16.1.0 scope objective - edaranintranet.edaran.com/edaranportal/sop/sop 16 - asset...

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STANDARD OPERATING PROCEDURE

Index

Edaran Digital Systems Berhad Policies and Procedures Manual Version

1.0

Revision Date 1st June, 2002

SOP 16 Asset Management Page No. of 18

Section Procedures Document Process Owner

16.1.0 SCOPE

This policy establishes the standards and procedures to ensure that Edaran manages its Assets in accordance with best practices.

16.2.0 OBJECTIVE

The objectives of these instructions are:

16.2.1 To ensure that assets are safeguarded at all times.

16.2.2 To ensure that property are well managed and utilized efficiently.

16.2.3 To provide a conducive environment for staff to work in.

16.2.4 To ensure that all acquisitions, renovations and disposals of fixed assets are properly authorized and recorded.

16.2.5 To ensure that all acquisitions, renovations and disposals of fixed assets have been accounted for & adequate records are maintained.

16.2.6 To ensure that the accounting treatment of fixed assets is consistent with generally accepted accounting principles.

16.2.7 To be able to provide information about Edaran’s property when required.

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16.3.0 ABBREVIATION

16.3.1 The abbreviations for documents referred to in these instructions herein are as follows:

Fixed Asset Register FARFixed Asset Verification Schedule FAVSGeneral Ledger GLFixed Assets Discrepancy Memo FADMAsset Disposal Form ADFJournal Voucher JVAsset Transfer Form ATFFixed Asset Listing FALReceipt RRepair and Service Request Form RSRFCar Usage Authorisation Form CUAF

16.3.2 The abbreviations for Job Titles referred to in these instructions herein are as follows:

Abbreviation Title in FullMD Managing DirectorADP Admin PersonnelAP Accounts PersonnelAFM Accounts & Finance ManagerCEO Chief Executive OfficerBOD Board of DirectorsGFC Group Financial ControllerHOD Head of DepartmentHRM HR and Admin Manager

16.4.0 PROCESS FLOW

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16.5.0 POLICIES

16.5.1 All Acquisitions / Disposal / Write Off of Fixed Assets must be approved according to the LOA.

16.5.2 All Acquisitions / Disposal / Write Off of Fixed Assets must be updated in the FAR / FAL / GL within a week.

16.5.3 The ADP is responsible to update the FAL, and the AP is responsible to update the FAR and the GL.

16.5.4 The Asset Capitalization policy is as follows: Items other than software: A single item of tangible property with a relevant cost of RM300 (or overseas currency equivalent) or more must be capitalized. For software: A single package with cost of RM 1,000 (or overseas currency equivalent) or more must be capitalized. Items which do not meet the requirements for capitalization must be expensed off in the GL in the current financial period.

16.5.5 The capitalized amount must include the relevant cost of bringing the fixed asset to the point of “ready for use,” including Purchase Price, Commissions, Taxes, Transportation and Installation costs, where applicable.

16.5.6 The cost of Maintaining, Repairing, Relocating, Reinstalling and Operating fixed assets must be charged to the Profit & Loss Account as expenses. However, significant improvements and / or upgrading must be capitalized.

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16.5.7 A detailed FAR must be prepared and maintained by the AC. The FAR must include details on: • The Acquisition & Disposal details of the assets, • Estimated useful life, • Depreciation charges, • Net Book Value, and • Actual location of the Asset.

16.5.8 All Fixed Assets must be depreciated on a monthly basis using straight-line method at the annual rates, which are based on their estimated useful life.

16.5.9 All Fixed Assets must be depreciated according to the following rates:

Asset Depreciation %Building 2Furniture & Fittings 20Office Equipment 20Renovations 20-33 1/3Motor Vehicles 20Equipment tools 20Computers 20

16.5.10 Any exceptions to this policy must be reviewed and approved by the BOD.

16.5.11 All Rental Agreements must be vetted by the Legal Officer before presenting it to the Customer.

16.5.12 Rental of the building & land must be charged on a monthly basis to either: • 3rd party tenants • Related companies

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16.5.13 All rentals must be accrued for in the GL at the end of each month.

16.5.14 Rental to / from 3rd party tenants must be paid for / received from using either of the two methods: • Standing instruction • Post dated cheques – by 7th of the following month.

16.5.15 Rental to / from related companies must be recognized via the raising of a JV.

16.5.16 Land & Buildings must be consistently revalued every 3 - 5 years.

16.5.17 When an asset is being revalued, the entire category of Fixed Asset that the asset belongs to must be revalued.

16.5.18 The Fair Value / Market Value of the asset must be appraised by professional qualified Valuers.

16.5.19 The ADP must ensure that: • All company vehicles are serviced based on the schedule of

service set by the HRM, and • Annual Maintenances (E.g. Road Tax) are monitored and

paid.

16.5.20 The ADP must also inspect the condition of the vehicle being used by the employee, once every half yearly. Should there be any damages not covered by the insurance, the employee must pay for the restoration cost.

16.5.21 Any Modification, Overhaul, Restoration and related costs must be recorded properly in the FAR / FAL / GL, and the original copy of the supporting documents filed in together.

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16.6.0 PROCEDURE

16.6.1

Fixed Assets Acquisition

(Please refer to SOP 1 Procurement and Payment).

16.6.2 Tagging

16.6.2.1 The ADP and the AP shall arrange for a time to tag the asset with the AO. The ADP and the AP shall tag the Fixed Asset in an orderly & visible way, using a pre-numbered printed FAT. The FAT number shall then be recorded in the FAL and the FAR.

FAT, FAR ADP, AP

16.6.2.2 The ADP and the AP shall NOT tag the following assets: 1. Land & Building 2. Renovations, upgrading or improvement of building 3. Motor Vehicle 4. Computer Software 5. Or other fixed assets on the condition that it has obtained

permission from the MD.

16.6.3

Physical Verification

16.6.3.1 At the end of every Financial Year (before the closing of accounts), the ADP and the AP shall perform a physical verification of Fixed Assets and shall prepare a FAVS.

FAVS ADP, AP

16.6.3.2 The AFM shall investigate any discrepancies between the FAR, the FAL, and the GL.

FAR AFM

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16.6.3.3 The relevant User department shall confirm the discrepancies in the FADM.

FADM User Department

16.6.3.4 The AFM shall compile the FADM and forward the FADM to the HRM.

FADM AFM

16.6.3.5 All discrepancies (i.e. badly damaged / missing items) identified during the year end physical verification shall be approved by the CEO (through the presentation of the FADM), upon which the respective parties shall update the FAR, the FAL and the GL.

FADM CEO

16.6.4

Disposal

16.6.4.1 The GFC and / or the HRM shall initiate the Fixed Asset disposal.

16.6.4.2 The GFC shall recommend the assets to be disposed in an ADF to the Approving Parties according to the LOA.

ADF GFC

16.6.4.3 The Approving Parties shall approve the disposal upon checking the asset for Obsolescence / Wear and Tear.

16.6.4.4 Upon approval, the ADF shall be passed to the ADP and the AP to update the FAR / FAL / GL.

ADF AP

16.6.5

Asset Depreciation

16.6.5.1 At the end of each month, the AP shall prepare a JV to recognize the depreciation expenses.

JV AP

16.6.5.2 The AFM shall review and sign the JV (please refer to SOP 21 Accounting Documents).

JV AFM

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16.6.5.3 The original cost and related accumulated depreciation of fully depreciated assets shall remain in the GL and the FAR until such time as the assets are disposed from service.

16.6.6

Rentals

16.6.6.1 At the end of each month, the AP shall prepare a JV / R to recognize the Rental Income / Expenses.

JV AP

16.6.6.2 The AFM shall review and sign the JV / R (please refer to SOP 21 Accounting Documents).

JV AFM

16.6.6.3 Administration Department Administration Department is responsible for the following matters: • Monitor all the rental administration • Monitor the Edaran’s properties administration including

the upkeep and maintenance of Edaran’s Properties

16.6.7

Valuations

16.6.7.1 The GFC shall initiate Revaluations for classes of assets according to the policy (3 - 5 years consistently) by engaging professional Valuers to perform valuations.

16.6.7.2 The GFC shall forward the Valuation Reports to the AP who shall take the new figures up in the FAR and the GL by raising a JV.

JV AP

16.6.7.3 The AFM shall review and sign the JV (please refer to SOP 21 Accounting Documents).

JV AFM

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16.6.8

Transfers

16.6.8.1 The HOD for both the Transferor and Transferee department shall initiate the transfer of assets by raising the ATF.

ATF HOD

16.6.8.2 The HOD of the Transferor department shall then forward the ATF to the ADP / AP, who shall update the FAR / FAL / GL for the transfer.

ATF, FAR, FAL, GL

HOD, ADP, AP

16.6.9 Issuance and control of company assets

16.6.9.1 General The following assets may be issued to employees to facilitate their work but they shall remain the property of the Company: • Vehicles • Notebook Computer • Mobile phones/Pager • Tools and Equipment • Stationery • Calculators Company assets issued to employees are the responsibility of individual employee concerned until they are return to the Company and acknowledged by the Head of Administration Department. Employees are to use company assets with proper and due care. Any discovery of lost, damage or stolen Company assets has to be reported to Administration Section immediately.

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Company assets issued to employee will be recovered from him when he resigns or is terminated from service or when project is completed (if the assets issued are according to specific project).

16.6.9.2 Company Vehicles Company vehicles refer to any vehicles that the Company purchased or leased for official use.

(i) Categories Company vehicles are categorized into the following: • Vehicles provided to key personnel i.e. Directors,

Managing Director, Manager or any other Personnel approved by a Director.

• Vehicles assigned to specific team or group • Vehicles assigned for general use (pool)

(ii) Usage

a) Company vehicles must be used for official purposes only and are to be driven by authorized employee only.

b) An employee who wish to use and drive the

Company’s Pool Vehicle is require to fill the CUAF (refer exhibit) and seek recommendation from their HOD, and submit to the administration Department for approval and administrative arrangements.

c) An employee who uses / drives the Company’s Pool

Vehicle is responsible for the vehicle until the key(s) are returned to the Administration Department.

CUAF

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(iii) Fuel Purchase of fuel is to be made by the person authorized to drive the Company vehicles and will be reimbursed in monthly expense claim.

(iv) Responsibilities Authorized employees must ensure that the vehicles are always at all time road worthy and check regularly to ensure that the following are in good conditions: • Lights • Brakes • Tyres • water check • oil check • fan and air-con belt Authorized employees are required to use the vehicles with proper care. Authorized employees must advice or report to the Administration Department on repairs and maintenance, accidents, insurance and road tax expiry date, theft to vehicles, tools or parts.

(v) Administration Department Administration Department is responsible for the following matters: • Monitor the usage of vehicles (except for vehicles provided

to the key personnel). • Monitor the maintenance of vehicles (except for vehicles

provided to the key personnel). • Monitor and renew road tax and insurance for all vehicles.

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(vi) Accidents In the event of any accident involving the Company’s Vehicle, the following procedure must be adhered:-

a) The employee involved must not admit liability under any circumstances.

b) A report must be lodge promptly at the nearest Police Station within twenty four (24) hours of the accident.

c) Under no circumstances should the liability be admitted to the other party. The drivers / users must exchange particulars with the other party :-

- Name and Contact Numbers - NRIC - Address - Vehicles Registration Number - The vehicle(s)’ insurance company d) Any accident involving any Company’s Vehicles are

to be promptly reported to the Administration Department.

e) Details of the accident and copy of the Police Report must be submitted to the Administration Department as soon as possible for further action and arrangement.

f) Those who fail to provide official report to the Administration Department and proceed with the repairs etc. without prior approval shall bear the cost of repairs.

g) The Company is not liable to pay any summons issued as a result from personal negligence, careless or deliberate unlawful acts.

(vii) Vehicles Maintenance All Company’s Vehicles for maintenance and repairs shall be made through the Administration Department. Administration Department shall appoint Panel of workshops for the above purpose.

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This procedure (vehicle maintenance) does not apply to vehicles assigned to the key personnel, as they are personally responsible for the maintenance of the vehicle provide to them.

a) An employee who need to send the vehicle for servicing or repairs must fill in the RSRF – refer exhibit

b) Application for Service or Repairs of Company Vehicles or Pool Vehicle shall be approved by the HRM.

c) The users are responsible to ensure that vehicle is in good condition by monitoring a regular Maintenance and Services.

d) Servicing of the company’s vehicle is required at every 5,000 kilometers on the Vehicles Mileage reading or once in three (3) months which ever is earlier.

e) The users shall be responsible to any Maintenance and Repairs Works as a result from personal negligence, careless or deliberate unlawful acts.

f) All Company’s Vehicles must be sent to the Panel Workshops and agents appointed by the Company.

g) Users are not allowed to send the vehicles for Service or Repairs without prior approval from the Administration Department. However, exception can be made whereby,:- i. The Company’s Vehicle broke down during Rest

Day, Public Holiday or Paid Leave. ii. Emergency breakdown while traveling outstation.

h) The Company shall not bear any expenses pertaining to additional or extra accessories installed at the Company’s vehicles without prior approval (e.g. Sport Rims, unnecessary upholstery etc.)

i) The Administration Department shall be responsible for all Road Taxes and Motor Vehicle Insurance renewal.

RSRF

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16.6.9.3 Mobile Phone/Pager

(i) Allocation The Company may allocate mobile phones or pagers to the following persons: The General Manager will be provided with mobile phone throughout their employment with the Company. To any employee determined by the management who is assigned to specific project. Pager - to all confirmed engineers and sales staff.

(ii) Use of Mobile Phone/Pager The use of company mobile phones/pager by the designated users shall be for official purposes only and the Company may at any time request for the return of these assets.

(iii) Billing All billings will be addressed to the Company. Payment will only make for official calls only. Any personal calls determined will be set off against monthly expense claim.

(iv) Responsibility All mobile phones/pagers users must be solely responsible for their own designated sets and must take prudent care and use of the sets to eliminate from unnecessary damage, breakage, theft or other irresponsible incidences. In the event of lost or theft, the users are to immediately lodge a police report and subsequently inform Administration

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Department and complete the Defect Form. Users of company mobile phones/pagers are not allowed to pass custody to non-authorized personnel or third party(s) for their personal use. Users of mobile phones/pagers are to obtain Administration Department approval on any change of numbers, serial nos., make/model etc.

(v) Administration Department The Administration Department is responsible for the following matters: Monitor a full list of all company mobile phones and pager. Administration Department to take necessary step to get the sets repaired or replaced the sets (if in the case of the theft or stolen sets). To maintain records on the following information: • To whom issued • Date of licenses • Date of expiry • Model/Serial nos. etc. • Any changes/repair • Renewal of licenses or fees

16.6.9.4 Stationery

(i) General Standard office stationery will be provided to all employees. Employees are to use the stationery issued to them

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economically and not to be taken home.

(ii) Requisition for Stationery All requisitions for stationery must be made on the "Stationery Requisition Form". The application shall be approved by Section Head or other authorized personnel. Employees are not allowed to take stationery without informing the authorized personnel.

16.6.9.5 Calculators Eligible employees will be provided with one (1) unit of calculator. Employees are to use the calculator with proper care. Any discovery of lost, damage or stolen calculators must be reported to the Administration Department immediately.

16.6.10

Usage of Company Facility

16.6.10.1 Utilities Employees are responsible and should contribute to create a conducive working environment by following these rules: Employees should try to conserve water and electricity. Where applicable lights should be switched off in area or room which is not used.

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Employees should ensure that his working area is clean. Any unwanted items to be removed. Employees should not litter or dirty the working areas, common areas, corridors, pantries and toilets.

16.6.10.2 Facsimile Facsimile transmissions are allowed for official purposes only. Facsimile transmissions are to be used only when the messages are important and urgent. Facsimile transmission is not to be used when it is not economical to do so. All facsimile transmissions must be recorded.

16.6.10.3 Courier / Mail Official mail can be sent through courier only when it is justifiable to do so on the basis of urgency, security and cost effectiveness. Mail do not meet the above criteria shall be sent through ordinary postage. Mail, which has been sent through fax, shall not be sent through courier. Courier mail only can be made to destination outside PJ and K.L area.

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16.6.10.4 Telephone Employees who are eligible will be provided with one telephone each. Telephone calls are to be made for official purpose only. Calls are to be as brief as possible. Personal calls are not encourage unless necessary. Employees are to pay for personal outstations calls made through Company telephones. All personal calls must be recorded by receptionist or authorized employee. Any outstation calls must be made through receptionist or authorized employee only.

16.6.11 Others – Request for Service or Repairs of Company’s Properties

16.6.11.1 All Company’s properties are under the administration of the Administration Department.

16.6.11.2 All employee / users of company’s properties who wish to repair or service the company’s equipment / properties (e.g. Computer, Office Equipment) under his / her purview must fill and submit the RSRF (refer exhibit) to the Administration Department for the necessary approval and arrangements.

RSRF

16.6.12 APPENDICES

REPAIRS AND SERVICE REQUEST FORM (RSRF)

To : Administration / MIS Department Date :

Office Equipment Premises / Building Vehicle Computer Equipment Handphone

Others :

Please tick / describe whichever applicable

I Particular Of repairs & scrvlices

I Reason / Justification

Name : Dept :

t

Name : Dept :

Requested By, Verified By (Administration / MIS),

Name : Dept :

Approved By

. ., . . . . . . . . . . . . . . . . . . . . . . . . . . .-. ": ... - . . . . .:.i., .:.. - . . . . . . . . . . . . . . . . . . . . . . . . . . , . . . . . . . . . .' . . . . . . . . . . :. ..).:- . . . . .-, ;', ',>;* .:: ... ... ... .... , ,-, . ., ,.: , .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . , . . ,8 ..>. . . ,.,:;.:.:..:;:.; ,:-; .;:, . ,:

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! : . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .* -- :.t.:-. 7 :

Repairer Vendor :

Remarks

Cost

Date Complete : I Job Done : Satisfactory I Not Satisfactory

Name : Date :

Checked By

I I I

Edaran Digital Systems Berhad

Comments :

CAR USAGE AUTHORISATION FORM (CUAF)

Company : EDARAN / EKOM / ECOMM / EMAC / S I D I C / MIDC

Applicant's Name Designation Department / Division : Date

1 Type of Vehicle Required : Signature I I Destination : Purpose of Travelling :

Duration : . From : To :

I Out : Time In :

Recommended by : I Remarks : (Head of Department)

Name : Designation : Date : * WORKjPROJECT SCHEDULE MUST BE PROVIDED WITH THIS FORM

I F APPLICABLE

Approved by :

Name : Date :

Type of Vehicle : Registration Number : Key(s) : Others :

I

IMPORTANT NOTE : 1. The application form (CUAF) should be submitted to

the Administration Dept. ONE (1) DAY I N ADVANCE before the intended usage of date.

2. Approval of the Company's Pool Vehicle application would be subjected to the availability of vehicle or based on Assignment / Job Priorities.

3. The Usage of the Company's Vehicle 1s strictly limited for company business matters / purposes.

4. The user Is required to record details of traveling in the Vehicle Logbook.

5. I t is essential that the vehicle be returned to the Admin Dept. not later than the period of usage as stated above.

6. Please notify the Admin Dept. ONE (1) DAY I N ADVANCE should there be any cancellatlon.

7. User shall be responsible to undertake any penalties, Summons or Damages to the Vehicle resulting from Negligence or Improper us? of Vehicle by user.

Edaran Digital Systems Berhad