contentsjayatiasa.listedcompany.com/misc/ar2003.pdf · 2007. 11. 27. · export market corporate...
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Corporate Information
5-Year Financial Highlights
Notice of Annual General Meeting
Notice of Dividend Entitlement
Statement Accompanying Notice of Annual General Meeting
Key Information
Board of Directors
Directors' Profiles
Chairman's Statement
Export Market
Corporate Structure
Statement on Corporate Governance
Audit Committee Report
Statement on Internal Control
Directors' Responsibility Statement
Financial Statements
Additional Compliance Information
Analysis of Shareholdings
List of Properties
Proxy Form
Contents
2 Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003
Corporate Information
Company Secretaries
Ngu Ung Huong
Lim Phooi Kee
Ng Yim Kong
Auditors
Ernst & Young
Chartered Accountants
Share Registrar
Signet Share Registration Services Sdn Bhd
11th Floor, Tower Block
Kompleks Antarabangsa
Jalan Sultan Ismail
50250 Kuala Lumpur
Tel : 03-21454337
Fax : 03-21421353
Stock Exchange Listing
The Kuala Lumpur Stock Exchange - Main Board
Principal Bankers
HSBC Bank Malaysia Berhad
Citibank Berhad
RHB Bank Berhad
Registered Office
No. 1-9, Pusat Suria Permata
Jalan Upper Lanang
96000 Sibu, Sarawak
Tel : 084-213255
Fax : 084-213855
E-mail : [email protected]
Website Address
www.jayatiasa.com
Board of Directors
Gen (Rtd) Tan Sri Abdul Rahman bin Abdul HamidIndependent Non-Executive Chairman
Mr Tiong Chiong HooManaging Director
Dr. Tiong Ik KingNon-Independent Non-Executive Director
Tuan Haji Wan Alshagaf bin Tuanku EsimIndependent Non-Executive Director
Tuan Haji Ashaari @ Asahari bin ShebliIndependent Non-Executive Director
Mr John Leong Chung LoongIndependent Non-Executive Director
Mdm Tiong ChoonNon-Independent Non-Executive Director
Mr Tiong Chiong HeeNon-Independent Non-Executive Director
Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003 3
5-Year Financial Highlightsfor financial year ended 30 April 2003
4 Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003
NOTICE IS HEREBY GIVEN that the Forty-Third Annual General Meeting of the
Company will be held at the Auditorium Room, Ground Floor, No.62, Lorong
Upper Lanang 10A, 96000 Sibu, Sarawak on Monday, 29 September 2003 at
11.45 a.m. for the following purposes:-
Notice of Annual General Meeting
Agenda
1. To receive the Audited Financial Statements of the Company for the year ended
30 April 2003 together with the Directors’ and Auditors’ Reports thereon.
2. To approve payment of Directors’ Fees for the year ended 30 April 2003.
3. To declare a First and Final Dividend of 3% less tax for the year ended 30 April 2003.
4. To re-elect the following directors: -
i. Gen (Rtd) Tan Sri Abdul Rahman Bin Abdul Hamid
ii. Mr Tiong Chiong Hoo
iii. Tuan Haji Wan Alshagaf Bin Tuanku Esim
5. To re-appoint Auditors and to authorise the Directors to fix their remuneration.
6. As Special Business
To consider and, if thought fit, to pass the following Ordinary Resolution: -
Authority for Directors to Allot and Issue Shares
“THAT subject always to the approvals of the relevant authorities, the Directors
be and are hereby authorised pursuant to Section 132D of the Companies Act,
1965, to allot and issue shares in the Company at any time and upon such
terms and conditions and for such purposes as the Directors may deem fit,
provided that the aggregate number of shares to be issued pursuant to this
resolution does not exceed ten per centum (10%) of the total issued capital of
the Company at the time of issue and that such authority shall continue in force
until the conclusion of the next Annual General Meeting of the Company.”
7. To transact any other business of which due notice shall have been given in
accordance with the Company’s Articles of Association and the Companies Act, 1965.
Resolution 1
Resolution 2
Resolution 3
Resolution 4
Resolution 5
Resolution 6
Resolution 7
Resolution 8
Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003 5
Notice of Dividend Entitlement
NOTICE IS HEREBY GIVEN THAT the First and Final Dividend of 3% less tax for
the financial year ended 30 April 2003, if approved at the Forty-Third Annual
General Meeting, will be paid on 20 November 2003 to Depositors registered in
the Record of Depositors at the close of business on 23 October 2003.
A depositor shall qualify for entitlement only in respect of:-
a) Shares deposited into the depositor’s securities account before 12.30 p.m. on 21 October 2003 in respect of shares
which are exempted from mandatory deposit;
b) Shares transferred into the depositor’s securities account before 4.00 p.m. on 23 October 2003 in respect of
ordinary transfers; and
c) Shares bought on the Kuala Lumpur Stock Exchange on a cum entitlement basis according to the Rules of the
Kuala Lumpur Stock Exchange.
By Order of the Board
JAYA TIASA HOLDINGS BERHAD
NGU UNG HUONG
LIM PHOOI KEE
NG YIM KONG
Company Secretaries
Sibu, Sarawak
5 September 2003
Notes On Appointment Of Proxy
1. A member of the Company entitled
to attend and vote at the meeting is
entitled to appoint one or more proxies
in his/her stead. Where a member
appoints two (2) or more proxies, he/she
shall specify the proportion of his/her
shareholdings to be represented by
each proxy.
2. A proxy may but need not be a member
of the Company and the provision of
Section 149(1)(b) of the Companies
Act, 1965 shall not apply to the Company.
3. The instrument appointing a proxy
must be deposited at the Company’s
Registered Office at No.1-9, Pusat
Suria Permata, Jalan Upper Lanang,
96000 Sibu, Sarawak not less than
forty-eight (48) hours before the time
for holding the meeting or at any
adjournment thereof.
4. If the appointer is a corporation, the
proxy form must be executed under
its common seal or under the hand
of its attorney.
Notes On Special Business
The Proposed Ordinary Resolution, if
passed, will empower the Directors of the
Company, from the date of the above
Annual General Meeting, authority to allot
and issue shares in the Company up to an
amount not exceeding in total 10% of the
issued capital of the Company for such
purposes as the Directors consider would
be in the interest of the Company. This
authority, unless revoked or varied at a
General Meeting will expire at the next
Annual General Meeting.
6 Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003
1. Forty-Third Annual General Meeting
Date : 29 September 2003 (Monday)
Time : 11.45 a.m.
Venue : Auditorium Room, Ground Floor,
No.62, Lorong Upper Lanang 10A
96000 Sibu, Sarawak
2. Name of Directors standing for re-election
Directors who are standing for re-election at the Forty-Third Annual General Meeting of the Company are: -
• Gen (Rtd) Tan Sri Abdul Rahman Bin Abdul Hamid Resolution 4
• Mr Tiong Chiong Hoo Resolution 5
• Tuan Haji Wan Alshagaf Bin Tuanku Esim Resolution 6
3. Details of Directors standing for re-election
Details of directors who are standing for re-election are set out in the Directors’ Profiles on page 9 of the Annual
Report.
4. Details of attendance of Directors at Board Meetings
A total of four (4) Board of Directors Meetings were held during the financial year ended 30 April 2003. Details of
attendance are as follows: -
Name of Directors Number of Meetings Attended
Gen (Rtd) Tan Sri Abdul Rahman Bin Abdul Hamid 4/4
Mr Tiong Chiong Hoo 4/4
Dr Tiong Ik King 4/4
Tuan Haji Wan Alshagaf Bin Tuanku Esim 3/4
Tuan Haji Ashaari @ Asahari Bin Shebli 4/4
Mr John Leong Chung Loong 4/4
Mdm Tiong Choon 4/4
Mr Tiong Chiong Hee 4/4
Statement Accompanying Notice of Annual General Meeting
Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003 7
Key Information
Forest Concessions
Area 1,760,535 acres
Location Sarawak, Malaysia
Main Species Meranti, Kapor, Keruing, Selangan Batu, Jelutong, Melapi, Mersawa, Nyatoh and Arau
Annual Production Capacity
Malaysia
Jaya Tiasa Rimbunan Hijau Jaya Tiasa Total
Plywood Plywood Timber Products
Sdn Bhd Sdn Bhd Sdn Bhd
Plywood cubic metre 180,000 120,000 60,000 360,000
Veneer cubic metre 324,000 – – 324,000
Sawntimber cubic metre 70,000 – – 70,000
Blockboard cubic metre – 12,000 – 12,000
Film-Overlay Plywood cubic metre – 6,000 – 6,000
Sliced-Veneer square metre – – 6,000,000 6,000,000
Brazil
Maginco Verde Ltda Selvaplac Verde Ltda Total
Plywood cubic metre 67,200 48,000 115,200
Sawntimber cubic metre 19,200 – 19,200
8 Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003
Board of Directors
Gen (Rtd) Tan Sri Abdul Rahman bin Abdul Hamid
Mr Tiong Chiong Hoo
Tuan Haji Wan Alshagaf bin Tuanku Esim
Mdm Tiong Choon
Tuan Haji Ashaari @ Asahari Bin Shebli
Mr John Leong Chung Loong
Dr Tiong Ik King
Mr Tiong Chiong Hee
Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003 9
Directors’ Profiles
Gen (Rtd) Tan Sri Abdul Rahman binAbdul HamidIndependent Non-Executive Chairman
Gen (Rtd) Tan Sri Abdul Rahman bin Abdul Hamid, aged
65, was appointed to the Board on 27 March 1995. He
serves as chairman of the Board and the Audit Committee.
He is a graduate of the Royal Military College, Malaysia
and Army Staff College, Camberlay, United Kingdom. From
1958 to 1994, he served in various capacities and
appointments in the Malaysian Armed Forces. He was the
Chief of the Malaysian Army and Defence Force between
1992 and 1994 and was the Acting Governor of Penang in 1994.
Presently, he is the Chairman of Perbadanan Perwira
Harta Malaysia, a subsidiary of Lembaga Tabung
Angkatan Tentera (“LTAT”), a provident fund in Malaysia
involving mainly in property development and construction.
He sits on the Board of Composite Technologies
Research Malaysia (“CTRM”), an aerospace company
produces Eagle 150 aircrafts, Lancair and other
aircraft products made from composite materials. He is
also the chairman and director of a few other multinational
and private companies established in Malaysia.
He has no family relationship with any Director and/or
major shareholder of the Company, nor any conflict of
interest with the Company.
Gen (Rtd) Tan Sri Abdul Rahman bin Abdul Hamid
attended all the 4 Board Meetings held in the financial
year ended 30 April 2003.
Mr Tiong Chiong HooGroup Managing Director
Mr Tiong Chiong Hoo, aged 43, was appointed Executive
Director on 27 March 1995 and subsequently
re-designated as Managing Director on 26 April 1995.
He is a member of the Audit Committee.
He holds a Bachelor of Law and a Bachelor of
Economics degree from Monash University, Australia
and is a registered barrister. He has more than twenty
years of experience in timber industry.
He is the son of Tan Sri Datuk Tiong Hiew King, a major
shareholder of the Company. His uncle Dr Tiong Ik King,
sister Mdm Tiong Choon and cousin brother Mr Tiong
Chiong Hee are also members of the Board.
He is deemed interested in the related party transactions
entered into in the ordinary course of business disclosed
in Note 30(b) to the Financial Statements on pages 58
to 59. Saved as disclosed therein, he has no conflict of
interest with the Company.
Mr Tiong Chiong Hoo attended all the 4 Board Meetings
held in the financial year ended 30 April 2003.
Dr Tiong Ik KingNon-Independent Non-Executive Director
Dr Tiong Ik King, aged 53, joined the Board on
27 March 1995. He is a member of the Remuneration
Committee and the Nomination Committee.
He graduated with M.B.B.S from the National University
of Singapore in 1975 and obtained M.R.C.P. from Royal
College of Physicians, United Kingdom in 1977. He
joined Rimbunan Hijau Group in 1982. Currently, he
sits on the board of EON Capital Berhad.
He is the brother of Tan Sri Datuk Tiong Hiew King, a
major shareholder of the Company. His nephews,
Mr Tiong Chiong Hoo and Mr Tiong Chiong Hee and
his niece Mdm Tiong Choon are also members of the
Board. He is deemed interested in the related party
transactions entered into in the ordinary course of
business disclosed in Note 30(b) to the Financial
Statements on pages 58 to 59. Saved as disclosed
therein, he has no conflict of interest with the Company.
Dr Tiong Ik King attended all the 4 Board Meetings
held in the financial year ended 30 April 2003.
Tuan Haji Wan Alshagaf bin Tuanku EsimIndependent Non-Executive Director
Tuan Haji Wan Alshagaf bin Tuanku Esim, aged 58,
joined the Board on 10 March 1999. He serves as
Chairman of the Nomination Committee and is a member
of the Audit Committee and Remuneration Committee.
He holds a Master in Business Administration, United
Kingdom. He had held various senior positions in
Sarawak Economic Development Corporation from
1972 till 1992 and was a member of Public Service
Commission from 1992 to 1998. He was the first President
of Persatuan Alumni Universiti Teknologi Mara Sarawak
(“MITSA”).
Currently, he is the Vice-President of Persatuan Pesara
Kerajaan Negeri Sarawak and Patron of Executive
Committee of Arr-Rahmah Mosque at RPR Batu Kawa,
Kuching. He is also active in social activities.
He has no family relationship with any Director and/or
major shareholder of the Company, nor any
conflict of interest with the Company.
Tuan Haji Wan Alshagaf bin Tuanku Esim attended 3
out of 4 Board Meetings held in the financial year ended
30 April 2003.
10 Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003
Directors’ Profiles (cont’d)
Tuan Haji Ashaari @ Asahari Bin ShebliIndependent Non-Executive Director
Tuan Haji Ashaari @ Asahari Bin Shebli, aged 65, joined
the Board on 2 October 2000. He is the Chairman of
the Remuneration Committee and a member of the
Nomination Committee.
He had been in the government and public services
for more than twenty years before venturing into his
own business in 1992.
He has no family relationship with any Director and or
major shareholder of the Company, nor any conflict
of interest with the Company.
Tuan Haji Ashaari @ Asahari Bin Shebli attended all
the 4 Board Meetings held in the financial year ended
30 April 2003.
Mr John Leong Chung LoongIndependent Non-Executive Director
Mr John Leong Chung Loong, aged 56, was appointed
to the Board on 28 March 2002. He is a member of
the Audit Committee.
He holds a Bachelor of Economics degree majoring in
Accounting from Sydney University, NSW, Australia.
He is an Approved Company Auditor and a member of
several professional bodies, including the Australian
Society of Certified Practising Accountants, Australian
Institute of Taxation (Fellow), Malaysian Institute of
Accountants, Malaysian Institute of Certified Public
Accountants and Malaysian Institute of Taxation
(Associate). He started his career as an Accountant in
Tractors Malaysia Berhad, Sandakan Branch in 1972
and left in 1973 to join John Liaw & Co as an audit
manager. He was a partner of Liaw, Leong, Wong &
Co from 1986 to 1997 and a partner of Ernst & Young
from 1997 to 2001.
He has no family relationship with any Director and/
or major shareholder of the Company, nor any
conflict of interest with the Company.
Mr John Leong Chung Loong attended all the 4 Board
Meetings held in the financial year ended 30 April 2003.
Mdm Tiong ChoonNon-Independent Non-Executive Director
Mdm Tiong Choon, aged 34, was appointed to the
Board on 3 May 1999.
She graduated with a Bachelor of Economics Degree
from Monash University, Australia in 1990 and has
more than twelve years of managerial experience in
various capacities.
She is the daughter of Tan Sri Datuk Tiong Hiew King,
a major shareholder of the Company. Her uncle
Dr Tiong Ik King, brother Mr Tiong Chiong Hoo and
cousin brother Mr Tiong Chiong Hee are also members
of the Board. She is deemed interested in the related
party transactions entered into in the ordinary course
of business disclosed in Note 30(b) to the Financial
Statements on pages 58 to 59. Saved as disclosed
therein, she has no conflict of interest with the Company.
Mdm Tiong Choon attended all the 4 Board Meetings
held in the financial year ended 30 April 2003.
Mr Tiong Chiong HeeNon-Independent Non-Executive Director
Mr Tiong Chiong Hee, aged 30, was appointed to the
Board on 14 May 1999.
He obtained a Bachelor of Commerce Degree from
University of Melbourne, Australia in 1995 and has
more than seven years of managerial experience in
logging and oil palm operations in Sarawak and overseas.
He is the nephew of Tan Sri Datuk Tiong Hiew King, a
major shareholder of the Company. His uncle Dr Tiong
Ik King, cousin brother Mr Tiong Chiong Hoo and cousin
sister Mdm Tiong Choon are also members of the
Board. He is deemed interested in the related party
transactions entered into in the ordinary course of
business disclosed in Note 30(b) to the Financial
Statements on pages 58 to 59. Saved as disclosed
therein, he has no conflict of interest with the Company.
Mr Tiong Chiong Hee attended all the 4 Board Meetings
held in the financial year ended 30 April 2003.
Notes:
1. None of the Directors has any conviction for
offences within the past 10 years.
2. All the directors of the Company are Malaysian.
Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003 11
I am pleased to report that the Group has managed
to turn around after a temporary setback suffered in
the previous financial year. The timber market started
to recover during the first half of the financial year
following a severe downtrend as a result of the global
economic slowdown and the aftermath of September 11
terrorist attack in USA. Recovery of both plywood and
log prices had been encouraging due to concerted
efforts taken in regulating log supply. However, the
sustainability of timber prices was shortlived mainly
as a result of the geopolitical uncertainties in West
Asia which subsequently led to the eruption of Iraq
war in March 2003. The outbreak of the SARS
epidemic during the fourth quarter of the financial year
also adversely affected our East Asian timber markets.
Financial Performance
The Group recorded a profit before tax of RM 65.0
million for the financial year ended 30 April 2003 as
compared to a loss before tax of RM 107.2 million in
the previous financial year. Net profit after tax surged
to RM 58.6 million against a net loss after tax of
RM 107.7 million in the preceding year. Revenue increased
by 31% to RM 578.4 million as compared to RM 440.3
million achieved in the previous financial year. Net
earnings per share recovered to 22.22 sen per share
as compared to a loss per share of 39.38 sen in
the previous year. The net tangible asset backing per
share also increased from RM 2.54 to RM 2.68. In
addition, the Group’s shareholders’ funds increased
to RM 792.24 million as at 30 April 2003 while
gearing continued to remain low. The significant
improvement in the results was principally attributed to
the recovery of global timber prices during the first
half of the financial year.
Operations Review
For the financial year under review, the selling prices
for most of our timber products improved as compared
to the previous financial year. The enforcement
action taken by Indonesia in regulating log supply and
its introduction of new forestry policies to better manage
its forest resources in a sustainable manner have
brought some positive impact to the timber industry.
The imposition of a permanent log export ban by the
Indonesian government from April 2002 and the
concerted efforts taken to combat illegal logging
activities by large timber producing and importing
nations have resulted in curtailed log supply thereby
resulting in a price recovery for most timber products,
in particular log and plywood during the first half of
the financial year.
However, the price uptrend of our products lost its
momentum and softened during the third financial quarter.
With the global economy being plagued by
economic and political uncertainties mainly as a result
of geopolitical tension in West Asia and the pessimism
over the recovery of the US economy coupled with
the spate of terrorist activities happening worldwide,
business confidence was weakened. The outbreak of
the US-led war against Iraq in March 2003 further
aggravated market sentiment with the corresponding
Chairman’s Statement
On behalf of the Board of Directors,
it is my great pleasure to present the
Annual Report and Financial Statements
of Jaya Tiasa Holdings Berhad for the
year ended 30 April 2003.
12 Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003
increase in oil prices adding uncertainty to the timber
market. In addition, the onset of the SARS epidemic
in March 2003 also exacerbated the already sluggish
timber market affecting particularly the East Asian
timber markets.
As a result of the softening of timber market during
the second half of the financial year, prices eased
during the last two quarters as demand, especially
from the East Asian markets contracted. However, the
Group in its earlier endeavor in diversifying and
developing its European and US markets on high-end
plywood products has alleviated these negative
impact. Our diversification into these niche products,
including film faced plywood fetched higher margins
and helped in mitigating the adverse effect experienced
from the depressed East Asian markets. With our
customer-focused approach in timely delivery and
reliable supply, the Group managed to adapt and
weather through the difficult and challenging
environment during the second half of the financial year.
In terms of revenue contribution, both the logging
and the plywood divisions each contributed about 45%
of the Group’s total revenue. Taiwan and Japan were
our key markets for round logs representing 37% and
33% respectively of the total log export during the
year. Export of logs to China dropped during the year
mainly attributed to stiff competition from Russian
softwood and the availability of cheaper logs from
Indonesia. As for plywood, USA remained our major
market taking up 55% of our total plywood export
during the year followed by Korea, who took up 32%.
With China becoming a net exporter of plywood
competing with those from Malaysia and Indonesia,
our export to China dropped during the year due to
the availability of internally produced plywood.
To meet the ever changing and increasing competitive
operating environment, the Group has upgraded its
wood processing technology for the processing of
smaller diameter logs to minimize costs, maximize
product recovery and hence improve manufacturing
efficiencies. The investment in these modern technology
is also in tandem with the Group’s embarkation into
reforestation whereby smaller diameter logs will be
processed with minimal wastage.
Other Developments
While prospects for the timber market remain
challenging, the Group took the opportunity to
review and increase its resource base. This involved a
two-pronged strategy with the Group refocusing on
its growth strategy and consolidation of its existing
strength and capability in the timber industry on the
one hand and actively embarking into oil palm
cultivation and reforestation on the other. These steps
taken will ensure that the Group maximise its ability
to capitalize on opportunities in existing and new
markets.
Reforestation
As a major player in the timber industry, we have
always placed the protection of our environment on
our top agenda. As biodiversity conservation and other
environmental issues are setting new demands for
forest management practices around the world, we
have set a new standard in our forest management
practices which will ensure biodiversity conservation
and protection of our environment.
Amid this very competitive business environment and
to accelerate our pace in ensuring future growth, the
Group has decided to venture into reforestation. We
have entered into agreements with RH Forest
Corporation Sdn Bhd to develop 235,000 hectares of
tree plantation in Kapit, Sarawak and to harvest and
purchase the timber grown naturally in the area and
the subsequent generations of plantation timber for
a period of 60 years. This huge land bank ensures
sustainable wood supply with close proximity to the
mills at a very competitive cost. The estimated
annual supply of mixed tropical hard wood during the
initial years is around 420,000 M3. Construction of
nursery and plantation village is progressing well.
Planting is scheduled to start in the last quarter of
2003. Various indigenous and fast growing exotic
species will be planted. The plantation will produce an
estimated 1.6 million M3 of wood annually when
harvesting starts in the 10th to the 15th year,
depending on the species planted.
Whilst our sustainable forest management practices
ensure ongoing replenishment of the wood resources
and the continuous supply of wood to the mills, the
homogeneity of plantation wood also offers better
opportunity to raise wood product quality and
uniformity, thus improving mill productivity and better
product pricing.
Fast growing plantation wood cultivated in the tropics
are in a favorable position to match the standards of
environmentally sound low cost wood. Sustainable
wood source gives the wood product a “green image”
Chairman’s Statement (cont’d)
Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003 13
Chairman’s Statement (cont’d)
enabling it to compete favorably in the international
market. The environmental friendly status of
plantat ion wood is an added advantage to
manufacturers like us who depend heavily on the
export market. It gives us a better opportunity to
penetrate the more sophisticated markets and fetches
premium prices.
Natural forest regeneration cannot economically and
adequately meet the wood demand as they require a
longer rotation period. Fast growing forest plantation
can produce much faster than natural forest. The yield
from the plantation will lessen the pressure on the
natural forest and help to avert the damage done to
the natural forest. Legume tree species, like Acacia
hybrid, Acacia crassicarpa and Albizzia, which are to
be planted will not only generate an active carbon
sink but also enrich the forest soil through nitrogen
fixation.
Oil Palm Plantation
To enhance strategic growth, the Group has embarked
into oil palm cultivation during the financial year under
review. Infrastructure development is being carried
out in the oil palm estate in Suai, Miri and is
progressing accordingly to schedule. Planting of oil
palm commenced in June 2002. On 28 February 2003,
the Company entered into a conditional Sale and
Purchase Agreement with the shareholders of
Hariyama Sdn Bhd to acquire the entire issued and
paid-up share capital in Hariyama Sdn Bhd. The
acquisition would increase the oil palm land bank of
the Group to 15,600 hectares.
Dividends
The Board of Directors has recommended a final
dividend of 3 sen less 28% income tax for the financial
year ended 30 April 2003. Although the Group has
posted a significant improved set of financial results,
the Board of Directors decided not to declare a higher
dividend rate, but instead to retain the profit for the
development and maintenance of the reforestation and
oil palm cultivation projects.
Outlook
The Group anticipates another challenging year ahead.
Despite the end of the Iraq war which has reduced
uncertainty in the Middle East region, the contagion
effect of the SARS epidemic subsequent to the financial
year end and the lingering concern of a weak global
economy especially in the USA and Japan will
continue to affect business confidence. The recent
imposition of JAS certification under the revision of
Building Standard Act in Japan on certain plywood
products is expected to cause short term uncertainty
in the timber market.
However, the Group envisages that the longer term
prospect of the timber industry remains intact. The
continuous enforcement in Indonesia in regulating log
supply coupled with the introduction of new forestry
policies including its recent plan to control smuggling
of logs and to reduce log production by 50% augur well
for the industry. The dynamic economic developments
with heavy infrastructure construction activities in
China and India, the region’s economic powerhouse
are expected to generate demand and add stability to
the industry.
Going forward, shareholders can rest assured that
the Directors will continue to seek new business
opportunities and manage its resources prudently, fully
cognizant of its responsibilities to them for long-term
growth in shareholders value.
Appreciation
On behalf of the Board of Directors, I wish to express
our sincere appreciation to the management and staff
of the Group for their contribution and commitment. I
would also like to thank our customers, bankers,
business associates and shareholders of the Group
for their continuous and strong support. The Board
would also like to record its gratitude to the relevant
authorities and members of the community for their
invaluable assistance and advice.
Gen. (Rtd) Tan Sri Abdul Rahman Bin Abdul Hamid
Chairman
14 Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003
Percentage of export Sales
Year ended Logs Plywood Veneer Others
30 April 2003 45.8% 44.7% 6.2% 3.3% 100%
30 April 2002 48.5% 33.1% 12.1% 6.3% 100%
30 April 2001 51.8% 33.2% 12.2% 2.8% 100%
Carribean Islands
China
Europe
Hong Kong
India
Japan
Korea
Middle East
Pakistan
Philippines
Singapore
Taiwan
Thailand
USA
Vietnam
14 Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003
Export Market
Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003 15
Sales Value 2003 (%) Sales Volume 2003 (%)
Sales Value 2002 (%) Sales Volume 2002 (%)
Sales Value 2001 (%) Sales Volume 2001 (%)
Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003 15
Export Market (cont’d)
16 Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003
Jaya Tiasa Plywood Sdn Bhd
Jaya Tiasa Timber Products Sdn Bhd
Rimbunan Hijau Plywood Sdn Bhd
Guanaco Sdn Bhd
Maujaya Sdn Bhd
Maxiwealth Holdings Sdn Bhd
Mantan Sdn Bhd
Jaras Sdn Bhd
Sericahaya Sdn Bhd
Curiah Sdn Bhd
Jaya Tiasa Forest Plantation Sdn Bhd
(Formerly known as Jaya Tiasa Plantations Sdn Bhd)
Multi Greenview Sdn Bhd
Simalau Plantation Sdn Bhd
Bonhin Sdn Bhd
Mafrica Trading Sdn Bhd
Hak Jaya Sdn Bhd
Kunari Timber Sdn Bhd
Jaya Tiasa R&D Sdn Bhd
(Formerly known as Jubiland Development Sdn Bhd)
Jaya Tiasa Aquaculture Sdn Bhd
Eastern Timber Limited
Eastern Green Company Inc.
Pacific Timber Holdings Limited
Selvaplac Verde Ltda
Atlantic Evergreen Holdings
Western Timber Resources Limited
Atlantic Timber Holdings Limited
Maginco Verde Ltda
Corporate Structure
Jaya Tiasa Holdings Berhad
Manufacturing of timber products
Extraction of logs
Reforestation
Oil Palm plantation
Helicopter Chartering Services
Heli-logging
Marketing
Research and Development
Dormant
Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003 17
Statement on Corporate Governance
Board Of Directors
The Board retains effective control of the Group and is
responsible for the Group’s overall strategic plans,
business performance, succession planning, risk
management, investor relations, internal control and
management information systems.
Board Balance
Jaya Tiasa Group is led and managed by an
experienced Board comprising members with a wide
range of experience in relevant fields required to
successfully direct and supervise the company’s business
activities, which are vital to the success of the Group.
The Board has eight (8) members comprising an
Independent Non-Executive Chairman, a Group
Managing Director, three (3) Independent Non-Executive
Directors and three (3) Non-Independent Non-Executive
Directors. The profiles of the members of the Board are
as shown on pages 9 and 10. The Board is of the
opinion that its current composition and size constitutes
an effective Board to the Company.
The Group practices a clear demarcation of responsibilities
while maintaining balance of power and authority. The
positions of the Chairman and the Managing Director
are individually held by two persons. The Chairman is
primarily responsible for the orderly conduct and working
of the Board. The day-to-day responsibilities of
overseeing the overall Group’s financial and operational
matters lies with the Executive Management under the
direction of the Group Managing Director to ensure that
the Group is managed in an efficient manner. The Managing
Director is also responsible for the implementation of
Board policies and the making of operational decisions.
The roles and responsibilities of the Executive Director
and senior management are clearly outlined. Adequate
support is in place to ensure continuity in the absence
of key executives.
The Board recognises the importance and contribution
of its Independent Non-Executive Directors. This ensures
the balance of power in the exercise of objective and
independent judgement at Board level, to safeguard
the interests of the major stakeholders and minority
shareholders respectively.
The Board has identified Gen (Rtd) Tan Sri Abdul
Rahman bin Abdul Hamid as the Senior Independent
Non-Executive Director to whom concerns of shareholders,
management and others may be conveyed.
Board Meetings
The Board holds at least four (4) regularly scheduled
meetings annually, with additional meetings to be convened
as and when necessary. There were four (4) Board
meetings held during this financial year. All conclusions
of the Board are duly recorded in Board minutes.
The attendance of the Board of Directors at Board Meetings
held during the financial year can be found in the Statement
Accompanying Notice of Annual General Meeting
(“AGM”) on page 6.
Supply Of Information
The Directors have unrestricted access to information
pertaining to the Group’s business and affairs to enable
them in discharging their duties and responsibilities.
All the Board members are provided with timely agenda
and relevant board papers which include annual budgets,
quarterly and annual financial statements, operational
reports, business and corporate proposals, minutes of
meetings as well as reports from independent advisers/
consultants to facilitate informed decision making.
All Directors have access to the advice of the Company
Secretaries, independent professional advisers, and
internal or external auditors at the Company's expense.
Committees
The following committees have been established to assist
the Board in the execution of its duties and responsibilities.
The Board of Directors of the Company is committed to ensure that the
highest standards of corporate governance are practiced throughout the
Company and its group of companies as a fundamental part of discharging its
responsibilities to protect and enhance shareholders value and financial performance.
Set out below is a statement by the Board of Directors of the Company on the
application by the Group of the principles contained in the Malaysian Code
on Corporate Governance (“Code”), and the extent of compliance with the
best practices of the Code.
18 Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003
Committees (cont’d)
The functions and terms of reference of the committees
as well as authority delegated by the Board to these
Committees are clearly defined.
a. Audit Committee
The Audit Committee Report is set out separately on
pages 20 to 22.
b. Nomination Committee
The following Directors are members of the Nomination
Committee:-
Chairman - Tuan Haji Wan Alshagaf bin Tuanku Esim
(Independent Non-Executive Director)
Members - Tuan Haji Ashaari @ Asahari bin Shebli
(Independent Non-Executive Director)
- Dr. Tiong Ik King
(Non-Independent Non-Executive Director)
The Nomination Committee is tasked with the following
responsibilities:-
• To review regularly the Board structure, size and
composition and make recommendations to the
Board with regards to any adjustments that are
deemed necessary;
• To propose, identify and recommend new nominees
for appointment to the Board of Directors and
Board Committees. This includes candidates for
directorships proposed by the Managing Director
and, within the bounds of practicability, by any
other senior executive or any Director or shareholder;
• To review the Board’s mix of skills and experience
and other qualities including core competencies,
which non-executive Directors should bring to the
Board and to determine whether or not, a Director
is Executive, Non-Executive or Independent on an
annual basis;
• To recommend to the Board for continuation (or not)
in service of Executive Director(s) and Directors
who are due for retirement by rotation; and
• To orientate and educate new Directors on the nature
of the business, current issues within the Company
and the corporate strategy, the expectations of
the company concerning input from the Directors and
the general responsibilities of Directors.
c. Remuneration Committee
The following Directors are members of the Remuneration
Committee:-
Chairman - Tuan Haji Ashaari @ Asahari bin Shebli
(Independent Non-Executive Director)
Members - Tuan Haji Wan Alshagaf bin Tuanku Esim
(Independent Non-Executive Director)
- Dr. Tiong Ik King
(Non-Independent Non-Executive Director)
Statement on Corporate Governance (cont’d)
The Remuneration Committee is tasked with the following
functions:-
• to recommend to the Board the framework of
Executive Directors’ remuneration and the
remuneration package for each Executive Director,
drawing from outside advice as necessary;
• to recommend to the Board any performance
related pay schemes for Executive Directors;
• to review Executive Directors’ scope of service
contracts; and
• to consider the appointment of the service of
such advisers or consultants as it deems
necessary to fulfill its functions.
Remuneration package of Executive Directors will be a
matter to be decided by the Board as a whole with the
Director concerned abstaining from deliberations and voting
on decisions in respect of his individual remuneration.
Presently, the fees of all Directors are recommended
by the Board for approval by the shareholders of the
company at the AGM.
d. Risk Management Committee
The Managing Director, Mr Tiong Chiong Hoo is the chairman
of the Risk Management Committee. He is authorized
by the Board to appoint members to support him in his
role in leading the management in the risk management
activities. Currently, his team members are from the
senior management.
The Risk Management Committee is tasked with the
following functions:-
• to establish a risk management framework and
execute an annual risk assessment. The frame
work should provide a consistent approach to risk
and facilitate an accurate perception of acceptable
risk by all employees. The annual risk assessment
will characterize the full range of corporate risk
exposures, including risk impacts such as harm to
employees and the public, environmental harm,
and damage to corporate reputation;
• as part of the annual business planning process,
to review the defined risk/return parameters, risk
appetite and risk management standards;
• to report annually to the Board of Directors on
risk assessment results and report at least half-
yearly to the Board on the risk management
activities and the effectiveness of the risk
management framework; and
• to formulate the annual risk assessment plan for
Board’s approval.
The ultimate responsibility for ensuring an effective
risk management framework/program is in place and
is aligned with the business objectives of the Group,
however, lies with the Board.
Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003 19
Statement on Corporate Governance (cont’d)
Directors’ Remuneration
During the financial year ended 30 April 2003, the
remuneration of the Executive Directors and Non-Executive
Directors are as follows:-
Directors’ Executive Non-Executive
Remuneration Director(s) Director(s)
RM RM
Fee(s) 30,000 210,000
Salary391,500 -
(including EPF)
Bonus 126,500 -
Allowance - 48,000
Total 548,000 258,000
Directors’ Executive Non-Executive
Remuneration Director Directors
Below RM50,000 - 6
RM50,001 to
RM100,000- 1
RM450,001 to
RM500,0001 -
Directors’ Training
All members of the Board have attended the Mandatory
Accreditation Training Programme prescribed by the Kuala
Lumpur Stock Exchange (“KLSE”). In addition, all
directors are required to participate in the KLSE-
accredited Continuing Education Programme and
activities. Further, all directors are given necessary
materials, information and updates pertaining to the
Company on a regular basis.
Re-election of Directors
In accordance with the Company’s Articles of
Association, at least one third (1/3) of the Directors
shall retire and be eligible for re-election by rotation at
each Annual General Meeting. All directors are to retire
from office at least once in three years.
Shareholders
Information pertaining to the activities and performance
of the Jaya Tiasa Group is communicated to shareholders
and other stakeholders through the following:-
• the Annual Report;
• disclosures and announcements made to the
Kuala Lumpur Stock Exchange including the
quarterly and annual financial statements;
• the Company website at
http://www.jayatiasa.com; and
• periodic dialogues with shareholders, research
analysts, fund managers and institutional
investors on the financial results and statements,
Group’s strategies as well as other significant
corporate events as and when required.
The Company's AGM serves as a principal forum for
dialogue with shareholders. Extraordinary General
Meetings are also held as and when required.
The Company endeavours to provide as much information
as possible to its shareholders and stakeholders whilst
ensuring adherence to prevailing regulatory and
statutory requirements.
Financial Reporting
In presenting the annual financial statements and
quarterly announcements to shareholders, the
Directors aim to present a balanced and understandable
assessment of the Group’s position and prospects. These
financial statements are drawn-up in accordance with
the provisions of the Companies Act, 1965 and the
applicable approved accounting standards of the
Malaysian Accounting Standards Board (MASB).
The Audit Committee assists the Board in ensuring
accuracy and adequacy of information by reviewing and
recommending certain information for public disclosure.
Internal Control
The Statement on the State of Internal Control within
the Group is provided on page 23.
Relationship With The Auditors
A transparent and appropriate relationship is maintained
with the Company’s auditors through the Audit
Committee. The Audit Committee has been explicitly
accorded the power to communicate directly with both
external auditors and internal auditors.
The auditors may from time to time throughout the
financial year, highlight to the Audit Committee and the
Board on matters that require the Board’s attention.
The Audit Committee has met once with the external
auditors without the presence of the Executive Director
during the financial year.
This statement is made in accordance with a resolution
of directors dated 19 August 2003.
20 Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003
Members
Gen (Rtd) Tan Sri Abdul Rahman Bin Abdul Hamid
Chairman - Independent Non-Executive Director
Mr Tiong Chiong Hoo
Member - Managing Director
Terms Of Reference
1. Size And Composition
1.1 The Audit Committee shall be appointed by
the Board of Directors from among their
number and shall be composed of not less
than three members, a majority of whom
must be independent directors. At least one
member of the Audit Committee must be a
member of the Malaysian Institute of
Accountants or person who meets the
requirements set out in Paragraph 15.10(c)(ii)
of the Kuala Lumpur Stock Exchange Listing
Requirements. No alternate director shall be
appointed as member of the Audit Committee.
1.2 The members of the Audit Committee shall
elect a chairman from among their number
who shall be an independent director.
1.3 The term of office of each member shall be
subject to review every three years.
1.4 If a member of the Audit Committee resigns,
dies or for any other reason ceases to be a
member with the result that the number of
members is reduced to below three, the
Board of Directors shall, within three months
of that event, appoint such number of new
members as may be required to make up
the minimum number of three members.
2. Authority And Rights
2.1 The Committee wherever necessary and
reasonable for the performance of its
duties, shall in accordance with the procedure
determined by the Board and at the cost of
the Company:-
(a) have authority to investigate any
matter within its Terms of Reference;
(b) have the resources which are required
to perform its duties;
(c) have full and unrestricted access to any
information relevant to its activities;
(d) have direct communication channels
with the external auditors and
person(s) carrying out the internal
audit function or activity;
(e) be able to obtain external legal or other
independent professional advice if it
considers this necessary; and
(f) be able to convene meetings with the
external auditors, excluding the
attendance of the executive members
of the committee, whenever deemed
necessary.
3. Functions And Duties
The Committee shall, amongst others, discharge
the following functions:
3.1 to assess the adequacy and effectiveness
of the systems of internal control and the
efficiency of the Group’s operations.
3.2 to review the following and report the same
to the Board of Directors of the Company:-
(a) with the external auditors:-
(i) the audit plan;
(ii) his evaluation of the system of
internal controls;
(iii) his audit report;
(iv) the assistance given by the
employees of the Company to the
auditors;
(b) the adequacy of the scope, functions
and resources of the internal audit
functions and that it has the necessary
authority to carry out its work;
(c) the internal audit programme,
processes, the results of the audit
Audit Committee Report
Tuan Haji Wan Alshagaf Bin Tuanku Esim
Member - Independent Non-Executive Director
Mr John Leong Chung Loong
Member - Independent Non-Executive Director
Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003 21
3. Functions And Duties (cont’d)
programme, processes or investigation
undertaken and whether or not
appropriate action is taken on the
recommendations of the internal audit
function;
(d) the quarterly results and year end
financial statements, prior to the
approval by the board of directors,
focusing particularly on:-
(i) changes in or implementation of
major accounting policies and
practices;
(ii) significant and unusual events;
(iii) the going concern assumption;
and
(iv) compliance with accounting
s tandards and o ther l ega l
requirements;
(e) any related party transaction and
conflict of interest situation that may
arise within the Company or Group;
and
(f) any letter of resignation from the
external auditors of the Company;
3.3 to consider the appointment of external
auditors, the audit fee and any questions of
resignation or dismissal.
3.4 to promptly report to Kuala Lumpur Stock
Exchange on matters which result in a
breach of Listing Requirements.
3.5 to submit to the Board on a periodic basis a
Report on the summary of activities of the
Audit Committee in the discharge of its
functions and duties in respect of each
financial quarter and the financial year.
4. Procedure Of Audit Committee
4.1 The Audit Committee shall meet not less
than four times in a year. Additional meetings
may be called at any time if so requested
by any Committee member, management
or the internal or external auditors.
4.2 A quorum shall consist of a majority of
independent directors.
Members Attendance
Gen (Rtd) Tan Sri Abdul Rahman5/5
bin Abdul Hamid
Mr Tiong Chiong Hoo 4/4
Tuan Haji Wan Alshagaf4/5
bin Tuanku Esim
Mr John Leong Chung Loong 5/5
Summary Of Audit Committee
Activities
The Audit Committee, in discharging its functions and
duties in accordance with its Terms of Reference, had
carried out the following activities during the financial
year ended 30 April 2003:-
a) Reviewed the unaudited quarterly financial
results of the Company and the Group
before recommending them for approval by
the Board;
b) Reviewed the annual audited financial
statements of the Company and the Group
with the external auditors prior to submission
to the Board for its approval;
c) Reviewed and approved the scope of internal
audit and the annual audit plan;
4.3 Other Directors and employees may attend
any particular Audit Committee meeting only
at the Audit Committee’s invitation, specific
to the relevant meeting.
4.4 Procedures in relation to giving of notice,
voting and proceedings of meeting of the
Committee shall be governed by the relevant
provisions contained in the Articles of
Association of the Company.
4.5 The Company Secretary shall act as secretary
of the Audit Committee.
Meetings And Attendance
The Audit Committee met five times during the
financial year ended 30 April 2003. One of the
meetings was held without the presence of the
Executive Director. Details of the attendance of the
members are as follows:
Audit Committee Report (cont’d)
22 Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003
Audit Committee Report (cont’d)
Summary Of Audit Committee Activities
(cont’d)
d) Reviewed the internal audit reports, audit
recommendations made and management
response to these recommendations. Where
necessary, the Committee has directed action
to be taken by the management to rectify
and improve the system of internal controls;
e) Reviewed the recurrent related party
transactions ("RRPT") entered into by the
Company and Group to ensure that the
established procedures for monitoring RRPT
are adhered to; and
f) Met with the external auditors in the
absence of the Executive Director.
Summary Of Internal Audit
Activities
The internal audit function of the Group provides the
Audit Committee with independent and objective
reports on the state of internal controls, risk management,
the extent of compliance with applicable policies and
procedures and its recommendation thereof.
The Internal Audit Department dedicates its efforts
towards assisting the Group in creating an atmosphere
of accountability, transparency and improved performance
in the activities being reviewed. During the financial
year, the main audit activities included the following: -
a) Reviewing and appraising the soundness,
adequacy and application of accounting,
financial, operational and other controls,
recommending and promoting control
awareness in the Company and the Group
at reasonable cost;
b) Ascertaining the extent of compliance
with the established Group policies,
procedures and statutory requirements;
c) Ascertaining the extent to which the
Company's and Group's resources are
accounted for and safeguarded from
losses;
d) Determining the reliability and integrity
of information generated for management
reporting purposes;
e) Attending the half-yearly and year-end
physical inventories of finished goods,
raw materials and spare parts;
f) Reviewing the related party transactions
within the Company and the Group;
g) Performing follow up on the
implementation and satisfactory
dispositions of audit findings and
recommendations on the previous
assignments; and
h) Attending the bimonthly Risk
Management Committee Meeting and
assisting in the review of the key risks
reported by various functional areas
within the Group.
Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003 23
Statement on Internal Control
Responsibility of the BoardThe Board is responsible for ensuring that a sound system
of internal control to safeguard shareholders’ interests
and the Group’s assets is maintained. The system of
internal controls within the Group encompasses financial,
operational, compliance and risk management. However,
it should be noted that the system of internal controls
is designed to manage rather than eliminate the risk of
failure to achieve business objectives and can only
provide reasonable but not absolute assurance against
material misstatement or loss.
Risk ManagementThe Board regards risk management as an integral part
of the business operations. Following the adoption of
the Risk Management Policy and Terms of Reference of
Risk Management Committee (“RMC”) in September
2002, the Board has assigned the RMC to review and
report on its Annual Risk Assessment Plan and to
ensure that there is an effective Risk Management
(“RM”) framework/program in place which is aligned to
the Group’s business objectives.
The following risk management activities were
undertaken throughout the financial year and up to the
date of this report, unless otherwise mentioned: -
1. The formalization of a RM Framework; putting in
place a structured approach in identifying, assessing
and managing the key risks faced by the Group.
2. The identification of risk champions as coordinators
to enhance risk monitoring and reporting.
3. Review of the status of key risks and control
action plans submitted by the functional areas
through the risk champions in the bi-monthly
risk management meetings.
4. Continuous professional development on risk
management capabilities of the RMC and the risk
owners through planned training and educational
programs.
5. Conducting the annual risk assessment to cover
the full spectrum of the Group’s operations. The
exercise involves identifying the key risk exposures
of the Group and providing an assessment on
the risks identified, the strength of internal controls
and/or action plans to mit igate and manage
the risks and the residual risks that affect the
achievement of the Group's business objectives.
This risk assessment is subjected to periodic
review and updates.
Control Environment and ActivitiesThere is a comprehensive system of financial reporting
to the Board, based on quarterly results and annual
budgets. In particular, monthly management reports
and risk management reports are prepared and
discussed at the monthly management meetings. In
addition, there are also continuous improvement meetings
held to discuss, among others, the matters in relation
to the improvements in business processes and
enhancement on the functionalities of the SAP system.
The Company has in place a system to ensure there
are adequate financial and operational policies,
procedures and rules relating to delegation of authority.
Assurance FunctionInternal Audit provides the Audit Committee with
independent and objective reports on the adequacy and
integrity of the internal control system in managing
the key risks within the Group. In the event
significant control weaknesses are identified from the
reviews, improvement measures are recommended to
strengthen controls; with follow-up audits conducted by
Internal Audit to determine the status of corrective
action thereof by Management.
In carrying out the audit work, Internal Audit focuses
on areas of priority as determined by risk analysis and
in accordance with the annual audit plan approved by
the Audit Committee.
Board ReviewThe Board is taking continuous steps to assess and
enhance the effectiveness of the system of internal
controls. The Audit Committee reviews the reports from
the Internal Audit function and reports to the Board on
key findings, recommendations and status of
corrective actions.
The Board is of the opinion that the system of internal
controls is in place throughout the Group and the risk
management program is appropriate to safeguard the
Group’s assets. The Board is pleased to advise that no
significant internal control weaknesses were noted
during the period under review and to the date of
approval of the annual report. However, the process to
identify, evaluate and manage the significant risks faced
by the Group will be on-going in order to meet the
changing needs of the Group’s operations.
This Statement is made in accordance with a resolution
of the Board of Directors dated 19 August 2003.
Paragraph 15.27 (b) of the Kuala Lumpur Stock Exchange Listing Requirements
requires the directors of listed companies to make a statement in annual
reports on the state of their internal controls. The Board believes that the
practice of good corporate governance is an important continuous process in
enhancing shareholders’ value in addition to regulatory compliance.
24 Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003
Directors’ Responsibility Statementon Annual Audited Financial Statements
In preparing the annual financial statements of the
Company and the Group, the Directors are collectively
responsible for ensuring that these financial statements
have been prepared to give a true and fair view of the
financial position of the Company and the Group at the
end of the financial year and the results and cash flows of
the Company and the Group are in accordance with the
requirements of the applicable approved accounting standards
in Malaysia, the provisions of the Companies Act, 1965 and
the Listing Requirements of the Kuala Lumpur Stock Exchange.
In preparing the financial statements for the year ended 30 April 2003, the Directors have:
a) applied appropriate accounting policies on a consistent basis;
b) made judgments and estimates that are reasonable and prudent;
c) prepared the financial statements on a going concern basis; and
d) ensured that proper accounting records are kept which disclose with reasonable
accuracy, the financial position of the Company and the Group and which enable
them to ensure that the financial statements comply with the Companies Act, 1965.
The Directors have overall responsibilities for taking such steps as are reasonably
open to them to safeguard the assets of the Group and to prevent and detect fraud
and other irregularities.
26 Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003
Directors’ Report
The directors have pleasure in presenting their report together with the audited financial statements of the Group
and of the Company for the year ended 30 April 2003.
Principal activities
The principal activities of the Company are investment holding, provision of management services, extraction and
sale of logs. There have been no significant changes in the nature of these activities during the year. The principal
activities of the subsidiary companies are set out in Note 9 to the financial statements.
Results
Group Company
RM’000 RM’000
Profit/(loss) after taxation 58,594 (675)
Minority interests (22) -
Net profit/(loss) for the year 58,572 (675)
There were no material transfers to or from reserves or provisions during the financial year other than as disclosed
in the Statements of Changes in Equity.
In the opinion of the directors, the results of the operations of the Group and of the Company during the financial
year have not been substantially affected by any item, transaction or event of a material and unusual nature, other
than those disclosed in the financial statements.
Dividends
During the year, the Company paid a final dividend of 3%, less taxation, amounting to RM5,676,944 in respect of
the previous financial year.
The directors now recommend the payment of a final dividend of 3%, less taxation, amounting to RM5,664,760 be
paid in respect of the year under review, which shall be subject to the approval of shareholders at the forthcoming
Annual General Meeting.
Directors
The names of the directors of the Company in office since the date of the last report and at the date of this report are:
General (Rtd) Tan Sri Abdul Rahman Bin Abdul Hamid Chairman
Tiong Chiong Hoo Managing Director
Dr. Tiong Ik King
Tuan Haji Wan Alshagaf Bin Tuanku Esim
Tuan Haji Ashaari @ Asahari Bin Shebli
John Leong Chung Loong
Tiong Choon
Tiong Chiong Hee
Directors’ benefits
Neither at the end of the financial year, nor at any time during that year, did there subsist any arrangement to
which the Company is a party, whereby directors might acquire benefits by means of the acquisition of shares in,
and/or debentures of, the Company or any other body corporate.
Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003 27
Directors’ Report (cont’d)
Directors’ benefits (cont’d)
Since the end of the previous financial year, no director has received or become entitled to receive any benefit
(other than a benefit included in the aggregate amount of emoluments received or due and receivable by directors
shown in the financial statements or the fixed salary of a full-time employee of the Company) by reason of a
contract made by the Company or a related corporation with the director or with a firm of which the director is a
member, or with a company in which the director has a substantial financial interest required to be disclosed by
Section 169(8) of the Companies Act, 1965, except for those benefits which may be deemed to have arisen by
virtue of those contracts, agreements and transactions (either as a supplier, agent or contractor) in respect of
trading and other services, entered into in the ordinary course of business between the Company and its subsidiaries
and companies in which certain directors are deemed to have a substantial financial interest.
Directors’ interests
According to the register of directors’ shareholdings, the interests of directors in office at the end of the financial
year in shares in the Company during the financial year were as follows:
Ordinary shares of RM1.00 each
As at 1.5.2002 and 30.4.2003
The Company
Tiong Chiong Hoo - direct 1,013,889
Dr. Tiong Ik King - direct 103,339
Tiong Chiong Hee - direct 5,000
None of the other directors who held office at the end of the financial year had any interest in shares in the
Company or its related corporations during the financial year.
Share buy-backs
Pursuant to the authority granted by the shareholders of the Company to the directors at the Extraordinary
General Meeting held on 26 September 2002, the Company purchased during the year a total of 4,374,000
(2002: 3,652,000) of its issued shares from the open market for a total cost of RM13,574,777 (2002: RM8,059,086).
The average cost paid for the shares purchased during the year was RM3.10 (2002: RM2.21) per share. Subsequent
to the balance sheet date and up to 11 August 2003, being the last practicable date prior to the printing of this
report, the Company purchased an additional 415,400 shares for a total cost of RM1,110,868. The average cost
paid for the shares purchased during the period was RM2.67 per share.
The above purchases were financed from the Company’s internal funds. The shares purchased are held as treasury
shares in accordance with Section 67A of the Companies Act, 1965. As at 11 August 2003, the issued and paid up
capital of the Company comprises 282,528,499 ordinary shares of RM1.00 each, of which 20,686,400 ordinary
shares are held as treasury shares.
Movements on share buy-backsTotal Average price
No. of cost per share
shares RM’000 RM
At 1 May 2002 15,897,000 49,574 3.12
Purchased during the year ended 30 April 2003 4,374,000 13,575 3.10
At 30 April 2003 20,271,000 63,149 3.12
Purchased subsequent to 30 April 2003 415,400 1,111 2.67
At 11 August 2003 20,686,400 64,260 3.11
The directors of the Company are committed to enhancing the value of the Company to its shareholders and
believe that the share buy-backs plan can be applied in the best interests of the Company and its shareholders.
28 Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003
Other statutory information
(a) Before the income statements and balance sheets of the Group and of the Company were made out, the
directors took reasonable steps:
(i) to ascertain that proper action has been taken in relation to the writing-off of bad debts and the making
of provision for doubtful debts and satisfied themselves that all known bad debts had been written off
and that adequate provision had been made for doubtful debts; and
(ii) to ensure that any current assets which were unlikely to realise their values as shown in the accounting
records in the ordinary course of business have been written-down to an amount which they might be
expected so to realise.
(b) At the date of this report, the directors are not aware of any circumstances which would render:
(i) the amount written off for bad debts or the amount of the provision for doubtful debts of the Group and
of the Company inadequate to any substantial extent; and
(ii) the values attributed to current assets in the financial statements of the Group and of the Company misleading.
(c) At the date of this report, the directors are not aware of any circumstances which have arisen which would
render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company
misleading or inappropriate.
(d) At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this
report or financial statements of the Group and of the Company which would render any amount stated in the
financial statements misleading.
(e) As at the date of this report, there does not exist:
(i) any charge on the assets of the Group or of the Company which has arisen since the end of the financial
year which secures the liabilities of any other person; or
(ii) any contingent liability in respect of the Group or of the Company which has arisen since the end of the
financial year.
(f) In the opinion of the directors:
(i) no contingent liability or other liability has become enforceable or is likely to become enforceable within
the period of twelve months after the end of the financial year which will or may affect the ability of the
Group or of the Company to meet their obligations when they fall due; and
(ii) no item, transaction or event of a material and unusual nature has arisen in the interval between the end
of the financial year and the date of this report which is likely to affect substantially the results of the
operations of the Group or of the Company for the financial year in which this report is made.
Significant event
The significant event is as disclosed in Note 33 to the financial statements.
Auditors
The auditors, Ernst & Young, have expressed their willingness to continue in office.
Signed on behalf of the Board in accordance with a resolution of the directors:
General (Rtd) Tan Sri Abdul Rahman Bin Abdul Hamid
Chairman
Tiong Chiong Hoo
Managing Director
Kuching, Malaysia
Date: 19 August 2003
Directors’ Report (cont’d)
Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003 29
Statement by DirectorsPursuant to Section 169(15) of the Companies Act, 1965
Statutory DeclarationPursuant to Section 169(16) of the Companies Act, 1965
We, General (Rtd) Tan Sri Abdul Rahman Bin Abdul Hamid and Tiong Chiong Hoo, being two of the
directors of Jaya Tiasa Holdings Berhad, do hereby state that in the opinion of the directors, the accompanying
financial statements set out on pages 31 to 60 are drawn up in accordance with applicable Approved Accounting
Standards in Malaysia and the provisions of the Companies Act, 1965 so as to give a true and fair view of the
financial position of the Group and of the Company as at 30 April 2003 and of the results and the cash flows of the
Group and of the Company for the year then ended.
Signed on behalf of the Board in accordance with a resolution of the directors:
General (Rtd) Tan Sri Abdul Rahman Bin Abdul Hamid
Chairman
Tiong Chiong Hoo
Managing Director
Kuching, Malaysia
Date: 19 August 2003
I, Tiong Chiong Hoo, being the director primarily responsible for the financial management of Jaya Tiasa
Holdings Berhad, do solemnly and sincerely declare that the accompanying financial statements set out on
pages 31 to 60 are in my opinion correct and I make this solemn declaration conscientiously believing the same to
be true and by virtue of the provisions of the Statutory Declarations Act, 1960.
Tiong Chiong Hoo
Subscribed and solemnly declared
by the abovenamed Tiong Chiong Hoo
at Kuching in the State of Sarawak
on 19 August 2003
Before me,
Yap Yau Sin
Commissioner for Oaths (No.Q074)
Kuching, Malaysia
30 Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003
We have audited the accompanying financial statements set out on pages 31 to 60. These financial statements are
the responsibility of the Company’s directors. Our responsibility is to express an opinion on these financial statements
based on our audit.
We have conducted our audit in accordance with applicable Approved Standards on Auditing in Malaysia. Those
standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles
used and significant estimates made by directors, as well as evaluating the overall presentation of the financial
statements. We believe that our audit provides a reasonable basis for our opinion.
In our opinion:
(a) the financial statements have been properly drawn up in accordance with the provisions of the Companies Act, 1965
and applicable Approved Accounting Standards in Malaysia so as to give a true and fair view of:
(i) the financial position of the Group and of the Company as at 30 April 2003 and of the results and the cash
flows of the Group and of the Company for the year then ended; and
(ii) the matters required by Section 169 of the Companies Act, 1965 to be dealt with in the financial statements;
and
(b) the accounting and other records and the registers required by the Act to be kept by the Company and by its
subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of
the Act.
We have considered the financial statements and the Auditors’ Reports thereon of the subsidiaries of which we
have not acted as auditors, as indicated in Note 9 to the financial statements, being financial statements that have
been included in the consolidated financial statements.
We are satisfied that the financial statements of the subsidiaries that have been consolidated with the financial
statements of the Company are in form and content appropriate and proper for the purposes of the preparation of
the consolidated financial statements and we have received satisfactory information and explanations required by
us for those purposes.
The Auditors’ Reports on the financial statements of the subsidiaries were not subject to any qualification material
to the consolidated financial statements and did not include any comment required to be made under Section 174 (3)
of the Companies Act, 1965.
ERNST & YOUNG YONG VOON KAR
AF: 0039 1769/04/04 (J/PH)
Chartered Accountants Partner
Kuching, Malaysia
Date: 19 August 2003
Report of the auditorsto the members of Jaya Tiasa Holdings Berhad
Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003 31
Income Statements for the year ended 30 April 2003
Group Company
Note 2003 2002 2003 2002
RM’000 RM’000 RM’000 RM’000
Revenue 3 578,396 440,295 279,379 235,019
Cost of sales (457,316) (493,419) (255,331) (269,395)
Gross profit/(loss) 121,080 (53,124) 24,048 (34,376)
Other operating income 7,624 55,218 3,907 17,694
Selling expenses (21,758) (19,611) - -
Administrative expenses (31,380) (79,656) (20,851) (27,675)
Profit/(loss) from operations 75,566 (97,173) 7,104 (44,357)
Finance costs (10,541) (10,069) (3,164) (1,416)
Profit/(loss) before taxation 4 65,025 (107,242) 3,940 (45,773)
Taxation 5 (6,431) (420) (4,615) (3,337)
Profit/(loss) after taxation 58,594 (107,662) (675) (49,110)
Minority interests (22) 1,908 - -
Net profit/(loss) for the year 58,572 (105,754) (675) (49,110)
Earnings/(loss) per share (sen) 6 22.2 (39.4)
Dividends per share (sen) 7
- Gross dividend 3.0 3.0 3.0 3.0
- Net of tax 2.2 2.2 2.2 2.2
The accompanying notes form an integral part of the financial statements.
32 Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003
Balance Sheets as at 30 April 2003
Group Company
Restated Restated
Note 2003 2002 2003 2002
RM’000 RM’000 RM’000 RM’000
Non-current assets
Property, plant and equipment 8 402,054 367,227 82,706 63,494
Investment in subsidiary companies 9 - - 381,274 379,009
Investment in associated company 10 - - - -
Other investments 11 - 2 - 2
Rights in timber licences 12 204,375 220,654 182,222 196,733
Goodwill on consolidation 13 89,710 87,445 - -
Current assets
Inventories 14 58,523 73,784 6,969 8,184
Trade receivables 15 140,595 163,867 10,929 16,694
Other receivables 16 50,854 27,461 24,654 967
Amount due from related companies 17 - - 147,502 147,215
Cash and bank balances 37,990 48,983 13,532 7,142
287,962 314,095 203,586 180,202
Current liabilities
Amount due to bankers 18 99,059 106,992 40,161 39,233
Trade payables 19 59,348 68,487 19,823 23,188
Other payables 20 6,980 18,889 2,242 10,290
Lease payables 21 12,278 7,083 6,703 3,851
Amount due to related companies 17 - - 205,041 136,427
Current tax liabilities 177 13,289 - 11,301
177,842 214,740 273,970 224,290
Net current assets/(liabilities) 110,120 99,355 (70,384) (44,088)
806,259 774,683 575,818 595,150
Financed by:
Share capital 22 282,529 282,529 282,529 282,529
Cost of treasury shares 23 (63,149) (49,574) (63,149) (49,574)
Reserves 24 572,858 532,420 351,846 358,198
Shareholders’ funds 792,238 765,375 571,226 591,153
Minority interests 3,079 3,058 - -
Long-term and deferred liabilities
Lease payables 21 7,056 6,250 782 3,997
Deferred tax liabilities 25 3,886 - 3,810 -
10,942 6,250 4,592 3,997
806,259 774,683 575,818 595,150
The accompanying notes form an integral part of the financial statements.
Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003 33
Statements of Changes in Equityfor the year ended 30 April 2003
Non-D
istr
ibuta
ble
Dis
trib
uta
ble
Capital
Capital
Share
Tre
asury
Share
Exchange
redem
ption
reserv
e o
nReta
ined
Note
capital
share
spre
miu
mre
serv
ere
serv
econsolidation
pro
fit
Tota
l
RM
’000
RM
’000
RM
’000
RM
’000
RM
’000
RM
’000
RM
’000
RM
’000
Gro
up
At
1 M
ay 2
001
- as p
revio
usly
report
ed
282,5
29
(41,5
15)
322,7
26
(11,5
81)
3,6
84
22,7
10
322,1
83
900,7
36
- prior
year
adju
stm
ent
29
--
--
--
5,6
50
5,6
50
As r
esta
ted
282,5
29
(41,5
15)
322,7
26
(11,5
81)
3,6
84
22,7
10
327,8
33
906,3
86
Changes in G
roup’s
inte
rest
26
--
-(1
0,9
23)
-(1
1,7
49)
-(2
2,6
72)
Net
loss f
or
the y
ear
--
--
--
(105,7
54)
(105,7
54)
Purc
hase o
f tr
easury
share
s23
-(8
,059)
--
--
-(8
,059)
Div
idends f
or
year
ended 2
001
--
--
--
(5,6
50)
(5,6
50)
Arisin
g f
rom
tr a
nsla
tion o
f
fo
reig
n s
ubsid
iary
com
panie
s-
--
1,1
24
--
-1,1
24
At
30 A
pril 2002
282,5
29
(49,5
74)
322,7
26
(21,3
80)
3,6
84
10,9
61
216,4
29
765,3
75
At
1 M
ay 2
002
- as p
revio
usly
report
ed
282,5
29
(49,5
74)
322,7
26
(21,3
80)
3,6
84
10,9
61
210,6
70
759,6
16
- prior
year
adju
stm
ent
29
--
--
--
5,7
59
5,7
59
As r
esta
ted
282,5
29
(49,5
74)
322,7
26
(21,3
80)
3,6
84
10,9
61
216,4
29
765,3
75
Net
pro
fit
for
the y
ear
--
--
--
58,5
72
58,5
72
Purc
hase o
f tr
easury
share
s23
-(1
3,5
75)
--
--
-(1
3,5
75)
Div
idends f
or
year
ended 2
002
7-
--
--
-(5
,677)
(5,6
77)
Arisin
g f
rom
tr a
nsla
tion o
f
fo
reig
n s
ubsid
iary
com
panie
s-
--
(1,4
96)
--
-(1
,496)
Arisin
g f
rom
busin
ess
re
org
anis
ation
--
--
-(1
0,9
61)
-(1
0,9
61)
At
30 A
pril 2003
282,5
29
(63,1
49)
322,7
26
(22,8
76)
3,6
84
-269,3
24
792,2
38
The a
ccom
panyin
g n
ote
s f
orm
an inte
gra
l part
of
the f
inancia
l sta
tem
ents
.
34 Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003
Statements of Changes in Equityfor the year ended 30 April 2003 (cont’d)
Non-Distributable Distributable
Capital
Share Share Treasury redemption Retained
Note capital premium shares reserve profit Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Company
At 1 May 2001
- as previously reported 282,529 322,726 (41,515) 3,684 80,898 648,322
- prior year adjustment 29 - - - - 5,650 5,650
As restated 282,529 322,726 (41,515) 3,684 86,548 653,972
Net loss for the year - - - - (49,110) (49,110)
Purchase of treasury shares 23 - - (8,059) - - (8,059)
Dividends for year ended 2001 - - - - (5,650) (5,650)
At 30 April 2002 282,529 322,726 (49,574) 3,684 31,788 591,153
At 1 May 2002
- as previously reported 282,529 322,726 (49,574) 3,684 26,029 585,394
- prior year adjustment 29 - - - - 5,759 5,759
As restated 282,529 322,726 (49,574) 3,684 31,788 591,153
Net loss for the year - - - - (675) (675)
Purchase of treasury shares 23 - - (13,575) - - (13,575)
Dividends for year ended 2002 7 - - - - (5,677) (5,677)
At 30 April 2003 282,529 322,726 (63,149) 3,684 25,436 571,226
The accompanying notes form an integral part of the financial statements.
Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003 35
Cash Flow Statements for the year ended 30 April 2003
Group Company
Note 2003 2002 2003 2002
RM’000 RM’000 RM’000 RM’000
Cash flows from operating activities
Profit/(loss) before taxation 65,025 (107,242) 3,940 (45,773)
Adjustments for:
Amortisation of timber rights 16,279 16,279 14,511 14,511
Bad debts written-off 239 38,010 25 492
Depreciation of property, plant
and equipment 43,584 47,815 9,073 6,332
Dividend income - - - (12,000)
Interest expense 7,404 6,149 2,993 1,249
Gain on disposal of a subsidiary company - (42,472) - -
Gain on disposal of property, plant
and equipment (2,294) (3,769) (32) -
Impairment losses 1,557 - - -
Loss on disposal of property, plant
and equipment 4,599 41 - 39
Property, plant and equipment written-off 71 200 - -
Provision for diminution in value of
investment - 1,965 - 4,400
Provision for doubtful debts - 2,600 - 2,600
Interest income (1,184) (1,436) (120) (480)
Operating profit/(loss) before working
capital changes 135,280 (41,860) 30,390 (28,630)
Decrease in inventories 15,261 42,486 1,215 2,683
Decrease/(increase) in receivables 1,047 64,962 (4,619) 2,355
(Decrease)/increase in payables (21,048) (37,873) (11,413) 1,491
Decrease in amount due from related
companies - - 68,327 51,945
Cash generated from operations 130,540 27,715 83,900 29,844
Interest received 1,184 1,436 120 480
Interest paid (7,404) (6,149) (2,993) (1,249)
Taxation paid (28,026) (19,325) (25,434) (5,000)
Net cash generated from operating activities 96,294 3,677 55,593 24,075
Cash flows from investing activities
Net cash inflow on disposal of a
subsidiary company 26(b) - 184 - -
Dividends received - - - 8,640
Investment in subsidiary companies - - (2,265) (47,028)
Purchase of additional shares in a
subsidiary company (2,265) (31) - -
Proceeds from disposal of other investments 2 - 2 -
Purchase of own shares (13,575) (8,059) (13,575) (8,059)
Purchase of property, plant and equipment (74,866) (45,306) (22,998) (8,727)
Proceeds from disposal of property,
plant and equipment 3,942 6,749 280 182
Net cash used in investing activities (86,762) (46,463) (38,556) (54,992)
36 Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003
Cash Flow Statements for the year ended 30 April 2003 (cont’d)
Group Company
Note 2003 2002 2003 2002
RM’000 RM’000 RM’000 RM’000
Cash flows from financing activities
Dividends paid (5,677) (5,804) (5,677) (5,804)
Net repayments of loans and lease payables (19,751) (10,451) (5,898) (2,575)
Net proceeds of bankers’ acceptances 10,792 35,478 1,500 38,400
Net cash (used in)/generated from financing
activities (14,636) 19,223 (10,075) 30,021
Net (decrease)/increase in cash and
cash equivalents (5,104) (23,563) 6,962 (896)
Effects of exchange rate changes 2,836 3,985 - -
Cash and cash equivalents at the
beginning of the year 35,697 55,275 6,309 7,205
Cash and cash equivalents at the end
of the year 27 33,429 35,697 13,271 6,309
The accompanying notes form an integral part of the financial statements.
Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003 37
Notes to the Financial Statements - 30 April 2003
1. Corporate information
The Company is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the
Main Board of the Kuala Lumpur Stock Exchange. The registered office is located at No. 1 - 9, Pusat Suria
Permata, Jalan Upper Lanang, 96000 Sibu, Sarawak.
The principal activities of the Company are investment holding, provision of management services, extraction
and sale of logs. The principal activities of the subsidiary companies are set out in Note 9 to the financial
statements. There have been no significant changes in the nature of the activities of the Group and of the
Company during the financial year.
The financial statements of the Group and of the Company are expressed in Ringgit Malaysia.
The financial statements were authorised for issue by the Board of Directors in accordance with a resolution
of the directors on 19 August 2003.
2. Significant accounting policies
(a) Basis of preparation
The financial statements of the Group and of the Company are prepared under the historical cost
convention, unless as otherwise indicated in the significant accounting policies, and comply with the
provisions of the Companies Act, 1965 and applicable Approved Accounting Standards in Malaysia.
(b) Basis of consolidation
(i) Subsidiaries
The consolidated financial statements include the financial statements of the Company and all its
subsidiary companies. Subsidiaries are those companies in which the Group has a long-term equity
interest and where it has power to exercise control over the financial and operating policies so as to
obtain benefits therefrom.
Where the subsidiaries are consolidated using the acquisition method of accounting, the results of
the subsidiaries acquired or disposed of during the year are included in the consolidated income
statement from the effective date of acquisition or up to the effective date of disposal, as appropriate.
The assets and liabilities of subsidiaries are measured at their fair values at the date of acquisition
and these values are reflected in the consolidated balance sheet. The difference between the cost
of an acquisition and the fair value of the Group’s share of the net assets of the acquired subsidiaries
at the date of acquisition is included in the consolidated balance sheet as goodwill or reserve arising
on consolidation as appropriate.
Acquisition of subsidiaries which meet the criteria for merger are accounted for using merger
accounting principles. When the merger method is used, the cost of investment in the Company’s
book is recorded at the nominal value of shares issued and the difference between the carrying
value of the investment and the nominal value of shares acquired is treated as merger reserve or
merger deficit. The results of the companies being merged are included as if the merger had been
effected throughout the current and previous financial years.
Intragroup transactions, balances and resulting unrealised gains are eliminated on consolidation
and the consolidated financial statements reflect external transactions only. Unrealised losses are
eliminated on consolidation unless costs cannot be recovered.
The gain or loss on disposal of subsidiaries is the difference between the net disposal proceeds and
the Group’s share of its net assets together with any unamortised balance of goodwill and exchange
differences, which were not previously recognised in the consolidated income statement.
Minority interest is measured at the minorities’ share of the fair values of the net assets or liabilities
of the subsidiaries, to the extent of their investment. Minority interest is separately disclosed in the
financial statements.
38 Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003
2. Significant accounting policies (cont’d)
(b) Basis of consolidation (cont’d)
(ii) Associates
Associates are those companies in which the Group has a long term equity interest and where it
exercises significant influence over the financial and operating policies.
Investments in associates are accounted for in the consolidated financial statements by the equity
method of accounting based on the audited or management financial statements of the associates.
Under the equity method of accounting, the Group’s share of profits less losses of associates during
the year is included in the consolidated income statement. The Group’s interest in associates is
carried in the consolidated balance sheet at cost plus the Group’s share of post-acquisition reserves.
Unrealised gains on transactions between the Group and the associates are eliminated to the extent
of the Group’s interest in the associates.
(c) Goodwill
Goodwill represents the excess of the cost of acquisition over the Group’s interest in the fair value of the
identifiable assets and liabilities of a subsidiary or associate at the date of acquisition.
Goodwill is stated at cost less impairment losses. The policy for the recognition and measurement of
impairment losses is in accordance with Note 2(g). Goodwill arising on the acquisition of subsidiaries is
presented separately in the balance sheet while goodwill arising on the acquisition of associates is
included within the carrying amount of investment in associates. No amortisation is provided on goodwill
on consolidation.
(d) Investments in subsidiaries and associates
The Company’s investments in subsidiaries and associates are stated at cost less impairment losses.
The policy for the recognition and measurement of impairment losses is in accordance with Note 2(g).
On disposal of such investments, the difference between net disposal proceeds and their carrying amounts
is recognised in the income statement.
(e) Rights in timber licences
Rights in timber licences are stated at cost and are amortised on a straight-line basis over the remaining
tenure of the licence period.
(f) Property, plant and equipment and depreciation
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses.
The policy for the recognition and measurement of impairment losses is in accordance with Note 2(g).
Freehold land is not amortised. Leasehold land is amortised over the period of the respective leases.
Plantation development expenditure, consisting of land clearing and upkeep of immature oil palms
incurred during the pre-maturity period (pre-cropping costs) is capitalised under plantation
development expenditure. Upon maturity, all subsequent maintenance expenditure is charged
to revenue and the capitalised pre-cropping costs is amortised on a straight-line basis over 25 years, the
expected useful life of oil palms. Oil palms is considered mature 36 months after the month of planting.
Depreciation of other property, plant and equipment is provided on a straight-line basis to write off
the cost of the assets over their estimated useful lives. The estimated useful lives are as follows:
Factory, buildings and quarters - 10 to 25 years
Watercraft, motor vehicles, plant and machinery - 5 to 10 years
Roads and bridges - 5 to 10 years
Office renovation, furniture, fittings and equipment - 2 to 10 years
Notes to the Financial Statements - 30 April 2003
Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003 39
Notes to the Financial Statements - 30 April 2003
2. Significant accounting policies (cont’d)
(f) Property, plant and equipment and depreciation (cont’d)
Capital work-in-progress is not depreciated until the property, plant and equipment is fully completed
and brought into use.
Upon the disposal of an item of property, plant or equipment, the difference between the net disposal
proceeds and the carrying amount is charged or credited to the income statement.
Fully depreciated assets are retained in the financial statements until they are no longer in use and no
further charge for depreciation is made in respect of these assets.
(g) Impairment of assets
At each balance sheet date, the Group and Company reviews the carrying amounts of its assets to
determine whether there is any indication of impairment. If any such indication exists, impairment is
measured by comparing the carrying values of the assets with their recoverable amounts. Recoverable
amount is the higher of net selling price and value in use, which is measured by reference to discounted
future cash flows.
An impairment loss is recognised as an expense in the income statement immediately, unless the asset
is carried at revalued amount. Any impairment loss of a revalued asset is treated as a revaluation
decrease to the extent of any available previously recognised revaluation surplus for the same asset.
Reversal of impairment losses recognised in prior years is recorded when there is an indication that the
impairment losses recognised for the asset no longer exist or have decreased.
(h) Inventories
Plywood, sawn timber, veneer and blockboard inventories are stated at the lower of average cost of
production and net realisable value. In arriving at net realisable value, due allowance is made for all
obsolete and slow moving items.
General stores are valued on a weighted average basis. Logs are stated at cost based on a first-in-first-out
basis.
Cost of finished goods and work-in-progress include the cost of raw materials, direct labour and an
appropriate proportion of fixed and variable factory overheads. Net realisable value represents the
estimated selling price less all estimated costs to completion and costs to be incurred on marketing,
selling and distribution.
(i) Foreign currencies
(i) Foreign currency transactions
Transactions in foreign currencies are initially recorded in Ringgit Malaysia at rates of exchange
ruling at the date of the transaction. At each balance sheet date, foreign currency monetary items
are translated into Ringgit Malaysia at exchange rates ruling at that date, unless hedged by forward
foreign exchange contracts, in which case the rates specified in such forward contracts are used.
Non-monetary items initially denominated in foreign currencies, which are carried at historical cost
are translated using the historical rate as of the date of acquisition and non monetary items which
are carried at fair value are translated using the exchange rate that existed when the values were
determined.
All exchange rate differences are taken to the income statement with the exception of differences
on foreign currency borrowings that provide a hedge against a net investment in a foreign entity.
These exchange differences are taken directly to equity until the disposal of the net investment, at
which time they are recognised in the income statement.
40 Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003
Notes to the Financial Statements - 30 April 2003
2. Significant accounting policies (cont’d)
(i) Foreign currencies (cont’d)
(ii) Foreign entities
Financial statements of foreign consolidated subsidiaries are translated at year-end exchange rates
with respect to the assets and liabilities, and at exchange rates at the dates of the transactions with
respect to the income statement. All resulting translation differences are included in the foreign
exchange reserve in shareholders’ funds.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as
assets and liabilities of the Company and translated at the exchange rate ruling at the date of the
transaction.
The principal exchange rates for every unit of foreign currency ruling at balance sheet date used are
as follows:
2003 2002
RM RM
United States Dollar 3.800 3.800
Reais 1.315 1.673
Euro Dollar 4.266 3.462
Japanese Yen 0.032 0.030
Swiss Franc 2.827 2.366
Singapore Dollar 2.162 2.128
(j) Income tax
Income tax on the profit or loss for the year comprises current and deferred tax. Current tax is the
expected amount of income taxes payable in respect of the taxable profit for the year and is measured
using the tax rates that have been enacted at the balance sheet date.
Deferred tax is provided for using the liability method in respect of all material timing differences except
that where the timing differences give rise to deferred tax benefits, these benefits are not recognised.
(k) Cash and cash equivalents
Cash and cash equivalents in the Cash Flow Statement represent cash and bank balances and short-term,
highly liquid investments that are readily convertible to cash with an insignificant risk of changes
in value less short-term borrowings repayable on demand.
(l) Leases
A lease is recognised as a finance lease if it transfers substantially to the Group and Company all the
risks and rewards incident to ownership. All other leases are classified as operating leases.
Assets acquired by way of hire purchase of finance leases are stated at an amount equal to the lower of
their fair values and the present value of the minimum lease payments at the inception of the leases,
less accumulated depreciation and impairment losses. The corresponding liability is included in the
balance sheet as borrowings. In calculating the present value of the minimum lease payments, the
discount factor used is the interest rate implicit in the lease, when it is practicable to determine; other
wise, the Group’s incremental borrowing rate is used.
Lease payments are apportioned between the finance costs and the reduction of the outstanding liability.
Finance costs, which represent the difference between the total leasing commitments and the fair value
of the assets acquired, are charged to the income statement over the term of the relevant lease so as to
produce a constant periodic rate of charge on the remaining balance of the obligations for each accounting
period.
The depreciation policy for leased assets is consistent with that for depreciable property, plant
and equipment as described in Note 2 (f).
Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003 41
Notes to the Financial Statements - 30 April 2003
2. Significant accounting policies (cont’d)
(m) Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group
and the Company and the revenue can be reliably measured. The following specific recognition criteria
must also be met before revenue is recognised:
(i) Sale of goods
Revenue is recognised when the significant risks and rewards of ownership of the goods have
passed to the buyer.
(ii) Interest and rental
Revenue is recognised as the interest and rental accrue unless collectibility is in doubt.
(iii) Dividends
Revenue is recognised when the right to receive the payment is established.
(iv) Management fees
Revenue is recognised as the management fees accrue unless collectibility is in doubt.
(v) Provision of services
Revenue from provision of services is recognised when the services are rendered.
(n) Financial instruments
Financial instruments are recognised in the balance sheet when the Group has become a party to the
contractual provisions of the instrument.
(i) Other non-current investments
Non-current investments other than investments in subsidiaries and associates are stated at cost
less provision for any permanent diminution in value of investments and is recognised as an
expense in the period which the decline occurred.
(ii) Receivables
Receivables are carried at anticipated realisable values. Bad debts are written off when identified.
An estimate is made for doubtful debts based on a review of all outstanding amounts as at the
balance sheet date.
(iii) Payables
Payables are stated at cost, which is the fair value of the consideration to be paid in the future for
goods and services received.
(iv) Interest-bearing borrowings
Interest-bearing bank loans and overdrafts are recorded at the amount of proceeds received.
(v) Equity instruments
Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in
the period in which they are declared.
When issued shares of the Company are repurchased, the consideration paid, including any
attributable transaction costs is presented as a change in equity. Repurchased shares are either
held as treasury shares, cancelled or a combination of both at the discretion of the Board and are
accounted for by the cost method. Should such shares be cancelled, their nominal amounts are
eliminated, and the differences between their cost and nominal amounts will be taken to reserves
as appropriate. Repurchased shares that have not been cancelled are classified as treasury shares
and presented as a deduction from equity. No gain or loss is recognised in the income statement on
the sale, re-issuance or cancellation of treasury shares.
42 Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003
Notes to the Financial Statements - 30 April 2003
3. Revenue
Revenue of the Group comprises services supplied or provided net of discounts and commissions, invoiced
value of goods sold less discounts or claims and interest income.
Revenue of the Company comprises management fee derived from subsidiary companies and log sales.
The significant categories of revenue recognised during the year are as follows:
Group Company
2003 2002 2003 2002
RM’000 RM’000 RM’000 RM’000
Sale of timber and related products 574,097 438,716 279,379 234,899
Management fee - - - 120
Chartering services income 4,299 6 - -
Interest income - 1,573 - -
578,396 440,295 279,379 235,019
4. (a) Profit/(loss) before taxation
This is stated after charging:
Amortisation of timber rights 16,279 16,279 14,511 14,511
Auditors’ remuneration
Statutory audit
- current year 154 156 40 36
- underprovision in prior year 9 - 4 -
Other services 102 85 102 85
Bad debts written-off 239 38,010 25 492
Depreciation of property, plant and equipment 43,584 47,815 9,073 6,332
Directors’ remuneration
- fees 336 308 240 212
- other emoluments 566 503 566 503
Hiring charges - - 2,400 2,400
Impairment losses 1,557 - - -
Interest expense 7,404 6,149 2,993 1,249
Loss on disposal of property, plant
and equipment 4,599 41 - 39
Property, plant and equipment written-off 71 200 - -
Provision for diminution in value of investment - 1,965 - 4,400
Provision for doubtful debts - 2,600 - 2,600
Realised foreign exchange loss 53 30 - -
Rental expense 550 370 254 96
and after crediting:
Gain on disposal of property,
plant and equipment 2,294 3,769 32 -
Gain on disposal of a subsidiary company - 42,472 - -
Gross dividend income from
unquoted subsidiary companies - - - 12,000
Hiring income - 66 - 66
Interest income 1,184 1,436 120 480
Management fee income - 120 - 120
Realised foreign exchange gain 256 17 - -
Rental income 3,479 5,047 2,865 4,973
Software maintenance income from
subsidiary companies - - 321 319
Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003 43
Notes to the Financial Statements - 30 April 2003
4. (b) Employee information
Group Company
2003 2002 2003 2002
RM’000 RM’000 RM’000 RM’000
Staff costs 35,205 28,381 7,867 5,360
Number of employees at the end of the year
(including Executive director) 3,612 2,715 255 243
5. Taxation
Based on profit for the year 1,779 583 32 -
Under/(over) provision in prior years 766 (163) 773 3,337
Deferred tax liability 3,886 - 3,810 -
6,431 420 4,615 3,337
The disproportionate taxation charge of the Company for the current year is mainly due to disallowance of
certain expenses for taxation purposes.
Subject to agreement by the Inland Revenue Board, estimated tax losses and capital allowances available to
be set off against future assessable income amounted to RM13.8 million (2002: RM16.8 million) and Nil
(2002: RM13.8 million), respectively. The income tax benefit in respect thereof will only be realised if the
Company derives future assessable income of a nature and of sufficient amount to enable the benefit to be
realised, and existing legislation does not change in a manner which would adversely affect the Company’s
ability to realise the benefit.
6. Earnings/(loss) per share
The earnings/(loss) per share has been calculated based on the net profit for the year of RM58,572,000
(2002: net loss for the year of RM105,754,000) and the weighted average number of ordinary shares in issue
during the financial year of 263,628,666 (2002: 268,518,999), excluding the number of shares purchased
and held as treasury shares.
7. Dividends
Group/Company
2003 2002
sen per share RM’000 sen per share RM’000
(gross) (net) (gross) (net)
Proposed final dividend, net of tax 3.0 5,665 3.0 5,759
Adjustment for overprovision of
prior year’s final dividend arising
from the share buy-backs - - - (82)
3.0 5,665 3.0 5,677
At the forthcoming Annual General Meeting, a final dividend of 3% less taxation amounting to RM5,664,760
will be proposed for shareholder’s approval. The financial statements do not reflect this final dividend,
which will be accrued as a liability when approved by shareholders.
44 Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003
Notes to the Financial Statements - 30 April 2003
8. Property, plant and equipment
Office
Land, Watercraft, renovation,
factory, motor furniture,
buildings vehicles, Roads fittings Plantation Capital
and plant and and and development work-in-
quarters machinery bridges equipment expenditure progress Total
RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000
Group
Cost
At 1 May 2002 175,966 470,652 61,358 26,242 1,364 8,285 743,867
Exchange translation (1,876) (3,172) - (33) - (532) (5,613)
Amount restated
at 1 May 2002 174,090 467,480 61,358 26,209 1,364 7,753 738,254
Reclassification (12,215) (1,096) 230 143 - 12,938 -
Additions 2,580 15,023 21,151 1,226 13,529 37,117 90,626
Disposals (26) (14,816) - (224) - - (15,066)
Written-off - (66) - (15) - - (81)
At 30 April 2003 164,429 466,525 82,739 27,339 14,893 57,808 813,733
Accumulated
depreciation
Charge for 2002 8,889 33,191 3,358 2,377 - - 47,815
At 1 May 2002 56,530 284,159 28,423 7,528 - - 376,640
Exchange translation (243) (1,027) - (11) - - (1,281)
Amount restated
at 1 May 2002 56,287 283,132 28,423 7,517 - - 375,359
Charge for the year 8,021 27,833 5,204 2,534 - - 43,592
Impairment of assets - 1,557 - - - - 1,557
Disposals - (8,665) - (154) - - (8,819)
Written-off - - - (10) - - (10)
At 30 April 2003 64,308 303,857 33,627 9,887 - - 411,679
Net book value
At 30 April 2003 100,121 162,668 49,112 17,452 14,893 57,808 402,054
At 30 April 2002 119,436 186,493 32,935 18,714 1,364 8,285 367,227
Included in the plantation development expenditure are the following expenses incurred during the year:
2003 2002
RM RM
Depreciation of property, plant and equipment 8 -
Staff costs 64 1
Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003 45
Notes to the Financial Statements - 30 April 2003
8. Property, plant and equipment (cont’d)
Land, Watercraft, Office
factory, motor renovation,
buildings vehicles, Roads furniture,
and plant and and fittings and
quarters machinery bridges equipment Total
RM’000 RM’000 RM’000 RM’000 RM’000
Company
Cost
At 1 May 2002 1,607 43,756 13,814 14,018 73,195
Additions 2,676 8,740 14,401 671 26,488
Disposals - (532) - (54) (586)
At 30 April 2003 4,283 51,964 28,215 14,635 99,097
Accumulated depreciation
Charge for 2002 84 3,507 1,377 1,364 6,332
At 1 May 2002 138 11,193 2,425 1,869 15,625
Charge for the year 175 4,993 2,469 1,436 9,073
Disposals - (331) - (7) (338)
At 30 April 2003 313 15,855 4,894 3,298 24,360
Net book value
At 30 April 2003 3,970 36,109 23,321 11,337 74,737
Add: Capital work-in-progress 7,969
82,706
At 30 April 2002 1,469 32,563 11,389 12,149 57,570
Add: Capital work-in-progress 5,924
63,494
Land, factory, building and quarters stated at cost, comprises:
Group Company
2003 2002 2003 2002
RM’000 RM’000 RM’000 RM’000
Freehold land 4,465 2,973 623 623
Long leasehold land 6,688 5,377 - -
Short leasehold land 1,302 2,565 - -
Factory, buildings and quarters 151,974 165,051 3,660 984
164,429 175,966 4,283 1,607
Included in plant and machinery of the Group and of the Company are assets acquired under instalment plans
with a net book value of RM21,676,171 (2002: RM21,502,892) and RM12,371,750 (2002: RM17,165,935),
respectively.
46 Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003
Notes to the Financial Statements - 30 April 2003
8. Property, plant and equipment (cont’d)
During the year, the Group and the Company acquired property, plant and equipment by the following means:
Group Company
2003 2002 2003 2002
RM’000 RM’000 RM’000 RM’000
Cash 74,874 45,306 22,998 8,727
Lease instalment arrangements 15,752 14,384 5,535 8,000
90,626 59,690 28,533 16,727
9. Investment in subsidiary companies
Company
2003 2002
RM’000 RM’000
Unquoted shares, at cost
At 1 May 379,028 331,999
Arising from further subscription of shares in a subsidiary company 2,265 47,029
At 30 April 381,293 379,028
Provision for diminution in value of investment (19) (19)
381,274 379,009
Details of subsidiary companies as at 30 April 2003 and their principal activities are shown below:
Group equity
Country of interest
Name of company Principal activities incorporation 2003 2002
Direct subsidiaries of the Company
Rimbunan Hijau Plywood Sdn. Bhd. Manufacturing and sale of
sawn timber, blockboard
and plywood Malaysia 100% 100%
Jaya Tiasa Plywood Sdn. Bhd.* Manufacturing and sale of
veneer, plywood and
sawn timber Malaysia 100% 100%
Guanaco Sdn. Bhd.* Extraction and sale of
timber Malaysia 100% 100%
Hak Jaya Sdn. Bhd. Extraction and sale of logs Malaysia 100% 100%
Maxiwealth Holdings Sdn. Bhd.* Extraction and sale of
timber Malaysia 100% 100%
Kunari Timber Sdn. Bhd.* Extraction and sale of
timber Malaysia 100% 100%
Jaras Sdn. Bhd. Extraction, purchase and
sale of logs Malaysia 100% 100%
Maujaya Sdn. Bhd.* Extraction and sale of
timber Malaysia 100% 100%
Mantan Sdn. Bhd. Extraction and sale of logs Malaysia 100% 100%
Curiah Sdn. Bhd. Extraction and sale of logs Malaysia 70% 70%
Sericahaya Sdn. Bhd. Extraction and sale of logs Malaysia 70% 70%
Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003 47
Notes to the Financial Statements - 30 April 2003
9. Investment in subsidiary companies (cont’d)
Group equity
Country of interest
Name of company Principal activities incorporation 2003 2002
Direct subsidiaries of the Company (cont’d)
Jaya Tiasa Forest Extraction of logs,
Plantation Sdn. Bhd. development and
(formerly known as maintenance of
Jaya Tiasa Plantations Sdn. Bhd.) planted forests Malaysia 100% 100%
Bonhin Sdn. Bhd. Provision of air
transportation services Malaysia 100% 100%
Eastern Timber Ltd. Offshore trading agent Federal Territory
of Labuan,
Malaysia 100% 100%
Eastern Green Company, Inc. Importation and sale of
wood products U.S.A. 100% 100%
Jaya Tiasa Timber Manufacturing and sale
Products Sdn. Bhd.* of veneer, sawn timber
and plywood Malaysia 100% 100%
Simalau Plantation Sdn. Bhd. Oil palm plantation Malaysia 100% 90%
Jaya Tiasa Aquaculture Sdn. Bhd. Dormant Malaysia 100% 100%
Jaya Tiasa R&D Sdn. Bhd.
(formerly known as Jubiland
Development Sdn. Bhd.) Dormant Malaysia 100% -
Atlantic Evergreen Holdings Investment holding Cayman Islands 100% 100%
Atlantic Timber Holdings Limited Investment holding Cayman Islands 100% 100%
Pacific Timber Holdings Limited Investment holding Cayman Islands 100% 100%
Subsidiary of Atlantic Evergreen Holdings
Western Timber Resources Limited Investment holding Cayman Islands 100% 100%
Subsidiary of Atlantic Timber Holdings Limited
Maginco Verde Ltda. Investment holding Brazil 100% 100%
Subsidiary of Pacific Timber Holdings Limited
Verde Para Sempre Ltda. Investment holding Brazil - 100%
Subsidiary of Verde Para Sempre Ltda.
Selvaplac Verde Ltda. Manufacturing and sale
(formerly known as of plywood and other
Selvaplac Verde S.A.) wood related products Brazil 100% 99.92%
* not audited by Ernst & Young or their associates.
On 31 March 2003, the net liabilities of Selvaplac Verde Ltda. (formerly known as Selvaplac Verde S.A.) were
merged with those of its immediate holding company, Verde Para Sempre Ltda. Following the merger,
Selvaplac Verde Ltda. became a direct subsidiary company of Pacific Timber Holdings Limited.
48 Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003
Notes to the Financial Statements - 30 April 2003
10. Investment in associated company
Group Company
2003 2002 2003 2002
RM’000 RM’000 RM’000 RM’000
Unquoted shares, at cost
- ordinary shares 2,000 2,000 2,000 2,000
- redeemable non-cumulative preference shares 2,400 2,400 2,400 2,400
4,400 4,400 4,400 4,400
Provision for diminution in value of investment (2,400) (2,400) (4,400) (4,400)
2,000 2,000 - -
Share of post-acquisition losses (2,000) (2,000) - -
- - - -
The Group’s interest in the associated company is as follows:
Group
2003 2002
RM’000 RM’000
Group’s share of net tangible assets (335) (335)
Premium on acquisition 335 335
- -
The associated company, which is incorporated in Malaysia, is:
Financial Percentage of
Name of company Principal activities year-end equity held
2003 2002
Mafrica Trading Sdn. Bhd.* General trading and
heli-logging services 28.2.2003 40% 40%
* Not audited by Ernst & Young or their associates.
11. Other investments
Group/Company
2003 2002
RM’000 RM’000
Unquoted shares, at cost - 2
Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003 49
Notes to the Financial Statements - 30 April 2003
12. Rights in timber licences
Group Company
2003 2002 2003 2002
RM’000 RM’000 RM’000 RM’000
At cost 298,447 298,447 247,724 247,724
Provision for amortisation
At 1 May 77,793 61,514 50,991 36,480
Amortisation during the year 16,279 16,279 14,511 14,511
At 30 April 94,072 77,793 65,502 50,991
204,375 220,654 182,222 196,733
In 1998, the Company acquired nine timber licensee companies and the rights to two timber licences. Apart
from one licence expiring in the year 2011, all the other licences will expire in the year 2015.
13. Goodwill on consolidation
Group
2003 2002
RM’000 RM’000
At cost
At 1 May 87,445 87,414
Arising from incidental charges incurred on acquisition of a subsidiary company 2,265 31
At 30 April 89,710 87,445
14. Inventories
Group Company
2003 2002 2003 2002
RM’000 RM’000 RM’000 RM’000
Plywood 19,488 25,497 - -
Veneer 12,220 13,082 - -
Blockboard 558 971 - -
General stores 14,721 16,126 891 81
Logs 9,859 15,680 6,078 8,103
Sawn timber 458 2,066 - -
Work-in-progress 1,620 763 - -
58,924 74,185 6,969 8,184
Provision for inventory obsolescence (401) (401) - -
58,523 73,784 6,969 8,184
The carrying amount of inventories
is stated as follows:
At cost 58,186 53,616 6,969 8,184
At net realisable value 337 20,168 - -
58,523 73,784 6,969 8,184
50 Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003
Notes to the Financial Statements - 30 April 2003
15. Trade receivables
The Group and the Company’s normal trade credit term is 30 days. Other credit terms are assessed and
approved on a case-by-case basis.
The Group and the Company have no significant concentration of credit risk that may arise from exposures to
a single receivable or to groups of receivables.
16. Other receivables
Group Company
2003 2002 2003 2002
RM’000 RM’000 RM’000 RM’000
Other receivables 18,187 7,119 11,056 768
Deposits 44 56 27 39
Prepayments 540 572 243 160
Current tax assets 32,083 19,714 13,328 -
50,854 27,461 24,654 967
The Group has no significant concentration of credit risk that may arise from exposures to a single receivable
or to groups of receivables.
17. Amount due from/(to) related companies
Group Company
2003 2002 2003 2002
RM’000 RM’000 RM’000 RM’000
Amount due from subsidiary companies - - 187,742 187,750
Provision for doubtful debts - - (40,240) (40,535)
- - 147,502 147,215
Amount due from associated company 2,600 2,600 2,600 2,600
Provision for doubtful debts (2,600) (2,600) (2,600) (2,600)
- - - -
- - 147,502 147,215
Amount due to subsidiary companies - - (205,041) (136,427)
The amounts due from/(to) related companies are unsecured, interest-free and have no fixed term of repayment.
18. Amount due to bankers
Group Company
2003 2002 2003 2002
RM’000 RM’000 RM’000 RM’000
Bankers’ acceptances 94,498 83,706 39,900 38,400
Bank overdrafts 4,561 13,286 261 833
Revolving loan - 10,000 - -
99,059 106,992 40,161 39,233
The amount due to bankers is unsecured and bears interest at various rates ranging between 7.15% to
7.80% (2002: 7.00% to 8.05%) per annum.
Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003 51
Notes to the Financial Statements - 30 April 2003
19. Trade payables
The normal trade credit terms granted to the Group range from 30 to 180 days.
20. Other payables
Group Company
2003 2002 2003 2002
RM’000 RM’000 RM’000 RM’000
Exchange contract advances 1,139 2,174 - -
Other payables and accruals 5,841 16,715 2,242 10,290
6,980 18,889 2,242 10,290
21. Lease payables
Minimum lease payments:
Repayable within one year 13,367 7,914 7,137 4,342
Repayable after one year but within five years 7,364 6,483 673 4,159
Future finance charges on finance leases (1,397) (1,064) (325) (653)
Present value of finance lease liabilities 19,334 13,333 7,485 7,848
Present value of finance lease liabilities:
Repayable within one year
(shown under current liabilities) 12,278 7,083 6,703 3,851
Repayable after one year but within
five years (shown under long-term and
deferred liabilities) 7,056 6,250 782 3,997
19,334 13,333 7,485 7,848
The lease payables bore interest at the balance sheet date at between 3.80% to 5.00% (2002: 3.80% to
4.75%) per annum.
22. Share capital
Group/Company
2003 2002
RM’000 RM’000
Authorised:
Ordinary shares of RM1.00 each 1,000,000 1,000,000
Issued and fully paid:
Ordinary shares of RM1.00 each 282,529 282,529
Of the total 282,528,499 issued and fully paid ordinary shares, 20,271,000 (2002: 15,897,000) are held as
treasury shares by the Company. As at 30 April 2003, the number of outstanding shares in issue and
fully paid is therefore 262,257,499 (2002: 266,631,499) ordinary shares of RM1.00 each.
52 Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003
Notes to the Financial Statements - 30 April 2003
23. Treasury shares
Pursuant to the authority granted by the shareholders of the Company to the directors at the Extraordinary
General Meeting held on 26 September 2002, the Company purchased during the year a total of 4,374,000
(2002: 3,652,000) of its issued shares from the open market for a total cost of RM13,574,777 (2002: RM8,059,086).
The average cost paid for the shares purchased during the year was RM3.10 (2002: RM2.21) per share.
Subsequent to the balance sheet date and up to 11 August 2003, being the last practicable date prior to the
printing of this report, the Company purchased an additional 415,400 shares for a total cost of RM1,110,868.
The average cost paid for the shares purchased during the period was RM2.67 per share.
The above purchases were financed from the Company’s internal funds. The shares purchased are held as
treasury shares in accordance with Section 67A of the Companies Act, 1965. As at 11 August 2003, the
issued and paid up capital comprises 282,528,499 ordinary shares of RM1.00 each, of which 20,686,400
ordinary shares are held as treasury shares.
Movements on share buy-backs
Total Average price
No. of cost per share
shares RM’000 RM
At 1 May 2002 15,897,000 49,574 3.12
Purchased during the year ended 30 April 2003 4,374,000 13,575 3.10
At 30 April 2003 20,271,000 63,149 3.12
Purchased subsequent to 30 April 2003 415,400 1,111 2.67
At 11 August 2003 20,686,400 64,260 3.11
The directors of the Company are committed to enhancing the value of the Company to its shareholders and
believe that the share buy-backs plan can be applied in the best interests of the Company and its shareholders.
24. Reserves
Movements in reserves are shown in the Statements of Changes in Equity.
Based on the estimated tax credits available, the entire retained profit of the Company is available for
distribution by way of dividends without incurring additional tax liability. In addition, the Company has tax
exempt credit estimated at RM2 million (2002: RM2 million) which is available for distribution as tax exempt
dividends. These amounts are subject to agreement by the Inland Revenue Board.
25. Deferred tax liabilities
Group Company
2003 2002 2003 2002
RM’000 RM’000 RM’000 RM’000
At 1 May - - - -
Transfer from income statement 3,886 - 3,810 -
At 30 April 3,886 - 3,810 -
Deferred taxation of the Group is in respect of timing differences between depreciation and capital allowances
on property, plant and equipment.
Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003 53
Notes to the Financial Statements - 30 April 2003
25. Deferred tax liabilities (cont’d)
The following unutilised tax losses and allowances have not been provided, the effects of which at 28% are:
Group Company
2003 2002 2003 2002
RM’000 RM’000 RM’000 RM’000
Tax losses carried forward 23,727 35,825 3,864 4,704
Capital allowance carried forward 25,150 33,360 - 3,864
Reinvestment allowance carried forward 842 842 - -
As at 30 April 2003, the deferred tax benefits are not recognised as there is no assurance beyond any
reasonable doubt that in the near future there will be sufficient taxable income to allow the assets to be realised.
26. Disposal of a subsidiary company
The effect of the disposal of a subsidiary company on the Consolidated Income Statement and Consolidated
Balance Sheet were as follows:
2002
RM’000
(a) Consolidated Income Statement
Revenue 2
Cost of sales (1,710)
Gross loss (1,708)
Other operating income 554
Selling and distribution costs (60)
Administrative expenses (1,099)
Other operating expenses -
Gain on disposal of subsidiary 42,472
Profit from operations 40,159
Finance costs (2,996)
Profit for the year 37,163
(b) Consolidated Balance Sheet
Property, plant and equipment 3,134
Current assets 19,776
Current liabilities (42,520)
Net liabilities (19,610)
Reclassification from shareholders’ equity
Foreign currency exchange reserve (10,923)
Capital reserve consolidation (11,749)
Proceeds from disposal (190)
Gain on disposal of a subsidiary company (42,472)
Proceeds from disposal 190
Less: Cash and cash equivalents of subsidiary disposed of (6)
Net cash inflow on disposal of a subsidiary company 184
54 Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003
Notes to the Financial Statements - 30 April 2003
27. Cash and cash equivalents
Group Company
2003 2002 2003 2002
RM’000 RM’000 RM’000 RM’000
Cash and bank balances 37,990 48,983 13,532 7,142
Bank overdrafts (4,561) (13,286) (261) (833)
33,429 35,697 13,271 6,309
28. Segmental reporting
The Group adopts business segment analysis as its primary reporting format and geographical segment as its
secondary reporting format. The Group is organised into two major business segments:
(i) Logs trading - Extraction and sale of logs
(ii) Manufacturing - Manufacturing and trading of sawn timber, plywood, veneer, blockboard and laminated wood
Other business segments include the provision of air transportation services, oil palm plantation, development
and maintenance of planted forests, offshore trading and investment holding.
The directors are of the opinion that all inter-segment transactions have been entered into in the normal
course of business and have been established on terms and conditions that are not materially different from
those obtainable in transactions with unrelated parties.
(a) Primary reporting format - business segments
Logs trading Manufacturing Others Eliminations Total
RM’000 RM’000 RM’000 RM’000 RM’000
2003
Revenue
External revenue 369,932 206,599 1,865 - 578,396
Intersegment revenue 212,192 96,252 4,007 (312,451) -
Total revenue 582,124 302,851 5,872 (312,451) 578,396
Results
Profit from operations 14,413 61,976 1,421 (2,244) 75,566
Finance costs (3,373) (4,422) (4,046) 1,300 (10,541)
Profit/(loss) before taxation 11,040 57,554 (2,625) (944) 65,025
Taxation (6,431) - - - (6,431)
Profit/(loss) after taxation 4,609 57,554 (2,625) (944) 58,594
Minority interests - - - - (22)
Net profit/(loss) for the year 4,609 57,554 (2,625) (944) 58,572
Other information
Segment assets 173,648 433,521 57,784 (7,020) 657,933
Rights in timber licenses 182,222 - - 22,153 204,375
Goodwill on consolidation - - - - 89,710
Current tax assets 23,428 5,945 2,710 - 32,083
Total assets 379,298 439,466 60,494 15,133 984,101
Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003 55
Notes to the Financial Statements - 30 April 2003
28. Segmental reporting (cont’d)
(a) Primary reporting format - business segments (cont’d)
Logs trading Manufacturing Others Eliminations Total
RM’000 RM’000 RM’000 RM’000 RM’000
2003 (cont’d)
Segment liabilities 33,469 32,715 4,030 - 70,214
Bank borrowings 48,363 69,808 222 - 118,393
Tax liabilities 66 - 111 - 177
Total liabilities 81,898 102,523 4,363 - 188,784
Capital expenditure 36,409 40,561 13,656 - 90,626
Depreciation of property,
plant and equipment 12,263 28,007 3,322 - 43,592
Amortisation of timber
rights 16,279 - - - 16,279
Impairment losses - 1,557 - - 1,557
2002
Revenue
External revenue 317,950 119,762 2,583 - 440,295
Intersegment revenue 171,314 95,351 3,840 (270,505) -
Total revenue 489,264 215,113 6,423 (270,505) 440,295
Results
(Loss)/profit from
operations (86,671) (38,375) 178 27,695 (97,173)
Finance costs (1,562) (7,175) (5,475) 4,143 (10,069)
Loss before taxation (88,233) (45,550) (5,297) 31,838 (107,242)
Taxation (3,813) 33 - 3,360 (420)
Loss after taxation (92,046) (45,517) (5,297) 35,198 (107,662)
Minority interests - - - - 1,908
Net loss for the year (92,046) (45,517) (5,297) 35,198 (105,754)
Other information
Segment assets 148,832 461,956 56,956 (6,134) 661,610
Rights in timber licenses 196,733 - - 23,921 220,654
Goodwill on consolidation - - - - 87,445
Current tax assets 10,629 5,945 3,140 - 19,714
Total assets 356,194 467,901 60,096 17,787 989,423
Segment liabilities 49,974 32,809 4,593 - 87,376
Bank borrowings 47,926 72,224 175 - 120,325
Tax liabilities 13,044 - 245 - 13,289
Total liabilities 110,944 105,033 5,013 - 220,990
56 Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003
Notes to the Financial Statements - 30 April 2003
28. Segmental reporting (cont’d)
(a) Primary reporting format - business segments (cont’d)
Logs trading Manufacturing Others Eliminations Total
RM’000 RM’000 RM’000 RM’000 RM’000
2002 (cont’d)
Capital expenditure 33,528 24,685 1,477 - 59,690
Depreciation of property,
plant and equipment 8,528 35,598 3,689 - 47,815
Amortisation of timber
rights 16,279 - - - 16,279
(b) Secondary reporting format - geographical segments
Although the Group’s two major business segments are managed on a worldwide basis, they operate in
two principal geographical areas of the world. In Malaysia, its home country, the Group’s areas of
operation are principally logs trading and investment holding. Additionally, the Group’s manufacturing
activities are also conducted principally in Malaysia. Other operations in Malaysia include the provision of
air transportation services, oil palm plantation, development and maintenance of planted forests, offshore
trading and investment holding.
The Group also operates in other countries:
(i) U.S.A. - importation and sale of wood products.
(ii) Cayman Islands - investment holding.
Other
Malaysia Brazil countries Eliminations Total
RM’000 RM’000 RM’000 RM’000 RM’000
2003
Revenue
External revenue 576,823 - 1,573 - 578,396
Intersegment revenue 312,451 - - (312,451) -
Total revenue 889,274 - 1,573 (312,451) 578,396
Other information
Segment assets 847,177 31,628 453 15,133 894,391
Capital expenditure 90,626 - - - 90,626
Depreciation of property,
plant and equipment 41,953 1,632 7 - 43,592
Amortisation of timber rights 16,279 - - - 16,279
Impairment losses 1,557 - - - 1,557
2002
Revenue
External revenue 438,345 377 1,573 - 440,295
Intersegment revenue 270,505 - - (270,505) -
Total revenue 708,850 377 1,573 (270,505) 440,295
Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003 57
Notes to the Financial Statements - 30 April 2003
28. Segmental reporting (cont’d)
(b) Secondary reporting format - geographical segments (cont’d)
Other
Malaysia Brazil countries Eliminations Total
RM’000 RM’000 RM’000 RM’000 RM’000
2002 (cont’d)
Other information
Segment assets 854,700 29,032 459 17,787 901,978
Capital expenditure 59,597 93 - - 59,690
Depreciation of property,
plant and equipment 44,931 2,876 8 - 47,815
Amortisation of timber rights 16,279 - - - 16,279
29. Change in accounting policy and prior year adjustment
During the year, the Group and the Company changed its accounting policy in respect of the treatment of
dividends proposed or declared after the balance sheet date in accordance with MASB Standard No.19 ‘Events
After the Balance Sheet Date’.
In previous years, dividends were accrued as a liability when proposed by the Board of directors. The Group
and the Company have now changed the accounting policy to recognise dividends in shareholders’ funds in
the year in which the obligation to pay is established in accordance with MASB Standard No.19. Therefore,
final dividends are now accrued as a liability after approval by shareholders at the Annual General Meeting.
This change in accounting policy has been accounted for retrospectively and the comparatives have been restated.
The change in policy has the effect of increasing the Group and the Company’s retained profit and decreasing
the current liabilities for the year ended 30 April 2003 by RM5,759,240 (2002: RM5,650,096) respectively.
The effect of the changes in the Group and the Company’s financial statements are reflected in the Statements
of Changes in Equity.
30. Significant related party transactions
Significant related party transactions entered into by the Group and Company are as follows:
(a) Transactions with subsidiary companies
Company
2003 2002
RM’000 RM’000
Hiring charges paid to a subsidiary company 2,400 2,400
Software maintenance income from subsidiary companies 321 319
Dividend received from a subsidiary company - 12,000
Interest received from a subsidiary company 120 480
Management fee received from subsidiary comspanies - 120
Purchase from subsidiary companies 11,198 6,590
Sales to subsidiary companies 211,271 190,939
58 Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003
Notes to the Financial Statements - 30 April 2003
30. Significant related party transactions (cont’d)
(b) Transactions with companies in which certain directors of the Company and their close family
members have a substantial financial interest and/or are directors:
Group Company
2003 2002 2003 2002
RM’000 RM’000 RM’000 RM’000
Income
(i) Sale of logs
Perpuluhan Jaya Sdn. Bhd. 1,775 309 1,464 305
Subur Tiasa Group* 443 8,528 443 7,107
(ii) Sale of power
Subur Tiasa Group* 844 816 33 -
(iii) Rental of equipment
Hose Mountains Logging Sdn. Bhd. - 33 - 33
Taman Logging Sdn. Bhd. 2,723 4,710 2,723 4,710
Tiong Toh Siong & Sons Sdn. Bhd. 92 228 92 162
Expenditure
(i) Purchase of logs
Binamewah Sdn. Bhd. 21,989 11,599 12,331 4,537
Lukutan Enterprises Sdn. Bhd. 10,600 3,079 4,886 1,201
Rejang Logging Co. Sdn. Bhd. - 156 - -
Subur Abadi Sdn. Bhd. - 152 - -
Subur Tiasa Group* 81 718 - 18
(ii) Purchase of raw material
Petanak Enterprises Sdn. Bhd. 13,672 8,376 - -
(iii) Contract fee for log harvesting
Hose Mountains Logging Sdn. Bhd. 16,500 26,608 - -
Meli-Mujong Logging Sdn. Bhd. 14,358 19,465 - -
Rimbunan Hijau Sdn. Bhd. 14,182 11,153 - -
Taman Logging Sdn. Bhd. 35,403 36,795 35,403 36,795
Tiong Toh Siong & Sons Sdn. Bhd. 77,522 116,579 77,522 115,188
(iv) Purchase of spare parts, fuel and lubricants
Rimbunan Hijau General Trading Sdn. Bhd. 943 647 195 94
(v) Towage and freight charges
Globular Sdn. Bhd. - 1,993 - 1,324
Onward Shipping Sdn. Bhd. 1,548 1,013 - -
Rimbunan Hijau Sdn. Bhd. - 2,441 - 2,329
Transport Resources Sdn. Bhd. 150 1,886 53 1,146
(vi) Insurance charges
Evershine Agency Sdn. Bhd. 80 422 36 119
Harmony Agencies Sdn. Bhd. 51 510 - 15
(vii) Purchase of air tickets
RH Tours and Travel Agency Sdn. Bhd. 95 108 22 62
(viii) Purchase of computer hardware and
related products
Comserv (Sarawak) Sdn. Bhd. 90 125 83 123
Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003 59
Notes to the Financial Statements - 30 April 2003
30. Significant related party transactions (cont’d)
(b) Transactions with companies in which certain directors of the Company and their close
family members have a substantial financial interest and/or are directors: (cont’d)
* Subur Tiasa Group includes Subur Tiasa Holdings Bhd. and its wholly owned subsidiaries, namely,
Subur Tiasa Plywood Sdn. Bhd., Homet Raya Sdn. Bhd. and RH Timber Processing Industries Sdn. Bhd.
The directors are of the opinion that the above transactions were entered into in the normal course of
business have been established on terms and conditions that are not materially different from those
obtainable in transactions with unrelated parties.
(c) Directors remuneration
The aggregate remuneration of the directors of the Group and of the Company categorised into
appropriate components are as follows:
Group Company
2003 2002 2003 2002
RM’000 RM’000 RM’000 RM’000
Executive Directors
- fees 30 30 30 30
- salaries and other emoluments 518 455 518 455
548 485 548 485
Non-Executive Directors
- fees 306 278 210 182
- other emoluments 48 48 48 48
354 326 258 230
The remuneration paid to the directors of the Company, analysed into bands of RM100,000 are as follows:
Number of directors
Range of remuneration Executive Non-Executive
Below 100,000 - 7
RM100,001 - RM200,000 - -
RM200,001 - RM300,000 - -
RM300,001 - RM400,000 - -
RM400,001 - RM500,000 - -
RM500,001 - RM600,000 1 -
31. Contingent liabilities, unsecured
Company
2003 2002
RM’000 RM’000
Bankers’ guarantees issued to third parties
on behalf of subsidiary companies 2,228 2,700
Corporate guarantees issued to bankers
on behalf of subsidiary companies 156,049 150,236
158,277 152,936
60 Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003
Notes to the Financial Statements - 30 April 2003
32. Capital commitments
Group Company
2003 2002 2003 2002
RM’000 RM’000 RM’000 RM’000
Authorised capital expenditure not provided
for in the financial statements:
- approved and contracted for 1,528 6,931 1,132 -
33. Significant event
On 28 February 2003, the Company entered into a Sale and Purchase Agreement to acquire 10,000 ordinary
shares of RM1.00 each, representing the entire issued and paid-up share capital of Hariyama Sdn. Bhd., a
company incorporated in Malaysia, for a total cash consideration of RM23,573,340. The acquisition has been
approved by the relevant authorities and is now pending completion.
34. Financial instruments
(a) Financial risk management objectives and policies
The Group’s financial risk management policy seeks to ensure that adequate financial resources are
available for the development of the Group’s businesses whilst managing its interest rate, liquidity,
credit and foreign exchange risks. The Group operates within clearly defined guidelines that are
approved by the Board and the Group’s policy is not to engage in speculative transactions.
(b) Interest rate risk
The Group’s primary interest rate risk relates to interest-bearing debt, as the Group had no substantial
long-term interest-bearing assets as at 30 April 2003. The investments in financial assets are short term
in nature and are not held for speculative purposes.
(c) Liquidity risk
The Group actively manages its debt maturity profile, operating cash flows and the availability of funding
so as to ensure that all repayment and funding needs are met. As part of its overall prudent liquidity
management, the Group maintains sufficient levels of cash and cash equivalents to meet its working
capital requirements. In addition, the Group strives to maintain available banking facilities of a reasonable
level to its overall debt position.
(d) Credit risk
Credit risk is managed by credit approvals and monitoring procedures.
The Group does not have any significant exposure to any individual customer or counter party nor does
it have any major concentration of credit risk related to any financial instruments.
(e) Foreign exchange risk
The Group is exposed to currency risk in respect of its foreign investments in subsidiaries. These are,
however, not significant.
(f) Fair value
The carrying amounts of short-term financial assets and liabilities approximate their fair value due to the
relative short maturity term of these financial instruments.
35. Comparative figures
The presentation and classification of items in the current year’s financial statements are consistent with the
previous financial year except that certain comparative amounts have been adjusted as a result of the change
in accounting policy as disclosed in Note 29.
Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003 61
Additional Compliance Information
1. American Depository Receipt (ADR) or Global Depository Receipt (GDR)
There were no American Depository Receipt (ADR) or Global Depository Receipt (GDR) programmes
sponsored by the Company during the financial year.
2. Sanctions and/or Penalties
There were no sanctions and/or penalties imposed on the Company or its subsidiaries, directors or management
by any relevant authority during the financial year.
3. Variation in Results
There were no profit estimates, forecasts or projections or unaudited results announced which differed by
10% or more during the financial year.
4. Profit Guarantees
There were no profit guarantees given by the Company and its subsidiaries during the financial year.
5. Material Contracts
There were no material contracts (not being contracts entered into in the ordinary course of business)
entered into by the Company or its subsidiaries which involve directors and major shareholders, either still subsisting
at the end of the financial year ended 30 April 2003 or entered into since the end of the previous financial year.
6. Revaluation Policy
There were no revaluation policies adopted on landed properties during the financial year.
7. Utilisation of Proceeds Raised from Corporate Proposals
There were no utilisations of proceeds raised from any proposal during the financial year.
8. Options, Warrants or Convertible Securities
There were no options, warrants or convertible securities exercised during the financial year.
9. Non-audit fee
The non-audit fees paid by the Group to the external auditors for the financial year ended 30 April 2003
amounted to RM102,000.
10. Share Buy-backs
At the Extraordinary General Meeting held on 26 September 2002, the shareholders renewed the authority
for the Company to purchase and/or hold up to a maximum of 28,252,000 ordinary shares of RM1.00 each
representing 10% of the issued and paid up share capital of the Company.
During the financial year ended 30 April 2003, a total of 4,374,000 of the Company’s own shares were
purchased pursuant to the share buybacks mandate. All the shares purchased are retained as treasury
shares. None of the shares purchased has been resold or cancelled as at 30 April 2003. A monthly breakdown
of the shares bought back is set out below:
Month No. of Shares Price Average Total Cost
Highest Lowest Cost
RM RM RM RM
May 2002 72,000 2.50 2.19 2.45 176,061
June 2002 476,000 2.60 2.04 2.44 1,159,526
July 2002 1,366,000 3.50 2.69 3.23 4,415,675
August 2002 503,000 3.42 3.10 3.33 1,676,853
September 2002 626,000 3.40 3.04 3.24 2,027,636
October 2002 260,000 3.46 3.16 3.35 870,368
November 2002 678,000 3.20 3.08 3.16 2,139,587
December 2002 - - - - -
January 2003 22,000 3.38 2.98 3.13 68,755
February 2003 59,000 3.12 3.08 3.13 184,681
March 2003 274,000 3.00 2.49 2.75 753,359
April 2003 38,000 2.70 2.62 2.69 102,276
4,374,000 13,574,777
62 Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003
Additional Compliance Information (cont’d)
11. Recurrent Related Party Transactions of A Revenue or Trading Nature
The Company obtained the approval of its shareholders at the Extraordinary General Meeting held on 26
September 2002 for the Group to enter into recurrent related party transactions of a revenue or trading
nature which are in the ordinary course of business of the Group.
The aggregate value of the recurrent related party transactions entered into by the Company and/or its
subsidiaries with related parties during the financing year ended 30 April 2003 are as follows: -
Nature of Transactions Related Parties Relationship with Amount
entered into by the the Company Transacted
Company and/or its RM’000
subsidiary(ies)
Contract fee for the Tiong Toh Siong & Sons Sdn Bhd 1 (a) 77,522
harvesting of logs from Taman Logging Sdn Bhd 1 (c) 35,403
timber concessions Hose Mountains Logging Sdn Bhd 1 (c) 16,500
paid to Related Parties Meli-Mujong Logging Sdn Bhd 1 (c) 14,358
Rimbunan Hijau Sdn Bhd 1 (b) 14,182
Purchase of logs from Binamewah Sdn Bhd 1 (c) 21,989
Related Parties Lukutan Enterprises Sdn Bhd 1 (b) 10,600
Subur Group2 1 (c) 81
Purchase of raw material Petanak Enterprises Sdn Bhd 1 (d) 13,672
(glue) from Related Party
Sales of logs to Related Subur Group2 1 (c) 443
Parties
Towage and freight Transport Resources Sdn Bhd 1 (c) 150
charges paid to Related Onward Shipping Sdn Bhd 1 (f) 1,548
Parties
Equipment Rental Income Taman Logging Sdn Bhd 1 (c) 2,723
received from Related Tiong Toh Siong & Sons Sdn Bhd 1 (a) 92
Parties
Purchase of spare parts, Rimbunan Hijau General Trading 1 (c) 943
fuel and lubricants from Sdn Bhd
Related Party
Purchase of computer Comserv (Sarawak) Sdn Bhd 1 (b) 90
hardware and related
products from Related
Party
Supply of power to Subur Group2 1 (c) 844
Related Parties
Purchase of air ticket R.H. Tours & Travel Agency Sdn Bhd 1 (c) 95
through the Related Party
Total 211,235
Notes:
1. Relationship of the Related Party with the Company.
(a) A wholly-owned subsidiary of a major shareholder
(b) A subsidiary of a major shareholder
(c) A company in which major shareholder(s) and/or person(s) connected have substantial interests
(d) A company in which major shareholder(s) are deemed to have substantial interests
(e) A company in which director and person(s) connected have substantial interests
(f) A company in which a person connected with a director has a substantial interest
2. Subur Group include Subur Tiasa Holdings Berhad and its wholly owned subsidiaries, namely, Subur Tiasa Plywood Sdn Bhd,
Homet Raya Sdn Bhd and R.H. Timber Processing Industries Sdn Bhd.
Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003 63
Analysis of Shareholdings as at 5 August 2003
Authorised share capital : RM1,000,000,000-00
Issued and fully paid-up share capital : RM282,528,499-00
Class of share : Ordinary share of RM1-00 each
Voting Rights : 1 vote per ordinary share
Distribution of shareholdings No. of Holders % No. of Holdings %
1 - 99 48 1.89 1,599 0.00
100 - 1000 1,064 41.86 984,622 0.38
1001 - 10000 1,117 43.94 4,400,628 1.68
10001 - 100000 206 8.10 6,778,820 2.59
100001 - 13092203 (less than 5% of issued shares) 103 4.05 140,324,352 53.59
13092204 (5%) and above of issued shares 4 0.16 109,354,078 41.76
TOTAL 2,542 100.00 261,844,099* 100.00
* the number of 261,844,099 ordinary shares was arrived at after deducting 20,684,400 treasury shares
retained by the Company from the issued and paid-up share capital of 282,528,499 ordinary shares.
Top 30 Shareholders
No. Name Shareholdings %
1 Tiong Toh Siong Holdings Sdn Bhd 40,428,867 15.44
2 HSBC Nominees (Asing) Sdn Bhd 31,762,711 12.13
HSBC Sg Ltd for Genine Chain Limited
3 Bumiputra-Commerce Nominees (Tempatan) Sdn Bhd 19,162,500 7.32
Pledged Securities Account for Amanas Sdn Bhd
4 Public Nominees (Tempatan) Sdn Bhd 18,000,000 6.87
Pledged Securities Account for Asanas Sdn Bhd
5 RHB Capital Nominees (Tempatan) Sdn Bhd 13,000,000 4.96
Pledged Securities Account for Tiong Toh Siong Holdings Sdn Bhd
6 Employees Provident Fund Board 10,955,000 4.18
7 Asanas Sdn Bhd 9,250,000 3.53
8 Bumiputra-Commerce Nominees (Tempatan) Sdn Bhd 8,412,500 3.21
Pledged Securities Account for Asanas Sdn Bhd
9 Bumiputra-Commerce Nominees (Tempatan) Sdn Bhd 8,212,500 3.14
Pledged Securities Account for Nustinas Sdn Bhd
10 Bumiputra-Commerce Nominees (Tempatan) Sdn Bhd 8,212,500 3.14
Pledged Securities Account for Insan Anggun Sdn Bhd
11 Malaysia Nominees (Tempatan) Sendirian Berhad 7,736,880 2.95
Great Eastern Life Assurance (Malaysia) Berhad
12 Mayban Nominees (Tempatan) Sdn Bhd 7,250,000 2.77
Pledged Securities Account for Tiong Toh Siong Holdings Sdn Bhd
13 Cartaban Nominees (Asing) Sdn Bhd 6,169,342 2.36
Credit Suisse Singapore for Double Universal Limited
14 Mayban Nominees (Asing) Sdn Bhd 5,076,419 1.94
DBS Bank for Bloomswick Ltd
15 Insan Anggun Sdn Bhd 4,500,000 1.72
16 Kenanga Nominees (Tempatan) Sdn Bhd 3,758,759 1.44
Pledged Securities Account for Tiong Thai King
17 DB (Malaysia) Nominee (Asing) Sdn Bhd 3,347,304 1.28
UBS Ag Singapore for Pacific Investment Fund
18 Lembaga Tabung Haji 2,877,000 1.10
64 Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003
Analysis of Shareholdings as at 5 August 2003 (cont’d)
Top 30 Shareholders (cont’d)
No. Name Shareholdings %
19 Mayban Nominees (Tempatan) Sdn Bhd 2,621,911 1.00
DBS Bank for Tiong Hiew King
20 Cartaban Nominees (Asing) Sdn Bhd 2,599,026 0.99
Credit Suisse Singapore for Gold Palace Profits Limited
21 HSBC Nominees (Asing) Sdn Bhd 2,322,333 0.89
JPMorgan Chase Bank for Roxton Investments Limited
22 Marabong Lumber Sendirian Berhad 1,850,435 0.71
23 Ke-Zan Nominees (Tempatan) Sdn Bhd 1,480,000 0.57
Kim Eng Ong Asia Securities Pte Ltd for Wong Thiam Meng
24 Am Nominees (Tempatan) Sdn Bhd 1,296,000 0.49
Employees Provident Fund Board
25 Tiong Chiong Ong 1,200,889 0.46
26 Azerina Mohd Arip @ Gertie Chong Soke Hoon 1,000,000 0.38
27 HSBC Nominees (Asing) Sdn Bhd 1,000,000 0.38
HSBCIT (S) Ltd for Numbley Assets Limited
28 Lembaga Amanah Kebajikan Darul Falah 1,000,000 0.38
29 Mayban Nominees (Tempatan) Sdn Bhd 1,000,000 0.38
DBS Bank for Tiong Chiong Hoo
30 BBMB Securities Nominees (Tempatan) Sdn Bhd 945,000 0.36
Petroliam Nasional Berhad
Substantial Shareholders
Name Direct No. % Indirect No. %
of Shares of Shares
Tiong Toh Siong Holdings Sdn Bhd 60,678,867 23.17 2,135,711(a) 0.82
Asanas Sdn Bhd 35,662,500 13.62
Genine Chain Limited 31,762,711 12.13
Amanas Sdn Bhd 19,162,500 7.32
Employees Provident Fund Board 13,523,000 5.16
Tan Sri Datuk Tiong Hiew King 2,682,212 1.02 62,814,578(b) 23.99
Teck Sing Lik Enterprise Sdn Bhd 62,814,578(c) 23.99
Dato’ Zulkifli Bin Ali 35,662,500(d) 13.62
Cheung Pak Keung 31,762,711(e) 12.13
Chang Meng 31,762,711(e) 12.13
Datuk Kenneth Kanyan Temenggong Koh 19,162,500(f) 7.32
Notes:
a. Deemed interested by virtue of its substantial shareholding in Marabong Lumber Sdn Bhd and Tiong Toh Siong & Sons Sdn Bhd.
b. Deemed interested by virtue of his substantial shareholding in Teck Sing Lik Enterprise Sdn Bhd.
c. Deemed interested by virtue of its substantial shareholding in Tiong Toh Siong Holdings Sdn Bhd.
d. Deemed interested by virtue of his substantial shareholding in Asanas Sdn Bhd.
e. Deemed interested by virtue of their substantial shareholdings in Genine Chain Limited.
f. Deemed interested by virtue of his substantial shareholding in Amanas Sdn Bhd.
Directors' Shareholdings
Name Direct No. % Indirect No. %
of Shares of Shares
Gen (Rtd) Tan Sri Abdul Rahman bin Abdul Hamid - - - -
Mr Tiong Chiong Hoo 1,013,899 0.39 - -
Dr. Tiong Ik King 103,339 0.04 - -
Tuan Haji Wan Alshagaf bin Tuanku Esim - - - -
Tuan Haji Ashaari @ Asahari bin Shebli - - - -
Mr John Leong Chung Loong - - - -
Mdm Tiong Choon - - - -
Mr Tiong Chiong Hee 5,000 0.002 - -
Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003 65
List of Properties as at 30 April 2003
Malaysia
Description Tenure Existing use Land Area Approximate Net Book Date of
age of Value as at Acquisition
building 30 April
2003
(RM’000)
Tanjung Ensurai, Sibu
Engkilo L.D. Blk 8 Leasehold land 19 June 1996
Lot 804 expiring on
05.09.2062 Factory, warehouse 141,298 16 years 5,887
and staff quarter sq metres
Sibu O.T. 838 Leasehold land 1 January 1997
expiring on
31.12.2024
Sibu Grant No. 2383, 2458 Leasehold land 31 March 1993
expiring on
31.12.2018
Engkilo L.D. Blk 8 Leasehold land Factory, warehouse 136,326 11 years 8,945 31 March 1993
Lot 803 expiring on and staff quarter sq metres
05.09.2062
Sibu O.T. 655 and 837 Leasehold land 31 March 1993
expiring on
31.12.2024
Sibu O.T. 12262 Leasehold land Vacant 16,183 - 229 26 July 2000
expiring on Agriculture land sq metres
13.06.2027
Putai, Kapit Factory, warehouse 11 years 21,619 -
Concession land and staff quarter
Upper Lanang Rd, Sibu
Sibu Town District Leasehold land Detached 832 13 years 34 31 December 1990
Blk 10 Lot 169 expiring on residential house sq metres
01.03.2050
Salim, Sibu
Seduan L.D. Blk 16 Leasehold land Warehouse 19,981 5 years 4,252 14 November 1995
Lot 1393 expiring on sq metres
31.12.2915
Ulu Oya Road, Sibu
Seduan L.D. Blk 10 Leasehold land Semi-detached 430.2 6 years 227 19 October 1999
Lot 1161 expiring on residential house sq metres
07.08.2054
Tanjung Manis, Sarikei
Sare L.D. Blk 3, Lot 25 Rented land Factory, warehouse 250,717 5 years 41,805 -
expiring on and staff quarter sq metres
22.09.2052
Sare L.D. Blk 3, Lot 71, Freehold land Vacant 40,961 - 307 19 January 1998
86 and 87 Agriculture land sq metres
Sare L.D. Blk 3, Leasehold land Vacant 15,699.50 - 1,854 1 September 2002
Lot 138 expiring on Industrial land sq metres
19.06.2062
Sare L.D. Blk 3, Lot 53, Freehold land Vacant 230,747 - 623 14 November 1996
54, 56, 57, 58, 59, 60 Agriculture land sq metres
and 61
Sungei Terus, Niah, Miri Provisional Vacant 23,629,286 - 1,782 30 April 2001
Lot 161, Suai Land leasehold Agriculture land sq metres
District expiring on
06.12.2060
Lot 934, Niah Land Provisional Vacant 26,369,203 - 1,989 30 April 2001
District leasehold Agriculture land sq metres
expiring on
06.12.2060
66 Jaya Tiasa Holdings Berhad (3751-V) Annual Report 2003
List of Properties as at 30 April 2003
Brazil
Municipality/State Description Tenure Existing Land Area Approx. Net Book Date of
Freehold Land Use Age Of Value Acquisition
Building As At
30 April
2003
(RM’000)
Maginco Verde Ltda
Sao Felix do Xingu, Para Lote n. 44-D Freehold Forest Land 2,275.745 hectares – 3 1 July 1997
Sao Felix do Xingu, Para Lote n. 35-E Freehold Forest Land 2,393.587 hectares – 2 1 July 1997
Sao Felix do Xingu, Para Lote n. 36-E, M-12060 Freehold Forest Land 2,440.310 hectares – 1 1 July 1997
Sao Felix do Xingu, Para Lote n. 28-E Freehold Forest Land 2,815.882 hectares – 1 1 July 1997
Sao Felix do Xingu, Para Reg. 4496 Pg 234 Freehold Forest Land 4,356.000 hectares – 2 1 July 1997
Sao Felix do Xingu, Para Reg. 4496 Pg 232 Freehold Forest Land 4,356.000 hectares – 63 1 July 1997
Sao Felix do Xingu, Para Lote n. 24-E Freehold Forest Land 2,985.052 hectares – 100 1 July 1997
Sao Felix do Xingu, Para Lote n. 25-E Freehold Forest Land 2,902.378 hectares – 33 1 July 1997
Sao Felix do Xingu, Para Lote n. 26-E Freehold Forest Land 2,989.808 hectares – 100 1 July 1997
Sao Felix do Xingu, Para Lote n. 27-E Freehold Forest Land 2,998.449 hectares – 56 1 July 1997
Sao Felix do Xingu, Para Lote n. 42-D Freehold Forest Land 2,464.510 hectares – 50 1 July 1997
Ananindeus, Para Enroll no. 289 Freehold Factory Building 138,084 sq. metres 19 5,773 1 July 1997
Ananindeus, Para Enroll no. 1722 Freehold Urban Land 20,000 sq. metres – 47 1 July 1997
Ananindeus, Para Lote nbr. 322 Freehold Urban Land 2,301 sq. metres – 5 1 July 1997
Ananindeus, Para Lote nbr. 344-C Freehold Urban Land 1,926 sq. metres – 2 1 July 1997
Ananindeus, Para Lote nbr. 342 Freehold Urban Land 4,820 sq. metres – 5 1 July 1997
Ananindeus, Para Lote nbr. 342-A Freehold Urban Land 5,184 sq. metres – 5 1 July 1997
Ananindeus, Para Lote nbr. 344-B Freehold Urban Land 5,184 sq. metres – 5 1 July 1997
Ananindeus, Para Lote nbr. 306 Freehold Urban Land 1,221 sq. metres – 2 1 July 1997
Ananindeus, Para Lote nbr. 362 Freehold Urban Land 3,804 sq. metres – 12 1 July 1997
Ananindeus, Para Lote nbr. 312 Freehold Urban Land 4,569 sq. metres – 8 1 July 1997
Ananindeus, Para Lote nbr. 342-B Freehold Urban Land 600 sq. metres – 1 1 July 1997
Ananindeus, Para Lote nbr. 340 Freehold Urban Land 2,102 sq. metres – 9 1 July 1997
Ananindeus, Para Lote nbr. 390 Freehold Urban Land 1,512 sq. metres – 40 1 July 1997
REFORESTATION
Carauari, Amazonas Seringal Nazare Freehold Forest Land 8,679.924 hectares – 9 1 July 1997
Carauari, Amazonas Seringal Pupunha I Freehold Forest Land 3,441.455 hectares – 4 1 July 1997
Carauari, Amazonas Seringal Pupunha II Freehold Forest Land 830.345 hectares – 1 1 July 1997
Carauari, Amazonas Seringal Pupunha III Freehold Forest Land 2,300.037 hectares – 3 1 July 1997
Selvaplac Verde Ltda
Moju, Para M. 4199, F.99, L.2-AV Freehold Rural Land 1,160.000 hectares – 36 1 July 1997
Portel, Para M. 951, F.99, L.2 Freehold Forest Land 7,090.000 hectares – 1,905 1 July 1997
Icoaraci, Para Ind. Plant (M.473, Freehold Factory Building 47,076 sq. metres 20 4,747 1 July 1997
L2-AM)
Icoaraci, Para M.236, F.236, L.2-GV Freehold Urban Land 106,323 sq. metres – 575 1 July 1997
M.47, F.47, L.2-GX
Number of shares held
I / We NRIC No.
(Full name in capital letters)
of
(Address)
being a member / members of JAYA TIASA HOLDINGS BERHAD hereby appoint
NRIC No.
(Full name in capital letters)
of
(Address)
or failing him NRIC No.
(Full name in capital letters)
of
(Address)
as my / our proxy to vote for me / us and on my / our behalf at the Forty-Third Annual General Meeting of the
Company to be held at the Auditorium Room, Ground Floor, No.62, Lorong Upper Lanang 10A, 96000 Sibu,
Sarawak on Monday, 29 September 2003 at 11:45 a.m. and at any adjournment thereof.
Resolution For Against
No. 1 Adoption of the Audited Financial Statements for the year ended 30 April 2003
together with the Directors' and Auditors' Reports thereon.
No. 2 Approval of Directors' Fees for the year ended 30 April 2003.
No. 3 Declaration of a First and Final Dividend of 3% less tax for the year ended
30 April 2003.
No. 4 Re-election of Gen (Rtd) Tan Sri Abdul Rahman bin Abdul Hamid.
No. 5 Re-election of Mr Tiong Chiong Hoo.
No. 6 Re-election of Tuan Haji Wan Alshagaf bin Tuanku Esim.
No. 7 Re-appointment of Auditors.
No. 8 Authority for the directors to allot and issue shares pursuant to Section 132D
of the Companies Act, 1965.
(Please indicate with (x) how you wish your vote to be casted. If no specific direction as to voting is given, the proxy will vote or abstain at his / her discretion)
Dated this day of 2003
Signature / Common Seal of Shareholder(s)
Notes:
1. A member of the Company entitled to attend and vote at the meeting is entitled to appoint one or more proxies in his/her stead. Where a member
appoints two (2) or more proxies, he/she shall specify the proportion of his/her shareholdings to be represented by each proxy.
2. A proxy may but need not be a member of the Company and the provision of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the
Company.
3. The instrument appointing a proxy must be deposited at the Company's Registered Office at No. 1-9, Pusat Suria Permata, Jalan Upper Lanang,
96000 Sibu, Sarawak not less than forty-eight (48) hours before the time set for holding the meeting or at any adjournment thereof.
4. If the appointer is a corporation, the proxy form must be executed under its common seal or under the hand of its attorney.
Jaya Tiasa Holdings Berhad(Incorporated in Malaysia)
Proxy Form
The Secretary
Jaya Tiasa Holdings Berhad
No. 1-9, Pusat Suria Permata
Jalan Upper Lanang
96000 Sibu, Sarawak
Malaysia