubberhosetoOEMmanufacturersandmanufacturers.
WiththecompletionofthenewfactorysituatedadjacenttotheexistingfactoryofourGroupinSeptember2006,weareputtingcontinuousendeavourtoimprovetheutilizationofproductioncapacityviaamoreaggressivemarketingstrategies.Duringtheyear,wehaveparticipatedinthree(3)internationalexhibitions,whichincludeCantonFair2007heldatGuangzhou,ProvinceofChina,Tubetech2007heldatSaoPaulo,BrazilandInternationalPlasticandRubberFairheldatDusseldorf,Germanywiththeviewtosecuremoresalesordersandfurtherdiversifyourcustomerbase.Wehavealsoincreasedourcustomerbaseto134customersfrom97customersinMay2006,representinganincreaseof38%,whichhascontributedpositivelytowardsthegrowthinrevenueforthisfinancialyear.
Wehavealsoexpandedourextrusioncapacityinthesecondhalfoftheyearbyadditionofseven(7)newlinesto16lines,representinganincreaseofapproximately80%inextrusionproductioncapacity.
OurGroupstartedoffbymanufacturingandsellingrubberhoseto3majorapplicationmarketsandwehavesinceexpandedtomorethan6majorapplicationmarkets,whichinclude,theairandwater,weldingandgas,oilandfuel,automobile,shipbuildingandfoodandbeverage.
OurGroupsellstocustomersinmostcontinentsintheworld,coveringatotalof51countries.Forthefinancialyearended30September2007,weexportedapproximately94%ofourrubberhosetoMiddleEast,Europe,USA,Canada,Australia,NewZealand,Asia,SouthAfricaandSouthAmerica.
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Chairman’s Statement (Cont’d)
CORPORATE DEVELOPMENT
On22November2007,theCompanyproposedtoundertakethefollowingcorporateproposals:
(i) Proposedbonusissueofupto44,511,005newordinarysharesofRM0.50eachinWellcall(“WellcallShares”or“Shares”)(“BonusShares”)onthebasisof1BonusShareforevery2existingSharesheldintheCompany(“ProposedBonusIssue”);
(ii) ProposedincreaseintheauthorisedsharecapitalofWellcallfromRM50,000,000comprising100,000,000SharestoRM100,000,000comprising200,000,000Shares(“ProposedIncreaseinAuthorisedShareCapital”);and
(iii) Proposedtransferofthelistingofandquotationfortheentireissuedandpaid-upsharecapitalofWellcallfromtheSecondBoardtotheMainBoardofBursaMalaysiaSecuritiesBerhad(“BursaSecurities”)uponcompletionoftheProposedBonusIssueandProposedIncreaseinAuthorisedShareCapital(“ProposedTransferListing”).
(collectivelyreferredtoasthe“Proposals”).
TheProposedTransferListingisexpectedtoenhancetheGroup’sprestigeandreputationaswellastheconfidenceofourcustomers,suppliers,employeesandbankers.ItisalsoexpectedtofurtherenhanceWellcall’sstandingamongstitsinvestorsandimprovethemarketabilityoftheWellcallShares.TheProposalsareexpectedtobecompletedbythefirstquarterof2008.
MARKET OUTLOOK
OurGroupisaglobalindustrialrubberhosemanufacturerandthelargestindustrialrubberhosemanufacturerinthecountry.Morethan94%ofourGroup’sproductsareexportedto51countriesandourGrouphasconsistentlybeenabletoattainMalaysia’sexportmarketsharesinthehightwentiesintermsofpercentages.Withthenewlyexpandedcapacitycoupledwithdiversifiedmarket,weexpectourGroupcontinuetorideontheglobaloutsourcingtrend,whichstartedin2002.OurGroupwillcontinuetocapitaliseonourGroupreputation,productquality,efficientserviceandestablishednetworktostrengthenourmarketpositionlocallyandabroad.Inaddition,ourGroupwillcontinuetoexplorenewpotentialforeignmarketsviatheparticipationininternationalexhibitionfairsforourproducts.
Baringunforeseencircumstances,ourGroupisexpectedtoperformsatisfactorilyinthecomingfinancialyear.
DIVIDEND
TheBoardofDirectorsisnotrecommendinganyfinaldividendpaymentforthefinancialyearended30September2007.Forthefinancialyearended30September2007,theCompanyhad:
i) On15March2007,paidafirsttaxexemptinterimdividendof3.6senperordinaryshareamountedtoRM3,024,792;
ii) On 28 September 2007, paid a second tax exempt interim dividend of 4.4 sen per ordinary share amounted toRM3,751,309;and
iii) On 18 December 2007, paid a third tax exempt interim dividend of 1.5 sen per ordinary share amounted toRM1,279,308.19.
Thetotaltaxexemptdividendof9.5senperordinarysharedeclaredandpaidforthefinancialyearended30September2007representinganincreaseofapproximately160%comparedtothetaxexemptdividendof3.65senperordinarysharedeclaredandpaidforthefinancialperiodended30September2006.Thetotaldividenddeclaredandpaidrepresentsadistributiontoshareholdersofapproximately53%oftheGroup’snetprofitforthisfinancialyear.
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Chairman’s Statement (Cont’d)
ACKNOWLEDGEMENTS
OnbehalfoftheBoardofDirectors,IwishtoexpressoursincereappreciationtothemanagementandstaffofourGroupfortheircontinueddedication,commitmentandloyaltytoourGroup.
GiventhejointcommitmentoftheBoardofDirectors,managementandstaff,aswellastheco-operationandsupportofcustomersandshareholders,ourGroupispoisedtomeetthenewchallengesintheyearsahead.
Ialsowishtoexpressoursincereappreciationtoourcustomers,shareholders,businessassociates,governmentauthoritiesandbankersfortheircontinuedsupportandco-operation.
DATUK NG PENG HONG @ NG PENG HAYChairman
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Directors’ Profile
DATUK NG PENG HONG @ NG PENG HAY, D.M.S.M., D.S.M., P.J.K.
Age : 55Nationality : MalaysianQualification : MalaysianCertificateofEducationOccupation : CompanyDirectorPosition : Non-IndependentNon-ExecutiveChairmanOther Directorships of Public Companies : BoniaCorporationBerhad Farm’sBestBerhad TaWinHoldingsBerhad KomarkcorpBerhad Dunham-BushHoldingBhd (formerly known as Dunham-Bush (Malaysia) Bhd)The Date He Was First Appointed to the Board : 17April2006
The Details of Any Board Committee to Which He Belongs :NominationCommitteeofWellcall
Securities Holding in the Company :Direct :NilIndirect :9,765,241ordinaryshares
Securities Holding in the Subsidiary :DeemedtohaveinterestsinsharesofthesubsidiarytotheextentWellcallhasaninterest.
Family Relationship With Any Director and / or Major Shareholders of the Company :Nil
Conflict of Interest :None
List of Convictions for Offences Within the Past 10 Years Other Than Traffic Offences :None
Working Experience :HewasappointedtotheBoardofWellcallon17April2006.HewastheStateAssemblymanforTengkeraConstituencyunderBarisanNasionalbetween1982and1986.HethenservedasaSenatorintheMalaysianParliamentfrom1987to1993.Hisfirstinvolvementinsocialactivitieswasuponcompletinghissecondaryeducation.HehasbeenappointedastheInvestmentCo-ordinatoroftheMalaccaStateDevelopmentCorporationtohandledirectinvestmentintheStateofMelakasince1988.Together with his team of officials and his excellent public relations; he has helped in attracting numerousTaiwanese,SingaporeanandChineseinvestorsintotheStateofMelake.Inrecognitionofhiseffortsanddedication,hewasconferredtheDarjahMuliaSeriMelakabyhisExcellency,theGovernorofMelakain1992.On17July1999,theTaiwaneseGovernmentawardedhimtheEconomicMedal.HewastheChairmanofMCA,7th-BranchMelakasince1982.HewasalsoappointedasViceChairmanofMelakaStateMalaysiaCrimePreventionFoundation(MCPF)since1997andasExcoMemberofNationalMalaysiaCrimePreventionFoundation.HeisalsotheChairmanofMalaccaState’sInspectorateofNationalServiceTrainingCouncil.
The Number of Board Meetings Attended in the Financial Year :4outof4
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Directors’ Profile (cont’d)
HUANG SHA, PMP
Age : 52Nationality : Taiwanese(MalaysianPermanentResident)Qualification : SecondaryEducation,TaiwanOccupation : CompanyDirectorPosition : Non-IndependentManagingDirectorOther Directorships of Public Companies : NilThe Date He Was First Appointed to the Board : 17April2006
The Details of Any Board Committee to Which He Belongs :Nil
Securities Holding in the Company :Direct :1,000,000ordinarysharesIndirect :27,372,679ordinaryshares
Securities Holding in the Subsidiary :DeemedtohaveinterestsinsharesofthesubsidiarytotheextentWellcallhasaninterest.
Family Relationship With Any Director and / or Major Shareholders of the Company :Nil
Conflict of Interest :None
List of Convictions for Offences Within the Past 10 Years Other Than Traffic Offences :None
Working Experience :HewasappointedtotheBoardofWellcallon17April2006.HuangShabeganhiscareerin1972uponcompletinghissecondaryeducationandworkedforvariousmanufacturersofrubberproductsinTaiwanandIndonesiaandprogressedtothepositionofproductionmanager.From1989tothemid-1990s,hejoinedJetfloRobin(M)SdnBhd,amanufacturerofindustrialrubberhose,asaGeneralManager.Subsequently,heestablishedoursubsidiary,WHSB,togetherwith2otherpartners.Withhisin-depthknowledge,skillsandexpertiseinallaspectsofthemanufacturingofrubberhoseformorethan30years,hehasformulatedoursubsidiary’sstrategicplanstobeinlinewiththechangesinthetrendsofvariousindustriesandcustomersneeds.HehasalsoledWHSBtonewheightsbydiversifyingitscustomer’sbaseandexpandingitsexistingproductrangeintheoilandgassectoraswellasdeveloping3newrubberhose,namelyfoodandbeveragehose,chemicalhoseandsteamhose.Asrecognitionforhisachievementintheindustry,hewasawardedtheWinneroftheGlobalTopEnterpriseGoldenSolidAwardsbytheChineseEnterpriseDevelopmentAssociationofTaiwanon2October2004.HealsoheadsourR&Ddivisionwhereheplaysapivotalroleintheproductformulationanddevelopment.HeisalsotheManagingDirectorofoursubsidiary,WHSB,whereheiscurrentlyresponsibleforthestrategicplanninganddevelopmentofourGroup.
The Number of Board Meetings Attended in the Financial Year :4outof4
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LEONG HON CHONG
Age : 62Nationality : MalaysianQualification : BachelorofCommerce(Accountancy), UniversityofOtagoinNewZealandOccupation : CompanyDirectorPosition : Non-IndependentExecutiveDirectorOther Directorships of Public Companies : NilThe Date He Was First Appointed to the Board : 17April2006
The Details of Any Board Committee to Which He Belongs :Nil
Securities Holding in the Company :Direct :500,000ordinarysharesIndirect :27,342,679ordinaryshares
Securities Holding in the Subsidiary :DeemedtohaveinterestsinsharesofthesubsidiarytotheextentWellcallhasaninterest.
Family Relationship With Any Director and / or Major Shareholders of the Company :Nil
Conflict of Interest :None
List of Convictions for Offences Within the Past 10 Years Other Than Traffic Offences :None
Working Experience :HewasappointedtotheBoardofWellcallon17April2006.HegraduatedfromtheUniversityofOtagoinNewZealandwithaBachelorofCommerce(Accountancy)in1970.HestartedhiscareerasanauditorwithSwenry&Co.,apublicaccountingfirminNewZealand.After2years,hejoinedMalaysiaVetsingSdnBhdasanAccountsSupervisortill1975.From1975to1985,hefurtheredhiscareerwithCarterSemiconductorSdnBhdasaControllerforthecompany’sadministration,financeandmarketingdivisions.In1985hesetupaproprietorshipprovidingmanagementconsultancyservicestillmid-1990s.Subsequently,heestablishedoursubsidiary,WHSB,togetherwithHuangShaandLinKunPaoandwasappointedasanExecutiveDirectorofoursubsidiarywhereheiscurrentlyresponsiblefortheadministrationandmarketingfunctionsofourGroup.
The Number of Board Meetings Attended in the Financial Year :3outof4
Directors’ Profile (cont’d)
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CHEW CHEE CHEK
Age : 37Nationality : MalaysianQualification : DiplomaInCommerce(FinancialAccounting),Kolej TunkuAbdulRahman,Malaysia FellowoftheAssociationofCharteredCertified Accountants,UKOccupation : CompanyDirectorPosition : Non-IndependentExecutiveDirectorOther Directorships of Public Companies : KomarkcorpBerhadThe Date He Was First Appointed to the Board : 17April2006
The Details of Any Board Committee to Which He Belongs :AuditCommitteeandRemunerationCommitteeofWellcall
Securities Holding in the Company :Direct :NilIndirect :27,342,679ordinaryshares
Securities Holding in the Subsidiary :DeemedtohaveinterestsinsharesofthesubsidiarytotheextentWellcallhasaninterest.
Family Relationship With Any Director and / or Major Shareholders of the Company :Nil
Conflict of Interest :None
List of Convictions for Offences Within the Past 10 Years Other Than Traffic Offences :NoneWorking Experience :HewasappointedtotheBoardofWellcallon17April2006.HegraduatedwithaDiplomainCommerce(FinancialAccounting)in1993fromTunkuAbdulRahmanCollegeandisafellowoftheAssociationofCharteredCertifiedAccountants.HestartedhiscareerasanAuditAssistantinBDOBinder,KualaLumpur,apublicaccountingfirm,from1994to1995.In1995,hejoinedPricewaterhouseCoopers(formerlyknownasCoopers&Lybrand)asAuditSemiSeniorandsubsequentlypromotedtoAuditSenior.In1996,hejoinedAmanahMerchantBankBerhadasaCorporateFinanceExecutivewhereheacquiredextensiveexperienceincorporaterestructuringexerciseinvolvinginitialpublicoffer,mergerandacquisition,reversetakeover,backdoorlisting,debtrestructuring,rightsissue,privateplacementandbonusissue.Subsequently,hewaspromotedtothepositionofCorporateFinanceAssistantManager.In2000,hejoinedKomarkcorpBerhadasaGroupFinancialControllerandin2003,hewasappointedasanIndependentNon-ExecutiveDirectorofKomarkcorpBerhad.Duringthesametime,from2000to2004,healsoventuredintomanagementconsultancyviaWCLConsultingSdnBhd(“WCL”),wherehewasappointedasanExecutiveDirectorandlaterbecameaNon-ExecutiveDirectorofthecompany.HeresignedastheDirectorofWCLinAugust2006.Healsositsontheboardofdirectorsofaprivatelimitedcompany.
The Number of Board Meetings Attended in the Financial Year :4outof4
Directors’ Profile (cont’d)
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TAN KANG SENG
Age : 39Nationality : MalaysianQualification : MalaysianCertificateofEducationOccupation : CompanyDirectorPosition : Non-IndependentNon-ExecutiveDirectorOther Directorships of Public Companies : NilThe Date He Was First Appointed to the Board : 17April2006
The Details of Any Board Committee to Which He Belongs :Nil
Securities Holding in the Company :Direct :300,000ordinarysharesIndirect :9,765,241ordinaryshares
Securities Holding in the Subsidiary :DeemedtohaveinterestsinsharesofthesubsidiarytotheextentWellcallhasaninterest.
Family Relationship With Any Director and / or Major Shareholders of the Company :Nil
Conflict of Interest :None
List of Convictions for Offences Within the Past 10 Years Other Than Traffic Offences :None
Working Experience :HewasappointedtotheBoardofWellcallon17April2006.Uponcompletionofhissecondaryeducationin1984,hewasinvolvedinhisfamilybusiness,PohHuatChan,whichismainlyawholesalerofreligion-relatedprayerofferingproducts,tilltodate.In2000,hebecamethepersonalassistanttoDatukNgPengHong@NgPengHayandsubsequentlyheresignedinSeptember2006tofocusinhisbusiness.Throughouthiscareerspanningmorethan18years,TanKangSenghasgainedvastexperienceintheretailandcommercesector.HeisalsoaNon-ExecutiveDirectorofoursubsidiary,WHSB.
The Number of Board Meetings Attended in the Financial Year :3outof4
Directors’ Profile (cont’d)
��WELLCALL HOLDINGS BERHAD (Co. No. 707346-W) ANNUAL REPORT 2007
YB DATO’ HAJI MOHTAR BIN NONG, DPMT, ASM. PJC, PJK, BLB
Age : 53Nationality : MalaysianQualification : BachelorofEconomics(Hons),UniversitiKebangsaan MalaysiaMasterinBusinessAdministration, UniversityofDubuque,Iowa,USAOccupation : CompanyDirectorPosition : Non-IndependentNon-ExecutiveDirectorOther Directorships of Public Companies : TDMBerhad PermodalanTerengganuBerhad PTBUnitTrustBerhad AstinoBerhadThe Date He Was First Appointed to the Board : 17April2006
The Details of Any Board Committee to Which He Belongs :Nil
Securities Holding in the Company :Nil
Securities Holding in the Subsidiary :Nil
Family Relationship With Any Director and / or Major Shareholders of the Company :Nil
Conflict of Interest :None
List of Convictions for Offences Within the Past 10 Years Other Than Traffic Offences :None
Working Experience :HewasappointedtotheBoardofWellcallon17April2006.HeobtainedhisMasterinBusinessAdministrationfromUniversityofDubuque,Iowa,USAin1994andaBachelorofEconomics(Hons)fromUniversitiKebangsaanMalaysiain1978.HeservedinvariouspositionswithintheTerengganuStatefrom1978until2004includingGeneralManagerofYayasanPembangunanUsahawanTerengganu, President of Majlis Perbandaran KualaTerengganu and Deputy State Financial Officer prior toassuminghiscurrentpositionasTerengganuStateFinancialOfficerin2004till2006.HewasappointedastheTerengganuStateSecretaryinJanuary2007.Heisalsocurrentlyadirectorofvariousprivatecompanies.
The Number of Board Meetings Attended in the Financial Year :3outof4
Directors’ Profile (cont’d)
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MAT ZAID BIN IBRAHIM, PJC
Age : 44Nationality : MalaysianQualification : DiplomainValuation, UniversityofTechnology,Malaysia BachelorofSurveyinginPropertyManagement(Hon), UniversityofTechnology,MalaysiaOccupation : CompanyDirectorPosition : Non-IndependentNon-ExecutiveDirector (AlternateDirectortoYBDato’HajiMohtarbinNong)Other Directorships of Public Companies : NilThe Date He Was First Appointed to the Board : 17April2006
The Details of Any Board Committee to Which He Belongs :Nil
Securities Holding in the Company :Nil
Securities Holding in the Subsidiary :Nil
Family Relationship With Any Director and / or Major Shareholders of the Company :Nil
Conflict of Interest :None
List of Convictions for Offences Within the Past 10 Years Other Than Traffic Offences :None
Working Experience :HewasappointedtotheBoardofWellcallon17April2006.HegraduatedfromtheUniversityofTechnology,MalaysiainBachelorofSurveyinginPropertyManagementwithHonoursandaDiplomainValuationin1986and1982respectively.HestartedhiscareerwithYayasanIslamTerengganu(“YIT”)in1986asanAssistantDirector(Development&Investment)whereheisin-chargeofYIT’sinvestmentandwaspromotedasPrincipalAssistantDirector(Development&Investment)in2006.Healsositsontheboardofdirectorsofotherprivatecompanies.
The Number of Board Meetings Attended in the Financial Year :4outof4
Directors’ Profile (cont’d)
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RAZMI BIN ALIAS
Age : 50Nationality : MalaysianQualification : DiplomainBusinessStudies, UniversitiTeknologiMara BachelorinBusinessAdministration, WesternMichiganUniversity,Michigan,USA MastersinBusinessAdministration, CentralMichiganUniversity,Michigan,USAOccupation : CompanyDirectorPosition : IndependentNon-ExecutiveDirectorOther Directorships of Public Companies : Can-OneBerhadThe Date He Was First Appointed to the Board : 17April2006
The Details of Any Board Committee to Which He Belongs :AuditCommittee,NominationCommitteeandRemunerationCommitteeofWellcall
Securities Holding in the Company :Nil
Securities Holding in the Subsidiary :Nil
Family Relationship With Any Director and / or Major Shareholders of the Company :Nil
Conflict of Interest :None
List of Convictions for Offences Within the Past 10 Years Other Than Traffic Offences :None
Working Experience :HewasappointedtotheBoardofWellcallon17April2006.HegraduatedfromUniversitiTeknologiMarain1977withaDiploma inBusinessStudiesbeforeobtainingaBachelor inBusinessAdministrationfromWesternMichiganUniversity,Michigan,USAin1981andaMastersinBusinessAdministrationfromtheCentralMichiganUniversity,Michigan,USAin1982.Heworkedwithalocalfinancialinstitutionin1998andsince1999tillpresent,heholdsdirectorshipsinIskaTenagaSdnBhdandotherprivatecompanies.
The Number of Board Meetings Attended in the Financial Year :4outof4
Directors’ Profile (cont’d)
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YANG CHONG YAW, ALAN
Age : 38Nationality : MalaysianQualification : BachelorofEconomics(AccountingandFinance), MacquarieUniversity,Sydney,Australia MasterinBusinessAdministration, MacquarieGraduateSchoolofManagement, Sydney,Australia MemberoftheAustralianSociety ofCertifiedPractisingAccountantsOccupation : CompanyDirectorPosition : IndependentNon-ExecutiveDirectorOther Directorships of Public Companies : NilThe Date He Was First Appointed to the Board : 17April2006
The Details of Any Board Committee to Which He Belongs :Nil
Securities Holding in the Company :Nil
Securities Holding in the Subsidiary :Nil
Family Relationship With Any Director and / or Major Shareholders of the Company :Nil
Conflict of Interest :None
List of Convictions for Offences Within the Past 10 Years Other Than Traffic Offences :None
Working Experience :He was appointed to the Board ofWellcall on 17 April 2006. He obtained his Master in Business Administration fromMacquarieGraduateSchoolofManagement,Sydney,Australiain1999andaBachelorofEconomics(AccountingandFinance)fromMacquarieUniversity,Sydney,Australiain1992.HeisalsoamemberoftheAustralianSocietyofCertifiedPractisingAccountants.MrYanghasmorethan15yearsofexperienceincorporatefinanceandaccounting.HeispresentlytheChiefOperatingOfficerofWBResearchSdnBhd,acompanythatmarketsfinancialanalyticsproducts.
The Number of Board Meetings Attended in the Financial Year :4outof4
Directors’ Profile (cont’d)
��WELLCALL HOLDINGS BERHAD (Co. No. 707346-W) ANNUAL REPORT 2007
MOHD KHASAN BIN AHMAD
Age : 45Nationality : MalaysianQualification : DiplomainAccountancy,UniversityTeknologiMara, Malaysia DegreeinAccountancy,UniversityTeknologiMara MemberofMalaysianInstituteofAccountantsOccupation : CompanyDirectorPosition : IndependentNon-ExecutiveDirectorOther Directorships of Public Companies : Farm’sBestBerhad TaWinHoldingsBerhad CrestBuilderHoldingsBerhad MOLAccessPortalBerhad RalcoCorporationBerhadThe Date He Was First Appointed to the Board : 17April2006
The Details of Any Board Committee to Which He Belongs :Nil
Securities Holding in the Company :Nil
Securities Holding in the Subsidiary :Nil
Family Relationship With Any Director and / or Major Shareholders of the Company :Nil
Conflict of Interest :None
List of Convictions for Offences Within the Past 10 Years Other Than Traffic Offences :None
Working Experience :HewasappointedtotheBoardofWellcallon17April2006.HeobtainedadiplomainAccountancyandlatergraduatedwithadegreeinAccountancyfromUniversityTeknologiMarain1985.HeisalsoamemberoftheMalaysianInstituteofAccountants.HeservedBankNegaraMalaysiaforaperiodofabout7years,thelast2yearsofwhichhewassecondedtotheCapitalIssuesCommitteeasitsPrincipalAssistantSecretary.Subsequently,hejoinedtheSecuritiesCommissionforaperiodofabout6yearsandhislastcapacitywasanAssistantManagerinitsIssuesandInvestmentDivision.Duringthetenureofhisaboveappointments,hewasinvolvedinvariouscorporateexercisesrangingfrominitialpublicofferings,mergersandacquisitions,reversetakeovers,issuanceofbondsandothercapitalraisingexercises.Hejoinedtheprivatesectorin1997andheldvariousseniormanagementpositions.
The Number of Board Meetings Attended in the Financial Year :4outof4
Directors’ Profile (cont’d)
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Statement on Corporate Governance
TheBoardofDirectors(“Board”)oftheCompanyispleasedtoreportthatforthefinancialyearunderreview,theCompanyhascontinuedtoapplygoodgovernancepracticesinmanaginganddirectingthebusinessaffairsoftheGroup,byadoptingthesubstanceandspiritoftheprinciplesadvocatedbytheMalaysianCodeonCorporateGovernance(“Code”)whereverpossible.
InthisStatement,theBoardhasconsideredthemannerinwhichtheprinciplesoftheCodehavebeenapplied,theextentofcompliancewiththeBestPracticesandthealternativesfordeparturefromsuchbestpractices.
BOARD OF DIRECTORS
Board Composition and Balance
TheGroupiscontrolledandledbyadynamicBoardwhichisprimarilyentrustedwiththeresponsibilityofchartingthedirectionoftheGroup.Inaddition,theBoardoverseestheconductoftheGroupbusinessesandestablishedandmaintainedanadequatesystemofinternalcontrols.Duetolimitationsinherenttoanysystemofinternalcontrols,theBoardfocusedprimarilyonthemitigationofanyforeseeableorpotentialrisksfacingtheGroup.
Inthemanagementandday-to-dayoperationsoftheGroup,theBoard,throughtheExecutiveDirectors,isfullyassistedbytheManagement.TheBoardoutlinesthepoliciesandobjectivesoftheGroup,whicharecarriedoutbytheManagementthroughthesupervisionoftheExecutiveDirectors.
TheBoardmembersconsistofone(1)Non-IndependentNon-ExecutiveChairman,one(1)Non-IndependentManagingDirector,two(2)Non-IndependentExecutiveDirectors,two(2)Non-IndependentNon-ExecutiveDirectorsandthree(3)IndependentNon-ExecutiveDirectors.
TheprofilesofindividualDirectorsaresetoutonpages9to18oftheAnnualReport.
ThecompositionoftheBoardnotonlyreflectsthebroadrangeofexperience,skillsandknowledgerequiredtosuccessfullydirectandsupervisetheGroupbusinessactivities,butalsotheimportanceof independenceindecision-makingattheBoardlevel.
ThereisalsobalanceintheBoardbecauseofthepresenceofIndependentNon-ExecutiveDirectorswiththenecessarycalibertocarrysufficientweightintheBoard’sdecisionmakingprocess.AlltheNon-ExecutiveDirectorsareindependentofthemanagementandfreefromanybusinessorotherrelationshipthatcouldmateriallyinterferewiththeexerciseoftheirindependentjudgement.TheyhavethecapabilitytoensurethatthestrategiesproposedbytheManagementarefullydeliberatedandexaminedinthelong-terminterestoftheGroup,aswellastheshareholders,employees,customers,suppliersandthemanycommunitiesinwhichtheGroupconductsitsbusinesses.
Indischargingitsduties,theBoardmetatotaloffour(4)timesduringthefinancialyearended30September2007.TherecordofattendanceatthemeetingsoftheBoardofDirectorsforthefinancialyearended30September2007isasfollows:-
No. of Board Directors Meetings Attended
DatukNgPengHong@NgPengHay 4/4HuangSha 4/4LeongHonChong 3/4ChewCheeChek 4/4TanKanSeng 3/4YBDato’HjMohtarBinNong 3/4MatZaidbinIbrahim(AlternateDirectortoYBDato’HjMohtarBinNong) 4/4RazmiBinAlias 4/4MohdKhasanBinAhmad 4/4YangChongYaw,Alan 4/4
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Statement on Corporate Governance (cont’d)
Board Responsibilities
TheBoard isprimarily responsible for theGroup’soverallcorporategovernance,strategicplans,businessperformance,successionplanning,riskmanagement,aswellasreviewingtheadequacyandintegrityofitsinternalcontrolandmanagementinformationsystems.
TheBoardmeetsregularlytoreviewtheGroup’scorporatestrategies,businessoperationsandfinancialperformance.
Directors’ Training
TheGroupacknowledgesthefactthatcontinuouseducationisvitalfortheBoardmemberstogaininsightintothestateofeconomy, technologicaladvances inourcorebusiness, latest regulatorydevelopmentsandmanagementstrategies.Therefore,theDirectorsareencouragedtoevaluatetheirowntrainingneedsonacontinuousprocessandtodeterminetherelevantprogrammes,seminarsandbriefingsthatwouldenhancetheirknowledgetoenabletheDirectorstodischargetheirresponsibilitiesmoreeffectively.
Statement on Continuing Education Programme
Forthefinancialyearended30September2007,theBoardofDirectors,exceptMrLeongHonChongandTanKangSengwhowasonmedicalleaveandoverseasbusinesstriprespectively,hadon17August2007attendedatalkorganizedbytheexternalauditors,namelyOng&Wong,CharteredAccountantsonthechangesmadetotheFinancialReportingStandards2004.
Appointment and Re-election of Directors
InaccordancewiththeCompany’sArticlesofAssociation,theBoardcanappointanypersontobeaDirectorasandwhenitisdeemednecessary.AnypersonsoappointedshallholdofficeuntilthenextAnnualGeneralMeeting(“AGM”)andshallthenbeeligibleforre-election.AtthefirstAGM,alltheDirectorsshallretirefromoffice,andattheAGMineverysubsequentyearone-thirdoftheDirectorsshallretirefromofficeandeligibleforre-election.AnelectionofDirectorstakesplaceeveryyearandalltheDirectorsshallretirefromofficeonceatleastineachthree(3)yearsbutshallbeeligibleforre-election.
Information and External Advice
TheBoardisprovidedwithcomprehensiveboardpapersonatimelybasispriortoboardmeetings.ThisistoensureandtoenabletheDirectorstodischargetheirdutiesandresponsibilitiescompetentlyandinawell-informedmanner.AllmembersoftheBoardhaveaccesstotheadviceandservicesoftheCompanySecretary.TheDirectorsmeet,reviewandapproveallcorporateannouncements,includingtheannouncementofthequarterlyfinancialresults,priortoreleasingthemtoBursaSecurities.
Directorsarealsoempoweredtoseeksuchexternalindependentprofessionaladviceastheymayrequire,attheexpenseoftheGroup,toenablethemtomakewell-informeddecisions.
Directors’ Remuneration
Directors’remunerationisdecidedinlinewiththeobjectiverecommendedbytheCodetodeterminetheremunerationforDirectorssoastoattractandretainDirectorsofthecaliberneededtoruntheCompanysuccessfully.Ingeneral,thecomponentpartsofremunerationarestructuredsoastolinkrewardstoperformance,inthecaseofExecutiveDirectors.InthecaseofNon-ExecutiveDirectors,thelevelofremunerationreflectstheexperienceandresponsibilitiesundertakenbytheparticularnon-executiveconcerned.DirectorsdonotparticipateindecisionsregardingtheirownremunerationpackagesandDirectorsfeesmustbeapprovedbyshareholdersattheAGM.
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ThedetailsoftheremunerationoftheDirectorsoftheCompanyforthefinancialyearunderreviewareasfollows:-
Salaries & Other Fees Emoluments Benefit in Kind Category (RM’000) (RM’000) (RM’000)
ExecutiveDirector – 1,784 47Non-ExecutiveDirector 240 – –
ThenumbersofDirectorsoftheCompanywhosetotalremunerationduringthefinancialyearunderreviewthatfallwithinthefollowingbandsareasfollows:-
Executive Non-Executive Range of Remuneration Director Director
BelowRM50,000 – 4RM50,001–RM100,000 – 2RM150,001–RM200,000 1 –RM400,001–RM450,000 1 –RM1,200,001–RM1,250,000 1 –
TheCompanyhasoptednottodiscloseeachDirector’sremunerationastheBoardconsiderstheinformationtobesensitiveandproprietary.
Board Committees
Inordertoensuretheeffectivedischargeofitsfiduciaryduties,theBoardhasestablishedvariousBoardCommitteestoassisttheBoardintherunningoftheGroup.ThisistoallowthemembersoftheBoardCommitteestodeliberateandexamineissueswithintheirtermsofreferenceingreaterdetailandsubsequentlyrecommendandreporttotheBoard.Thefunctionsandtermsofreferenceofthecommittees,aswellastheauthoritydelegatedbytheBoardtothesecommittees,havebeenclearlydefinedandapprovedbytheBoard.AllBoardCommitteesdonothaveexecutivepowersbutonlythepowertomakerecommendationstotheBoard.
TheBoardCommitteesforthefinancialyearunderreviewareasfollows:
(a) Audit Committee
TheAuditCommitteeisresponsiblefortherecommendationtoourBoardregardingtheselectionoftheexternalauditors,reviewingtheresultsandscopeoftheauditandotherservicesprovidedbytheGroup’sexternalauditorsandreviewsandevaluatestheGroup’sinternalauditandcontrolfunctions.TheAuditCommitteeisalsoresponsiblefortheassessmentoffinancialriskandmattersrelatingtorelatedpartytransactionsandconflictofinterests.TheAuditCommitteemayobtainadvicefromindependentpartiesandotherprofessionalsintheperformanceofitsduties.ThecurrentmembersofourAuditCommitteeareasfollows:
Name Designation Directorship
RazmibinAlias Chairman IndependentNon-ExecutiveDirectorYangChongYaw,Alan Member IndependentNon-ExecutiveDirectorChewCheeChek* Member Non-IndependentExecutiveDirector
Note: * In compliance with the revised Code of Corporate Governance which took effect on 1 October 2007, Chew Chee Chek resigned on 22 November 2007 and Tan Kang Seng has been appointed as the new Audit Committee member on the even date
TheTermsofReferenceoftheCommitteeareasstatedonpages25to28ofthisAnnualReport.AsummaryoftheactivitiesoftheAuditCommitteeduringtheyearissetoutintheAuditCommitteeReportonpage28.
TheCommitteemetatotaloffour(4)timesduringthefinancialyearended30September2007.
Statement on Corporate Governance (cont’d)
22WELLCALL HOLDINGS BERHAD (Co. No. 707346-W) ANNUAL REPORT 2007
(b) Remuneration Committee
The Remuneration Committee was appointed by our Board and consists of 3 members, a majority of whom areIndependentNon-ExecutiveDirectors.TheChairmanisanIndependentNon-ExecutiveDirector.TheRemunerationCommitteeisprimarilychargedwiththeresponsibilityofrecommendingtoourBoardthepolicyandframeworkforourDirectors’remunerationincludingtheremunerationandtermsofserviceofourExecutiveDirectorsinallitsforms,drawingfromoutsideadvice,ifnecessary.
ThedeterminationofremunerationofourExecutiveandNon-ExecutiveDirectorsshallbeamattertobedeterminedbyourBoardasawholeaftertakingintoconsiderationoftheRemunerationCommittee’srecommendations.ThecurrentmembersofourRemunerationCommitteearesetforthbelow:
Name Designation Directorship
RazmibinAlias Chairman IndependentNon-ExecutiveDirectorYangChongYaw,Alan Member IndependentNon-ExecutiveDirectorChewCheeChek Member Non-IndependentExecutiveDirector
(c) Nomination Committee
The Nomination Committee was appointed by our Board and consists of 3 members, a majority of whom areIndependentNon-ExecutiveDirectors.TheNominationCommitteeisprimarilyresponsibleforproposingnewnomineesforourBoardaswellastheDirectorstofilltheseatsonboardcommittees,andassessingtheDirectorsonanongoingbasis.
In particular, the Board through this Committee would review on an annual basis the required mix of skills andexperienceandothercorequalities,includingcorecompetencies,whichtheNon-ExecutiveDirectorsshouldbringtotheBoard.ThecurrentmembersoftheNominationCommitteearesetforthbelow:
Name Designation Directorship
DatukNg Chairman Non-IndependentNon-ExecutiveChairmanRazmibinAlias Member IndependentNon-ExecutiveDirectorYangChongYaw,Alan Member IndependentNon-ExecutiveDirector
INVESTOR RELATIONS AND SHAREHOLDER COMMUNICATION
The Board clearly recognises the importance of transparency and accountability to all its stakeholders, particularly itsshareholdersandinvestorsasitensuresthatmarketcredibilityandinvestors’confidencearemaintained.Throughextensivedisclosuresofappropriateandrelevantinformation,usingvariouschannelsofcommunicationonatimelybasis,theGroupaimstoeffectivelyprovideshareholdersandinvestorswithinformationtofulfilltransparencyandaccountabilityobjectives.Atthisjuncture,thechannelofcommunicationtoshareholders,stakeholdersandgeneralpublicfortheoverallperformanceandoperationsoftheGroup’sbusinessactivitiesarepressreleases,publicannouncementsonquarterlybasis,annualreportanddisclosurestotheBursaSecurities.Meetingswithinstitutionalinvestors,fundmanagers,analysts,researchhousesandmembersofthemediafromtimetotimeprovideanadditionalavenuefortheBoardandmanagementtoconveyinformationaboutGroupperformance,strategyandothermattersaffectingshareholders’interests.
ANNUAL GENERAL MEETING
TheupcomingAnnual General Meeting represents theprincipal forumfordialogueand interactionwith shareholders.Shareholdersareaccordedboththeopportunityandtimetoraisequestionsontheagendaitemsofthegeneralmeeting.Thenoticeofmeetingandtheannualreportaresentouttoshareholdersatleast21daysbeforethedateofthemeetinginaccordancewiththeCompany’sArticlesofAssociation.
Statement on Corporate Governance (cont’d)
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ACCOUNTABILITY AND AUDIT
Financial Reporting
TheBoardaimstopresentabalanced,insightfulandtimelyassessmentoftheGroup’sfinancialpositionandprospectsbyensuringqualityfinancialreportingthroughtheannualauditedfinancialstatementsandquarterlyfinancialresultstoitsstakeholders,inparticular,shareholders,investorsandtheregulatoryauthorities.TheAuditCommitteeassiststheBoardinscrutinisinginformationfordisclosuretoensurethequalityoffinancialreportingandadequacyofsuchinformation,priortosubmissiontotheBoardforitsapproval.AsrequiredbytheCompaniesAct,1965(“Act”),theDirectorsareresponsibleforthepreparationoffinancialstatementsinaccordancewithapplicableapprovedaccountingstandardsandtogiveatrueandfairviewofthestateofaffairsoftheGroupandCompanyattheendofeachfinancialyearandoftheresultsandcashflowsoftheGroupandCompanyforthefinancialyear.
Inpreparingthefinancialstatements,theDirectorshave:• adoptedappropriateaccountingpoliciesandappliedthemconsistently;• madejudgementsandestimatesthatareprudentandreasonable;• ensuredthatapplicableaccountingstandardshavebeenfollowed;and• preparedthefinancialstatementsonagoingconcernbasisastheDirectorshaveareasonableexpectation,having
madeenquiries,thattheGroupandCompanyhaveadequateresourcestocontinueinoperationalexistencefortheforeseeablefuture.
TheDirectors have responsibility for ensuring that theCompanykeepsproperaccounting records which disclose withreasonableaccuracyatanytime,thefinancialpositionoftheGroupandCompanyandtoenablethemtoensurethatthefinancialstatementscomplywiththeActandapplicableapprovedaccountingstandards. Inaddition,theDirectorsarealsoresponsiblefortakingreasonablestepstosafeguardtheassetsfortheGroupandCompanyandtopreventanddetectfraudaswellasotherirregularities.
Internal Control
TheBoardacknowledgesitsoverallresponsibilityformaintainingasoundsystemofinternalcontrolsthatprovidesreasonableassessmentofeffectiveandefficientoperations,internalfinancialcontrolsandcompliancewithlawsandregulationsaswellaswithinternalproceduresandguidelines.TheeffectivenessofthesystemsofinternalcontrolsoftheGroupisreviewedperiodicallybytheAuditCommittee.FurtherdetailsoftheGroup’ssystemofinternalcontrolsaresetoutintheStatementonInternalControlsectionofthisAnnualReport.
Relationship with Auditors
TheBoardmaintainsatransparentandprofessionalrelationshipwiththeexternalauditors.TheAuditCommitteemeetswiththeexternalauditorsatleastonceayeartodiscusstheirauditplan,auditfindingsandthefinancialstatements.TheAuditCommitteealsomeetstheexternalauditorswithoutthepresenceoftheExecutiveDirectorsandthemanagementwheneverdeemednecessary.Fromtimetotime,theauditorshighlighttotheAuditCommitteeandtheBoardonmattersthatrequiretheBoard’sattention.TheroleoftheAuditCommitteeinrelationtoboththeinternalandexternalauditorsisdescribedintheAuditCommitteeReportofthisAnnualReport.
CORPORATE SOCIAL RESPONSIBILITY
TheCompanyhasinvolvedinvariousactivitiesaspartofitsCorporateSocialResponsibility(CSR)efforts:-
(a) Occupational Safety and Health
TheCompanyiscommittedtomaintainhighsafetyandhealthstandardsatworkplace.Acommitteehasbeensetuptomonitorthecomplianceofthesafetyandhealthstandards.Aseriesofin-houseprogrammesonsafetyandhealthareregularlyconductedwiththeassistanceofexternalexpertsandcommitteemembers.Thisincludestrainingonhandlingchemical,flammablematerialsandmachineriesinworkplace.
(b) Contribution to charitable causes
TheCompanyhasbeencontributingregularlytoschoolswithanobjectivetoprovidethelessfortunateanopportunitytopursuefurthereducation.
Statement on Corporate Governance (cont’d)
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Statement of Internal Control
TheBoardofDirectorsisultimatelyresponsiblefortheGroup’ssystemofinternalcontrolandforreviewingtheeffectivenessoftheinternalcontrolsystemduringtheyearpursuanttoparagraph15.27(b)oftheBursaSecuritiesListingRequirements.InternalcontrolsystemisprimarilydesignedtocaterforthebusinessneedsandmanagethepotentialbusinessrisksoftheGroup.
TheBoardhasoverallresponsibilityfortheGroup’ssystemofinternalcontrol,whichaimsto:
• safeguardshareholders’investmentsandtheGroup’sassets;
• ensurethatproperaccountingrecordsaremaintained;and
• ensurethatthefinancialinformationprovidedwithinthebusinessandforpublicationisreliable.
Inviewofthelimitationsthatareinherentinanysystemsofinternalcontrol,suchsystemsaredesignedtomitigateratherthaneliminatethelikelihoodoffraudanderror.Accordingly,thesesystemscanprovideonlyreasonableandnotabsoluteassuranceagainstmaterialmisstatementorloss.Theconceptofreasonableassurancealsorecognizesthatthecostofcontrolproceduresshouldnotexceedtheexpectedbenefits.
TherearealwaysopportunitiestofurtherimprovethecurrentinternalcontrolsystemsoftheGroup.Aprogrammeofactionstoenhancetheinternalcontrolsystemwasundertakeninlinewiththecorporategovernancecompliances.TheCompanyhason17November2006outsourcedtheinternalauditfunctionoftheGrouptoMatrixConsultancySdnBhd(“MatrixConsultancy”).MatrixConsultancyreportsdirecttotheAuditCommittee.ItsroleistoprovidetheAuditCommitteewithindependentandobjectivereportsonthestateofinternalcontrolsoftheoperatingunitswithintheGroupandtheextentofcompliancebysuchunitswiththeGroup’sestablishedpoliciesandproceduresandtheregulatoryrequirementsoftherelevantauthorities.
Inseekingtoachievetheobjectivesoftheinternalcontrolsystems,thefollowingkeyelementshavebeenconsidered:
CONTROL ENVIRONMENT AND ACTIVITIES
It is imperative that the Group should operate on a sound system of internal control. In general, the overall line ofcommunicationsacrossthebusinessiswelldefinedandthereisanappropriateintegrityinriskmanagement.
Thereisalsoalimitonauthoritythatclearlydefinesauthorizationlimittoensureproperidentificationofaccountabilitiesandsegregationofduties.OperationControlprocedureshavebeenestablishedaccordingtoIS09001:2000standard.Thiswillensurethatthebusinessprocessflowisaccordinglyandproperlyexecuted.
RISK MANAGEMENT
TheBoardfullysupportsthecontentsoftheStatementon InternalControlandGuidanceforDirectorsofPublicListedCompanies.The Board together with the assistance of a professional firm will undertake to review the existing riskmanagementprocessinplacewithinthevariousbusinessoperations,withtheaimofformalizingtheriskmanagementfunctionsacrosstheGroup.
Asanongoingprocess,significantbusinessrisksfacedbytheGroupareidentifiedandevaluatedandconsiderationisgivenonthepotential impactofachievingthebusinessobjectives.This includesexaminingprincipalbusinessrisks incriticalareas,assessingthelikelihoodofmaterialexposuresandidentifyingthemeasurestakentomitigate,avoidoreliminatetheserisks.
GOING CONCERN
TheBoard,basedonthecurrentbusinessactivitiesandfacilitiesavailableaswellasthestableeconomicenvironment,haveareasonableexpectationsthattheGroupisinapositiontocontinueitsoperationalpresenceandexistenceintheforeseeablefuture.HencetheGroupfinancialstatementshavebeenpreparedonthegoingconcernbasis.
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Audit Committee Report
TheAuditCommitteeofWellcallHoldingsBhdispleasedtopresenttheAuditCommitteeReportforthefinancialyearended30September2007.
1. MEMBERSHIP AND ATTENDANCE
Number of Audit Committee Meetings
Composition of Audit Committee Held Attended
RazmibinAlias 4 4Chairman/Independent Non-Executive Director
YangChongYaw,Alan 4 4Member/Independent Non-Executive Director
ChewCheeChek* 4 4Member/Non-Independent Executive Director
Note: * In compliance with the revised Code of Corporate Governance which took effect on 1 October 2007, Chew Chee Chek resigned on 22 November 2007 and Tan Kang Seng has been appointed as the new Audit Committee member on the even date
2. COMPOSITION AND TERMS OF REFERENCE
2.1 MEMBERSHIP
(a) TheAuditCommitteeshallbeappointedbytheBoardfromamongsttheDirectorsoftheCompanyandshallconsistofnotlessthanthree(3)membersofwhomthemajorityshallbeIndependentDirectors.Atleastone(1)memberoftheAuditCommittee:-
i) mustbeamemberoftheMalaysianInstituteofAccountants;or
ii) ifheisnotamemberoftheMalaysianInstituteofAccountants,hemusthaveatleastthree(3)years’workingexperienceand:-
(aa) he must have passed the examinations specified in Part 1 of the 1st Schedule of theAccountantsAct,1967;or
(bb) hemustbeamemberofoneoftheassociationsofaccountantsspecifiedinPartIIofthe1stScheduleoftheAccountantsAct,1967.
(b) NoalternateDirectorshallbeappointedasamemberoftheAuditCommittee.
(c) IntheeventanyvacancyintheAuditCommitteeresultinginthenon-complianceofitem(a)above,thevacancymustbefilledwithinthree(3)monthsofthatevent.
(d) The Board must review the term of office and performance of an Audit Committee and each of itsmembersatleastonceeverythree(3)yearstodeterminewhethersuchAuditCommitteeandmembershavecarriedouttheirdutiesinaccordancewiththeirtermsofreference.
2.2 QUORUM
Aquorumoftwo(2)membersandthemajorityofmemberspresentshallbeIndependentDirectors.
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2.3 CHAIRMAN
Themembersof theAuditCommitteeshallelectaChairman fromamongtheirnumberswhoshallbeanIndependentDirector.
2.4 MEETINGS
Meetingsshallbeheldat least four (4) timesayear.Additionalmeetingsmaybecalledatanytimeat thediscretionoftheChairmanoftheAuditCommittee.
TheAuditCommitteemayinviteanyotherDirectors,managementandstafftobeinattendanceduringmeetingstoassistinitsdeliberation.
TheCompanySecretaryorhisrepresentativesshallresponsibleforsendingoutnoticesofmeetings,preparingandkeepingminutesofmeetingsandcirculatingtheminutesofmeetingstocommitteemembersandtoallmembersoftheBoard.
2.5 OBJECTIVES
(a) TorecommendtotheBoardregardingtheselectionoftheexternalauditors,reviewingtheresultsandscopeoftheauditandotherservicesprovidedbytheGroup’sexternalauditors;
(b) ToreviewandevaluatetheGroup’sinternalauditandcontrolfunctions;
(c) Toberesponsiblefortheassessmentoffinancialriskandmattersrelatingtorelatedpartytransactionsandconflictofinterests;
(d) To assist the Board in discharge its responsibilities by reviewing the adequacy and integrity of theCompany’s internal control systems and management information systems, including systems forcompliancewithapplicablelaws,regulations,rules,directivesandguidelines;
(e) Toreinforcetheindependenceoftheexternalauditorsandtherebyhelpassurethattheywillhavefreereinintheauditprocess;
(f ) Toprovide,bywayofregularmeetings,alineofcommunicationbetweentheBoardandtheexternalauditors;
(g) Toprovideaforumfordiscussionthatisindependentofthemanagement;and
(h) ToreviewthequalityoftheauditsconductedbytheexternalauditorsoftheCompany.
2.6 DUTIES AND RESPONSIBILITIES
ThefunctionsoftheAuditCommitteeareasfollows:-
a) toreviewthefollowingandreportthesametotheBoardofDirectors:-
i) withtheexternalauditors,theauditplan;
ii) withtheexternalauditors,hisevaluationofthesystemofinternalcontrols;
iii) withtheexternalauditor,hisauditreport;
iv) theassistancegivenbytheCompany’semployeestotheexternalauditors;
v) theadequacyofthescope,thefunctionsandresourcesoftheinternalauditfunctionsandthatithasthenecessaryauthoritytocarryoutitswork;
Audit Committee Report (Cont’d)
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vi) theinternalauditprogrammes,processes,theresultsoftheinternalauditprogrammes,processesorinvestigationundertakenandwhetherornotappropriateactionistakenontherecommendationsoftheinternalauditfunction;
vii) thequarterlyandyear-endfinancial statementsof theCompany,prior to theapprovalby theBoard,focusingparticularlyon:-
• Changesinorimplementationofmajoraccountingpolicychanges;
• Significantandunusualevents;
• Thegoingconcernassumption;
• Compliancewithaccountingstandardsandotherlegalrequirements;
viii) anyrelatedpartytransactionandconflictofinterestsituationthatmayarisewithintheCompanyor group including any transaction, procedure or course of conduct that raises questions ofmanagementintegrity;
ix) anyletterofresignationfromtheexternalauditorsoftheCompany;
x) whetherthereisreason(supportedbygrounds)tobelievethattheCompany’sexternalauditorsisnotsuitableforre-appointment;and
xi) reviewthelistofeligibleemployeesandtheallocationofEmployees’ShareOptionScheme(“ESOS”)tobeofferedtothem.
b) toconsiderthefollowingandreportthesametotheBoardofDirectors:-
i) themajorfindingsofinternalinvestigationsandmanagement’sresponse;
ii) othertopicsasdefinedbytheBoard;and
iii) thenominationofapersonorpersonsasexternalauditorstogetherwithsuchotherfunctionsasmaybeagreedbytheAuditCommitteeandtheBoard.
(c) todiscussproblemsandreservationsarisingfromtheinterimandfinalaudits,andanymatterthattheexternalauditormaywishtoraise(intheabsenceofmanagement,wherenecessary).
2.7 RIGHTS OF THE AUDIT COMMITTEE
TheAuditCommitteeshall,wherevernecessaryandreasonablefortheCompanytotheperformanceofitsduties,inaccordancewithaproceduretobedeterminedbytheBoardofDirectorsandatthecostoftheCompany:-
(a) investigateanymatterwithinitstermsofreference;
(b) havetheresourceswhicharerequiredtoperformitsduties;
(c) havefullandunrestrictedaccesstoanyinformationpertainingtotheCompany;
(d) havedirectcommunicationchannelswiththeexternalauditorsandperson(s)carryingouttheinternalauditfunctionoractivity(ifany);
(e) obtainadvicefromindependentpartiesandotherprofessionalsintheperformanceofitsduties;and
(f ) convenemeetingswiththeexternalauditors,excludingtheattendanceoftheexecutivemembersoftheAuditCommittee,wheneverdeemednecessary.
Audit Committee Report (Cont’d)
2�WELLCALL HOLDINGS BERHAD (Co. No. 707346-W) ANNUAL REPORT 2007
3. SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE
TheAuditCommitteehasdischargeditsdutiesassetoutinitsTermsofReference.Duringthefinancialyear,theactivitiesoftheAuditCommitteeincluded:-
1. ReviewedtheQuarterlyReportsandtheAnnualReporttoensureadherencetolegalandregulatoryreportingrequirementsandappropriateresolutionofallaccountingmattersrequiringsignificantjudgment;
2. Reviewed and deliberated the significant risk areas, internal control and financial matters brought to theattentionoftheexternalauditorsinthecourseoftheirwork;
3. Deliberatedtheemergingfinancialreportingissuespursuanttotheintroductionofnewaccountingstandardsandadditionalstatutory/regulatorydisclosurerequirements;
4. DeliberatedthebestBoardpracticesformeetingmarketexpectationsandprotectingshareholders’intereststhatwerehighlightedbytheexternalauditors;and
5. VerifiedtheallocationofoptionsharespursuanttotheESOStoeligibleemployeeshadbeenmadeinaccordancewiththecriteriaofallocationofoptionsharesassetoutintheBye-LawsoftheESOS.
4. SUMMARY OF ACTIVITIES OF THE OUTSOURCED INTERNAL AUDIT DEPARTMENT
TheCompanyhason17November2006outsourcedtheinternalauditfunctionoftheGrouptoMatrixConsultancy.MatrixConsultancyreportsdirecttotheAuditCommittee.ItsroleistoprovidetheCommitteewithindependentandobjectivereportsonthestateof internalcontrolsoftheoperatingunitswithintheGroupandtheextentofcompliancebysuchunitswiththeGroup’sestablishedpoliciesandproceduresandtheregulatoryrequirementsoftherelevantauthorities.TheAuditCommitteereviewsandapprovestheinternalauditplanoftheGroupsubmittedbyMatrixConsultancy.Duringthefinancialyearended30September2007,theareasauditedincludedauditsofthevariousdepartmentscoveringthesubsidiaryoftheGroup.InternalauditreportswereissuedtotheAuditCommitteeregularly and tabled in the Audit Committee meetings.The reports are also issued to the respective operationsmanagement,incorporatingauditrecommendationsandmanagementresponseswithregardstoanyauditfindingsontheweaknessesinthesystemsandcontrolsoftheoperations.MatrixConsultancyalsofollowsupwithmanagementontheimplementationoftheagreedauditrecommendations.
Audit Committee Report (Cont’d)
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Other Information
SHARE BUYBACKS
TherewerenosharebuybackexerciseundertakenbytheCompanyduringthefinancialyearunderreview.
OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES
Duringthecurrentfinancialyearended30September2007,atotalof3,092,000newordinaryshareswereissuedandallottedpursuanttotheexerciseofESOSoptions.ExceptforESOSoptionsbeinggrantedtothefollowingnon-executivedirectorsduringthefinancialyearended30September2007,thereisnoESOSoptionsbeinggrantedtoothereligibleemployeesofWellcallGroup:
Amount of ESOS Amount of ESOS Name of Director options offered options exercised
RazmibinAlias 80,000 –YangChongYaw,Alan 80,000 –MohdKhasanbinAhmad 40,000 –
Otherthanabove,therewerenoissuancesofwarrantsorconvertiblesecuritiesduringthefinancialyear.
AMERICAN DEPOSITORY RECEIPT (“ADR”) OR GLOBAL DEPOSITORY RECEIPT (“GDR”)
TheCompanydidnotsponsoranyADRorGDRprogrammeduringthefinancialyear.
IMPOSITION OF SANCTIONS/PENALTIES
There were no public sanctions and/or penalties imposed on the Company and its subsidiary company, Directors ormanagementbytherelevantregulatorybodiesduringthefinancialyear.
NON-AUDIT FEES
Thenon-auditfeespaidorpayabletoexternalauditorsandtheiraffiliatedcompanyforthefinancialyearended30September2007areasfollows:
RM’000
O&WTaxConsultantsSdnBhd 5
PROFIT GUARANTEES
Duringthefinancialyear,therewerenoprofitguaranteesgivenbytheCompany.
MATERIAL CONTRACTS
Duringthefinancialyear,therewerenomaterialcontracts(notbeingcontractsenteredintotheordinarycourseofbusiness)enteredintobytheCompanyanditssubsidiariesinvolvingDirectors’and/orsubstantialshareholders’interests.
�0WELLCALL HOLDINGS BERHAD (Co. No. 707346-W) ANNUAL REPORT 2007
REVALUATION POLICY
Duringthefinancialyear,theCompanyanditssubsidiarydonothaveanyrevaluationpolicyonitslandedproperties.
UTILISATION OF PROCEEDS FROM PUBLIC ISSUE
Theproceedsraisedfromthepublicissuehavebeenfullyutilised,whichissetoutasfollows:
Amount Utilisation as allocated at 7/12/2007 Balance RM’000 RM’000 RM’000
Capitalexpenditure 7,700 7,700 –Workingcapital 6,793 6,793 –Researchanddevelopment 1,105 1,105 –Defrayestimatedlistingexpenses 1,500 1,254 *246 17,098 16,852 246
* utilized as working capital
Other Information (Cont’d)
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financialstatements
32 Directors’Report
37 StatementbyDirectorsandStatutoryDeclaration
38 ReportoftheAuditors
39 BalanceSheets
40 IncomeStatements
41 StatementsofChangesinEquity
43 CashFlowStatements
46 NotestotheFinancialStatements
�2WELLCALL HOLDINGS BERHAD (Co. No. 707346-W) ANNUAL REPORT 2007
Directors’ Reportfor the year ended �0th September, 2007
ThedirectorshavepleasureinsubmittingtheirreportandtheauditedfinancialstatementsoftheGroupandoftheCompanyforthefinancialyearended30thSeptember,2007.
PRINCIPAL ACTIVITIES
TheCompanyisprincipallyengagedasaninvestmentholdingcompany.TheprincipalactivityofthesubsidiarycompanyisdisclosedinNote5tothefinancialstatements.Therehavebeennosignificantchangesintheseactivitiesduringthefinancialyear.
RESULTS
Group Company RM RM
Profitbeforetaxation 16,630,396 21,077,242Taxation (1,424,297) –
Profitfortheyear 15,206,099 21,077,242
DIVIDENDS
DividendsdeclaredandpaidbytheCompanysincetheendofthepreviousfinancialyearwere:
i) afirstinterimtaxexemptdividendof3.60senpershareamountingtoRM3,024,792inrespectofthefinancialyearended30thSeptember,2007waspaidon15thMarch,2007.
ii) asecondinterimtaxexemptdividendof4.40senpershareamountingtoRM3,751,309inrespectofthefinancialyearended30thSeptember,2007waspaidon28thSeptember,2007.
iii) on22ndNovember,2007,thedirectorsdeclaredandapprovedathirdinterimtaxexemptdividendof1.50senpershareinrespectofthefinancialyearended30thSeptember,2007.
RESERVES AND PROVISIONS
Therewerenomaterialtransferstoorfromreservesorprovisionsduringthefinancialyear.
ISSUE OF SHARES
Duringthefinancialyear,thefollowingordinaryshareswereissuedbytheCompany:
Class Number of shares Term of issue Purpose of issue Ordinary 3,092,000 Cash ExerciseofESOS
SHARE OPTION
Duringthefinancialyear,theCompanydidnotgrantanyoptiontoanypersontotakeuptheunissuedsharesoftheCompany,apartfromtheissueofsharespursuanttotheEmployees’ShareOptionScheme(“ESOS”).
TheESOSoftheCompanyisgovernedbytheBy-LawsapprovedbytheshareholdersatanExtraordinaryGeneralMeetingheldon15thNovember,2005.ItgrantsoptionstoeligibledirectorsandemployeesoftheGrouptosubscribeforupto15%oftheissuedandpaid-upsharecapitaloftheCompany.
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ThesalientfeaturesoftheESOSareasfollows:
i) Eligibledirectorsandemployeesarethosewhoattainedtheageofatleast18yearsoldandareemployedfull-timebyandonthepayrollofacompanywithintheGroupandhaveservedintheemploymentoftheGroup.
ii) Eachoffershallbemadeinwritingandispersonaltotheeligiblegranteeandshallbeincapableofbeingassigned,transferred,encumberedorotherwisedisposedofinanymannerwhatsoever.
iii) Thesubscriptionpriceofeachordinarysharecomprisedinanyoptionshallbeasfollows:
a) InrespectofanyofferwhichismadeinconjunctionwiththeCompany’slistingonBursaSecurities,theinitialpublicofferprice;and
b) InrespectofanyofferwhichismadesubsequenttotheCompany’slistingonBursaSecurities,theweightedaveragemarketpriceofthesharesforthefive(5)marketdaysimmediatelyprecedingthedateofofferwitha discount of not more than 10% (or such other pricing mechanism as may be permitted by the relevantauthorities)attheESOScommittee’sdiscretion,providedthatthesubscriptionpriceshallinnoeventbelessthantheparvalueoftheshares.
iv) TheESOSshallbeimplementedforayearof10yearsfromthedateoffullcompliancewithallrelevantrequirementsgoverningtheESOS.
v) ThenumberofnewsharesthatmaybeofferedtoaneligiblegranteeshallbedeterminedatthediscretionoftheESOScommitteeaftertakingintoconsiderationtheperformance,seniorityandlengthofserviceoftheeligiblegrantee.
vi) AllnewordinarysharesissueduponexerciseoftheoptionsgrantedundertheESOSwillrankparipassuinallrespectswiththeexistingordinarysharesoftheCompanyexceptthatthesharessoissuedwillnotbeentitledtoanydividends,rights,allotmentsand/oranydistributionswhichmaybedeclared,madeorpaidtoshareholderspriortothedateofallotmentofthenewordinaryshares.
DetailsoftheESOSoptionsgrantedtoeligibledirectorsandemployeesaresetoutinthesectiononDirectors’interestsinsharesinthisreportandNote11tothefinancialstatements.
SUBSEQUENT EVENT
EventsubsequenttothefinancialyearisdisclosedinNote24.
DIRECTORS
Thedirectorswhoservedsincethedateofthelastreportare:
HuangSha,PMPDatukNgPengHong@NgPengHay,DMSM,DSM,PJKLeongHonChongChewCheeChekDato’HajiMohtarBinNong,DPMT,ASM,PJC,PJK,BLBTanKangSengYangChongYawAlanRazmiBinAliasMohdKhasanBinAhmadMatZaidBinIbrahim,PJC (alternate director to Dato’ Haji Mohtar Bin Nong, DPMT, ASM, PJC, PJK, BLB)
Directors’ Report (Cont’d)
for the year ended �0th September, 2007
��WELLCALL HOLDINGS BERHAD (Co. No. 707346-W) ANNUAL REPORT 2007
DIRECTORS’ INTERESTS IN SHARES
AccordingtotheRegisterofDirectors’shareholdings,particularsofdirectors’interestsinthesharesoftheCompanyanditssubsidiarycompanyattheendofthefinancialyearareasfollows:
Number of ordinary shares of RM0.50 each Balance at Balance at 01.10.06 Allotted Sold 30.09.07 Direct interest in ordinary sharesof the Company HuangSha,PMP – 1,000,000 – 1,000,000DatukNgPengHong@ NgPengHay,DMSM,DSM,PJK – 300,000 (300,000) –LeongHonChong – 500,000 – 500,000TanKangSeng – 300,000 – 300,000
Deemed interest in ordinary sharesof the Company
HuangSha,PMP* – 30,000 – 30,000 Indirect interest in ordinary sharesof the Company LifewiseAllianceSdn.Bhd. HuangSha,PMP 27,342,679 – – 27,342,679LeongHonChong 27,342,679 – – 27,342,679ChewCheeChek 27,342,679 – – 27,342,679 MaximumPerspectiveSdn.Bhd.DatukNgPengHong@ NgPengHay,DMSM,DSM,PJK 9,765,241 – – 9,765,241TanKangSeng 9,765,241 – – 9,765,241
* Deemed interested in shares by virtue of Section 134(12)(c) of the Companies (Amendment) Act, 2007.
Options over number of ordinary shares of RM0.50 each Balance at Balance at 01.10.06 Granted Exercised 30.09.07
Direct interest in ESOS optionsof the Company
HuangSha,PMP 1,000,000 – (1,000,000) –DatukNgPengHong@ NgPengHay,DMSM,DSM,PJK 300,000 – (300,000) –LeongHonChong 600,000 – (500,000) 100,000ChewCheeChek 600,000 – – 600,000TanKangSeng 300,000 – (300,000) –YangChongYawAlan – 80,000 – 80,000RazmiBinAlias – 80,000 – 80,000MohdKhasanBinAhmad – 40,000 – 40,000
Directors’ Report (Cont’d)
for the year ended �0th September, 2007
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ByvirtueoftheirinterestsinthesharesoftheCompany,HuangSha,PMP,DatukNgPengHong@NgPengHay,DMSM,DSM,PJK,LeongHonChong,ChewCheeChekandTanKangSengarealsodeemedinterestedinsharesofitssubsidiarycompanytotheextentthatWellcallHoldingsBerhadhasaninterest.
Saveasdisclosedabove,noneoftheotherdirectorsholdingofficeat30thSeptember,2007hadanyinterestintheordinarysharesoftheCompanyanditssubsidiarycompanyduringthefinancialyear.
DIRECTORS’ BENEFITS
Sincetheendofthepreviousfinancialperiod,nodirectorhasreceivedorbecomeentitledtoreceiveanybenefit(otherthanabenefit includedintheaggregateamountofemolumentsreceivedordueandreceivablebydirectorsshowninthefinancialstatements,orthefixedsalaryofafull-timeemployeeoftheCompany)byreasonofacontractmadebytheCompanyorarelatedcorporationwithanydirectororwithafirmofwhichthedirectorisamemberorwithacompanyinwhichthedirectorhasasubstantialfinancialinterest.
NeitherduringnorattheendofthefinancialyearwastheCompanyapartytoanyarrangementswhoseobjectwastoenablethedirectorstoacquirebenefitsbymeansoftheacquisitionofsharesordebenturesoftheGroupandoftheCompanyoranyotherbodycorporate.
OTHER STATUTORY INFORMATION
BeforetheIncomeStatementsandBalanceSheetsoftheGroupandoftheCompanyweremadeout,thedirectorstookreasonablesteps:
i) toascertainthatproperactionhadbeentakeninrelationtothewritingoffofbaddebtsand,themakingofallowancefordoubtfuldebts,andhavesatisfiedthemselvesthattherewerenoknownbadordoubtfuldebts;and
ii) toensurethatanycurrentassetswhichwereunlikelytorealiseintheordinarycourseofbusinesstheirvalueasshownintheaccountingrecordsofwhichwerewrittendowntoanamountwhichtheymightbeexpectedsotorealise.
Atthedateofthisreport,thedirectorsarenotawareofanycircumstances:
i) whichwouldrequireanyamounttobewrittenoffasbaddebts,orprovidedforasdoubtfuldebts;
ii) whichwouldrenderthevaluesattributedtothecurrentassetsinthefinancialstatementsoftheGroupandoftheCompanymisleading;
iii) whichhavearisenwhichrenderadherencetotheexistingmethodsofvaluationofassetsorliabilitiesinthefinancialstatementsoftheGroupandoftheCompanymisleadingorinappropriate;and
iv) nototherwisedealtwithinthisreportorinthefinancialstatementsoftheGroupandoftheCompany,thatwouldrenderanyamountstatedintherespectivefinancialstatementsmisleading.
Atthedateofthisreport,theredoesnotexist:
i) anychargeontheassetsoftheGroupandoftheCompanythathasarisensincetheendofthefinancialyearwhichsecurestheliabilitiesofanyotherperson;or
ii) anycontingentliabilityinrespectoftheGroupandoftheCompanythathasarisensincetheendofthefinancialyear.
NocontingentliabilityorotherliabilitiesoftheGroupandoftheCompanyhasbecomeenforceable,orislikelytobecomeenforceablewithintheperiodoftwelvemonthsaftertheendofthefinancialyearwhich,intheopinionofthedirectors,willormaysubstantiallyaffecttheabilityoftheGroupandoftheCompanytomeettheirobligationsasandwhentheyfalldue.
Intheopinionofthedirectors:
i) theresultsoftheoperationsoftheGroupandoftheCompanyforthefinancialyearhavenotbeensubstantiallyaffectedbyanyitem,transactionoreventofamaterialandunusualnature;and
ii) noitem,transactionoreventofamaterialandunusualnaturehasarisenintheintervalbetweentheendofthefinancialyearandthedateofthisreportwhichislikelytoaffectsubstantiallytheresultsoftheoperationsoftheGroupandoftheCompanyforthefinancialyearinwhichthisreportismade.
Directors’ Report (Cont’d)
for the year ended �0th September, 2007
��WELLCALL HOLDINGS BERHAD (Co. No. 707346-W) ANNUAL REPORT 2007
AUDITORS
TheAuditors,ONG&WONG,haveindicatedtheirwillingnesstocontinueinoffice.
Signedinaccordancewitharesolutionofthedirectors
HUANG SHA, PMPDirector
CHEW CHEE CHEKDirector
KualaLumpurDated:5thDecember,2007
Directors’ Report (Cont’d)
for the year ended �0th September, 2007
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Statement by Directors(pursuant to Section ��� (��) of the Companies Act, ����)
We,HUANG SHA, PMPandCHEW CHEE CHEK,twoofthedirectorsofWELLCALL HOLDINGS BERHAD,statethat,intheopinionofthedirectors,thefinancialstatementssetoutonpages39to67aredrawnupinaccordancewiththeprovisionsoftheCompaniesAct,1965andapplicableMASBapprovedaccountingstandardsinMalaysiaforentitiesotherthanprivateentitiessoastogiveatrueandfairviewofthestatesofaffairsoftheGroupandoftheCompanyasat30thSeptember,2007andoftheresultsoftheiroperations,changesinequityandcashflowsoftheGroupandoftheCompanyforthefinancialyearendedonthatdate.
Signedinaccordancewitharesolutionofthedirectors
HUANG SHA, PMPDirector
CHEW CHEE CHEKDirector
KualaLumpurDated:5thDecember,2007
I,CHEW CHEE CHEK,thedirectorprimarilyresponsibleforthefinancialmanagementofWELLCALL HOLDINGS BERHAD,dosolemnlyandsincerelydeclarethatthefinancialstatementssetoutonpages39to67are,tothebestofmyknowledgeandbelief,correctandImakethissolemndeclarationconscientiouslybelievingthesametobetrueandbyvirtueoftheprovisionsoftheStatutoryDeclarationAct,1960.
Subscribedandsolemnlydeclaredby )theabovenamedatKualaLumpurin )WilayahPersekutuanon )5thDecember,2007 ) ) CHEW CHEE CHEK
Beforeme,
KOK POH HIMNo.W386CommmissionerforOaths
Statutory Declaration(pursuant to Section 169 (16) of the Companies Act, 1965)
��WELLCALL HOLDINGS BERHAD (Co. No. 707346-W) ANNUAL REPORT 2007
Report of the Auditorsto the Members of Wellcall Holdings Berhad (Incorporated in Malaysia)
Wehaveauditedthefinancialstatementssetoutonpages39to67.ThesefinancialstatementsaretheresponsibilityoftheCompany’sdirectors.
Itisourresponsibilitytoformanindependentopinion,basedonouraudit,onthosefinancialstatementsandtoreportouropiniontoyou,asabody,inaccordancewithSection174oftheCompaniesAct,1965andfornootherpurpose.Wedonotassumeresponsibilitytowardsanyotherpersonforthecontentofthisreport.
WehaveconductedourauditinaccordancewithapprovedauditingstandardsinMalaysia.Thosestandardsrequirethatweplanandperformtheaudittoobtainreasonableassuranceaboutwhetherthefinancialstatementsarefreeofmaterialmisstatement.Anauditincludesexamining,onatestbasis,evidencesupportingtheamountsanddisclosuresinthefinancialstatements.Anauditalsoincludesassessingtheaccountingpoliciesusedandsignificantestimatesmadebydirectors,aswellasevaluatingtheoverallfinancialstatementspresentation.Webelievethatourauditprovidesareasonablebasisforouropinion.
Inouropinion:
(a) thefinancialstatementsareproperlydrawnupinaccordancewiththeprovisionsoftheCompaniesAct,1965andapplicableMASBapprovedaccountingstandardsinMalaysiaforentitiesotherthanprivateentities,soastogiveatrueandfairviewof:
(i) themattersrequiredbySection169oftheCompaniesAct,1965tobedealtwithinthefinancialstatementsoftheGroupandoftheCompany;and
(ii) thestateofaffairsoftheGroupandoftheCompanyat30thSeptember,2007andoftheresultsoftheoperationsandofthecashflowsoftheGroupandoftheCompanyforthefinancialyearendedonthatdate;
and
(b) the accounting and other records and the registers required by the Act to be kept by the Company and by thesubsidiarycompanyforwhichwehaveactedasauditorshavebeenproperlykeptinaccordancewiththeprovisionsoftheAct.
WearesatisfiedthatthefinancialstatementsofthesubsidiarycompanythathavebeenconsolidatedwiththeCompany’sfinancialstatementsareinformandcontentappropriateandproperforthepurposesofthepreparationoftheconsolidatedfinancial statements and we have received satisfactory information and explanations as required by us for thesepurposes.
Theauditors’reportonthefinancialstatementsofthesubsidiarycompanywasnotsubjecttoanyqualificationanddidnotincludeanycommentmadeundersubsection(3)ofSection174oftheCompaniesAct1965.
ONG & WONGAF0241 CharteredAccountants
ONG KONG LAI494/06/08(J/PH)PartnerofFirm
KualaLumpurDated:5thDecember,2007
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Balance Sheetsas at �0th September, 2007
Group Company Note 2007 2006 2007 2006 RM RM RM RM (Restated)
ASSETSNon-current assetsProperty,plantandequipment 3 26,438,983 23,828,646 – –Prepaidleasepaymentsforland 4 2,325,001 2,372,477 – –Investmentsinsubsidiarycompany 5 – – 32,550,803 32,550,803Otherinvestment 6 10,000 10,000 – –
28,773,984 26,211,123 32,550,803 32,550,803
Current assetsInventories 7 12,121,602 8,774,588 – –Tradeandotherreceivables 8 7,646,246 4,009,581 29,851 –Amountduefromsubsidiarycompany 9 – – 23,639,625 15,296,422Depositswithlicensedbanks 10 22,492,791 19,460,591 10,000,000 600,000Cashandbankbalances 3,189,685 4,062,265 59,829 819,750
45,450,324 36,307,025 33,729,305 16,716,172
TOTAL ASSETS 74,224,308 62,518,148 66,280,108 49,266,975
EQUITY AND LIABILITIESEquity attributable to equity holders of the Company Sharecapital 11 42,646,005 41,100,005 42,646,005 41,100,005Sharepremium 9,971,678 7,294,780 9,971,678 7,294,780Reserves 12 13,552,239 6,032,930 13,519,744 129,292
Total equity 66,169,922 54,427,715 66,137,427 48,524,077 Non-current liabilitiesDeferredtaxation 13 478,909 433,000 – – Current liabilitiesTradeandotherpayables 14 7,313,959 7,589,010 142,681 742,898Taxpayable 261,518 68,423 – –
7,575,477 7,657,433 142,681 742,898
Total liabilities 8,054,386 8,090,433 142,681 742,898
TOTAL EQUITY AND LIABILITIES 74,224,308 62,518,148 66,280,108 49,266,975
Theannexednotesformanintegralpartofthesefinancialstatements.
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Income Statementsfor the year ended �0th September, 2007
Group Company 01.10.06 to 23.08.05 to 01.10.06 to 23.08.05 to Note 30.09.07 30.09.06 30.09.07 30.09.06 RM RM RM RM (Restated) (Restated) Revenue 91,391,822 32,445,879 21,530,000 3,200,000Costofsales (66,975,987) (22,991,346) – –
Grossprofit 24,415,835 9,454,533 21,530,000 3,200,000Otheroperatingincome 15 1,196,427 325,133 54,740 20,140
25,612,262 9,779,666 21,584,740 3,220,140Administrativeexpenses (5,409,019) (3,063,289) (507,498) (1,241,800)Selling&distributioncosts (3,326,484) (1,506,365) – –
Profitfromoperations 16,876,759 5,210,012 21,077,242 1,978,340Financecosts (246,363) (93,515) – –
Profitbeforetaxation 16 16,630,396 5,116,497 21,077,242 1,978,340Taxation 17 (1,424,297) (502,587) – –
Profitfortheyear/period 18 15,206,099 4,613,910 21,077,242 1,978,340
Earningspershare(sen) 19 -Basic 18.10 15.25 -Diluted 17.61 15.08
Dividendpershare(sen) 20 8.00 3.65
Theannexednotesformanintegralpartofthesefinancialstatements.
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Statements of Changes in Equityfor the year ended �0th September, 2007
< ------------- Attributable to Equity Holders of the Company ------------- > < -------------- Non-distributable -------------- > Distributable Share Share Reserve on Option Retained Total Note capital premium consolidation reserve profit equity RM RM RM RM RM RM
Group At23rdAugust,2005 2 – – – – 2
Issueofsharespursuant toacquisitionof subsidiarycompany 32,550,803 – 3,268,068 – – 35,818,871
Issueofsharespursuant topublicissue 8,549,200 8,549,200 – – – 17,098,400
ESOSoptions-granted – – – 1,151,252 – 1,151,252
Listingexpenses – (1,254,420) – – – (1,254,420)
Profitfortheperiod – – – – 4,613,910 4,613,910
Dividends 20 – – – – (3,000,300) (3,000,300)
At30thSeptember,2006 -aspreviouslyreported 41,100,005 7,294,780 3,268,068 – 2,764,862 54,427,715-prioryearadjustment 25 – – – 1,151,252 (1,151,252) –
-asrestated 41,100,005 7,294,780 3,268,068 1,151,252 1,613,610 54,427,715
EffectsofadoptingFRS3 25 – – (3,268,068) – 3,268,068 –
41,100,005 7,294,780 – 1,151,252 4,881,678 54,427,715
ESOSoptions-granted – – – 279,422 – 279,422-exercised 1,546,000 2,736,111 – (1,190,111) – 3,092,000
Listingexpenses – (59,213) – – – (59,213)
Profitfortheyear – – – – 15,206,099 15,206,099
Dividends 20 – – – – (6,776,101) (6,776,101)
At30thSeptember,2007 42,646,005 9,971,678 – 240,563 13,311,676 66,169,922
Theannexednotesformanintegralpartofthesefinancialstatements.
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Non-distributable Distributable Retained profit/ Share Share Option (Accumulated Total Note capital premium reserve loss) equity RM RM RM RM RM Company At23rdAugust,2005 2 – – – 2 Issueofsharespursuantto acquisitionofsubsidiary company 32,550,803 – – – 32,550,803 Issueofsharespursuant topublicissue 8,549,200 8,549,200 – – 17,098,400 ESOSoptions-granted – – 1,151,252 – 1,151,252 Listingexpenses – (1,254,420) – – (1,254,420) Profitfortheperiod – – – 1,978,340 1,978,340 Dividends 20 – – – (3,000,300) (3,000,300) At30thSeptember,2006 -aspreviouslyreported 41,100,005 7,294,780 – 129,292 48,524,077-prioryearadjustment 25 – – 1,151,252 (1,151,252) –
-asrestated 41,100,005 7,294,780 1,151,252 (1,021,960) 48,524,077
ESOSoptions-granted – – 279,422 – 279,422-exercised 1,546,000 2,736,111 (1,190,111) – 3,092,000
Listingexpenses – (59,213) – – (59,213)
Profitfortheyear – – – 21,077,242 21,077,242
Dividends 20 – – – (6,776,101) (6,776,101)
At30thSeptember,2007 42,646,005 9,971,678 240,563 13,279,181 66,137,427
Theannexednotesformanintegralpartofthesefinancialstatements.
Statements of Changes in Equity (Cont’d)
for the year ended �0th September, 2007
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Cash Flow Statementsfor the year ended �0th September, 2007
Group Company 01.10.06 to 23.08.05 to 01.10.06 to 23.08.05 to Note 30.09.07 30.09.06 30.09.07 30.09.06 RM RM RM RM (Restated) (Restated)
CASH FLOWS FROM OPERATING ACTIVITIESProfitbeforetaxation 16,630,396 5,116,497 21,077,242 1,978,340Adjustmentsfor: Amortisationof prepaidleasepayments 47,476 23,006 – – Depreciationofproperty, plant&equipment 2,795,730 756,110 – – Share-basedcompensation 279,422 1,151,252 279,422 1,151,252 Unrealisedgainonforeignexchange (562,702) (8,934) – – Gainondisposalofproperty, plant&equipment (9,999) – – – Interestexpense 246,363 93,515 – – Interestincome (604,219) (313,714) (54,644) (20,140)
Operatingprofitbeforeworking capitalchanges 18,822,467 6,817,732 21,302,020 3,109,452
Increaseininventories (3,347,014) (3,173,146) – –(Increase)/Decreaseinreceivables (3,073,963) 4,842,489 (8,373,054) (15,296,422)(Decrease)/Increaseinpayables (275,051) 2,018,661 (600,217) 742,898
Cashgeneratedfrom/(usedin)operations 12,126,439 10,505,736 12,328,749 (11,444,072)Taxpaid (1,185,293) (87,864) – –Interestpaid (246,363) (93,515) – –Interestreceived 604,219 313,714 54,644 20,140
Netcashgeneratedfrom/(usedin) operatingactivities 11,299,002 10,638,071 12,383,393 (11,423,932) CASH FLOWS FROM INVESTING ACTIVITIES Proceedsfromdisposalofproperty, plant&equipment 10,000 – – –Purchaseofproperty,plant&equipment (5,406,068) (14,108,636) – –Acquisitionofleaseholdland – (1,274,585) – –Acquisitionofsubsidiarycompany A(iii) – (17,126,479) – (32,550,803)
Netcashusedininvestingactivities (5,396,068) (32,509,700) – (32,550,803) CASH FLOWS FROM FINANCING ACTIVITIES Proceedsfromissueofshares 3,092,000 49,649,205 3,092,000 49,649,205Paymentoflistingexpenses (59,213) (1,254,420) (59,213) (1,254,420)Dividendpaid (6,776,101) (3,000,300) (6,776,101) (3,000,300)
Netcash(usedin)/generated fromfinancingactivities (3,743,314) 45,394,485 (3,743,314) 45,394,485 Netincreaseincashandcashequivalents 2,159,620 23,522,856 8,640,079 1,419,750Cashandcashequivalents atbeginningofyear 23,522,856 – 1,419,750 –
Cashandcashequivalents atendofyear/period B 25,682,476 23,522,856 10,059,829 1,419,750
��WELLCALL HOLDINGS BERHAD (Co. No. 707346-W) ANNUAL REPORT 2007
NOTE
A. ACQUISITION OF SUBSIDIARY COMPANY
i) Effects on financial results
TheeffectsofthisacquisitiononthefinancialresultsoftheGroupduringthepreviousfinancialperiodareshownbelow:
23.08.05 to 30.09.06 RM
Revenue 32,445,879Costofsales (22,991,346)
Grossprofit 9,454,533Otheroperatingincome 304,993
9,759,526
Administrativeexpenses (1,821,489)Selling&distributionexpenses (1,506,365)
Profitfromoperations 6,431,672
Financecosts (93,515)
Profitbeforetaxation 6,338,157Taxation (502,587)
IncreaseinGroupprofitfortheyear 5,835,570
ii) Effects on financial position
Theeffectsof thisacquisitiononthefinancialpositionof theGroupatpreviousbalancesheetdateareasfollows:
2006 RM
Property,plant&equipment 13,352,526Prepaidleasepaymentsforland 1,251,579Inventories 3,173,146Tradereceivables (344,591)Otherreceivables,deposits&prepayments (3,596,446)Cash&bankbalances 6,678,782Tradepayables (844,846)Otherpayables&accruals (1,334,495)Taxation (53,043)Deferredtaxation (350,620)
IncreaseinGroupnetassets 17,931,992
Cash Flow Statements (Cont’d)
for the year ended �0th September, 2007
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NOTE (Cont’d)
A. ACQUISITION OF SUBSIDIARY COMPANY (Cont’d)
iii) Effects on cash flow statement
TheeffectsofthisacquisitiononthecashflowstatementoftheGroupduringthepreviousfinancialperiodareasfollows:
23.08.05 to 30.09.06 RM
Property,plant&equipment 10,476,120Prepaidleasepaymentsforland 1,120,898Otherinvestment 10,000Inventories 5,601,442Tradereceivables 3,927,964Otherreceivables,deposits&prepayments 864,851Depositsformachineries 3,157,803Cash&bankbalances 15,424,324Tradepayables (2,308,591)Otherpayables&accruals (2,358,180)Taxation (15,380)Deferredtaxation (82,380)
Fairvalueofnetassetacquiredon17thApril,2006 35,818,871Reserveonconsolidation (3,268,068)
Purchaseconsiderationdischargedbycash 32,550,803Less:Cash&cashequivalentsinsubsidiaryacquired (15,424,324)
17,126,479
B. CASH AND CASH EQUIVALENTS
Cashandcashequivalentsincludedinthecashflowstatementcomprisethefollowingbalancesheetamounts:
Group Company 2007 2006 2007 2006 RM RM RM RM
Depositswithlicensedbanks 22,492,791 19,460,591 10,000,000 600,000Cash&bankbalances 3,189,685 4,062,265 59,829 819,750
25,682,476 23,522,856 10,059,829 1,419,750
Cash Flow Statements (Cont’d)
for the year ended �0th September, 2007
��WELLCALL HOLDINGS BERHAD (Co. No. 707346-W) ANNUAL REPORT 2007
Notes to the Financial Statements- �0th September, 2007
1. GENERAL INFORMATION
TheCompany isprincipallyengagedasan investmentholdingcompany. Theprincipalactivityofthesubsidiarycompanyisdisclosedinnote5tothefinancialstatements.
TheCompanyisapubliclimitedliabilitycompany,incorporatedanddomiciledinMalaysia,andislistedontheSecondBoardofBursaMalaysiaSecuritiesBerhad(“BursaSecurities”).
TheregisteredofficeislocatedatUnitC-6-5,6thFloor,BlockC,MeganAvenueII,No.12,JalanYapKwanSeng,50450KualaLumpur.
TheprincipalplaceatwhichbusinessiscarriedonislocatedatPlotNo.48,JalanJohan2/5,KawasanPerindustrianPengkalanII,FasaII,31500Lahat,Ipoh,PerakDarulRidzuan.
2. ACCOUNTING POLICIES
TheaccountingpoliciesadoptedbytheGroupandtheCompanyareconsistentwiththoseadoptedinthepreviousyearsexceptfortheadoptionofthefollowingnew/revisedFRSseffectiveforfinancialyearbeginning1stOctober,2006:
FRS2 Share-basedPaymentFRS3 BusinessCombinationsFRS101 PresentationofFinancialStatementsFRS102 InventoriesFRS108 AccountingPolicies,ChangesinEstimatesandErrorsFRS110 EventsaftertheBalanceSheetDateFRS116 Property,PlantandEquipmentFRS117 LeasesFRS121 TheEffectsofChangesinForeignExchangeRatesFRS124 RelatedPartyDisclosuresFRS127 ConsolidatedandSeparateFinancialStatementsFRS132 FinancialInstruments:DisclosureandPresentationFRS133 EarningsPerShareFRS136 ImpairmentofAssets
Forthissetoffinancialstatements,theGroupandtheCompanyhavechosennottoearlyadoptthefollowingFRS:
Effective for financial FRS periods beginning on or after
FRS139 FinancialInstruments: Deferred RecognitionandMeasurement
TheGroupandtheCompanyarenotrequiredtodisclosethepossibleimpactofapplyingFRS139onthesefinancialstatementsbyvirtueofexemptionsprovidedunderthisFRS.
Theadoptionofthenew/revisedFRSsdoesnothavesignificantfinancialimpactontheGroupandtheCompanyotherthanFRS2,FRS3andFRS117.Theeffectsofthechangesinaccountingpoliciesresultingfromtheadoptionofthenew/revisedFRSsaredisclosedinNote25.
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Notes to the Financial Statements (Cont’d)
- �0th September, 2007
2. ACCOUNTING POLICIES (CONT’D)
a. Basis of Preparation
ThefinancialstatementsoftheGroupandoftheCompanyhavebeenpreparedinaccordancewiththeprovisionsoftheCompaniesAct,1965andapplicableapprovedaccountingstandardsinMalaysiaforentitiesotherthanprivateentitiesissuedbytheMalaysianAccountingStandardsBoard(“MASB”).Thefinancialstatementshavebeenpreparedunderthehistoricalcostconvention,exceptwhereotherwisestatedintherespectiveaccountingpolicies.
The financial statements are presented in Ringgit Malaysia (“RM”) which is also the Company’s functionalcurrency.
b. Subsidiary Company and Basis of Consolidation
(i) Subsidiary Company
SubsidiaryCompanyisanentityoverwhichtheGrouphasthepower,directlyorindirectly,toexercisecontroloverthefinancialandoperatingpoliciessoastoobtainbenefitsfromitsactivities.
In the Company’s separate financial statements, investment in subsidiary company is stated at costlessimpairmentlosses,ifany.Ondisposalofsuchinvestment,thedifferencebetweenthenetdisposalproceedsanditscarryingamountisincludedintheincomestatement.ThepolicyfortherecognitionandmeasurementofimpairmentlossesisinaccordancewithNote2(f ).
(ii) Basis of Consolidation
TheconsolidatedfinancialstatementsincludethefinancialstatementsoftheCompanyanditssubsidiarycompanymadeuptotheendofthefinancialyear.Theresultsofthesubsidiarycompanyisconsolidatedusingtheacquisitionmethod.
Undertheacquisitionmethod,subsidiarycompanyareconsolidatedfromthedateonwhichcontrolistransferredtotheGroupandarenolongerconsolidatedfromthedatethatcontrolceases.Thecostofacquisitionismeasuredastheaggregateoffairvalues,atthedateofexchange,oftheassetsgiven,liabilitiesincurredorassumed,andequityinstrumentsissued,plusanycostsdirectlyattributabletothebusiness combination. Identifiable assets acquired, liabilities and contingent liabilities assumed in abusinesscombinationaremeasuredinitiallyattheirfairvaluesattheacquisitiondate,irrespectiveoftheextentofanyminorityinterest.AnydifferencebetweenthecostofacquisitionandtheGroup’sinterestinthenetfairvalueoftheidentifiableassets,liabilitiesandcontingentliabilitiesacquiredisrecognisedasgoodwillornegativegoodwill.
Intragrouptransactions,balancesandresultingunrealisedgainsareeliminatedonconsolidationandtheconsolidatedfinancialstatementsreflectexternaltransactionsonly.Unrealisedlossesareeliminatedonconsolidationunlesscostscannotberecovered.Consistentaccountingpoliciesareappliedfortransactionsandeventsinsimilarcircumstances.
c. Foreign Currencies
TheindividualfinancialstatementsofeachentityintheGrouparemeasuredusingtheirrespectivefunctionalcurrency.
Inpreparingtheindividualfinancialstatements,transactionsincurrenciesotherthantheentity’sfunctionalcurrency(“foreigncurrencies”)aretranslatedintothefunctionalcurrenciesusingtheexchangeratesprevailingatthedatesofthetransactions.Ateachbalancesheetdate,monetaryassetsandliabilitiesdenominatedinforeigncurrenciesaretranslatedattheratesprevailingonthebalancesheetdate.Non-monetaryitemsthataremeasuredintermsofhistoricalcostinaforeigncurrencyaretranslatedattheexchangerateprevailingatthedateoftheinitialtransaction.Non-monetaryitemsmeasuredatfairvalueinaforeigncurrencyaretranslatedatexchangeratesatthedatewhenthefairvalueisdetermined.ExchangedifferencesarisingonthesettlementofmonetaryitemsorontranslatingmonetaryitemsatbalancesheetdatearerecognisedintheincomestatementexceptforthosearisingonmonetaryitemsthatformpartoftheGroup’snetinvestmentinforeignoperation.
Notes to the Financial Statements (Cont’d)
- �0th September, 2007
��WELLCALL HOLDINGS BERHAD (Co. No. 707346-W) ANNUAL REPORT 2007
2. ACCOUNTING POLICIES (CONT’D)
c. Foreign Currencies (Cont’d)
Theclosingratesusedinthetranslationofforeigncurrencymonetaryassetsandliabilitiesareasfollows:
2007 2006 RM RM
1UnitedStatesDollar(“USD”) 3.35 3.651EURO 4.82 4.65
d. Property, Plant and Equipment and Depreciation
Property,plant&equipmentarestatedatcostlessaccumulateddepreciationandanyimpairmentlosses.
Otherproperty,plant&equipmentaredepreciatedonastraightlinebasisatratescalculatedtowriteoffthecostoftheassetsovertheirestimatedusefullives.Theprincipalannualratesare:
Factorybuilding 51-60yearsElectricalinstallation 10%-15%Firefightinginstallation 10%-15%Furniture&fittings 15%Motorvehicles 15%Officeequipment 15%Plantandmachinery 10%-15%
Gainorlossarisingfromdisposalofanassetisdeterminedasthedifferencebetweentheestimatednetdisposalproceedsandthecarryingamountofanasset,andisrecognisedintheincomestatement.
e. Leased Assets
Leaseholdlandthatnormallyhasanindefiniteeconomiclifeandtitleisnotexpectedtopasstothelesseebytheendoftheleasetermistreatedasanoperatinglease.Thepaymentmadeonenteringintooracquiringaleaseholdlandisaccountedasprepaidleasepaymentsthatareamortisedovertheleasetermrangingfrom51to60years.
TheGrouphadpreviouslyclassifiedaleaseoflandasfinanceleaseandhadrecognisedtheamountofprepaidleasepaymentsaspropertywithinitsproperty,plantandequipment. TheGrouptreatssuchaleaseasanoperatinglease,withtheunamortisedcarryingamountclassifiedasprepaidleasepaymentsforland.
f. Impairment of Assets
ThecarryingamountoftheGroup’sassets,otherthaninventories,deferredtaxassetsandfinancialassetsarereviewedateachbalancesheetdatetodeterminewhetherthereareanyindicationsofimpairment.Ifanysuchindicationsexist,theasset’srecoverableamountisestimatedtodeterminetheamountofimpairmentloss.Thepoliciesonimpairmentofassetsaresummarisedasfollows:
Property,plantandequipmentandinvestmentinsubsidiarycompanyarereviewedforobjectiveindicationsof impairment at each balance sheet date or whenever there is any indication that these assets may beimpaired.
Wheresuchindicationsexist,impairmentlossisdeterminedastheexcessoftheasset’scarryingvalueoveritsrecoverableamount(greaterofvalueinuseorfairvaluelesscoststosell)andisrecognisedintheincomestatement.Anyreversalofan impairment loss for theseassets is recognised in the incomestatement.Thecarryingamountisincreasedtoitsrevisedrecoverableamount,providedthattheamountdoesnotexceedthecarryingamountthatwouldhavebeendetermined(netofamortisationordepreciation)hadnoimpairmentlossbeenrecognisedfortheassetinprioryears.
Ifanassetiscarriedatarevaluedamount,impairmentlossistreatedasarevaluationdecreasetotheextentofpreviouslyrecognisedrevaluationsurplusforthesameasset.Anysubsequentreversalistreatedasarevaluationincrease.
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Notes to the Financial Statements (Cont’d)
- �0th September, 2007
2. ACCOUNTING POLICIES (CONT’D)
g. Inventories
Inventoriesarevaluedatthelowerofcostandnetrealisablevalue.Costisdeterminedonafirst-in,first-outbasis.
Costoffinishedgoodsandwork-in-progress includesdirectmaterials,direct labour,otherdirectcostsandappropriateproductionoverheads.
Netrealisablevaluerepresentstheestimatedsellingpriceslessallestimatedcoststocompletionandcoststobeincurredinmarketing,sellinganddistribution.
Whereobsoleteordamagedinventoriescanbepositivelyidentified,anallowanceforobsoleteanddamagedinventoriesismade.
h. Financial Instruments
Financialinstrumentscomprisefinancialassets,financialliabilitiesandoff-balancesheetfinancialinstruments.FinancialinstrumentsarerecognisedinthebalancesheetwhentheGrouphasbecomeapartytothecontractualprovisionsoftheinstruments.
Financialinstrumentsareclassifiedasliabilitiesorequityinaccordancewiththesubstanceofthecontractualarrangement.Interest,dividends,gainsandlossesrelatingtoafinancialinstrumentclassifiedasliabilityarereportedasexpenseorincome.Distributionstoholdersoffinancialinstrumentsclassifiedasequityarechargeddirectlytoequity.FinancialinstrumentsareoffsetwhentheGrouphasalegallyenforceablerighttooffsetandintendseithertosettleonanetbasis,ortorealisetheassetandsettletheliabilitysimultaneously.
(i) Cash and Cash Equivalents
Cashandcashequivalentscomprisebankbalances,cashinhandandshorttermhighlyliquidassetsthatarereadilyconvertibletocashwithoutsignificantriskofchangesinvaluenetofoutstandingbankoverdrafts.
(ii) Other Investment
Other investment is stated at cost less allowance for diminution in value. A diminution in value isrecognisedasanexpenseintheperiodwhen,intheopinionofthedirectors,thereisapermanentdeclineinvalueofsuchinvestment.
(iii) Receivables
Receivablesarecarriedatanticipatedrealisablevalue.Baddebtsarewrittenoffintheperiodinwhichtheyareidentified.Anestimateismadefordoubtfuldebtsbasedonareviewofalloutstandingamountsatthebalancesheetdate.
(iv) Payables
Payablesarestatedatthefairvalueoftheconsiderationtobepaidinthefutureforgoodsandservicesreceived.
(v) Equity Instruments
Ordinarysharesareclassifiedasequityinthebalancesheet.Costsdirectlyattributabletotheissuanceofnewequitysharesaretakentoequityasadeductionfromtheproceeds.
Dividendsonordinarysharesareaccountedforasanappropriationofretainedprofitsintheperiodinwhichtheyareapproved.
Notes to the Financial Statements (Cont’d)
- �0th September, 2007
�0WELLCALL HOLDINGS BERHAD (Co. No. 707346-W) ANNUAL REPORT 2007
2. ACCOUNTING POLICIES (CONT’D)
i. Income Tax
Incometaxontheprofitorlossfortheyearcomprisescurrentanddeferredtax.Currenttaxistheexpectedamountofincometaxespayableinrespectofthetaxableprofitfortheyearandismeasuredusingthetaxratesthathavebeenenactedatthebalancesheetdate.
Deferredtaxisprovidedfor,usingtheliabilitymethod,ontemporarydifferencesatthebalancesheetdatebetween the tax bases of assets and liabilities and their carrying amounts in the financial statements. Inprinciple,deferredtaxliabilitiesarerecognisedforalltaxabletemporarydifferencesanddeferredtaxassetsarerecognisedforalldeductibletemporarydifferences,unusedtaxlossesandunusedtaxcreditstotheextentthatitisprobablethattaxableprofitwillbeavailableagainstwhichthedeductibletemporarydifferences,unusedtaxlossesandunusedtaxcreditscanbeutilised.Deferredtaxisnotrecognisedifthetemporarydifferencearisesfromgoodwillornegativegoodwillorfromtheinitialrecognitionofanassetorliabilityinatransactionwhichisnotabusinesscombinationandatthetimeofthetransaction,affectsneitheraccountingprofitnortaxableprofit.
Deferredtaxismeasuredatthetaxratesthatareexpectedtoapplyintheperiodwhentheassetisrealisedortheliabilityissettled,basedontaxratesthathavebeenenactedorsubstantivelyenactedatthebalancesheetdate.Deferredtaxisrecognisedintheincomestatement,exceptwhenitarisesfromatransactionwhichisrecogniseddirectlyinequity,inwhichcasethedeferredtaxisalsochargedorcrediteddirectlyinequity,orwhenitarisesfromabusinesscombinationthatisanacquisition,inwhichcasethedeferredtaxisincludedintheresultinggoodwillornegativegoodwill.
j. Revenue Recognition
Revenueisrecognisedwhenitisprobablethattheeconomicbenefitsassociatedwiththetransactionwillflowtotheenterpriseandtheamountoftherevenuecanbemeasuredreliably.
(i) Sales of Goods
Revenuefromsalesofgoodsismeasuredatthefairvalueoftheconsiderationreceivableandisrecognisedintheincomestatementwhenthesignificantrisksandrewardsofownershiphavebeentransferredtothecustomers.
(ii) Interest Income
Interestisrecognisedonanaccrualbasisthatreflectstheeffectiveyieldontheasset.
(iii) Dividend Income
Dividendincomeisrecognisedwhentherighttoreceivepaymentisestablished.
(iv) Rental Income
Rentalincomeisrecognisedonaccrualbasis.
k. Employee Benefits
(i) Short Term Benefits
Wages,salaries,bonusesandallowancesarerecognisedasexpensesintheyearinwhichtheassociatedservicesarerenderedbyemployeesoftheCompany.Shorttermaccumulatingcompensatedabsencessuchaspaidannualleavearerecognisedwhenservicesarerenderedbyemployeesthatincreasetheirentitlementtofuturecompensatedabsences,andshorttermnon-accumulatingcompensatedabsencessuchassickleavearerecognisedwhentheabsencesoccur.
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Notes to the Financial Statements (Cont’d)
- �0th September, 2007
2. ACCOUNTING POLICIES (CONT’D)
k. Employee Benefits (cont’d)
(ii) Defined Contribution Plans
ObligationsforcontributionstodefinedcontributionplanssuchastheEmployeesProvidentFund(“E.P.F”)arerecognisedasanexpenseintheincomestatementasincurred.
(iii) Share-Based Compensation Benefits
TheCompanyoperatesanequitysettled,share-basedcompensationplani.e.theESOSsince14thJuly,2006,whereESOSoptionsareissuedtoeligibledirectorsandemployees.
Thefairvalueofemployees’servicesrenderedinexchangeforthegrantoftheshareoptionsisrecognisedasanexpenseoverthevestingperiod.Thetotalamounttobeexpensedintheincomestatementoverthevestingperiodisdeterminedbyreferencetothefairvalueofeachshareoptiongrantedatthegrantdateandthenumberofshareoptionsvestedbyvestingdate,withacorrespondingincreaseinequity(optionreserve).Ateachbalancesheetdate,theGroupwillreviseitsestimatesofthenumberofshareoptionsthatareexpectedtobecomeexercisable.Theoptionreservesinrespectofoptionswhichhavebeenlapsedaretransferredtoretainedearnings.
Theproceedsreceivednetofanydirectlyattributabletransactioncostsarecreditedtosharecapitalandsharepremiumwhentheoptionsareexercised.
l. Critical Judgments Made in Applying Accounting Policies
Inthepreparationofthefinancialstatements,managementhasbeenrequiredtomakejudgments,estimatesandassumptionsthataffecttheapplicationofaccountingpoliciesandthereportedamountsofassets,liabilities,incomeandexpenses.Actualresultsmaydifferfromtheseestimates.Estimatesandunderlyingassumptionsarereviewedonanongoingbasis.Revisionstoaccountingestimatesarerecognisedinthefinancialstatementsintheperiodinwhichtheestimateisrevisedandinanyfutureperiodsaffected.
Intheprocessofapplyingtheaccountingpoliciesasdescribedabove,managementisoftheviewthattherearenoinstancesofapplicationofjudgmentswhichareexpectedtohavesignificanteffectontheamountsrecognisedinthefinancialstatements.
Notes to the Financial Statements (Cont’d)
- �0th September, 2007
�2WELLCALL HOLDINGS BERHAD (Co. No. 707346-W) ANNUAL REPORT 2007
3. PROPERTY, PLANT & EQUIPMENT
As at Disposal/ As at 01.10.06 Addition Retirement 30.09.07 RM RM RM RM
Group
2007
COSTFactorybuildings 9,171,373 883,011 – 10,054,384Electricalinstallation 1,236,220 489,208 – 1,725,428Firefightinginstallation 420,793 60,517 – 481,310Furniture&fittings 26,108 152,413 – 178,521Motorvehicles 1,249,361 94,454 (36,440) 1,307,375Officeequipment 111,807 100,003 – 211,810Plant&machinery 12,369,094 3,626,462 – 15,995,556
24,584,756 5,406,068 (36,440) 29,954,384
As at Charge for Disposal/ As at 01.10.06 the year Retirement 30.09.07 RM RM RM RM
ACCUMULATED DEPRECIATIONFactorybuildings 32,089 192,181 – 224,270Electricalinstallation 10,710 171,929 – 182,639Firefightinginstallation 1,899 46,301 – 48,200Furniture&fittings 3,565 28,270 – 31,835Motorvehicles 136,145 311,337 (36,439) 411,043Officeequipment 7,989 35,746 – 43,735Plant&machinery 563,713 2,009,966 – 2,573,679
756,110 2,795,730 (36,439) 3,515,401
As at 30.09.07 RM
NET BOOK VALUEFactorybuildings 9,830,114Electricalinstallation 1,542,789Firefightinginstallation 433,110Furniture&fittings 146,686Motorvehicles 896,332Officeequipment 168,075Plant&machinery 13,421,877
26,438,983
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Notes to the Financial Statements (Cont’d)
- �0th September, 2007
3. PROPERTY, PLANT & EQUIPMENT (CONT’D)
Acquisition As at of Subsidiary Disposal/ As at 23.08.05 Company Addition Retirement 30.09.06 RM RM RM RM RM
Group
2006 (Restated) COSTFactorybuildings – 4,323,966 4,847,407 – 9,171,373Electricalinstallation – 244,220 992,000 – 1,236,220Firefightinginstallation – 79,608 341,185 – 420,793Furniture&fittings – 23,367 2,741 – 26,108Motorvehicles – 916,428 332,933 – 1,249,361Officeequipment – 56,199 55,608 – 111,807Plant&machinery – 4,832,332 7,536,762 – 12,369,094
– 10,476,120 14,108,636 – 24,584,756
As at Charge for Disposal/ As at 23.08.05 the period Retirement 30.09.06 RM RM RM RM
ACCUMULATED DEPRECIATIONFactorybuildings – 32,089 – 32,089Electricalinstallation – 10,710 – 10,710Firefightinginstallation – 1,899 – 1,899Furniture&fittings – 3,565 – 3,565Motorvehicles – 136,145 – 136,145Officeequipment – 7,989 – 7,989Plant&machinery – 563,713 – 563,713
– 756,110 – 756,110
As at 30.09.06 RM
NET BOOK VALUEFactorybuildings 9,139,284Electricalinstallation 1,225,510Firefightinginstallation 418,894Furniture&fittings 22,543Motorvehicles 1,113,216Officeequipment 103,818Plant&machinery 11,805,381
23,828,646
CertainfactorybuildingoftheGroupwithnetbookvalueofRM3,192,170(2006:RM3,309,094)hasbeenpledgedassecuritytofinancialinstitutionforbankingfacilities.
Notes to the Financial Statements (Cont’d)
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3. PROPERTY, PLANT & EQUIPMENT (CONT’D)
Thedepreciationwaschargedtothefollowings:
01.10.06 to 23.08.05 to 30.09.07 30.09.06 RM RM (Restated)
Factoryoverhead 2,420,377 608,411Administrativeexpenses 375,353 147,699
2,795,730 756,110
4. PREPAID LEASE PAYMENTS FOR LAND
Group 30.09.07 30.09.06 RM RM
Cost -Asatbeginningofyear/period 2,395,483 –-Acquisitionofsubsidiarycompany – 1,120,898-Additionduringtheyear/period – 1,274,585
-Asatendofyear/period 2,395,483 2,395,483
Accumulated amortisation-Asatbeginningofyear/period 23,006 –-Amortisationchargedduringtheyear/period 47,476 23,006
-Asatendofyear/period 70,482 23,006
Carrying amount 2,325,001 2,372,477
CertainleaseholdlandoftheGroupwithcarryingamountofRM839,047(2006:RM856,197)hasbeenpledgedassecuritytofinancialinstitutionforbankingfacilitiesgrantedtotheGroup.
5. INVESTMENT IN SUBSIDIARY COMPANY
Company 2007 2006 RM RM
Unquotedshares,atcost 32,550,803 32,550,803
Thesubsidiarycompanyis:
Country of Effective incorporation Principal activity equity interest 2007 2006
WellcallHose(M)Sdn.Bhd. Malaysia Manufacturingofrubberhose 100% 100% andrelatedproducts
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Notes to the Financial Statements (Cont’d)
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6. OTHER INVESTMENT
Group 2007 2006 RM RM
UnquotedsharesinMalaysia,atcost 10,000 10,000
7. INVENTORIES
Group 2007 2006 RM RM
Rawmaterials 6,968,369 5,787,508Work-in-progress 1,108,139 1,090,657Inventoriesintransit 888,776 371,626Finishedgoods 3,156,318 1,524,797
12,121,602 8,774,588
8. TRADE AND OTHER RECEIVABLES
Group Company 2007 2006 2007 2006 RM RM RM RM
Tradereceivables 5,847,890 3,583,373 – –Otherreceivables 1,785,856 372,422 29,851 –Deposits 12,500 49,236 – –Prepayments – 4,550 – –
7,646,246 4,009,581 29,851 –
Localtradereceivables 1,907,035 615,630 Foreigntradereceivables 3,940,855 2,967,743 5,847,890 3,583,373
TheGroup’snormaltradecredittermsrangefrom30to120days(2006:30to120days).
9. AMOUNT DUE FROM SUBSIDIARY COMPANY
Thisbalanceisunsecured,interestfreeandhasnofixedtermofrepayment.
Notes to the Financial Statements (Cont’d)
- �0th September, 2007
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10. DEPOSITS WITH LICENSED BANKS
Group Company 2007 2006 2007 2006 RM RM RM RM
Fixeddeposits 17,992,791 17,492,791 7,500,000 –Shorttermdeposits 4,500,000 1,967,800 2,500,000 600,000
22,492,791 19,460,591 10,000,000 600,000
Depositswithlicensedbankscompriseoffixeddepositsandshorttermdeposits.ThematurityofthefixeddepositsandshorttermdepositsoftheGroupandoftheCompanyasattheendofthefinancialyear/periodisfrom1to352daysand2to5days(2006:1to352daysand2to5days),respectively.
11. SHARE CAPITAL
Company 2007 2006 RM RM
Authorised:
Numberofordinaryshares Atbeginningofyear/periodatRM0.50/RM1each 100,000,000 100,000 SharesplitintoRM0.50each – 100,000 Createdduringtheyear/periodatRM0.50each – 99,800,000
Atendofyear/periodatRM0.50each 100,000,000 100,000,000
Ordinaryshares Atbeginningofyear/periodatRM0.50/RM1each 50,000,000 100,000 Createdduringtheyear/periodatRM0.50each – 49,900,000
Atendofyear/periodatRM0.50each 50,000,000 50,000,000
Issuedandfullypaid:
Numberofordinaryshares Atbeginningofyear/periodatRM0.50/RM1each 82,200,010 2 SharesplitintoRM0.50each – 2 Issuedduringtheyear/periodatRM0.50each 3,092,000 82,200,006
Atendofyear/periodatRM0.50each 85,292,010 82,200,010
Ordinaryshares Atbeginningofyear/periodatRM0.50/RM1each 41,100,005 2 Issuedduringtheyear/periodatRM0.50each 1,546,000 41,100,003
Atendofyear/periodatRM0.50each 42,646,005 41,100,005
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Notes to the Financial Statements (Cont’d)
- �0th September, 2007
11. SHARE CAPITAL (CONT’D)
ESOSoptions:
ThedetailsofESOSoptionsovertheordinarysharesoftheCompanygrantedareasfollows:
2007
Subscription Date Exercisable price At Forfeited/ At granted period (sen/share) 01.10.06 Granted Exercised Lapsed 30.09.07 14.07.06 14.07.06to 13.07.16 100 7,320,000 – (3,092,000) (698,000) 3,530,00009.02.07 09.02.07to 13.07.16 283 – 200,000 – – 200,000
7,320,000 200,000 (3,092,000) (698,000) 3,730,000
2006
Subscription Date Exercisable price At Forfeited/ At granted period (sen/share) 01.10.06 Granted Exercised Lapsed 30.09.07
14.07.06 14.07.06to 13.07.16 100 7,320,000 – – – 7,320,000
2007 2006 NumberofESOSoptionsvestedasatbalancesheetdate 952,000 3,722,000
12. RESERVES
Group Company 2007 2006 2007 2006 RM RM RM RM (Restated) (Restated)
Optionreserve 240,563 1,151,252 240,563 1,151,252Retainedprofit/(Accumulatedloss) 13,311,676 1,613,610 13,279,181 (1,021,960)Reserveonconsolidation – 3,268,068 – –
13,552,239 6,032,930 13,519,744 129,292
Notes to the Financial Statements (Cont’d)
- �0th September, 2007
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13. DEFERRED TAXATION
Group 2007 2006 RM RM
Atbeginningofyear/period 433,000 –Acquisitionofsubsidiarycompany – 74,000 Transferredfromincomestatement -Beforeacquisitionofsubsidiarycompany – 217,142-Afteracquisitionofsubsidiarycompany 45,909 141,858
Atendofyear/period 478,909 433,000
Thenetdeferredtaxliabilitiesisinrespectof thefollowingtemporarydifferences: -Property,plant&equipment 478,909 433,000
14. TRADE AND OTHER PAYABLES
Group Company 30.09.07 30.09.06 30.09.07 30.09.06 RM RM RM RM
Tradepayables 3,845,000 3,153,437 – –Otherpayables 1,941,729 3,194,712 140,361 740,168Accruals 1,527,230 1,240,861 2,320 2,730
7,313,959 7,589,010 142,681 742,898
Localtradepayables 3,408,720 2,392,592 Foreigntradepayables 436,280 760,845 3,845,000 3,153,437
ThenormaltradecredittermsgrantedtotheGrouprangefrom30to60days(2006:30to60days).
15. OTHER OPERATING INCOME
Group Company 01.10.06 to 23.08.05 to 01.10.06 to 23.08.05 to 30.09.07 30.09.06 30.09.07 30.09.06 RM RM RM RM
Gainondisposalofproperty, plant&equipment 9,999 – – –Interestincome -Deposits 589,063 279,103 51,881 –-Repo 15,156 14,716 2,763 245-Other – 19,895 – 19,895Rentalincome 800 – – –Unrealisedgainonforeignexchange 562,702 8,934 – –Others 18,707 2,485 96 –
1,196,427 325,133 54,740 20,140
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Notes to the Financial Statements (Cont’d)
- �0th September, 2007
16. PROFIT BEFORE TAXATION
Group Company 01.10.06 to 23.08.05 to 01.10.06 to 23.08.05 to 30.09.07 30.09.06 30.09.07 30.09.06 RM RM RM RM (Restated) (Restated)
Profitbeforetaxationis arrivedataftercharging: Amortisationofprepaid leasepayments 47,476 23,006 – – Auditors’remuneration 19,320 10,112 2,320 2,320 Depreciationofproperty, plant&equipment 2,795,730 756,110 – – Directors’remuneration -Fees -DirectorsoftheCompany 240,000 115,000 120,000 60,000 -Otheremoluments -DirectorsoftheCompany 1,784,312 704,343 – – -Directorsofsubsidiarycompany 117,000 397,084 – – Financecosts -Bankcharges,commission &commitment 246,363 93,070 – – -Bankoverdraftinterest – 445 – – Preliminaryexpenses – 2,500 – 2,500 Rentalofhostel 600 7,260 – – Rentalofofficeequipment 3,600 1,650 – – Staffcosts -Salaries,wages&others 6,253,039 2,270,098 – – -E.P.F. 249,627 90,826 – – -Socso 38,151 12,734 – – -Share-basedcompensation 279,422 1,151,252 279,422 1,151,252
ThetotalemployeesoftheGroupandoftheCompany(includingdirectors)asatendofthefinancialyear/periodamountedto398and5(2006:372and9)respectively.
17. TAXATION
Group Company 01.10.06 to 23.08.05 to 01.10.06 to 23.08.05 to 30.09.07 30.09.06 30.09.07 30.09.06 RM RM RM RM
Currentyear’s/period’sprovision 1,376,190 360,729 – –Underprovisioninpriorperiod 2,198 – – –Deferredtaxation(Note13) 45,909 141,858 – –
1,424,297 502,587 – –
Notes to the Financial Statements (Cont’d)
- �0th September, 2007
�0WELLCALL HOLDINGS BERHAD (Co. No. 707346-W) ANNUAL REPORT 2007
17. TAXATION (CONT’D)
% % % % Applicabletaxrate 27 28 27 28Taxeffectof: -Exemptdividendincome – – (27) (28)-Incomeexemptedunderpioneerstatus (19) (20) – –
Averageeffectivetaxrate 8 8 – –
SubjecttoagreementwiththeInlandRevenueBoard,theCompanyhasthefollowingbalances:
2007 2006 RM RM Taxexemptaccount 2,724,000 199,700
TheCompanyhastaxexemptaccounttofrankthepaymentoftaxexemptdividendsamountingtoRM2,724,000(2006:RMNil)fromitsretainedprofit.
18. PROFIT FOR THE YEAR/PERIOD
Thecompleteproformaresultsof theGroup for thefinancialperiodended30thSeptember,2006aresetoutasfollows:
Pre-acquisition Pre-acquisition Post-acquisition Proforma total 23.08.05 to 01.10.05 to 17.04.06 to 23.08.05 to 30.09.05 16.04.06 30.09.06 30.09.06 RM RM RM RM (Restated) (Restated)
Revenue 6,702,160 34,976,635 32,445,879 74,124,674Costofsales (4,552,242) (24,505,017) (22,991,346) (52,048,605)
Grossprofit 2,149,918 10,471,618 9,454,533 22,076,069
Otheroperatingincome 41,426 237,491 325,133 604,050Administrativeexpenses (456,998) (2,498,149) (3,063,289) (6,018,436)Selling&distributionexpenses (268,006) (1,194,454) (1,506,365) (2,968,825)
Profitsfromoperations 1,466,340 7,016,506 5,210,012 13,692,858Financecosts (20,972) (96,026) (93,515) (210,513)
Profitbeforetaxation 1,445,368 6,920,480 5,116,497 13,482,345Taxation (320,256) (652,412) (502,587) (1,475,255)
Profitfortheperiod 1,125,112 6,268,068 4,613,910 12,007,090
TheacquisitionofWellcallHose(M)Sdn.Bhd.wascompletedon17thApril,2006.
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Notes to the Financial Statements (Cont’d)
- �0th September, 2007
19. EARNINGS PER SHARE
a. Basic Earnings Per Share
BasicearningspershareiscalculatedbydividingprofitattributabletoequityholdersbytheweightedaverageamountofordinarysharesofRM0.50eachissuedduringthefinancialyear/period.
01.10.06 to 23.08.05 to 30.09.07 30.09.06 RM RM (Restated)
Profitfortheyear/periodattributedtoequity holdersoftheCompany(RM) 15,206,099 4,613,910
Numberofordinarysharesinissueatthebeginning ofyear/period 82,200,010 2Effectofsharesissuedduringtheyear/period 1,799,208 30,249,423
Weightedaveragenumberofsharesinissue 83,999,218 30,249,425
Basicearningspershare(sen) 18.10 15.25
b. Diluted Earnings Per Share
DilutedearningspershareiscalculatedbydividingprofitattributedtoequityholdersbytheadjustedweightedaveragenumberofordinarysharesofRM0.50eachinissueandissuableduringthefinancialyear/period.
01.10.06 to 23.08.05 to 30.09.07 30.09.06 RM RM (Restated)
Profitfortheyear/periodattributedtoequity holdersoftheCompany(RM) 15,206,099 4,613,910
Numberofordinarysharesinissueatthebeginning ofyear/period 82,200,010 2Effectofsharesissuedduringtheyear/period 1,799,208 30,249,423EffectofESOSoptions 2,353,122 343,467
Adjustedweightedaveragenumberofsharesin issueandissuable 86,352,340 30,592,892
Dilutedearningspershare(sen) 17.61 15.08
Notes to the Financial Statements (Cont’d)
- �0th September, 2007
�2WELLCALL HOLDINGS BERHAD (Co. No. 707346-W) ANNUAL REPORT 2007
20. DIVIDENDS
01.10.06 to 30.09.07 23.08.05 to 30.09.06 Net dividend Net dividend per share Amount per share Amount Sen RM Sen RM
Interimtaxexemptdividendpaid – – 3.65 3,000,300Firstinterimtaxexemptdividendpaid 3.60 3,024,792 – –Secondinterimtaxexemptdividendpaid 4.40 3,751,309 – –
TheCompanydeclaredandpaidtheinterimtaxexemptdividendofamountingtoRM3,024,792andRM3,751,309inrespectofthecurrentfinancialyearended30thSeptember,2007on15thMarch,2007and28thSeptember,2007respectively.
On22ndNovember,2007,thedirectorsdeclaredandapprovedathirdinterimtaxexemptdividendof1.50senpershareinrespectofthefinancialyearended30thSeptember,2007.
21. FINANCIAL INSTRUMENTS
a. Financial Risks
(i) Interest Rate Risk
Theinterestrateriskthatfinancial instruments’valueswillfluctuateasaresultofchangesinmarketinterestrates,andtheinterestratesonclassesoffinancialassetsasatfinancialyearend,areasfollows:
2007 2006 Carrying Interest Carrying Interest amount rate amount rate RM % RM %
Group
FinancialAssets-Depositswithlicensedbanks 22,492,791 2.70 - 4.00 19,460,591 2.70-4.00
Company
FinancialAssets-Depositswithlicensedbanks 10,000,000 2.30 - 3.46 600,000 2.30
(ii) Credit Risk
Themaximumcreditriskassociatedwithrecognisedfinancialassetsisthecarryingamountshowninthebalancesheet.
TheGrouphasnosignificantconcentrationofcreditriskthatmayarisefromexposurestosingledebtorortogroupofdebtors.
Asat30thSeptember,2007, theGrouphadnosignificantcredit riskassociatedwith itsexposuretopotentialcounterpartyfailuretosettleoutstandingforeigncurrencytransactions.
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Notes to the Financial Statements (Cont’d)
- �0th September, 2007
21. FINANCIAL INSTRUMENTS
b. Fair Values
ThefairvaluesoffinancialassetsandfinancialliabilitieswhicharenotcarriedatfairvalueonthebalancesheetsoftheGroupandoftheCompanyarepresentedasfollows:
2007 2006 Carrying Carrying amount Fair value amount Fair value RM RM RM RM
Group
FinancialAssets-Otherinvestment -Unquotedshares 10,000 (1) 10,000 (1)
Company
FinancialAssets-Amountduefrom subsidiarycompany 23,639,625 (2) 15,296,422 (2)
(1) It is not practical to estimate the fair value of the non-current unquoted shares because of the lack of quoted market prices and the inability to estimate fair value without incurring excessive costs.
(2) It is not practical to estimate the fair value of amount due from subsidiary company due principally to the lack of fixed repayment term entered into by the parties involved and without incurring excessive costs. However, the Company does not anticipate the carrying amount recorded at the balance sheet date to be significantly different from the value that would eventually be received.
Thefollowingmethodsandassumptionswereusedtoestimatethefairvalueateachclassoffinancialinstrumentsforwhichitispracticabletoestimatethevalue:
(i) CashandCashEquivalents,TradeandOtherReceivables/Payables
Thecarryingamountsapproximatefairvaluesduetotheshortmaturityyearsoftheseinstruments.
(ii) OtherFinancialAssetsandLiabilities
ThefairvalueofotherfinancialassetsandliabilitiesoftheGroupandoftheCompanyisdeemedtobeequaltotheircarryingvalueunlessstatedotherwiseintherelevantnotestothefinancialstatements.
22. SIGNIFICANT RELATED PARTY TRANSACTION
Company 01.10.06 to 23.08.05 to 30.09.07 30.09.06 RM RM
Dividendincomefromsubsidiarycompany 21,530,000 3,200,000
Notes to the Financial Statements (Cont’d)
- �0th September, 2007
��WELLCALL HOLDINGS BERHAD (Co. No. 707346-W) ANNUAL REPORT 2007
23. SEGMENT INFORMATION
SegmentinformationispresentedinrespectoftheGroup’sbusinessandgeographicalsegments.Theprimaryformat,businesssegments,isbasedontheGroup’smanagementandinternalreportingstructure.
Segmentresults,assetsandliabilitiesincludeitemsdirectlyattributabletoasegmentaswellasthosethatcanbeallocatedonareasonablebasis.Unallocateditemsmainlycompriseinterest-earningassets&revenueandcorporateassets&expenses.
Segmentcapitalexpenditureisthetotalcostincurredduringtheyeartoacquiresegmentassetsthatareexpectedtobeusedformorethanoneyear.
Business Segments
TheGroup’sbusinesssegmentsmainlycomprisethemanufactureandsaleofrubberhoseandrelatedproducts.
BusinesssegmentalinformationhasthereforenotbeenpreparedasalltheGroup’srevenue,operatingprofit,assetsemployed, liabilities,depreciationandamortisation,andnoncashexpensesaremainlyconfinedtoonebusinesssegment.
Geographical Segments
ThemanufacturingandinvestmentholdingsegmentsareoperatedsolelyinMalaysia. Inpresentinginformationonthebasisofgeographicalsegments,segmentrevenueisbasedonthegeographicallocationofcustomerswhilesegmentassetsarebasedonthegeographicallocationofassets.
Revenue from Carrying amount Capital external customers of segment assets expenditure RM’000 RM’000 RM’000
2007
Geographicallocation:
Malaysia 5,445 74,214 5,406MiddleEast 18,749 – –Europe 22,692 – –USA/Canada 14,115 – –Australia/NewZealand 9,424 – –Asia 14,606 – –SouthAmerica 6,361 – –
Total 91,392 74,214 5,406
< ------------ Revenue from external customers ------------ > Pre- Pre- Post- Proforma Carrying acquisition acquisition acquisition total amount of 23.08.05 to 01.10.05 to 17.04.06 to 23.08.05 to segment Capital 30.09.05 16.04.06 30.09.06 30.09.06 assets expenditure RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
2006
Geographicallocation:
Malaysia 415 2,801 1,691 4,907 62,508 15,383MiddleEast 960 6,839 5,670 13,469 – –Europe 2,261 8,578 9,099 19,938 – –USA/Canada 1,104 6,756 6,819 14,679 – –Australia/NewZealand 750 3,324 3,403 7,477 – –Asia 798 4,504 3,971 9,273 – –SouthAmerica 414 2,175 1,793 4,382 – –
Total 6,702 34,977 32,446 74,125 62,508 15,383
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Notes to the Financial Statements (Cont’d)
- �0th September, 2007
24. EVENT SUBSEQUENT TO THE FINANCIAL YEAR
Onthe22ndNovember,2007,theCompanyannouncedproposalstoundertakethefollowing:
(i) Proposedbonusissueofupto44,511,005newordinarysharesofRM0.50eachintheCompany(“BonusShares”)forevery2existingordinarysharesheldintheCompany.(“ProposedBonusIssue”);
(ii) ProposedincreaseintheauthorisedsharecapitaloftheCompanyfromRM50,000,000comprises100,000,000ordinarysharestoRM100,000,000comprises200,000,000ordinaryshares.(“ProposedIncreaseinAuthorisedShareCapital”);and
(iii) Proposedtransferofthelistingofandquotationfortheentireissuedandpaid-upsharecapitaloftheCompanyfromtheSecondBoardtotheMainBoardofBursaSecuritiesuponcompletionoftheProposedBonusIssueandProposedIncreaseinAuthorisedShareCapital.
25. CHANGES IN ACCOUNTING POLICIES AND PRIOR YEAR ADJUSTMENT
TheaccountingpoliciesdisclosedinNote2havebeenappliedinpreparingthefinancialstatementsforthefinancialyearended30thSeptember,2007.Theimpactresultingfromchangesinaccountingpoliciesarisingfromtheadoptionofthenew/revisedFRSsaresummarisedbelow:
a. FRS 2 Share-based Payment
ThisFRSrequiresanentitytorecogniseshare-basedpaymenttransactionsinitsfinancialstatements,includingtransactionswithemployeesorotherpartiestobesettledincash,otherassetsorequityinstrumentsoftheentity.
Prior to 1st October, 2006, no compensation expense was recognised in the income statement over thevestingperiodsofthegrantswithacorrespondingincreaseinequity.ThetotalamounttoberecognisedascompensationexpenseisdeterminedbyreferencetothefairvalueoftheshareoptioniscomputedusingtheBlack-ScholesMethod.Ateverybalancesheetdate,theGrouprevisesitsestimatesofthenumberofshareoptionsthatareexpectedtovestbythevestingdate. Anyrevisionof thisestimate is included in incomestatementandacorrespondingadjustmenttoequityovertheremainingvestingperiod.
UnderthetransitionalprovisionsofFRS2,thisFRSmustbeappliedtoshareoptionsthatweregrantedafter31stDecember,2004andhadnotyetvestedon1stJanuary,2006.Theapplicationisretrospectiveandaccordingly,thecomparative amounts as at30thSeptember,2006were restatedand theopeningbalanceof retainedprofitsasat1stOctober,2006hasbeenadjusted.ThefinancialimpacttotheGrouparisingfromthischangeinaccountingpolicyisadecreaseinopeningretainedprofitsofRM1,151,252withacorrespondingincreaseincapitalreserve.
b. FRS 3 Business Combinations
Inprioryears,negativegoodwillwaspresentedasreserveonconsolidation.Itisthedifferencebetweenthecostofinvestmentsandthefairvalueofnetassetsofthesubsidiarycompanyacquired.
Witheffectfrom1stOctober,2006andinaccordancewithFRS3,ifthefairvalueofthenetassetsacquiredinabusinesscombinationexceedstheconsiderationpaid(anamountariseswhichwouldhavebeenknownasnegativegoodwillunderthepreviousaccountingpolicy),theexcessisrecognisedimmediatelyintheincomestatementasitarises.InaccordancewiththetransitionalprovisionsofFRS3,existingnegativegoodwillasat1stOctober,2006ofRM3,268,068isderecognizedwithacorrespondingincreaseinopeningretainedprofits.
Notes to the Financial Statements (Cont’d)
- �0th September, 2007
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25. CHANGES IN ACCOUNTING POLICIES AND PRIOR YEAR ADJUSTMENT (CONT’D)
c. FRS 117 Leases
Priorto1stOctober,2006,leaseholdlandwasclassifiedunderproperty,plant&equipmentandwasstatedatcostlessaccumulateddepreciationandimpairmentlosses.TheadoptionoftherevisedFRS117hasresultedinaretrospectivechangetotheclassificationofleaseholdland.Theup-frontpaymentsmadefortheleaseholdlandrepresentsprepaidleasepaymentsandareamortisedonastraight-linebasisovertheleaseterm.TheunamortisedamountofleaseholdlandisretainedasthesurrogatecarryingamountofprepaidleasepaymentsasallowedbythetransitionalprovisionsofFRS117.ThisFRShasbeenappliedretrospectivelyandcertaincomparativefiguresasat30thSeptember,2006havebeenrestated.
ThefollowingcomparativefiguresoftheGroupandoftheCompanyhavebeenrestatedfortheeffectsofadoptingtheabovechangesinaccountingpoliciesandtoconformtocurrentyear’spresentation:
As previously Effect of Effect of Effect of As reported FRS 2 FRS 3 FRS 117 restated RM RM RM RM RM
Group
Balance sheet as at 30.09.06
Property,plant& equipment 26,201,123 – – (2,372,477) 23,828,646 Prepaidlease paymentforland – – – 2,372,477 2,372,477
Reserves-Retainedprofit 2,764,862 (1,151,252) 3,268,068 – 4,881,678-Optionreserve – 1,151,252 – – 1,151,252-Reserveon consolidation 3,268,068 – (3,268,068) – –
Income Statement for the financial period ended 30.09.06
-Administrative expenses 1,912,037 1,151,252 – – 3,063,289
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Notes to the Financial Statements (Cont’d)
- �0th September, 2007
25. CHANGES IN ACCOUNTING POLICIES AND PRIOR YEAR ADJUSTMENT (CONT’D)
As previously Effect of As reported FRS 2 restated RM RM RM
Company
Balance sheet as at 30.09.06 Reserves-Retainedprofit/(accumulatedloss) 129,292 (1,151,252) (1,021,960)-Optionreserve – 1,151,252 1,151,252
Income Statement for the financial period ended 30.09.06
-Administrativeexpenses 90,548 1,151,252 1,241,800
26. AUTHORISATION FOR ISSUE
ThefinancialstatementsoftheCompanyforthefinancialyearended30thSeptember,2007wereauthorisedforissueinaccordancewitharesolutionoftheBoardofDirectorson5thDecember,2007.
��WELLCALL HOLDINGS BERHAD (Co. No. 707346-W) ANNUAL REPORT 2007
Analysis of Shareholdingsas at 7th December, 2007
Authorised share capital : RM50,000,000Issued and paid-up share capital : RM42,646,005Class of shares : OrdinarysharesofRM0.50eachVoting rights : Onevotepershare
DISTRIBUTION OF SHAREHOLDINGS
Size of No. of % of No. of % of Issued Shareholdings Shareholders Shareholders Shares Share Capital
Lessthan100 2 0.17 100 0.00100-1,000 367 30.84 267,200 0.311,000-10,000 595 50.00 2,697,400 3.1610,001-100,000 175 14.70 5,431,200 6.37100,001tolessthan5%ofissuedshares 46 3.87 24,733,972 29.005%andaboveofissuedshares 5 0.42 52,162,138 61.16
Total 1,190 100.00 85,292,010 100.00
SUBSTANTIAL SHAREHOLDERS
Direct Indirect Total Name of Shareholders No. of % of Issued No. of % of Issued No. of % of Issued Shares Held Share Capital Shares Held Share Capital Shares Held Share Capital
LifewiseAllianceSdnBhd 27,342,679 32.06 – – 27,342,679 32.06MaximumPerspectiveSdnBhd 9,765,241 11.45 – – 9,765,241 11.45- 9,765,241 Shares Held through HLG Nominee (Tempatan) Sdn Bhd PTBVenturesSdn.Bhd.(“PTBVentures”) 9,392,781 11.01 – – 9,392,781 11.01YayasanIslamTerengganu 7,829,321 9.18 – – 7,829,321 9.18HuangSha 1,000,000 1.17 27,342,679 32.06 (a) 28,342,679 33.23LeongHonChong 500,000 0.59 27,342,679 32.06 (a) 27,842,679 32.64ChewCheeChek – – 27,342,679 32.06 (a) 27,342,679 32.06DatukNgPengHong@NgPengHay – – 9,765,241 11.45 (b) 9,765,241 11.45TanKangSeng 300,000 0.35 9,765,241 11.45 (b) 10,065,241 11.80PTBBaktiHoldingsSdnBhd(“PTBBakti”) – – 9,392,781 11.01 (c) 9,392,781 11.01PermodalanTerengganuBerhad (“PermodalanTerengganu”) – – 9,392,781 11.01 (d) 9,392,781 11.01LembagaTabungAmanah – – 9,392,781 11.01 (e) 9,392,781 11.01
(a) Deemed interest by virtue of Section 6A of the Companies Act, 1965, through his shareholding in LASB(b) Deemed interest by virtue of Section 6A of the Companies Act, 1965, through his shareholding in MASB(c) Deemed interest by virtue of Section 6A of the Companies Act, 1965, through its shareholding in PTB Ventures(d) Deemed interest by virtue of Section 6A of the Companies Act, 1965, through its shareholding in PTB Bakti(e) Deemed interest by virtue of Section 6A of the Companies Act, 1965, through its shareholding in Permodalan Terengganu
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DIRECTORS’ SHAREHOLDINGS
Direct Indirect Total Name of Directors No. of % of Issued No. of % of Issued No. of % of Issued Shares Held Share Capital Shares Held Share Capital Shares Held Share Capital
DatukNgPengHong@NgPengHay* – – 9,765,241 (a) 11.45 9,765,241 11.45HuangSha* 1,000,000 1.17 27,372,679 (c) 32.09 28,372,679 33.27LeongHonChong* 500,000 0.59 27,342,679 (b) 32.06 27,842,679 32.64ChewCheeChek* – – 27,342,679 (b) 32.06 27,342,679 32.06TanKangSeng* 300,000 0.35 9,765,241 (a) 11.45 10,065,241 11.80YBDato’HajiMohtarbinNong – – – – – –MatZaidBinIbrahim (Alternate Director to YB Dato’ Haji Mohtar bin Nong) – – – – – –RazmiBinAlias – – – – – –MohdKhasanBinAhmad – – – – – –YangChowYaw,Alan – – – – – –
(a) Deemed interest by virtue of Section 6A of the Companies Act, 1965, through his shareholding in MASB(b) Deemed interest by virtue of Section 6A of the Companies Act, 1965, through his shareholding in LASB(c ) Includes deemed interest in 27,342,679 Shares by virtue of Section 6A of the Act, through his shareholding in LASB and deemed interest in 30,000 Shares
by virtue of Section 134(12)(c) of the Act through the shareholdings of his children in the Company
* By virtue of their interest in shares of the Company, the Directors are also deemed to have an interest in all the shares held by the Company in the subsidiary company to the extent that the Company has an interest
Analysis of Shareholdings (Cont’d)
as at 7th December, 2007
70WELLCALL HOLDINGS BERHAD (Co. No. 707346-W) ANNUAL REPORT 2007
THIRTY (30) LARGEST SHAREHOLDERS AS AT 7 DECEMBER 2007
Name of Shareholders No. of Shares %
1 LIFEWISEALLIANCESDN.BHD. 20,832,517 24.422 HLGNOMINEE(TEMPATAN)SDNBHD 9,765,241 11.45 PLEDGED SECURITIES ACCOUNT FOR MAXIMUM PERSPECTIVE SDN BHD (CCTS)3 PTBVENTURESSDN.BHD. 9,392,781 11.014 YAYASANISLAMTERENGGANU 7,829,321 9.185 LIFEWISEALLIANCESDN.BHD. 4,342,278 5.096 HSBCNOMINEES(ASING)SDNBHD 3,000,000 3.52 EXEMPT AN FOR THE HONGKONG AND SHANGHAI BANKING CORPORATION LIMITED (HBFS-B CLT 500)7 CIMSECNOMINEES(ASING)SDNBHD 2,200,000 2.58 ING ASIA PRIVATE BANK LTD FOR CLEVELAND MANAGEMENT LIMITED8 LIFEWISEALLIANCESDN.BHD. 2,167,884 2.549 CITIGROUPNOMINEES(ASING)SDNBHD 2,139,800 2.51 EXEMPT AN FOR AMERICAN INTERNATIONAL ASSURANCE COMPANY LIMITED10 AMANAHRAYANOMINEES(TEMPATAN)SDNBHD 1,699,800 1.99 PUBLIC ISLAMIC OPPORTUNITIES FUND11 RHBCAPITALNOMINEES(TEMPATAN)SDNBHD 1,435,400 1.68 PLEDGED SECURITIES ACCOUNT FOR TING SIEW PIN (CEB)12 HUANGSHA 1,000,000 1.1713 HLGNOMINEE(TEMPATAN)SDNBHD 1,000,000 1.17 PLEDGED SECURITIES ACCOUNT FOR CHO KIM WING (CCTS)14 AMANAHRAYANOMINEES(TEMPATAN)SDNBHD 880,000 1.03 PB ISLAMIC ASIA STRATEGIC SECTOR FUND15 AMMBNOMINEES(TEMPATAN)SDNBHD 610,700 0.72 AMTRUSTEE BERHAD FOR HLG PENNY STOCK FUND (5/4-3)16 RHBCAPITALNOMINEES(TEMPATAN)SDNBHD 578,000 0.68 PLEDGED SECURITIES ACCOUNT FOR SUSY DING (CEB)17 HSBCNOMINEES(TEMPATAN)SDNBHD 500,000 0.59 HSBC (M) TRUSTEE BHD FOR HWANG-DBS SELECT SMALL CAPS FUND (4579)18 CIMSECNOMINEES(ASING)SDNBHD 500,000 0.59 ING ASIA PRIVATE BANK LTD FOR OCEANNA VICTORY LTD19 LEONGHONCHONG 500,000 0.5920 CHOYSWEEHEONG 360,000 0.4221 LOOIWOOMIN 350,000 0.4122 HSBCNOMINEES(TEMPATAN)SDNBHD 347,500 0.41 HSBC (M) TRUSTEE BHD FOR HWANG-DBS DANA IZDIHAR (4207)23 CHENGSHUNU 344,600 0.4024 HLGNOMINEE(TEMPATAN)SDNBHD 340,000 0.40 PLEDGED SECURITIES ACCOUNT FOR TEO LIA ENG (CCTS)25 HLGNOMINEE(TEMPATAN)SDNBHD 300,000 0.35 PLEDGED SECURITIES ACCOUNT FOR TAN KANG SENG (CCTS)26 CIMSECNOMINEES(ASING)SDNBHD 300,000 0.35 ING ASIA PRIVATE BANK LTD FOR FORTUNE GREAT CAPITAL LTD27 AIBBNOMINEES(TEMPATAN)SDNBHD 299,600 0.35 PLEDGED SECURITIES ACCOUNT FOR WONG YEE HUI28 LEECHEANSEONG 295,500 0.3529 LEEKOKYUEN 279,000 0.3330 UNIVERSALTRUSTEE(MALAYSIA)BERHAD 253,900 0.30 SBB EMERGING COMPANIES GROWTH FUND
Analysis of Shareholdings (Cont’d)
as at 7th December, 2007
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Summary of Landed Properties and Buildings
Net book value as at Registered Title No./location Age of Land Built-up 30 September owner building Existing Usage area area Tenure 2007 (years) (sq. ft) (sq. ft) (RM)
Wellcall PT8290,JalanJohan2/5 11 Industriallanderected 217,600 150,000 leasehold 4,469,732Hose(M) KawasanPerindustrian withablockof (expiringSdnBhd PengkalanII,FasaII factory/officebuilding on6May 31500Lahat includingacanteen 2056) Ipoh,Perak andworkers’hostel, Heldunder: whichiscurrentlyused HSD48717forP.T.8290 byWHSBforthe intheMukimof purposeofcarryingout SungaiTerap,District manufacturingactivities Kinta,StateofPerak
Wellcall PT8300,JalanJohan2/5 1 Industriallanderected 286,973 170,000 leasehold 7,877,510Hose(M) KawasanPerindustrian withablockoffactory, (expiringSdnBhd PengkalanII,FasaII acanteenandworkers’ on6May 31500Lahat hostel,forthepurpose 2056) Ipoh,Perak ofcarryingout Heldunder: manufacturingactivities HS(D)48727PTNo.8300 intheMukim SungaiTerap,Districtof Kinta,StateofPerak
72WELLCALL HOLDINGS BERHAD (Co. No. 707346-W) ANNUAL REPORT 2007
Notice of Annual General Meeting
NOTICE IS HEREBY GIVEN THATtheSecondAnnualGeneralMeeting(“AGM”)ofWellcall Holdings Berhad(707346-W)(“theCompany”)willbeheldatLangkawiRoom,BukitJalilGolf&CountryResort,Jalan3/155B,BukitJalil,57000KualaLumpuronMonday,4February2008,at10.30a.m.forthefollowingpurposes:-
AS ORDINARY BUSINESS
1. To consider and receive the Audited Financial Statements together with the Reports of theDirectorsandAuditorsthereonforthefinancialyearended30September2007.
2. ToapproveDirectors’FeesofRM120,000.00forthefinancialyearended30September2007.3. Tore-electthefollowingDirectorswhoretirepursuanttoArticle94oftheCompany’sArticles
ofAssociation:
(a) DatukNgPengHong@NgPengHay(b) Mr.LeongHonChong(c) Mr.ChewCheeChek
4. Tore-appointMessrsOng&WongasAuditorsoftheCompanyandtoauthorisetheBoardofDirectorstofixtheirremuneration.
AS SPECIAL BUSINESS
Toconsiderand,ifthoughtfit,topass,withorwithoutmodifications,thefollowingResolutions:- 5. SPECIAL RESOLUTION – PROPOSED AMENDMENTS TO THE ARTICLES OF ASSOCIATION OF
THE COMPANY “THAT the deletions, alterations, modifications, variations or additions to the Articles of
AssociationoftheCompanyascontainedinAppendix“A”beandareherebyapproved.”
6. ORDINARY RESOLUTION – AUTHORITY TO ALLOT SHARES PURSUANT TO SECTION 132D OF THE COMPANIES ACT, 1965
“THAT,subjectalwaystotheCompaniesAct,1965,theArticlesofAssociationoftheCompanyandtheapprovalsoftherelevantgovernment/regulatoryauthorities,theDirectorsbeandtheyareherebyauthorised,pursuanttoSection132DoftheCompaniesAct,1965toallotandissuesharesintheCompanyatanytimeuntiltheconclusionofthenextAnnualGeneralMeetinganduponsuchtermsandconditionsandforsuchpurposesastheDirectorsmay,intheirabsolutediscretion,deemfitprovidedthattheaggregatenumberofsharestobeissueddoesnotexceed10percentumoftheissuedsharecapitaloftheCompanyforthetimebeing.”
OTHER ORDINARY BUSINESS
7. Totransactanyotherbusinessofwhichduenoticeshallhavebeengiven.
ByOrderoftheBoardCHIN WOON LI (F) (MAICSA 7008636)WONG SHAN MAY (F) (LS0008582)CompanySecretaries
Dated:9January2008KualaLumpur
(Resolution 1)
(Resolution 2)
(Resolution 3)(Resolution 4)(Resolution 5)
(Resolution 6)
(Resolution 7)
(Resolution 8)
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NOTES ON APPOINTMENT OF PROXY
(a) A Member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote in his stead. A proxy may but need not be a Member of the Company. The provisions of Section 149(1)(a) and 149(1)(b) of the Companies Act, 1965 (the Act) shall not apply to the Company.
(b) The instrument appointing a proxy must be deposited at the registered office of the Company at Unit C-6-5, 6th Floor, Block C, Megan Avenue II, No. 12, Jalan Yap Kwan Seng, 50450 Kuala Lumpur not less than forty-eight (48) hours before the time appointed for the meeting or at any adjournment thereof.
(c) A Member shall not be entitled to appoint more than one (1) proxy to attend and vote at the same meeting. The provision of Section 149(1)(c) of the Act shall not apply to the Company.
(d) In the case of a corporate member, the instrument appointing a proxy must be executed under its common seal or under the hand of its attorney.
(e) Where a Member of the Company is an Authorised Nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint one proxy in respect of each Securities Account it holds with shares of the Company standing to the credit of the said Securities Account.
EXPLANATORY NOTE TO SPECIAL BUSINESS:
1. Special Resolution – Resolution 7 – Proposed Amendments to the Articles of Association of the Company
The Proposed Amendments to the Articles of Association of the Company, if passed, will render the Articles of Association of the Company to be in line with the recent amendments to the Listing Requirements of Bursa Malaysia Securities Berhad and any prevailing laws, rules, regulations, orders, guidelines or requirements of the relevant authorities and to further enhance administrative efficiency of the Company. Please refer to Appendix “A” for details of the Proposed Amendments.
2. Ordinary Resolution – Resolution 8 – Authority to Directors to issue and allot shares pursuant to Section 132D of the Companies Act, 1965.
The effect of the resolution under item 6 of the agenda, if passed will empower the Directors to allot and issue new shares up to 10% of the issued capital of the Company for the time being for such purposes as the Directors consider would be in the interest of the Company. This authority will commence from the date of this Annual General Meeting and unless revoked or varied by the Company at a general meeting, will expire at the conclusion of the next Annual General Meeting of the Company.
Notice of Annual General Meeting (Cont’d)
✄
WELLCALL HOLDINGS BERHAD(CompanyNo.707346-W)(IncorporatedinMalaysia)
SECOND ANNUAL GENERAL MEETINGFORM OF PROXY CDS Account No.
No. of share held
*I/We............................................................................................................................................................. (NRICNo.................................................................................) (FULLNAMEINBLOCKLETTERS)
of.......................................................................................................................................................................................................................................................................... (FULLADDRESS)
beingashareholderofWellcallHoldingsBerhad(“Company”),herebyappoint.................................................................................................................
......................................................................................................................................... (NRICNo..................................................................................................................) (FULLNAMEINBLOCKLETTERS)
of......................................................................................................................................................................................................................................................................or (FULLADDRESS)
failing*him/her.......................................................................................................................................... (NRICNo.................................................................................) (FULLNAMEINBLOCKLETTERS)
of........................................................................................................................................................................................... orfailing*him/her,theChairmanofthe (FULLADDRESS)
meetingas*my/ourproxytovotefor*me/usandon*my/ourbehalfattheSecondAnnualGeneralMeetingoftheCompanyandactfor*me/uson*my/ourbehalf,attheSecondAnnualGeneralMeetingoftheCompanytobeheldatLangkawiRoom,BukitJalilGolf&CountryResort,Jalan3/155B,BukitJalil,57000KualaLumpuronMonday,4February2008at10.30a.m.andatanyadjournmentthereof.*My/ourproxyistovoteasindicatedbelow:-
Resolution For Against
1. ORDINARY BUSINESS ToconsiderandreceivetheAuditedFinancialStatementstogetherwiththeReportsof
theDirectorsandAuditorsthereonforthefinancialyearended30September2007.
2. ToapproveDirectors’FeesofRM120,000.00forthefinancialyearended30September2007.
3. Re-electofDirectorretiringpursuanttoArticle94oftheCompany’sArticlesofAssociation-DatukNgPengHong@NgPengHay
4. Re-electofDirectorretiringpursuanttoArticle94oftheCompany’sArticlesofAssociation-Mr.LeongHonChong
5. Re-electofDirectorretiringpursuanttoArticle94oftheCompany’sArticlesofAssociation-Mr.ChewCheeChek
6. Tore-appointMessrsOng&WongasAuditorsoftheCompanyandtoauthorisetheBoardofDirectorstofixtheirremuneration.
7. SPECIAL BUSINESS ProposedAmendmentstotheCompany’sArticlesofAssociation.
8. AuthoritytoallotsharespursuanttoSection132DoftheCompaniesAct,1965.
Please indicate with an “x” in the appropriate space how you wish your votes to be cast. Unless otherwise instructed, the proxy will vote as he thinks fit.
Datedthis.............................. dayof...................................... 2008. .................................................................................................. SignatureofShareholder*Deleteifnotapplicable (IfshareholderisaCorporation, thispartshouldbeexecutedunderseal)
(a) A Member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend and vote in his stead. A proxy may but need not be a Member of the Company. The provisions of Section 149(1)(a) and 149(1)(b) of the Companies Act, 1965 (the Act) shall not apply to the Company.
(b) The instrument appointing a proxy must be deposited at the registered office of the Company at Unit C-6-5, 6th Floor, Block C, Megan Avenue II, No. 12, Jalan Yap Kwan Seng, 50450 Kuala Lumpur not less than forty-eight (48) hours before the time appointed for the meeting or at any adjournment thereof.
(c) A Member shall not be entitled to appoint more than one (1) proxy to attend and vote at the same meeting. The provision of Section 149(1)(c) of the Act shall not apply to the Company.
(d) In the case of a corporate member, the instrument appointing a proxy must be executed under its common seal or under the hand of its attorney.
(e) Where a Member of the Company is an Authorised Nominee as defined under the Securities Industry (Central Depositories) Act 1991, it may appoint one proxy in respect of each Securities Account it holds with shares of the Company standing to the credit of the said Securities Account.