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| Notes to the accounts 2003 (DATE : 27-Feb-2004) |
| 1. |
The quarterly financial statements have been prepared
using the same accounting policies and methods of computation
applied in the most recent annual audited financial statements,
and should be read in conjunction with the audited financial
statements for the year ended 31 December 2002.
The accounting policies and methods of computation adopted
by the Group in this interim financial report are consistent
with those adopted in the annual financial year ended
31 December 2002, except for the following:
| (i) |
Adoption of MASB No. 25, Income Taxes, whereby
deferred tax asset have been recognised in the Balance
Sheet to the extent that it is probable to be utilised
against future taxable profit. |
| (ii) |
Adoption of MASB No. 29, Employee Benefits, whereby
employee benefits are recognised in the income statement.
The adoption of this new MASB does not have any
material impact on the result of the Group. |
The comparative figures for the above have been restated
retrospectively to reflect the impact as the prior year
adjustment. |
| 2. |
The preceding annual financial statements was not subject
to any qualification. |
| 3. |
The Group's operations are not materially affected by
any seasonal or cyclical factors. |
| 4. |
There were no unusual items for the current quarter and
financial year-to-date. |
| 5. |
There were no changes in estimates of amounts in prior
interim periods of the current financial year and in the
prior financial years that have material effect in the
current interim period. |
| 6. |
There were no issuances and repayment of debt and equity
securities, share buy-backs, share cancellations, share
held as treasury shares and resale of treasury shares
for the current financial period under review except for
the issuance of 5,827,000 new ordinary shares of RM1.00
each pursuant to the exercise of the Employees' Share
Option Scheme. |
| 7. |
No dividend has been proposed or paid in the financial
period under review and in the preceding financial period.
|
| 8. |
|
| 9. |
There is no valuation of property, plant and equipment
brought forward from the previous audited financial statements
as the Group does not adopt a revaluation policy on property,
plant and equipment. |
| 10. |
There were no material events during the quarter under
review. |
| 11. |
| (a) |
Prior to the announcement made on 29 April 2003,
the Company had on 28 April 2003 entered into a
Share Sale Agreement to dispose off it's wholly
owned subsidiary, Sunway Asphalt & Readymix
(S) Pte Ltd ("SARS"), to Jurong Readymix
Concrete Pte Ltd.
The effect on the disposal of SARS on the interim
financial statements is as follows:
| |
|
| |
Decrease in the Group's
net profit / loss |
|
| (i) |
3 months ended 30 Sept
2003 |
NIL |
| |
12 months ended 31 Dec
2003 |
NIL |
| (ii) |
Decrease in the Group's
net assets |
2,366 |
| (iii) |
Cash inflow/outflow from
the disposal |
2,366 |
|
| (b) |
(b) Further to the announcement dated 28 January
2003, the Company had on 8 July 2003 completed the
disposal of Menara Sunway Sdn Bhd ("MSSB"),
a 51% owned subsidiary, to Sunway City Berhad.
The effect on the disposal of MSSB on the interim
financial statements is as follows:
| |
|
| |
Decrease in the Group's
net profit / loss |
|
| (i) |
3 months ended 30 Sept
2003 |
NIL |
| |
12 months ended 31 Dec
2003 |
NIL |
| (ii) |
Decrease in the Group's
net assets |
25,890 |
| (iii) |
Cash inflow/outflow from
the disposal |
20,000 |
|
| (c) |
(c) Further to the announcement made on 8 July
2003, the Company had completed the corporate restructuring
exercise of Sunway Building Technology Berhad ("SunTech")
Group. The total cash consideration of RM28.5 million
was received in full on 19 August 2003. The corporate
restructuring entailed an internal restructuring
of SunTech Group which involved the divestment of
construction business to its 62% owned subsidiary,
Sunway Construction Berhad and the acquisition of
the entire equity interests in the manufacturing
subsidiaries directly by the Company. The above
reorganization of businesses have no material effect
on the results and net assets of the Group for this
period. |
|
| 12. |
Details of contingent liabilities of the group as at the
date of issue of the report are as follows:-
| |
| |
| Guarantees given
to bankers for facilities obtained and utilised
by third parties |
31,184 |
24,655 |
| Guarantees given
to third parties in respect of contracts and trade
performance |
926,034 |
1,010,385 |
|
| 13. |
The Group recorded a revenue of RM1.4 billion and profit
from operations of RM143 million for the period ended
31 December 2003. All segments of the Group's businesses
have contributed positively to the higher earnings except
for the share of losses from investments in associated
companies amounting to RM3 million. |
| 14. |
The Group registered RM38.6 million pre-tax profit
during the fourth quarter as compared to the preceding
quarter of RM32.5 million. The increased profit was contributed
mainly by the construction segment. |
| 15. |
With the Group's strategy of focusing on its core businesses
of construction, building materials, trading and property
development and the continued divestment of non-profitable,
non-core assets, the Group expects to achieve steady growth
in profitability going forward. |
| 16. |
The company did not issue any profit forecast during the
period. |
| 17. |
Income tax comprises:
| |
| |
| |
| Current taxation |
4,646 |
2,040 |
19,690 |
8,319 |
| Deferred taxation |
1,952 |
(4,174) |
6,455 |
(3,608) |
| Associated companies |
373 |
(303) |
863 |
(25) |
| Under / (Over) provision in respect
of prior financial years |
9 |
3,352 |
9 |
1,489 |
|
| 18. |
There were no profits/ (loss) from the sale of
unquoted investments or properties for the current quarter
and financial year-to-date. |
| 19. |
| (a) |
(a) 828,200 units of Warrants of Suntech was disposed
during the current quarter for a consideration of
RM586,587. For the financial year-to-date, 19,594,200
units of Warrants of Suntech was disposed for a
consideration of RM1,516,962. The disposal has no
financial effect on the net assets of the Group.
Except for the above, there were no purchase nor
disposal of quoted securities for the current quarter
and financial year-to-date. |
| (b) |
Details of investments in quoted securities as
at the reporting period are as follows:
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| |
| Total investments at cost
|
45,222 |
| Total investments at carrying
value / book value |
9,968 |
| Total investments at market
value |
9,721 |
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| 20. |
| (a) |
Fund Raising Exercise
On 15 August 2003, the Company announced its proposed
fund raising exercise involving the issuance of
ABS Notes by ABS Land & Properties Berhad ("ABS
Proposal") and five (5) year unsecured bonds
by SunInc.
The ABS Proposal involve the disposal of assets
by the Company and its subsidiaries and are subject
to the approvals by the Securities Commission, the
shareholders of the Company and any other relevant
authorities.
The ABS Proposal was approved by the shareholders
of the Company at its Extraordinary General Meeting
held on 7th January 2004. Approval of the ABS Proposal
has been received from the Securities Commission
subject to the fulfillment of certain conditions. |
| (b) |
Sunway Holding Incorporated Berhad ("SunInc")
Warrants
| On 18 September 2003 and 16
January 2004, the Company announced the following
proposals: |
| (i) |
Proposed renounceable rights issue of up
to 199,874,746 new warrants in SunInc ("Warrants")
at an issue price of RM0.05 per warrant on
the basis of seven (7) new warrants for every
twenty (20) existing ordinary shares of RM1.00
each in SunInc held at the Book Closure Date;
and |
| (ii) |
Proposed restricted issue of up to 12,357,620
new warrants at an issue price of RM0.05 per
warrant to the holders of options granted
and to be granted to the eligible employees
and the executive directors of SunInc and
its subsidiaries pursuant to the employees'
share option scheme of SunInc on the basis
of seven (7) new warrants for every twenty
(20) options in SunInc held at the Book Closure
Date.
Applications have been made to the relevant
authorities. The Proposals are subject to
the approval of the authorities and the shareholders
of SunInc at an EGM to be convened. |
|
| (c) |
Private Placement
The Company announced its proposed private placement
of up to 10% of the issued and paid-up share capital
of the Company at an issue price of RM1.60. Approval
have been received from the Securities Commission
and Foreign Investment Committee. |
| (d) |
Privatization of Sunway
Construction Berhad ("SunCon")
Conditional voluntary general offer for the
remaining shares of RM1.00 each in SunCon, which
are not already owned by the Company at an offer
price of RM2.73 to be satisfied by cash of RM1.10
and one (1) Ordinary Share of RM1.00 in Sunway Holdings
Incorporated Berhad at an issue price of RM1.63.
The proposal is pending approval from the relevant
authorities and shareholders at an EGM to be convened.
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| 21 |
Group borrowings and debt securities as at the end of
the reporting period are as follows:-
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| |
| Borrowing |
|
|
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| - Secured |
19,249 |
8,173 |
27,422 |
| - Unsecured |
311,539 |
57,322 |
368,861 |
| The details of the borrowings and
debt securities which are denominated in foreign
currencies are as follows:- |
| |
|
| |
|
| Secured |
|
|
|
| - Denominated in
Singapore Dollar (SGD '000) |
361 |
154 |
|
| |
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| Unsecured |
|
|
|
| - Denominated in
Singapore Dollar (SGD '000) |
7,196 |
- |
|
| - Euroconvertible
Bonds (USD '000) |
7,514 |
- |
|
| - Bonds (USD '000) |
10,770 |
10,770 |
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| 22. |
There were no financial instruments with off balance sheet
risks as at the date of issue of the report. |
| 23. |
| (a) |
A claim was brought by Proselesa Sdn Bhd ("Proselesa")
against Sunway Holdings Incorporated Berhad and
its subsidiaries, SWL Factoring Sdn Bhd and Sunway
Credit and Leasing Sdn Bhd ("the Parties")
for damages and specific performance in respect
of an alleged breach/wrongful termination of a sale
and purchase agreement. In the event the specific
performance of the said agreement is granted by
the Court, the Parties will be liable to pay the
sum of RM77,766,000, being 10% of the purchase price,
or to pay general damages of a sum that the Court
may order. The Parties have not provided for the
claim as the Directors, based on advice from legal
advisors, are of the opinion that Proselesa's claim
will not succeed as one of the conditions precedent
was not fulfilled. The said suit was heard on the
19 and 20 November, 2002 and is fixed for continued
hearing on 7, 8 and 16 July 2003 and from 11 to
14 August 2003, of which the continued hearing has
been postponed to 10 October 2003 and 1 to 3 March
2004. |
| (b) |
(b) An action has been brought by Sunway Credit
and Leasing Sdn Bhd ("SCL") against Atlas
Corporation Sdn Bhd ("Atlas") and Yeo
Chu Hui ("Yeo") under Kuala Lumpur High
Court No. D3-22-1231-2002. SCL is claiming against
Atlas for the sum of RM4,480,677.76 together with
interest at the rate of 3.55% per annum above the
base lending rate of Malayan Banking Berhad calculated
on a monthly rest basis from 1 May 2002 until full
and final settlement pursuant to Atlas failure to
honour their obligations under the Facilities Agreement
dated 15 January 2001. Yeo is being sued as Atlas
guarantor in respect of the latter's obligations
under the aforesaid Facilities Agreement. SCL has
filed the application for Summary Judgement which
has been fixed for hearing on 23 June 2003. A Sealed
Judgment and Order dated 18 September 2003 have
been served on Atlas and Yeo. |
Except for the abovementioned claim, there was no pending
material litigation as at the date of the report. |
| 24. |
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| |
| |
| Basic earnings / (loss) per share |
|
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| Net loss for the period (RM '000)
|
23,651 |
18,981 |
75,312 |
(183,722) |
| Weighted average number of ordinary
share in issue ('000) |
405,969 |
404,985 |
405,969 |
404,985 |
| Basic loss per share (sen) |
5.82 |
4.69 |
18.55 |
(45.37) |
| Diluted loss per share (sen)
|
5.68 |
4.69 |
18.10 |
(45.37) |
The assumed conversion from the Bonds, exercise of warrants
and options over shares under the ESOS during the period
are anti-dilutive. |
| 25. |
| (a) |
Capital commitment not provided for in the financial
statements as at 30 September 2003 is as follows:-
| |
| |
| Amount authorised
and contracted for |
- |
-
|
| Amount authorised
but not contracted for |
948 |
2,044 |
Analysed as
follows:
property, plant and equipment |
948 |
2,044 |
|
| (b) |
(b) Operating lease commitment not provided for
in the financial statements as at 31 December 2003
is as follow:-
| |
| |
| Non-cancellable
operating lease commitment in respect of land
and building |
|
|
| - not later
than 1 year |
- |
44 |
| later than
1 year and not later than 5 years |
- |
90 |
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