oilcorp financialstatement sharestats properties noticeagm (490kb)

7/29/2019 Oilcorp FinancialStatement ShareStats Properties NoticeAGM (490KB)

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Directors Report

DIRECTORS REPORTFOR THE YEAR ENDED 31 DECEMBER 2003

The directors hereby submit their report together with the audited financial statements of the Group and

of the Company for the financial year ended 31 December 2003.

PRINCIPAL ACTIVITIES

The Company is principally engaged in investment holding. The principal activities of its subsidiary

companies are set out in Note 5 to the financial statements. There have been no significant changes in

the nature of these principal activities during the financial year.

RESULTS

DIVIDEND

No dividend was paid or declared by the Company since the end of the previous financial year.

The directors do not recommend the payment of any dividend in respect of the financial year ended

31 December 2003.

RESERVES AND PROVISIONS

All material transfers to and from reserves and provisions during the financial year have been disclosed

in the financial statements.

Profit after taxation

Minority interests

Profit after taxation and minority interests

Pre-acquisition porfit

Net profit from ordinary activities

Group

RM

14,665,924

424,255

15,090,179

(2,739,330)

12,350,849

Company

RM

32,020

-

32,020

-

32,020


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Directors Report

BAD AND DOUBTFUL DEBTSBefore the income statements and balance sheets of the Group and of the Company were made out,

the directors took reasonable steps to ascertain that action had been taken in relation to the writing off

of bad debts and the making of provision for doubtful debts, and satisfied themselves that all known bad

debts had been written off and that adequate provision had been made for doubtful debts.

At the date of this report, the directors are not aware of any circumstances that would render the

amount written off for bad debts, or the amount of the provision for doubtful debts, in the financial

statements of the Group and of the Company inadequate to any substantial extent.

CURRENT ASSETS

Before the income statements and balance sheets of the Group and of the Company were made out,

the directors took reasonable steps to ensure that any current assets, other than debts, which were

unlikely to realise in the ordinary course of business, their values as shown in the accounting records of the

Group and of the Company have been written down to an amount that they might be expected to realise.

At the date of this report, the directors are not aware of any circumstances that would render the values

attributed to the current assets in the financial statements of the Group and of the Company misleading.

VALUATION METHODS

At the date of this report, the directors are not aware of any circumstances which have arisen which

render adherence to the existing methods of valuation of assets or liabilities of the Group and of the

Company misleading or inappropriate.

CONTINGENT AND OTHER LIABILITIES

At the date of this report, there does not exist:-

(i) any charge on the assets of the Group and of the Company that 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 and of the Company that has arisen since the end

of the financial year.

No contingent liability or other liability of the Group and of the Company has become enforceable, or is likely

to become enforceable within the period of twelve months after the end of the financial year which, in the

opinion of the directors, will or may substantially affect the ability of the Group and of the Company to meet

their obligations as and when they fall due, other than as disclosed in Note 30 to the financial statements.

CHANGE OF CIRCUMSTANCES

At the date of this report, the directors are not aware of any circumstances, not otherwise dealt with inthis report or the financial statements of the Group and of the Company that would render any amount

stated in the financial statements misleading.


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Directors Report

ITEMS OF AN UNUSUAL NATUREThe results of the operations of the Group and of the Company for the financial year were not, in theopinion of the directors, substantially affected by any item, transaction or event of a material andunusual nature.

There has not arisen in the interval between the end of the financial year and the date of this report any

item, transaction or event of a material and unusual nature likely, in the opinion of the directors, to affect

substantially the results of the operations of the Group and of the Company for the financial year in

which this report is made.

ISSUE OF SHARES AND DEBENTURESDuring the financial year, the Company increased its authorised share capital from RM100,000/- to

RM200,000,000/- by the creation of 199,900,000 ordinary shares of RM1/-. The Company also increased

its issued and fully paid-up share capital from RM2/- to RM151,600,002/- credited as fully paid-up through

the following issues:-

(i) 35,000,000 new ordinary shares of RM1/- each for settlement of the creditors of Abrar Corporation

Berhad (ACB);

(ii) 1,600,000 new ordinary shares of RM1/- each in exchange for 32,000,000 ACB ordinary shares of

RM1/- each;

(iii) 95,000,000 new ordinary shares of RM1/- each for settlement of the purchase consideration for the

acquisition of Oil-Line Engineering & Associates Sdn. Bhd. and its subsidiaries;

(iv) 20,000,000 new ordinary shares of RM1/- each for the settlement of the purchase consideration for

the acquisition of Ascentland Sdn. Bhd.

The movements in the authorised and issued and fully paid-up share capital of the Company are

disclosed in Note 22 to the financial statements.

No debentures were issued by the Company during the financial year.

DIRECTORS

The directors in office since the date of the last report are:-

Dato Seri (Dr) Haji Abu Hassan Bin Haji Omar - appointed on 12.5.2003

Ng Huat Tian - appointed on 12.5.2003

Pua Yow Liang - appointed on 12.5.2003

Mohamed Hazali Bin Dato Seri (Dr) Haji Abu Hassan - appointed on 12.5.2003

Ang Choon Hug - appointed on 12.5.2003

Ng Huat Chai - appointed on 12.5.2003

Chng Kong San - appointed on 12.5.2003

Francis Ng - appointed on 12.5.2003

Cho Nam Sang

Cheah Seng Imm - resigned on 13.5.2003


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DIRECTORS INTERESTSAccording to the Register of Directors Shareholdings, the interests of those directors who held office at

the end of the financial year in shares in the Company and its subsidiary companies during the financial

year are as follows:-

Number of ordinary shares of RM1/ - each

Other than as stated above, none of the other directors in office at the end of the financial year had

any interest in shares in the Company and its related corporations during the financial year.

In accordance with Article 103 of the Articles of Association of the Company, Cho Nam Sang retires from

the Board at the forthcoming Annual General Meeting and being eligible, offers himself for re-election.

In accordance with Article 109 of the Articles of Association of the Company, Dato Seri (Dr) Haji Abu

Hassan bin Haji Omar, Ng Huat Tian, Pua Yow Liang, Mohamed Hazali Bin Dato Seri (Dr) Haji Abu Hassan,

Ang Choon Hug, Ng Huat Chai, Chng Kong San and Francis Ng retire from the Board at the forthcoming

Annual General Meeting and being eligible, offer themselves for re-election.

SIGNIFICANT EVENTS

Significant events during the financial year are disclosed in Note 34 to the financial statements.

43

Directors Report

The Company

Oilcorp Berhad

Dato Seri (Dr) Haji Abu

Hassan Bin Haji Omar

Ng Huat Tian

Pua Yow Liang

Mohamed Hazali Bin Dato

Seri (Dr) Haji Abu Hassan

Ang Choon Hug

Cho Nam Sang

The subsidiary company

Oil-Line Fabricators Sdn. Bhd.

Mohamed Hazali Bin Dato

Seri (Dr) Haji Abu Hassan

At 1 Jan 2003

or date of

appointment

3,835,500

40,702,320

4,000,000

3,835,500

1,911,223

1

490,000

Bought

-

22,500,000

-

269,800

-

-

1,960,000

Sold

-

23,687,000

2,000,000

455,500

-

-

-

At

31 December

2003

3,835,500

39,515,320

2,000,000

3,649,800

1,911,223

1

2,450,000


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Directors Report

DIRECTORS' BENEFITSSince the end of the previous financial year, no director of the Company has received or become

entitled to receive a benefit (other than as disclosed in the financial statements) by reason of a contract

made by the Company or a related corporation with the director or with a firm of which the director is

a member, or with a company in which the director has a substantial financial interest.

Neither during nor at the end of the financial year was the Company or any of its related corporations

a party to any arrangement whose object was to enable the directors to acquire benefits by means of

the acquisition of shares in, or debentures of, the Company or any other body corporate.

AUDITORS

The auditors, Messrs Monteiro & Heng, have expressed their willingness to continue in office.

On behalf of the Board,

........................................................................

NG HUAT TIAN

Director

........................................................................

PUA YOW LIANG

Director

Kuala Lumpur

Date: 28 April 2004


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Balance Sheets

BALANCE SHEETS AS AT 31 DECEMBER 2003

PROPERTY, PLANT AND EQUIPMENT

INVESTMENT PROPERTIES

INVESTMENT IN SUBSIDIARY COMPANIES

OTHER INVESTMENTS

GOODWILL ON CONSOLIDATION

CURRENT ASSETS

Property development expenditure

Amount due from customers for

contract works

Trade debtors

Other debtors, deposits and prepayments

Tax recoverable

Fixed deposits placed with licensed banks

Cash and bank balances

Less:

CURRENT LIABILITIES

Amount due to customers for

contract works

Trade creditors

Other creditors, deposits and accruals

Provision

Amount due to directors

Amount due to subsidiary companies

Bank overdrafts - secured

Hire purchase creditors

Short term borrowings

Provision for taxation

NET CURRENT ASSETS/(LIABILITIES)

Note

3

4

5

6

7

8

9

10

11

12

8

13

14

15

16

17

18

19

20

2003 2003 2002

RM RM RM

43,437,260 - -

14,177,394 - -

- 115,000,000 -

104,900 - -

63,545,935 - -

40,169,109 - -

9,366,545 - -

44,719,743 - -

3,935,545 - -

73,417 - -

6,444,101 - -

2,688,577 970 2

107,397,017 970 2

150,063 - -

17,584,376 - -

27,478,773 54,674 2,280

9,081,055 - -

1,760,830 27,197 9,624

- 1,190,331 -

4,335,992 - -

235,688 - -

19,069,388 - -

3,690,948 87,000 -

83,387,113 1,359,202 11,904

24,009,904 (1,358,232) (11,902)

145,275,393 113,641,768 (11,902)

Group Company


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Balance Sheets

BALANCE SHEETS AS AT 31 DECEMBER 2003 (Continued)

Group Company

2003 2003 2002

Note RM RM RM

Financed by:

SHARE CAPITAL 22 151,600,002 151,600,002 2

REVENUE RESERVE (25,639,405) (37,958,234) (11,904)

SHAREHOLDERS FUNDS/ (CAPITAL DEFICIENCY) 125,960,597 113,641,768 (11,902)

MINORITY INTERESTS 2,305,351 - -

HIRE PURCHASE CREDITORS 19 317,627 - -

LONG TERM LIABILITIES 21 12,731,723 - -

DEFERRED TAXATION 23 3,960,095 - -

145,275,393 113,641,768 (11,902)

The accompanying notes form an integral part of these financial statements.


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Income Statements


INCOME STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2003

REVENUE

Cost of sales

GROSS PROFIT

Other operating income

Other operating expenses

Administrative expenses

OPERATING PROFIT/(LOSS)

Finance costs (net)

PROFIT/(LOSS) BEFORE TAXATION

Taxation

PROFIT/(LOSS) AFTER TAXATION

Minority interests

PROFIT/(LOSS) AFTER TAXATION

AND MINORITY INTERESTS

Pre-acquisition profit

NET PROFIT/(LOSS) FROM ORDINARY ACTIVITIES

Extraordinary items

- one off corporate costs pursuant to

Corporate and Restucturing Scheme

for transfer of listing status written off

NET PROFIT FOR THE YEAR

Earnings/(loss) per share (sen)

Basic

- before extraordinary items

- after extraordinary items

Fully diluted

Note

24

25

26

27

28

29

2003 2003 2002

RM RM RM

119,896,595 350,000 -

(94,887,710) - -

25,008,885 350,000 -

1,200,436 - -

- - -

(5,269,468) (230,980) (4,412)

20,939,853 119,020 (4,412)

(602,715) - -

20,337,138 119,020 (4,412)

(5,671,214) (87,000) -

14,665,924 32,020 (4,412)

424,255 - -

15,090,179 32,020 (4,412)

(2,739,330) - -

12,350,849 32,020 (4,412)

(37,978,350) (37,978,350) -

(25,627,501) (37,946,330) (4,412)

13.01

(26.99)

-

Group Company


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Statements Of Changes In Equity


STATEMENTS OF CHANGES IN EQUITY


Group

Balance at 1 January 2003

Issued during the year

One off corporate costs written off

Net profit for the year

Balance at 31 December 2003

Company

Balance at 1 January 2002

Net loss for the year



One off corporate costs written off



Note

22

28

22

28

One Off

Share Corporate Costs Retained

Capital Written Off Profit Total

RM RM RM RM

2 - (11,904) (11,902)

151,600,000 - - 151,600,000

- (37,978,350) - (37,978,350)

- - 12,350,849 12,350,849

151,600,002 (37,978,350) 12,338,945 125,960,597

One Off

Share Corporate Costs Retained

Capital Written Off Profit Total

RM RM RM RM

2 - (7,492) (7,490)

- - (4,412) (4,412)

2 - (11,904) (11,902)

151,600,000 - - 151,600,000

- (37,978,350) - (37,978,350)

- - 32,020 32,020

151,600,002 (37,978,350) 20,116 113,641,768

Revenue Reserve

Revenue Reserve


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Cash Flow Statements

CASH FLOW STATEMENTS


CASH FLOW FROM OPERATING

ACTIVITIES:

Profit/(loss) before taxation after

extraordinary items

Less: Pre-acquisition profit

Adjustments for:

Bad debts written off

Depreciation

- charge for the year

- pre-acquisition profit

Provision for doubtful debts

- current year

- no longer required

Extraordinary items

Interest expenses

- charge for the year


Interest income

- received for the year


Gain on disposal of property, plant and equipment

Attributable profit to development work performed todate

- recognised for the year


Plant and equipment written off

Sundry deposit writen off

Operating Profit/(loss) Before Working Capital Changes

2003 2003 2002

RM RM RM

(17,641,212) (37,859,330) (4,412)

(3,756,063) - -

(21,397,275) (37,859,330) (4,412)

23,141 - -

798,173 - -

(256,590) - -

541,583 - -

89,687 - -

(243,220) - -

37,978,350 37,978,350 -

1,858,178 - -

(441,044) - -

1,417,134 - -

(1,255,463) - -

44,783 - -

(1,210,680) - -

(791,165) - -

(8,396,077) - -

1,324,245 - -

(7,071,832) - -

4,063 - -

23,725 - -

9,363,511 119,020 (4,412)

Group Company


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FOR THE YEAR ENDED 31 DECEMBER 2003 (CONTINUED)

Increase in amount due from/to customers for

contract work

Increase debtors

Increase in creditors

Increase in provision

Increase progress billingsIncrease in development expenditure

Cash Generated From/(Used In) Operations

Interest paid

Interest received

Taxation paid

Net Cash From/(Used In) Operating Activities

CASH FLOW FROM

INVESTING ACTIVITIES:

Purchase of plant and equipment*

Proceeds from disposal of property,

plant and equipment

Proceeds from disposal of a subsidiary

company

Increase in development expenditure for

investment properties

Acquisition of subsidiary companies net of cash

acquired**

Net Cash (Used In)/From Investing Activities

2003 2003 2002

RM RM RM

1,390,963 - -

(12,990,142) - -

12,755,899 52,394 1,780

9,081,055 - -

14,254,305 - -(22,428,208) - -

11,427,383 171,414 (2,632)

(791,864) - -

1,210,680 - -

(3,741,244) - -

8,104,955 171,414 (2,632)

(19,550,744) - -

5,485,869 - -

1 1 -

(1,687,966) - -

(14,963,770) - -

(30,716,610) 1 -

Group Company


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FOR THE YEAR ENDED 31 DECEMBER 2003 (CONTINUED)

CASH FLOW FROM

FINANCING ACTIVITIES:

Fixed deposits held as security value

Corporate expenses paid

Increase in amount due to subsidiary companies

Increase in directors accountsInterest paid

Drawdown of term loan

Payments to hire purchase creditors

Repayment of term loan

Net Cash From/(Used In) Financing Activities

NET (DECREASE)/INCREASE IN

CASH AND CASH EQUIVALENTS


AT BEGINNING OF THE YEAR


AT END OF THE YEAR

ANALYSIS OF CASH AND CASH EQUIVALENTS:


Fixed deposits

Bank overdrafts

Bankers' acceptance

Trust receipts

Less: Deposits held as security values

2003 2003 2002

RM RM RM

(1,653,936) - -

(1,378,351) (1,378,351) -

- 1,190,331 -

523,066 17,573 2,632(1,094,543) - -

16,462,604 - -

(203,551) - -

(5,057,521) - -

7,597,768 (170,447) 2,632

(15,013,887) 968 -

2 2 2

(15,013,885) 970 2

2,688,557 970 2

6,444,101 - -

(4,335,992) - -

(12,309,720) - -

(1,056,730) - -

(8,569,784) 970 2

(6,444,101) - -

(15,013,885) 970 2

Group Company

* During the year, the Group acquired plant and equipment amounting to RM20,023,172/- of which RM436,130/-were acquired under hire purchase instalment plans. Cash payments amounting to RM87,297/- were made towardsthe hire purchase.


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** SUMMARY OF EFFECTS ON ACQUISITION OF SUBSIDIARY COMPANIES

Assets

Property, plant and equipment

Investment properties

Other investments

Property, development expenditure

Amount due from customers for contract works

DebtorsFixed deposits placed with licensed bank


Liabilities

Amount due to customers for contract works

Creditors


Borrowings

Deferred taxation


Minority interests

Net assets acquired

Goodwill on consolidation

Purchase consideration

Portion of consideration settled by issuance of Oilcorp Shares

Cash of subsidiary company acquired

Net cash outflow from acquisition of subsidiary company

2003

RM

28,654,438

12,489,428

104,900

24,577,696

11,227,236

35,558,4794,790,165

904,089

118,306,431

619,791

32,304,969

1,228,140

23,305,470

3,037,755

3,717,456

64,213,581

(2,638,785)

51,454,065

63,545,935

115,000,000

(115,000,000)

14,963,770

14,963,770

On 2 May 2003, the Company entered into share sale agreements for the acquisition of 100% equity interest in Oil-Line

Engineering & Associates Sdn. Bhd. ("Oil-Line") and Ascentland Sdn. Bhd. ("Ascentland") for considerations of

RM95,000,000/- and RM20,000,000/- respectively.


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The effects of the acquisitions of Oil-Line and Ascentland on the financial results of the Group from the

date of acquisition to 31 December 2003 were as follows:

Revenue

Cost of sales

Gross profit

Other operating income

Administrative expenses

Operating Profit

Finance costs

Profit before taxation

Taxation


Minority interests

Net profit after taxation and minority interests

Pre-acquisition profit


Financial year ended

31 December 2003

Oil-Line

RM

87,479,429

(70,866,621)

16,612,808

1,193,036

(4,564,041)

13,241,803

(381,190)

12,860,613

(3,592,674)

9,267,939

424,255

9,692,194

(1,881,619)

7,810,575

Ascentland

RM

32,417,166

(24,021,089)

8,396,077

7,400

(824,447)

7,579,030

(221,525)

7,357,505

(1,991,540)

5,365,965

-

5,365,965

(857,711)

4,508,254


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The effects of the acquisitions on the financial position of the Group at 31 December 2003 were as

follows:

Assets

Property,plant and equipment


Other investments

Land and development expenditureAmount due from customers for contract works

Debtors

Tax recoverable

Fixed deposits placed with licensed bank


Liabilities

Amount due to customers for contract works

Creditors

Provision


Borrowings

Deferred taxation


Net assets

As 31 December 2003

Oil-Line

RM

43,409,655

-

104,900

-9,366,545

40,158,967

73,417

6,444,101

762,964

(150,063)

(38,134,075)

-

(997,171)

(33,661,090)

(43,700)

(2,666,548)

24,667,902

Ascentland

RM

27,605

14,177,394

-

40,169,109-

8,496,321

-

-

1,924,623

-

(6,874,400)

(9,081,055)

(736,462)

(3,029,328)

(3,916,395)

(937,400)

40,220,012



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Notes To The Financial Statements

NOTES TO THE FINANCIAL STATEMENTS1. PRINCIPAL ACTIVITIES AND GENERAL INFORMATION

The Company is principally engaged in investment holding. The principal activities of its subsidiary

companies are set out in Note 5 to the financial statements. There have been no significant

changes in the nature of these principal activities during the financial year.

The Company is a public limited liability company, incorporated and domiciled in Malaysia and

listed on the Main Board of Bursa Malaysia Securities Berhad (formerly known as Malaysia

Securities Exchange Berhad).

The registered office and the principal place of business of the Company is located at No. 2-2,Jalan SS 6/6, Kelana Jaya, 47301 Petaling Jaya, Selangor Darul Ehsan.

The number of employees of the Group and of the Company (including directors) at the end of

the financial year is 169 and 2 (2002 : Nil) respectively.

The financial statements 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 28 April 2004.

2. SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of Accounting

The financial statements of the Group and of the Company comply with applicable

approved accounting standards issued by the Malaysian Accounting Standards Board and

have been prepared under the historical cost convention modified to include the revaluation

of certain assets, unless otherwise indicated in the accounting policies set out below.

(b) Basis of Consolidation

The consolidated financial statements include the financial statements of the Company andits subsidiary companies made up to the end of the financial year.

Subsidiary companies are those enterprises controlled by the Company. Control exists when

the Company has the power, directly or indirectly, to govern the financial and operating

policies of an enterprise so as to obtain benefits from its activities. The financial statements of

subsidiary companies are included in the consolidated financial statements from the date

that control effectively commences until the date that control effectively ceases.

Subsidiary companies are consolidated using the acquisition method of accounting. Under

the acquisition method of accounting, the results of subsidiary companies acquired or

disposed during the year are included in the Group financial statements from their respective

effective dates of acquisitions or up to their respective date of disposal.


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2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)(b) Basis of Consolidation (Continued)

The financial statements of the parent and its subsidiary companies are all drawn up to the same

reporting date.

Intra group 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.

Minority interest represents the interest of outside members in the operating results and net assets

of subsidiary companies.

The gains or loss on disposal of a subsidiary company is the difference between net disposal

proceeds and the Groups share of its assets together with any unamortised balance of goodwill

or reserve on consolidation which was not previously recognised in the consolidated income

statement.

(c) Reserve/Goodwill on Consolidation

The difference between the purchase consideration and the fair value of the net assets of

subsidiary companies at the respective dates of the acquisition is included in the consolidated

balance sheet as reserve or goodwill arising on consolidation.

The carrying amount of goodwill arising on consolidation is reviewed annually and is written down

for impairment where it is considered necessary.

(d) Subsidiary Companies

Subsidiaries are those enterprises in which the Group has power to exercise control over the

financial and operating policies so as to obtain benefits from their activities.

Investments in subsidiary companies are stated at cost less impairment losses, if any. The policy for

the recognition and measurement of impairment losses is in accordance with Note 2(t).

(e) Property, Plant and Equipment and Depreciation

Property, plant and equipment are stated at cost or at valuation less accumulated depreciation

and impairment losses, if any. The policy for the recognition and measurement of impairment

losses is in accordance with Note 2(t).


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2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)(e) Property, Plant and Equipment and Depreciation (Continued)

Freehold lands are not depreciated. All other property, plant and equipment are depreciated on

a straight line basis over the estimated useful lives of the assets concerned. The annual rates used

for this purpose are as follows:-

Freehold buildings 2%

Long leasehold land 95 years

Motor vehicles 20%

Office equipment 10% - 20%

Furniture & fittings 10% - 15%

Renovation 10%

Building-in-progress will be depreciated when the property is ready for its intended use.

Fully depreciated assets are retained in the financial statements until the assets are no longer in use.

(f) Property Development Expenditure

Property development expenditure consists of land under development at cost or at valuation

and other related costs including financial expenses incurred during the period of development,

and portion of profit or loss attributable to development work performed todate, less progress

billings. Provision for foreseeable losses is made when estimated future revenue realisable is lower

than the carrying amount of the project.

The Group considers as current assets that portion of property development projects which are

currently under development on which significant development work has been undertaken and is

expected to be completed within the Groups normal operating cycle. The current portion of the

property development projects are stated at the lower of carrying amount and net realisable value.

(g) Investment Properties

Investment properties are held for their investment potential and rental income and are stated at

cost less provision for diminution in value. Investment properties will be depreciated when the

property is ready for its intended use.

On disposal of an investment property, the difference between the net disposal proceeds and the

carrying amount is charged or credited to the income statement; any amount in revaluation

reserve relating to that investment property is transferred to unappropriated profits account.


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2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)(h) Other Investments

Other investments are stated at cost less impairment losses, if any. The policy for the recognition

and measurement of impairment losses is in accordance with Note 2(t).

On disposal of an investment, the difference between net disposal proceeds and its carrying

amount is charged or credited to the income statement.

(i) Debtors

Known bad debts are written off and specific provision is made for any debts considered to be

doubtful of collection.

(j) Revaluation of Assets

Land and buildings at valuation are revalued at a regular interval of at least once in every five

years with additional valuations in the intervening years where market conditions indicate that the

carrying values of the revalued land and buildings materially differ from the market values.

Any surplus or deficit arising from the revaluations will be dealt with in the Revaluation Reserve

Account. Any deficit is set-off against the Revaluation Reserve Account only to the extent of

surplus credited from the previous revaluation of the land and buildings and the excess of the

deficit is charged to the income statement.

(k) Borrowing Costs

Borrowing costs incurred on property development projects are capitalised and included as part

of development expenditure. The capitalisation of borrowing costs commences when expenditure

for the property development projects and borrowing costs are being incurred and the activities

that are necessary to prepare the property development projects for its intended sale are in

progress. However, capitalisation of borrowing costs is suspended during extended periods in

which active development is interrupted.

Capitalisation of borrowing costs should cease when substantially all the activities necessary to

prepare the property development projects for its intended sale are completed.

Borrowing costs incurred in financing the construction-in-progress are capitalised as part of the

cost of the assets. Capitalisation will cease when the relevant assets are ready for their intended use.

All other borrowing costs are charged to the income statement as an expense in the period in

which they are incurred.


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2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)(l) Amount due from/to Customers for Contract Works

When costs incurred on construction contracts plus recognised profits (less recognised losses)

exceed progress billings, the balance is shown as amount due from customers for contract works.

When progress billings exceed costs incurred plus recognised profits (less recognised losses), the

balance is shown as amount due to customers for contract works.

Contract costs incurred to date include:-

(i) Costs directly related to the contract;

(ii) Costs attributable to contract activity in general and can be allocated to the contract; and

(iii) Other costs specifically chargeable to the customer under the terms of the contract.

(m) Creditors

Creditors are stated at cost which is the fair value of the consideration to be paid in the future,

whether or not billed to the Group.

(n) Provisions for Liabilities

Provisions for liabilities are recognised when the Group has a present obligation as a result of a

past event and it is probable that an outflow of resources embodying economic benefits will be

required to settle the obligation, and a reliable estimate of the amount can be made. Provisions

are reviewed at each balance sheet date and adjusted to reflect the current best estimate.

(o) Hire Purchase

Assets financed by hire purchase arrangements which transfer substantially all the risks and

rewards of ownership to the Group are capitalised as property, plant and equipment, and the

corresponding obligations are treated as liabilities. The assets so capitalised are depreciated in

accordance with the accounting policy on property, plant and equipment. Finance charges are

charged to the income statements over the periods of the respective agreements.

(p) Revenue Recognition

(i) Contract Works

Revenue from contract works are recognised on a percentage of completion method.

Percentage of completion is determined on the proportion of contract costs incurred to date

against total estimated costs where the outcome of the project can be reliably determined.

All foreseeable losses on projects are recognised as soon as they are anticipated. When the

outcome of a project cannot be estimated reliably, revenue should be recognised only to

the extent of contract costs incurred that it is probable will be recovered.


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2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)(p) Revenue Recognition (Continued)

(ii) Engineering and Technical Services

Engineering and technical services are recognised upon services rendered to customers.

(iii) Property Development

Revenue from sale of property development projects is recognised on the percentage of

completion method. No profit is recognised where development is in its initial stage or has not

reached a stage of completion where it is possible to determine the financial outcome of the

development with reasonable accuracy. Provision for foreseeable losses is made whenestimated future revenue realisable is lower than the carrying amount of the project.

Interest income from late payments by house buyers and forfeiture income are recognised on

receipt basis.

(iv) Interest Income

Interest income is recognised on an accrual basis unless collectibility is in doubt in which

recognition will be on receipt basis.

(q) Employee Benefits

(i) Short Term Employee Benefits

Wages, salaries, social security contribution, bonuses and non-monetary benefits are accrued

in the period in which the associated services are rendered by the employees.

(ii) Post-Employment Benefits

The Group contributes to the Employees Provident Fund (EPF), the national defined

contribution plan. The contributions are charged to the income statement in the period to

which they are related. Once the contributions have been paid, the Group has no further

payment obligations.


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2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)(r) Taxation

The tax expense in the income statement represents the aggregate amount of current tax and

deferred tax included in the determination of net profit or loss for the year.

Deferred tax is provided for, using the liability method, on temporary differences at the balance

sheet date between the tax bases of assets and liabilities and their carrying amounts in the financial

statements. In principle, deferred tax liabilities are recognised for all taxable temporary differences

and deferred tax assets are recognised for all deductible temporary differences, unused tax losses

and unused tax credits to the extent that it is probable that taxable profit will be available against

which the deductible temporary differences, unused tax losses and unused tax credits can be

utilised.

Deferred tax is measured at the tax rates that are expected to apply in the period when the asset

is realised or the liability is settled, based on tax rates that have been enacted or substantively

enacted at the balance sheet date. Deferred tax is recognised in the income statement, except

when it arises from a transaction which is recognised directly in equity, in which case the deferred

tax is also charged or credited directly in equity.

Prior to the adoption of MASB 25 Income Taxes on 1 July 2002, deferred tax was provided for using

the liability method in respect of significant timing differences and deferred tax assets were not

recognised unless there was reasonable expectation of their realisation. There are no material

effects arising from this change in accounting policy.

(s) Financial Instruments

Financial instruments are recognised in the balance sheet when the Company has become a party

to the contractual provisions of the instruments. Financial instruments carried on the balance sheet

include cash and bank balances, investments, debtors, creditors and borrowings. The particular

recognition methods adopted are disclosed in the individual accounting policy statements

associated with each item.

Financial instruments are classified as liabilities or equity in accordance with the substance of the

contractual arrangement. Interest, dividends, gains and losses relating to a financial instrument

classified as liability are reported as expense or income. Distributions to holders of financialinstruments classified as equity are charged directly to equity. Financial instruments are offset when

the Company has a legally enforceable right to set off the recognised amounts and intends either

to settle on a net basis, or to realise the asset and settle the liability simultaneously.


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2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)(t) Impairment of Assets

The carrying values of assets are reviewed for impairment when there is an indication that the assets

might be impaired. Impairment is measured by comparing the carrying values of the assets with

their recoverable amounts. The recoverable amount is the higher of an assets net selling price and

its value in use, which is measured by reference to discounted future cash flows. Recoverable

amounts are estimated for individual assets, or if it is not possible, for the cash-generating unit.

An impairment loss is charged to 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 previously recognised revaluation surplus for the same asset.

Subsequent increase in the recoverable amount of an asset is treated as reversal of the previous

impairment loss and is recognised to the extent of the carrying amount of the asset that would have

determined (net of amortisation and depreciation) had no impairment loss been recognised. The

reversal is recognised in the income statement immediately, unless the asset is carried at revalued

amount. A reversal of an impairment loss on a revalued asset is credited directly to revaluation

surplus. However, to the extent that an impairment loss on the same revalued asset was previously

recognised as an expense in the income statement, a reversal of that impairment loss is recognised

as income in the income statement.

(u) Segmental Information

Segment revenues and expenses are those directly attributable to the segments and include any

joint revenue and expenses where a reasonable basis of allocation exists. Segments assets include

all assets used by a segment and consist principally of cash, receivables, inventories, intangibles and

property, plant and equipment, net of allowances and accumulated depreciation and

amortisation. Most segment assets can be directly attributed to the segments on a reasonable basis.

Segment assets and liabilities do not include income tax assets and liabilities respectively.

(v) Intersegment Transfers

Segment revenues, expenses and result include transfers between segments. The prices charged

on intersegment transactions are the same as those charged for similar goods to parties outside of

the economic entity at an arms length transactions. These transfers are eliminated onconsolidation.


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2. SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)(w) Foreign Currency Translation

Transactions in foreign currencies are converted into Ringgit Malaysia at the exchange rates ruling

at the transaction dates. Monetary assets and liabilities in foreign currencies at the balance sheet

date are converted into Ringgit Malaysia at the rate of exchange ruling on that date. Exchange

differences arising from the settlement of foreign currency transactions and from the translation of

foreign currency monetary assets and liabilities are included in the income statements.

The principal closing rate used in translation of foreign currency amounts is stated below:-

2003 2002

Foreign currency RM RM

1 US Dollar 3.825 3.825

(x) Cash and Cash Equivalents

Cash and cash equivalents consist of cash in hand, bank balances, demand deposits, bank

overdrafts, trust receipts, bankers acceptance and other short term, highly liquid investments that

are readily convertible to known amounts of cash and which are subject to an insignificant risk of

changes in value.


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PROPERTY,PLANTANDEQUIPMENT

Long

Leasehold

Freehold

Landsand

Furniture

Landand

Buildings-

Motor

and

Office

Group

Buildings

In-Progress

Vehicles

Fittings

Equ

ipment

Renovation

Total

2003

RM

RM

RM

RM

RM

RM

RM

Cost/Valuation

At1Janua

ry2003

-

-

-

-

-

-

-

New

subsidiariesacquired

11,391,017

16,179,529

2,307,509

303,355

1,002,822

161,224

31,345,456

Additions

16,388

19,386,231

436,130

69,455

89,106

25,862

20,023,172

Disposals/writeoffs

(4,607,405)

-

(389,885)

(19,402)

(

96,811)

-

(5,113,503)

At31December2003

6,800,000

35,565,760

2,353,754

353,408

995,117

187,086

46,255,125

Accumula

tedDepreciation

At1Janua

ry2003

-

-

-

-

-

-

-

New

subsidiariesacquired

81,994

189,541

1,382,721

203,130

699,331

134,301

2,691,018

Chargefo

rtheyear

47,206

112,377

280,386

23,300

66,502

11,812

541,583

Disposals/writeoffs

-

-

(315,020)

(14,657)

(

85,059)

-

(414,736)

At31December2003

129,200

301,918

1,348,087

211,773

680,774

146,113

2,817,865

NetBookValueat

31Decem

ber2003

6,670,800

35,263,842

1,005,667

141,635

314,343

40,973

43,437,260

Cost/Valuationis

represente

dby:

Cost

-

19,565,760

2,353,754

353,408

995,117

187,086

23,455,125

Valuation

6,800,000

16,000,000

-

-

-

-

22,800,000

Total

6,800,000

35,565,760

2,353,754

353,408

995,117

187,086

46,255,125


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3. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)Group

Long leasehold lands comprise leasehold interest with an unexpired term in excess of 50 years.

The freehold land and buildings and the long leasehold land at valuation are stated at directors'

valuation based on the valuation conducted by a firm of professional valuers in May 2002 using the

open market value basis.

Had the revalued freehold land and buildings and long leasehold lands been carried at historical cost

less accumulated depreciation, the total net book values of the said freehold land and buildings and

long leasehold land that would have been included in the financial statements of the Group is

RM5,761,508/- and RM30,515,031/- respectively.

Freehold land and buildings and leasehold land and building-in-progress with net book values of

RM6,670,800/- and RM35,263,842/- respectively have been pledged to licensed banks to secure credit

facilities granted to subsidiary companies.

Motor vehicles of the Group with total net book values of RM1,003,368/- are acquired under hire

purchase instalment plans.

Included in the addition to the building-in-progress of the Group is interest expense of RM123,595/-.

The leasehold building-in-progress of the Group costing RM18,394,675/- represents progress billings on

the construction of a yard at the estimated cost of RM29,850,000/-. The balance of the construction

costs is disclosed as a capital commitment in Note 31 to the financial statements.

4. INVESTMENT PROPERTIES

Freehold lands - at valuation

Balance at the beginning

New subsidiaries acquired

Balance at the end

Development expenditure - at cost



Additions during the year

Balance at the end

Group

2003

RM

-

8,800,995

8,800,995

-

3,688,433

1,687,966

5,376,399

14,177,394


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4. INVESTMENT PROPERTIES (CONTINUED)Group

Investment properties consist of freehold land and properties under development, which comprise a

clubhouse, a water theme park and commercial space which a subsidiary company intends to hold for

rental income and investment purposes.

The freehold lands are stated at directors' valuation based on a valuation conducted by a firm of

professional valuers in May 2002 using the open market value basis.

The investment properties have been pledged to a licensed bank to secure term loan facility granted

to a subsidiary company.

The development expenditure represents progress billings on the construction of a club house and a

water theme park at the estimated cost of RM23,982,925/-. The balance of the construction costs is

disclosed as a capital commitment in Note 31 to the financial statements.

5. INVESTMENT IN SUBSIDIARY COMPANIES

Company

2003 2002

RM RM

Unquoted shares at cost 115,000,000 -

The following information relates to the subsidiary companies which are all incorporated in Malaysia:

Effective

Equity

Name of Company Interest Principal Activities

2003

%Direct subsidiary companies

Oil-Line Engineering & 100 Providing engineering,

Associates Sdn. Bhd. procurement, construction,

technical, contracts and

related services and

investment holding

Ascentland Sdn. Bhd. 100 Property investment, resort and

hotel operations and property

development


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5. INVESTMENT IN SUBSIDIARY COMPANIES (CONTINUED)Effective

Equity

Name of Company Interest Principal Activities

2003

%

Indirect subsidiary companies held

through Oil-Line Engineering &

Associates Sdn. Bhd.

Tenaga Nazar (M) Sdn. Bhd. 100 Providing engineering andtechnical services to the oil

and gas industries

Oil-Line Synergy Sdn. Bhd. 100 Providing engineering,

procurement, construction

and contract related services

Azdaman Engineering Sdn. Bhd. 90 Suppliers and contractors

of engineering and technical

services

Azdaman Sdn. Bhd. 100 Suppliers and contractors of

engineering and technical

services

Oil-Line Fabricators Sdn. Bhd. 51 Fabricators of off-shores modules

and on-shore modules in the

oil & gas and petrochemical

industries

6. OTHER INVESTMENTSGroup

2003

RM

Golf club membership at cost 104,900


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7. PROPERTY DEVELOPMENT EXPENDITURE

Freehold lands - at valuation



Balance at the end

Development expenditure - at cost




Balance at the end

Total property development expenditure

Portion of profit attributable to development work performed to date




Balance at the end

Progress billings




Balance at the end

Current portion

Current charges to development expenditure includes:-

Term loan interest

Group

2003

RM

-

12,199,005

12,199,005

-

13,942,466

22,773,886

36,716,352

48,915,357

-

4,535,077

7,071,832

11,606,909

60,522,266

-

(6,098,852)

(14,254,305)

(20,353,157)

40,169,109

345,678

Group

The freehold lands are stated at directors' valuation based on a valuation conducted by a firm of

professional valuers in May 2002 using the open market value basis.

The freehold lands are pledged to a licensed bank to secure term loan facility granted to a subsidiary

company.


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7. PROPERTY DEVELOPMENT EXPENDITURE (CONTINUED)

8. AMOUNT DUE FROM/(TO) CUSTOMERS FOR CONTRACT WORKS

Aggregate costs incurred to date

Recognised profits less recognised losses

Progress billings

Amount due to customers for contract

works included in current liabilities

Amount due from customers for contract

works included in current assets

Construction contract costs recognised

as contract expenses during the year

Group

2003

RM

65,476,019

12,553,694

78,029,713

(68,813,231)

9,216,482

150,063

9,366,545

64,555,181

Group

A subsidiary company, Ascentland Sdn. Bhd., has entered into leaseback agreements with certain

owners of the development properties known as "PD Tiara Bay Resort". The subsidiary company has

offered to rent from the owners the said properties together with fittings for purposes of letting out the

same as rental accommodation for the Resort and the owners have agreed to let the said properties to

the said subsidiary company at a leaseback guaranteed returns of 8% per annum on selling price of the

said properties for a period of 2 years.

As at balance sheet date, the leaseback guaranteed returns is disclosed as lease commitments in Note31 to the financial statements.


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9. TRADE DEBTORS

10. OTHER DEBTORS, DEPOSITS AND PREPAYMENTS

Trade debtors

Less: Provision for doubtful debts

Group

2003

RM

45,396,555

(676,812)

44,719,743

Other debtors

DepositsPrepayments

Interest receivable

Group

2003

RM

3,753,460

77,63843,640

60,807

3,935,545

Group

Included in other debtors are the following:

(a) amounts totalling RM894,304/- which represent advances to third parties which are unsecured,

bear interest at the rate of 8% per annum and is repayable by four fixed quarterly instalments

commencing March 2003. The said amounts have been settled subsequent to the balance sheet

date; and

(b) an amount of RM1,864,376 which represents the balance of the purchase consideration from the

disposal of the freehold land and building by a subsidiary company. This amount has been settled

subsequent to the balance sheet date.

11. FIXED DEPOSITS PLACED WITH LICENSED BANKS

Group

The fixed deposits placed with licensed banks are pledged to the banks to secure credit facilities

granted to a subsidiary company.

Group

The Group's normal trade credit terms range from 30 to 90 days. Other credit terms are assessed and

approved on a case-by-case basis.


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12. CASH AND BANK BALANCES

Group Company

2003 2003 2002

RM RM RM

Cash and bank balances 2,139,865 970 2

Cash held under Housing Development Account 548,692 - -

2,688,557 970 2

Cash held under Housing Development Account represents receipts from purchasers of residential

properties less payments or withdrawals pursuant to Section 7A of the Housing Development (Control

and Licensing) Act, 1966 and therefore restricted from use in other operations.

13. TRADE CREDITORS

Group

Included in this account are amounts totalling RM3,062,282/- which represent retention sums for contract

works performed.

The normal trade credit term granted to the Group ranges from 30 to 60 days.

14. OTHER CREDITORS, DEPOSITS AND ACCRUALS

Group Company

2003 2003 2002

RM RM RM

Other creditors 11,720,893 26,774 -

Deposits 473,034 - -

Accruals 15,284,846 27,900 2,280

27,478,773 54,674 2,280


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14. OTHER CREDITORS AND ACCRUALS (CONTINUED)

Group

Included in other creditors are the following:-

(a) an amount of RM761,478/- being service tax payable to the Royal Custom and Excise Department.

The subsidiary company is appealing against the assessment raised by the Royal Custom and Excise

Department on the ground of the subsidiary company does not fall within the definition of taxable

person under Service Tax Act, 1975;

(b) an amount of RM358,256/- due to companies in which a director has substantial financial interest; and

(c) an amount of RM10,376,450/- which represents contractor fees payable in respect of the

construction of the leasehold building-in-progress.

Included in deposits are amounts totalling RM473,034/- represent deposits received/receivable from

house purchasers.

Included in accruals are the following:

(a) amounts totalling RM2,337,878/- which represent property development expenditure accrued inrespect of the development activities of a subsidiary company; and

(b) amounts totalling RM7,353,624/- which represents project costs accrued for the contracts work

undertaken by a subsidiary company.

15. PROVISION

Group

2003

RM

Property development expenditure

Balance at the beginning -

Additions during the financial year 9,081,055

Balance at the end 9,081,055

Current 9,081,055

Provision for property development expenditure is made in respect of probable outflow of resources

related to property development activities of a subsidiary company.


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16. AMOUNT DUE TO DIRECTORS

Group and Company

The amounts due to directors are unsecured, interest free and have no fixed terms of repayment.

17. AMOUNT DUE TO SUBSIDIARY COMPANIES

Company

The amounts due to subsidiary companies are unsecured, interest free and have no fixed terms of

repayment.

18. BANK OVERDRAFTS - SECURED

The bank overdrafts are secured by legal charges over the freehold land and buildings and fixed

deposits of a subsidiary company and are also jointly and severally guaranteed by certain directors of

the Company. The bank overdrafts bear interest at rates ranging from 7.50% to 7.75% per annum.

19. HIRE PURCHASE CREDITORS

Group2003

RM

Minimum hire-purchase payments:-

- not later than one year 287,183

- later than one year and not later than five years 363,049

- later than five years 4,092

654,324

Less: Future interest charges (101,009)

Present value of hire-purchase liabilities 553,315


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19. HIRE PURCHASE CREDITORS (CONTINUED)

Group

2003

RM

Represented by:

Current:-

- not later than one year 235,688

Non-current:

- later than one year and not later than five years 313,656

- later than five years 3,971

317,627

553,315

20. SHORT TERM BORROWINGS

Group

2003

RM

Bankers' acceptance 12,309,720

Trust receipts 1,056,730

Term loans due within one year (Note 21) 5,702,938

19,069,388

The bankers' acceptance and trust receipts are secured by legal charges over the freehold land and

buildings and fixed deposits of a subsidiary company and are also jointly and severally guaranteed bycertain directors of the Company. The said borrowings bear interest at rates ranging from 3.00% to 7.90%

per annum.

21. LONG TERM LIABILITIES

Group

2003

RM

Outstanding term loans principal 18,434,661

Portion due within one year (Note 20) (5,702,938)

Portion due after one year 12,731,723


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21. LONG TERM LIABILITIES (CONTINUED)

The term loans of the Group are secured by way of legal charges over the freehold land and buildings

and leasehold land and building-in-progress of subsidiary companies and are also jointly and severally

guaranteed by certain directors of the Company. The said loans bear interest at rates ranging from

1.50% to 1.75% per annum above the bank's base lending rate and are repayable by equal monthly

installments. The terms of repayment of the loans are as follows:-

Group

2003

RM

Within the next twelve months (Note 20) 5,702,938

After the next twelve months

- not later than two years 2,880,369

- later than two years but later than five years 6,771,927

- later than five years 3,079,427

12,731,723

18,434,661

22. SHARE CAPITAL

Group and Company

2003 2002

RM RM

Ordinary shares of RM1/- each

Authorised:

At 1 January 100,000 100,000

Created during the year 199,900,000 -

At 31 December 200,000,000 100,000

Issued and fully paid:

At 1 January 2 2


- acquisition of subsidiary companies 115,000,000 -

- in exchange for shares in Abrar Corporation Berhad ("ACB") 1,600,000 -

- settlement of ACB's creditors 35,000,000 -At 31 December 151,600,002 2


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23. DEFERRED TAXATION

Group

2003

RM

At 1 January -

New subsidiaries acquired 3,037,755

Transfer from income statement 922,340

At 31 December 3,960,095

Representing the tax effects of:

Timing differences between depreciation

and corresponding capital allowances 43,700

Timing differences relating to the revaluation

of freehold lands held for development 1,538,995

Timing differences relating to the recognition

of property development income 2,377,400

3,960,095

Deferred taxation not provided for

in the financial statements:

Arising from revaluation of freehold lands held

for investment purpose 310,464

Arising from revaluation of long leasehold land

held for long term purpose 242,005

552,469

Further, the deferred tax assets have not been recognised for the following items:-

Group2003

RM

Deductible temporary differences 25,500

Unutilised tax losses 62,200

87,700

The unutilised tax losses and deductible temporary differences do not expire under current tax

legislation. Deferred tax assets have not been recognised in respect of these items because it is not

probable that future taxable profit will be available against which the subsidiary company can utilise the

benefits.


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24. REVENUE

Group Company

2003 2003 2002

RM RM RM

Contract revenue 76,400,656 - -

Engineering and technical services 11,078,773 - -

Sale of development properties 32,417,166 - -

Management fee - 350,000 -

119,896,595 350,000 -

25. OPERATING PROFIT/(LOSS)

Operating profit/(loss) has been arrived at:

Group Company

2003 2003 2002

RM RM RM

After charging:

Audit fee

- current year 88,000 3,000 1,000

- underprovision in previous year 6,450 - -

Bad debts written off 23,141 - -

Directors' remuneration

- fee 142,500 22,500 -

- salaries, bonus and allowances 813,727 65,000 -

- others 58,548 7,800 -

Depreciation 798,173 - -

Plant and equipment written off 4,063 - -

Provision for doubtful debts

- current year 89,687 - -

- no longer required (243,220) - -

Rental of premises 126,270 - -

Staff costs

- Employees' Provident Funds & SOCSO 324,712 - -

- salaries, bonuses, incentives and allowances 11,048,028 - -

- staff amenities 29,968 - -

- staff training 27,161 - -

Sundry deposit written off 23,725 - -

And crediting:

Bad debts recovered 109,102 - -

Gain on disposal of plant and equipment 791,165 - -

Rental income

companies in which a director has interest 286,000 - -

Directors' remuneration of the Group excludes estimated monetary value of benefits in kind of

RM60,100/-.


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26. FINANCE COSTS (NET)

Group

2003

RM

Interest income

- fixed deposits 161,492

- others 1,093,971

1,255,463

Interest expenses

- bank overdrafts (302,633)

- bills payable (629,550)

- hire purchase (77,744)

- term loans (608,322)

- others (239,929)

(1,858,178)

(602,715)

27. TAXATION

Group Company

2003 2003 2002

RM RM RM

Income tax

- current year's provision (4,929,300) (87,000) -

- overprovision in prior years 180,426 - -

Deferred taxation

- current year (998,240) - -- prior years 75,900 - -

(5,671,214) (87,000) -


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27. TAXATION (CONTINUED)

The provision for taxation differs from the amount of taxation determined by applying the applicable

statutory tax rate of the profit/(loss) before tax as a result of the following differences.

Group Company

2003 2003 2002

RM RM RM

Accounting profit/(loss) 20,337,138 119,020 (4,412)

Taxation at applicable tax rate of

28% (2002: 28%) (5,694.399) (33,326) 1,235

Tax effects arising from

- non-taxable income 368,579 - -

- non-deductible expenditure (609,320) (53,674) (1,235)

- reversal of deferred tax assets not

recognised in the financial statements 7,600 - -

- overprovision in prior years 256,326 - -

Tax expense for the year (5,671,214) (87,000) -

28. EXTRAORDINARY ITEMS

Group Company

2003 2003 2002

RM RM RM

Corporate costs incurred in respect of the

Corporate and Restructuring Scheme of the

Group as mentioned in Note 34 to the

financial statements

- professional fees, regulatory fees and

incidental expenses incurred (1,378,351) (1,378,351) -

- issuance of the Company's shares to the

creditors of ACB (35,000,000) (35.000.000) -

- issuance of the Company's shares to the

existing shareholders of ACB (1,600,000) (1,600,000) -

Gain on disposal of ACB to Primiavis

Jaya Sdn. Bhd., a company

established as special vehiclepursuant to the Corporate and

Restructuring Scheme 1 1 -

(37,978,350) (37,978,350) -


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29. EARNINGS/(LOSS) PER SHARE

Basic Earnings/(Loss) Per Share

a) Before Extraordinary Items

The earnings per share for the year has been calculated based on the Group's profit after taxation

and minority interests but before extraordinary items of RM12,350,849/- and on the weighted

average number of 94,966,669 ordinary shares in issue during the year.

b) After Extraordinary Items

The loss per share for the year has been calculated based on the Group's loss after taxation, minority

interests and extraordinary items of RM25,627,501/- and on the weighted average number of

94,966,669 ordinary shares in issue during the year.

Diluted Earnings Per Share

The diluted earnings per share is not shown as it is not applicable to the Group.

30. CONTINGENT LIABILITIES

(a) There is a claim by the Royal Customs and Excise Department ("RCED") against the Company for

alleged non-compliance of the Service Tax Act, 1975. The directors are of the opinion that the

likelihood of this claim being crystallised is remote and as such, no provision has been made in the

financial statements. As at the balance sheet date, the quantum of the service tax and penalty

claimable by RCED are not ascertainable.

(b) As at 31 December 2003, the Group is contingently liable for the following:-

Group

2003

RM

Secured

Bank guarantees issued in favour of various third parties 1,272,036

Unsecured

Potential tax penalty 13,102

1,285,138


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30. CONTINGENT LIABILITIES (CONTINUED)

(c) Subsequent to the balance sheet date, the Group is further contingently liable to the extent of

RM801,463/- in respect of the bank guarantees issued in favour of various third parties.

The bank guarantees of the Group is secured over freehold land and buildings, and fixed deposits of a

subsidiary company and are also jointly and severally guaranteed by a director of the Company.

31. COMMITMENTS

Group

2003

RM

Capital Commitments


- capital expenditure approved and contracted for but

not provided in the financiaI statements 10,627,562

- capital expenditure approved but not contracted for 7,993,369

Leasehold building-in-progress

- capital expenditure approved and contracted for but

not provided in the financial statements 10,915,325

29,536,256

Group

2003

RM

Lease Commitments

Lease back guaranteed returns

- Lease commitments not provided for in the

financial statements:-

expiring within one year -

expiring between two to five years 10,204,374

10,204,374


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32. SIGNIFICANT RELATED PARTY TRANSACTIONS

Group Company

2003 2003 2002

RM RM RM

Management fee received from subsidiary companies

- Oil-Line Engineering & Associates Sdn. Bhd. - 100,000 -

- Ascentland Sdn. Bhd. - 250,000 -

Contract revenue received/receivable from Town & Country

Properties Sdn. Bhd., a company in which a director,

Pua Yow Liang has substantial financial interest 8,548,334 - -

Rental expenses paid/payable to a director,

Ng Huat Tian 24,000 - -

Rental income received/receivable from

- Uniusaha Jaya Sdn. Bhd., a company in which certain

directors, Ng Huat Tian and Pua Yow Liang have

substantial financial interests 240,000 - -

- Crest Engineering Services Sdn. Bhd., a company in

which certain directors, Ng Huat Tian and Pua Yow

Liang have substantial financial interest 6,000 - -

Subcontractors' charges paid/payable to

- PP Phone Corporation Sdn. Bhd., a company in which

a director, Ng Huat Tian has substantial financial interest 355,080 - -

- Oil-Line Industries Sdn. Bhd., a company in which a director,

Ng Huat Tian has substantial financial interest 82,423 - -

The directors of the Company are of the opinion that the above transactions have been entered into in the

normal course of business and the terms are no less favourable than those arranged with third parties.

33. SEGMENTAL ANALYSIS

The Group's operating business are classified according to the nature of activities as follows:

Property : Comprise mainly property related activities.

Oil & Gas and Engineering : Comprise mainly engineering, procurement,

construction and contract related services

Investment : Comprise mainly investment holding.


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33. SEGMENTAL ANALYSIS (CONTINUED)

Primary Reporting - Business Segments

Oil & Gas

and Investment

2003 Property Engineering Holding Total

RM RM RM RM

REVENUE

External revenue 32,417,166 87,479,429 - 119,896,595

RESULTS

Segment results 7,571,630 12,048,767 119,020 19,739,417

Other operating income 7,400 1,193,036 - 1,200,436

Finance costs (net) (221,525) (381,190) - (602,715)

Profit from ordinary activities 7,357,505 12,860,613 119,020 20,337,138

Taxation (1,991,540) (3,592,674) (87,000) (5,671,214)

Profit after taxation 5,365,965 9,267,939 32,020 14,665,924

Minority interests - 424,255 - 424,255


and minority interests 5,365,965 9,692,194 32,020 15,090,179

Pre-acquisition profit (857,711) (1,881,619) - (2.739,330)

Net profit from

ordinary activities 4,508,254 7,810,575 32,020 12,350,849

Extraordinary items - - (37,978,350) (37,978,350)Net profit/(loss) for the year 4,508,254 7,810,575 (37,946,330) (25,627,501)


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33. SEGMENTAL ANALYSIS (CONTINUED)

Primary Reporting - Business Segments (Continued)

Oil & Gas

and Investment

2003 Property Engineering Holding Total

RM RM RM RM

OTHER INFORMATION

Segment assets 64,795,052 100,306,318 63,487,719 228,589,089

Total assets 64,795,052 100,306,318 63,487,719 228,589,089

Segment liabilities 19,721,245 72,942,400 81,870 92,745,515

Total liabilities 19,721,245 72,942,400 81,870 92,745,515

Capital expenditure 18,061 20,005,111 - 20,023,172

Depreciation 4,712 793,461 - 798,173

Secondary Reporting - Geographical Segments

2003 Malaysia Foreign Total

RM RM RM

Revenue 118,996,595 900,000 119,896,595

Results 14,846,844 243,335 15,090,179

Total assets 228,589,089 - 228,589,089

Total liabilities 92,745,515 - 92,745,515

Capital expenditure 20,023,172 - 20,023,172

Depreciation 798,173 - 798,173


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34. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

During the financial year, the Proposed Corporate and Restructuring Schemes as disclosed in the

financial statements of the Company in the previous financial year that involved the Company and its

subsidiary companies were approved by all the relevant regulatory authorities and have been

completed.

The Corporate and Restructuring Scheme of the Group involved the following:-

(i) the transfer of the listing status of ACB on the Main Board of Bursa Malaysia Securities Berhad

(formerly known as Malaysia Securities Exchange Berhad) to OilCorp, the consideration of which

was satisfied by new OilCorp Shares in accordance with the terms and conditions of the Facilitation

of Listing Agreement and the Workout Proposal as follows:

(a) OilCorp has issued 1,600,000 new OilCorp Shares to the existing shareholders of ACB in

exchange for 32,000,000 ACB ordinary shares on the basis of one (1) new OilCorp Share for

every twenty (20) ACB Shares held. The Share Exchange was completed on 27 June 2003; and

(b) OilCorp has issued to the creditors of ACB, through the Special Administrators (SA),

35,000,000 new OilCorp Shares at par, credited as fully paid in the manner and proportion

determined by the SA.

(ii) OilCorp acquired the entire issued and paid-up share capital of Oil-Line Engineering & Associates

Sdn. Bhd. (Oil-Line) comprising 10,591,540 ordinary shares of RM1/- each for a purchase

consideration of RM95,000,000, which was satisfied via an issuance of 95,000,000 new OilCorp Sharesat par. The acquisition was completed on 2 May 2003.

(iii) OilCorp acquired the entire issued and paid-up share capital of Ascentland Sdn. Bhd.

(Ascentland) comprising 5,000,000 ordinary shares of RM1/- each for a purchase consideration of

RM20,000,000, which was satisfied via an issuance of 20,000,000 new OilCorp Shares at par. The

acquisition was completed on 2 May 2003.

(iv) The offer for shares by the creditors of ACB and Oil-Line vendors and/or the Ascentland vendors, of

43,900,000 ordinary shares of RM1/- each in OilCorp at an offer price of RM1.10 per share payable

in full on application to the shareholders of ACB, directors and employees of the OilCorp Berhad,

potential investors and Bumiputra investors approved by the Ministry of International Trade and

Industry (MITI).

(v) The entire enlarged issued and paid-up share capital of the Company comprising 151,600,002

ordinary shares of RM1/- each was listed and quoted on the Main Board of Bursa Malaysia Securities

Berhad (formerly known as Malaysia Securities Exchange Berhad) on 5 August 2003.

(vi) Upon the completion of the Workout Proposal, Oilcorp disposed of its entire shareholding in ACB for

a nominal consideration of RM1/- to Primiavis Jaya Sdn. Bhd., a company established as special

vehicle for the purpose of facilitating the implementation of the Workout Proposal on 13 August

2003.


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35. FINANCIAL INSTRUMENTS

(a) Financial Risk Management and Objectives

The Group seeks to manage effectively various risks namely credit, foreign currency, market, liquidity

and interest rate risk, to which the Group is exposed to in its daily operation.

(b) Credit Risk

The management has a credit policy in place to monitor and minimise the exposure of default.

Trade debtors are monitored on an ongoing basis.

As at balance sheet date, there were no significant concentrations of credit risk in the Group.

(c) Foreign Currency Risk

The Group is not exposed to significant foreign currency risks as the majority of the Groups

transactions, assets and liabilities are denominated in Ringgit Malaysia. Foreign currency

denominated assets and liabilities together with expected future cash flows from highly probable

purchases and sales give rise to foreign exchange exposures.

(d) Liquidity Risk

The Group actively manages its debt maturity profile, operating cash flows and the availability of

funding so as to ensure that all financing, repayment and funding needs are met. As part of its

overall prudent liquidity management, the Group maintains sufficient levels of cash or cash

convertible investments to meet its working capital requirements.

(e) Interest Rate Risk

The Groups primary interest rate risk relates to interest-bearing debt as at 31st December 2003. The

investments in financial assets are mainly short term in nature and they are not held for speculative

purposes.

The Group actively reviews its debt portfolio, taking into account the nature of its assets. This

strategy allows it to capitalise on cheaper funding in a low interest rate environment and achieve

a certain level of protection against rate hikes.


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35. FINANCIAL INSTRUMENTS (CONTINUED)

(e) Interest Rate Risk (Continued)

Effective Interest Rates

Effective

Interest Within 1 - 5 After

Group Rate 1 Year Years 5 Years Total

As at 31 December 2003 % RM RM RM RM

Financial Assets

Other debtors, deposits

and prepayments 8.00 894,304 - - 894,304

Fixed deposits placed

with licensed banks 3.11 - 3.19 6,444,101 - - 6,444,101

Financial Liabilities

Bank overdrafts - secured 7.50 - 7.75 4,335,992 - - 4,335,992

Banker's acceptance 3.00- 3.26 12,309,720 - - 12,309,720

Trust receipts 7.90 1,056,730 - - 1,056,730

Hire purchase creditors 5.67 - 9.43 235,688 313,656 3,971 553,315

Term loans 7.50 - 7.90 5,702,938 9,652,296 3,079,427 18,434,661

(f) Fair Values

Recognised financial instruments

The fair value of financial assets and financial liabilities approximate their respective carrying values

on the balances sheets of the Group and of the Company.

Unrecognised financial instruments

There are no financial instruments not recognised in the balance sheets as at 31 December 2003

that are required to be disclosed.

36. COMPARATIVE FIGURES

There are no comparative figures for the Group as this is the first set of financial statements for the Group.


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Statement By Directors

STATEMENT BY DIRECTORS

We, SUNNY NG HUAT TIAN and PUA YOW LIANG, being two of the directors of OILCORP BERHAD, do

hereby state that in the opinion of the directors, the financial statements set out on pages 43 to 85, are

drawn up in accordance with applicable approved accounting standards in Malaysia so as to give a

true and fair view of the state o

oilcorp financialstatement sharestats properties noticeagm (490kb)

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