CORPORATE INFORMATION - listed companyapm.listedcompany.com/misc/ar2013.pdf · • Certificate of...

02 Corporate Information

03 Business Divisions

04 Chairman’s Statement

10 Profile of the Board of Directors

14 5 Years Financial Highlights

16 Corporate Governance Statement

24 Other Statements and Disclosures

25 Internal Control Statement

27 Audit Committee Report

30 Directors’ Responsibility Statement

31 Financial Statements

103 Group Properties

105 Analysis of Shareholdings

108 Notice of Annual General Meeting

Form of Proxy

CONTENTS

APM AR2013_Layout 1 4/28/14 10:16 AM Page 1

2

CORPORATE INFORMATION

APM Automotive Holdings Berhad (424838-D)

AUDIT COMMITTEE

Dato’ N Sadasivan DPMP, JSM, KMNSenior Independent Non-Executive DirectorChairman of the Audit Committee

Dato’ Haji Kamaruddin @ Abas NordinDSSA, KMNIndependent Non-Executive Director

Heng Ji KengIndependent Non-Executive Director

NOMINATING COMMITTEE

Heng Ji KengIndependent Non-Executive DirectorChairman of the Nominating Committee


Dato’ N Sadasivan DPMP, JSM, KMNSenior Independent Non-Executive Director

COMPANY SECRETARIES

Lee Yuen Lin (MIA 16484)Lee Kwee Cheng (MIA 9160)Ang Lay Bee (MAICSA 7000388)

REGISTERED OFFICE

62 - 68 Jalan Ipoh51200 Kuala Lumpur, MalaysiaT : 603 – 4047 8888F : 603 – 4047 8636

CORPORATE OFFICE

Lot 600, Pandamaran IndustrialEstateLocked Bag No. 21842009 Port KlangSelangor Darul Ehsan, MalaysiaT : 603 – 3161 8888F : 603 – 3161 8833Website :www.apm.com.myEmail address:[email protected]

BOARD OF DIRECTORS Dato’ Tan Heng Chew JP, DJMKExecutive Chairman

Low Seng CheeExecutive Director and Chief Executive Officer

Dato’ Tan Eng Hwa DIMPExecutive Director and Chief OperatingOfficer

Dato’ N Sadasivan DPMP, JSM, KMNSenior Independent Non-Executive Director


Heng Ji K engIndependent Non-Executive Director

Siow Tiang SaeExecutive Director

Nicholas Tan Chye SengNon Independent Non Executive Director

Sow Soon HockExecutive Director

REGISTRARS

Tricor Investor Services SdnBhdLevel 17The Gardens North TowerMid Valley City,Lingkaran Syed Putra59200 Kuala Lumpur, MalaysiaT : 603 – 2264 3883F : 603 – 2282 1886

AUDITORS

KPMGLevel 10 KPMG Tower8 First AvenueBandar Utama48700 Petaling JayaSelangor Darul Ehsan,Malaysia

STOCK EXCHANGE LISTING

Main Market of BursaMalaysia Securities BerhadStock Code : 5015


SUSPENSION DIVISION• Leaf Springs• Parabolic Springs• Shock Absorbers• Coil Springs• U-Bolts• Gas Springs

INTERIOR & PLASTICS DIVISION• Automotive Seats• Plastic Parts• Body Side Mouldings• Interior Trims• Door Panels

ELECTRICAL & HEATEXCHANGE DIVISION

• Starter Motors• Alternators• Wiper Systems• Distributors• Engine Management Systems• Throttle Bodies• Air-Conditioning Systems• Condensers• Evaporators• Compressors• Radiators

MARKETING DIVISION

OVERSEAS OPERATIONS

• Local Replacement Market• Export Market

• Indonesia• USA• Vietnam

3

BUSINESS DIVISIONS

Annual Report 2013


4

HIGHLIGHTS

On behalf of the Board of Directors, I am pleased to report thatin 2013 we have once again continued to deliver consistentvalue to our shareholders. Against the backdrop of a tougheconomic environment, the improvement in the Group’s keyperformance parameters highlights the strong foundationestablished through the hard work and dedication of the staffs.The efforts that have been put into realigning the organizationin terms of cost, operational efficiency and technology are allbeginning to take effect.

In 2013, the total industry volume (“TIV”) in the country grewby 5.6% from 2012 to 601,407 units [Source: MalaysianAutomotive Association] as result of higher demand for newvehicle models launched by original equipmentmanufacturing (“OEM”).

Group revenue rose 12.1% to RM1.259 billion while profitbefore tax correspondingly increased by 11.3% to RM177.5million. As a result, earnings per share was up 9.0% to 63.3sen.Additionally, Net Assets per Share has increased to RM4.68(2012: RM4.54), with the total shareholders’ fund of RM943.0million (2012: RM908.5 million).

The Board is recommending a net of tax final dividend undersingle tier system of 12sen in addition to the interim dividendnet of tax of 30sen paid in September 2013. The interimdividend paid in 2013 plus the final dividend recommended bythe Board, brings the total 2013 annual dividend net of tax to42sen per share, up 75% against total dividend paid for 2012.

CHAIRMAN’S STATEMENT


On behalf of the Board ofDirectors, I am pleased to reportthat in 2013 we have once againcontinued to deliver consistentvalue to our shareholders.

• APM IAC Automotive Systems Sdn. Bhd. Headlining Manufacturing

• APM IAC Automotive Systems Sdn. Bhd. Waterjet Cell


5

SUSPENSION DIVISION, MALAYSIA

The successful commissioning of a new state-of-the artparabolic leaf spring manufacturing line in 2013 has furtherprogressed our plan to become a regional OEM manufacturer.Complementing this important milestone, the company hasalso started supplying leaf springs to a global truck maker fortheir regional production. This is an important step towardachieving our objective to be global supplier.

The division’s revenue increased by 6.3% from RM226.3 millionin 2012 to RM240.5 million in 2013. Profit before tax, however,decreased by 32.0% to RM11.5million compared to RM16.9million in 2012 mainly due to additional provision for productswarranty.


Annual Report 2013

INTERIOR AND PLASTICS DIVISION, MALAYSIA

The interior and plastics division accounts for almost 56.4% of thegroup’s total gross revenue and is the largest contributor to thegroup in terms of revenue and profit. Having its main operationsin the Bukit Beruntung area the division manufactures productsthat include seating system, plastic injection & extrusioncomponents, instrument panel modules and others. In 2013,revenue increased by 28.9%, mainly due to higher production ofnew vehicle models in Malaysia. With the increase in revenue, thedivision’s profit before tax increased by 21.4%.

The transition from components manufacturing to systemsupplier has gained traction in 2013 through the supply ofInterior Modules to two major OEM’s; one in the Klang Valley andthe other in the North. Both of these businesses have addedpositively to the group.

The interior and plasticsdivision accounts for almost56.4% of the group’s total grossrevenue and is the largestcontributor to the group interms of revenue and profit

The division’s revenueincreased by 6.3% fromRM226.3 million in 2012 toRM240.5 million in 2013.

• Exhibition Booth at Automac Brazil 2013


ELECTRICAL & HEAT EXCHANGE DIVISION,MALAYSIA

In keeping up with the increasing demand for higherperformance components that weight lighter and cost less, anew range of condensers and evaporators have been launched.These new products have been developed using cutting edgesimulations to optimize important performance parameters.New processes have been introduced to support furtheroperational enhancements.

Designs of new engine cooling modules and wiper systems arein the second stage of development. With their completion in2014, these new products will bring us one step closer tobecoming a tier one integrator.

6



With their completion in 2014, these new products will bring us one step closerto becoming a tier one integrator.

• Certificate of Appreciation fromInokom to APM Auto Electrics Sdn.Bhd. Top 5 Best Performance Vendor

• Certificate of Appreciation fromInokom to APM Plastics Sdn. Bhd

• Best Quality Improvement Year 2013to APM Auto Electrics Sdn. Bhd.


7

MARKETING DIVISION, MALAYSIA

The main business of this division is the distribution ofautomotive components manufactured by the group fordomestic and export markets.

In the domestic market, APM’s strong name has enabled us tobe the dominant player in the aftermarket with over 380dealers. Efforts are underway to further solidify our topposition, through a stronger product portfolio and anenhanced marketing strategy which is strongly focused onmeeting the changing expectation of customers.

With the establishment of an export-focused company, APMAuto Parts Marketing (Malaysia) Sdn Bhd and the appointmentof an experience and new export marketing head, plans areunderway to create the “APM” success regionally in the shortterm and globally in the longer term.

The gross turnover for this division accounted for about 16.0%of the group’s revenue. The pretax profit decreased by 4.7%from RM12.7 million to RM12.1 million, mainly due to morecompetitive pricing and the challenges faced in the Euro Zone.


Annual Report 2013

The main business of this division is the distribution of automotivecomponents manufactured by the group for domestic and export markets.

“Top Sales and Million Dollar Award, Year 2013”

• APM IAC Automotive Systems Sdn. Bhd. Substrate Press


MALAYSIA

GERMANY

VIETNAMCHINA

INDONESIA

AUSTRALIA

8

OPERATIONS OUTSIDE MALAYSIA

We have established a strong presence in Malaysia and canhumbly claim that APM is the largest independent automotivecomponents manufacturer. For the continuing growth of thecompany, we recognize a need to venture into distant shores.APM is proud to announce our manufacturing presence inIndonesia and Vietnam.

Our leaf spring manufacturing plant in Vietnam saw significantimprovements in operational efficiencies. Over 49.0% of theproducts manufactured are exported through the APM network.

In 2013, our Joint Venture, PT APM Armada Autoparts, divestedshares in PT Armada Johnson Controls as part of the group’sreorganization exercise.



We have established a strong presence in Malaysia and can humbly claim thatAPM is the largest independent automotive components manufacturer.

Our wholly-owned suspension company, PT APM ArmadaSuspension, has commenced supply of coil springs to a localOEM in 2013. With the added volume, the plant was able tofurther improve operational efficiencies and is close to makingpositive contribution to profits. Discussions are underway toobtain contracts from other car makers.

Revenue from Operations Outside Malaysia for 2013 wasRM39.5 million, decreased slightly by 1.5% from RM40.1million in 2012. Pretax profit improved by 40.6% from RM6.9million in 2012 to RM9.8 million in 2013.


9

PROSPECTS

The Malaysian Automotive Association (MAA) has forecasteda total industry volume of 670,000 units in 2014 which is agrowth of 2.2% above the 655,793 units achieved in 2013.

The success of APM, both the OEM and REM Market is welldocumented. Currently about 75% of the group’s turnover iscontributed by local OEM’s, about 10% by REM and the restfrom export and overseas operations.

The group is seeking to aggressively grow businesses outsideMalaysia. New production facilities will be added in Vietnam toincrease product portfolio and coverage. In the coming year, anew manufacturing plant to manufacture leaf springs will beadded in Indonesia. Products will be initially for the exportmarkets, with the ultimate aim to establish a strong domesticfoothold.

Dedicated teams have been formed to spearhead overseas newbusiness development and export market growth.

Activities in Thailand are also progressing well. A subsidiarywas incorporated with a licence to manufacture plasticinjection and extrusion products. In addition, the company haspurchased a piece of land for this operation and constructionof the plant will commence soon.

Although still very much in its infancy, Myanmar could proveto be a strong engine of growth for the group. A wholly-ownedsubsidiary was established and a manufacturing licence forseating, suspension parts & interior systems was granted bythe Myanmar authority. The company is in the process ofacquiring land for housing the manufacturing plant.

The transformation, which was initiated a few years ago, from acomponent centric manufacturer to a tier one system provider,has taken root. The company that has been tasked to spearheadthis effort, APM Engineering & Research Sdn Bhd, will have anew permanent home in Oasis Square, Ara Damansara of over24,000 sq ft in 4th quarter 2014. Activities of this group include:Design & Development with the latest cutting edge simulationtools, technical training & talent development and realignmentof manufacturing operations. With these efforts, the group willbe in a better position to support growth for both the local andoverseas operations. I am confident that our efforts andemphasis on technology will enable the group to exceed thesuccess we have enjoyed so far.


Annual Report 2013

DIVIDENDS

An interim ordinary dividend of 40 sen per share lesstax at 25% (2012: 10 sen less tax at 25%) amounting toRM58.71 million was paid to the shareholders on 30September 2013.

The Board has recommended a final ordinary dividendof 12 sen per share under single tier system for the yearended 31 December 2013 (2012: 12 sen less tax at 25%and a special final ordinary dividend of 10 sen less taxat 25%) amounting to RM23.48 million based on thetotal number of ordinary shares outstanding as at 31December 2013.

The amounts, if approved at the forthcoming AnnualGeneral Meeting, will result in a total dividendpayment of RM82.19 million (2012: RM46.97 million)for the financial year ended 31 December 2013.

Acknowledgement

The Board would like to express itsappreciation to all our valuedshareholders, customers, bankersand business partners for theirresolute confidence in and supportto the Group.

To the members of managementand staff, sincere thanks for theircontinued dedication andcommitment in sustaining theGroup’s performance.

Executive Chairman


10

Dato’ Tan Heng Chew, JP, DJMK, 67, a Malaysian, was the firstdirector of the Company when it was incorporated on 26March 1997. He was appointed the Chairman of the Board on1 November 1999. Dato’ Tan has been re-designated asExecutive Chairman effective 1 January 2011.

Dato’ Tan graduated from the University of New South Wales,Australia with a Bachelor of Engineering (Honours) degree andhas a Masters degree in Engineering from the University ofNewcastle, Australia. He joined the Tan Chong Motor HoldingsBerhad (“TCMH”) group of companies in 1970 and wasinstrumental in the establishment of its Autoparts Division inthe 1970s and early 1980s.

Dato’ Tan sits on the Board of TCMH as Executive DeputyChairman and Group Managing Director and also the ExecutiveChairman of Warisan TC Holdings Berhad. He is also a directorand shareholder of Tan Chong Consolidated Sdn Bhd, a majorshareholder of the Company. Dato’ Tan has abstained fromdeliberating and voting in respect of transactions between theGroup and related parties involving himself.

Mr. Low Seng Chee, 54, a Malaysian, is an Executive Directorappointed to the Board on 1 July 2010. He was re-designated asExecutive Director and Chief Executive Officer on 1 June 2013.

Mr. Low graduated from Monash University, Melbourne,Australia with a Bachelor of Electrical Engineering degree andsubsequently obtained his Master of Business Administrationfrom Heriot-Watt University, Edinburgh, Scotland.

Mr. Low has more than 25 years of working experience in highvolume semiconductor production, automotive componentmanufacturing, vehicle assembly as well as vehicle retailing.Senior management positions held by Mr. Low includedheading the operations of automotive assembly plants ofseveral global marques in Malaysia and an Aluminum foundrysupplying to the automotive and motorcycle industries.

PROFILE OF THE BOARD OF DIRECTORS


Dato’ Tan Heng ChewJP, DJMK, 67, a Malaysian

Mr. Low Seng Chee54, a Malaysian


11

Dato’ Tan Eng Hwa, DIMP, 59, a Malaysian, is an ExecutiveDirector. He was first appointed to the Board on 1 November1999 as a Non-Independent Non-Executive Director. Dato’ Tanwas re-designated as Executive Director on 23 March 2004 andas Executive Director and Chief Operating Officer on 1 June 2013.

Dato’ Tan graduated from the University of Birmingham with aBachelor of Commerce degree. He was with the Tan ChongMotor Holdings Berhad group as Treasurer and was also involvedin various departmental functions within the group.

Dato’ Tan is a director and shareholder of Tan Chong ConsolidatedSdn Bhd, a major shareholder of the Company. He has abstainedfrom deliberating and voting in respect of transactions betweenthe Group and related parties involving himself.

Dato’ N. Sadasivan s/o N.N. Pillay, DPMP, JSM, KMN, 74, aMalaysian, is an Independent Non-Executive Director. He wasappointed to the Board on 1 November 1999 and is theChairman of the Audit Committee and a member ofNominating Committee. Dato’ was re-designated as SeniorIndependent Non-Executive Director on 22 January 2013.

Dato’ Sadasivan graduated from the University of Malaya with aBachelor of Arts (Honours) degree majoring in Economics in 1963.In the same year, Dato’ Sadasivan commenced working for theSingapore Economic Development Board and was head of theIndustrial Facilities Division when he left to join MalaysianInvestment Development Authority (previously known asMalaysian Industrial Development Authority) (“MIDA”) in 1968. Hewas with MIDA for a total of 27 years and became its Director-General in 1984. He retired from MIDA in 1995.

Dato’ Sadasivan is a director of Petronas Gas Berhad. He alsosits on the board of Bank Negara Malaysia.

Dato’ Haji Kamaruddin @ Abas Nordin, DSSA, KMN, 75, aMalaysian, is an Independent Non-Executive Director. He hasbeen a member of the Board and the Audit Committee since 1 November 1999. He was appointed as member of theNominating Committee on 22 January 2013.

Dato’ Haji Kamaruddin graduated from the University ofCanterbury, New Zealand with a Master of Arts degreemajoring in Economics in 1966. He joined the civil serviceupon his graduation and served the Government until heretired in 1993. During his tenure with the civil service he heldvarious senior positions, among them as Director, IndustriesDivisions in Ministry of International and Trade Industry(“MITI”), Deputy Secretary-General, Ministry of Works andDirector-General of the Registration Department, Ministry ofHome Affairs.

Dato’ Haji Kamaruddin is a director of Lion Industries CorporationBerhad and Tan Chong Motor Holdings Berhad. He has abstainedfrom deliberating and voting in respect of transactions betweenthe Group and related parties involving himself.


Annual Report 2013

Dato’ Tan Eng HwaDIMP, 59, a Malaysian

Dato’ N. Sadasivan s/o N.N. Pillay

DPMP, JSM, KMN, 74, a Malaysian

Dato’ Haji Kamaruddin @Abas Nordin

DSSA, KMN, 75, a Malaysian


12

Mr. Heng Ji Keng, 66, a Malaysian, is an Independent Director.He joined the Board and the Audit Committee on 1 January2011. He was appointed Chairman of the NominatingCommittee on 22 January 2013.

Mr. Heng has a Bachelor of Economics (Honours) degree inAccounting from University of Malaya and a Master ofCommerce from the University of New South Wales, Australia.He qualified as a chartered accountant when he was with PriceWaterhouse & Co, Sydney in 1976. In 1982, he co-foundedMonteiro & Heng, a public accounting firm, now known asBaker Tilly Monteiro Heng. He is also the co-founder of FerrierHodgson MH, the corporate recovery arm of Baker TillyMonteiro Heng. Mr. Heng is now the Executive Chairman ofBaker Tilly Monteiro Heng group, which provides a wide rangeof professional services such as audit and taxation, corporateadvisory, forensic investigation and corporate recovery,restructuring and insolvency.

Mr. Heng is the Chairman of the Institute of Chartered Accountantsin Australia (Malaysian Chapter), a Council Member of theMalaysian Institute of Accountants, a Council Member of theMalaysian Institute of Chartered Secretaries and Administrators, aPanel Member of the Disciplinary Committee of CPA Australia anda Panel Member of the Disciplinary Committee, Advocates &Solicitors Disciplinary Board.

Mr. Siow Tiang Sae, 56, a Malaysian, is an Executive Director.He was appointed to the Board on 1 June 2013.

Mr. Siow graduated from Tunku Abdul Rahman College and isa member of the Malaysian Institute of Accountants and aFellow member of the Association of Chartered CertifiedAccountants.

Mr. Siow has more than 28 years of experience in audit,accounting, procurement, logistic, information technologyand marketing.

Mr. Siow joined Tan Chong Motor Holdings Berhad in May1982 as Senior Internal Auditor for about three (3) years andlater joined APM Automotive Holdings Berhad (APM”) Groupin January 1985 where he was the Accountant for certainsubsidiaries of APM. He is the Senior General Manager of theCompany in charge of new business development for APMGroup since August 2011. Prior to this, senior positions heldby Mr Siow included heading the operations of interiordivision and APM Auto Components USA Inc. in USA.



Mr. Heng Ji Keng66, a Malaysian

Mr. Siow Tiang Sae56, a Malaysian


13

Mr. Nicholas Tan Chye Seng, 40, a Malaysian, is a Non-Independent Non-Executive Director. He was appointed to theBoard on 1 June 2013.

Mr. Nicholas Tan graduated from Boston University School ofManagement with a Bachelor of Science Degree. He joined TanChong Motor Holdings Berhad Group (“TCMH Group”) in 2006and formed the Corporate Planning and Strategic InvestmentsDivision of TCMH Group. He is an Executive Director of variousoperating companies involved in manufacturing, distribution,trading, retailing and financial services. He was formerly anExecutive Director and Vice-President in research ininvestment banking prior of joining TCMH Group.

Mr. Nicholas Tan is the son of Dato’ Tan Heng Chew, a directorand major shareholder of the Company.

Mr. Sow Soon Hock, 56, a Malaysian, is an Executive Director.He was appointed to the Board on 22 November 2013.

Mr. Sow graduated from United Business Institute, Brusselswith an Executive MBA. He started his career with the APMGroup in 1978, rising from supervisory and managerialpositions in the Suspension Division until his transfer to OEMMarketing as Senior General Manager.

In July 2006, Mr. Sow was appointed Executive Director ofMarketing of APM, being responsible for the Sales andMarketing function of the Group.

Mr. Sow was re-designated as Non-Executive Director of APMin July 2009. However, he did not seek re-election at theAnnual General Meeting of APM in May 2010.

Subsequent thereto, Mr. Sow was the Head of TCManufacturing (Sabah) Sdn Bhd (“TCMS”), a subsidiary ofTCMH. He joined TCMS since July 2011 and was assigned tohead the Sabah new project.


Annual Report 2013

Mr. Nicholas Tan Chye Seng40, a Malaysian

Mr. Sow Soon Hock56, a Malaysian

Notes

Except for Dato’ Tan Heng Chew, Dato’ Tan Eng Hwa and Mr. Nicholas Tan Chye Seng, none of the other Directors haveany family relationship with any other Director and/or major shareholders of the Company.

None of the Directors have any convictions for offences within the past 10 years. Except as disclosed above, none ofthe Directors have any conflict of interest in any business arrangement involving the Company.

A summary of the attendance of the Directors at board meetings held in 2013 is set out on page 20


14

RESULTS 2013 20121 20111 20101 20091

(RM'000) (RM'000) (RM'000) (RM'000) (RM'000)

Revenue 1,259,020 1,123,147 1,107,305 1 ,081,441 850,867Profit before tax 177,502 159,524 172,843 179,495 98,643Taxation (40,634) (34,337) (36,959) (39,161) (16,365)

Profit for the financial year 136,868 125,187 135,884 140,334 82,278

Attributable to :Equity holders of the Company 123,789 113,602 118,093 124,489 72,651Minority interest 13,079 11,585 17,791 15,845 9,627

BALANCE SHEETAssets Property, plant & equipments 234,123 212,477 232,968 234,247 216,768Prepaid lease payments 14,586 15,286 6,052 6,320 4,043Investment properties 16,617 17,002 1,177 1,217 1,257Equity accounted investees 41,106 30,956 28,684 30,256 18,529Intangible asset 873 474 799 936 1,549Deferred tax assets 15,683 12,801 14,951 18,990 13,801

Total non ‐current assets 322,988 288,996 284,631 291,966 255,947Current assets 891,139 831,111 771,913 698,746 588,309

Total assets 1,214,127 1,120,107 1,056,544 990,712 844,256

Equity Share capital 201,600 201,600 201,600 201,600 201,600Reserves 727,960 698,840 640,949 556,088 453,663Treasury shares (12,806) (12,796) (12,786) (12,776) (12,733)

Total equity attributable to equity holders of the Company 916,754 887,644 829,763 744,912 642,530

Non‐controlling interest 26,200 20,821 25,298 30,359 20,806

Total equity 942,954 908,465 855,061 775,271 663,336Non-current liabilities 12,311 14,531 16,969 18,459 18,078Current liabilities 258,862 197,111 184,514 196,982 162,842

Total equity and liabilities 1,214,127 1,120,107 1,056,544 990,712 844,256

FINANCIAL STATISTICSBasic earning per share(sen) 63.26 58.05 60.30 63.60 36.90Gross dividend per share (sen) 52.00 32.00 32.00 20.00 16.00Net assets per share (RM) 4.68 4.54 4.24 3.81 3.28Return on shareholders equity (%) 13.72 13.23 15.00 17.95 11.78

1. Comparative figures have been restated to take into account the effects of:i. Adoption of MFRS 10 Consolidated Financial Statement, MFRS 11 Joint Arrangements and MFRS 12 Disclosure of Interests in Other Entities on 1

January 2013.ii. Interests in some of the joint ventures are deconsolidated to the equity method.

5 YEARS FINANCIAL HIGHLIGHTS



2009 2010 2011 2012 2013

Profit For The Financial Year

20

0

40

60

80

100

120

160

140

RM’ million

82

140 137125

136

2009 2010 2011 2012 2013

Net Assets

100

0

200

300

400

500

600

800

900

1,000

700

RM’ million

2009 2010 2011 2012 2013

Revenue

200

0

400

600

800

1000

1,200

1,400

RM’ million

851

1,081

1,107

1,123

1,259

2009 2010 2011 2012 2013

Basic Earning Per Share

10.0

0

20.0

30.0

40.0

50.0

60.0

70.0

Sen

917888830745

643

2009 2010 2011 2012 2013

Net Assets Per ShareRM

0.50

0

1.00

1.50

2.00

2.50

3.00

4.00

4.50

5.00

3.5036.9

63.6 60.3

58.1

63.3

4.68

4.544.243.813.28

2009 2010 2011 2012 2013

Return On Equity holdersPercentage

2.00

0.00

4.00

6.00

8.00

10.00

12.00

16.00

18.00

20.00

14.00

13.72%

13.23%

15.00%

17.95%

11.78%

5 YEARS FINANCIAL HIGHLIGHTS

Annual Report 2013 15


The Board of APM Automotive Holdings Berhad (the “Company”) recognises the importance of adopting high standards ofcorporate governance in the Company in order to safeguard stakeholders’ interests as well as enhancing shareholders’ value.The Directors consider corporate governance to be synonymous with four key concepts, namely transparency, accountability,integrity as well as corporate performance.

As such, the Board seeks to embed in the Group a culture that aims to balance conformance requirements with the need todeliver long-term strategic success through performance, without compromising on personal or corporate ethics and integrity.

This corporate governance statement (“Statement”) sets out how the Company has applied the 8 Principles of the MalaysianCode on Corporate Governance (“MCCG 2012”) and observed the 26 Recommendations supporting the Principles during thefinancial year. Where a specific Recommendation of the MCCG 2012 has not been observed during the financial year underreview, the non-observation, including the reasons thereof and, where appropriate, the alternative practice, if any, is mentionedin this Statement.

Principle 1 - Establish clear Roles and Responsibilities of the Board and Management

The Board recognises the key role it plays in charting the strategic direction of the Company and has assumed the followingprincipal responsibilities in discharging its fiduciary and leadership functions:

• reviewing and adopting a strategic plan for the Company, addressing the sustainability of the Group’s business;

• overseeing the conduct of the Group’s business and evaluating whether or not its businesses are being properly managed;

• identifying principal business risks faced by the Group and ensuring the implementation of appropriate internal controlsand mitigating measures to address such risks;

• ensuring that all candidates appointed to senior management positions are of sufficient calibre, including having in placea process to provide for the orderly succession of senior management personnel and members of the Board;

• overseeing the development and implementation of a shareholder communications policy; and

• reviewing the adequacy and integrity of the Group’s internal control and management information systems.

To assist in the discharge of its stewardship role, the Board has established Board Committees, namely the Audit Committeeand Nominating Committee, to examine specific issues within their respective terms of reference as approved by the Board andreport to the Board with their recommendations. The ultimate responsibility for decision making, however, lies with the Board.

(i) Board Charter

To enhance accountability, the Board has established clear functions reserved for the Board and those delegated toManagement. There is a formal schedule of matters reserved to the Board for its deliberation and decision to ensure thedirection and control of the Company are in its hands.

Key matters reserved for the Board include, inter-alia, the approval of annual budgets, quarterly and annual financialstatements for announcement, investment and divestitures, as well as monitoring of the Group’s financial and operatingperformance. Such delineation of roles is clearly set out in the Board Charter, which serves as a reference point for Boardactivities. The Board Charter provides guidance for Directors and Management regarding the responsibilities of the Board,its Committees and Management, the requirements of Directors in carrying out their stewardship role and in dischargingtheir duties towards the Company as well as boardroom activities. The salient features of the Board Charter are publiclyavailable on the Company’s website at www.apm.com.my in line with Recommendation 1.7 of the MCCG 2012.

CORPORATE GOVERNANCE STATEMENT

APM Automotive Holdings Berhad (424838-D)16


(ii) Code of Ethics

The Board has formalized a Directors’ Code of Ethics setting out the standards of conduct expected from Directors. TheDirectors’ Code of Ethics is made available on the Company’s website at www.apm.com.my. To inculcate good ethicalconduct, the Group has established a Code of Conduct for employees, which has been communicated to all levels ofemployees in the Group.

The Board has also formalized a Special Complaint Policy, which is equivalent to whistle-blowing policy, with the aim toprovide an avenue for raising concerns related to possible breach of business conduct, non-compliance of laws andregulatory requirements as well as other malpractices.

(iii) Sustainability of Business

The Board is mindful of the importance of business sustainability and, in conducting the Group’s business, the impact onthe environmental, social and governance aspects is taken into consideration. The Group also embraces sustainability in itsoperations and supply chain, through its own actions as well as in partnership with its stakeholders, including suppliers,customers and other organizations.

The Group’s activities on corporate social responsibility for the financial year under review are disclosed on page 24 of thisAnnual Report.

(iv) Access to Information and Advice

The Directors are supplied with relevant information and reports on financial, operational, corporate, regulatory, businessdevelopment and audit matters for decisions to be made on an informed basis and effective discharge of the Board’sresponsibilities.

Procedures have been established for timely dissemination of Board and Board Committee papers to all Directors at leastseven (7) days prior to the Board and Board Committee meetings, to give effect to Board decisions and to deal with mattersarising from such meetings. Senior Management of the Group and external advisers are invited to attend Board meetingsto provide additional insights and professional views, advice and explanations on specific items on the meeting agenda.Besides direct access to Management, Directors may obtain independent professional advice at the Company’s expense, ifconsidered necessary, in accordance with established procedures set out in the Board Charter in furtherance of their duties.

Directors have unrestricted access to the advice and services of the Company Secretaries to enable them to discharge theirduties effectively. The Board is regularly updated and advised by the Company Secretaries who are qualified, experiencedand competent on statutory and regulatory requirements, and the resultant implications of any changes therein to theCompany and Directors in relation to their duties and responsibilities.

Principle 2 - Strengthen Composition of the Board

During the financial year under review, the Board consisted of nine (9) members, comprising one (1) Executive Chairman, four(4) Executive Directors and four (4) Non-Executive Directors of which three (3) are Independent Directors. This compositionfulfills the requirements as set out under the Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa”), which stipulatethat at least two (2) Directors or one-third of the Board, whichever is higher, must be Independent. The profile of each Directoris set out on pages 10 to 13 of this Annual Report. The Directors, with their diverse backgrounds and specializations, collectivelybring with them a wide range of experience and expertise in areas such as engineering, finance; accounting and audit; andmarketing and operations.

(i) Nominating Committee – Selection and Assessment of Directors

On 22 January 2013, the Board established a Nominating Committee as it recognizes the importance of the roles theCommittee plays not only in the selection and assessment of Directors but also in other aspects of corporate governancewhich the Committee can assist the Board to discharge its fiduciary and leadership functions. The Nominating Committeecomprises the following members:

• Heng Ji Keng (Chairman of Committee and Independent Non-Executive Director).• Dato’ N. Sadasivan s/o N.N. Pillay (Senior Independent Non-Executive Director);• Dato’ Haji Kamaruddin@Abas bin Nordin (Independent Non-Executive Director);

Annual Report 2013


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The Board has stipulated specific terms of reference for the Nominating Committee, which cover, inter-alia, assessing andrecommending to the Board the candidature of Directors, appointment of Directors to Board Committees and trainingprograms for the Board. The terms of reference require the Nominating Committee to review annually the required mix ofskills and experience of Directors; succession plans and board diversity, including gender diversity; training courses forDirectors and other qualities of the Board, including core-competencies which the Independent Non-Executive Directorsshould bring to the Board. The Committee is also entrusted to assess annually the effectiveness of the Board as a whole, theCommittees of the Board and contribution of each individual Director. Insofar as board diversity is concerned, the Boarddoes not have a specific policy on setting target number for women candidates. The evaluation of the suitability ofcandidates is solely based on the candidates’ competency, character, time commitment, integrity and experience in meetingthe needs of the Company, including, where appropriate, the ability of the candidates to act as Independent Non-ExecutiveDirectors, as the case may be.

The Nominating Committee shall meet at least once (1) a year or more frequently as deemed necessary by the Chairman.During the financial year under review, the Nominating Committee held six (6) meetings including a meeting that consideredand recommended the extension of service contract of the Executive Chairman. All members attended the meetings.

On 19 November 2013, the Nominating Committee met to review and assess the effectiveness of the Board as a whole, theBoard Committee and the performance of individual Directors as well as to assess the independence of the IndependentDirectors based on the self and peer assessment approach. In assessing the Individual Directors’ performance, theNominating Committee considered, inter-alia, the contribution, performance, competency, personality, integrity and timecommitment of each Director to effectively discharge his role as a Director of the Company. From the results of theassessment, including the mix of skills and experience possessed by the Directors, and based on the Nominating Committee’srecommendation, the Board recommended the re-election and re-appointment of Directors at the Company’s forthcomingAnnual General Meeting. The Nominating Committee also assessed the training needs of each Director of the Companyand recommended suitable training courses for the Directors.

(ii) Directors’ Remuneration

The Board is of the view that the existing remuneration guidelines formulated by drawing upon the wealth of experienceof all the Directors on the Board would be more effective and therefore, a Remuneration Committee is currently not required.The Board, as a whole, determines and recommends the remuneration packages of Independent Non-Executive Directorssubject to an aggregate amount not exceeding RM350,000 per annum, the sum of which was approved by shareholders atthe 13th Annual General Meeting of the Company in 2010 and Executive Directors with the Directors concerned abstainingfrom discussions on their individual remuneration.

The remuneration policy of the Group essentially seeks to attract, retain and motivate employees of all levels, includingExecutive Directors, to contribute positively towards the Group’s performance.

The quantum of annual performance bonus and increment for the employees of the Group is dependent on the operatingresults of the Group after taking into account the prevailing business conditions and the individual’s performance. The sameguidelines apply to the Executive Directors.

The aggregate remuneration of the Directors for the financial year ended 31 December 2013 are as follows:

Fees Salaries Bonus Benefits-in-kindand allowances

(RM) (RM) (RM) (RM)

Executive Directors - 4,970,742.19 1,809,672.00 212,410.37Non-Executive Directors 255,850.00 49,400.00 - -




The number of Directors of the Company [including former Directors who resigned/retired from the Company during theyear] whose total remuneration including benefits-in-kind for the financial year ended 31 December 2013 which fall withinthe required disclosure bands are as follows:

Range of Remuneration Executive Non-Executive

RM50,000.00 and below - 4RM50,001 to RM100,000 - 3RM600,001 to RM650,000 1 -RM1,200,001 to RM1,250,000 2 -RM1,450,001 to RM1,500,000 1 -RM2,450,001 to RM2,500,000 1 -

Principle 3 – Reinforce Independence of the Board

The Company has an Executive Chairman who is primarily responsible for setting the Group’s strategic direction and leadingthe Board in the oversight of management. The role of day-to-day management of the Group’s business development andoperations and implementation of policies and decisions of the Board is helmed by the Chief Executive Officer and the ExecutiveDirector. The Board believes that such division of power and responsibilities helps ensure that no one person in the Board hasunfettered powers to make major decisions for the Company unilaterally.

While the position of the Chairman is not held by an Independent Non-Executive Director, the Board has three (3) IndependentNon-Executive Directors, constituting one third (1/3) of the composition of the Board. The Board acknowledges the importanceof balance of power and authority of the Board and has identified Dato’ N Sadasivan as the Company’s Senior Independent Non-Executive Director, to whom concerns may be conveyed by fellow Directors, shareholders and other stakeholders.

The Executive Chairman is responsible for ensuring the adequacy and effectiveness of the Board’s governance process and actsas a facilitator at Board meetings to ensure that contributions from Directors are forthcoming on matters being deliberated andthat no Board member dominates discussion.

The Independent Non-Executive Directors bring to bear objective and independent views, advice and judgment on interests,not only of the Group, but also of shareholders, employees, customers, suppliers and the communities in which the Groupconducts its business. Independent Non-Executive Directors are essential for protecting the interests of shareholders and canmake significant contributions to the Company’s decision making by bringing in the quality of detached impartiality.

The Nominating Committee assesses the independence of the Independent Non-Executive Directors based on criteria set outin the Listing Requirements of Bursa. The Board Charter provides a limit of a cumulative term of nine (9) years on the tenure ofan Independent Director and thereafter he may be re-designated as a Non-Independent Non-Executive Director. In the eventthe Board intends to retain the Director as Independent Director after the latter has served a cumulative term of nine (9) years,the Board must justify the decision and seek shareholders’ approval at general meeting. In justifying the decision, the NominatingCommittee is required to assess the candidate’s suitability to continue as an Independent Non-Executive Director based on thecriteria on independence adopted by the Board.

Following an assessment and recommendation by the Nominating Committee, the Board recommended that Dato’ N Sadasivanand Dato’ Haji Kamaruddin @ Abas Nordin whom have served as Independent Non-Executive Director of the Company for acumulative term of more than nine (9) years as at the end of the financial year under review, be retained as an IndependentNon-Executive Director, subject to shareholders’ approval at the forthcoming Annual General Meeting. Key justifications forretaining them as Independent Non-Executive Director are as follows:

• they fulfill the criteria under the definition on Independent Director as stated in the Listing Requirements of Bursa and,therefore, is able to bring independent and objective judgment to the Board;

• their experience in the relevant industries enable them to provide the Board and Audit Committee, as the case may be, withpertinent and a diverse set of expertise, skills and competence; and

• they have been with the Company long and therefore understands the Company’s business operations which enable themto contribute actively and effectively during deliberations or discussions at Audit Committee and Board meetings, as thecase may be.

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Principle 4 – Foster commitment of Directors

The Board ordinarily meets at least five (5) times a year, scheduled well in advance before the end of the preceding financialyear to facilitate the Directors in planning their meeting schedule for the year. Additional meetings are convened when urgentand important decisions need to be made between scheduled meetings. Board and Board Committee papers, which areprepared by Management, provide the relevant facts and analysis for the convenience of Directors. The meeting agenda, therelevant reports and Board papers are furnished to Directors and Board Committee members at least seven (7) days before themeeting to allow the Directors sufficient time to peruse for effective discussion and decision making during meetings. At thequarterly Board meetings, the Board reviews the business performance of the Group and discusses major operational andfinancial issues. All pertinent issues discussed at Board meetings in arriving at the decisions and conclusions are properly recordedby the Company Secretaries by way of minutes of meetings. During the financial year under review, the Board convened seven(7) Board meetings and the Directors’ attendance at the Board Meetings were as follows:-

Name Attendance

Dato’ Tan Heng Chew 6/7Dato’ Tan Eng Hwa 7/7Low Seng Chee 7/7Dato’ N Sadasivan 7/7Dato’ Haji Kamaruddin @ Abas Nordin 7/7Heng Ji Keng 6/7Siow Tiang Sae (Appointed on 1 June 2013) 2/3Nicholas Tan Chye Seng (Appointed on 1 June 2013) 3/3Sow Soon Hock (Appointed on 11 November 2013) 1/1

As stipulated in the Board Charter, the Directors shall devote sufficient time to carry out their responsibilities. The Board shallobtain this commitment from Directors at the time of appointment. Each Director is expected to commit time as and whenrequired to discharge the relevant duties and responsibilities, besides attending meetings of the Board or Board Committees.

Directors’ Training – Continuing Education Programmes

The Board is mindful of the importance for its members to undergo continuous training to be apprised on changes to regulatoryrequirements and the impact such regulatory requirements have on the Group.

All Directors have completed the Mandatory Accreditation Programme. During the financial year under review, all Directorsattended development and training programmes. The continuous education programmes attended by the Directors during thefinancial year ended 31 December 2013 include the following:-

Name Training Attended

Dato’ Tan Heng Chew KPMG: Malaysian Financial Reporting Standards (MFRS) Updates 2013 SeminarTan Chong Group: Highlights of 2014 Budget and GST Briefing

Dato’ Tan Eng Hwa • Updates on Relevant Acts & Practical Issues #3• Compliance Issues &Common Offences under the Companies Act, 1965• The 9th Tricor Tax and Corporate Seminar

Low Seng Chee • Malaysian Financial Reporting Standard (MFRS Update)• The 9th Tricor Tax and Corporate Seminar

Dato’ N Sadasivan • Audit Committee Conference 2013 – Powering for Effectiveness• Breakfast Session with Board Chairman: Discussion on Corporate Governance

Practices• Corporate Integrity Advocacy Programme – themed “Designing Corruption Out of

the Business Eco-System”




Name Training Attended

Dato’ Haji Kamaruddin @Abas bin Nordin • Director Duties, Regulatory Updates & Governance Seminar for Directors of

PLCs 2013• Corporate Directors Advanced programme (CDAP) 2013: Strategy & Risks• Goods and Service Tax (GST) Briefing Session• Sustainability Training for Directors & Practitioners• Corporate Governance / Enterprise Risk Management• Personal Data Protection Act, 2010• Competition Act 2010• Nominating Committee Programme• Audit Committee Seminar 2013 – “Improving Audit Committee Effectiveness”• Future of Corporate Reporting• ASEAN CG Scorecard (Special Session)• Advocacy Sessions on Corporate Disclosure for Directors of Listed Issuers• Khazanah Megatrends Forum 2013• World Capital Markets Symposium 2013• The 9th Tricor Tax and Corporate Seminar

Heng Ji Keng • Financial Reporting Frameworks in Malaysia & MASB Exposure Draft 72• Updates of Standards Related to Consolidation, Fair Value Measurement & Other

MFRSs effective on 1 Jan 2013• Malaysian Financial Reporting Standards 2013 A Technical Brief• MAICSA Annual Conference 2013 • 2013 World Conference• Baker Tilly Monteiro Heng Tax Budget Seminar• CTIM Tax Budget Seminar• MIA Conference

Siow Tiang Sae • Personal Data Protection Act 2010• GST – Goods and Service Tax for Malaysia• Work Ethics for Effective Management • Mandatory Accreditation Programme

Nicholas Tan Chye Seng • Mandatory Accreditation Programme

Sow Soon Hock • Mandatory Accreditation Programme

The Company Secretaries normally circulate the relevant guidelines on statutory and regulatory requirements from time to timefor the Board’s reference. The Group Financial Controller and External Auditors also briefed the Board members on any changesto the Malaysian Financial Reporting Standards that would affect the Group’s financial statements during the financial year underreview. The Directors continue to undergo relevant training programs to further enhance their skills and knowledge in thedischarge of their stewardship role.

Principle 5 – Uphold integrity in financial reporting by the Company

It is the Board’s commitment to present a balanced and meaningful assessment of the Group’s financial performance andprospects at the end of each reporting period and financial year, primarily through the quarterly announcement of Group’sresults to Bursa, the annual financial statements of the Group and Company as well as the Executive Chairman’s statement andreview of the Group’s operations in the Annual Report, where relevant.

The Board is responsible for ensuring that the financial statements give a true and fair view of the state of affairs of the Groupand the Company as at the end of the reporting period and of their results and cash flows for the period then ended.

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21


In assisting the Board to discharge its duties on financial reporting, the Board has established an Audit Committee, comprisingwholly Independent Non-Executive Directors, with Dato N Sadasivan as the Committee Chairman. The composition of the AuditCommittee, including its roles and responsibilities, are set out in the Audit Committee Report on pages 27 to 29 of this AnnualReport. One of the key responsibilities of the Audit Committee in its specific terms of reference is to ensure that the financialstatements of the Group and Company comply with applicable financial reporting standards in Malaysia and provisions of theCompanies Act 1965, as the case may be. Such financial statements comprise the quarterly financial report announced to Bursaand the annual statutory financial statements.

The Board understands its role in upholding the integrity of financial reporting by the Company. Accordingly, the AuditCommittee, which assists the Board in overseeing the financial reporting process of the Company, has adopted a policy for thetypes of non-audit services permitted to be provided by the external auditors, including the need for obtaining the AuditCommittee’s approval for such services.

In assessing the independence of external auditors, the Audit Committee received a written assurance from the external auditors,confirming that they are, and have been, independent throughout the conduct of the audit engagement with the Company inaccordance with the independence criteria set out by the International Federation of Accountants and the Malaysian Instituteof Accountants.

Principle 6 – Recognise and manage risks of the Group

The Group has implemented a comprehensive risk management framework and established a process for the identification,evaluation and reporting of the major risks within the Group. The Group Risk Management Committee is responsible for creatingrisk-awareness and monitoring major risks whilst the subsidiaries’ management is responsible for managing risks, developing,implementing and monitoring the system of internal control. The Group has, however, established a Group Risk ManagementCommittee (“GRMC”), which functions to create risk awareness and examine the identified risks. The risk responses and internalcontrols that Management has taken and/ or is taking are documented in the minutes of the GRMC meetings.

The identified risks are periodically reviewed by the Board through the Audit Committee, which informs the Board on the progressof the mitigation plans for each key business risks identified.

In line with the MCCG 2012 and the Listing Requirements of Bursa, the Company has in place a Systems & Internal Audit (“SIA”)function, which reports directly to the Audit Committee on the effectiveness of the current system of internal controls from theperspectives of governance, risks and controls. All internal audits carried out are guided by internal auditing standardspromulgated by the Institute of Internal Auditors Inc, a globally recognised professional body for internal auditors. The in-houseSIA function is independent of the activities it audits and the scope of work covered by the SIA during the financial year underreview is provided in the Audit Committee Report set out on pages 27 to 29 of this Annual Report.

Principle 7 – Ensure timely and high quality disclosure

The Board is aware of the need to establish corporate disclosure policies and procedures to enable comprehensive, accurateand timely disclosures relating to the Company and its subsidiaries to be made to the regulators, shareholders and stakeholders.Accordingly, the Board is taking steps to formalise pertinent corporate disclosure policies not only to comply with the disclosurerequirements as stipulated in the Listing Requirements of Bursa, but also setting out the persons authorised and responsible toapprove and disclose material information to regulators, shareholders and stakeholders.

To augment the process of disclosure, the Board has provided a section for corporate governance on the Company’s websitewhere information on the Company’s announcements to the regulators, the Board Charter, rights of shareholders and theCompany’s Annual Report may be accessed.




Principle 8 – Strengthen relationship between the Company and its shareholders

(i) Shareholder participation at general meeting

The Annual General Meeting (“AGM”), which is the principal forum for shareholder dialogue, allows shareholders to reviewthe Group’s performance via the Company’s Annual Report and pose questions to the Board for clarification. At the AGM,shareholders participate in deliberating resolutions being proposed or on the Group’s operations in general. At the lastAGM, a question & answer session was held where the Chairman invited shareholders to raise questions with responsesfrom the Board and Senior Management.

The Notice of AGM is circulated at least twenty one (21) days before the date of the meeting to enable shareholders to gothrough the Annual Report and papers supporting the resolutions proposed. All the resolutions set out in the Notice of thelast AGM were put to vote by show of hands and duly passed. The outcome of the AGM was announced to Bursa on thesame meeting day.

(ii) Communication and engagement with shareholders and investors

The Board recognises the importance of being transparent and accountable to the Company’s investors. The Company willhold group and individual discussions with analysts, institutional shareholders, and investment communities, at theirrequest, with the view to fostering greater understanding of the business of the Group. The various channels ofcommunications are through the quarterly announcements on financial results to Bursa, relevant announcements andcirculars, when necessary, the Annual and Extraordinary General Meetings and through the Group’s website atwww.apm.com.my where shareholders can access corporate information, annual reports, press releases, financialinformation, and company announcements. To maintain a high level of transparency and to effectively address any issuesor concerns, the Group has a dedicated electronic mail, i.e. [email protected] to which stakeholders can direct theirqueries or concerns.

This Statement is dated 8 April 2014

Annual Report 2013


23


OTHER STATEMENTS AND DISCLOSURES


1. Share Buy-Back

During the financial year ended 31 December 2013, 2,000 ordinary shares of RM1.00 each were repurchased as treasuryshares at a total consideration of RM10,675.18. All the said repurchased shares were retained as treasury shares and noneof the repurchased shares was resold or cancelled during the financial year ended 31 December 2013.

The details of the shares bought back during the financial year ended 31 December 2013 are as follows:-

Month Number of Highest Lowest Averageshares price price price

purchased paid per paid per paid per Totalshare share share Consideration(RM) (RM) (RM) (RM)

March 2013 1,000 5.00 5.00 5.00 5,046.50August 2013 1,000 5.58 5.58 5.58 5,628.68

Total 2,000 10,675.18

2. Internal Audit Function

The Group has an in-house Internal Audit and management fees charged to subsidiaries for performing this function for financialyear ended 31 December 2013 was RM420,345.00.

3. Non-Audit Fees

The amount of non-audit fees paid by the Company to its external auditors or a firm or company affiliate to the external auditorsduring the financial year ended 31 December 2013 was RM1,244,887.00.

4. Material Contracts

There were no material contracts of the Company and its subsidiaries involving directors’ and major shareholders’ interests, eitherstill subsisting at the end of the financial year or, if not then subsisting, entered into since the end of the previous financial yearended 31 December 2013.

5. Recurrent Related Party Transactions of a Revenue or Trading Nature (“RRPT”)

The details of related party transactions undertaken by the Group during the financial year ended 31 December 2013 as stated innote 31 of the financial statements on page 79 to 81 of this Annual Report.

Disclosure on Corporate Social Responsibility (“CSR”)

The Group is aware of its corporate social responsibilities and has always made CSR an integral part of the way it conducts itsbusinesses. The various activities carried out during the year reflect the Group’s commitment towards CSR, in particular theenvironment, occupational safety and health as well as welfare of its employees and the community.

The APM Education Awards for 2013 benefited employees whose children secured places in institutions of higher learning inMalaysia. As for the community, the Group continued to donate to several children and welfare homes.

Full compliance with the requirements of applicable laws and regulations related to the environment has always been animportant policy of the Group. The Group will continue to strive to be environmental friendly in conducting its business.

The Group is committed to provide and ensure a safe and healthy environment at all times. It continues to implement variousongoing safety and health programmes and to educate employees on the various aspects of safety practices. The Group willcontinue to emphasise on the importance of safety and health at the work place.


Annual Report 2013

INTERNAL CONTROL STATEMENT

25

The Board of Directors recognises the importance of the Principles and Recommendations promulgated by the Malaysian Codeon Corporate Governance 2012. As such, the Board is committed to maintaining a sound system of risk management and internalcontrol to safeguard the Group’s assets and shareholders’ investments. As required under Paragraph 15.26(b) of the ListingRequirements of Bursa Malaysia Securities Berhad (“Bursa”), the Board is pleased to provide the Internal Control Statement whichoutlines the nature and scope of internal control of the Group for 2013.

BOARD’S RESPONSIBILITY

The Board of Directors acknowledges its ultimate responsibility for maintaining as well as reviewing the adequacy and integrityof the Group’s risk management and internal control system. Due to the limitations inherent in any system of internal control,such a system is designed to manage rather than eliminate the risk of failure to achieve business objectives. Accordingly, it canonly provide reasonable and not absolute assurance against material misstatement or loss.

The Audit Committee assists the Board in reviewing the adequacy and integrity of the system of risk management and internalcontrol in the Group. The Audit Committee is assisted by the Group’s in-house Internal Audit department, which carries outsystematic reviews of the system of risk management and internal control of the Group and also the extent of compliance withthe Group’s operating policies and procedures. Audit reports and plan status are submitted to Audit Committee for review ona quarterly basis. Included in the reports are recommended corrective measures on findings identified for implementation byManagement.

The membership of the Audit Committee, summary of its terms of reference and activities are set out on pages 27 to 29 of the Annual Report.

RISK MANAGEMENT

Risk management is an integral part of the Group’s business operations. The Group has implemented a risk managementframework and established a process for the identification, evaluation and reporting of the major risks within the Group.

The Group Risk Management Committee is responsible for creating risk-awareness and monitoring major risks whilst thesubsidiaries’ management is responsible for managing risks, developing, implementing and monitoring the system of internalcontrol. The Internal Audit department reviews the progress of implementation of the subsidiaries’ risks response plans and theeffectiveness of existing controls in managing the relevant risks. The results of the reviews are presented in the Group RiskManagement Committee meetings. In addition, Internal Audit department also provides training support to subsidiaries uponrequest or where necessary, to ensure that the established risk management process is carried out.

Continuous efforts are taken to monitor and re-assess the existing risk management framework in order to maintain a propersystem of managing risks as well as the related control activities.

Business continuity management is regarded as an integral part of the Group’s risk management process. In order to minimisepotential disruption to business and operations, certain business units have been identified to implement business continuity plans.


INTERNAL CONTROL STATEMENT


OTHER KEY ELEMENTS OF INTERNAL CONTROL

Apart from risk management activities, the key elements of the internal control system of the Group are as follows:

• The executive directors manage the businesses and hold dialogues with senior management of the various subsidiaries;

• There are defined delegation of responsibilities and limits of authority for different processes, decisions and commitments;

• The Executive Management Committee (“EMC”), established by the Board to manage and control the Group’s businesses,monitors the performance of the subsidiaries and identifies areas requiring follow-up actions. The EMC is further supportedby various sub-committees. Matters beyond the EMC’s limits of authority are referred to the Board for approval;

• The Board meets at least quarterly to discuss the performance of the Group and other major issues. The year end financialstatements and the announcements of the quarterly results are reviewed by the Audit Committee before the Board’sapproval and release to Bursa Malaysia; and

• The Board also reviews and approves the Group’s annual budget and business plan consisting of the budgets and businessplans of the subsidiaries. These plans set out the key business objectives of the respective subsidiaries including major risks,opportunities as well as the action plans.

This Risk Management and Internal Control System has not dealt with associate companies and jointly controlled entities wherethe Group does not have full management over them. However, the Group’s interest is served through representations on theBoard of the respective associate companies and jointly controlled entities.

The Board, with the assistance of the Audit Committee reviews the adequacy and integrity of the system of risk managementand internal control. The Board is of the view that there have been no material losses incurred during the financial year underreview as a result of weaknesses in the risk management and internal control system.

Management has also provided the relevant assurance to the Board, stating that the Group’s risk management and internalcontrol system is operating adequately and effectively in all material aspects. The Board is of the view that the risk managementand internal control system is sound and sufficient to provide reasonable assurance in safeguarding the interests of shareholdersinvestment and the Group’s assets.


Annual Report 2013

AUDIT COMMITTEE REPORT

27

The Audit Committee (“AC”) was formed on 1 November 1999. The current terms of reference of the AC, were adopted by theBoard of Directors at a meeting held on 22 January 2013.

Composition and Meetings

The members of the AC and their attendance at the AC Committee meetings held during the financial year ended 31 December2013 were as follows:

Name Attendance

Dato’ N Sadasivan, Chairman, Senior Independent Non-Executive 7/7Dato’ Haji Kamaruddin @ Abas Nordin, Independent Non-Executive 6/7Heng Ji Keng, Independent Non-Executive 7/7

Terms of Reference

Membership

The AC shall be appointed by the Board from amongst the directors and must be composed of no fewer than three (3) members.All AC members must be non-executive directors with a majority of them being independent directors. The AC shall include atleast one director who is a member of the Malaysian Institute of Accountants or alternatively, a person who must have at least3 years working experience and have passed the examinations specified in Part I of the First Schedule of the Accountants Act,1967 or is a member of one of the associations specified in Part II of the said Schedule or fulfils such other requirements asprescribed or approved by Bursa Malaysia Securities Berhad (“Bursa Malaysia”).

No alternate director shall be appointed a member of the AC. The members of the AC shall elect a Chairman from among theirnumber who shall be an independent director. In the event of any vacancy in the AC, which results in a breach in the MainMarket Listing Requirements of Bursa Malaysia (“Listing Requirements”), the vacancy must be filled within three (3) months.The term of office and performance of the AC and each of its members shall be reviewed by the Board at least once every three(3) years.

Authority

The AC is authorised by the Board, and at the cost of the Company, to:-

1. investigate any matter within its terms of reference;

2. have the resources which are required to perform its duties;

3. have full and unrestricted access to any information pertaining to the Company or the Group;

4. have direct communication channels with the external auditors and person(s) carrying out the internal audit function oractivity (if any);

5. be able to obtain independent professional or other advice; and

6. convene meetings with the external auditors, the internal auditors or both, excluding the attendance of the other directorsand employees of the Company.




Functions

The functions of the AC shall be, amongst others, to –

1. review the following and report the same to the Board:

a) the audit plan, the evaluation of the system of internal control and the audit report with the external auditor as well asthe assistance given by the employees of the Company/Group to the external auditor;

b) the adequacy of the scope, functions, competency and resources of the internal audit function and that it has thenecessary authority to carry out its work;

c) the internal audit programme and processes, ensuring adoption of standards established by professional bodies, andthe results of the same or investigations undertaken and whether appropriate action is taken on the recommendationsof the internal audit function;

d) the quarterly results and year end financial statements, prior to approval by the Board, focusing on changes in orimplementation of major accounting policy changes, significant and unusual events and compliance with accountingstandards and other legal requirements;

e) any related party transaction and conflict of interest situation that may arise within the Company or Group includingany transaction, procedure or course of conduct that raises questions of management integrity;

f ) assess, review and monitor the suitability and independence of the external auditors, including obtaining writtenassurance from external auditors confirming they are, and have been, independent throughout the conduct of auditengagement in accordance with the terms of all relevant professional and regulatory requirements;

g) policy on non-audit services which may be provided by the external auditors and conditions and procedures whichmust be adhered by the external auditors in the provision of such services;

h) any letter of resignation from external auditor; and

i) whether there is reason to believe that the external auditor is not suitable for re-appointment;

2. recommend the nomination of person or persons as external auditor;

3. approve any appointment or termination of senior staff members of the internal audit function and review any appraisal orassessment of the performance of its members;

4. approval of non-audit services provided by external auditors; and

5. any other function as may be required by the Board from time to time.

Conduct of Meetings

The Chairman shall call for meetings to be held not less than four times a year. Any member of the AC may at any time, and thecompany secretaries shall on requisition of the member, summon a meeting. Except in the case of an emergency, seven (7) days’notice of meeting shall be given in writing to all members. A quorum of meetings shall be a majority of independent directors.Meetings shall be chaired by the Chairman, and in his absence, by an independent director. Decisions shall be made by a majorityof votes.

The head of Finance, head of Internal Audit and the company secretaries shall normally attend meetings. Other Board membersand employees may attend meetings upon the invitation of the AC. A representative of the external auditor shall attend themeeting to consider the final financial statements and such other meetings determined by the Committee. The Chairman shallexercise the right to require those who are in attendance to leave the room when matters to be discussed are likely to behampered by their presence or confidentiality of matters needed to be preserved.


Annual Report 2013


29

Reporting Procedures

The company secretaries shall record the proceedings of meetings. Minutes shall be circulated to all members of the Board. TheAC shall prepare, for the Board and for inclusion in the Company’s annual report, a summary of its activities in the discharge ofits functions and duties for the financial year. The AC must promptly report to Bursa Malaysia, a matter reported by it to theBoard which has not been satisfactorily resolved resulting in a breach of the Listing Requirements.

SUMMARY OF ACTIVITIES OF THE AUDIT COMMITTEE

During the year, the AC reviewed the Group’s audit strategy plan with the external auditors before commencement of the auditfor the financial year end and thereafter the annual financial statements, as well as the quarterly financial results beforerecommending to the Board for release to Bursa Malaysia. The AC also reviewed related party transactions on quarterly basis,the internal audit plan for the year, all the Group’s internal audit and risk management reports.

SUMMARY OF ACTIVITIES OF THE INTERNAL AUDIT FUNCTION

The principal role of the internal audit function, which is performed in-house, is to undertake regular independent review andappraisal on the effectiveness of the Group’s system of internal control. It reports directly to the AC, which reviews and approvesits annual audit plan.

During the year ended 31 December 2013, the internal audit function undertook audit visits to major subsidiaries of the Groupaimed at providing reasonable assurance that the relevant internal control activities were operating satisfactorily and that thesubsidiaries had complied with the Group’s established policies and procedures. In addition, it also performed ad hocinvestigations as well as routine year end reviews such as annual stock takes, recurrent related party transactions and its pricingreviews. The audit findings were reported to the AC and forwarded to management for its attention. Audit reports alsoencompassed recommendations for improvements which were deemed practical and necessary. Follow-up reviews were carriedout to ascertain that management action plans had been duly implemented.

Lastly, the internal audit function assisted the Group Risk Management Committee in discharging its responsibilities by ensuringthat the on-going risk management process had been duly accomplished.


The directors are required by the Companies Act 1965 (“the Act”) to prepare financial statements for each financial year whichgive a true and fair view of the state of affairs of the Company and the Group, and their results for the financial year.

In preparing the financial statements for the year ended 31 December 2013, the directors have:

1. adopted the appropriate accounting policies, which are consistently applied;2. made judgments and estimates that are reasonable and prudent; and3. ensured that the applicable approved accounting standards in Malaysia and provisions of the Act are complied with.

The directors are responsible for ensuring that the Company and the Group keep accounting records which disclose withreasonable accuracy the financial position of the Company and the Group and which enable them to ensure that the financialstatements comply with the Act. The directors have general responsibility for taking such steps as are reasonably available tothem to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

DIRECTORS’ RESPONSIBILITY STATEMENTfor the audited financial statements



32DIRECTORS’ REPORT

36STATEMENTS OFFINANCIAL POSITION

38STATEMENTS OF PROFITOR LOSS AND OTHERCOMPREHENSIVE INCOME

40CONSOLIDATEDSTATEMENT OF CHANGES IN EQUITY

41STATEMENT OF CHANGES IN EQUITY

Financial Statements

100 Statement by Directors100 Statutory Declaration101 Independent Auditors’ Report

42STATEMENTS OF CASH FLOWS

44NOTES TO THEFINANCIALSTATEMENTS


The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Companyfor the financial year ended 31 December 2013.

Principal activities

The Company is principally an investment holding company and also provides shared services to companies in the Group forwhich it charges management fees. The principal activities of the subsidiaries are as stated in Note 32 to the financial statements.There has been no significant change in the nature of these activities during the financial year.

Results

Group CompanyRM’000 RM’000

Profit for the year attributable to:Owners of the Company 123,789 136,377Non-controlling interests 13,079 -

136,868 136,377

Reserves and provisions

There were no material transfers to or from reserves and provisions during the financial year under review except as disclosedin the financial statements.

Dividends

Since the end of the previous financial year, the Company paid:

a) a final ordinary dividend of 12 sen per ordinary share less tax at 25% totalling RM17,612,000 (9.00 sen net per ordinaryshare) in respect of the financial year ended 31 December 2012 on 28 June 2013;

b) a special final ordinary dividend of 10 sen per ordinary share less tax at 25% totalling RM14,677,000 (7.50 sen net per ordinaryshare) in respect of the financial year ended 31 December 2012 on 28 June 2013;

c) an interim ordinary dividend of 10 sen per ordinary share less tax at 25% totalling RM14,677,000 (7.50 sen net per ordinaryshare) in respect of the financial year ended 31 December 2013 on 30 September 2013; and

d) a special interim ordinary dividend of 30 sen per ordinary share less tax at 25% totalling RM44,030,000 (22.50 sen net perordinary share) in respect of the financial year ended 31 December 2013 on 30 September 2013.

The directors now recommend the declaration of final ordinary dividend of 12 sen per ordinary share under single-tier systemtotalling RM23,483,000 in respect of the financial year ended 31 December 2013. These dividends will be recognised insubsequent financial period upon approval by the owners of the Company.

DIRECTORS’ REPORT for the year ended 31 December 2013



Directors of the Company

Directors who served since the date of the last report are:

Dato’ Tan Heng Chew Dato’ Tan Eng HwaLow Seng Chee Dato’ N. Sadasivan s/o N.N. Pillay Dato’ Haji Kamaruddin @ Abas Nordin Heng Ji Keng Siow Tiang Sae (appointed on 1.6.2013)Nicholas Tan Chye Seng (appointed on 1.6.2013)Sow Soon Hock (appointed on 11.11.2013)Tan Eng Soon (resigned on 22.5.2013)Dr. Fun Woh Peng (resigned on 1.6.2013)Azman Badrillah (resigned on 1.6.2013)

Directors’ interests in shares

The interests and deemed interests in the ordinary shares of the Company and of its related corporations (other than wholly-owned subsidiaries) of those who were Directors at year end (including the interests of the spouses or children of the Directorswho themselves are not Directors of the Company) as recorded in the Register of Directors’ Shareholdings are as follows:

Number of ordinary shares of RM1 eachAt 1.1.2013/ At

date of Bought Sold 31.12.2013appointment

Shareholdings in which Directors have direct interests:

Interest in the Company:Dato’ Tan Heng Chew 5,359,999 565,000 - 5,924,999Dato’ Tan Eng Hwa 207,008 - - 207,008Dato’ Haji Kamaruddin @ Abas Nordin 5,448 - - 5,448Nicholas Tan Chye Seng (appointed on 1.6.2013) - 163,000 - 163,000Siow Tiang Sae (appointed on 1.6.2013) 2,050 - - 2,050

Shareholdings in which Directors have deemed interest in the Company

Interest in the Company:

Dato’ Tan Heng Chew 99,034,290* 2,163,000 (4,656,555) 96,540,735Dato’ Tan Eng Hwa 15,267,728* - - 15,267,728

* Including interests of spouse and child by virtue of Section 134(12)(c) of the Companies Act, 1965.

Dato’ Tan Heng Chew and Dato’ Tan Eng Hwa by virtue of their shareholdings in the Company are also deemed interested in theshares of the subsidiaries during the financial year to the extent that the Company has an interest. Details of their deemedshareholdings in non-wholly-owned subsidiaries are shown in Note 32 to the financial statements.

None of the other Directors holding office at 31 December 2013 had any interest in the ordinary shares of the Company and ofits related corporations during the financial year.

for the year ended 31 December 2013

Annual Report 2013

DIRECTORS’ REPORT

33


Directors’ benefits

Since the end of the previous financial year, no Director of the Company has received nor become entitled to receive any benefit(other than a benefit included in the aggregate amount of emoluments received or due and receivable by Directors as shownin the financial statements or the fixed salary of a full time employee of the Company or of related corporations) by reason of acontract made by the Company or a related corporation with the Director or with a firm of which the Director is a member, orwith a company in which the Director has a substantial financial interest, other than certain Directors who have significantfinancial interest in companies which traded with certain companies in the Group in the ordinary course of business as disclosedin Note 31 to the financial statements.

There were no arrangements during and at the end of the financial year which had the object of enabling Directors of theCompany to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

Issue of shares and debentures

There were no changes in the authorised, issued and paid-up capital of the Company during the financial year. There were nodebentures issued during the financial year.

Treasury shares

During the financial year, the Company repurchased 2,000 of its issued ordinary shares from the open market at an averageprice of RM5.34 per ordinary share. The total consideration paid for the repurchase including transaction costs was RM10,675.The ordinary shares repurchased are being held as treasury shares in accordance with Section 67A of the Companies Act, 1965.

As at 31 December 2013, the Company held as treasury shares a total of 5,912,000 of its 201,600,000 issued ordinary shares.Such treasury shares are held at a carrying amount of RM12,806,000 and further relevant details are disclosed in Note 16 to thefinancial statements.

Options granted over unissued shares

No options were granted to any person to take up unissued shares of the Company during the financial year.

Other statutory information

Before the financial statements of the Group and of the Company were made out, the Directors took reasonable steps to ascertainthat:

i) all known bad debts have been written off and adequate provision made for doubtful debts, and

ii) any current assets which were unlikely to be realised in the ordinary course of business have been written down to anamount which they might be expected so to realise.

At the date of this report, the Directors are not aware of any circumstances:

i) that would render the amount written off for bad debts or the amount of the provision for doubtful debts in the Group andin the Company inadequate to any substantial extent, or

ii) that would render the value attributed to the current assets in the financial statements of the Group and of the Companymisleading, or

iii) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and ofthe Company misleading or inappropriate, or

iv) not otherwise dealt with in this report or the financial statements, that would render any amount stated in the financialstatements of the Group and of the Company misleading.

DIRECTORS’ REPORT for the year ended 31 December 2013



Other statutory information (continued)

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

i) any charge on the assets of the Group or of the Company that has arisen since the end of the financial year and whichsecures the liabilities of any other person, or

ii) any contingent liability in respect of the Group or of the Company that has arisen since the end of the financial year.

No contingent liability or other liability of any company in the Group has become enforceable, or is likely to become enforceablewithin the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or maysubstantially affect the ability of the Group and of the Company to meet their obligations as and when they fall due.

In the opinion of the Directors, except for the provision of warranties as disclosed in Note 24 to the financial statements, thefinancial performance of the Group and of the Company for the financial year ended 31 December 2013 have not beensubstantially affected by any item, transaction or event of a material and unusual nature nor has any such item, transaction orevent occurred in the interval between the end of that financial year and the date of this report.

Auditors

The auditors, Messrs KPMG, have indicated their willingness to accept re-appointment.

Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:

……………………………………………………….. Low Seng Chee

……………………………………………………….. Dato’ Tan Eng Hwa

Kuala Lumpur, Date: 8 April 2014


Annual Report 2013

DIRECTORS’ REPORT

35


Group CompanyNote 31.12.2013 31.12.2012 1.1.2012 31.12.2013 31.12.2012

RM’000 RM’000 RM’000 RM’000 RM’000Restated Restated

AssetsProperty, plant and equipment 3 234,123 212,477 232,968 842 1,348Prepaid lease payments 4 14,586 15,286 6,052 - -Investment properties 5 16,617 17,002 1,177 - -Investments in subsidiaries 6 - - - 355,745 342,439Investment in an associate 7 8,455 - - - -Investments in joint ventures 8 32,651 30,956 28,684 - -Intangible assets 9 873 474 799 - -Deferred tax assets 10 15,683 12,801 14,951 73 159

Total non-current assets 322,988 288,996 284,631 356,660 343,946

Inventories 11 229,062 167,627 156,110 - -Current tax assets 3,527 4,492 5,036 647 1,171Trade and other receivables,

including derivatives 12 277,755 216,287 201,382 48,140 40,633Deposits and prepayments 13 74,379 17,796 14,376 73 820Cash and cash equivalents 14 306,416 424,909 385,531 3,215 3,136Assets classified as held for sale 15 - - 9,478 - -

Total current assets 891,139 831,111 771,913 52,075 45,760

Total assets 1,214,127 1,120,107 1,056,544 408,735 389,706

EquityShare capital 201,600 201,600 201,600 201,600 201,600Reserves 727,960 698,840 640,949 213,195 167,879Treasury shares (12,806) (12,796) (12,786) (12,806) (12,796)

Total equity attributable to owners ofthe Company 916,754 887,644 829,763 401,989 356,683

Non-controlling interests 26,200 20,821 25,298 - -

Total equity 16 942,954 908,465 855,061 401,989 356,683

Liabilities Employee benefits 17 10,301 13,187 14,204 615 1,257Deferred tax liabilities 10 2,010 1,344 2,765 - -

Total non-current liabilities 12,311 14,531 16,969 615 1,257

Loans and borrowings 18 12,847 20,570 18,467 - -Provisions 19 23,547 9,364 8,854 - -Trade and other payables,

including derivatives 20 215,851 163,609 153,767 6,131 31,766Current tax liabilities 6,617 3,568 3,426 - -

Total current liabilities 258,862 197,111 184,514 6,131 31,766

Total liabilities 271,173 211,642 201,483 6,746 33,023

Total equity and liabilities 1,214,127 1,120,107 1,056,544 408,735 389,706

STATEMENTS OF FINANCIAL POSITION as at 31 December 2013


The notes on pages 44 to 99 are an integral part of these financial statements.


(In US$ Equivalent) as at 31 December 2013

Annual Report 2013

STATEMENTS OF FINANCIAL POSITION

37

Group31.12.2013 31.12.2012 1.1.2012

US$’000 US$’000 US$’000Restated Restated

AssetsProperty, plant and equipment 71,346 64,750 70,994Prepaid lease payments 4,445 4,658 1,844Investment properties 5,064 5,181 359Investment in an associate 2,577 - -Investment in joint ventures 9,950 9,434 8,741Intangible assets 266 144 244Deferred tax assets 4,779 3,901 4,556

Total non-current assets 98,427 88,068 86,738

Inventories 69,804 51,083 47,573Current tax assets 1,075 1,369 1,535Trade and other receivables, including derivatives 84,643 65,911 61,369Deposits and prepayments 22,666 5,423 4,381Cash and cash equivalents 93,377 129,486 117,486Assets classified as held for sale - - 2,888

Total current assets 271,565 253,272 235,232

Total assets 369,992 341,340 321,970

EquityShare capital 61,435 61,435 61,435Reserves 221,838 212,963 195,322Treasury shares (3,902) (3,899) (3,896)

Total equity attributable to equity holders of the Company 279,371 1,270,499 252,861Non-controlling interest 7,984 6,345 7,709

Total equity 287,355 276,844 260,570

LiabilitiesEmployee benefits 3,139 4,019 4,328Deferred tax liabilities 613 410 843

Total non-current liabilities 3,752 4,429 5,171

Loans and borrowings 3,915 6,268 5,628Provisions 7,176 2,854 2,698Trade and other payables, including derivatives 65,778 49,858 46,859Current tax liabilities 2,016 1,087 1,044

Total current liabilities 78,885 60,067 56,229

Total liabilities 82,637 64,496 61,400

Total equity and liabilities 369,992 341,340 321,970

The information contained on this page does not form part of the audited statements.

The figure are converted from RM into US$ equivalent using the exchange rate of RM 3.2815 = US$ 1.00 which approximatesthat prevailing on 31 December 2013.



STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME


Group CompanyNote 2013 2012 2013 2012

RM’000 RM’000 RM’000 RM’000Restated

Revenue 21 1,259,020 1,123,147 141,521 19,302Cost of sales (992,476) (893,959) - -

Gross profit 266,544 229,188 141,521 19,302Other income 8,732 8,887 39 96Distribution expenses (40,953) (25,382) - -Administration expenses (71,801) (62,847) (4,965) (11,651)Other expenses (4,408) (5,395) (80) -

Results from operating activities 158,114 144,451 136,515 7,747Finance costs 22 (339) (597) (151) (63)Finance income 23 10,311 11,388 993 1,159Net finance income 9,972 10,791 842 1,096Share of profit of associate, net of tax 448 - - -Share of profit of joint ventures, net of tax 8,968 4,282 - -

Profit before tax 24 177,502 159,524 137,357 8,843Income tax expense 26 (40,634) (34,337) (980) (2,201)

Profit for the year 136,868 125,187 136,377 6,642

Other comprehensive (expense)/income, net of tax Items that will not be reclassified subsequently to profit or loss

Remeasurement of defined benefit liability/(asset) 1,635 - (65) -Items that will be reclassified subsequently to

profit or lossForeign currency translation differences for

foreign operations (5,308) (5,991) - -

Other comprehensive expense for the year 27 (3,673) (5,991) (65) -

Total comprehensive income for the year 133,195 119,196 136,312 6,642

Profit attributable to:Owners of the Company 123,789 113,602 136,377 6,642Non-controlling interests 13,079 11,585 - -

Profit for the year 136,868 125,187 136,377 6,642

Total comprehensive income attributable to:Owners of the Company 120,116 107,711 136,312 6,642Non-controlling interests 13,079 11,485 - -

Total comprehensive income for the year 133,195 119,196 136,312 6,642

Basic earnings per ordinary share (sen) 28 63.3 58.1



(In US$ Equivalent ) for the year ended 31 December 213)

Annual Report 2013

STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

39

Group2013 2012

US$’000 US$’000Restated

Revenue 383,672 3 42,266Cost of sales (302,446) (272,424)

Gross profit 81,226 69,842Other income 2,661 2,708Distribution expenses (12,480) (7,734)Administration expenses (21,881) (19,152)Other expenses (1,343) (1,644)

Results from operating activities 48,183 44,020Finance costs (103) (182)Finance income 3,142 3,470Net finance income 3,039 3,288Share of profit of associate, net of tax 137 -Share of profit of joint ventures, net of tax 2,733 1,305

Profit before tax 54,092 48,613Income tax expense (12,383) (10,464)

Profit for the year 41,709 38,149

Other comprehensive (expense)/income, net of taxItems that will not be reclassified subsequentlyto profit or loss

Remeasurement of defined benefit liability/(asset) 498 -Items that will be reclassified subsequently to profit or lossForeign currency translation differences for foreign operations (1,617) (1,826)

Other comprehensive expense for the year (1,119) (1,826)

Total comprehensive income, for the year 40,590 36,323

Profit attributable to :Owners of the Company 37,723 34,619Non-controlling interests 3,986 3,530

Profit for the year 41,709 38,149

Total comprehensive income attributable to :Owners of the Company 36,604 32,823Non-controlling interests 3,986 3,500

Total comprehensive income for the year 40,590 36,323

Basic earnings per ordinary share (cent) 19.3 17.7

The information contained on this page does not form part of the audited statements.

The figure are converted from RM into US$ equivalent using the exchange rate of RM 3.2815 = US$ 1.00 which approximatesthat prevailing on 31 December 2013.


Attributable to the owners of the CompanyNon-distributable Distributable

Non-Share Treasury Shares Translation Retained controlling Total

capital shares premium reserve earnings Total interests equityGroup Note RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

At 1 January 2012 201,600 (12,786) 17,898 (943) 623,994 829,763 25,298 855,061Foreign currency

translation differences for foreign operations - - - (5,891) - (5,891) (100) (5,991)

Profit for the year - - - - 113,602 113,602 11,585 125,187Total comprehensive

income for the year - - - (5,891) 113,602 107,711 11,485 119,196Own shares acquired - (10) - - - (10) - (10)Subscription of shares in a

subsidiary bynon-controlling interest - - - - - - 1,920 1,920

Dividends to owners of the Company- Final 2011 ordinary 29 - - - - (17,612) (17,612) - (17,612)- Special final 2011 ordinary 29 - - - - (14,677) (14,677) - (14,677)- Interim 2012 ordinary 29 - - - - (14,677) (14,677) - (14,677)

Dividends to non- controlling interest - - - - - - (15,166) (15,166)

Total transactions with owners of the Company - (10) - - (46,966) (46,976) (13,246) (60,222)

Acquisition of non-controlling interest in a subsidiary - - - - (2,854) (2,854) (2,716) (5,570)

At 31 December 2012 201,600 (12,796) 17,898 (6,834) 687,776 887,644 20,821 908,465

At 1 January 2013 201,600 (12,796) 17,898 (6,834) 687,776 887,644 20,821 908,465Foreign currencytranslation differences for foreign operations - - - (5,308) - (5,308) - (5,308)

Remeasurement of defined benefit liability - - - - 1,635 1,635 - 1,635

Profit for the year - - - - 123,789 123,789 13,079 136,868Total comprehensive

income for the year - - - (5,308) 125,424 120,116 13,079 133,195Own shares acquired - (10) - - - (10) - (10)Dividends to owners

of the Company- Final 2012 ordinary 29 - - - - (17,612) (17,612) - (17,612)- Special final 2012

ordinary 29 - - - - (14,677) (14,677) - (14,677)- Interim 2013 ordinary 29 - - - - (14,677) (14,677) - (14,677)- Special interim 2013

ordinary 29 - - - - (44,030) (44,030) - (44,030)Dividends to

non-controlling interest - - - - - - (7,700) (7,700)Total transactions with

owners of the Company - (10) - - (90,996) (91,006) (7,700) (98,706)

At 31 December 2013 201,600 (12,806) 17,898 (12,142) 722,204 916,754 26,200 942,954

Note 16 Note 16 Note 16 Note 16 Note 16

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the year ended 31 December 2013



Attributable to the owners of the CompanyNon-distributable Distributable

Share Treasury Share Retainedcapital shares premium earnings Total

Company Note RM’000 RM’000 RM’000 RM’000 RM’000

At 1 January 2012 201,600 (12,786) 17,898 190,305 397,017Profit/Total comprehensive income

for the year - - - 6,642 6,642Own shares acquired - (10) - - (10)- Final 2011 ordinary 29 - - - (17,612) (17,612)- Special final 2011 ordinary 29 - - - (14,677) (14,677)- Interim 2012 ordinary 29 - - - (14,677) (14,677)Total transactions with owners

of the Company - (10) - (46,966) (46,976)

At 31 December 2012/ 1 January 2013 201,600 (12,796) 17,898 149,981 356,683Profit for the year - - - 136,377 136,377Remeasurement of defined benefit liability - - - (65) (65)Total comprehensive income for the year - - - 136,312 136,312Own shares acquired - (10) - - (10)Dividends to owners of the Company- Final 2012 ordinary 29 - - - (17,612) (17,612)- Special final 2012 ordinary 29 - - - (14,677) (14,677)- Interim 2013 ordinary 29 - - - (14,677) (14,677)- Special interim 2013 ordinary 29 - - - (44,030) (44,030)Total transactions with owners

of the Company - (10) - (90,996) (91,006)

At 31 December 2013 201,600 (12,806) 17,898 195,297 401,989

Note 16 Note 16 Note 16 Note 16


Annual Report 2013

STATEMENT OF CHANGES IN EQUITY

41




RM’000 RM’000 RM’000 RM’000

Cash flows from operating activitiesProfit before tax 177,502 159,524 137,357 8,843Adjustments for:Amortisation of intangible assets 9 412 443 - -Amortisation of prepaid lease payments 4 96 157 - -Depreciation of investment properties 5 747 714 - -Depreciation of property, plant and equipment 3 24,886 31,384 270 259Employee benefits 17 1,458 214 321 152Finance costs 22 339 597 151 63Impairment loss on property, plant and

equipment written back 3 - (254) - -Interest income 23 (10,311) (11,388) (993) (1,159)(Gain)/Loss on disposal of property, plant and equipment (134) (484) 80 -Gain on disposal of asset held for sale - (461) - -Provision of warranties 19 19,328 5,333 - -Provision of warranties reversed 19 (441) (933) - -Property, plant and equipment written off 88 28 - -Share of profit of associate, net of tax (448) - - -Share of profit of joint ventures, net of tax (8,968) (4,282) - -

Operating profit before changes in working capital 204,554 180,592 137,186 8,158Deposits and prepayments (56,583) (3,420) 747 21Inventories (59,388) (4,146) - -Trade and other payables, including derivatives 50,799 (14,905) (25,635) 26,469Trade and other receivables, including derivatives (57,098) 9,842 (7,507) 10,114

Cash generated from operations 82,284 167,963 104,791 44,762Employee benefits paid 17 (2,435) (1,215) (1,050) (480)Interest received 23 10,311 11,388 993 1,159Interest paid 22 (339) (597) (151) (63)Warranties paid 19 (4,859) (3,881) - -Income tax paid (39,642) (34,526) (348) (2,717)

Net cash generated from operating activities 45,320 139,132 104,235 42,661

Cash flows from investing activitiesAcquisition of property, plant and equipment 3 (48,968) (28,934) - (276)Addition of intangible assets 9 (811) (118) - -Acquisition of non-controlling interest in a subsidiary - (5,570) - -Acquisition of subsidiary, net of cash and cash

equivalents acquired (2,150) - - -Investment in subsidiaries - - (13,306) (37,731)Lease payment for leasehold land 4 (932) (9,708) - -Proceeds from disposal of property, plant and equipment 648 686 156 -Proceeds from disposal of asset held for sale - 2,509 - -Subscription of shares in joint ventures (4,117) - - -

Net cash used in investing activities (56,330) (41,135) (13,150) (38,007)

STATEMENTS OF CASH FLOWS for the year ended 31 December 2013




RM’000 RM’000 RM’000 RM’000

Cash flows from financing activitiesDividends paid to non-controlling interest (7,700) (15,166) - -Dividends paid to owners of the Company 29 (90,996) (46,966) (90,996) (46,966)Repayment of revolving credit - (2,858) - -(Repayment)/Drawdown of bankers’ acceptances (13,912) 5,715 - -Drawdown/(Repayment) of foreign currency trade loan 6,189 (754) - -Purchase of Company’s own shares (10) (10) (10) (10)Subscription of shares in a subsidiary by non-controlling interest - 1,920 - -

Net cash used in financing activities (106,429) (58,119) (91,006) (46,976)

Net (decrease)/increase in cash and cash equivalents (117,439) 39,878 79 (42,322)Effect of exchange rate fluctuations on cash held (1,054) (500) - -Cash and cash equivalents at 1 January (i) 424,909 385,531 3,136 45,458

Cash and cash equivalents at 31 December (i) 306,416 424,909 3,215 3,136

i) Cash and cash equivalents

Cash and cash equivalents included in the statements of cash flows comprise the following statements of financial positionamounts:


RM’000 RM’000 RM’000 RM’000

Deposits placed with licensed banks 14 242,463 329,425 - -Corporate management accounts 14 45,267 75,648 1,706 2,266Cash and bank balances 14 18,686 19,836 1,509 870

306,416 424,909 3,215 3,136

Corporate management accounts are interest bearing currrent accounts maintained with a bank.


Annual Report 2013

STATEMENTS OF CASH FLOWS

43



APM Automotive Holdings Berhad is a public limited liability company, incorporated and domiciled in Malaysia and is listed onthe Main Market of Bursa Malaysia Securities Berhad. The addresses of the principal place of business and registered office ofthe Company are as follows:

Principal place of businessLot 600, Pandamaran Industrial EstateLocked Bag No. 21842009 Port KlangSelangor Darul Ehsan

Registered office62-68, Jalan Ipoh51200 Kuala Lumpur

The consolidated financial statements of the Company as at and for the financial year ended 31 December 2013 comprised theCompany and its subsidiaries (together referred to as the “Group” and individually referred to as “Group entities”) and the Group’sinterests in associate and joint ventures. The financial statements of the Company as at and for the financial year ended 31December 2013 do not include other entities.

The Company is principally an investment holding company and also provides shared services to companies in the Group forwhich it charges management fees. The principal activities of the subsidiaries are as stated in Note 32 to the financial statements.There has been no significant change in the nature of these activities during the financial year.

These financial statements were authorised for issue by the Board of Directors on 8 April 2014.

1. Basis of preparation

(a) Statement of compliance

The financial statements of the Group and of the Company have been prepared in accordance with Malaysian FinancialReporting Standards (“MFRSs”), International Financial Reporting Standards and the requirements of the CompaniesAct, 1965 in Malaysia.

The following are accounting standards, amendments and interpretations of the MFRS frameworks that have beenissued by the Malaysian Accounting Standards Board (MASB) but have not been adopted by the Group and theCompany:

MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2014

• Amendments to MFRS 10, Consolidated Financial Statements: Investment Entities• Amendments to MFRS 12, Disclosure of Interests in Other Entities: Investment Entities• Amendments to MFRS 127, Separate Financial Statements (2011): Investment Entities• Amendments to MFRS 132, Financial Instruments: Presentation – Offsetting Financial Assets and Financial Liabilities• Amendments to MFRS 136, Impairment of Assets – Recoverable Amount Disclosures for Non-Financial Assets• Amendments to MFRS 139, Financial Instruments: Recognition and Measurement – Novation of Derivatives and

Continuation of Hedge Accounting• IC Interpretation 21, Levies

MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 July 2014

• Amendments to MFRS 1, First-time Adoption of Malaysian Financial Reporting Standards (Annual Improvements 2011-2013 Cycle)

• Amendments to MFRS 2, Share-based Payment (Annual Improvements 2010-2012 Cycle)• Amendments to MFRS 3, Business Combinations (Annual Improvements 2010-2012 Cycle and 2011-2013 Cycle)• Amendments to MFRS 8, Operating Segments (Annual Improvements 2010-2012 Cycle)• Amendments to MFRS 13, Fair Value Measurement (Annual Improvements 2010-2012 Cycle and 2011-2013 Cycle)• Amendments to MFRS 116, Property, Plant and Equipment (Annual Improvements 2010-2012 Cycle)• Amendments to MFRS 119, Employee Benefits – Defined Benefit Plans: Employee Contributions• Amendments to MFRS 124, Related Party Disclosures (Annual Improvements 2010-2012 Cycle)• Amendments to MFRS 138, Intangible Assets (Annual Improvements 2010-2012 Cycle)• Amendments to MFRS 140, Investment Property (Annual Improvements 2011-2013 Cycle)

NOTES TO THE FINANCIAL STATEMENTS



1. Basis of preparation (continued)

(a) Statement of compliance (continued)

MFRSs, Interpretations and amendments effective for a date yet to be confirmed

• MFRS 9, Financial Instruments (2009)• MFRS 9, Financial Instruments (2010)• MFRS 9, Financial Instruments – Hedge Accounting and Amendments to MFRS 9, MFRS 7 and MFRS 139• Amendments to MFRS 7, Financial Instruments: Disclosures – Mandatory Effective Date of MFRS 9 and Transition

Disclosures

The Group and the Company plan to apply the above mentioned accounting standards, amendments andinterpretations:

• from the annual period beginning 1 January 2014 for those accounting standards, amendments or interpretationsthat are effective for annual periods beginning on or after 1 January 2014 except for IC Interpretation 21 which isnot applicable to the Group and the Company.

• from the annual period beginning on 1 January 2015 for those accounting standards, amendments orinterpretations that are effective for annual periods beginning on or after 1 July 2014.

The initial application of the accounting standards, amendments or interpretations are not expected to have anymaterial financial impacts to the current period and prior period financial statements of the Group and of theCompany.

(b) Basis of measurement

The financial statements have been prepared on the historical cost basis other than those as disclosed in Note 2.

(c) Functional and presentation currency

These financial statements are presented in Ringgit Malaysia (“RM”), which is the Company’s functional currency. Allfinancial information is presented in RM and has been rounded to the nearest thousand, unless otherwise stated.

(d) Use of estimates and judgements

The preparation of the financial statements in conformity with Malaysian Financial Reporting Standards (“MFRSs”)requires management to make judgements, estimates and assumptions that affect the application of accountingpolicies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from theseestimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates arerecognised in the period in which the estimates are revised and in any future periods affected.

There are no significant areas of estimation uncertainty and critical judgements in applying accounting policies thathave significant effect on the amounts recognised in the financial statements other than those disclosed in the followingnotes:

Note 5 - Valuation of investment propertiesNote 10 - Recognition of deferred tax assetsNote 19 - Provisions for warranties and contingent liabilities

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2. Significant accounting policies

The accounting policies set out below have been applied consistently to the periods presented in these financial statements,unless otherwise stated.

(a) Basis of consolidation

(i) Subsidiaries

Subsidiaries are entities, including structured entities, controlled by the Company. The financial statements ofsubsidiaries are included in the consolidated financial statements from the date that control commences until thedate that control ceases.

The Group adopted MFRS 10, Consolidated Financial Statements in the current financial year. This resulted in changesto the following policies:

• Control exists when the Group is exposed, or has rights, to variable returns from its involvement with the entityand has the ability to affect those returns through its power over the entity. In the previous financial years,control exists when the Group has the ability to exercise its power to govern the financial and operating policiesof an entity so as to obtain benefits from its activities.

• Potential voting rights are considered when assessing control only when such rights are substantive. In theprevious financial years, potential voting rights are considered when assessing control when such rights arepresently exercisable.

• The Group considers it has de facto power over an investee when, despite not having the majority of votingrights, it has the current ability to direct the activities of the investee that significantly affect the investee’sreturn. In the previous financial years, the Group did not consider de facto power in its assessment of control.

The change in accounting policy has been made retrospectively and in accordance with the transitionalprovision of MFRS 10. There is no effect from the adoption of MFRS 10.

Investments in subsidiaries are measured in the Company’s statement of financial position at cost less anyimpairment losses, unless the investment is classified as held for sale or distribution. The cost of investmentsincludes transaction costs.

(ii) Business combinations

Business combinations are accounted for using the acquisition method from the acquisition date, which is the dateon which control is transferred to the Group.

For new acquisitions, the Group measures the cost of goodwill at the acquisition date as:

• the fair value of the consideration transferred; plus• the recognised amount of any non-controlling interests in the acquiree; plus• if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree;

less• the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.

When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss.

For each business combination, the Group elects whether it measures the non-controlling interests in the acquireeeither at fair value or at the proportionate share of the acquiree’s identifiable net assets at the acquisition date.

Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurs inconnection with a business combination are expensed as incurred.




2. Significant accounting policies (continued)

(a) Basis of consolidation (continued)

(iii) Acquisitions of non-controlling interests

The Group treats all changes in its ownership interest in a subsidiary that do not result in a loss of control as equitytransactions between the Group and its non-controlling interest holders. Any difference between the Group’s shareof net assets before and after the change, and any consideration received or paid, is adjusted to or against Groupreserves.

(iv) Loss of control

Upon the loss of control of a subsidiary, the Group derecognises the assets and liabilities of the former subsidiary,any non-controlling interests and the other components of equity related to the former subsidiary from theconsolidated statement of financial position. Any surplus or deficit arising on the loss of control is recognised inprofit or loss.

If the Group retains any interest in the former subsidiary, then such interest is measured at fair value at the datethat control is lost. Subsequently, it is accounted for as an equity accounted investee or as an available-for-salefinancial asset depending on the level of influence retained.

(v) Associates

Associates are entities, including unincorporated entities, in which the Group has significant influence, but notcontrol, over the financial and operating policies.

Investments in associates are accounted for in the consolidated financial statements using the equity method lessany impairment losses. The cost of the investment includes transaction costs. The consolidated financial statementsinclude the Group’s share of the profit or loss and other comprehensive income of the associates, after adjustmentsif any, to align the accounting policies with those of the Group, from the date that significant influence commencesuntil the date that significant influence ceases.

When the Group’s share of losses exceeds its interest in an associate, the carrying amount of that interest includingany long-term investments is reduced to zero, and the recognition of further losses is discontinued except to theextent that the Group has an obligation or has made payments on behalf of the associate.

When the Group ceases to have significant influence over an associate, any retained interest in the former associateat the date when significant influence is lost is measured at fair value and this amount is regarded as the initialcarrying amount of a financial asset. The difference between the fair value of any retained interest plus proceedsfrom the interest disposed of and the carrying amount of the investment at the date when equity method isdiscontinued is recognised in the profit or loss.

When the Group’s interest in an associate decreases but does not result in a loss of significant influence, any retainedinterest is not re-measured. Any gain or loss arising from the decrease in interest is recognised in profit or loss.Any gains or losses previously recognised in other comprehensive income are also reclassified proportionately toprofit or loss if that gain or loss would be required to be reclassified to profit or loss on the disposal of the relatedassets or liabilities.

Investments in associates are measured in the Company’s statement of financial position at cost less any impairmentlosses. The cost of the investment includes transaction costs.

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(a) Basis of consolidation (continued)

(vi) Joint arrangements

Joint arrangements are arrangements of which the Group has joint control, established by contracts requiringunanimous consent for decisions about the activities that significantly affect the arrangements’ returns.

The Group adopted MFRS 11, Joint Arrangements in the current financial year. As a result, joint arrangements areclassified and accounted for as follows:

• A joint arrangement is classified as “joint operation” when the Group has rights to the assets and obligationsfor the liabilities relating to an arrangement. The Group accounts for each of its share of the assets, liabilitiesand transactions, including its share of those held or incurred jointly with the other investors, in relation to thejoint operation.

• A joint arrangement is classified as “joint ventures” when the Group has rights only to the net assets of thearrangements. The Group accounts for its interest in the joint venture using the equity method.

In the previous financial years, joint arrangements were classified and accounted for as follows:

• For joint ventures, the Group accounted for its interest using the proportionate accounting method.

• For jointly controlled asset or jointly controlled operation, the Group accounted for each its share of the assets,liabilities and transactions, including its share of those held or incurred jointly with the other investors.

The change in accounting policy has been made retrospectively and in accordance with the transitional provisionof MFRS 11. The effects from the adoption of MFRS 11 are disclosed in Note 38.

(vii) Non-controlling interests

Non-controlling interests at the end of the reporting period, being the equity in a subsidiary not attributable directlyor indirectly to the equity holders of the Company, are presented in the consolidated statement of financial positionand statement of changes in equity within equity, separately from equity attributable to the owners of theCompany. Non-controlling interests in the results of the Group is presented in the consolidated statement of profitor loss and other comprehensive income as an allocation of the profit or loss and the comprehensive income forthe year between non-controlling interests and owners of the Company.

Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests evenif doing so causes the non-controlling interests to have a deficit balance.

(viii) Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income and expenses arising from intra-grouptransactions, are eliminated in preparing the consolidated financial statements.

Unrealised gains arising from transactions with equity accounted associates and joint ventures are eliminatedagainst the investment to the extent of the Group’s interest in the investees. Unrealised losses are eliminated inthe same way as unrealised gains, but only to the extent that there is no evidence of impairment.





(b) Foreign currency

(i) Foreign currency transactions

Transactions in foreign currencies are translated to the respective functional currencies of Group entities atexchange rates at the dates of the transactions.

Monetary assets and liabilities denominated in foreign currencies at the end of the reporting period are retranslatedto the functional currency at the exchange rate at that date.

Non-monetary assets and liabilities denominated in foreign currencies are not retranslated at the end of thereporting date, except for those that are measured at fair value are retranslated to the functional currency at theexchange rate at the date that the fair value was determined.

Foreign currency differences arising on retranslation are recognised in profit or loss.

(ii) Operations denominated in functional currencies other than Ringgit Malaysia (RM)

The assets and liabilities of operations denominated in functional currencies other than RM are translated to RM atexchange rates at the end of the reporting period. The income and expenses of foreign operations are translatedto RM at exchange rates at the dates of the transactions.

Foreign currency differences are recognised in other comprehensive income and accumulated in the foreigncurrency translation reserve (“FCTR”) in equity. However, if the operation is a non-wholly-owned subsidiary, thenthe relevant proportionate share of the translation difference is allocated to the non-controlling interests. When aforeign operation is disposed of such that control, significant influence or joint control is lost, the cumulative amountin the FCTR related to that foreign operation is reclassified to gain or loss as part of the profit or loss on disposal.

When the Group disposes of only part of its investment in an associate or joint venture that includes a foreignoperation while retaining significant influence or joint control, the relevant proportion of the cumulative amountis reclassified to profit or loss.

In the consolidated financial statements, when settlement of a monetary item receivable from or payable to aforeign operation is neither planned nor likely in the foreseeable future, foreign exchange gains and losses arisingfrom such a monetary item are considered to form part of a net investment in a foreign operation and arerecognised in other comprehensive income, and are presented in the FCTR in equity.

(c) Financial instruments

(i) Initial recognition and measurement

A financial asset or a financial liability is recognised in the statement of financial position when, and only when,the Group or the Company becomes a party to the contractual provisions of the instrument.

A financial instrument is recognised initially, at its fair value plus, in the case of a financial instrument not at fairvalue through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financialinstrument.

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(c) Financial instruments (continued)

(ii) Financial instrument categories and subsequent measurement

The Group and the Company categorise financial instruments as follows:

Financial assets

(a) Financial assets at fair value through profit or loss

Fair value through profit or loss category comprises financial assets that are held for trading, includingderivatives (except for a derivative that is a designated and effective hedging instrument) or financial assetsthat are specifically designated into this category upon initial recognition.

Financial assets categorised as fair value through profit or loss are subsequently measured at their fair valueswith the gain or loss recognised in profit or loss.

(b) Loans and receivables

Loans and receivables category comprises trade and other receivables and cash and cash equivalents.

Financial assets categorised as loans and receivables are subsequently measured at amortised cost using theeffective interest method.

All financial assets, except for those measured at fair value through profit or loss, are subject to review forimpairment (see Note 2(k)).

Financial liabilities

All financial liabilities are subsequently measured at amortised cost other than those categorised as fair valuethrough profit or loss.

Fair value through profit or loss category comprises financial liabilities that are held for trading, derivatives (exceptfor a derivative that is a designated and effective hedging instrument) or financial liabilities that are specificallydesignated into this category upon initial recognition.

Financial liabilities categorised as fair value through profit or loss are subsequently measured at their fair valueswith the gain or loss recognised in profit or loss.

(iii) Regular way purchase or sale of financial assets

A regular way purchase or sale is a purchase or sale of a financial asset under a contract whose terms require deliveryof the asset within the time frame established generally by regulation or convention in the marketplace concerned.

A regular way purchase or sale of financial assets is recognised and derecognised, as applicable, using trade dateaccounting. Trade date accounting refers to:

(a) the recognition of an asset to be received and the liability to pay for it on the trade date, and

(b) derecognition of an asset that is sold, recognition of any gain or loss on disposal and the recognition of areceivable from the buyer for payment on the trade date.





(c) Financial instruments (continued)

(iv) Derecognition

A financial asset or part of it is derecognised when, and only when the contractual rights to the cash flows fromthe financial asset expire or the financial asset is transferred to another party without retaining control orsubstantially all risks and rewards of the asset. On derecognition of a financial asset, the difference between thecarrying amount and the sum of the consideration received (including any new asset obtained less any new liabilityassumed) and any cumulative gain or loss that had been recognised in equity is recognised in the profit or loss.

A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract isdischarged or cancelled or expires. On derecognition of a financial liability, the difference between the carryingamount of the financial liability extinguished or transferred to another party and the consideration paid, includingany non-cash assets transferred or liabilities assumed, is recognised in the profit or loss.

(d) Property, plant and equipment

(i) Recognition and measurement

Items of property, plant and equipment are stated at cost less any accumulated depreciation and any accumulatedimpairment losses.

Cost includes expenditures that are directly attributable to the acquisition of the asset and any other costs directlyattributable to bringing the asset to working condition for its intended use, and the costs of dismantling andremoving the items and restoring the site on which they are located. The cost of self-constructed assets also includesthe cost of materials and direct labour.

When significant parts of an item of property, plant and equipment have different useful lives, they are accountedfor as separate items (major components) of property, plant and equipment.

The gain or loss on disposal of an item of property, plant and equipment is determined by comparing the proceedsfrom disposal with the carrying amount of property, plant and equipment and is recognised net within “otherincome ”and “other expenses” respectively in profit or loss.

(ii) Subsequent costs

The cost of replacing a component of an item of property, plant and equipment is recognised in the carryingamount of the item if it is probable that the future economic benefits embodied within the part will flow to theGroup or the Company, and its cost can be measured reliably. The carrying amount of the replaced part isderecognised to profit or loss. The costs of the day-to-day servicing of property, plant and equipment are recognisedin profit or loss as incurred.

(iii) Depreciation

Depreciation is calculated over the depreciable amount, which is the cost of an asset, or other amount substitutedfor cost, less its residual value.

Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each componentof an item of property, plant and equipment. Leased assets are depreciated over the shorter of the lease term andtheir useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term.Freehold land is not depreciated. Property, plant and equipment under construction are not depreciated until theassets are ready for their intended use.

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(d) Property, plant and equipment (continued)

(iii) Depreciation (continued)

The estimated useful lives for the current and comparative periods are as follows:

• long term leasehold land 64 - 80 years• buildings 20 - 25 years• plant, machinery and equipment 1 - 10 years• furniture, fittings and office equipment 2 - 7 years• motor vehicles 5 - 10 years

Depreciation methods, useful lives and residual values are reviewed and adjusted as appropriate at end of thereporting period.

(e) Leased assets

(i) Finance leases

Leases in terms of which the Group or the Company assumes substantially all the risks and rewards of ownershipare classified as finance leases. Upon initial recognition, the leased asset is measured at an amount equal to thelower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, theasset is accounted for in accordance with the accounting policy applicable to that asset.

Minimum lease payments made under finance leases are apportioned between the finance expense and thereduction of the outstanding liability. The finance expense is allocated to each period during the lease term so asto produce a constant periodic rate of interest on the remaining balance of the liability. Contingent lease paymentsare accounted for by revising the minimum lease payments over the remaining term of the lease when the leaseadjustment is confirmed.

Leasehold land which in substance is a finance lease is classified as property, plant and equipment, or as investmentproperty it held to earn rental income or for capital appreciation or for both.

(ii) Operating leases

Leases, where the Group does not assume substantially all the risks and rewards of the ownership are classified asoperating leases and, except for property interest held under operating lease, the leased assets are not recognisedon the Group’s statement of financial position.

Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of thelease. Lease incentives received are recognised in profit or loss as an integral part of the total lease expense, overthe term of the lease. Contingent rentals are charged to profit or loss in the reporting period in which they areincurred.

Leasehold land which in substance is an operating lease is classified as prepaid lease payments.





(f) Intangible assets

(i) Research and development expenditure

Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledgeand understanding, is recognised in profit or loss as incurred.

Expenditure on development activities for new products is capitalised if the cost can be measured reliably, theproduct is technically and commercially feasible, future economic benefits are probable and the Group has sufficientresources to complete development.

The expenditure capitalised includes the cost of materials, direct labour and an appropriate proportion ofoverheads. Other development expenditure is recognised in profit or loss as incurred.

Capitalised development expenditure is stated at cost less accumulated amortisation and any accumulatedimpairment losses.

(ii) Other intangible assets

Intangible assets that are acquired by the Group, which have finite useful lives, are measured at cost less anyaccumulated amortisation and any accumulated impairment losses.

(iii) Subsequent expenditure

Subsequent expenditure on capitalised intangible assets are capitalised only when it increases the future economicbenefits embodied in the specific asset to which it relates. All other expenditure is recognised in profit or loss asincurred.

(iv) Amortisation

Other intangible assets are amortised from the date that they are available for use.

Amortisation is recognised in profit or loss on a straight-line basis over the estimated useful lives of intangibleassets from the date that they are available for use.

The estimated useful lives for the current and comparative periods are as follows:

• development expenditures 3-5 years• trademarks 2 years

Amortisation methods, useful lives and residual values are reviewed at the end of each reporting period areadjusted, if appropriate.

(g) Investment properties

(i) Investment properties carried at cost

Investment properties are properties held to earn rental income or for capital appreciation or for both. These includeland held for a currently undetermined future use. Properties that are occupied by the companies in the Group areaccounted for as owner-occupied rather than as investment properties.

Investment properties are stated at cost less accumulated depreciation and any accumulated impairment losses,consistent with the accounting policy for property, plant and equipment as stated in accounting policy Note 2(d).

Depreciation on buildings is charged to profit or loss on a straight-line basis over the estimated useful lives of 20to 25 years. Long term leasehold land is depreciated over the lease term of 64 to 80 years.

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(g) Investment properties (continued)

(i) Investment properties carried at cost (continued)

An investment property is derecognised on its disposal, or when it is permanently withdrawn from use and nofuture economic benefits are expected from its disposal. The difference between the net disposal proceeds andthe carrying amount is recognised in profit or loss in the period in which the item is derecognised.

(ii) Reclassification to/from investment property

When the Group or the Company transfers a property between investment property and property, plant andequipment, the property transferred will be stated at its carrying amount from previous classification.

(iii) Determination of fair value

The Directors estimate the fair value of investment property for disclosure without the involvement of independentvaluers.

(h) Inventories

Inventories are measured at the lower of cost and net realisable value.

The cost of inventories is measured based on the weighted average cost formula, and includes expenditure incurred inacquiring the inventories, production or conversion costs and other costs incurred in bringing them to their existinglocation and condition. In the case of work in progress and manufactured inventories, cost includes an appropriateshare of production overheads based on normal operating capacity.

Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs ofcompletion and the estimated costs necessary to make the sale.

(i) Cash and cash equivalents

Cash and cash equivalents consist of cash in hand, balances and deposits placed with licensed banks. For the purposeof the statements of cash flows, cash and cash equivalents are presented net of bank overdrafts and pledged deposits.

(j) Assets held for sale

Non-current assets that are expected to be recovered primarily through sale rather than through continuing use areclassified as held for sale.

Immediately before classification as held for sale, the assets are remeasured in accordance with the Group’s accountingpolicies. Thereafter, generally the assets are measured at the lower of their carrying amount and fair value less costs to sell.

Impairment losses on initial classification as held for sale and subsequent gains or losses on remeasurement arerecognised in profit or loss. Gains are not recognised in excess of any cumulative impairment loss.

(k) Impairment

(i) Financial assets

All financial assets (except for financial assets categorised as fair value through profit or loss, investment insubsidiaries, investment in joint ventures and investment in associates) are assessed at each reporting date whetherthere is any objective evidence of impairment as a result of one or more events having an impact on the estimatedfuture cash flows of the asset. Losses expected as a result of future events, no matter how likely, are not recognised.

An impairment loss in respect of loans and receivables is recognised in profit or loss and is measured as thedifference between the asset’s carrying amount and the present value of estimated future cash flows discountedat the asset’s original effective interest rate. The carrying amount of the asset is reduced through the use of anallowance account.





(k) Impairment (continued)

(ii) Other assets

The carrying amounts of other assets (except for inventories, deferred tax asset and non-current asset classified asheld for sale) are reviewed at the end of each reporting period to determine whether there is any indication ofimpairment. If any such indication exists, then the asset’s recoverable amount is estimated.

For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generatescash inflows from continuing use that are largely independent of the cash inflows of other assets (known as cash-generating unit).

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value lesscosts of disposal. In assessing value in use, the estimated future cash flows are discounted to their present valueusing a pre-tax discount rate that reflects current market assessments of the time value of money and the risksspecific to the asset or cash-generating unit.

An impairment loss is recognised if the carrying amount of an asset or its related cash-generating unit exceeds itsestimated recoverable amount.

Impairment losses are recognised in the profit or loss. Impairment losses recognised in respect of cash-generatingunits are allocated to reduce the carrying amount of the assets in the cash-generating unit (groups of cash-generating units) on a pro rata basis.

Impairment losses recognised in prior periods are assessed at the end of each reporting period for any indicationsthat the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in theestimates used to determine the recoverable amount since the last impairment loss was recognised. An impairmentloss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that wouldhave been determined, net of depreciation or amortisation, if no impairment loss had been recognised. Reversalsof impairment losses are credited to profit or loss in the financial year in which the reversals are recognised.

(l) Equity instruments

Instruments classified as equity are stated at cost on initial recognition and are not remeasured subsequently.

Repurchase of share capital

When share capital recognised as equity is repurchased, the amount of the consideration paid, including directlyattributable costs, net of any tax effect, is recognised as a deduction from equity. Repurchased shares that are notsubsequently cancelled are classified as treasury shares in the statement of changes in equity.

(m) Employee benefits

(i) Short-term employee benefits

Short-term employee benefit obligations in respect of salaries, annual bonuses, paid annual leave and sick leaveare measured on an undiscounted basis and are expensed as the related service is provided.

A liability is recognised for the amount expected to be paid under short-term cash bonus/incentive if the Grouphas a present legal or constructive obligation to pay this amount as a result of past service provided by the employeeand the obligation can be estimated reliably.

(ii) State plans

The Group’s contributions to statutory pension funds are charged to profit or loss in the financial year to which theyrelate. Once the contributions have been paid, the Group has no further payment obligations. Prepaid contributionsare recognised as an asset to the extent that a cash refund or a reduction in future payments is available.

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(m) Employee benefits (continued)

(iii) Termination benefits

Termination benefits are expensed at the earlier of when the Group can no longer withdraw the offer to thosebenefits and when the Group recognises costs for a restructuring. If benefits are not expected to be settled whollywithin 12 months of the end of the reporting period, then they are discounted.

(iv) Defined benefit plans

As a result of adopting MFRS 119 (2011), Employee Benefits, the Group has changed its accounting policy in respectof the basis for determining the income or expense relating to its post employment defined benefit plans.

The Group’s net obligation in respect of defined benefit plans is calculated separately for each plan by estimatingthe amount of future benefit that employees have earned in the current and prior periods, discounting that amountand deducting the fair value of any plan assets.

The calculation of defined benefit obligations is performed every three years by a qualified actuary using theprojected unit credit method. When the calculation results in a potential asset for the Group, the recognised assetis limited to the present value of economic benefits available in the form of any future refunds from the plan orreductions in future contributions to the plan. To calculate the present value of economic benefits, considerationis given to any applicable minimum funding requirements.

Remeasurements of the net defined benefit liability, which comprise actuarial gains and losses, the return on planassets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised immediatelyin other comprehensive income. The Group determines the net interest expense or income on the net definedliability or asset for the period by applying the discount rate used to measure the defined benefit obligation at thebeginning of the annual period to the net defined benefit liability or asset, taking into account any changes in thenet defined benefit liability or asset during the period as a result of contributions and benefit payments. Previously,the Group determined interest income on plan assets based on their long-term rate of expected return.

Net interest expense and other expenses relating to defined benefit plans are recognised in profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates topast service or the gain or loss on curtailment is recognised immediately in profit or loss. The Group recognisesgains and losses on the settlement of a defined benefit plan when the settlement occurs.

The adoption of MFRS 119 (2011) has no significant impact to the financial statements of the Group.

(n) Provisions

A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that canbe estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.

Warranties

A provision for warranties is recognised when the underlying products are sold. The provision is based on historicalwarranty claim.

In rare circumstances, a provision for warranties is not made when it is related to unusual product defects and wherethe amount of obligation cannot be measured with sufficient reliability.





(o) Revenue and other income

(i) Goods sold

Revenue from the sale of goods in the course of ordinary activities is measured at fair value of the considerationreceived or receivable, net of returns and allowances and trade discounts. Revenue is recognised when persuasiveevidence exists, usually in the form of an executed sales agreement, that the significant risks and rewards ofownership have been transferred to the customer, recovery of the consideration is probable, the associated costsand possible return of goods can be estimated reliably, and there is no continuing management involvement withthe goods, and the amount of revenue can be measured reliably. If it is probable that discounts will be grantedand the amount can be measured reliably, then the discount is recognised as a reduction of revenue as the salesare recognised.

(ii) Services

Revenue from services rendered is recognised in profit or loss as and when the services are performed.

(iii) Dividend income

Dividend income is recognised in profit or loss on the date that the Group’s or the Company’s right to receivepayment is established.

(iv) Rental income

Rental income from investment property is recognised in profit or loss on a straight-line basis over the term of thelease. Lease incentives granted are recognised as an integral part of the total rental income, over the term of thelease.

(v) Interest income

Interest income is recognised as it accrues, using the effective interest method in profit or loss.

(p) Borrowing costs

Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying assetare recognised in profit or loss using the effective interest method.

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assetsthat necessarily take a substantial period of time to get ready for their intended use or sale, are capitalised as part ofthe cost of those assets.

(q) Income tax

Income tax expense comprises current and deferred tax. Current tax and deferred tax is recognised in profit or lossexcept to the extent that it relates to items recognised directly in equity or other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enactedor substantively enacted by the end of the reporting period, and any adjustment to tax payable in respect of previousfinancial years.

Deferred tax is recognised using the liability method, providing for temporary differences between the carrying amountsof assets and liabilities in the statement of financial position and their tax bases. Deferred tax is not recognised for initialrecognition of assets or liabilities in a transaction that is not a business combination and that affects neither accountingnor taxable profit or loss.

Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse,based on the laws that have been enacted or substantively enacted by the end of the reporting period.

Annual Report 2013


57



(q) Income tax (continued)

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets,and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities,but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realisedsimultaneously.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available againstwhich temporary difference can be utilised. Deferred tax assets are reviewed at the end of each reporting period andare reduced to the extent that it is no longer probable that the related tax benefit will be realised.

Unutilised reinvestment allowance and investment tax allowance, being tax incentives that is not a tax base of an asset,is recognised as a deferred tax asset to the extent that it is probable that the future taxable profits will be availableagainst the unutilised tax incentive can be utilised.

(r) Earnings per ordinary share

The Group presents basic earnings per share data for its ordinary shares (“EPS”). Basic EPS is calculated by dividing theprofit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary sharesoutstanding during the period, adjusted for own shares held.

(s) Operating segments

An operating segment is a component of the Group that engaged in business activities from which it may earn revenuesand incur expenses, including revenues and expenses that relate to transactions with any of the Group’s othercomponents. An operating segment’s operating results are reviewed regularly by the Chief Operating Decision Makers(“CODM”), which in this case is the Executive Directors of the Group, to make decisions about resources to be allocatedto the segment and assess its performance, and for which discrete financial information is available.

(t) Fair value measurement

From 1 January 2013, the Group adopted MFRS 13, Fair Value Measurement which prescribed that fair value of an assetor a liability, except for share-based payment and lease transactions, is determined as the price that would be receivedto sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurementdate. The measurement assumes that the transaction to sell the asset or transfer the liability takes place either in theprincipal market or in the absence of a principal market, in the most advantageous market.

For non-financial asset, the fair value measurement takes into account a market participant’s ability to generateeconomic benefits by using the asset in its highest and best use or by selling it to another market participant that woulduse the asset in its highest and best use.

In accordance with the transitional provision of MFRS 13, the Group applied the new fair value measurement guidanceprospectively, and has not provided any comparative fair value information for new disclosures. The adoption of MFRS13 has not significantly affected the measurements of the Group’s assets or liabilities other than the additionaldisclosures.




3. Property, plant and equipment

Plant, Furniture,Long term machinery fittings

Freehold leasehold and and office Motor UnderGroup land land Buildings equipment equipment vehicles construction Total

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

CostAt 1 January 2012 15,862 40,532 127,462 384,004 25,421 8,799 5,810 607,890Additions 3,049 - 3,878 18,678 1,385 660 1,284 28,934Disposals - - - (4,090) (515) (1,108) - (5,713)Written off - - - (1,507) (109) (53) (26) (1,695)Transfer - - 1,805 1,082 - - (2,887) -Transfer to investment

properties - (12,743) (13,536) - (854) - - (27,133)Effect of movement in

exchange rates - - (750) (1,285) (36) (29) (3) (2,103)

At 31 December 2012/1 January 2013 18,911 27,789 118,859 396,882 25,292 8,269 4,178 600,180

Additions 6,098 76 22,563 14,805 2,473 1,645 1,308 48,968Disposals - - - (4,812) (205) (1,472) (40) (6,529)Acquisition through

business combination - - - 52 1 45 - 98Written off - - (19) (4,977) (117) (1) (3) (5,117)Transfer - - 705 2,508 163 - (3,376) -Transfer to investment

properties - (897) - - - - - (897)Effect of movement in

exchange rates - - (606) (1,371) (7) (29) 4 (2,009)

At 31 December 2013 25,009 26,968 141,502 403,087 27,600 8,457 2,071 634,694

Accumulated depreciation and impairment loss

At 1 January 2012Accumulated depreciation - 7,593 43,983 297,233 21,155 4,704 - 374,668Accumulated impairment loss - - - 254 - - - 254

- 7,593 43,983 297,487 21,155 4,704 - 374,922Charge for the year - 346 4,529 24,020 1,604 885 - 31,384Disposals - - - (4,033) (507) (971) - (5,511)Written off - - - (1,432) (182) (53) - (1,667)Transfer to investment

properties - (2,277) (7,527) - (790) - - (10,594)Reversal of impairment loss - - - (254) - - - (254)Effect of movement in

exchange rates - - (83) (461) (15) (18) - (577)

At 31 December 2012/1 January 2013Accumulated depreciation - 5,662 40,902 315,327 21,265 4,547 - 387,703

Charge for the year - 346 4,933 16,761 1,985 861 - 24,886Disposals - - - (4,736) (202) (1,077) - (6,015)Written off - - (4) (4,938) (86) (1) - (5,029)Transfer to investment

properties - (535) - - - - - (535)Effect of movement in

exchange rates - - (86) (323) (2) (28) - (439)

At 31 December 2013Accumulated depreciation - 5,473 45,745 322,091 22,960 4,302 - 400,571

Annual Report 2013


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3. Property, plant and equipment (continued)

Plant, Furniture,Long term machinery fittings

Freehold leasehold and and office Motor UnderGroup land land Buildings equipment equipment vehicles construction Total


Carrying amountsAt 1 January 2012 15,862 32,939 83,479 86,517 4,266 4,095 5,810 232,968

At 31 December 2012/1 January 2013 18,911 22,127 77,957 81,555 4,027 3,722 4,178 212,477

At 31 December 2013 25,009 21,495 95,757 80,996 4,640 4,155 2,071 234,123

Furniture,fittings

and office Motorequipment vehicles Total

Company RM’000 RM’000 RM’000

CostAt 1 January 2012 754 1,502 2,256Additions 191 85 276Transfer from a subsidiary 4 - 4

At 31 December 2012/1 January 2013 949 1,587 2,536Disposals - (330) (330)

At 31 December 2013 949 1,257 2,206

Accumulated depreciationAt 1 January 2012 713 212 925Charge for the year 74 185 259Others 4 - 4

At 31 December 2012/1 January 2013 791 397 1,188Charge for the year 103 167 270Disposals - (94) (94)

At 31 December 2013 894 470 1,364

Carrying amountsAt 1 January 2012 41 1,290 1,331

At 31 December 2012/1 January 2013 158 1,190 1,348

At 31 December 2013 55 787 842




4. Prepaid lease payments

Unexpired period less than or equal to 50 years

Group RM’000

CostAt 1 January 2012 6,182Additions 9,708Effect of movement in exchange rate (325)

At 31 December 2012/1 January 2013 15,565Additions 932Effect of movement in exchange rate (1,515)

At 31 December 2013 14,982

AmortisationAt 1 January 2012 130Charge during the year 157Effect of movement in exchange rate (8)

At 31 December 2012/1 January 2013 279Charge during the year 96Effect of movement in exchange rate 21

At 31 December 2013 396

Carrying amountsAt 1 January 2012 6,052

At 31 December 2012/1 January 2013 15,286

At 31 December 2013 14,586

5. Investment properties

Long termleasehold

Note land Buildings Others TotalGroup RM’000 RM’000 RM’000 RM’000

CostAt 1 January 2012 - 1,791 - 1,791Transfer from property, plant and equipment 3 12,743 13,536 854 27,133

At 31 December 2012/1 January 2013 12,743 15,327 854 28,924Transfer from property, plant and equipment 3 897 - - 897

At 31 December 2013 13,640 15,327 854 29,821

Annual Report 2013


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5. Investment properties (continued)

Long termleasehold

Note land Buildings Others TotalGroup RM’000 RM’000 RM’000 RM’000

Accumulated depreciation1 January 2012 - 614 - 614Depreciation for the year 130 583 1 714Transfer from property, plant and equipment 3 2,277 7,527 790 10,594

At 31 December 2012/1 January 2013 2,407 8,724 791 11,922Depreciation for the year 130 616 1 747Transfer from property, plant and equipment 3 535 - - 535

At 31 December 2013 3,072 9,340 792 13,204

Carrying amountsAt 1 January 2012 - 1,177 - 1,177

At 31 December 2012/1 January 2013 10,336 6,603 63 17,002

At 31 December 2013 10,568 5,987 62 16,617

The following are recognised in profit or loss in respect of investment properties:

Group2013 2012

RM’000 RM’000

Rental income 2,355 2,167Direct operating expenses from income generating investment properties (252) (243)

5.1 Fair value information

Fair value of investment properties are categorised as follows:

Level 1 Level 2 Level 3 Total2013 RM’000 RM’000 RM’000 RM’000Financial assetsLong-term leasehold land - - 40,005 40,005Buildings - - 32,458 32,458

- - 72,463 72,463




5. Investment properties (continued)

5.1 Fair value information (continued)

The fair value of investment properties can be categorised based on the following:

Level 1 fair value: Level 1 fair value is derived from quoted price (unadjusted) in active markets for identical investment properties that the entity can access at the measurement date; or

Level 2 fair value: Level 2 fair value is estimated using inputs other than quoted prices included within Level 1 that are observable for the investment property, either directly or indirectly; or

Level 3 fair value: Level 3 fair value is estimated using unobservable inputs for the investment property.

The fair values of all investment properties are determined by the Directors using income approach. Key assumption isas follow:

Yield rates 8% - 8.5% (2012: 8% - 8.5%)

6. Investment in subsidiaries

Company2013 2012

RM’000 RM’000

Unquoted shares, at cost 365,284 351,978Less: Accumulated impairment losses (9,539) (9,539)

355,745 342,439

Details of the subsidiaries are shown in Note 32.

6.1 Non-controlling interest in subsidiaries

The Group’s subsidiaries that have material non-controlling interests (“NCI”) are as follows:

2013Fuji Seats Other subsidiary

(Malaysia) Sdn. Bhd. with immaterial NCI TotalRM’000 RM’000 RM’000

NCI percentage of ownership interestand voting interest 40%(held via Fuji Seat Co.,Ltd)

Carrying amount of NCI 23,888 2,312 26,200

Profit allocated to NCI 12,297 782 13,079

Annual Report 2013


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6. Investment in subsidiaries (continued)

6.1 Non-controlling interest in subsidiaries (continued)

2013Summarised financial information Fuji Seats Other subsidiarybefore intra-group elimination (Malaysia) Sdn. Bhd. with immaterial NCI Total

RM’000 RM’000 RM’000

As at 31 December 2013 RM’000

Non-current assets 4,200Current assets 108,353Non-current liabilities (907)Current liabilities (51,926)

Net assets 59,720

Year ended 31 December 2013 RM’000

Revenue 283,714Profit for the year 30,743Total comprehensive income 30,787

RM’000

Cash flows from operating activities 30,171Cash flows from investing activities (636)Cash flows from financing activities (19,249)

Net increase in cash and cash equivalents 10,286

Dividends paid to NCI 7,700

2012Fuji Seats Other subsidiary

(Malaysia) Sdn. Bhd. with immaterial NCI TotalRM’000 RM’000 RM’000

NCI percentage of ownership interest and voting interest 40%(Held via Fuji Seat Co.,Ltd)

Carrying amount of NCI 19,291 1,530 20,821

Profit allocated to NCI 12,100 (515) 11,585

Summarised financial informationbefore intra-group elimination

As at 31 December 2012 RM’000

Non-current assets 4,174Current assets 93,542Non-current liabilities (878)Current liabilities (48,610)

Net assets 48,228




6. Investment in subsidiaries (continued)

6.1 Non-controlling interest in subsidiaries (continued)

The Group’s subsidiaries that have material non-controlling interests (“NCI”) are as follows (continued):

2012Summarised financial information Fuji Seats Other subsidiarybefore intra-group elimination (Malaysia) Sdn. Bhd. with immaterial NCI Total

RM’000 RM’000 RM’000

Year ended 31 December 2012 RM’000

Revenue 277,146Profit for the year/Total comprehensive income 30,250

RM’000

Cash flows from operating activities 34,243Cash flows from investing activities (819)Cash flows from financing activities (37,915)

Net decrease in cash and cash equivalents (4,491)

Dividends paid to NCI 15,166

6.2 Restriction imposed by shareholder’s agreement

For Fuji Seats (Malaysia) Sdn. Bhd., the non-controlling interests shareholder holds protective rights restricting theGroup’s ability to use the net assets of the subsidiary to settle the liabilities of the Group, unless approval is obtainedfrom the non-controlling interests shareholder.

7. Investment in an associate

Group2013 2012

RM’000 RM’000

Unquoted shares, at cost 5,048 -Share of post-acquisition reserves 3,407 -

8,455 -

Detail of the material associate is as follow:

Effective ownershipCountry of Nature of interest and

Name of entity incorporation the relationship voting interest2013 2012

P.T. Armada Johnsons Indonesia Manufacturing and supplying automotive Controls (“PTAJC”) products to the Group 12.5% 25%

In 2013, PTAJC was classified as a joint venture of the Group. On 6 September 2013, the effective interest in PTAJC held viaP.T. APM Armada Autoparts was diluted from 25% to 12.5%. As a result of the dilution, the Group has lost joint control ofPTAJC and the involvement in day to day operation. Thus, PTAJC is reclassified as an associate of the Group.

Annual Report 2013


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8. Investments in joint ventures

Group2013 2012

RM’000 RM’000

Unquoted shares, at cost 25,162 28,684Share of post-acquisition reserves 7,489 2,272

32,651 30,956

Details of joint ventures are as follows:

Name of joint ventures Nature of the relationship Effective ownershipinterest

2013 2012

APM Tachi-S Seating Technical partner and tier-one automotive seats manufacturer 60% -Systems Sdn. Bhd. for Original Equipment Market customers of the Group.(held via 100% ownedsubsidiary, Auto PartsHoldings Sdn. Bhd.)

P.T. APM Armada Autoparts Manufacture interior products and is one of the strategic 50% 50%(held via 100% owned partnerships to develop Indonesia’s automotive market.subsidiary, Auto PartsHoldings Sdn. Bhd.)

IAC APM Automotive Manufacture interior plastic components and is one of the 40% 40%Systems Ltd strategic partnerships to develop Thailand’s automotive market.(held via 100% ownedsubsidiary, APM AutomotiveInternational Ltd.)

Diversified Furniture Dormant 50% 50%Systems Sdn.Bhd.(held via 100% ownedsubsidiary, Auto PartsHoldings Sdn. Bhd.)

There is no individually material joint venture which is significant to the Group. The following is the summarise informationof the joint ventures of the Group.

Summarise financial informationAs at 31 December 2013 2012

RM’000 RM’000

Non-current assets 38,692 61,168Current assets 87,162 97,249Non-current liabilities (20,941) (909)Current liabilities (35,636) (68,356)Cash and cash equivalents 39,819 6,779Non-current financial liabilities (excluding trade and other payables and provisions) (1,559) (909)

Profit/Total comprehensive income 16,822 15,484




8. Investments in joint ventures (continued)

Details of joint ventures are as follows (continued):

Included in the total comprehensive income 2013 2012RM’000 RM’000

Revenue 96,115 286,949Depreciation and amortisation (1,390) (7,875)Interest income 302 233Interest expense - (1,382)Income tax expense (7,979) (4,711)

9. Intangible assets

GroupDevelopment

Trademarks expenditure TotalRM’000 RM’000 RM’000

CostAt 1 January 2012 - 2,118 2,118Additions - 118 118

At 31 December 2012/1 January 2013 - 2,236 2,236Additions 712 99 811

At 31 December 2013 712 2,335 3,047

AmortisationAt 1 January 2012 - 1,319 1,319Additions - 443 443

At 31 December 2012/1 January 2013 - 1,762 1,762Charge for the year - 412 412

At 31 December 2013 - 2,174 2,174

Carrying amountsAt 1 January 2012 - 799 799

At 31 December 2012/1 January 2013 - 474 474

At 31 December 2013 712 161 873

The amortisation charge is allocated to the cost of sales and is recognised in profit or loss.

Annual Report 2013


67


10. Deferred tax assets/(liabilities)

Recognised deferred tax assets/(liabilities)

Deferred tax assets and liabilities are attributable to the following:

Assets Liabilities Net2013 2012 2013 2012 2013 2012

Group RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Employee benefits 1,546 3,535 - - 1,546 3,535Property, plant and equipment 150 21 (8,055) (6,211) (7,905) (6,190)Provisions 3,437 2,361 - - 3,437 2,361Unutilised capital allowance 385 - - - 385 - Unutilised reinvestment allowance 4,132 5,254 - - 4,132 5,254Others 12,682 6,838 (604) (341) 12,078 6,497

Tax assets/(liabilities) 22,332 18,009 (8,659) (6,552) 13,673 11,457Set off of tax (6,649) (5,208) 6,649 5,208 - -

Net deferred tax assets/(liabilities) 15,683 12,801 (2,010) (1,344) 13,673 11,457

CompanyProperty, plant and equipment - - (147) (192) (147) (192)Employee benefits 22 - - - 22 - Others 198 351 - - 198 351

Tax assets/(liabilities) 220 351 (147) (192) 73 159Set off of tax (147) (192) 147 192 - -

Net deferred tax assets/(liabilities) 73 159 - - 73 159

Movement in temporary differences during the year

RecognisedRecognised Recognised in other

in profit At in profit comprehensive AtAt or loss 31.12.2012/ or loss income 31.12.2013

Group 1.1.2012 (Note 26) 1.1.2013 (Note 26) (Note 27)RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Employee benefits 3,690 (155) 3,535 (1,444) (545) 1,546Property, plant and equipment (5,416) (774) (6,190) (1,715) - (7,905)Provisions 2,253 108 2,361 1,076 - 3,437Unutilised capital allowance - - - 385 - 385Unutilised reinvestment allowance 5,350 (96) 5,254 (1,122) - 4,132Unutilised tax losses 259 (259) - - - -Others 6,050 447 6,497 5,581 - 12,078

12,186 (729) 11,457 2,761 (545) 13,673

Company

Property, plant and equipment (207) 15 (192) 45 - (147)Employee benefits - - - - 22 22Others 436 (85) 351 (153) - 198

229 (70) 159 (108) 22 73




10. Deferred tax assets/(liabilities) (continued)

Unrecognised deferred tax assets

Deferred tax assets have not been recognised in respect of the following items:

Group2013 2012

RM’000 RM’000

Unutilised tax losses 15,073 12,441Unabsorbed capital allowances 797 1,580Deductible temporary differences 4,247 4,405

20,117 18,426

The unutilised tax losses, unabsorbed capital allowances and deductible temporary differences do not expire under currenttax legislation except for the unutilised tax losses of RM11,567,000 (IDR36,376,937,000) which will expire in financial years2013 - 2014 for the subsidiary in Indonesia. Deferred tax assets have not been recognised in respect of these items becauseit is not probable that future taxable profit will be available against which the Group can utilise the benefits there from.

11. InventoriesGroup

2013 2012RM’000 RM’000

Raw materials 163,234 106,732Work-in-progress 10,648 10,982Manufactured inventories and trading inventories 47,020 39,905Spare parts and others 8,160 10,008

229,062 167,627

Recognised in profit or lossWrite-down to net realisable value (2,526) (2,565)Reversal of write-downs 1,439 1,458

The write-down and reversal are included in cost of sales.

12. Trade and other receivables, including derivatives

Group Company2013 2012 2013 2012

Note RM’000 RM’000 RM’000 RM’000

TradeTrade receivables 218,040 182,439 - -Less: Impairment losses (1,301) (1,058) - -

216,739 181,381 - -Joint ventures 12.1 25,406 85 - -Related parties 12.1 25,487 28,810 - -

267,632 210,276 - -

Annual Report 2013


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12. Trade and other receivables, including derivatives (continued)

Group Company2013 2012 2013 2012

Note RM’000 RM’000 RM’000 RM’000Non-tradeOther receivables 8,997 4,653 852 2,674Subsidiaries 12.2 - - 47,239 37,852Joint ventures 12.2 1,060 326 30 29Derivatives held for trading at fair value

through profit or loss- Forward exchange contracts 66 677 - -

Others - 355 19 78

10,123 6,011 48,140 40,633

277,755 216,287 48,140 40,633

12.1 The trade amounts due from joint ventures and related parties are subject to normal trade terms.

12.2 The non-trade amounts due from subsidiaries and joint ventures are unsecured, interest free and repayable on demandexcept for amount due from subsidiaries, amounting to RM30,905,000 (2012: RM33,189,000) which is subject to interest ranging from 3.3% to 3.5% (2012: 3.3% to 3.5%) per annum.

13. Deposits and prepayments

Group Company2013 2012 2013 2012

RM’000 RM’000 RM’000 RM’000

Deposits 16,267 4,609 5 755Prepayments 58,112 13,187 68 65

74,379 17,796 73 820

During the financial year, there was an increase in prepayment due to complete knock down components purchased fromoverseas supplier amounting to RM41,758,000 (2012: RM6,680,000).

14. Cash and cash equivalents

Group Company2013 2012 2013 2012

RM’000 RM’000 RM’000 RM’000

Deposits placed with licensed banks 242,463 329,425 - -Corporate management accounts 45,267 75,648 1,706 2,266Cash and bank balances 18,686 19,836 1,509 870

306,416 424,909 3,215 3,136

Corporate management accounts are interest bearing current accounts maintained with a bank.




15. Assets classified as held for sale

In 2011, plant and equipment and inventories held by the Group through a wholly-owned subsidiary, Radiators Australia(2000) Pty. Ltd. were presented as assets held for sale following the commitment of the Group’s management to a plan tosell the assets. The sale was finalised on 20 January 2012 following the Asset Sales Agreement signed with a third party fora total consideration of AUD3.74 million.

Group1.1.2012

RM’000

Plant and equipment 2,107Inventories 7,371

9,478

16. Capital and reserves

Share capital

Group and CompanyNumber Number

Amount of shares Amount of shares2013 2013 2012 2012

RM’000 ’000 RM’000 ’000

Authorised Ordinary shares of RM1.00 each 300,000 300,000 300,000 300,000

Issued and fully paid Ordinary shares of RM1.00 each 201,600 201,600 201,600 201,600

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one voteper share at meetings of the Company. In respect of the Company’s treasury shares that are held by the Group (see below),all rights are suspended until those shares are reissued.

Treasury shares

The shareholders of the Company, by an ordinary resolution passed in a general meeting held on 22 May 2013, approvedthe Company’s plan to purchase its own shares. The Directors of the Company are committed to enhancing the value of theCompany to its shareholders and believe that the purchase plan can be applied in the best interest of the Company and itsshareholders.

During the financial year, the Company repurchased 2,000 (2012: 2,000) of its issued ordinary share capital from the openmarket at an average price of RM5.34 (2012: RM4.75) per ordinary share. The purchase transactions were financed byinternally generated funds. The ordinary shares purchased are retained as treasury shares.

At 31 December 2013, the Company held 5,912,000 (2012: 5,910,000) of the Company’s shares.

Share premium

The reserve comprises the premium paid on subscription of shares in the Company over and above par value of the shares.

Translation reserve

The translation reserve comprises all foreign currency differences arising from the translation of the financial statements ofthe Group entities with functional currencies other than RM.

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17. Employee benefits

Group Company2013 2012 2013 2012

RM’000 RM’000 RM’000 RM’000

Recognised liability for employee benefits 10,301 13,187 615 1,257

Under the terms of employment with its employees, the Group and the Company have to pay employee benefits to eligibleemployees who have completed a qualifying period of service. Eligible employees are entitled to employee benefits basedon a certain percentage of total basic salary earned for the period of service less the employers’ Employee Provident Fundscontribution.

Movement in net defined benefit liability

The following table shows a reconciliation from the opening balance to the closing balance for net defined benefit liabilityand its components.

Net defined benefit liability2013 2012

Group RM’000 RM’000

Balance at 1 January 13,187 14,204

Included in profit or lossCurrent service cost 779 (130)Past service credit 279 (188)Interest cost 512 532Effect of movements in exchange rate 159 (16)

1,729 198

Included in other comprehensive incomeActuarial gain recognised in equity (2,180) -

OthersBenefits paid (2,435) (1,215)

Balance at 31 December 10,301 13,187

Company

Balance at 1 January 1,257 1,585

Included in profit or lossCurrent service cost 74 104Past service credit 225 69Interest cost/(income) 22 (21)

321 152

Included in other comprehensive incomeActuarial gain recognised in equity 87 -

OthersBenefits paid (1,050) (480)

Balance at 31 December 615 1,257




17. Employee benefits (continued)

Actuarial assumptions

Principal actuarial assumptions at the end of the reporting period (expressed as weighted averages):

Group and Company2013 2012

Discount rate 5.75%-6.0% 5.4%Future salary growth 6.5% 6.5%Future pension growth 12%-13% 12%

Assumptions regarding future mortality are based on published statistics and mortality tables. The average life expectancyof an individual retiring at age 55 years and extended to age 60 years with effect from 1 July 2013 (2012: 55 years) for bothgenders at the end of the reporting date.

At 31 December 2013, the weighted-average duration of the defined benefit obligation was 3 years (2012: 3 years).

18. Loans and borrowings

Group 2013 2012

RM’000 RM’000

CurrentUnsecured foreign currency trade loans 12,306 6,117Unsecured bankers’ acceptances 541 14,453

12,847 20,570

The borrowings of the Group are subject to interest at 0.9% to 3.8% (2012: 1.3% to 3.3%) per annum.

19. Provisions

GroupRM’000

At 1 January 2012 8,854Provisions made during the year 5,333Provisions paid during the year (3,881)Provisions reversed during the year (933)Effect of movement in exchange rates (9)

At 31 December 2012/1 January 2013 9,364Provisions made during the year 19,483Provisions paid during the year (4,859)Provisions reversed during the year (441)

At 31 December 2013 23,547

A provision for warranties is recognised when the products are sold where they are entitled to warranty. The provision isbased on historical warranty claim and the Group expects to incur most of the liabilities over the next 1 - 3 years.

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19. Provisions (continued)

Contingent liability on abnormal defect

Where an abnormal defect is discovered on a product, the management will perform investigation to identify the cause.The total warranty liability that will be incurred is highly dependent on the course of action that needs to be taken by theGroup in consultation with the affected customer. It may vary significantly.

Towards the end of March 2013, the management discovered an abnormal defect on one of its products. As at the date ofthis report, the management has not established the course of action that needs to be taken with the customer.

20. Trade and other payables, including derivatives

Group Company2013 2012 2013 2012

Note RM’000 RM’000 RM’000 RM’000

TradeTrade payables 120,192 95,071 - -Joint ventures 20.1 3,104 1,575 - -Related parties 20.1 9,196 796 - -

132,492 97,442 - -

Non-tradeOther payables and accruals 78,777 64,952 2,719 2,465Subsidiaries 20.2 - - 3,412 29,301Joint ventures 20.2 3,646 14 - -Related parties 20.2 689 112 - -Derivatives held for trading at fair value

through profit or loss- Forward exchange contracts 247 1,089 - -

83,359 66,167 6,131 31,766

215,851 163,609 6,131 31,766

20.1 The trade amounts due to related parties and joint ventures are subject to normal trade terms.

20.2 The non-trade amounts due to subsidiaries, related parties and joint ventures are unsecured, interest free and repayableon demand except for an amount due to a subsidiary in 2012, amounting to RM25,729,000, was subjected to interestranging from 3.75% to 4.50%.

21. Revenue

Group Company2013 2012 2013 2012

RM’000 RM’000 RM’000 RM’000

Sale of goods 1,259,020 1,123,147 - -Services rendered - - - 8,890Dividend income - - 141,521 10,412

1,259,020 1,123,147 141,521 19,302




22. Finance costs

Group Company2013 2012 2013 2012

RM’000 RM’000 RM’000 RM’000

Interest expense of financial liabilities that are not at fairvalue through profit or loss:

- unsecured bankers’ acceptances 207 299 - -- other borrowings 132 298 151 63

339 597 151 63

23. Finance income

Group Company2013 2012 2013 2012

RM’000 RM’000 RM’000 RM’000

Interest income received from deposits placed with licensed banks 10,311 11,388 - -

Interest income received from subsidiaries - - 993 1,159

10,311 11,388 993 1,159

24. Profit before tax Group Company

2013 2012 2013 2012RM’000 RM’000 RM’000 RM’000

Profit before tax is arrived at after chargingAmortisation of intangible assets 412 443 - -Amortisation of prepaid lease payments 96 157 - -Auditors’ remuneration:Audit fees- KPMG Malaysia 364 312 42 39- Overseas affiliates of KPMG Malaysia - 25 - -- Other auditors 56 44 - -Non-audit fees- KPMG Malaysia 34 49 34 49- Local affiliates of KPMG Malaysia 105 127 6 5- Overseas affiliates of KPMG Malaysia 1,102 - 900 -- Other auditors 4 39 - -Depreciation of property, plant and equipment 24,886 31,384 270 259Depreciation of investment property 747 714 - -Direct operating expenses of investment properties 252 243 - -Impairment loss- trade receivables 588 203 - -Loss on disposal of property, plant and equipment - - 80 -Net foreign exchange loss- realised - - 30 70- unrealised 352 675 - -Personnel expenses (including key management personnel)- Employee benefits 1,570 214 321 152- Termination benefits 261 2,117 - -- Contributions to state plans 7,966 8,379 304 1,364- Wages, salaries and others 105,816 101,741 - 7,825Property, plant and equipment written off 88 28 - -Provision of warranties 19,483 5,333 - -Rental of premises 2,685 1,034 - -Royalties 13,999 9,948 - -

Annual Report 2013


75


24. Profit before tax (continued)

Group Company2013 2012 2013 2012

RM’000 RM’000 RM’000 RM’000

and after crediting:Gain on disposal of property, plant and equipment 134 504 - -Gain on disposal of asset held for sale - 461 - -Net foreign exchange gain - realised 4,845 - - -- unrealised 444 - - 58Rental income from investment property 2,355 2,167 - -Reversal of impairment loss- trade receivables 345 852 - -- property, plant and equipment - 254 - -Reversal of provision of warranties 441 933 - -Grossed dividends received from subsidiaries - - 141,521 10,412

25. Key management personnel compensation

The key management personnel compensations are as follows:

Group Company2013 2012 2013 2012

RM’000 RM’000 RM’000 RM’000

Directors- Fees 256 284 256 284- Remuneration 6,111 4,898 4,846 4,303Other short term employee benefits (including estimated monetaryvalue of benefits-in-kind) 1,278 122 1,209 58

Total short-term employee benefits 7,645 5,304 6,311 4,645Post-employment benefits 65 91 8 90

7,710 5,395 6,319 4,735

Other key management personnel:- Short-term employee benefits 3,594 2,090 - -- Post-employment benefits 162 77 - -

3,756 2,167 - -

11,466 7,562 6,319 4,735

Other key management personnel comprises certain members of senior management of the Group other than the Directorsof the Group entities, who have the authority and responsibility for planning, directing and controlling the activities of theGroup either directly or indirectly.




26. Income tax expense

Recognised in profit or lossGroup Company

2013 2012 2013 2012RM’000 RM’000 RM’000 RM’000

Recognised in profit or lossIncome tax expense 40,634 34,337 980 2,201Share of tax of associate 186 - - -Share of tax of joint ventures 4,546 1,187 - -

45,366 35,524 980 2,201

Current tax expenseMalaysia- current year 43,332 33,698 168 2,171- (over)/under provision in prior year (367) (715) 699 (40)Overseas- current year 240 - - -- under provision in prior year - 303 - -

Total current tax recognised in profit or loss 43,205 33,286 867 2,131

Others 190 322 5 -

Deferred tax expense- Origination and reversal of temporary differences (1,000) 868 98 111- (Over)/Under provision in prior year (1,761) (139) 10 (41)

Total deferred tax recognised in profit or loss (2,761) 729 108 70

Share of tax of associate 186 - - -Share of tax of joint ventures 4,546 1,187 - -

Total income tax expense 45,366 35,524 980 2,201

Reconciliation of tax expense

Profit for the year 136,868 125,187 136,377 6,642Total income tax expense 45,366 35,524 980 2,201

Profit excluding tax 182,234 160,711 137,357 8,843

Income tax using Malaysian tax rate of 25% (2012: 25%) 45,559 40,178 34,339 2,211Non-deductible expenses 4,752 1,542 1,318 71Tax exempt income (125) (279) (35,250) -Tax incentives (3,243) (5,522) (141) -Other items 361 (166) - -Withholding tax 190 322 5 -

47,494 36,075 271 2,282Malaysia

(Over)/Under provision of tax expense in prior year (367) (715) 699 (40)(Over)/Under provision of deferred tax expense in prior year (1,761) (139) 10 (41)

OverseasUnder provision of tax expense in prior year - 303 - -

Total tax expense 45,366 35,524 980 2,201

Annual Report 2013


77


27. Other comprehensive (expense)/income

Group2013 2012

Before Net of Before Net oftax Tax tax tax Tax tax

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Items that will not be reclassifiedsubsequently to profit or loss

Remeasurement of definedbenefit liability 2,180 (545) 1,635 - - -

Items that will be reclassifiedsubsequently to profit or loss

Foreign currency translation differences for foreign operations

- Losses arising duringthe financial year (5,308) - (5,308) (5,991) - (5,991)

(3,128) (545) (3,673) (5,991) - (5,991)

CompanyBefore Net of

tax Tax tax2013 RM’000 RM’000 RM’000Items that will not be classified subsequently to profit or lossRemeasurement of defined benefit liability (87) 22 (65)

28. Earnings per ordinary share

Basic earnings per ordinary share

The calculation of basic earnings per ordinary share at 31 December 2013 was based on the profit attributable to ordinaryshareholders and a weighted average number of ordinary shares outstanding, calculated as follows:

Group2013 2012

Profit for the year attributable to ordinary shareholders (RM’000) 123,789 113,602

Weighted average number of ordinary shares (’000 units)Issued ordinary shares at 1 January 201,600 201,600Effect of treasury shares held (5,912) (5,910)

Weighted average number of ordinary shares at 31 December 195,688 195,690

Basic earnings per ordinary share (sen) 63.3 58.1




29. Dividends

Dividends recognised by the Company:

Sen Totalper share amount Date of payment

(net of tax) RM’0002013

Special interim 2013 ordinary 22.50 44,030 30 September 2013Interim 2013 ordinary 7.50 14,677 30 September 2013Final 2012 ordinary 9.00 17,612 28 June 2013Special final 2012 ordinary 7.50 14,677 28 June 2013

90,996

2012

Interim 2012 ordinary 7.50 14,677 28 September 2012Final 2011 ordinary 9.00 17,612 28 June 2012Special final 2011 ordinary 7.50 14,677 28 June 2012

46,966

After the reporting period the following dividends were proposed by the Directors. These dividends will be recognised insubsequent financial period upon approval by the owners of the Company.

TotalSen amount

per share RM’000

Final 2013 ordinary-single tier 12.00 23,483

30. Capital and other commitments

Group2013 2012

RM’000 RM’000

Property, plant and equipmentContracted but not provided for and payable within one year 10,809 18,853

Authorised but not contracted for 36,701 1,675

31. Related parties

Identity of related parties

For the purposes of these financial statements, parties are considered to be related to the Group if the Group or the Companyhas the ability, directly or indirectly, to control or jointly control the party or exercise significant influence over the party inmaking financial and operating decisions, or vice versa, or where the Group or the Company and the party are subject tocommon control. Related parties may be individuals or other entities.

Related parties also include key management personnel defined as those persons having authority and responsibility forplanning, directing and controlling the activities of the Group either directly or indirectly. Key management personnelincludes all the Directors of the Group, and certain members of senior management of the Group.

Annual Report 2013


79


31. Related parties (continued)

Identity of related parties

Controlling related party relationships are as follows:

i) The subsidiaries as disclosed in Note 32.

ii) The substantial shareholders of the Company are Tan Chong Consolidated Sdn. Bhd. (“TCC”) and Wealthmark HoldingsSdn. Bhd. (“WH”). TCC and WH are also substantial shareholders of Warisan TC Holdings Berhad Group (“WTCH Group”).TCC is also a substantial shareholder of Tan Chong Motor Holdings Berhad Group (“TCMH Group”) and Tan ChongInternational Limited Group (“TCIL Group”).

The Director of the Company, Dato’ Tan Heng Chew is deemed interested in the shares held by TCC and WH by virtue ofSection 6A of the Companies Act, 1965.

For the purpose of related parties transactions and balances disclosure, the Group and the Company treat TCC as the ultimatecontrolling shareholder.

i) Significant related party transactions with TCMH, WTCH and TCIL Groups are as follows:

Group Company2013 2012 2013 2012

RM’000 RM’000 RM’000 RM’000

With TCMH GroupSales 111,280 128,030 - -Purchases (7,497) (7,224) - (88)Administrative and consultancy services (1,282) (883) 19 (234)Insurance (2,903) (2,417) - (102)Rental expenses (11) (11) - -Rental income 1,824 1,381 - -

With WTCH GroupSales 27 20 - -Purchases - (351) - (235)Administrative and consultancy services (3,066) (2,070) - -Rental expenses (253) (253) - -

With TCIL GroupSales 73,837 1,048 - -Purchases - (2) - -Administrative and consultancyservices (1,095) (581) - -

These transactions have been entered into in the normal course of business and have been established under negotiatedterms.

All of the above outstanding balances are expected to be settled in cash by the related parties.

The outstanding net amounts due from/(to) related parties are disclosed in Note 12 and Note 20 respectively.

There are no allowances for impairment losses made and no bad or doubtful receivables recognised for the financialyear ended 31 December 2013 and 31 December 2012 in respect of related parties balances.




31. Related parties (continued)

Identity of related parties (continued)

ii) The significant related party transactions of the Company, other than key management personnel compensation (seeNote 25), are as follows:

Transactions valuefor the year ended

31 DecemberCompany 2013 2012

RM’000 RM’000

SubsidiariesManagement fees receivable - 8,890

32. Subsidiaries

The principal activities of the subsidiaries in the Group and the Group’s effective ownership interest are as follows:

Name of subsidiary Principal activities Effectiveownership

interest2013 2012

% %

APM Auto Electrics Sdn. Bhd. Manufacture and sale of automotive electrical components 100 100

APM Climate Control Sdn. Bhd. Manufacture and sale of automotive air-conditioners and radiators 100 100

APM Coil Springs Sdn. Bhd. Manufacture and sale of automotive coil springs 100 100

APM Plastics Sdn. Bhd. Manufacture and sale of plastic injection and extrusion moulded parts and components 100 100

APM Seatings Sdn. Bhd. Manufacture and sale of automotive seats 100 100(held via 100% owned subsidiary, Auto Parts Holdings Sdn. Bhd.)

APM Shock Absorbers Sdn. Bhd. Manufacture and sale of shock absorbers and related 100 100component parts

APM Springs Sdn. Bhd. Manufacture and sale of automotive leaf springs 100 100

Auto Parts Manufacturers Manufacture and sale of automotive seats 100 100Co. Sdn. Bhd.

APM Auto Parts Marketing Marketing and sale of automotive parts and accessories 100 100(Malaysia) Sdn. Bhd.

APM Auto Parts Marketing Sdn. Bhd. Marketing and sale of automotive parts and accessories 100 100

Auto Parts Holdings Sdn. Bhd. Investment holding 100 100

Annual Report 2013


81


32. Subsidiaries (continued)

The principal activities of the subsidiaries in the Group and the Group’s effective ownership interest are as follows:


interest2013 2012

% %

APM Automotive International Ltd. Investment holding 100 100

Fuji Seats (Malaysia) Sdn. Bhd. Manufacture and sale of automotive seats and 60 60(held via 100% owned subsidiary, componentsAuto Parts Holdings Sdn. Bhd.)

APM IAC Automotive Systems Sdn. Manufacture and sale of automotive interior plastic 60 60Bhd.(held via 100% owned subsidiary, component and systemsAuto Parts Holdings Sdn. Bhd.)

APM Corporate Services Sdn. Bhd. Provision of management services 100 100

APM Engineering & Research Sdn. Bhd. Provision of automotive research and development 100 100

APM Auto Mechanisms Sdn. Bhd. Property investment 100 100

KAB Otomotif Sdn. Bhd. Property investment 100 100

Perusahaan Tilam Kereta Sdn. Bhd. Property investment 100 100

APM Chalmers Suspensions Sdn. Bhd. Dormant 100 100(held via 100% owned subsidiary, Auto Parts Holdings Sdn. Bhd.)

APM Interiors Sdn. Bhd. Dormant 100 100

APM Metal Industries Sdn. Bhd. Dormant 100 100

APM Motorsport Sdn. Bhd. Dormant 100 100

APM Radiators Sdn. Bhd. Dormant 100 100

APM Tooling Centre Sdn. Bhd. Dormant 100 100

Atsugi Parts Manufacturing Sdn. Bhd. Dormant 100 100

Pandamaran Special Steel Sdn. Bhd. Dormant 100 100

APM Suspension Systems Sdn. Bhd. Dormant 100 100

APM Automotive Modules Sdn. Bhd. Assembly and sale of door trim module and instrument panel module parts 100 100

APM Thermal Systems Sdn. Bhd. Dormant 100 100

APM Auto Safety Systems Sdn Bhd Dormant 100 100(formerly known as TC-Kinugawa Rubber Sdn. Bhd.)






interest2013 2012

% %

APM-Coachair Sdn Bhd Distribution and provision of after sales service for bus 100 50(held via 100% owned subsidiary, coach air conditioningAuto Parts Holdings Sdn. Bhd.)

APM Holdings Inc. * Investment holding 100 100(held via 100% owned subsidiary, Auto Parts Holdings Sdn. Bhd.)

APM Components America Inc. * Dormant 100 100(held via 100% owned subsidiary,APM Holdings Inc.)

APM Springs (Vietnam) Co., Ltd.* Manufacture and sale of automotive suspension parts 100 100(held via 100% owned subsidiary, APM Automotive International Ltd.)

APM Auto Components (USA) Inc. * Marketing and sale of 100 100(held via 100% owned subsidiary, automotive parts and accessoriesAPM Automotive International Ltd.)

Radiators Australia (2000) Pty. Ltd. * Distribution and assembly of automotive and industrial 100 100(held via 100% owned subsidiary, radiators and other automotive componentsAuto Parts Holdings Sdn. Bhd.)

P.T. APM Armada Suspension * Manufacture and distribution of coil springs and leaf springs 100 100(held via 100% owned subsidiaries, Auto Parts Holdings Sdn. Bhd. andAPM Automotive International Ltd.)

APM Auto Components Manufacture and sale of automotive seats and its 100 100(Vietnam) Co., Ltd. * components, shock absorbers, radiators and (held via 100% owned subsidiary, air-conditioner parts for automobilesAPM Automotive International Ltd.)

P.T. APM Auto Components Indonesia * Manufacture and sale automotive heat exchange product 100 100(held via 100% owned subsidiaries, Auto Parts Holdings Sdn. Bhd. andAPM Automotive International Ltd.)

APM Automotive IndoChina Ltd. * Investment holding 100 100

APM Automotive Thailand Ltd. * Investment holding 100 100

APM Automotive Myanmar Ltd. * Investment holding 100 100

APM Auto Components Myanmar Dormant 100 -Co., Ltd* (held via 100% owned subsidiary, APM Automotive Myanmar Ltd.)

APM Auto Components (Thailand) Ltd* Dormant 100 -(held via 100% owned subsidiary, APM Automotive Thailand Ltd.)

Annual Report 2013


83



APM Components America Inc. and APM Holdings Inc. are incorporated in Canada. APM Springs (Vietnam) Co., Ltd. andAPM Auto Components (Vietnam) Co., Ltd. are incorporated in Vietnam. APM Auto Components (USA) Inc. is incorporatedin the United States of America. Radiators Australia (2000) Pty. Ltd. is incorporated in Australia. P.T. APM Armada Suspensionand P.T. APM Auto Components Indonesia are incorporated in Indonesia. APM Automotive Components (Thailand) Ltd. isincorporated in Thailand. APM Auto Component Myanmar Co, Ltd are incorporated in Myanmar. All other subsidiaries areincorporated in Malaysia.

* Audited by another firm of Public Accountants

33. Operating segments

The Group has six divisions, as described below, which are the Group’s strategic business units. The strategic business unitsoffer different products and services, and are managed separately. For each of the strategic business units, the ChiefOperating Decision Makers (“CODM”), which in this case is the Executive Directors of the Group, review internal managementreports on a monthly basis. The following summary describes the operations in each of the Group’s division:

- Suspension Division, Malaysia: Business in products such as leaf springs, parabolic springs, coil springs, shock absorbers,gas springs, U-bolts and metal parts.

- Interior & Plastics Division, Malaysia: Business in products such as plastics parts, interiors, seatings for motor vehicles,buses, auditoriums and cinemas.

- Electrical & Heat Exchange Division, Malaysia: Business in products such as air-conditioning systems, radiators, startermotors, alternators, wiper system, distributors and other electrical parts.

- Marketing Division, Malaysia: Trading and distribution of automotive components/parts manufactured by the Groupfor the replacement and export market.

- Others, Malaysia: Operations related to the rental of investment properties in Malaysia, provision of managementservices for companies within the Group, and provision of automotive research and development services.

- Operations Outside Malaysia: Businesses in Thailand, Indonesia, Vietnam, Australia and USA.

Performance is measured based on segment revenue and profit before tax, as included in the internal management reportsthat are reviewed by the CODM. Segment profit is used to measure performance as management believes that suchinformation is the most relevant in evaluating the results of certain segments relative to other entities that operate withinthese industries.

Segment assets

The total of segment asset is measured based on all assets of a segment, as included in the internal management reportsthat are reviewed by the CODM. Segment total asset is used to measure the return of assets of each segment.

Segment liabilities

Segment liabilities information is neither included in the internal management reports nor provided regularly to the CODM.Hence no disclosure is made on segment liabilities.

Segment capital expenditure

Segment capital expenditure is the total cost incurred during the year to acquire property, plant and equipment, andintangible assets other than goodwill.




33. Operating segments (continued)

Interior Electrical Operationsand and heat outside

Suspension plastics exchange Marketing Malaysia Others Eliminations Total2013 2013 2013 2013 2013 2013 2013 2013


Segment profit/(loss) 11,539 128,899 18,290 12,122 9,767 (2,547) (568) 177,502

Included in the measure of segment profit are:

Revenue from external customers 121,578 685,210 229,317 195,814 24,584 2,517 - 1,259,020

Inter-segment revenue 118,897 302,899 24,200 5,524 14,940 27,578 (494,038) - Provisions for warranties 1,637 1,673 6,393 130 - 9,650 - 19,483Depreciation and

amortisation (7,168) (9,510) (3,755) (109) (2,421) (4,072) 894 (26,141)Finance income 1,382 6,544 588 941 679 10,272 (10,095) 10,311

Not included in the measure of segment profit but provided to CODM:

Income tax expense (3,879) (29,297) (4,659) (2,958) (241) (1,393) 1,793 (40,634)

Segment assets 221,585 524,840 168,478 27,573 135,811 625,457 (489,617) 1,214,127

Included in the measure of segment assets are:

Additions to non-current assets other than financial instruments and deferred tax assets 3,870 11,612 2,423 363 3,433 29,545 (535) 50,711




Segment profit 16,854 106,199 14,427 12,720 6,946 1,644 734 159,524

Included in the measure of segment profit are:Revenue from external

customers 109,835 568,912 222,302 198,550 20,794 2,676 78 1,123,147Inter-segment revenue 116,485 197,821 23,842 6,682 19,351 27,209 (391,390) -Provisions for warranties 2,855 1,326 1,668 163 (679) - - 5,333Depreciation and amortisation (6,965) (15,609) (4,047) (94) (2,772) (3,596) 385 (32,698)Finance income 1,349 6,825 464 1,055 475 11,284 (10,064) 11,388

Annual Report 2013


85






Not included in the measure of segment profit but

provided to CODM:

Income tax expense 884 (26,442) (3,127) (2,847) (1,647) (5,799) 4,641 (34,337)

Segment assets 215,997 487,644 153,984 55,134 104,915 549,228 (446,795) 1,120,107

Included in the measure of segment assets are:Additions to non-current

assets other than financial instruments and deferred tax assets 8,740 9,566 1,370 34 10,204 8,846 - 38,760

Geographical segments

In presenting information on the basis of geographical segments, segment revenue is based on geographical location ofcustomers. Segment assets are based on the geographical location of the assets. The amounts of non-current assets do notinclude financial instruments and deferred tax assets.

GroupNon-current

Revenue assetsGeographical information RM’000 RM’0002013

Malaysia 1,234,436 237,380Indonesia 4,465 57,953Vietnam 13,316 10,812Other countries 6,803 1,160

1,259,020 307,305

2012Malaysia 1,102,353 217,464Indonesia 2,850 47,755Vietnam 9,934 10,880Other countries 8,010 96

1,123,147 276,195





Major customers

The following are major customers with revenue equal or more than 10% of the Group’s total revenue:

Revenue Segments2013 2012

RM’000 RM’000

All common control companies of:- Company A 457,358 437,885 Suspension, Interior and Plastics and Electrical and Heat Exchange

- Company B 105,362 160,402 Suspension, Interior and Plastics and Electrical and Heat Exchange

- Company C 99,231 114,874 Suspension, Interior and Plastics and Electrical and Heat Exchange

34. Financial instruments

34.1 Categories of financial instruments

The table below provides an analysis of financial instruments categorised as follows:

(a) Loans and receivables (L&R);(b) Fair value through profit or loss (FVTPL):

- Held for trading (HFT); and(c) Other financial liabilities measured at amortised cost (OL).

Carrying L&R/ FVTPLamount (OL) -HFTRM’000 RM’000 RM’000

Financial assetsGroup2013Trade and other receivables, including derivatives 277,755 277,689 66Cash and cash equivalents 306,416 306,416 -

584,171 584,105 66

CompanyTrade and other receivables, including derivatives 48,140 48,140 -Cash and cash equivalents 3,215 3,215 -

51,355 51,355 -

Financial liabilitiesGroup2013Loans and borrowings (12,847) (12,847) - Trade and other payables, including derivatives (215,851) (215,604) (247)

(228,698) (228,451) (247)

Annual Report 2013


87


34. Financial instruments (continued)

34.1 Categories of financial instruments (continued)

Carrying L&R/ FVTPLamount (OL) -HFTRM’000 RM’000 RM’000

CompanyTrade and other payables, including derivatives (6,131) (6,131) -

Financial assetsGroup2012Trade and other receivables, including derivatives 216,287 215,610 677Cash and cash equivalents 424,909 424,909 -

641,196 640,519 677

CompanyTrade and other receivables, including derivatives 40,633 40,633 -Cash and cash equivalents 3,136 3,136 -

43,769 43,769 -

Financial liabilitiesGroup2012Loans and borrowings (20,570) (20,570) -Trade and other payables, including derivatives (163,609) (162,520) (1,089)

(184,179) (183,090) (1,089)

CompanyTrade and other payables, including derivatives (31,766) (31,766) -

34.2 Net gains and losses arising from financial instruments

Group Company2013 2012 2013 2012

RM’000 RM’000 RM’000 RM’000

Net gains/(losses) on:Loans and receivables 15,005 11,362 963 1,147Financial liabilities measured at amortisation cost (339) (597) (151) (63)Fair value through profits or loss (181) (412) - -

14,485 10,353 812 1,084

35. Financial risk management

The Group has exposure to the following risks from its use of financial instruments:

• Credit risk• Liquidity risk• Market risk




35. Financial risk management (continued)

35.1 Credit risk

Credit risk is the risk of a financial loss to the Group if a customer or counterparty to a financial instrument fails tomeet its contractual obligations. The Group’s exposure to a credit risk arises principally from its receivables fromcustomers. The Company’s exposure to credit risk arises principally from its loans and advances to subsidiaries.

Receivables

Risk management objectives, policies and processes for managing the risk

The Group has a credit policy in place and the exposure to credit risk is monitored on ongoing basis. Credit evaluationsare performed on customers who wish to trade on credit terms.

Exposure to credit risk, credit quality and collateral

As at the end of the reporting period, the maximum exposure to credit risk arising from trade receivables is representedby the carrying amounts in the statement of financial position.

The Group has taken reasonable steps to ensure that receivables that are neither past due nor impaired are stated attheir realisable values. Due to the nature of the industry, a significant portion of these receivables are regular customersthat have been transacting with the Group. The Group uses ageing analysis to monitor the credit quality of thereceivables. Significant past due receivables, if deemed as high risks, are normally being monitored individually.

The exposure of credit risk for trade receivables as at the end of the reporting period by geographic region was:

Group2013 2012

RM’000 RM’000

Malaysia 255,806 199,552Asia 3,408 3,432Europe 3,784 1,959North America 2,147 1,556South America 723 2,447Oceania 1,764 1,330

267,632 210,276

Impairment losses

The ageing of trade receivables as at the end of the reporting period was:

Group Gross Impairment NetRM’000 RM’000 RM’000

31 December 2013Not past due 190,424 (303) 190,121Past due 0 - 90 days 69,672 - 69,672Past due 91 - 180 days 7,788 (33) 7,755Past due more than 180 days 1,049 (965) 84

268,933 (1,301) 267,632

Annual Report 2013


89



35.1 Credit risk (continued)

Receivables (continued)

Impairment lossess (continued)

Gross Impairment NetRM’000 RM’000 RM’000

31 December 2012Not past due 183,978 - 183,978Past due 0 - 90 days 16,404 - 16,404Past due 91 - 180 days 3,008 (52) 2,956Past due more than 180 days 7,944 (1,006) 6,938

211,334 (1,058) 210,276

The movements in the allowance for impairment losses of trade receivables during the year were:

2013 2012RM’000 RM’000

At 1 January 1,058 1,711Impairment loss recognised 588 203Impairment loss reversed (345) (852)Effect of movement in exchange rate - (4)

At 31 December 1,301 1,058

The allowance account in respect of trade receivables is used to record impairment losses. Unless the Group is satisfiedthat recovery of the amount is possible, the amount considered irrecoverable is written off against the receivabledirectly.

Inter company balances


The Company provides advances to subsidiaries and monitors the results of the subsidiaries regularly.


As at the end of the reporting period, the maximum exposure to credit risks is represented by their carrying amountsin the statement of financial position.

Impairment losses

As at the end of the reporting period, there was no indication that the loans and advances to the subsidiaries are notrecoverable.





35.1 Credit risk (continued)

Other financial assets


The Group and the Company are also exposed to counterparty credit risk from financial institutions through fundplacement activities. These exposures are managed in accordance with the existing guidelines and procedures thatdefine the parameters within which the investment activities shall be undertaken in order to achieve the Group’sinvestment objective of preserving capital and generating additional returns above appropriate benchmarks withinallowable risk parameters. Investments are only made with reputable licensed financial institutions with highcreditworthiness.


The maximum exposure to credit risk is represented by the carrying amounts in the statement of financial position.

35.2 Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’sexposure to liquidity risk arises principally from its various payables, loans and borrowings.

The Group maintains a level of cash and cash equivalent deemed adequate by the management to ensure, as far aspossible, that it will have sufficient liquidity to meet its liabilities when they fall due.

Certain treasury functions, particularly for wholly-owned subsidiaries, are managed centrally by Group Treasury toensure sufficient cash to cover the expected cash demands. Surplus cash held by the subsidiaries over and abovebalances required for working capital management are placed in fixed deposits and money market deposits withappropriate maturities to provide sufficient liquidity to meet the Group’s liabilities when they fall due.

Maturity analysis

The table below summarises the maturity profile of the Group’s and the Company’s financial liabilities as at the end ofthe reporting period based on undiscounted contractual payments:

Carrying Contractual Contractual Under 1 - 3amount interest rate cash flow 1 year years

Group RM’000 % RM’000 RM’000 RM’00031 December 2013Non-derivative financial liabilitiesUnsecured bankers’ acceptances 541 3.8 541 541 -Unsecured foreign currency trade loan 12,306 0.9 12,357 12,357 -Trade and other payables, excluding derivatives 215,604 - 215,604 215,604 -

228,451 228,502 228,502 -

Derivative financial liabilitiesForward exchange contracts (gross settled):Outflow 181 - 20,084 20,084 -Inflow - - (19,903) (19,903) -

228,632 - 228,683 228,683 -

Annual Report 2013


91



35.2 Liquidity risk (continued)

Carrying Contractual Contractual Under 1 - 3amount interest rate cash flow 1 year years

Company RM’000 % RM’000 RM’000 RM’000

31 December 2013Non-derivative financial liabilitiesTrade and other payables, excluding derivatives 6,131 6,131 6,131 -

Group31 December 2012Non-derivative financial liabilitiesUnsecured bankers’ acceptances 14,453 3.3 14,453 14,453 -Unsecured foreign currency trade loan 6,117 1.3 6,147 6,147 -Trade and other payables, excluding derivatives 162,520 - 162,520 162,520 -

183,090 183,120 183,120Derivative financial liabilitiesForward exchange contracts (gross settled):Outflow 412 - 43,124 43,124 -Inflow - - (42,712) (42,712) -

183,502 183,532 183,532 -

Company31 December 2012Non-derivative financial liabilitiesTrade and other payables, excluding derivatives 31,766 - 31,766 31,766 -

35.3 Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and other priceswill affect the Group’s financial position or cash flows. The Group is exposed to risk arising from foreign exchange ratesand interest rates.

35.3.1 Currency risk

The Group is exposed to foreign currency risk through normal trading activities on sales and purchasestransactions that are denominated in a currency other than the respective functional currencies of Groupentities. The currencies giving rise to this risk are primarily US dollar (USD), Japanese Yen (JPY), Euro Dollar(EURO), Australian Dollar (AUD), Thai Baht (THB) and Indonesia Rupiah (IDR).


The Group monitors regularly its exchange exposures and may hedge its position selectively depending onthe size of the exposure and the future outlook of the particular currency unit. The Group uses forwardexchange contracts to hedge its foreign currency risk. Most of the forward exchange contracts have maturitiesof less than one year after the end of the reporting period. Where necessary, the forward exchange contractsare rolled over at maturity.





35.3 Market risk (continued)

35.3.1 Currency risk (continued)

Exposure to foreign currency risk

The Group’s exposure to foreign currency (a currency which is other than the currency of the Group entities) risk, based on carrying amounts as at the end of the reporting period was:

Denominated inGroup USD JPY EURO AUD IDR THBIn thousands RM

31 December 2013Trade receivables 12,073 160 3,383 682 912 -Trade payables (14,885) (12,038) (752) (577) (1,391) (8,709)Forward exchange contracts (113) 42 (47) - - (24)

Net exposure (2,925) (11,836) 2,584 105 (479) (8,733)

31 December 2012Trade receivables 6,492 238 1,682 1,220 2,789 - Trade payables (275) (8,221) (1,391) (2) (1,364) (8,756)Forward exchange contracts 563 (977) (20) 8 - 9

Net exposure 6,780 (8,960) 271 1,226 1,425 (8,747)

As foreign currency risks arising from Group’s operations is not material, sensitivity analysis is hence not presented.

35.3.2 Interest rate risk

The Group’s exposure to a risk of change in their fair value due to changes in interest rates relates primarily to the interest-bearing bank loans and borrowings and deposits placed with licensed banks. The management considers interest rate risks on borrowings to be low as the level of borrowings are relatively insignificant.

Group Company2013 2012 2013 2012

RM’000 RM’000 RM’000 RM’000

Fixed rate instrumentsFinancial assetDeposits placed with licensed banks 242,463 329,425 - -

Financial liabilitiesUnsecured Foreign currency trade loan (12,306) (6,117) - -Unsecured bankers’ acceptances (541) (14,453) - -

229,616 308,855 - -

Floating rate instrumentFinancial assetCorporate management accounts 45,267 75,648 1,706 2,266

As the Group does not fair value its fixed rate instruments, the Group is not exposed to fair value risk.

As cash flow risk arising from floating rate instruments is not material, sensitivity analysis is not presented.

Annual Report 2013


93



35.4 Fair value information

The carrying amounts of cash and cash equivalents, short term receivables and payables and short term borrowingsreasonably approximate fair values due to the relatively short term nature of these financial instruments.

Fair value of financial instruments Fair value of financial instruments not Totalcarried at fair value carried at fair value fair Carrying

Group Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total value amount2013 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Financial assetsForward exchange contracts - 66 - 66 - - - - 66 66

- 66 - 66 - - - - 66 66

Financial liabilitiesForward exchange contracts - (247) - (247) - - - - (247) (247)

2012Financial assetsForward exchange contracts - 677 - 677 - - - - 677 677

- 677 - 677 - - - - 677 677

Financial liabilitiesForward exchange contracts - (1,089) - (1,089) - - - - (1,089) (1,089)

Level 1 fair value

Level 1 fair value is derived from quoted price (unadjusted) in active markets for identical financial assets or liabilitiesthat the entity can access at the measurement date.

Level 2 fair value

Level 2 fair value is estimated using inputs other than quoted prices included within Level 1 that are observable forthe financial assets or liabilities, either directly or indirectly.

Derivatives

The fair value of forward exchange contracts is estimated by discounting the difference between the contractualforward price and the current forward price for the residual maturity of the contract using a risk-free interest rate(based on government bonds).

Transfers between Level 1 and Level 2 fair values

There has been no transfer between Level 1 and 2 fair values during the financial year (2012: no transfer in either directions).




36. Capital management

The Group’s primary objectives when managing capital are to safeguard the Group’s ability to provide returns forshareholders and benefits for other stakeholders, by pricing products and services commensurately with the level of risksand by securing access to finance at a reasonable cost.

The Group reviews and manages its capital structure maintaining a balance between the expected risk against expectedreturn and makes relevant adjustment to the capital structure in the light of changes in economic conditions. As at 31December 2012 and 2013, the Group was in net cash position.

Group31.12.2013 31.12.2012

RM’000 RM’000

Cash and cash equivalents (Note 14) 306,416 424,909Less: Loans and borrowings (Note 18) (12,847) (20,570)

Net cash 293,569 404,339

There were no changes in the Group’s approach to capital management during the year.

37. Dilution of interest in a joint venture

On 6 September 2013, the shareholding in P.T. Armada Johnson Controls held via P.T. APM Armada Autoparts which is ajoint venture of the Group, was diluted from 25% to 12.5% to become an associate.

38. Comparative figures

The Group and the Company adopted MFRS 11, Joint Arrangements on 1 January 2013. The transition has resulted in achange in its accounting policies from proportionate consolidation of joint ventures to equity accounting.

The change in accounting policy has been applied retrospectively in accordance with the requirements of MFRS 11. Thefinancial impacts are presented below.

38.1 Reconciliation of financial position

1.1.2012 31.12.2012As Effect of As Effect of

Group previously adoption of As previously adoption of Asstated MFRS 11 restated stated MFRS 11 restated

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

AssetsProperty, plant and equipment 246,021 (13,053) 232,968 228,698 (16,221) 212,477Prepaid lease payments 7,649 (1,597) 6,052 18,212 (2,926) 15,286Investment properties 1,177 - 1,177 17,002 - 17,002Investment in joint ventures - 28,684 28,684 - 30,956 30,956Intangible assets 799 - 799 1,726 (1,252) 474Deferred tax assets 15,586 (635) 14,951 13,405 (604) 12,801

Total non-current assets 271,232 13,399 284,631 279,043 9,953 288,996

Annual Report 2013


95


38. Comparative figures (continued)

38.1 Reconciliation of financial position (continued)

1.1.2012 31.12.2012As Effect of As Effect of

Group previously adoption of As previously adoption of Asstated MFRS 11 restated stated MFRS 11 restated

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Inventories 163,609 (7,499) 156,110 176,804 (9,177) 167,627Current tax assets 5,694 (658) 5,036 5,008 (516) 4,492Trade and other receivables,

including derivatives 211,026 (9,644) 201,382 229,271 (12,984) 216,287Deposits and prepayments 19,304 (4,928) 14,376 21,775 (3,979) 17,796Cash and cash equivalents 393,637 (8,106) 385,531 427,012 (2,103) 424,909Assets classified as held for sale 9,478 - 9,478 - - -

Total current assets 802,748 (30,835) 771,913 859,870 (28,759) 831,111

Total non-current assets 1,073,980 (17,436) 1,056,544 1,138,913 (18,806) 1,120,107

EquityShare capital 201,600 - 201,600 201,600 - 201,600Reserves 640,949 - 640,949 698,840 - 698,840Treasury shares (12,786) - (12,786) (12,796) - (12,796)

Total equity attributable to owners of the Company 829,763 - 829,763 887,644 - 887,644

Non-controlling interest 25,298 - 25,298 20,821 - 20,821

Total equity 855,061 - 855,061 908,465 - 908,465

LiabilitiesEmployee benefits 14,761 (557) 14,204 14,010 (823) 13,187Loans and borrowings - - - 795 (795) -Deferred tax liabilities 2,765 - 2,765 1,344 - 1,344

Total non-current liabilities 17,526 (557) 16,969 16,149 (1,618) 14,531

Loans and borrowings 21,677 (3,210) 18,467 25,308 (4,738) 20,570Provisions 9,011 (157) 8,854 9,443 (79) 9,364Trade and other payables,

including derivatives 166,717 (12,950) 153,767 175,980 (12,371) 163,609Current tax liabilities 3,988 (562) 3,426 3,568 - 3,568

Total current liabilities 201,393 (16,879) 184,514 214,299 (17,188) 197,111

Total liabilities 218,919 (17,436) 201,483 230,448 (18,806) 211,642

Total equity and liabilities 1,073,980 (17,436) 1,056,544 1,138,913 (18,806) 1,120,107

The transition to MFRS 11 does not have financial impact to the separate statement of profit or loss and othercomprehensive income of the Company.





38.2 Reconciliation of profit or loss and other comprehensive income for the year ended 31 December 2012

Effect oftransition

As to Aspreviously MFRS 11 restated

Group RM’000 RM’000 RM’000

Revenue 1,198,475 (75,328) 1,123,147Cost of sales (955,351) 61,392 (893,959)

Gross profit 243,124 (13,936) 229,188Other income 9,735 (848) 8,887Distribution expenses (29,402) 4,020 (25,382)Administrative expenses (67,475) 4,628 (62,847)Other expenses (5,818) 423 (5,395)

Results from operating activities 150,164 (5,713) 144,451

Finance costs (946) 349 (597)Finance income 11,493 (105) 11,388Net finance income 10,547 244 10,791Share of profit of joint ventures - 4,282 4,282

Profit before tax 160,711 (1,187) 159,524Income tax expense (35,524) 1,187 (34,337)

Profit for the year 125,187 - 125,187

Other comprehensive income Foreign currency translation differences for foreign operations (5,991) - (5,991)

Other comprehensive income for the year (5,991) - (5,991)

Total comprehensive income for the year 119,196 - 119,196

There are no changes in basic earnings per ordinary shares.

38.3 Reconciliation of statement of cash flows for the year ended 31 December 2012

As Effect ofpreviously transition As

stated to MFRS 11 restatedGroup RM’000 RM’000 RM’000

Cash flows from operating activitiesProfit before tax 160,711 (1,187) 159,524Adjustments for:Amortisation of intangible assets 443 - 443Amortisation of prepaid lease payment 162 (5) 157Depreciation of investment properties 714 - 714Depreciation of property, plant and equipment 33,018 (1,634) 31,384Employee benefits 544 (330) 214Finance costs 946 (349) 597

Annual Report 2013


97



38.3 Reconciliation of statement of cash flows for the year ended 31 December 2012 (continued)

As Effect ofpreviously transition As

stated to MFRS 11 restatedGroup RM’000 RM’000 RM’000

Cash flows from operating activities (continued)Impairment loss on property, plant and equipment written back (254) - (254)Interest income (11,493) 105 (11,388)(Gain)/loss on disposal of property, plant and equipment (504) 20 (484)Gain on disposal of asset held for sale (461) - (461)Provision of warranties 5,362 (29) 5,333Provision of warranties reversed (985) 52 (933)Property, plant and equipment written off 28 - 28Share of profit of joint ventures - (4,282) (4,282)

Operating profit before changes in working capital 188,231 (7,639) 180,592Deposits and prepayments (2,471) (949) (3,420)Inventories (5,824) 1,678 (4,146)Trade and other payables, including derivatives 9,263 (24,168) (14,905)Trade and other receivables, including derivatives (18,245) 28,087 9,842

Cash generated from operations 170,954 (2,991) 167,963

Cash generated from operations 170,954 (2,991) 167,963Employee benefits paid (1,232) 17 (1,215)Interest received 11,493 (105) 11,388Interest paid (946) 349 (597)Warranties paid (3,936) 55 (3,881)Income tax paid (34,611) 85 (34,526)

Net cash generated from operating activities 141,722 (2,590) 139,132

Cash flows from investing activitiesAcquisition of property, plant and equipment (34,884) 5,950 (28,934)Additions of intangible assets (1,370) 1,252 (118)Acquisition of non-controlling interest in a subsidiary (5,570) - (5,570)Lease payment for leasehold land (11,171) 1,463 (9,708)Proceeds from disposal of property, plant and equipment 768 (82) 686Proceeds from disposal of asset held for sale 2,509 - 2,509

Net cash used in investing activities (49,718) 8,583 (41,135)

Cash flows from financing activitiesDividends paid to non-controlling interest (15,166) - (15,166)Dividends paid to owners of the Company (46,966) - (46,966)Repayment of revolving credit (1,330) (1,528) (2,858)Drawdown of secured term loan 795 (795) -Drawdown of banker’s acceptance 5,715 - 5,715Repayment of foreign currency trade loan (754) - (754)Purchase of Company’s own shares (10) - (10)Subscription of shares in a subsidiary by non-controlling interest 1,920 - 1,920

Net cash used in financing activities (55,796) (2,323) (58,119)

Net increase in cash and cash equivalents 36,208 3,670 39,878Effect of exchange rate fluctuations on cash held (2,833) 2,333 (500)Cash and cash equivalents at 1 January 393,637 (8,106) 385,531

Cash and cash equivalents at 31 December 427,012 (2,103) 424,909




39. Supplementary information on the breakdown of realised and unrealised profits or losses

The breakdown of the retained earnings of the Group and of the Company as at 31 December 2013, into realised andunrealised profits, pursuant to Paragraphs 2.06 and 2.23 of Bursa Malaysia Main Market Listing Requirements, are as follows:

2013 2012Group Company Group Company

RM’000 RM’000 RM’000 RM’000

Total retained earnings of the Company and its subsidiaries:- realised profits 713,550 195,224 668,512 149,764- unrealised (losses)/profits (9,767) 73 786 217

703,783 195,297 669,298 149,981Total share of retained earnings of associate:- realised profits 8,260 - - -

Total share of retained earnings of joint ventures: - realised profits 21,834 - 24,882 -- unrealised profits - - 450 -

733,877 195,297 694,630 149,981Less: consolidation adjustments (11,673) - (6,854) -

Total retained earnings 722,204 195,297 687,776 149,981

The determination of realised and unrealised profits is based on the Guidance of Special Matter No.1, Determination ofRealised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad ListingRequirements, issued by Malaysian Institute of Accountants on 20 December 2011.

The disclosure of realised and unrealised profits above is solely for complying with the disclosure requirements stipulatedin the directive of Bursa Malaysia and should not be applied for any other purpose.

Annual Report 2013


99


In the opinion of the Directors, the financial statements set out on pages 36 to 98 are drawn up in accordance with MalaysianFinancial Reporting Standards, International Financial Reporting Standards and the requirements of Companies Act, 1965 inMalaysia so as to give a true and fair view of the financial position of the Group and of the Company at 31 December 2013 andof their financial performance and cash flows for the financial year then ended.

In the opinion of the Directors, the information set out in Note 39 on page 99 has been properly compiled in accordance withthe Guidance of Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuantto Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants and presented basedon the format prescribed by Bursa Malaysia Securities Berhad.

Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:

……………………………………………………….. Low Seng Chee

……………………………………………………….. Dato’ Tan Eng Hwa

Kuala Lumpur,

Date: 8 April 2014

Statutory Declaration pursuant to Section 169(16) of the Companies Act, 1965

I, Lee Yuen Lin, the officer primarily responsible for the financial management of APM Automotive Holdings Berhad, do solemnlyand sincerely declare that the financial statements set out on pages 36 to 99 are, to the best of my knowledge and belief, correctand I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the StatutoryDeclarations Act, 1960.

Subscribed and solemnly declared by the above named in Kuala Lumpur on 8 April 2014.

.....................................................................Lee Yuen Lin

Before me:

Lee Chin HinNo. W493

Commissioner for OathsKuala Lumpur

STATEMENT BY DIRECTORSpursuant to Section 169(15) of the Companies Act, 1965



Report on the Financial Statements

We have audited the financial statements of APM Automotive Holdings Berhad, which comprise the statements of financialposition as at 31 December 2013 of the Group and of the Company, and the statements of profit or loss and other comprehensiveincome, changes in equity and cash flows of the Group and of the Company for the financial year then ended, and a summaryof significant accounting policies and other explanatory notes, as set out on pages 36 to 98.

Directors’ Responsibility for the Financial Statements

The Directors of the Company are responsible for the preparation of financial statements so as to give a true and fair view inaccordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirementsof the Companies Act, 1965 in Malaysia. The Directors are also responsible for such internal control as the Directors determineis necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraudor error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit inaccordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirementsand plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from materialmisstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements.The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financialstatements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’spreparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in thecircumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An auditalso includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates madeby the Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company asof 31 December 2013 and of their financial performance and cash flows for the year then ended in accordance with MalaysianFinancial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965in Malaysia.

Report on Other Legal and Regulatory Requirements

In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following:

a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and itssubsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.

b) We have considered the accounts and the auditors’ reports of all the subsidiaries of which we have not acted as auditors,which are indicated in Note 32 to the financial statements.

c) We are satisfied that the accounts of the subsidiaries that have been consolidated with the Company’s financial statementsare in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Groupand we have received satisfactory information and explanations required by us for those purposes.

d) The audit reports on the financial statements of the subsidiaries did not contain any qualification or any adverse commentmade under Section 174(3) of the Act.

to the members of APM Automotive Holdings Berhad

Annual Report 2013

INDEPENDENT AUDITORS’ REPORT

101


Other Reporting Responsibilities

Our audit was made for the purpose of forming an opinion on the financial statements taken as a whole. The information setout in Note 39 to the financial statements has been compiled by the Company as required by the Bursa Malaysia SecuritiesBerhad Listing Requirements and is not required by the Malaysian Financial Reporting Standards or International FinancialReporting Standards. We have extended our audit procedures to report on the process of compilation of such information. Inour opinion, the information has been properly compiled, in all material respects, in accordance with the Guidance on SpecialMatter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa MalaysiaSecurities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants and presented based on the formatprescribed by Bursa Malaysia Securities Berhad.

Other Matters

We draw attention to the fact that US$ equivelant statements of financial position and statement comprehensive income onpage 37 and page 39 do not form part of audited financial statement. We have not audited these statement and accordingly,we do not express an opinion on these statement.

This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act,1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

KPMG Thong Foo VungFirm Number: AF 0758 Approval Number: 2867/08/14(J)Chartered Accountants Chartered Accountant

Petaling Jaya,

Date: 8 April 2014

INDEPENDENT AUDITORS’ REPORT to the members of APM Automotive Holdings Berhad



Annual Report 2013

GROUP PROPERTIES

103

Land Tenure Net Book Age of Date of DateLocation Description Area Expiry Value Building Last of

(sq m) Date (RM’000) (years) Revaluation Acquisition

Lot 1 Jalan 6/3 Factory, office, 40,545 Leasehold/ 7,632 16 1984 1984Seri Kembangan Industrial warehouse & 21.06.2092Estate 43300 Serdang, vacant landSelangor

Lot 3 Jalan 6/3 Factory, office, 42,046 Leasehold/ 7,499 19 1984 1984Seri Kembangan Industrial warehouse & 21.06.2092Estate 43300 Serdang, vacant landSelangor

Lot 600 Jalan Raja Lumu Factory, office 40,354 Leasehold/ 22,029 27 - 1999Kawasan Perindustrian & warehouse 19.10.2076Pandamaran 42000 Port Klang, Selangor

Lot 601 Jalan Raja Lumu Factory, office 20,234 Leasehold/ 2,813 35 1984 1974Kawasan Perindustrian & warehouse 19.10.2076Pandamaran 42000 Port Klang, Selangor

Lot 1622 Jalan Raja Lumu Factory 16,186 Leasehold/ 12,319 4 - 2005Kawasan Perindustrian & warehouse 19.10.2076Pandamaran 42000 Port Klang, Selangor

Lot 1621 Jalan Raja Lumu Factory, office 22,573 Leasehold/ 12,175 2-17 - 1996Kawasan Perindustrian & warehouse 06.04.2079Pandamaran 42000 Port Klang, Selangor

Lot 19712,19713,19714, Vacant 1,220 Freehold 2,003 - - 201119715, 19716,19717Persiaran Raja Muda Musa

Lot 13 Lorong Durian 3 Light industrial 195 Leasehold/ 125 17 - 1995Kian Yap Industrial Estate building 16.11.2922Off Km 9 Jalan Tuaran88300 Kota Kinabalu, Sabah

Lot 14 Lorong Durian 3 Light industrial 195 Leasehold/ 202 17 - 2001Kian Yap Industrial Estate building 16.11.2922Off Km 9 Jalan Tuaran88300 Kota Kinabalu, Sabah

HS(D) 45445, PT 16073 Factory, office, 32,325 Freehold 19,939 5-11 - 2002Jalan Jasmine 3 warehouse &Bandar Bukit Beruntung vacant land48300 Rawang, Selangor

Lot 30081 Jalan Jasmine 3 Factory, office, 32,354 Freehold 16,829 4-9 - 2002Bandar Bukit Beruntung warehouse &48300 Rawang, Selangor vacant land


Land Tenure Net Book Age of Date of DateLocation Description Area Expiry Value Building Last of

(sq m) Date (RM’000) (years) Revaluation Acquisition

No.12 Jalan Jasmine 4 Factory, office 8,094 Freehold 7,766 14 - 2012Bandar Bukit Beruntung & warehouse48300 Rawang, Selangor

Lots 17295, 17296,17297 Factory, office, 39,882 Freehold 11,511 9 - 2004Proton City Vendors Park warehouse Tanjung Malim, Perak and vacant land

C-G-05, LG, 1st, 2nd, 3rd, Office 1,294 Freehold 11,297 1 - 20133Ath, Floor, Block C, Oasis Square, No. 2, Jalan PJU 1A/7A, Ara Damansara, 47301 Petaling Jaya, Selangor Darul Ehsan

No. 5, Jalan Jasmine 3, Factory & 16,172 Freehold 15,115 8 - 2013Bandar Bukit Beruntung, Warehouse48300 Rawang, Selangor

No. 23 & 25 Jalan Selat Factory, office 2,358 Freehold 1,098 3 - 2000Selatan 21 Sobena Jaya, & warehousePandamaran 42000 Port Klang, Selangor

Suryacipta City of Industry Factory, office 20,131 Leasehold 5,675 6 - 2008Jl. Surya Utama kav. I-15 A & warehouse 25.05.2025Ciampel, Karawang Jawa Barat 41361 Indonesia

Jl. Surya Kencana Kav 1- Vacant 37,517 Leasehold 9,144 - - 2012MIJK Ciampel, Karawang industrial 25.05.2025Jawa Barat 41363 landIndonesia

25 Dai Lo Tu Do Factory, office 10,000 Leasehold 2,231 9 - 2004Vietnam Singapore Industrial & warehouse 08.08.2054Park Thuan An District, Binh Duong Province Socialist Republic of Vietnam

25A Dai Lo Tu Do Factory, office 10,000 Leasehold 3,555 4 - 2009Vietnam Singapore Industrial & warehouse 08.08.2054Park Thuan An District, Binh Duong Province Socialist Republic of Vietnam

27 Dai Lo Tu Do Vacant 10,000 Leasehold 2,446 - - 2010Vietnam Singapore Industrial industrial land 08.08.2054Park Thuan An District, BinhDuong Province SocialistRepublic of Vietnam

GROUP PROPERTIES



As at 31 March 2014

Annual Report 2013

ANALYSIS OF SHAREHOLDINGS

105

ANALYSIS BY SIZE OF HOLDINGS(Based on Record of Depositors as at 31 March 2014)

Size of shareholders No. of shareholders % of shareholders No. of shares held % of issued capital

1 - 99 411 7.361 15,413 0.007100 – 1,000 3,438 61.579 1,361,910 0.6951,001 - 10,000 1,396 25.004 4,605,535 2.35310,001 – 100,000 240 4.298 7,127,727 3.642100,001 – 9,784,314 97 1.737 117,680,461 60.1379,784,315 and above 1 0.017 64,895,254 33.162

Sub Total 5,583 100.000 195,686,300 100.000Treasury Shares 5,913,700

5,583 100.000 201,600,000 100.000

SHAREHOLDINGS OF SUBSTANTIAL SHAREHOLDERS(based on Register of Substantial Shareholders as at 31 March2014)

Name of Substantial Shareholders Direct IndirectNo. of shares held % No. of shares held %

Tan Chong Consolidated Sdn. Bhd. 75,944,854 38.81 2,094,023 1.071

Wealthmark Holdings Sdn. Bhd. 15,260,600 7.80 -Dato’ Tan Heng Chew 5,924,999 3.03 93,299,477 47.68 2

Tan Eng Soon - - 93,299,477 47.68 3

Tan Kheng Leong 30,000 0.02 78,038,877 39.884

1 Indirect interest held through HSBC Nominees (Tempatan) Sdn. Bhd. Exempt AN for HSBC (Malaysia) Trustee Bhd (Dimension 09Trust)- as to voting rights only.

2 Deemed interest by virtue of interests in Tan Chong Consolidated Sdn. Bhd. (“TCC”) and Wealthmark Holdings Sdn. Bhd. (“WH”)pursuant to Section 6A of the Companies Act 1965 (“Act”).

3 Deemed interest by virtue of interests in TCC, WH and Lung Ma Investments Pte Ltd (“LMI”) pursuant to Section 6A of the Act.

4 Deemed interest by virtue of interest in TCC pursuant to Section 6A of the Act.

* Percentage is based on issued shares less treasury shares.


SHAREHOLDINGS OF DIRECTORS(Based on Register of Directors as at 31 March 2014)

Name of Directors No. of shares held % No. of shares held %

Dato’ Tan Heng Chew 5,924,999 3.03 96,763,835 49.451

Dato’ Tan Eng Hwa 207,008 0.11 15,267,728 7.802

Nicholas Tan Chye Seng (Appointed on 1 June 2013) 176,100 0.093 -Dato’ Haji Kamaruddin@ Abas bin Nordin 5,448 0.0033 -Siow Tiang Sae (Appointed on 1 June 2013) 2,050 0.0013

The other directors, Low Seng Chee, Dato’ N. Sadasivan, Sow Soon Hock and Heng Ji Keng do not have any shares, whether direct orindirect, in the Company.

1 Deemed interest by virtue of interests in TCC and WH pursuant to Section 6A of the Act and interest of spouse by virtue of Section134(12)(c) of the Act.

2 Deemed interest by virtue of interests in WH and Solomon House Sdn. Bhd. pursuant to Section 6A of the Act and interest ofspouse by virtue of Section 134(12)(c) of the Act..

3 Less than 0.01%.


LIST OF THIRTY (30) LARGEST SECURITIES ACCOUNTS HOLDERS(Based on Record of Depositors as at 31 March 2014)

NO. NAME NO. OF SHARES HELD %

1 Tan Chong Consolidated Sdn. Bhd. 64,895,254 33.162

2 Amsec Nominees (Tempatan) Sdn. Bhd. Pledged Securities Account – Ambank (M) Berhad for Wealthmark Holdings Sdn. Bhd. 9,010,000 4.604


4 Tan Kim Hor 7,077,964 3.616

5 Amanahraya Trustees BerhadPublic Islamic Optical Growth Fund 5,699,100 2.912

6 Cartaban Nominees (Asing) Sdn. Bhd.BBH (Lux) SCA for Fidelity Funds Asean 4,597,600 2.349

7 HSBC Nominees (Asing) Sdn. Bhd.TNTC for Mondrian Emerging Markets Small Cap Equity Fund, L.P. 4,503,800 2.301

8 Kumpulan Wang Persaraan (Diperbadankan) 3,824,700 1.954

9 Maybank Nominees (Asing) Sdn. Bhd.DBS Bank for One North Capital – Asia Value Master Fund (290017) 3,656,000 1.868

10 Amanahraya Trustees BerhadPublic Smallcap Fund 3,487,100 1.781

ANALYSIS OF SHAREHOLDINGSAs at 31 March 2014



As at 31 March 2014

Annual Report 2013

ANALYSIS OF SHAREHOLDINGS

107

NO. NAME NO. OF SHARES HELD %

11 AMSEC Nominees (Tempatan) Sdn. Bhd.Ambank (M) Berhad (Hedging) 2,800,000 1.430

12 CIMSEC Nominees (Tempatan) Sdn. Bhd.CIMB Bank for Khor Swee Wah @ Koh Bee Leng (PBCL-0G0031) 2,522,508 1.289

13 Wealthmark Holdings Sdn. Bhd. 2,511,100 1.283

14 CIMSEC Nominees (Tempatan) Sdn. Bhd. 2,463,600 1.258CIMB Bank for Tan Heng Chew (MM1063)

15 Citigroup Nominees (Tempatan) Sdn. Bhd.Employees Provident Fund Board (AMUNDI) 2,400,600 1.226

16 Pang Sew Ha @ Phang Sui Har 2,384,156 1.218


18 Hong Leong Assurance BerhadAs Beneficial Owner (Life Par) 2,150,000 1.098

19 HSBC Nominees (Tempatan) Sdn. Bhd.Exempt AN for HSBC (Malaysia) Trustee Berhad (D09-6061) 2,094,023 1.070

20 HSBC Nominees (Asing) Sdn. Bhd.Exempt AN for the Bank of New York Mellon (Mellon Acct) 2,075,800 1.060

21 Public Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account for Tan Heng Chew (E-KLC) 1,960,600 1.001

22 CIMB Group Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account for Wealthmark Holdings Sdn. Bhd. (50003 PZDM) 1,900,000 0.970

23 Tan Boon Pun 1,862,621 0.951

24 Chinchoo Investment Sdn. Bhd. 1,735,300 0.886

25 Malaysia Nominees (Tempatan) Sdn. Bhd.Great Eastern Life Assurance (Malaysia) Berhad (Par 1) 1,698,300 0.867

26 Tan Ban Leong 1,639,108 0.837

27 Tan Beng Keong 1,639,108 0.837

28 Tan Chee Keong 1,639,108 0.837

29 Tan Hoe Pin 1,639,108 0.837

30 Cartaban Nominees (Asing ) Sdn. Bhd. 1,335,700 0.682BBH (Lux) SCA for Fidelity Funds Malaysia



NOTICE IS HEREBY GIVEN THAT the Seventeenth Annual General Meeting of APM AUTOMOTIVE HOLDINGSBERHAD (“Company”) will be held at Pacific Ballroom, Level 2, Seri Pacific Hotel Kuala Lumpur, Jalan Putra,50350 Kuala Lumpur, Malaysia, on Wednesday 28 May 2014 at 11:00 a.m. to transact the following businesses:

As Ordinary Business

1. To receive the Audited Financial Statements for the financial year ended 31 December 2013 together withthe Reports of the Directors and Auditors thereon.

2. To declare a final single tier dividend of 12% for the financial year ended 31 December 2013.

3. To re-elect the following Directors who are eligible and have offered themselves for re-election, inaccordance with Article 76 of the Company’s Articles of Association:-

(i) Mr Siow Tiang Sae

(ii) Mr Nicholas Tan Chye Seng

(iii) Mr Sow Soon Hock

4. To re-elect the following Directors who are eligible and have offered themselves for re-election, inaccordance with Article 96 of the Company’s Articles of Association:-

(i) Mr Low Seng Chee

(ii) Dato’ Tan Eng Hwa

(iii) Mr Heng Ji Keng

5. To consider and if thought fit, to pass the following resolutions:-

(i) “THAT pursuant to Section 129(6) of the Companies Act, 1965, Dato’ Haji Kamaruddin @ Abas Nordinbe and is hereby re-appointed as Director of the Company to hold office until the next annual generalmeeting, AND THAT he continues to be designated as an Independent Non-Executive Director of theCompany.”

(ii) “THAT pursuant to Section 129(6) of the Companies Act, 1965, Dato’ N. Sadasivan be and is herebyre-appointed as Director of the Company to hold office until the next annual general meeting, ANDTHAT he continues to be designated as an Independent Non-Executive Director of the Company.”

6. To re-appoint Messrs KPMG as Auditors of the Company for the financial year ending 31 December 2014and to authorise the Directors to fix their remuneration.

As Special Business

To consider and if thought fit, to pass the following resolutions:

7. PROPOSED GRANT OF AUTHORITY PURSUANT TO SECTION 132D OF THE COMPANIES ACT, 1965

“THAT, subject always to the Companies Act, 1965 (“Act”), the Articles of Association of the Company andapprovals and requirements of the relevant governmental/regulatory authorities (where applicable), theDirectors be and are hereby empowered pursuant to Section 132D of the Act to allot and issue newordinary shares of RM1.00 each in the Company, from time to time and upon such terms and conditionsand for such purposes and to such persons whomsoever the Directors may, in their absolute discretion,deem fit and expedient in the interest of the Company, provided that the aggregate number of sharesissued pursuant to this resolution does not exceed ten per centum (10%) of the issued and paid-up sharecapital (excluding treasury shares) for the time being of the Company AND THAT such authority shallcontinue to be in force until the conclusion of the next Annual General Meeting of the Company."

(Resolution 1)

(Resolution 2)

(Resolution 3)

(Resolution 4)

(Resolution 5)

(Resolution 6)

(Resolution 7)

(Resolution 8)

(Resolution 9)

(Resolution 10)

(Resolution 11)

(Resolution 12)

NOTICE OF ANNUAL GENERAL MEETING



Annual Report 2013


109

8. PROPOSED RENEWAL OF AUTHORITY FOR THE COMPANY TO PURCHASE ITS OWN ORDINARYSHARES

“THAT, subject to the Companies Act, 1965 (“Act”), the Memorandum and Articles of Association of theCompany, the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”)and the approvals of all relevant governmental and/or regulatory authorities (if any), the Company beand is hereby authorised to purchase such amount of ordinary shares of RM1.00 each in the Company(“Proposed Share Buy-Back”) as may be determined by the Directors of the Company from time to timethrough Bursa Securities upon such terms and conditions as the Directors may deem fit and expedient inthe interest of the Company, provided that the aggregate number of shares purchased and/or heldpursuant to this resolution does not exceed ten per centum (10%) of the issued and paid-up share capitalof the Company.

THAT an amount not exceeding the Company’s share premium and retained profits be allocated by theCompany for the Proposed Share Buy-Back.

THAT authority be and is hereby given to the Directors of the Company to decide at their discretion toretain the shares so purchased as treasury shares (as defined in Section 67A of the Act) and/or to cancelthe shares so purchased and/or to resell them and/or to deal with the shares so purchased in such othermanner as may be permitted and prescribed by the Act, rules, regulations, guidelines, requirements and/ororders pursuant to the Act and/or the rules, regulations, guidelines, requirements and/or orders of BursaSecurities and any other relevant authorities for the time being in force.

THAT the authority conferred by this resolution will be effective immediately upon the passing of thisordinary resolution and will expire:

(i) at the conclusion of the next Annual General Meeting (“AGM”) of the Company at which time the saidauthority will lapse unless by an ordinary resolution passed at a general meeting of the Company,the authority is renewed, either unconditionally or subject to conditions;

(ii) at the expiration of the period within which the next AGM of the Company is required by law to beheld; or

(iii) revoked or varied by an ordinary resolution passed by the shareholders in a general meeting;

whichever occurs first but not so as to prejudice the completion of the purchase(s) by the Company beforethe aforesaid expiry date and in any event, in accordance with the provisions of the guidelines issued byBursa Securities and/or any other relevant governmental and/or regulatory authorities (if any).

THAT the Directors of the Company be authorised to complete and do all such acts and things (includingexecuting all such documents as may be required) as they may consider expedient or necessary to giveeffect to the Proposed Share Buy-Back as may be agreed or allowed by any relevant governmental and/orregulatory authority.”

9. PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTYTRANSACTIONS WITH TAN CHONG MOTOR HOLDINGS BERHAD AND ITS SUBSIDIARIES

“THAT, subject to the Companies Act, 1965 (“Act”), the Memorandum and Articles of Association of theCompany and the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, approval be and ishereby given to the Company and its subsidiaries (“APM Group”) to enter into all arrangements and/ortransactions with Tan Chong Motor Holdings Berhad and its subsidiaries involving the interest of Directors,major shareholders or persons connected with Directors and/or major shareholders of the APM Group(“Related Parties”) including those set out under section 3.2.1 of the circular to shareholders dated 30 April2014 provided that such arrangements and/or transactions are recurrent transactions of a revenue or tradingnature which are necessary for the day-to-day operations and are carried out in the ordinary course of businesson normal commercial terms which are not more favourable to the Related Parties than those generallyavailable to the public and not to the detriment of the minority shareholders (“Shareholders’ Mandate”).

(Resolution 13)




THAT such approval shall continue to be in force until the conclusion of the next Annual General Meeting(“AGM”) of the Company at which time it will lapse, unless by a resolution passed at a general meeting,the authority of the Shareholders’ Mandate is renewed or the expiration of the period within which thenext AGM of the Company is required to be held pursuant to Section 143(1) of the Act (but shall not extendto such extension as may be allowed pursuant to Section 143(2) of the Act) or revoked or varied by aresolution passed by the shareholders in a general meeting, whichever is earlier.

THAT the Directors of the Company be and are hereby authorised to complete and do all such acts andthings (including executing all such documents as may be required) as they may consider expedient ornecessary to give effect to the Shareholders’ Mandate.”

10. PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTYTRANSACTIONS WITH WARISAN TC HOLDINGS BERHAD AND ITS SUBSIDIAIRES

“THAT, subject to the Companies Act, 1965 (“Act”), the Memorandum and Articles of Association of theCompany and the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, approval beand is hereby given to the Company and its subsidiaries (“APM Group”) to enter into all arrangementsand/or transactions with Warisan TC Holdings Berhad and its subsidiaries involving the interest ofDirectors, major shareholders or persons connected with Directors and/or major shareholders of the APMGroup (“Related Parties”) including those set out under section 3.2.2 of the circular to shareholders dated30 April 2014 provided that such arrangements and/or transactions are recurrent transactions of a revenueor trading nature which are necessary for the day-to-day operations and are carried out in the ordinarycourse of business on normal commercial terms which are not more favourable to the Related Partiesthan those generally available to the public and not to the detriment of the minority shareholders(“Shareholders’ Mandate”).



11. PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTYTRANSACTIONS WITH TAN CHONG INTERNATIONAL LIMITED AND ITS SUBSIDIARIES

“THAT, subject to the Companies Act, 1965 (“Act”), the Memorandum and Articles of Association of theCompany and the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, approval be andis hereby given to the Company and its subsidiaries (“APM Group”) to enter into all arrangements and/ortransactions with Tan Chong International Limited and its subsidiaries involving the interest of Directors,major shareholders or persons connected with Directors and/or major shareholders of the APM Group(“Related Parties”) including those set out under section 3.2.3 of the circular to shareholders dated 30 April2014 provided that such arrangements and/or transactions are recurrent transactions of a revenue or tradingnature which are necessary for the day-to-day operations and are carried out in the ordinary course ofbusiness on normal commercial terms which are not more favourable to the Related Parties than thosegenerally available to the public and not to the detriment of the minority shareholders (“Shareholders’Mandate”).



(Resolution 14)

(Resolution 15)

(Resolution 16)


Annual Report 2013


111

12. PROPOSED SALE AND PURCHASE TRANSACTION BETWEEN AUTO PARTS MANUFACTURERS CO. SDNBHD, A WHOLLY-OWNED SUBSIDIARY OF APM AUTOMOTIVE HOLDINGS BERHAD (“THECOMPANY”), AND FUJI SEATS (MALAYSIA) SDN BHD, A 60% OWNED SUBSIDIARY OF AUTO PARTSHOLDINGS SDN BHD WHICH IN TURN IS A WHOLLY-OWNED SUBSIDIARY OF THE COMPANY, OF ALLTHAT PIECE OF FREEHOLD LAND TOGETHER WITH THE BUILDINGS ERECTED THEREON HELD UNDERTITLE NO. HSD 47672, PT 16201, TOWN OF SERENDAH, DISTRICT OF ULU SELANGOR, STATE OFSELANGOR MEASURING APPROXIMATELY 16,172 SQUARE METRES FOR A CASH CONSIDERATIONOF RM18,100,000.00

THAT pursuant to Section 132E of the Companies Act, 1965, approval be and is hereby given for aproposed sale and purchase transaction to be entered into between Auto Parts Manufacturers Co. SdnBhd (“Vendor”), a wholly-owned subsidiary of APM Automotive Holdings Berhad (“the Company”), andFuji Seats (Malaysia) Sdn Bhd (“Purchaser”), a 60% owned subsidiary of Auto Parts Holdings Sdn Bhd whichin turn is a wholly-owned subsidiary of the Company, in respect of all that piece of freehold land heldunder title no. HSD 47672, PT 16201, Town of Serendah, District of Ulu Selangor, State of Selangormeasuring approximately 16,172 square metres together with a 2-storey office building with an annexedsingle storey factory, another single storey factory and two (2) guardhouses erected thereon bearingpostal address No. 5 Jalan Jasmine 3, Seksyen BB10, Bukit Beruntung, 48300 Rawang, Selangor, for a cashconsideration of RM18,100,000.00 and upon such arm’s length and commercially acceptable terms andconditions as the Vendor and the Purchaser, both of which are deemed to be connected with Dato’ TanHeng Chew, a Director of the Company, by virtue of the provisions of Section 122A of the Companies Act,1965, shall determine and agree upon AND THAT the respective Boards of Directors of the Vendor andthe Purchaser be and are hereby given full power to determine and assent to any terms and conditions,modifications, revaluations, variations and/or amendments that may be required and to take all such stepsand to execute all such documents as they may deem necessary or expedient in order to implement,finalise and give full effect to the aforesaid proposed sale and purchase transaction.

13. To transact any other business of the Company of which due notice shall have been received.

NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT

NOTICE IS HEREBY GIVEN THAT, subject to the approval of the shareholders at the Seventeenth Annual GeneralMeeting of APM Automotive Holdings Berhad, a final single tier dividend of 12% for the financial year ended31 December 2013 will be paid on 27 June 2014. The entitlement date shall be 6 June 2014.

A depositor shall qualify for the entitlement to the dividend only in respect of:

(1) shares transferred into the depositor’s securities account before 4:00 p.m. on 6 June 2014 in respect ofordinary transfers; and

(2) shares bought on Bursa Malaysia Securities Berhad on a cum entitlement basis in accordance with therules of Bursa Malaysia Securities Berhad.

By order of the BoardLEE YUEN LIN (MIA 16484)LEE KWEE CHENG (MIA 9160) ANG LAY BEE (MAICSA 7000388)Company Secretaries

Kuala Lumpur30 April 2014

(Resolution 17)




Notes:

1. A depositor whose name appears in the Record of Depositors of the Company as at 21 May 2014 (“Record of Depositors”)shall be regarded as a member entitled to attend, speak and vote at the meeting.

2. A member, other than a member who is also an Authorised Nominee (as defined under the Security Industries (CentralDepositories) Act, 1991 (“SICDA”)) or an Exempt Authorised Nominee who is exempted from compliance with the provisionsof Section 25A(1) of SICDA, shall be entitled to appoint not more than two (2) proxies to attend and vote for him at the meeting.A proxy need not be a member of the Company and a member may appoint any person to be his proxy without limitation andthe provisions of Section 149(1)(a) and (b) of the Companies Act, 1965 shall not apply to the Company. A proxy appointed toattend and vote at a meeting of the Company shall have the same right as the member to speak at the meeting.

3. Subject to Note 6 below, where a member is a Depositor who is also an Authorised Nominee, the Authorised Nominee mayappoint not more than two (2) proxies in respect of each securities account the Authorised Nominee holds with ordinaryshares in the Company standing to the credit of such securities account as reflected in the Record of Depositors.

4. Subject to Note 6 below, where a member is a Depositor who is also an Exempt Authorised Nominee which holds ordinaryshares in the Company for multiple beneficial owners in one securities account (“omnibus account”) as reflected in theRecord of Depositors, there is no limit to the number of proxies which the Exempt Authorised Nominee may appoint inrespect of each omnibus account it holds.

5. Each appointment of proxy by a member including an Authorised Nominee or an Exempt Authorised Nominee shall be bya separate instrument of proxy which shall specify:

(i) the securities account number; (ii) the name of beneficial owner for whom the Authorised Nominee or Exempt Authorised Nominee is acting; and(iii) where two (2) proxies are appointed, the proportion of ordinary shareholdings or the number of ordinary shares to be

represented by each proxy.

6. Any beneficial owner who holds ordinary shares in the Company through more than one (1) securities account and/orthrough more than one (1) omnibus account, shall be entitled to instruct the Authorised Nominee and/or Exempt AuthorisedNominee for such securities accounts and/or omnibus accounts to appoint not more than two (2) persons to act as proxiesof the beneficial owner. If there shall be three (3) or more persons appointed to act as proxies for the same beneficial ownerof ordinary shares in the Company held through more than one (1) securities account and/or through more than one (1)omnibus account, all the instruments of proxy shall be deemed invalid and shall be rejected.

7. Where the Form of Proxy is executed by a corporation, it must be executed under seal or under the hand of an officer orattorney duly authorised.

8. The Form of Proxy must be deposited at the Registered Office of the Company, 62-68 Jalan Ipoh, 51200 Kuala Lumpur,Malaysia, not less than forty-eight hours before the time appointed for the meeting.

Explanatory Notes On Special Business:

(1) Resolution 12 - Proposed Grant of Authority Pursuant to Section 132D of the Companies Act, 1965

The Company continues to consider opportunities to broaden the operating base and earnings potential of the Company.If any of the expansion or diversification proposals involve the issue of new shares, the Directors of the Company, undernormal circumstances, would have to convene a general meeting to approve the issue of new shares even though thenumber involved may be less than 10% of the issued share capital of the Company.

To avoid delay and cost involved in convening a general meeting to approve such issue of shares, the Directors of theCompany had obtained the general mandate at the Company’s 16th Annual General Meeting held on 22 May 2013 to allotand issue shares in the Company up to an amount not exceeding in total 10% of the issued and paid-up share capital(excluding treasury shares) of the Company for the time being, for such purpose. The Company has not issued any newshares under the general mandate granted to the Directors at the 16th Annual General Meeting which will lapse at theconclusion of the 17th Annual General Meeting to be held on 28 May 2014.

A renewal of the mandate is being sought at the 17th Annual General Meeting under proposed Resolution 12. The renewedmandate, unless revoked or varied at a general meeting, shall continue to be in force until the conclusion of the next AnnualGeneral Meeting of the Company.


Annual Report 2013


113

(2) Resolution 13 – Proposed Renewal of Authority for the Company to purchase its own ordinary shares

The proposed Resolution 13, if passed, will empower the Directors to purchase the Company’s shares of up to 10% of theissued and paid-up share capital of the Company by utilising the funds allocated out of the retained profits and sharepremium of the Company. This authority, unless revoked or varied at a general meeting, will expire at the conclusion of thenext Annual General Meeting of the Company.

Further information on Resolution 13 is set out in the Circular to Shareholders dated 30 April 2014 despatched togetherwith the Company’s 2013 Annual Report.

(3) Resolutions 14, 15 and 16 – Proposed Shareholders’ Mandate for Recurrent Related Party Transactions

The proposed Resolutions 14, 15 and 16 if passed, will enable the Company and/or its subsidiaries to enter into recurrenttransactions involving the interest of related parties, which are of a revenue or trading nature and necessary for the Group’sday-to-day operations, subject to the transactions being carried out in the ordinary course of business and on terms not tothe detriment of the minority shareholders of the Company.

Further information on Resolutions 14, 15 and 16 are set out in the Circular to Shareholders dated 30 April 2014 despatchedtogether with the Company’s 2013 Annual Report.

(4) Resolution 17 – Proposed Sale and Purchase Transaction between Auto Parts Manufacturers Co. Sdn Bhd and FujiSeats (Malaysia) Sdn Bhd

The Company proposes the disposal of the Subject Property held by Auto Parts Manufacturers Co. Sdn Bhd (“Vendor”) toFuji Seats (Malaysia) Sdn Bhd (“Purchaser”) at a cash consideration of RM18,100,000.00. The audited net book value of theProperty as at 31 December 2013 is RM15,115,000.00. As the proposed disposal falls under the provisions of Section 132Eof the Companies Act, 1965, the prior approval of the shareholders at a general meeting is required.

Further details on the proposed sale and purchase transaction between the Vendor and Purchaser are set out in the Circularto Shareholders dated 30 April 2014 despatched together with the Company’s 2013 Annual Report.


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APM AUTOMOTIVE HOLDINGS BERHAD (424838-D) FORM OF PROXY(Incorporated in Malaysia) CDS Account No.

Number of shares held

I/We(Name of shareholder and NRIC no/Company no)

of(Full address)

being a member of APM AUTOMOTIVE HOLDINGS BERHAD, hereby appoint as proxy

(Name and NRIC no) or failing him/her

(Name and NRIC no)

or failing them, the Chairman of the meeting, as my/our proxy to vote for me/us on my/our behalf at the Seventeenth AnnualGeneral Meeting of the Company to be held at Pacific Ballroom, Level 2, Seri Pacific Hotel Kuala Lumpur, Jalan Putra, 50350Kuala Lumpur, Malaysia, on Wednesday, 28 May 2014 at 11:00 a.m., and at any adjournment thereof, as indicated below:.

No. Resolutions For Against

Resolution 1 Financial Statements and Reports of the Directors and Auditors

Resolution 2 Final single tier dividend of 12%

Resolution 3 Re-election of Mr. Siow Tiang Sae

Resolution 4 Re-election of Mr. Nicholas Tan Chye Seng

Resolution 5 Re-election of Mr. Sow Soon Hock

Resolution 6 Re-election of Mr. Low Seng Chee

Resolution 7 Re-election of Dato’ Tan Eng Hwa

Resolution 8 Re-election of Mr. Heng Ji Keng

Resolution 9 Re-appointment of Dato’ Haji Kamaruddin @ Abas Nordin in accordance with Section 129 (6) of the Companies Act, 1965 and his continuous designation asan Independent Non-Executive Director

Resolution 10 Re-appointment of Datuk N. Sadasivan in accordance with Section 129 (6) of the Companies Act, 1965 and his continuous designation as an Independent Non-Executive Director

Resolution 11 Re-appointment of Auditors

Resolution 12 Proposed grant of authority pursuant to Section 132D of the Companies Act, 1965

Resolution 13 Proposed renewal of authority for the Company to purchase its own ordinary shares

Resolution 14 Proposed renewal of shareholders’ mandate for recurrent related party transactions with Tan Chong Motor Holdings Berhad and its subsidiaries

Resolution 15 Proposed renewal of shareholders’ mandate for recurrent related party transactions with Warisan TC Holdings Berhad and its subsidiaries

Resolution 16 Proposed renewal of shareholders’ mandate for recurrent related party transactions with Tan Chong International Limited and its subsidiaries

Resolution 17 Proposed sale & purchase of property

(If you wish to instruct your proxy how to vote, insert a “x” in the appropriate box. Subject to any voting instructions so given, the proxy will vote or mayabstain from voting on any resolution as he/she may think fit.)

For the appointment of two proxies, percentage ofshareholdings to be represented by each proxy:

Number of shares %__________________________________________ Signature/Common Seal Proxy 1 ____________________________

Proxy 2 ____________________________Date: Total ______________________ 100%


affix stamphere

Notes:

1. A depositor whose name appears in the Record of Depositors of the Company as at 20 May 2014 (“Record of Depositors”) shall be regarded as a member entitled toattend, speak and vote at the meeting.

2. A member, other than a member who is also an Authorised Nominee (as defined under the Security Industry (Central Depositories) Act, 1991 (“SICDA”)) or an ExemptAuthorised Nominee who is exempted from compliance with the provisions of Section 25A(1) of SICDA, shall be entitled to appoint not more than two (2) proxies toattend and vote for him at the meeting. A proxy need not be a member of the Company and a member may appoint any person to be his proxy without limitation andthe provisions of Section 149(1)(a) and (b) of the Companies Act, 1965 shall not apply to the Company. A proxy appointed to attend and vote at a meeting of theCompany shall have the same right as the member to speak at the meeting.

3. Subject to Note 6 below, where a member is a Depositor who is also an Authorised Nominee, the Authorised Nominee may appoint not more than two (2) proxies inrespect of each securities account the Authorised Nominee holds with ordinary shares in the Company standing to the credit of such securities account as reflected inthe Record of Depositors.

4. Subject to Note 6 below, where a member is a Depositor who is also an Exempt Authorised Nominee which holds ordinary shares in the Company for multiple beneficialowners in one securities account (“omnibus account”) as reflected in the Record of Depositors, there is no limit to the number of proxies which the Exempt AuthorisedNominee may appoint in respect of each omnibus account it holds.

5. Each appointment of proxy by a member including an Authorised Nominee or an Exempt Authorised Nominee shall be by a separate instrument of proxy which shallspecify:

(i) the securities account number; (ii) the name of beneficial owner for whom the Authorised Nominee or Exempt Authorised Nominee is acting; and(iii) where two (2) proxies are appointed, the proportion of ordinary shareholdings or the number of ordinary shares to be represented by each proxy.

6. Any beneficial owner who holds ordinary shares in the Company through more than one (1) securities account and/or through more than one (1) omnibus account,shall be entitled to instruct the Authorised Nominee and/or Exempt Authorised Nominee for such securities accounts and/or omnibus accounts to appoint not morethan two (2) persons to act as proxies of the beneficial owner. If there shall be three (3) or more persons appointed to act as proxies for the same beneficial owner ofordinary shares in the Company held through more than one (1) securities account and/or through more than one (1) omnibus account, all the instruments of proxyshall be deemed invalid and shall be rejected.

7. Where the Form of Proxy is executed by a corporation, it must be executed under seal or under the hand of an officer or attorney duly authorised.

8. The Form of Proxy must be deposited at the Registered Office of the Company, 62-68 Jalan Ipoh, 51200 Kuala Lumpur, Malaysia, not less than forty-eight hours beforethe time appointed for the meeting.

Company SecretariesAPM AUTOMOTIVE HOLDINGS BERHAD

62-68 Jalan Ipoh51200 Kuala Lumpur

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