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RAYA INTERNATIONAL BERHAD 2014ANNUALREPORT
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CORPORATE INFORMATION 2
DIRECTORS’ PROFILE 3
CHAIRMAN’S STATEMENT 11
CORPORATE GOVERNANCE STATEMENT 12
AUDIT COMMITTEE REPORT 19
STATEMENT ON RISK MANAGEMENT & INTERNAL CONTROL 25
ADDITIONAL COMPLIANCE STATEMENT 26
FINANCIAL STATEMENTS
• Directors’Report 28 • StatementbyDirectorsandStatutoryDeclaration 32 • IndependentAuditors’Report 33 • StatementsofProfit&LossandOtherComprehensiveIncome 35 • StatementsofFinancialPosition 36 • ConsolidatedStatementofChangesinEquity 37 • StatementofChangesinEquity 38 • StatementsofCashFlows 39 • NotestoFinancialStatements 41
LISTOFPROPERTIES 80
ANALYSISOFSHAREHOLDINGS 81
NOTICEOFEIGHTEENTHANNUALGENERALMEETING 83
PROXYFORM Enclosed
CONTENTS
RAYA INTERNATIONAL BERHAD2014 ANNUALREPORT
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BOARD OF DIRECTORS
Dato’ Izham Bin Yusoff Chen Hian LoongIndependentNon-ExecutiveChairman ExecutiveDirector Dato’ Tan Seng Hu Yee Chee Seng @ Yee YenManagingDirector Non-IndependentNon-ExecutiveDirector
Abdul Latif Bin Abdul Rahim Ho Fook MengNon-IndependentNon-ExecutiveDirector IndependentNon-ExecutiveDirector
Mohd Fikry Bin Rahman Tony Tan Han (Chen Han)IndependentNon-ExecutiveDirector IndependentNon-ExecutiveDirector
AUDIT COMMITTEE
Mohd Fikry Bin Rahman - Chairman IndependentNon-ExecutiveDirector
Ho Fook Meng IndependentNon-ExecutiveDirector
Yee Chee Seng @ Yee Yen Non-IndependentNon-ExecutiveDirector
NOMINATION COMMITTEE
Dato’ Izham Bin Yusoff - ChairmanIndependentNon-ExecutiveDirector
Abdul Latif Bin Abdul RahimNon-IndependentNon-ExecutiveDirector
Ho Fook MengIndependentNon-ExecutiveDirector
REMUNERATION COMMITTEE
Dato’ Izham Bin Yusoff - ChairmanIndependentNon-ExecutiveDirector
Abdul Latif Bin Abdul RahimNon-IndependentNon-ExecutiveDirector
Ho Fook MengIndependentNon-ExecutiveDirector
REGISTERED ADDRESS
No:149A,149B,151BPersiaranRajaMudaMusa42000PortKlang,SelangorDarulEhsan.Tel:603-31673830Fax:603-31683830
BUSINESS ADDRESS
3rdFloor,No:66,JalanKampungAttap,50460KualaLumpurTel:603-22766664Fax:603-22766661Website:www.raya.com.my
CORPORATE INFORMATION
COMPANY SECRETARIES
Wan Haslinda Wan YusoffMAICSA7055478
Sangar NallappanMACS01413
AUDITORS
STYLAssociatesAF 1929CharteredAccountantsUnitNo:902,9thFloorBlockA,DamansaraIntanNo:1,JalanSS20/2747400PetalingJayaTel:603-77242128/77242130/77242136Fax:603-77332125
SHARE REGISTRAR
TricorInvestorServicesSdnBhdLevel17,TheGardensNorthTowerMidValleyCity,LingkaranSyedPutra59200KualaLumpur.Tel:603-22643883Fax:603-22821886Email:[email protected]
PRINCIPAL BANKERS
PublicBankBerhadCIMBBankBerhad
STOCK EXCHANGE LISTING
ACEMarketofBursaMalaysiaSecuritiesBerhad
STOCK NAME - RAYA
STOCK CODE - 0080
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DIRECTORS’ PROFILE
DATO’ IZHAM BIN YUSOFFIndependent Non-Executive Chairman
Malaysian,aged48,wasappointedtotheBoardon1October2013asanIndependentNon-ExecutiveDirectoroftheCompany.Hewasre-designatedasIndependentNon-ExecutiveChairmanon14May2015.
Qualifications & Working Experience and Occupation
He graduated with Bachelor of Accounting and Master of Business Administration (Accounting andInternationalBusiness),bothfromUniversityofMiami,UnitedStatesofAmerica.HeisalsoanAssociateMemberofInstituteofInternalAuditorsMalaysia.
Dato’Izhamhasmorethan20yearsexperiencesinlargeandmultinationalcompanieswithvariousseniormanagementpositions,specialisingincorporateplanningandfinance.HewastheManagingDirectorandChiefExecutiveOfficerofPercetakanNasionalMalaysiaBerhad(PNMB)fromFebruary2010until31January2014.HewasExecutiveDirector/ChiefOperatingOfficerofNinebioSdnBhd.HewasalsotheManagingDirector/ChiefOperatingOfficerofKUBMalaysiaBerhadandAmanahRakyatBerhad.HesatonnumerouslistedcompaniesandwastheformerDirectorofBursaMalaysiaSecuritiesBerhad.
Board Committees
HewasappointedasChairmanoftheNominationandRemunerationCommitteeon30June2014.
Family Relationship with any Director and / or Major Shareholder of the Company
HehasnofamilyrelationshipwithotherDirectorsormajorshareholdersoftheCompany.
Conflict of Interest with the Company
HehasnoconflictofinterestwiththeCompanyoritssubsidiarycompanies.
Directorship of Public Companies (if any)
CurrentlyheistheManagingDirectorofBinaDarulamanBerhadandaDirectorofMalaysianAllianceofCorporateDirectors(MACD).
Conviction of Offences
Withinthelast10years,hehasnotbeenconvictedforanyoffencesotherthantrafficoffences,ifany.
Shareholdings in the Company
HedoesnotholdanysharesintheCompany.
No. of Board Meetings Attended from 1 January 2014 to 31 December 2014
Duringthefinancialyear,heattendedfiveoutofsevenmeetingsoftheBoard.
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DIRECTORS’ PROFILE (Cont’d)
DATO’ TAN SENG HUManaging Director
Malaysian,aged38,wasappointedasanExecutiveDirectorof theCompanyon19June2014andhewasre-designatedastheManagingDirectoron30June2014.
Qualifications & Working Experience and Occupation
HegraduatedwithaBachelorofArts,BusinessAdministration,HumanResourceandPersonnelfromtheWashingtonStateUniversity in2001andobtainedaMasterofScience,Economics fromtheUniversityofIdahoin2003.Hehasbeeninvolvedintheconstructionindustryforeightyearsandiscurrentlymanaginghisownprojectmanagementcompanysince2006.
Board Committees
HeisnotamemberofanyBoardCommitteeoftheCompany.
Family Relationship with any Director and / or Major Shareholder of the Company
DrTanChengKiat,beinghis father, isa substantial shareholderof theCompanyandMrYeeCheeSeng,Non-IndependentNon-ExecutiveDirectoroftheCompanyishisuncle.
Directorship of Public Companies (if any)
HeisanAlternateDirectortoDrTanChengKiat,aFoundingDirectorofBinaPuriHoldingsBhd.
Conflict of Interest with the Company
HehasnoconflictofinterestwiththeCompanyoritssubsidiarycompanies.
Conviction of Offences
Withinthelast10years,hehasnotbeenconvictedforanyoffencesotherthantrafficoffences,ifany.
No. of Board Meetings Attended from 1 January 2014 to 31 December 2014
Duringthefinancialyear,heattendedfouroutoffourmeetingsoftheBoard.
Shareholdings in the Company
Hisshareholdingisdisclosedonpage81oftheAnnualReport.
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DIRECTORS’ PROFILE (Cont’d)
CHEN HIAN LOONG Executive Director
Malaysian,aged43,isanExecutiveDirectoroftheCompany.HewasappointedtotheBoardon30June2014.
Qualifications & Working Experience and Occupation
HeholdsaDiplomaInBusinessandhasbeeninvolvedintele-communication,technicalandsalesformorethantwenty(20)yearsandiscurrentlymanaginghisownITCompany.
Board Committees
HeisnotamemberofanyBoardCommitteeoftheCompany.
Family Relationship with any Director and / or Major Shareholder of the Company
HehasnofamilyrelationshipwithotherDirectorsormajorshareholdersoftheCompany.
Conflict of Interest with the Company
HehasnoconflictofinterestwiththeCompanyoritssubsidiarycompanies.
Directorship of Public Companies (if any)
Hedoesnotholdanydirectorshipsinotherpubliccompanies.
Conviction of Offences
Withinthelast10years,hehasnotbeenconvictedforanyoffencesotherthantrafficoffences,ifany.
Shareholdings in the Company
AsatthedateofthisAnnualReport,hedoesnotholdanysharesintheCompany
No. of Board Meetings Attended from 1 January 2014 to 31 December 2014
Duringthefinancialyear,heattendedthreeoutofthreemeetingsoftheBoard.
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DIRECTORS’ PROFILE (Cont’d)
ABDUL LATIF BIN ABDUL RAHIMNon-Independent Non-Executive Director
Malaysian,aged57,isaNon-IndependentNon-ExecutiveDirectoroftheCompany.HewasappointedtotheBoardon1October2013.
Qualifications & Working Experience and Occupation
HeholdsaDiplomainBusinessAdministration.
EncikAbdulLatifbeganhiscareerinyear1982withMalaysianTobaccoasaSeniorExecutive.Inyear1992,hejoinedRegalMarketingSdn.Bhd.,asBusinessExecutiveandworkeduntil1998.HeiscurrentlytheGeneralManagerofAzeeraManagementConsultant(M)SdnBhdwhichhehasjoinedsinceyear1998.
Board Committees
HewasappointedasMembersoftheNominationandRemunerationCommitteeon30June2014.
Family Relationship with any Director and / or Major Shareholder of the Company
HehasnofamilyrelationshipwithotherDirectorsormajorshareholdersoftheCompany.
Conflict of Interest with the Company
HehasnoconflictofinterestwiththeCompanyoritssubsidiarycompanies.
Directorship of Public Companies (if any)
Hedoesnotholdanydirectorshipsinotherpubliccompanies.
Conviction of Offences
Withinthelast10years,hehasnotbeenconvictedforanyoffencesotherthantrafficoffences,ifany.
Shareholdings in the Company
HedoesnotholdanysharesintheCompany.
No. of Board Meetings Attended from 1 January 2014 to 31 December 2014
Duringthefinancialyear,heattendedsevenoutofsevenmeetingsoftheBoard.
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DIRECTORS’ PROFILE (Cont’d)
CAPTAIN TONY TAN HAN (CHEN HAN)Independent Non-Executive Director
Singaporean,aged39,isanIndependentNon-ExecutiveDirectoroftheCompany.HewasappointedtotheBoardon24March2015.
Qualifications & Working Experience and Occupation
HeobtainedhisDiplomainNauticalStudiesfromSingaporePolytechnicsin1999.In2009,heobtainedaSpecialistDiplomainworkplaceSafetyandHealthfromNgeeAnnPolytechnics.
CaptainTonyTanhasaCertificateofCompetency(“COC”)Class1MasterMariner(foreign-going)issuedbytheMaritimeandPortAuthorityofSingaporeandisalsoaRegisteredSafetyOfficerissuedbytheMinistryofManpowerin2011.
CaptainTonyTan started his career as aMarine Superintendent/SeniorMarketingExecutivewith EZRAMarine ServicesPteLtd in 2007. He joinedHakoOffshorePteLtd in 2010 as a Senior SafetyManager/DesignatedPersonAshore.HeestablishedSkipsMarineServicesinSingaporein2011andistheManagingDirector.
Captain Tony Tan is well versed in themaritime industry and has over 18 years of professionalmarineexperienceinbothsea-goingandshore-basedoperationswhichincludecontainer,tanker,oilandgas,offshorefleetandshipmanagement,shipoperationsandmarinesafetyoperations.Heisalsoinvolvedinaudit,incidentinvestigationaswellasimplementationofInternationalSafetyManagement(“ISM”)appointments.
Board Committees
HeisnotamemberofanyBoardCommitteeoftheCompany.
Family Relationship with any Director and / or Major Shareholder of the Company
HehasnofamilyrelationshipwithotherDirectorsormajorshareholdersoftheCompany. Conflict of Interest with the Company
HehasnoconflictofinterestwiththeCompanyoritssubsidiarycompanies.
Directorship of Public Companies (if any)
Hedoesnotholdanydirectorshipsinotherpubliccompanies.
Conviction of Offences
Withinthelast10years,hehasnotbeenconvictedforanyoffencesotherthantrafficoffences,ifany.
Shareholdings in the Company
HedoesnotholdanysharesintheCompany.
No. of Board Meetings Attended from 1 January 2014 to 31 December 2014
NotApplicableashewasappointedon24March2015.
SinceMarch2015,hehadattendedoneoutofonemeetingoftheBoardheldfromMarch2015toApril2015.
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HO FOOK MENG Independent Non-Executive Director
Malaysian,aged57, isan IndependentNon-ExecutiveDirectorof theCompany.Hewasappointed to theBoardon24March2015.
Qualifications & Working Experience and Occupation
HegraduatedfromtheUniversityofMalaya,KualaLumpurwithaBachelorofEconomics(Honours)degreein1981andholdsaMastersofBusinessAdministrationfromKenStateUniversity,Ohio,USA.
MrHostartedhiscareerinthebankingandfinancialservicesindustryin1981.HestartedasaBankOfficeratBankofCommerce(M)Berhadin1981.In1993,hejoinedUnitedOverseasBankasaTeamLeaderintheCommercialBankingDepartment.Subsequently,MrHojoinedAmBank(M)BerhadasaGeneralManagerintheBusinessBankingDivisionfrom2002to2014.
MrHohasover30yearsexperienceinthebankingandfinancialservicesindustryofwhichhespecializedinemergingmid-capcorporations.Asaseniorbanker,heisveryoftentappedforhisexpertiseandwiderangingexperiencebyhisbankingclientsandinvestorsintheirgrowthandexpansionstrategies.
Hehasestablishedaverywidebusinessnetworkthatwasbuiltovertheyearsasbankerandadvisortoawiderangeofhisbankingcustomers.
Board Committees
HewasappointedasMembersoftheAuditCommittee,NominationandRemunerationCommitteeon24March2015.
Family Relationship with any Director and / or Major Shareholder of the Company
HehasnofamilyrelationshipwithotherDirectorsormajorshareholdersoftheCompany. Conflict of Interest with the Company
HehasnoconflictofinterestwiththeCompanyoritssubsidiarycompanies.
Directorship of Public Companies (if any)
Hedoesnotholdanydirectorshipsinotherpubliccompanies.
Conviction of Offences
Withinthelast10years,hehasnotbeenconvictedforanyoffencesotherthantrafficoffences,ifany.
No. of Board Meetings Attended from 1 January 2014 to 31 December 2014
NotApplicableashewasappointedon24March2015.
SinceMarch2015,hehadattendedoneoutofonemeetingoftheBoardheldfromMarch2015toApril2015.
Shareholdings in the Company
Hisshareholdingisdisclosedonpage81oftheAnnualReport.
DIRECTORS’ PROFILE (Cont’d)
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DIRECTORS’ PROFILE (Cont’d)
YEE CHEE SENG @ YEE YENNon-Independent Non-Executive Director
Malaysian,aged75,isaNon-IndependentNon-ExecutiveDirectoroftheCompany.HewasappointedtotheBoardon27January2015.
Qualifications & Working Experience and Occupation
He is a qualified Accountant since 1965 and he is also a Fellow Member of the Chartered Institute ofManagementAccountantsofUnitedKingdom(U.K).
He has worked as an Internal Auditor for 2 years and later acquired extensive experience in accountingandfinanceworking for28years inFELDA(FederalLandDevelopmentAuthority) inwhichheheld theseniorpositionsasFinancialControllerandFinanceDirector.HeretiredfromFELDAin1995astheDeputyDirector-General.
Betweenyear2004-2008,hewasaBoardDirectorandChairmanofAuditCommitteeofPrestarResourceBhd,alistedcompanyinBursaMalaysia.
Board Committees
HewasappointedasMemberoftheAuditCommitteeon27January2015.
Family Relationship with any Director and / or Major Shareholder of the Company
MrYeeCheeSengistheUncletoDato’TanSengHu,theManagingDirectoroftheCompany. Conflict of Interest with the Company
HehasnoconflictofinterestwiththeCompanyoritssubsidiarycompanies.
Directorship of Public Companies (if any)
Hedoesnotholdanydirectorshipsinotherpubliccompanies.
Conviction of Offences
Withinthelast10years,hehasnotbeenconvictedforanyoffencesotherthantrafficoffences,ifany.
Shareholdings in the Company
HedoesnotholdanysharesintheCompany.
No. of Board Meetings Attended from 1 January 2014 to 31 December 2014
NotApplicableashewasappointedon27January2015.
SinceJanuary2015,hehadattendedtwooutoftwomeetingsoftheBoardheldfromJanuary2015toApril2015.
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DIRECTORS’ PROFILE (Cont’d)
MOHD FIKRY BIN RAHMAN Independent Non-Executive Director
Malaysian,aged29, isan IndependentNon-ExecutiveDirectorof theCompany.Hewasappointed to theBoardon18June2014.
Qualifications & Working Experience and Occupation
HegraduatedwithBachelorofEngineeringTechnologyinSupplyChainManagement.HestartedhiscareeratSeicomSystemSdnBhdasaProjectManagerresponsibleinmanagingaprojectdevelopmentfrominitiationstagetoitsclosure.
InSeptember2013tilltodate,heisservingasSeniorProcurementExecutiveatHalliburtonServices(M)SdnBhdresponsibleinmonitoring,processingandcontrollingallprocurementactivities.
Board Committees
HewasappointedasamemberofAuditCommitteeon18June2014andwasre-designatedasChairmanoftheAuditCommitteeon23June2014.
Family Relationship with any Director and / or Major Shareholder of the Company
HehasnofamilyrelationshipwithotherDirectorsormajorshareholdersoftheCompany.
Conflict of Interest with the Company
HehasnoconflictofinterestwiththeCompanyoritssubsidiarycompanies.
Directorship of Public Companies (if any)
Hedoesnotholdanydirectorshipsinotherpubliccompanies.
Conviction of Offences
Withinthelast10years,hehasnotbeenconvictedforanyoffencesotherthantrafficoffences,ifany.
Shareholdings in the Company
HedoesnotholdanysharesintheCompany.
No. of Board Meetings Attended from 1 January 2014 to 31 December 2014
Duringthefinancialyear,heattendedthreeoutoffourmeetingsoftheBoard.
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CHAIRMAN’S STATEMENT
DearShareholders,
OnbehalfoftheBoardofDirectorsofRayaInternationalBerhad(“Raya”or“theCompany”),itgivesmegreatpleasuretopresenttheAnnualReportandAuditedFinancialStatementsofRayaanditssubsidiaries(“theGroup’)forthefinancialyearended(“FYE”)31December2014.
FINANCIAL REVIEW
TheGroup’s revenue forFYE2014wasRM2.935million representing a 21.1%growth compared to thepreviousyearduetohigherrevenueingeneraltrading.
TheprofitabilityoftheGroupslippedintotheredduetohigheroperatingexpensesincurredanddepositswrittenoffaswellasareductioninthewaiverfromdirectorand/orshareholder.
PROSPECTS
TheGroupisoptimisticinitsgeneraltradingactivitiesbutexpectstofacechallengesinitsfiltrationactivitiesforthecomingfinancialyear.TheGroupiscurrentlydeliberatingontheviabilityoftheexistingbusinessoftheGroupandreviewitsstrategiesandbusinessoperationsandareconsideringoptionsavailabletoimproveitslongtermandsustainablefuturegrowth.
APPRECIATION
OnbehalfoftheBoardofDirectorsofRaya,Iwishtoconveymyheartfeltappreciationtothemanagementteamfortheirdedicationandhardwork.IalsowishtosincerelythankmycolleaguesontheBoardfortheirwisecounselandinsightsinhelpingtoguidetheGroupthroughthechallengesandtonewavenuesofopportunity.
Last but not least, our utmost gratitude to all our valued shareholders, customers, business associates,financiers,relevantauthoritiesandotherstakeholdersfortheconfidence,supportandtrustinus.
Together,wewillcontinuetoshareabetterfutureandlookforwardtoyourcontinuoussupportfortheyear2015.
Thankyou.
DATO’ IZHAM BIN YUSOFFIndependent Non-Executive Chairman
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TheBoardofDirectors (“theBoard”)ofRayaInternationalBerhad(“Raya”)recognizes the importanceofupholdingthehigheststandardsofcorporategovernanceinconductingtheGroup’sbusinessactivitiesanddischargingtheBoard’sfiduciaryresponsibilitiestoprotectandenhancetheshareholder’svalue.TheBoardreaffirmsitssupportstotheCodeandbelievesthatgoodcorporategovernanceisfundamentalinachievingtheGroup’sobjectives.Inordertoensurethatthebestinterestsofshareholdersandotherstakeholdersareeffectivelyserved,theBoardcontinuestoplayanactiveroleinimprovinggovernancepracticesandmonitorsthedevelopmentincorporategovernanceincludingtheCode.
ThisstatementdescribestheCompany’scompliancewiththeprinciplesoftheCode.
A. DIRECTORS
i. The Board
The Board is primarily responsible for the strategic directions of the Company. In addition, theBoardalsooversees the conductof theCompany‘sbusiness,whereby itdevises andputs inplaceadequatesystemsofcontrol,focusesprimarilyonthemitigationofanyforeseeableorpotentialriskbesettingtheCompany.TheGroupisledandcontrolledbyaneffectiveBoard.AllBoardmemberscarryanindependentjudgementtobearonissuesofstrategy,performance,resourcesandstandardsofconduct.TheBoardunderstandstheBoard’sphilosophy,principles,ethics,missionandvisionandreflectsthisunderstandingonkeyissuesthroughouttheyear.
ii. Board Balance
ThecurrentBoardhaseight(8)directorscomprisingtwo(2)ExecutiveDirectors,two(2)areNon-IndependentNon-ExecutiveDirectorsandfour(4)IndependentNon-ExecutiveDirectors.
More than one-third (1/3) of the current Board is represented by Independent Non-Executive
Directorswho are independent ofmanagement and free from any business or other relationshipwhichcould interferewith the exerciseof independent judgmenton theBoard’sdeliberationanddecisionmaking,eachofwhombringswithhimvastandvariedexperiences,exposureandexpertise.
TheprofileofeachmemberofthecurrentBoardissetoutinDirectors’profileofthisAnnualReport.
The ExecutiveDirector oversees the day to daymanagement and running of theGroup and theimplementationoftheBoard’sdecisionandpolicies.
Thepresenceof four (4) IndependentNon-ExecutiveDirectors is essential inprovidingunbiasedviews and impartiality to the Board’s deliberation and decision-making process. In addition, thenon-executivedirectorsensurethatmattersandissuesbroughttotheBoardarefullydiscussedandexamined, taking intoaccount the interestofall stakeholders in theGroupinorder toensuretheeffectivenessoftheIndependentDirectors.
In line with the Code, the tenure of an Independent Director shall not exceed nine (9) yearsconsecutively.Uponcompletionofthenine(9)years,anIndependentDirectormaycontinuetoserveontheBoardsubjecttohisredesignationasaNon-IndependentNon-ExecutiveDirectorshouldanIndependentDirectorberetainedafter9years,hisretentionmustbeapprovedbytheshareholders.
CORPORATE GOVERNANCE STATEMENT
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TheBoardhasnotappointedaSeniorIndependentDirectorasthereisnocombinationoroverlappingof roles between the current Chairman who is an Independent Non-Executive Director and theManagingDirectoroftheCompanyasthesetwo(2)positionsareheldbyseparateindividuals.
TherolesoftheIndependentNon-ExecutiveChairmanandtheManagingDirectorareseparatedwithcleardivisionofresponsibilitiesandthedecisionmakingprocessoftheBoardisbasedoncollectivedecisionswithoutany individualexercisinganyconsiderableconcentrationofpoweror influence.ToensurethatnoonepersondominatestheBoard,theBoard’scompositioniscomprisedofsix(6)Non-ExecutiveDirectorsoutofaBoardsizeofeight(8)Directorsofwhich,four(4)areIndependentNon-ExecutiveDirectorswhichensuresthatastrongelementofIndependenceispresent.
TheBoardtakesnotethattheCoderecommendsthattheChairmanoftheNominationCommitteeshouldbe theSenior IndependentDirector identifiedby theBoard,whichwill fromtimeto timereviewtherecommendationandmakethenecessaryappointmentasandwhenitdeemsfit.
TheCompanyalsoadoptsnon-discriminatorypolicyinemployingtalentstofulfillitshumanresource
needsatalllevelsincludingBoardespeciallyinensuringgenderdiversity.Presently,theBoardisoftheopinionthatthecurrentsizeandcompositionoftheBoardisappropriatetocommensuratethegroup’sbusinessskillrequirementandeffectivedecisionmaking.
iii. Board Meetings
ToensurethattheRayaGroupismanagedproperly,thecurrentBoardisscheduledtomeetatleastfour (4) times a year,with additionalmeetingsbeing convenedwhennecessary.Besides that, theBoardalsoapprovesmattersthroughthecirculationofDirector’CircularResolutioninaccordancewiththeArticlesofAssociationoftheCompany.
Duringthefinancialyearended31December2014,theBoardmetseven(7)times.ThedetailsoftheDirector’sattendancesattheBoardMeetingsduringtheirtenureinofficearesetoutbelow:-
No Name of Directors No of Meetings attended % during the time the Directors hold office
1. JeneralTanSriAbdulAzizBinZainal(Rtd) 5/7 72 IndependentNon-ExecutiveDirector (Resignedon27November2014)
2. Dato’IzhamBinYusoff 5/7 72 IndependentNon-ExecutiveDirector 3. Dato’MalekRadzuanBinSaharin 1/3 30 Non-IndependentNon-ExecutiveDirector (Resignedon18June2014)
4. DeepakJaikishanA/LJaikishanRewachand 3/3 100 ManagingDirector (Resignedon30May2014) 5. ArulampalamA/LSMariampillai 0/3 0 IndependentNon-ExecutiveDirector (Resignedon30May2014)
CORPORATE GOVERNANCE STATEMENT (Cont’d)
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No Name of Directors No of Meetings attended % during the time the Directors hold office 6. EzrulEhsanBinIsmail 4/4 100 ExecutiveDirector (Resignedon30June2014) 7. MohdShukriBinAbdullah 0/3 0 IndependentNon-ExecutiveDirector (Resignedon18June2014)
8. AbdulLatifBinAbdulRahim 7/7 100 Non-IndependentNon-ExecutiveDirector
9. RajeshA/LJaikishan 3/3 100 Non-IndependentNon-ExecutiveDirector (Resignedon30May2014) 10. MejarIsmailBinAhmad(Rtd) 6/7 86 Non-IndependentNon-ExecutiveDirector (Resignedon27November2014)
11. Mr.NareshKumarKukereja@LenderLalA/L 3/3 100 K.Lal IndependentNon-ExecutiveDirector (Resignedon30May2014) 12. Dato’TanSengHu 4/4 100 ManagingDirector (Appointedon19June2014)
13. MdYaakobBinMdShariff 4/4 100 IndependentDirector (Appointedon25June2014andsubsequently resignedon23March2015)
14. MohdFikryBinRahman 3/4 75 IndependentDirector (Appointedon18June2014)
15. ChenHianLoong 3/3 100 ExecutiveDirector (Appointedon30June2014) 16. YeeCheeSeng@YeeYen N/A Non-IndependentNon-ExecutiveDirector (Appointedon27January2015)
17. HoFookMeng N/A IndependentNon-ExecutiveDirector (Appointedon24March2015)
18. CaptTonyTanHan(ChenHan) N/A IndependentNon-ExecutiveDirector (Appointedon24March2015)
CORPORATE GOVERNANCE STATEMENT (Cont’d)
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CORPORATE GOVERNANCE STATEMENT (Cont’d)
iv. Supply of Information and Access to Advice TheBoardisprovidedwithcomprehensiveboardpapersonatimelymannerpriortoboardmeetings.
ThisistoensureandenablethemembersoftheBoardtodischargetheirdutiesandresponsibilitiescompetently in a well-informed manner. All members of the Board have unhindered access tothe advice and services of the Company Secretary, and where necessary, may seek independentprofessionaladvisersforadviceforthepurposeofdischargingtheirstatutoryandfiduciaryduties.
Alldirectorshave therightandduty tomake furtherenquirieswhere theyconsidernecessary. Inmostinstances,membersofSeniorManagementareinvitedtobeinattendanceatBoardmeetingstoprovideinsightandtofurnishclarificationonissuesthatmayberaisedbytheBoard.EveryDirectoralsohasunrestrictedaccesstoallinformationwithregardtotheactivitiesoftheRayaGroup.
v. Directors Training
AllDirectorshadattendedtheMandatoryAccreditationProgrammeforDirectorsofPublicListedCompanies (“MAP”)except thenewlyappointedDirectors i.eHoFookMengandTonyTanHan(ChenHan).TheywillattendtheMAPinduecoursepursuanttotheListingRequirementspendingregistrationwithBursatraSdnBhd.
vi. Re-election of Directors
InaccordancewiththeCompany’sArticlesofAssociation,one-third(1/3)ofthedirectorsshallretirefromoffice andbe eligible for re-election at eachAnnualGeneralMeeting andall directors shallretirefromofficeatleastonceineverythree(3)yearsbutshallbeeligibleforre-election.Directorsappointedduringtheyearwillbesubjecttoretirementandre-electionbyshareholdersintheAnnualGeneralMeeting.
Directorsoverseventy(70)yearsofagearerequiredtoretireandsubmitthemselvesforre-appointmentannuallyinaccordancewithSection129(6)oftheCompaniesAct,1965.
B. BOARD COMMITTEES
TheBoardhassetupthefollowingCommitteestoassisttheBoardindischargingtheirdutiesanddecisionmaking:-
(a) Audit Committee
TheexistingAuditCommitteecomprisesthree(3)membersasfollows:-
Chairman : MohdFikryBinRahman IndependentNon-ExecutiveDirector
Member : YeeCheeSeng@YeeYen Non-IndependentNon-ExecutiveDirector
: HoFookMeng IndependentNon-ExecutiveDirector
TheAuditCommitteeReportissetoutonpage19to24ofthisAnnualReport.
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(b) Nomination Committee
TheNominationCommitteecomprisesthefollowingmembers:-
Chairman : Dato’IzhamBinYusoff IndependentNon-ExecutiveDirector
Members : AbdulLatifBinAbdulRahim Non-IndependentNon-ExecutiveDirector : HoFookMeng IndependentNon-ExecutiveDirector
ThetermsofreferenceoftheNominationCommitteeareasfollows:-
• ToregularlyreviewtheBoardstructure,sizeandcomposition. • TorecommendcandidatesfortheapprovaloftheBoardtofillvacanciesintheBoard. • Toannuallyreviewtherequiredmixofskillsandexperienceandotherqualitiesandcompetencies
whichnon-executivedirectorsshouldbringtotheBoard. • Toannually assess the effectivenessof theBoardas awhole, the committeeof theBoardand
contributionsofeachindividualdirectoroftheBoard. • Identifyingandrecommendingdirectorswhoaretobeputforwardforretirementbyrotation. • ConsidergenderdiversitygenerallywhenmakingappointmentstotheBoard.
(c) Remuneration Committee
The Company has an established framework of principles to evaluate performance and rewardfor executive directors. Remuneration packages for the executive directors are formulated to becompetitive and realistic, emphasis being placed on performance, with aims to attract, motivateandretainexecutivedirectorsofhighcalibertotheGroup.Fornon-executivedirectors,thelevelofremunerationcommensuratewiththelevelofresponsibilitiesundertakenbythemfortheCompany.
TheRemunerationCommitteecomprisesthefollowingmembers:-
Chairman : Dato’IzhamBinYusoff IndependentNon-ExecutiveDirector
Members : AbdulLatifBinAbdulRahim Non-IndependentNon-ExecutiveDirector : HoFookMeng IndependentNon-ExecutiveDirector
ThetermofreferenceoftheRemunerationCommitteeareasfollows:-
• To review and determine, at least once annually, adjustments to the remuneration packageincludingbenefits-in-kindofeachexecutivedirector,takingintoaccounttheperformanceoftheindividual,theinflationpriceindexandwherenecessary,informationfromindependentsourcesonremunerationpackagesfortheequivalentjobsintheindustry.
• To review and determine the quantum of performance related bonuses, benefits-in-kind andEmployeeShareOptions,ifavailable,tobegiventotheexecutivedirectors.
• Toconsiderandexecutetherenewaloftheservicecontractofexecutivedirectorsasandwhendue,aswellastheservicecontractsandremunerationpackagesfornewlyappointedexecutivedirectorspriortotheirappointments.
CORPORATE GOVERNANCE STATEMENT (Cont’d)
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CORPORATE GOVERNANCE STATEMENT (Cont’d)
C. DIRECTORS’ REMUNERATION
The Directors are satisfied that the current level of remuneration is in line with the responsibilitiesexpected.
TheaggregateDirectors’remunerationpaidorpayabletoallDirectorsoftheCompanycategorisedintoappropriatecomponentsforthefinancialyearended31December2014areasfollows:-
Remuneration (RM’000) Non-Executive Executive Total Directors (“RM’000) Directors (RM’000) (RM’000) Salaries - - - Fees 84 - 84 Bonuses - - - Payrollbasedexpenses-EPF - - - MeetingAllowance - - - Benefits-in-kind - - - Total 84 - 84
Number of Director Range of Remuneration Non-Executive Executive Total
Directors Directors BelowRM50,000 - - - RM50,000–RM100,000 1 - 1 RM100,000–RM150,000 - - - RM150,000–RM200,000 - - -
D. RELATIONSHIP WITH SHAREHOLDERS
TheCompanymaintainsvariousmethodsofdisseminationofinformationimportanttoshareholders, stakeholdersandthepublicatlargethroughtimelyannouncementofevents,quarterlyannouncementof
financialresultsandproductinformationontheCompany’swebsite.
TheAnnualGeneralMeetingalsoprovidesanopportunityfortheshareholderstoseekandclarifyanyissuesrelevanttotheCompany.ShareholdersareencouragedtomeetandcommunicatewiththeBoardatAnnualGeneralMeetingsandtovoteonallresolutions.
E. ACCOUNTABILITY AND AUDIT
i. Financial Reporting
TheBoardaimstoprovideabalancedandunderstandableassessmentoftheGroup’sfinancialpositionandprospectsthroughtheannualreportaswellasquarterlyfinancialresultstoitsshareholders.
It is theBoard’s responsibility to ensure that the financial statements are prepared in accordancewiththeCompaniesAct,1965andtheapplicableapprovedaccountingstandardssetbyMalaysianAccountingStandardBoardsoastopresentabalancedandfairassessmentoftheGroup’sfinancialpositionandprospects.TheDirectorsarealsoresponsible forkeepingproperaccountingrecords,safeguardingtheassetsoftheCompanyandtakingreasonablestepstopreventandenabledetectionoffraudandotherirregularities.
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ii. Statement of Directors’ Responsibility in respect of the Financial Statements
TheMalaysianCompanyLawrequirestheDirectorstopreparefinancialstatementsforeachfinancialyear,whichgiveatrueandfairviewofthestateofaffairsoftheCompanyandtheresultsandcashflowoftheCompanyforthatperiod.
Inpreparingthosefinancialstatements,theDirectorsarerequiredto:-
a) Selectsuitableaccountingpoliciesandthenapplythemconsistently; b) Statewhetherapplicableaccountingstandardshavebeenfollowed; c) Makejudgmentsandestimatesthatarereasonableandprudent;and d) Preparethefinancialstatementsonagoingconcernbasisunlessitisinappropriatetopresume
thattheCompanywillcontinueinbusiness.
TheDirectorsareresponsibleforkeepingproperaccountingrecords,whichdisclosewithreasonableaccuracy, at any time, the financial position of the Company.TheDirectors are also responsibleforsafeguardingtheassetsoftheCompanyandfortakingreasonablestepsforthepreventionanddetectionoffraudandirregularities.
iii. Internal Control
TheBoardacknowledgesitsoverallresponsibilityformaintainingasoundsystemofinternalcontrol,whichencompassesriskmanagement,financial,organisational,operationalandcompliancecontrolsnecessary for the Group to achieve its objectives within an acceptable risk profile to safeguardshareholders’investmentandtheGroup’sassets.However,theBoardrecognizesthatsuchsystemisstructuredtomanageratherthaneliminatethepossibilityofencounteringriskoffailuretoachievecorporateobjectives.
TheStatementofRiskManagementandInternalControlsissetoutonpage25oftheAnnualReportprovidinganoverviewofthestateofinternalcontrolswithintheGroup.
iv. Relationships with Auditors TheBoardhasestablishedaformalandtransparentrelationshipwiththeauditor,Messrs.STYL&
AssociatesappointedbytheCompanyanditssubsidiarieswithinitsfold.
TheAuditCommittee,hasbeenaccordedtheauthoritytocommunicatedirectlywiththeexternalauditors.TheauditorsinturnareabletohighlightmatterswhichrequiretheattentionoftheBoardeffectivelytotheAuditCommitteeintermsofcompliancewiththeaccountingstandardsandotherrelatedregulatoryrequirements.
v. Corporate Social Responsibilities TheCompanydidnotundertakeanycorporatesocialresponsibilityactivitiesorpracticesduringthe
financialyearunderreview.
CORPORATE GOVERNANCE STATEMENT (Cont’d)
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TheAuditCommitteewasestablishedwiththeprimaryobjectivetoprovideassistancetotheBoardinfulfillingitsfiduciaryresponsibilitiesrelatingtothecorporategovernanceandpracticesfortheGroup,toimprovethebusinessefficiencyandenhancetheindependentroleofexternalandinternalauditors.
1. Composition of Audit Committee
TheexistingAuditCommitteecomprisesthree(3)membersasfollows:-
Chairman : MohdFikryBinRahman IndependentNon-ExecutiveDirector
Member : YeeCheeSeng@YeeYen Non-IndependentNon-ExecutiveDirector
: HoFookMeng IndependentNon-ExecutiveDirector
2. Terms Of Reference
Composition
TheAuditCommittee shall be appointedby theBoard fromamongst theirmembers,who fulfils thefollowingrequirements:-
a) TheAuditCommitteemustbecomposedofnofewerthanthree(3)members.IntheeventofanyvacancyintheAuditCommitteeresultinginthenon-complianceoftheabove,theCompanymustfillthevacancywithinthree(3)months.
b) AlltheAuditCommitteemembersmustbenon-executivedirectors,withamajorityofthembeingindependentdirectors.
c) AlltheAuditCommitteemembersmustbefinanciallyliterate,withatleastonemember:-
• mustbeamemberoftheMalaysianInstituteofAccountants;or • ifheisnotamemberoftheMalaysianInstituteofAccountants,hemusthaveatleastthree(3)
years’workingexperienceand:- • hemusthavepassedtheexaminationsspecifiedinPartIofthe1stScheduleoftheAccountants
Act1967;or • hemustbeamemberofoneoftheAssociationsofAccountantsspecifiedinPartIIof the1st
ScheduleoftheAccountantsAct1967;or • fulfilssuchotherrequirementsasprescribedorapprovedbytheExchange.
d) NoalternatedirectorshallbeappointedasamemberoftheAuditCommittee.
e) ThememberoftheAuditCommitteeshallelectaChairmanfromamongthemselveswhoshallbeanIndependentDirector.TheChairmanoftheAuditCommitteeshouldengageonacontinuousbasiswith seniormanagement, theheadof internalauditand theexternalauditors inorder tobekeptinformedofmattersaffectingtheCompany.
AUDIT COMMITTEE REPORT
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AllmembersoftheAuditCommittee,includingtheChairman,willholdofficeonlysolongastheyserveasDirectorsoftheCompany.TheBoardmustreviewthetermofofficeandperformanceoftheAuditCommitteeandeachofitsmembersatleastonceeverythree(3)yearstodeterminewhethertheAuditCommitteehascarriedoutitsdutiesinaccordancewithitstermsofreference.
Secretary of the Audit Committee
TheCompanySecretaryoftheCompanyshallbetheSecretaryoftheAuditCommittee.
Duties and Responsibilities of the Audit Committee
ThefollowingarethemaindutiesandresponsibilitiesoftheAuditCommitteecollectively:-
(a) ReviewthefollowingandreportthesametotheBoardoftheCompany:-
(i) overseetheCompany’sinternalcontrol; (ii) withtheexternalauditors,theauditplan; (iii) withtheexternalauditors,hisevaluationofthesystemofinternalcontrols; (iv) withtheexternalauditors,hisauditreport; (v) theassistancegivenby theemployeesof theCompany to theexternalauditorsand the internal
auditors; (vi) theadequacyofthescope,functions,competencyandresourcesoftheinternalauditfunctionsand
thatithasthenecessaryauthoritytocarryoutitswork (vii) theinternalauditprogramme,processes,theresultsoftheinternalauditprogramme,processesor
investigationundertakenandwhetherornotappropriateactionistakenontherecommendationsoftheinternalauditfunction;
(viii) thequarterlyresultsandyearendfinancialstatements,priortotheapprovalbytheBoard,focusingparticularlyon:-
• changesinorimplementationofmajoraccountingpolicychanges; • significantandunusualevents;and • compliancewithaccountingstandardsandotherlegalrequirements; (ix) anyrelatedpartytransactionandconflictofinterestsituationthatmayarisewithintheCompany
or group including any transaction, procedure or course of conduct that raises questions ofmanagementintegrity;
(x) anyletterofresignationfromtheexternalauditorsandanyquestionsofresignationordismissal;and
(xi) whetherthereisreason(supportedbygrounds)tobelievethattheCompany’sexternalauditorisnotsuitableforre-appointment;
(b) Oversee the Company’s internal control structure to ensure operational effectiveness and efficiency,reduceriskofinaccuratefinancialreporting,protecttheCompany’sassetsfrommisappropriationandencouragelegalandregulatorycompliance;
(c) AssisttheBoardinidentifyingtheprincipalrisksintheachievementoftheCompany’sobjectivesandensuringtheimplementationofappropriatesystemstomanagetheserisks;
(d) Recommend to theBoardon theappointmentandre-appointmentof theexternalauditorsand theirauditfee,aftertakingintoconsiderationtheindependenceandobjectivityoftheexternalauditorsandthecosteffectivenessoftheaudit;
(e) Discusswiththeexternalauditorsbeforetheauditcommencesthenatureandscopeof theauditandensureco-ordinationwheremorethanoneauditfirmisinvolved;
AUDIT COMMITTEE REPORT (Cont’d)
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(f) Discuss problems and reservations arising from the audits and anymatter the auditorsmaywish todiscussintheabsenceofthemanagementwherenecessary;
(g) Reviewtheexternalauditor’smanagementletterandmanagement’sresponsetherein;
(h) Inrelationtotheinternalauditfunction:-
a. reviewtheadequacyofthescope,functionsandresourcesoftheinternalauditfunctionandthatithasthenecessaryauthoritytocarryoutitswork;
b. reviewtheinternalauditprogrammeandresultsoftheinternalauditprocessand,wherenecessary,ensurethatappropriateactionsaretakenontherecommendationsoftheinternalauditfunction;
c. reviewanyappraisalorassessmentoftheperformanceofmembersoftheinternalauditfunction; d. approveanyappointmentofterminationofseniorstaffmembersoftheinternalauditfunction;and e. take cognizance of resignations of internal audit staffmembers and provide the resigning staff
memberanopportunitytosubmithisreasonsforresigning;
(i) Considerthemajorfindingsofinternalinvestigationsandmanagement’sresponse;
(j) ToreviewtheeffectivenessoftheinternalcontrolsandriskmanagementprocessesoftheCompany;and
(k) ConsiderothermattersasdefinedbytheBoard.
Rights of the Audit Committee
Incarryingoutitsdutiesandresponsibilities,theAuditCommitteewill:-
• havetheauthoritytoinvestigateanymatterwithinitstermsofreference;• havetheresourceswhicharerequiredtoperformitsduties;• havefullandunrestrictedaccesstoanyinformationpertainingtotheCompany;• havedirectcommunicationchannelswiththeexternalauditorsandperson(s)carryingouttheinternal
auditfunctionoractivity;• beabletoobtainindependentprofessionalorotheradviceandtoinviteoutsiderswithrelevantexperience
andexpertisetoattendtheAuditCommitteemeeting(ifrequired)andtobrieftheAuditCommittee;and• be able to convenemeetingswith the external auditors, the internal auditors or both, excluding the
attendanceofotherdirectorsandemployeesoftheCompany,wheneverdeemednecessary.
Conduct of Meetings
a) TheAuditCommitteewillmeetatleastfour(4)timesineachfinancialyearalthoughadditionalmeetingsmaybecalledatanytime,atthediscretionoftheChairmanoftheAuditCommittee.
b) Thequorumshallconsistofamajorityofindependentcommitteemembersandshallnotbelessthantwo(2).
c) RecommendationstotheAuditCommitteearesubmittedtotheBoardforapproval.
d) The Company Secretary shall be in attendance at each Audit Committee meeting and record theproceedingsofthemeetingthereat.
AUDIT COMMITTEE REPORT (Cont’d)
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e) MinutesofeachmeetingshallbekeptaspartofthestatutoryrecordoftheCompanyuponconfirmationbytheAuditCommitteeandacopyshallbedistributedtoeachmemberoftheBoard.
f) TheManagingDirectorandotherofficersmaybeinvitedtoattendwheretheirpresenceareconsideredappropriateasdeterminedbytheAuditCommitteeChairman.
g) Theinternalauditorsand/orexternalauditorshavetherighttoappearandbeheardatanymeetingoftheAuditCommittee.
h) Upontherequestoftheinternalauditorsand/orexternalauditors,theAuditCommitteeChairmanshallalsoconveneameetingoftheAuditCommitteetoconsideranymattertheauditor(s)believesshouldbebroughttotheattentionoftheBoardortheshareholders.
i) TheAuditCommitteemustbeabletoconvenemeetingswithexternalauditorswithoutthepresenceoftheexecutiveboardmembersandmanagementatleasttwiceayearandwheneverdeemednecessary.
j) Where the Audit Committee is of the view that amatter reported by it to the Board has not beensatisfactorilyresolvedresultinginabreachorBursaMalaysiaSecuritiesBerhadrequirements,theAuditCommitteemustpromptlyreportsuchmattertoBursaMalaysiaSecuritiesBerhad.
k) The attendance at any particularAuditCommitteemeeting by other directors and employees of theCompanyshallbeattheAuditCommittee’sinvitationanddiscretionandmustbespecifictotherelevantmeeting.
SUMMARY OF ACTIVITIES
TheAuditCommittee is scheduled tomeet at least four (4) times a year,with additionalmeetings beingconvenedwhennecessary.
Detailsoftheattendanceduringthefinancialyearended31December2014areasfollows:-
No Name of Directors No of Meetings attended during % the time the Directors hold office 1. EncikMohdShukriBinAbdullah 3/3 100 IndependentNon-ExecutiveDirector (Resignedon18June2014)
2. Dato’MalekRadzuanBinSaharin 1/3 30 Non-IndependentNon-ExecutiveDirector (Resignedon18June2014)
3. Mr.ArulampalamA/LSMariampillai 0/3 0 IndependentNon-ExecutiveDirector (Resignedon30May2014)
AUDIT COMMITTEE REPORT (Cont’d)
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AUDIT COMMITTEE REPORT (Cont’d)
No Name of Directors No of Meetings attended during % the time the Directors hold office
4. Mr.NareshKumarKukereja 3/3 100 @LenderLalA/LK.Lal IndependentNon-ExecutiveDirector (Resignedon30May2014)
5. MohdFikryBinRahman 2/2 100 IndependentNon-ExecutiveDirector (Appointedon18June2014)
6. MdYaakobBinMdShariff 2/2 100 IndependentDirector (Appointedon25June2014andsubsequently resignedon23March2015)
7. YeeCheeSeng@YeeYen N/A Non-IndependentNon-ExecutiveDirector (Appointedon27January2015) 8. HoFookMeng N/A IndependentNon-ExecutiveDirector (Appointedon24March2015)
Duringtheyearunderreview,thefollowingweretheactivitiesoftheAuditCommittee:-
(a) Reviewed the quarterly financial results and ensured that the financial reporting and disclosurerequirementsofrelevantauthoritieshadbeencompliedwith,focusingparticularlyon:-
(1)changesinorimplementationofmajoraccountingpoliciesandpractices; (2)thegoingconcernassumption; (3)significantandunusualevent;and
(4) compliancewithaccountingstandardsandotherlegalpoliciesandrequirements.
(b) Reviewedtherelatedpartytransactionsandconflictofinterestsituation,ifany,withintheCompanyorGroupincludinganytransactions,proceduresorcourseofconductthatraisedquestionsofmanagementintegrityintheordinarycourseofbusiness.
(c) Reviewedtheauditstrategyandplanoftheexternalauditors.
(d) Meetingswithexternalauditors.
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INTERNAL AUDIT FUNCTION
TheInternalAuditfunctionisoutsourcedtoMessrs.ChungWanLing&Co.
Duringthefinancialyearunderreview,theInternalAuditorshadassessedtheeffectivenessoftheinternalcontrolenvironmentoftheAccountsandFinancefunctionoftheCompanyandtheGroup.AllthefindingsraisedbytheInternalAuditorshavebeenappropriatelyaddressedbymanagement.
TheAuditCommitteeChairmanhasdirectaccesstotheInternalAuditors.TheymeetregularlytodiscussinternalcontrolandauditrelatedissueswithoutthepresenceofthemanagementandtheExternalAuditors.
In discharging its duties and responsibilities, the InternalAuditors receives instruction from and reportsdirectlytotheAuditCommittee.
ThefeeinrespectoftheInternalAuditfunctionforthefinancialyearended31December2014isapproximatelyRM6,000.00.
AUDIT COMMITTEE REPORT (Cont’d)
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INTRODUCTION TheBoardiscommittedtomaintainingasoundsystemofinternalcontroloftheCompanyandispleasedtoprovidethefollowingstatement,whichoutlinesthenatureandscopeofinternalcontroloftheCompanyduringtheyear.
THE BOARD’S RESPONSIBILITIES
The Board of Directors recognizes the importance of sound internal controls and risk management insafeguardingtheassetsoftheGroup.However,suchsystemsaredesignedtomanageratherthaneliminatethebusinessrisktotally.Itshouldbenotedthatanysystemcouldprovideonlyreasonableandnotabsoluteassuranceagainstmaterialmisstatementorfraud. TheGrouphasinplaceanon-goingprocesstoidentify,evaluate,monitorandmanageanysignificantrisksthroughtheinternalcontrolssetoutinordertoattainareasonableassurancethatbusinessobjectiveshavebeenmet.ThesecontrolsareregularlyreviewedbytheBoardandsubjecttocontinuousimprovement.
THE RISK MANAGEMENT PROCESS
Apartfromfinancialcontrols,theGroup’ssystemofinternalcontrolsalsocoveroperationalandcompliancecontrolsandmostimportantly,riskmanagement.Aspartoftheriskmanagementprocess,theBoardassistedbytheAuditCommittee,iscontinuouslyidentifying,assessingandmanagingsignificantbusinessrisksfacedbytheGroupthroughoutthefinancialyear.
TheprocesswillberegularlyreviewedbytheBoardthroughtheAuditCommitteeandisinaccordancewiththeguidanceascontainedintheInternalControlGuidelines.
THE INTERNAL CONTROL PROCESS
TheotherkeyfeaturesoftheGroup’sinternalcontrolsystemincludethefollowing: • An organization structure with defined lines of responsibility and appropriate reporting structure
includingproperapprovalandauthorizationlimitforapprovingcapitalexpenditureandexpenseswithintheGroup;
• The Audit Committee had appointed an outsourced independent professional internal audit serviceprovidertodischargetheinternalauditfunctionwhichperformsregularandsystematicreviewoftheinternalcontrolstoassessandprovidesufficientassuranceontheeffectivenessofthesystemsofinternalcontrolandtohighlightsignificantrisksimpactingtheGroupwithrecommendationforimprovement;and
• TheAuditCommitteewillregularlyreviewreportsbytheindependentprofessionalinternalauditserviceproviderandconductsannualassessmentontheadequacyofthefunction’sscopeofworkandresources.
TheGroupcontinuestotakemeasurestoenhanceandstrengthentheinternalcontrolenvironment.
TheBoardisoftheviewthatthereisnosignificantbreakdownorweaknessesinthesystemofinternalcontroloftheGroupthatmayhavematerialimpactagainsttheoperationsoftheGroupforthefinancialyearended31December2014.
STATEMENT ON RISK MANAGEMENT & INTERNAL CONTROL
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1. UTILISATION OF PROCEEDS
InSeptember2014,atotalof11,855,580newordinarysharesofRM0.10eachwereissuedpursuanttothePrivatePlacementatanissuepriceofRM0.16inaccordancewiththeShareholders’MandateatthelastAnnualGeneralMeetingandtotalproceedsofRM1,896,892.00hadbeenraisedfromthesaidPrivatePlacementexerciseoftheCompany.
Asat30April2015, theCompany hadutilized theaboveproceeds for theexpenses incurred for the
placementexpensesamountingtoRM133,000andbalanceofRM1,763,892.00forworkingcapital.
2. SHARE BUYBACK
Duringthefinancialyear,theCompanydidnotenterintoanysharebuybacktransaction.
3. OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES
Duringthefinancialyear,nooption,warrantsorconvertiblesecuritieswereissuedbytheCompany.
4. DEPOSITORY RECEIPT PROGRAMME
Duringthefinancialyear,theCompanydidnotsponsoranyDepositoryReceiptprogramme.
5. SANCTIONS AND/OR PENALTIES
During thefinancialyear, therewerenosanctionsand/orpenalties imposedon theCompanyand itssubsidiaries,directorsormanagementbytherelevantregulatorybodies.
6. NON-AUDIT FEES Therewerenonon-auditfeespaidtotheexternalauditorsbytheGroupforthefinancialyear.
7. PROFIT ESTIMATE, FORECAST OR PROJECTION
Therewasnoprofitestimate,forecastorprojectionissuedbytheCompanyand/oritssubsidiariesforthefinancialyear.
8. VARIATION OF RESULTS
Thevariancebetweentheauditedresults(netprofitaftertax)andtheunauditedresultsannouncedislessthan10%.
9. PROFIT GUARANTEE
TherewasnoprofitguaranteeissuedbytheCompanyand/oritssubsidiariesforthefinancialyear.
10. MATERIAL CONTRACTS
TherewerenomaterialcontractsenteredintobytheCompanyanditssubsidiarieswhichinvolvedthedirectorsandsubstantialshareholders’interestduringthefinancialyearended31December2014.
11. REVALUATION POLICY ON LANDED PROPERTIES
TheGroup’spolicyonrevaluationisdisclosedinNote4(f)tothefinancialStatements.
ADDITIONAL COMPLIANCE STATEMENT
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STATEMENTS
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ThedirectorsherebysubmittheirreporttogetherwiththeauditedfinancialstatementsoftheGroupandoftheCompanyforthefinancialyearended31stDecember2014. PRINCIPAL ACTIVITIES TheCompanyisprincipallyengagedininvestmentholdingandtheprovisionofmanagementservices. TheprincipalactivitiesofthesubsidiariesareasdisclosedinNote14totheFinancialStatements. There have been no significant changes in the nature of the principal activities of the Company and itssubsidiariesduringthefinancialyear. FINANCIAL RESULTS TheresultsoftheoperationsoftheGroupandoftheCompanyforthefinancialyearareasfollows: GROUP COMPANY RM RM Netlossforthefinancialyear (1,531,636) (393,830) Attributable to: OwnersoftheCompany (1,532,601) (393,830)Non-Controllinginterests 965 - (1,531,636) (393,830) Intheopinionofthedirectors,theresultsofoperationsoftheGroupandoftheCompanyduringthefinancialyearwerenotsubstantiallyaffectedbyanyitem,transactionoreventofamaterialandunusualnatureotherthantheexceptionalitemsasdisclosedintheFinancialStatements. DIVIDENDS Nodividendhasbeenpaidordeclaredby theCompany since theendof thepreviousfinancialyear.Thedirectorsalsodonotrecommendthepaymentofanydividendinrespectofthecurrentfinancialyear. RESERVES AND PROVISIONS TherewerenomaterialtransferstoorfromreservesorprovisionsduringthefinancialyearotherthanthosedisclosedintheFinancialStatements. ISSUE OF SHARES AND DEBENTURES
AsapprovedbytheshareholdersattheAnnualGeneralMeetingheldon30thJune2014,theissuedandpaid-upsharecapitalof theCompanywas increasedfromRM11,855,580toRM13,041,138duringthefinancialyearbytheallotmentof11,855,580newordinarysharesofRM0.10eachintheCompanyatanissuepriceofRM0.16pernewordinaryshareforcashbywayofprivateplacement. TheresultantsharepremiumarisingfromthesharesissuedduringthefinancialyearofRM711,335hasbeencredited to the sharepremiumaccount.All thenewordinary shares issuedrankparipassuwith the thenexistingordinarysharesoftheCompany. TheCompanyhasnotissuedanydebenturesduringthefinancialyear.
DIRECTORS’ REPORT
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SHARE OPTIONS NooptionshavebeengrantedbytheCompanytoanypartiesduringthefinancialyeartotakeupunissuedsharesoftheCompany. NoshareshavebeenissuedduringthefinancialyearbyvirtueoftheexerciseofanyoptionstotakeupunissuedsharesoftheCompany.Asattheendofthefinancialyear,therewerenounissuedsharesoftheCompanyunderoptions. DIRECTORS Thenamesofthedirectorsinofficesincethedateofthelastreport: Dato’IzhamBinYusoffAbdulLatifBinAbdulRahim MohdFikryBinRahman (appointedon18.6.2014)MdYaakobBinMdShariff (appointedon25.6.2014,resignedon23.3.2015) Dato’TanSengHu (appointedon19.6.2014)ChenHianLoong (appointedon30.6.2014)YeeCheeSeng@YeeYen (appointedon27.1.2015)HoFookMeng (appointedon24.3.2015)TonyTanHan(ChenHan) (appointedon24.3.2015)ArulampalamA/LSMariampillai (resignedon30.5.2014) DeepakJaikishanA/LJaikishanRewachand (resignedon30.5.2014) RajeshA/LJaikishan (resignedon30.5.2014) NareshKumarKukeraja@LenderLalA/LK.Lal (resignedon30.5.2014)MohdShukriBinAbdullah (resignedon18.6.2014)EzrulEhsanBinIsmail (resignedon30.6.2014)Dato’MalekRadzuanBinSaharin (resignedon18.6.2014) MejarIsmailBinAhmad(B) (resignedon27.11.2014)JeneralTanSriAbdulAzizBinZainal(B) (resignedon27.11.2014) DIRECTORS’ BENEFITS Sincetheendofthepreviousfinancialyear,noneofthedirectorsoftheCompanyhasreceivedorbecomeentitled to receive anybenefits (other than thebenefits included in the aggregate amountof emolumentsreceivedordueandreceivablebydirectorsasdisclosedinthefinancialstatementsorthefixedsalaryoffull-timeemployeesoftheCompany)byreasonofacontractmadebytheCompanyorarelatedcorporationwiththedirectororwithafirmofwhichthedirectorisamember,orwithacompanyinwhichthedirectorhasasubstantialfinancialinterest.
Neitherduringnorat theendof thefinancialyear,was theCompanyaparty toanyarrangementswhoseobjectistoenablethedirectorstoacquirebenefitsbymeansoftheacquisitionofsharesinordebenturesoftheCompanyoranyotherbodycorporate.
DIRECTORS’ INTERESTS TheshareholdingsintheCompanyandintherelatedcompaniesofthosewhoweredirectorsattheendofthefinancialyear,asrecordedintheRegisterofDirectors’ShareholdingskeptbytheCompanyunderSection134oftheCompaniesAct,1965,areasfollows:
DIRECTORS’ REPORT (Cont’d)
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NumberofordinarysharesofRM0.10each Balanceas at1.1.2014/ dateof Balanceasat appointment Bought Sold 31.12.2014Shares in the Company
Direct interest
Dato’TanSengHu 5,000,000 850,000 - 5,850,000ChenHianLoong 5,500,000 - - 5,500,000 MdYaakobBinMdShariff 5,196,800 - - 5,196,800
Indirect interest Dato’TanSengHu 11,000,000 - - 11,000,000 Byvirtueoftheabovedirectors’interestinthesharesoftheCompany,theabovementioneddirectorsarealsodeemedtohaveaninterestinthesharesofthesubsidiariestotheextentthattheCompanyhasaninterest. NoneoftheotherdirectorsinofficeattheendofthefinancialyearheldsharesorhadbeneficialinterestinthesharesoftheCompanyoritsrelatedcompaniesduringoratthebeginningandendofthefinancialyear. OTHER STATUTORY INFORMATION
a) Before the statements of profit or loss and other comprehensive income and statements of financialpositionoftheGroupandoftheCompanyweremadeout,thedirectorstookreasonablesteps:
(i) toascertainthatproperactionhadbeentaken inrelationto thewritingoffofbaddebtsandthemakingofallowancefordoubtfuldebtsandsatisfiedthemselvesthatallknownbaddebtshadbeenwrittenoffandthatadequateallowancehadbeenmadefordoubtfuldebts;and
(ii) toensurethatanycurrentassetswhichwereunlikelytorealiseintheordinarycourseofbusinesstheirvaluesasshowninthefinancialstatementsoftheGroupandoftheCompanyhavebeenwrittendowntoanamountwhichtheymightbeexpectedtorealise.
Asat31stDecember2014,theaccumulatedlossesoftheGroupandoftheCompanywereRM17,879,465andRM8,338,046respectivelywhicharosefromlossessustainedincurrentandprioryears.AsmentionedinNote4a)totheFinancialStatements,thefinancialstatementshavebeenpreparedonthebasisofaccountingprinciplesapplicabletoagoingconcernwhichpresumesthatfutureoperatingresultswillimproveandconsequently,therealisationofassetsandsettlementofliabilitieswilloccurintheordinarycourseofbusiness.
b) Otherthanasstated,atthedateofthisreport,thedirectorsarenotawareofanycircumstances:
(i) whichwouldrendertheamountwrittenoffforbaddebtsortheamountoftheallowancefordoubtfuldebts inthefinancialstatementsoftheGroupandoftheCompanyinadequatetoanysubstantialextent;or
(ii) whichwouldrenderthevaluesattributabletocurrentassetsinthefinancialstatementsoftheGroupandoftheCompanymisleading;or
DIRECTORS’ REPORT (Cont’d)
RAYA INTERNATIONAL BERHAD 2014ANNUALREPORT
31
(iii)whichhavearisenwhichrenderadherencetotheexistingmethodofvaluationofassetsorliabilitiesoftheGroupandoftheCompanymisleadingorinappropriate.
c) Atthedateofthisreport,theredoesnotexist:
(i) anychargeontheassetsoftheGroupandoftheCompanywhichhasarisensincetheendofthefinancialyearwhichsecurestheliabilityofanyotherperson;or
(ii) anycontingent liabilityof theGroupandof theCompanywhichhas arisen since the endof thefinancialyear.
d) NocontingentliabilityorotherliabilityoftheGroupandoftheCompanyhasbecomeenforceable,oris likely tobecomeenforceablewithin theperiodof twelvemonthsafter theendof thefinancialyearwhichintheopinionofthedirectors,willormaysubstantiallyaffecttheabilityoftheGroupandoftheCompanytomeettheirobligationsasandwhentheyfalldueotherthanthoseasdisclosedinNote29totheFinancialStatements.
e) Atthedateofthisreport,thedirectorsarenotawareofanycircumstancesnototherwisedealtwithinthisreportorthefinancialstatementsoftheGroupandoftheCompanywhichwouldrenderanyamountstatedinthefinancialstatementsmisleading.
f) Intheopinionofthedirectors,therehasnotarisenintheintervalbetweentheendofthefinancialyearandthedateofthisreportanyitem,transactionoreventofamaterialandunusualnaturelikelytoaffectsubstantiallytheresultsoftheoperationsoftheGroupandoftheCompanyforthefinancialyearinwhichthisreportismade.
AUDITORS
Theauditors,STYLAssociates,haveindicatedtheirwillingnesstocontinueinoffice.
SignedonbehalfoftheBoardinaccordancewitharesolutionofthedirectors,
DATO’ TAN SENG HU CHEN HIAN LOONG Director Director KualaLumpur Date:28thApril2015
DIRECTORS’ REPORT (Cont’d)
RAYA INTERNATIONAL BERHAD2014 ANNUALREPORT
32
We,DATO’TANSENGHUandCHENHIANLOONG,beingtwoof thedirectorsofRayaInternationalBerhad,doherebystatethat,intheopinionofthedirectors,theaccompanyingfinancialstatementsaredrawnupinaccordancewithMalaysianFinancialReportingStandards,InternationalFinancialReportingStandardsandtherequirementsoftheCompaniesAct,1965inMalaysiasoastogiveatrueandfairviewofthefinancialpositionoftheGroupandoftheCompanyasat31stDecember2014andoftheirfinancialperformanceandcashflowsoftheGroupandoftheCompanyfortheyearthenended. ThesupplementaryinformationsetoutinNote31hasbeenpreparedinallmaterialrespects,inaccordancewithGuidanceonSpecialMatterNo.1DeterminationofRealisedandUnrealisedProfitsorLosses in theContextofDisclosurePursuanttoBursaMalaysiaSecuritiesBerhadListingRequirements,asissuedbytheMalaysianInstituteofAccountants.
SignedonbehalfoftheBoardinaccordancewitharesolutionofthedirectors, DATO’ TAN SENG HU CHEN HIAN LOONG Director Director KualaLumpur
Date:28thApril2015 STATUTORY DECLARATION I,DATO’TANSENGHU,being thedirectorprimarily responsible for thefinancialmanagementofRayaInternationalBerhad,dosolemnlyandsincerelydeclarethattheaccompanyingfinancialstatementsare,inmyopinion,correctandImakethissolemndeclarationconscientiouslybelievingthesametobetrue,andbyvirtueoftheprovisionsoftheStatutoryDeclarationsAct,1960.
DATO’ TAN SENG HU
Subscribedandsolemnlydeclaredbythe abovenamedDATO’TANSENGHU, atPetalingJaya,on28thApril2015 Beforeme: S.ArokiadassA.M.N No.B460
STATEMENT BY DIRECTORS
RAYA INTERNATIONAL BERHAD 2014ANNUALREPORT
33
REPORT ON THE FINANCIAL STATEMENTS Wehaveaudited thefinancial statementsofRaya InternationalBerhad,whichcomprise the statementsoffinancialpositionasat31stDecember2014oftheGroupandoftheCompany,andthestatementsofprofitorlossandothercomprehensiveincome,statementsofchangesinequityandstatementsofcashflowsoftheGroupandoftheCompanyfortheyearthenended,andasummaryofsignificantaccountingpoliciesandotherexplanatoryinformation,assetoutonpages35to79.
Directors’ Responsibility for the Financial Statements
ThedirectorsoftheCompanyareresponsibleforthepreparationoffinancialstatementssoastogiveatrueandfairviewinaccordancewithMalaysianFinancialReportingStandards,InternationalFinancialReportingStandardsandtherequirementsoftheCompaniesAct,1965inMalaysia.Thedirectorsarealsoresponsibleforsuchinternalcontrolasthedirectorsdetermineisnecessarytoenablethepreparationoffinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror.
Auditors’ Responsibility
Ourresponsibilityistoexpressanopiniononthesefinancialstatementsbasedonouraudit.WeconductedourauditinaccordancewithapprovedstandardsonauditinginMalaysia.Thosestandardsrequirethatwecomplywithethicalrequirementsandplanandperformtheaudittoobtainreasonableassuranceaboutwhetherthefinancialstatementsarefreefrommaterialmisstatement. Anauditinvolvesperformingprocedurestoobtainauditevidenceabouttheamountsanddisclosuresinthefinancial statements.Theproceduresselecteddependonour judgement, includingtheassessmentofrisksofmaterialmisstatementof thefinancial statements,whetherdue to fraudor error. Inmaking those riskassessments,weconsiderinternalcontrolrelevanttotheentity’spreparationoffinancialstatementsthatgiveatrueandfairviewinordertodesignauditproceduresthatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheentity’sinternalcontrol.Anauditalsoincludesevaluatingtheappropriatenessofaccountingpoliciesusedandthereasonablenessofaccountingestimatesmadebythedirectors,aswellasevaluatingtheoverallpresentationofthefinancialstatements.
Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopinion.
Opinion Inouropinion,thefinancialstatementsgiveatrueandfairviewofthefinancialpositionoftheGroupandof theCompanyasat31stDecember2014andof theirfinancialperformanceandcashflows for theyearthenendedinaccordancewithMalaysianFinancialReportingStandards,InternationalFinancialReportingStandardsandtherequirementsoftheCompaniesAct,1965inMalaysia.
INDEPENDENT AUDITORS’ REPORTtothemembersofRayaInternationalBerhad
RAYA INTERNATIONAL BERHAD2014 ANNUALREPORT
34
INDEPENDENT AUDITORS’ REPORT (Cont’d)
Emphasis of Matter
Withoutqualifyingouropinion,wedrawattentiontoNote4a)totheFinancialStatementswhichindicatesthatthe accumulated losses of theGroup and of theCompany as at 31stDecember 2014wereRM17,879,465 andRM8,338,046respectively.ThesuccessfulturnaroundplanfortheGroupandtheCompanyisoneofthekeyfactorsforthesustainabilityoftheGroup’sandoftheCompany’soperationsandfortheGroupandtheCompanytocontinueasgoingconcernsintheforeseeablefuture.Thevalidityofthegoingconcernassumptionisthereforedependentonthesuccessfulimplementationoftheturnaroundplaninthefuture.Intheeventthegoingconcernassumptionisnolongervalid,theGroupandtheCompanymaynotbeabletodischargeitsliabilitiesinthenormalcourseofbusinessandadjustmentsmayhavetobemadetoreflectsuchsituation.ThefinancialstatementsoftheGroupandoftheCompanydonotincludeanyadjustmentrelatingtotheamountsandclassificationofassetsandliabilitiesthatmightbenecessaryshouldtheGroupandtheCompanybeunabletocontinueasgoingconcerns.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
InaccordancewiththerequirementsoftheCompaniesAct,1965inMalaysia,wealsoreportthefollowing:
(a) Inouropinion,theaccountingandotherrecordsandtheregistersrequiredbytheActtobekeptbytheCompanyhavebeenproperlykeptinaccordancewiththeprovisionsoftheAct.
(b) Wehaveconsideredthefinancialstatementsandtheauditors’reportsofallthesubsidiariesofwhichwehavenotactedasauditors,whichareindicatedinNote14totheFinancialStatements.
(c) WearesatisfiedthatthefinancialstatementsofthesubsidiariesthathavebeenconsolidatedwiththeCompany’sfinancialstatementsareinformandcontentappropriateandproperforthepurposesofthepreparationoftheconsolidatedfinancialstatementsoftheGroupandwehavereceivedsatisfactoryinformationandexplanationsrequiredbyusforthosepurposes.
(d) Theauditors’reportsonthefinancialstatementsofthesubsidiariesdidnotcontainanyqualificationoranyadversecommentmadeunderSection174(3)oftheActotherthanasdisclosedinNote14totheFinancialStatements.
OTHER REPORTING RESPONSIBILITIES ThesupplementaryinformationsetoutinNote31isdisclosedtomeettherequirementofBursaMalaysiaSecuritiesBerhadandisnotpartofthefinancialstatements.ThedirectorsareresponsibleforthepreparationofthesupplementaryinformationinaccordancewithGuidanceonSpecialMatterNo.1,DeterminationofRealisedandUnrealisedProfitsorLossesintheContextofDisclosurePursuanttoBursaMalaysiaSecuritiesBerhadListingRequirements,asissuedbytheMalaysianInstituteofAccountants(“MIAGuidance”)andthedirectiveofBursaMalaysiaSecuritiesBerhad.Inouropinion,thesupplementaryinformationisprepared,inallmaterialrespects,inaccordancewiththeMIAGuidanceandthedirectiveofBursaMalaysiaSecuritiesBerhad.
OTHER MATTERS ThisreportismadesolelytothemembersoftheCompany,asabody,inaccordancewithSection174oftheCompaniesAct,1965inMalaysiaandfornootherpurpose.Wedonotassumeresponsibilitytoanyotherpersonforthecontentofthisreport. STYL ASSOCIATES FirmNo.AF1929 CharteredAccountants
SI CHAY BENG ApprovalNo:1200/08/16(J) CharteredAccountant Date:28thApril2015 PetalingJaya
RAYA INTERNATIONAL BERHAD 2014ANNUALREPORT
35
GROUP COMPANY 2014 2013 2014 2013 Note RM RM RM RM Revenue 6 2,935,475 2,424,165 - -Otheroperatingincome 7 265,815 834,842 121,529 831,000Rawmaterialsandconsumablesused (224,783) (625,279) - -Changesininventoriesoffinishedgoods (5,314) (169,023) - -Purchasesandotherdirectcosts (2,564,889) (373,950) - -Staffcosts 8 (56,290) (175,689) (56,290) (175,689)Depreciationofproperty, plantandequipment (331,397) (563,155) (12,161) (8,412)Directors’remuneration 9 (84,000) (51,931) (84,000) (51,931)Otheroperatingexpenses 7 (834,402) (452,925) (362,908) (220,453)
Profit/(Loss)fromoperations (899,785) 847,055 (393,830) 374,515
Financecosts 10 (491,066) (495,767) - -
Profit/(Loss)beforetax (1,390,851) 351,288 (393,830) 374,515
Incometaxexpense 11 (140,785) (262,123) - -
Profit/(Loss)forthefinancialyear (1,531,636) 89,165 (393,830) 374,515
Othercomprehensiveincome,netoftax: Itemthatwillnotbereclassifiedsubsequently toprofitorloss Gainonrevaluationof property,plantandequipment - 173,755 - -
Totalcomprehensiveincome/(loss)forthefinancialyear (1,531,636) 262,920 (393,830) 374,515
Profit/(Loss)attributableto: OwnersoftheCompany (1,532,601) 89,165 (393,830) 374,515 Non-Controllinginterests 965 - - - (1,531,636) 89,165 (393,830) 374,515Totalcomprehensiveincome/(loss)attributableto: OwnersoftheCompany (1,532,601) 262,920 (393,830) 374,515 Non-Controllinginterests 965 - - - (1,531,636) 262,920 (393,830) 374,515Earnings/(Loss) per share attributable to owners of the Company: Basic(sen) 12 (1.26) 0.08Diluted(sen) 12 N/A N/A
TheaccompanyingNotesformanintegralpartoftheFinancialStatements.
STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMEFORTHEYEARENDED31STDECEMBER2014
RAYA INTERNATIONAL BERHAD2014 ANNUALREPORT
36
GROUP COMPANY 2014 2013 2014 2013 Note RM RM RM RMASSETSNon-Current Assets Property,plantandequipment 13 206,661 8,626,058 130,570 11,881Investmentsinsubsidiaries 14 - - 599,800 599,800Deferredtaxassets 15 52,991 195,383 - -Goodwillonconsolidation 16 95,527 95,527 - -TotalNon-CurrentAssets 355,179 8,916,968 730,370 611,681
Current AssetsInventories 17 745,240 975,337 - -Tradereceivables 18 4,400,025 2,851,135 - -Otherreceivablesand prepaidexpenses 18 66,320 485,355 640 59,675Taxrecoverable 14,988 42,810 - -Amountowingbysubsidiaries 14 - - 12,471,309 11,925,058Cashandbankbalances 612,906 45,162 599,196 15,514 5,839,479 4,399,799 13,071,145 12,000,247Assetheldforsale 19 8,196,984 - - -TotalCurrentAssets 14,036,463 4,399,799 13,071,145 12,000,247
TotalAssets 14,391,642 13,316,767 13,801,515 12,611,928
EQUITY AND LIABILITIES Capital and Reserves Sharecapital 20 13,041,138 11,855,580 13,041,138 11,855,580Reserves 21 (6,325,790) (5,432,190) 487,942 242,771EquityAttributabletoOwners oftheCompany 6,715,348 6,423,390 13,529,080 12,098,351Non-Controllinginterests 2,882 1,917 - -TotalEquity 6,718,230 6,425,307 13,529,080 12,098,351
Non-Current Liabilities Financeleaseliabilities 22 - 17,612 - -Termloans 23 3,821,184 3,963,472 - -Deferredtaxliabilities 15 - 3,629 - -TotalNon-CurrentLiabilities 3,821,184 3,984,713 - -
Current Liabilities Tradepayables 24 2,551,508 686,663 - -Otherpayablesand accruedexpenses 24 393,061 370,556 248,693 264,694Bankborrowings 25 903,761 996,865 - -Amountowingtodirectors 26 - 850,787 - 247,007Amountowingtosubsidiaries 14 - - 21,866 -Taxliabilities 3,898 1,876 1,876 1,876TotalCurrentLiabilities 3,852,228 2,906,747 272,435 513,577TotalLiabilities 7,673,412 6,891,460 272,435 513,577
TotalEquityandLiabilities 14,391,642 13,316,767 13,801,515 12,611,928
TheaccompanyingNotesformanintegralpartoftheFinancialStatements.
STATEMENTS OF FINANCIAL POSITIONASAT31STDECEMBER2014
RAYA INTERNATIONAL BERHAD 2014ANNUALREPORT
37
CO
NSO
LIDAT
ED S
TATE
MEN
T O
F C
HA
NG
ES IN
EQ
UIT
YFO
RTH
EYE
AREN
DED
31STDEC
EMBE
R2014
<-----------------Attributableto
OwnersoftheCom
pany----------------->
<-------Non
Distrib
utable------->
Share
Accum
ulated
Share
Revaluation
Non
-Con
trollin
gTo
tal
capital
loss
prem
ium
reserve
Total
interests
equity
RM
RM
RM
RM
RM
RM
RM
GRO
UP
Ba
lanceasat1stJanu
ary2013
11,855,580
(16,436,029)
8,186,987
2,553,932
6,160,470
-6,160,470
Profi
tforth
eyear
-89,165
--
89,165
-89,165
Otherco
mprehensiv
eincomefortheyear
neto
ftax
--
-173,755
173,755
-173,755
Totalcom
prehensiv
eincomeforthe
financialyear
-89,165
-173,755
262,920
-262,920
Transactionwith
OwnersoftheCom
pany
:
Acquisitionofsu
bsidiary
--
--
-1,917
1,917
Ba
lanceasat31stD
ecem
ber2
013
11,855,580
(16,346,864)
8,186,987
2,727,687
6,423,390
1,917
6,425,307
Profi
t/(Lo
ss)forth
eyearre
presentin
g
totalcom
prehensiv
eincome/(lo
ss)forth
e
financialyear
-(1,532,601)
--
(1,532,601)
965
(1,531,636)
Transactionwith
OwnersoftheCom
pany
:
Issuanceofsharesd
uringthefin
ancialyear
1,185,558
-
711,335
-1,896,893
-1,896,893
Shareissueexp
enses
--
(72,334)
-(72,334)
-(72,334)
Totaltransactio
nswith
OwnersoftheCom
pany
1,185,558
-639,001
-1,824,559
-1,824,559
Balanceasat31stD
ecem
ber2
014
13,041,138
(17,879,465)
8,825,988
2,727,687
6,715,348
2,882
6,718,230
TheaccompanyingNotesfo
rmanintegralparto
ftheFinancialStatements.
37
RAYA INTERNATIONAL BERHAD2014 ANNUALREPORT
38
STAT
EMEN
T O
F C
HA
NG
ES IN
EQ
UIT
Y
<---------Attributableto
OwnersoftheCom
pany--------->
Non
Distrib
utable-
Share
Accum
ulated
Share
Total
capital
loss
prem
ium
equity
RM
RM
RM
RM
CO
MPA
NY
Balanceasat1stJanu
ary2013
11,855,580
(8,318,731)
8,186,987
11,723,836
Profi
tforth
eyearre
presentin
gtotalcom
prehensiv
eincomefortheyear
-374,515
-374,515
Balanceasat31stD
ecem
ber2
013
11,855,580
(7,944,216)
8,186,987
12,098,351
Lossfo
rtheyearrepresentingtotalcom
prehensiv
elossfo
rtheyear
-(393,830)
-(393,830)
Transactionswith
OwnersoftheCom
pany
:
Issuanceofsharesd
uringthefin
ancialyear
1,185,558
-711,335
1,896,893
Shareissueexp
enses
--
(72,334)
(72,334)
Totaltransactio
nswith
OwnersoftheCom
pany
1,185,558
-639,001
1,824,559
Balanceasat31stD
ecem
ber2
014
13,041,138
(8,338,046)
8,825,988
13,529,080
TheaccompanyingNotesfo
rmanintegralparto
ftheFinancialStatements.
38
RAYA INTERNATIONAL BERHAD 2014ANNUALREPORT
39
STAT
EMEN
T O
F C
HA
NG
ES IN
EQ
UIT
Y
<---------Attributableto
OwnersoftheCom
pany--------->
Non
Distrib
utable-
Share
Accum
ulated
Share
Total
capital
loss
prem
ium
equity
RM
RM
RM
RM
CO
MPA
NY
Balanceasat1stJanu
ary2013
11,855,580
(8,318,731)
8,186,987
11,723,836
Profi
tforth
eyearre
presentin
gtotalcom
prehensiv
eincomefortheyear
-374,515
-374,515
Balanceasat31stD
ecem
ber2
013
11,855,580
(7,944,216)
8,186,987
12,098,351
Lossfo
rtheyearrepresentingtotalcom
prehensiv
elossfo
rtheyear
-(393,830)
-(393,830)
Transactionswith
OwnersoftheCom
pany
:
Issuanceofsharesd
uringthefin
ancialyear
1,185,558
-711,335
1,896,893
Shareissueexp
enses
--
(72,334)
(72,334)
Totaltransactio
nswith
OwnersoftheCom
pany
1,185,558
-639,001
1,824,559
Balanceasat31stD
ecem
ber2
014
13,041,138
(8,338,046)
8,825,988
13,529,080
TheaccompanyingNotesfo
rmanintegralparto
ftheFinancialStatements.
GROUP COMPANY 2014 2013 2014 2013 RM RM RM RM CASH FLOWS FROM OPERATING ACTIVITIES Profit/(Loss)beforetax (1,390,851) 351,288 (393,830) 374,515Adjustmentsfor: Baddebtswrittenoff - 507 - - Depreciationofproperty,plantand equipment 331,397 563,155 12,161 8,412 Impairmentlossonreceivables - 156,575 - - Inventorieswrittendown - 107,706 - - Inventorieswrittenoff 8,659 - - - Exceptionalitems: Depositswrittenoff 400,000 - - - Waiverofshareholder’sadvance (265,815) (831,000) (121,529) (831,000) Reversalofimpairmentlossontrade receivables (540) - - - Financecosts 491,066 495,767 - -Operatingprofit/(loss)beforeworking capitalchanges (426,084) 843,998 (503,198) (448,073)Changesinworkingcapital: Decreaseininventories 221,438 686,596 - - Increaseintradereceivables (1,548,350) (1,770,822) - - (Increase)/Decreaseinotherreceivables andprepaidexpenses 19,035 122,528 59,035 (7,485) (Increase)/Decreaseinamountowing bysubsidiaries - - (546,251) 382,673 Increaseintradepayables 1,864,845 369,381 - - Increase/(Decrease)inotherpayablesand accruedexpenses 22,505 (1,062,033) (16,001) (873,909) Increase/(Decrease)in amountowingtodirectors (584,972) 1,681,787 (125,478) 1,078,007 Increaseinamountowingtosubsidiaries - - 21,866 -CashGeneratedFrom/(UsedIn)Operations (431,583) 871,435 (1,110,027) 131,213 Interestpaid (491,066) (495,767) - - Taxrefunded 27,822 - - -Net Cash From/(Used In) Operating Activities (894,827) 375,668 (1,110,027) 131,213
(Forward)
STATEMENTS OF CASH FLOWSFORTHEYEARENDED31STDECEMBER2014
RAYA INTERNATIONAL BERHAD2014 ANNUALREPORT
40
STATEMENTS OF CASH FLOWS (Cont’d)
GROUP COMPANY 2014 2013 2014 2013 RM RM RM RM CASH FLOWS FROM INVESTING ACTIVITIES Purchaseofproperty,plantandequipment (108,984) (1,100) (130,850) (1,100) Acquisitionofinvestmentin subsidiary(Note14) - (92,010) - (100,000)Net Cash Used In Investing Activities (108,984) (93,110) (130,850) (101,100) CASH FLOWS FROM FINANCING ACTIVITIES Repaymentoftermloans (105,532) (57,348) - - Repaymentoffinanceleaseobligations (44,042) (59,471) - - Proceedsfromissuanceofshares 1,896,893 - 1,896,893 - Paymentofshareissueexpenses (72,334) - (72,334) -Net Cash From/(Used In) Financing Activities 1,674,985 (116,819) 1,824,559 - NET INCREASE IN CASH AND CASH EQUIVALENTS 671,174 165,739 583,682 30,113 CASH AND CASH EQUIVALENTS BROUGHT FORWARD (751,487) (917,226) 15,514 (14,599) CASH AND CASH EQUIVALENTS CARRIED FORWARD (80,313) (751,487) 599,196 15,514 Cashandcashequivalentscarried forwardconsistof: Cashandbankbalances 612,906 45,162 599,196 15,514 Bankoverdraft(Note25) (693,219) (796,649) - - (80,313) (751,487) 599,196 15,514
TheaccompanyingNotesformanintegralpartoftheFinancialStatements.
RAYA INTERNATIONAL BERHAD 2014ANNUALREPORT
41
NOTES TO THE FINANCIAL STATEMENTS
1) GENERAL INFORMATION
TheCompanyisapubliclimitedliabilitycompany,incorporatedanddomiciledinMalaysia,andislistedontheACEMarketofBursaMalaysiaSecuritiesBerhad.
TheCompanyisprincipallyengagedininvestmentholdingandtheprovisionofmanagementservices.TheprincipalactivitiesofthesubsidiariesareasdisclosedinNote14totheFinancialStatements.TherehavebeennosignificantchangesinthenatureoftheprincipalactivitiesoftheCompanyanditssubsidiariesduringthefinancialyear.
Theregisteredofficeof theCompany is locatedatNo:149A,149B,151B,PersiaranRajaMudaMusa,42000PortKlang,SelangorDarulEhsan.
TheprincipalplaceofbusinessoftheCompanyislocatedatNo:6-1PlazaDanau2,Jalan5/109F,TamanDanauDesa,58100KualaLumpur.
ThefinancialstatementsarepresentedinRinggitMalaysia(RM).
ThefinancialstatementshavebeenauthorisedbytheBoardofDirectorsforissuanceon28thApril2015.
2) BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS
The financial statements of theGroup and of the Company have been prepared in accordance withMalaysianFinancialReportingStandards(MFRS),InternationalFinancialReportingStandards(IFRS)andtherequirementsoftheCompaniesAct,1965inMalaysia.
Atthebeginningofthecurrentfinancialyear,theGroupandtheCompanyadoptedthenewandrevisedMFRSswhicharemandatoryforfinancialperiodbeginningonorafter1stJanuary2014.
Adoption of Amendments to MFRSs and Issues Committee (“IC”) Interpretations
TheaccountingpoliciesadoptedbytheGroupandtheCompanyareconsistentwiththoseadoptedinthepreviousyear,exceptasfollows:
AmendmentstoMFRS10 ConsolidatedFinancialStatements:InvestmentEntities AmendmentstoMFRS12 DisclosureofInterestinOtherEntities:InvestmentEntities
AmendmentstoMFRS127 SeparateFinancialStatements:InvestmentEntities AmendmentstoMFRS132 FinancialInstruments:Presentation-OffsettingFinancial
AssetsandFinancialLiabilities AmendmentstoMFRS136 ImpairmentofAssets-RecoverableAmountDisclosures
forNon-FinancialAssets AmendmentstoMFRS139 NovationofDerivativesandContinuationofHedgeAccounting ICInterpretation21 Levies
The adoption of the above standards and interpretations did not have any significant impact on thefinancialstatementsoftheGroupandoftheCompany.
RAYA INTERNATIONAL BERHAD2014 ANNUALREPORT
42
Standards issued but not yet effective
Asatthedateofauthorisationofthesefinancialstatements,thefollowingStandards,AmendmentsandAnnualImprovementshavebeenissuedbytheMalaysianAccountingStandardsBoard(“MASB”)butarenotyeteffectiveandhavenotbeenadoptedbytheGroupandtheCompany: Effectivefor
annualperiod beginningonor
after AmendmentstoMFRS119 DefinedBenefitPlans:EmployeeContribution 1stJuly2014 AnnualImprovementstoMFRSs2010-2012Cycle 1stJuly2014 AnnualImprovementstoMFRSs2011-2013Cycle 1stJuly2014 MFRS14 RegulatoryDeferralAccounts 1stJanuary2016 AmendmentstoMFRS11 AccountingforAcquisitionsofInterestsin JointOperations 1stJanuary2016 AmendmentstoMFRS127 EquityMethodinSeparateFinancialStatements 1stJanuary2016 AmendmentstoMFRS10 SaleorContributionofAssetsbetweenanInvestor 1stJanuary2016 andMFRS128 anditsAssociateorJointVenture
AmendmentstoMFRS116 ClarificationofAcceptableMethodsofDepreciation 1stJanuary2016 andMFRS138 andAmortisation
AmendmentstoMFRS116 Agriculture:BearerPlants 1stJanuary2016 andMFRS141
AnnualImprovementstoMFRSs2012-2014Cycle 1stJanuary2016 AmendmentstoMFRS101 DisclosureInitiative 1stJanuary2016 AmendmentstoMFRS10,
InvestmentEntities:ApplyingtheConsolidationException MFRS12andMFRS128 1stJanuary2016
MFRS15 RevenuefromContractswithCustomers 1stJanuary2017 MFRS9 FinancialInstruments(IFRS9issuedbyIASB 1stJanuary2018 inJuly2014)
TheGroupandtheCompanywilladopttheabovepronouncementswhentheybecomeeffectiveinthe
respectivefinancialperiods.ThesepronouncementsarenotexpectedtohaveanyeffecttothefinancialstatementsoftheGroupandoftheCompanyupontheirinitialapplication,exceptasdescribedbelow:
MFRS 9 Financial Instruments
InNovember2014,MASBissuedthecompleteversionofMFRS9replacingMFRS139.MFRS9retainsbutsimplifiesthemixedmeasurementmodelinMFRS139andestablishesthreeprimarymeasurementcategoriesforfinancialassets:amortisedcost,fairvaluethroughprofitorlossandfairvaluethroughothercomprehensiveincome(“OCI”).Thebasisofclassificationdependsontheentity’sbusinessmodelandthecontractualcashflowcharacteristicsofthefinancialasset.InvestmentsinequityinstrumentsarealwaysmeasuredatfairvaluethroughprofitorlosswithanirrevocableoptionatinceptiontopresentchangesinfairvalueinOCI(providedtheinstrumentisnotheldfortrading).Adebtinstrumentismeasuredatamortisedcostonlyiftheentityisholdingittocollectcontractualcashflowsandthecashflowsrepresentprincipalandinterest. Forliabilities,thestandardretainsmostoftheMFRS139requirements.Theseincludeamortisedcostaccountingformostfinancialliabilities,withbifurcationofembeddedderivatives.Themainchangeisthat,incaseswherethefairvalueoptionistakenforfinancialliabilities,thepartofafairvaluechangedue toanentity’sowncredit risk is recorded inothercomprehensive incomerather than the incomestatement,unlessthiscreatesanaccountingmismatch.
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ThereisnowanewexpectedcreditlossesmodelonimpairmentforallfinancialassetsthatreplacestheincurredlossimpairmentmodelusedinMFRS139.Theexpectedcreditlossesmodelisforward-lookingandeliminatestheneedforatriggereventtohaveoccurredbeforecreditlossesarerecognised.
TheGroup and theCompany are currently assessing the impactof the adoptionof this standards inrelationtothenewrequirementsforclassification,measurementandimpairment.
3) FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The operations of theGroup are subject to a variety of financial risks, includingmarket risk (foreigncurrencyexchange riskand interest rate risk), credit risk, and liquidity risk.TheGrouphasadoptedafinancialriskmanagementframeworkwiththeprincipalobjectiveofeffectivelymanagingtheserisksandminimisinganypotentialadverseeffectsonthefinancialperformanceoftheGroupandoftheCompany.
Market risk
Marketriskistheriskthatchangesinmarketprices,suchasforeigncurrencyexchangerisk,interestrateriskandotherpriceswillaffecttheGroup’sfinancialpositionandcashflows.
TheGrouphasinplacepoliciestomanageitscompetitiverisksfromitscompetitorsinprovidingbetteralternativesintermsofbetterservices.
(i) Interest rate risk
InterestrateriskistheriskthatthefairvalueorfuturecashflowsoftheGroup’sfinancialinstrumentswillfluctuatebecauseofchangesinmarketinterestrates.
TheGroup’svariablerateborrowingsareexposedtoariskofchangeincashflowsduetochangesininterestrates.TheGroup’sinvestmentinfinancialassetsaremainlyshortterminnatureandmostlyplacedinfinancialdeposits.
ChangesininterestratesarenotexpectedtohaveasignificantimpactontheGroup’sprofitorloss.
Cashflowsensitivityanalysisforvariablerateinstruments
An increaseof100basispointat thereportingdatewouldhave increase in lossbefore taxby theamountshownbelowandadecreasewouldhaveanequalbutoppositeeffect.Thisanalysisassumesthatallothervariables,remainconstant.
GROUP RM
Increaseinlossbeforetax 40,884 Credit risk
CreditriskistheriskofafinanciallosstotheGroupifacustomerorcounterpartytoafinancialinstrument
fails tomeet itscontractualobligations.TheGroup’sexposuretocreditriskarisesprincipally fromitsreceivables fromcustomers.TheCompany’s exposure to credit risk arises principally from loans andadvancestosubsidiary.
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Managementhasacreditpolicyinplaceandtheexposuretocreditriskismonitoredonanongoingbasis.Asattheendofthereportingperiod,themaximumexposuretocreditriskarisingfromreceivablesisrepresentedbythecarryingamountsinthestatementsoffinancialposition.
Managementhastakenreasonablestepstoensurethatreceivablesthatareneitherpastduenorimpairedaremeasuredattheirrealisablevalues.AsignificantportionofthesereceivablesareregularcustomersthathavebeentransactingwiththeGroup.TheGroupusesageinganalysistomonitorthecreditqualityofthereceivables.Anyreceivableshavingsignificantbalancespastduemorethan120days,whicharedeemedtohavehighercreditrisk,aremonitoredindividually.
Theageinganalysisoftradereceivablesasattheendofthereportingperiodareasfollows:
GROUP 2014 2013 RM RM
Neitherpastduenorimpaired 2,703,028 812,345 Pastdue31-120daysnotimpaired - 344,482 Pastduemorethan120daysnotimpaired 1,696,996 1,694,308 1,696,996 2,038,790 Impaired 2,796,566 2,861,602 7,196,590 5,712,737 i) Receivables that are neither past due nor impaired
Trade receivables that are neither past due nor impaired are creditworthy receivables with good
paymentrecordswiththeGroup.
NoneoftheGroup’stradereceivablesthatareneitherpastduenorimpairedhavebeenrenegotiatedduringthefinancialyear.
ii)Receivables that are past due but not impaired
TheGrouphastradereceivablesamountingtoRM1,696,996(2013:RM2,038,790)thatispastdueatthereportingdatebutnotimpaired.
Thesereceivablesareunsecured.Managementisconfidentthatthesereceivablesarerecoverableastheseaccountsarestillactive.
iii)Receivables that are impaired The Group’s trade receivables and the movement of the allowance accounts used to record the
impairmentisasfollow: GROUP 2014 2013 RM RM Tradereceivables-Norminalamount 2,796,565 2,861,602 Allowancefordoubtfuldebts (2,796,565) (2,861,602) - -
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
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Themovementsintheallowanceforimpairmentlossesofreceivablesduringthefinancialyearwere: GROUP 2014 2013 RM RM Asatbeginningofyear 2,861,602 2,769,746 Baddebtswrittenoff (64,497) - Impairmentlossrecognised - 91,856 Reversalofimpairmentloss (540) - Asatendofyear 2,796,565 2,861,602
Liquidity risk
LiquidityriskistheriskthattheGroupwillnotbeabletomeetitsfinancialobligationsasandwhentheyfalldue.
TheGrouppractisesprudentliquidityriskmanagementtominimisethemismatchoffinancialassetsandliabilitiesandtomaintainsufficientfundsforcontingentfundingrequirementofworkingcapital.
The table below summaries the maturity profile of the Group’s and the Company’s liabilities at thereportingdatebasedoncontractualundiscountedrepaymentobligations.
Contractual Ondemand Carrying undiscounted orwithin Twotofive Morethan
amount cashflows oneyear years fiveyears RM RM RM RM RM GROUP 2014
Financial liabilities Tradepayables 2,551,508 2,551,508 2,551,508 - -
Otherpayables 255,749 255,749 255,749 - - Termloans 4,031,726 3,821,184 210,542 820,881 2,789,761 6,838,983 6,628,441 3,017,799 820,881 2,789,761 2013
Financial liabilities Tradepayables 686,663 686,663 686,663 - -
Otherpayables 231,838 231,838 231,838 - - Amountowingtodirectors 850,787 850,787 850,787 - - Financeleaseliabilities 44,042 56,992 32,646 24,346 - Termloans 4,137,258 3,963,472 173,786 912,999 2,876,687 5,950,588 5,789,752 1,975,720 937,345 2,876,687
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
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Contractual Ondemand Carrying undiscounted orwithin Twotofive
amount cashflows oneyear years RM RM RM RM
COMPANY
2014 Financial liabilities Otherpayables 169,322 169,322 169,322 -
Amountowingtosubsidiaries 21,866 21,866 21,866 - 191,188 191,188 191,188 - 2013
Financial liabilities Otherpayables 150,735 150,735 150,735 -
Amountowingtodirectors 247,007 247,007 247,007 - 397,742 397,742 397,742 -
Capital Risk Management
TheprimaryobjectiveoftheGroup’scapitalmanagementistosafeguardtheGroup’sabilitytocontinueasagoingconcern,andtomaintainanoptimalcapitalstructuresoastoprovidereturnsforshareholders.
TheGroupmanages itscapital structureandmakesadjustments to it in lightofchanges ineconomicconditions.Tomaintainoradjustthecapitalstructure,theGroupmayadjustthedividendpaymenttoshareholders,returncapitaltoshareholdersorissuenewshares.Nochangesweremadeintheobjectives,policiesorprocessescomparedtothepreviousfinancialyear.
TheGroupisnotsubjecttoanyexternallyimposedcapitalrequirements.
Thedebt-to-equityratiosasat31stDecember2014andasat31stDecember2013wereasfollows:
GROUP 2014 2013 RM RM
Totalborrowings 4,724,945 4,977,949 Less:Cashandcashequivalents (612,906) (45,162) Netdebt 4,112,039 4,932,787 Totalequity 6,718,230 6,425,307
Debt-to-equityratio 0.61 0.77
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
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4) SIGNIFICANT ACCOUNTING POLICIES
a) Basis of Accounting
Thefinancialstatementsarepreparedunderthehistoricalcostconventionunlessotherwiseindicatedintheaccountingpoliciesbelowandexceptforcertainnon-currentassetsthataremeasuredatrevaluedamounts.Thefinancialstatementsarealsopreparedonthebasisofaccountingprinciplesapplicabletoagoing-concern.Asat31stDecember2014,theGroup’sandtheCompany’saccumulatedlosseswereRM17,879,465andRM8,338,046 respectively.Thesuccessful turnaroundplan for theGroupandtheCompanyisoneofthekeyfactorsforthesustainabilityoftheGroup’sandoftheCompany’soperationsand for theGroupand theCompany tocontinueasgoingconcerns in the foreseeablefuture.The validity of the going concerns assumption is therefore dependent on the successfulimplementationoftheturnaroundplaninthefuture.Intheeventthegoingconcernassumptionisnolongervalid,theGroupandtheCompanymaynotbeabletodischargeitsliabilitiesinthenormalcourseofbusinessandadjustmentsmayhavetobemadetoreflectsuchsituation.
Historicalcostisgenerallybasedonthefairvalueoftheconsiderationgiveninexchangeforassets.Fairvalueisthepricethatwouldbereceivedtosellanassetorpaidtotransferaliabilityinanorderlytransactionbetweenmarketparticipantsatthemeasurementdate,regardlessofwhetherthatpriceisdirectlyobservableorestimatedusinganothervaluation technique. Inestimating the fairvalueofanassetora liability, theGrouptakes intoaccount thecharacteristicsof theassetor liability ifmarketparticipantswouldtakethosecharacteristicsintoaccountwhenpricingtheassetorliabilityatthemeasurementdate.
Inaddition,forfinancialreportingpurposes,fairvaluemeasurementsarecategorisedintoLevel1,2or3basedonthedegreetowhichtheinputstothefairvaluemeasurementsareobservableandthesignificanceof the inputs to the fairvaluemeasurement in itsentirety,whicharedescribedasfollows:
(i) Level1inputsarequotedprices(unadjusted)inactivemarketsforidenticalassetsorliabilitiesthattheentitycanaccessatthemeasurementdate;
(ii) Level2areinputs,otherthanquotedpricesincludedwithinLevel1,thatareobservablefortheassetorliability,eitherdirectlyorindirectly;and
(iii)Level3inputsareunobservableinputsfortheassetorliability.
b) Revenue Recognition
Revenueisrecognisedwhenitisprobablethattheeconomicbenefitsassociatedwiththetransactionwill flow to the enterprise and the amount of the revenue can bemeasured reliably. Revenue ismeasuredatthefairvalueofconsiderationreceivedorreceivable,netofreturns,allowancesandtradediscounts.
Gross dividend income from investment is recognised when the right to received payment isestablished. Management fee, administrative charges, rental income and interest income arerecognisedonaccrualbasis,takingintoaccounttheeffectiveyieldonasset.
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c) Employee Benefits
(i) Shorttermbenefits
Wages,salaries,bonusesandsocialsecuritycontributionsarerecognisedasanexpenseintheyearinwhichassociatedservicesarerenderedbyemployeesoftheGroup.Shorttermaccumulatingcompensatedabsencessuchaspaidannualleavearerecognisedwhenservicesarerenderedbyemployeesthatincreasetheirentitlementtofuturecompensatedabsences,andshorttermnon-accumulatingcompensatedabsencessuchassickleavearerecognisedwhentheabsencesoccur.
(ii) Definedcontributionsplans
As required by law, companies inMalaysiamake contributions to the state pension scheme,EmployeesProvidentFund.Suchcontributionsarerecognisedasanexpenseinprofitorlossasincurred.
d) Foreign Currency Conversion
(i) FunctionalandPresentationCurrency
TheindividualfinancialstatementsofeachentityintheGrouparemeasuredusingtheprimaryeconomicenvironmentinwhichtheentityoperates(“thefunctionalcurrency”).Theconsolidatedfinancial statements are presented in Ringgit Malaysia (RM), which is also the Company’sfunctionalcurrency.
(ii) ForeignCurrencyTransactions
Foreigncurrencytransactionsaretranslatedintothefunctionalcurrencyusingtheexchangeratesprevailingatthedatesofthetransactions.Foreignexchangegainsandlossesresultingfromthesettlementofsuchtransactionsandfromthetranslationatyearendexchangeratesofmonetaryassetsandliabilitiesdenominatedinforeigncurrenciesarerecognisedinprofitorloss.
e) Income Taxes
(i) Currenttax
Currenttaxassetsandliabilitiesaremeasuredattheamountexpectedtoberecoveredfromorpaidtothetaxationauthorities.Thetaxratesandtaxlawsusedtocomputetheamountarethosethatareenactedorsubstantiallyenactedbythefinancialyearend.
Currenttaxesarerecognisedinprofitorloss,excepttotheextentthatthetaxrelatestoitemsrecognisedoutsideprofitorloss,eitherinothercomprehensiveincomeordirectlyinequity.
(ii) Deferredtax
Deferredtaxisrecognisedontemporarydifferencesbetweenthecarryingamountsofassetsandliabilitiesinthefinancialstatementsandthecorrespondingtaxbasesusedinthecomputationof taxable profit. Deferred tax liabilities are generally recognised for all taxable temporarydifferences.Deferredtaxassetsaregenerallyrecognisedforalldeductibletemporarydifferences,unusedtaxlossesandunusedtaxcreditstotheextentthatitisprobablethattaxableprofitwillbeavailableagainstwhichthosedeductibletemporarydifferences,unusedtaxlossesandunusedtaxcreditscanbeutilised.
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Thecarryingamountofdeferredtaxassetsisreviewedattheendofeachreportingperiodandreducedtotheextentthatitisnolongerprobablethatsufficienttaxableprofitswillbeavailabletoallowallorpartoftheassettoberecovered.
Deferredtaxassetsandliabilitiesaremeasuredatthetaxratesthatareexpectedtoapplyintheperiodinwhichtheliabilityissettledortheassetrealised,basedontaxrates(andtaxlaws)thathavebeenenactedorsubstantivelyenactedbytheendofthereportingperiod.Themeasurementofdeferred tax liabilities andassets reflects the tax consequences thatwould follow from themanner inwhich theGroupand theCompanyexpect, at theendof the reportingperiod, torecoverorsettlethecarryingamountofitsassetsandliabilities.
Deferred taxassetsand liabilitiesareoffsetwhenthere isa legallyenforceableright tosetoffcurrenttaxassetsagainstcurrenttaxliabilitiesandwhentheyrelatetoincometaxesleviedbythesametaxationauthorityandtheGroupandtheCompanyintendtosettleitscurrenttaxassetsandliabilitiesonanetbasis.
f) Property, Plant and Equipment
Allitemsofproperty,plantandequipmentareinitiallyrecordedatcost.Thecostofanitemofproperty,plant and equipment is recognised as an asset if, andonly if, it is probable that future economicbenefitsassociatedwiththeitemwillflowtotheGroupandthecostoftheitemcanbemeasuredreliably.
Subsequent costs are included in theasset’s carryingamountor recognisedas a separate asset, asappropriate, onlywhen it is probable that future economic benefits associatedwith the itemwillflowto theGroupand thecostof the itemcanbemeasuredreliably.Thecarryingamountof thereplacedpartisderecognised.Allotherrepairsandmaintenancearechargedtoprofitorlossduringthefinancialyearinwhichtheyareincurred.
Subsequent to recognition, property, plant and equipment are stated at cost less accumulateddepreciationandanyaccumulatedimpairmentlosses.
Freeholdlandandbuildingarestatedatvaluationandarerevaluedatregularintervalsofatleastonceineverythreeyearsbythedirectorsbasedonthevaluationreportsofindependentprofessionalvaluersusingthe“openmarketvalueonexistinguse”basiswithadditionalvaluationintheinterveningyearswheremarketconditionsindicatethatthecarryingvaluesoftherevaluedassetsdiffermateriallyfromthemarketvalue.
An increase in the carryingamount arising fromrevaluationofproperty,plant andequipment iscreditedtotherevaluationreserveaccountasrevaluationsurplus.Anydeficitarisingfromrevaluationis charged against the revaluation reserve account to the extent of a previous surplusheld in therevaluationreserveaccountforthesameasset.Inallothercases,adecreaseincarryingamountischargedtoprofitorloss.Anincreaseinrevaluationdirectlyrelatedtoapreviousdecreaseincarryingamountforthatsameassetthatwasrecognisedasanexpense,iscreditedtoprofitorlosstotheextentthatitoffsetsthepreviouslyrecordeddecrease.
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Freeholdlandisnotdepreciatedasithasaninfinitelife.Depreciationofproperty,plantandequipment,otherthanrenovation-in-progresswhichisnotdepreciated,iscalculatedtowriteoffthecostoftheproperty,plantandequipmentonastraight-linebasisovertheexpectedusefullivesoftheproperty,plantandequipmentconcerned.Theannualdepreciationratesusedareasfollows:
%
Freeholdbuildingandrenovation 2-10 Furniture,fittingsandotherequipment 15 Toolsandequipment 15 Motorvehicles 20 Computers 15 Officeequipment 15 The carrying values of property, plant and equipment are reviewed for impairment when events
or change in circumstances indicate that the carryingvaluemaynotbe recoverable.The residualvalues,usefullivesanddepreciationmethodsarereviewedateachfinancialyearend,andadjustedprospectively,ifappropriate.
Anitemofproperty,plantandequipmentisderecognisedupondisposalorwhennofutureeconomicbenefitsareexpectedfromitsuseordisposal.Gainor lossarisingfromthedisposalofanasset isdeterminedasthedifferencebetweentheestimatednetdisposalproceedandthecarryingamountoftheasset,andisrecognisedinprofitorloss.
g) Subsidiaries and Basis of Consolidation
TheconsolidatedfinancialstatementscomprisethefinancialstatementsoftheCompanyandentitiescontrolledbytheCompany.ControlisachievedwhentheGroup:
(i) haspowerovertheinvestee;
(ii) isexposed,orhasrights,tovariablereturnsfromitsinvolvementwiththeinvestee;and
(iii)hastheabilitytouseitspowertoaffectitsreturns.
WhentheGrouphaslessthanamajorityofthevotingorsimilarrightsofaninvestee,theGroupconsidersallrelevant factsandcircumstances inassessingwhether ithaspowerover the investee,including:
(i) thecontractualarrangementwiththeothervoteholdersoftheinvestee;
(ii) rightsarisingfromothercontractualarrangements;and
(iii)theGroup’svotingrightsandpotentialvotingrights.
SubsidiariesarefullyconsolidatedfromthedateonwhichcontrolistransferredtotheGroup.Theyaredeconsolidatedfromthedatethatcontrolceases.Specifically,incomeandexpensesofasubsidiaryacquiredordisposedofduringtheyearareincludedintheconsolidatedstatementofprofitorlossandother comprehensive income from thedate theGroupgains control until thedatewhen theGroupceasestocontrolthesubsidiary.
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ProfitorlossandeachcomponentofothercomprehensiveincomeareattributedtotheownersoftheCompanyand to thenon-controlling interests.Total comprehensive incomeof subsidiaries isattributedtotheownersoftheGroupandtothenon-controllinginterestsevenifthisresultsinthenon-controllinginterestshavingadeficitbalance.
When necessary, adjustments aremade to the financial statements of subsidiaries to bring theiraccounting policies into line with the Group’s accounting policies. Inter-company transactions,balances,incomeandexpensesontransactionsbetweenGroupcompaniesareeliminated.
Changes in the Group’s ownership interests in existing subsidiaries
Changes in theGroup’sownership interests in subsidiaries thatdonot result in theGroup losingcontrolareaccountedforasequitytransactions.ThecarryingamountsoftheGroup’sinterestsandthe non-controlling interests are adjusted to reflect the changes in their relative interests in thesubsidiaries.Anydifferencebetweentheamountbywhichthenon-controllinginterestsareadjustedandthefairvalueoftheconsiderationpaidorreceivedisrecogniseddirectlyinequityandattributedtoownersoftheCompany.
Disposal of Subsidiaries
When theGroup losescontrolofa subsidiary,againor loss is recognised inprofitor lossand iscalculatedasthedifferencebetween(i)theaggregateofthefairvalueoftheconsiderationreceivedandthefairvalueofanyretainedinterestand(ii)thepreviouscarryingamountoftheassets(includinggoodwill),andliabilitiesofthesubsidiaryandanynon-controllinginterests.AllamountspreviouslyrecognisedinothercomprehensiveincomeinrelationtothatsubsidiaryareaccountedforasiftheGrouphaddirectlydisposedoftherelevantassetsorliabilitiesofthesubsidiary(i.e.reclassifiedtoprofitorlossortransferredtoanothercategoryofequityasspecified/permittedbyapplicableMFRSs).ThefairvalueofanyinvestmentretainedintheformersubsidiaryatthedatewhencontrolislostisregardedasthefairvalueoninitialrecognitionforsubsequentaccountingunderMFRS139FinancialInstruments:RecognitionandMeasurementor,whenapplicable,thecostoninitialrecognitionofaninvestmentinanassociateorjointventure.
Transactions with Non-Controlling Interest
Non-Controlling interestrepresents theportionofprofitor lossandnetassets insubsidiariesnotheldbytheGroupandarepresentedseparatelyinprofitorlossoftheGroupandwithinequityinthe consolidated statements of financial position, separately from the parent shareholder’s equity.Transactions with non-controlling interest are accounted for using the entity concept method,whereby,transactionswithnon-controllinginterestsareaccountedforastransactionswithowners.Onacquisitionofnon-controllinginterest,thedifferencebetweentheconsiderationandbookvalueoftheshareofthenetassetsacquiredisrecogniseddirectlyinequity.Gainorlossondisposaltonon-controllinginterestisrecogniseddirectlyinequity.
h) Goodwill
GoodwillrepresentstheexcessofthecostofacquisitionofsubsidiariesandassociatesoverthefairvalueoftheGroup’sshareoftheiridentifiablenetassetsatthedateofacquisition.
Goodwillistestedannuallyforimpairmentandcarriedatcostlessaccumulatedimpairmentlosses.Impairment losses on goodwill (inclusive of impairment losses recognised in a previous interimperiod)arenotreversed.Gainsandlossesonthedisposalofasubsidiaryincludethecarryingamountofgoodwillrelatingtothesubsidiarysold.
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Goodwillisallocatedtocash-generatingunitsforthepurposeofimpairmenttesting.Theallocationismadetothosecash-generatingunitsorgroupsofcash-generatingunitsthatareexpectedtobenefitfromthesynergiesofthebusinesscombinationinwhichthegoodwillarose,identifiedaccordingtooperatingsegments.
AnyexcessoftheGroup’sshareoftheidentifiablenetassetsatthedateofacquisitionoverthecostofacquisitionisrecognisedimmediatelyinthestatementsofprofitorlossandothercomprehensiveincome.
i) Investments in Subsidiaries
In theCompany’s separatefinancial statements, investments in subsidiaries are stated at cost lessaccumulated impairment losses.Ondisposalofsuch investments, thedifferencebetweendisposalproceedsandtheircarryingamountsarerecognisedinprofitorloss.
j) Business Combinations
Acquisition of subsidiaries are accounted for using the acquisition method. The considerationtransferredinabusinesscombinationismeasuredatfairvalue,whichiscalculatedasthesumoftheacquisition-datefairvaluesofassettransferredbytheGroup,liabilitiesincurredbytheGrouptotheformerownersoftheacquireeandequityinstrumentsissuedbytheGroupinexchangeforcontroloftheacquiree.Acquisition-relatedcostsarerecognisedinprofitorlossasincurred.
Atacquisitiondate,theidentifiableassetsacquiredandliabilitiesassumedarerecognisedattheirfairvalues,exceptthat:
- deferredtaxassetsorliabilitiesandassetsorliabilitiesrelatedtoemployeebenefitarrangementsare recognised and measured in accordance with MFRS 112 Income Taxes and MFRS 119EmployeeBenefitsrespectively;
- liabilitiesorequityinstrumentsrelatedtotheshare-basedpaymentarrangementsoftheacquireeorshare-basedpaymentarrangementsoftheGroupenteredintotoreplaceshare-basedpaymentarrangementsoftheacquireearemeasuredinaccordancewithMFRS2Share-basedPaymentattheacquisitiondate;and
- assets(ordisposalgroups)thatareclassifiedasheldforsaleinaccordancewithMFRS5Non-CurrentAssetsHeldforSaleandDiscontinuedOperationsaremeasuredinaccordancewiththatStandard.
Goodwillismeasuredastheexcessofthesumoftheconsiderationtransferred,theamountofanynon-controllinginterestsintheacquiree,andthefairvalueoftheacquirer’spreviouslyheldequityinterestintheacquiree(ifany)overthenetoftheacquisition-dateamountsoftheidentifiableassetsacquiredandtheliabilitiesassumed.If,afterreassessment,thenetoftheacquisition-dateamountsof the identifiable assets acquired and liabilities assumed exceeds the sum of the considerationtransferred, the amountof anynon-controlling interests in the acquiree and the fair valueof theacquirer’spreviouslyheldequityinterestintheacquiree(ifany),theexcessisrecognisedimmediatelyinprofitorlossasabargainpurchasegain.
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Non-Controlling interests that are present ownership interests and entitle their holders to aproportionateshareof theentity’snetassets in theeventof liquidationmaybe initiallymeasuredeitheratfairvalueoratthenon-controllinginterests’proportionateshareoftherecognisedamountsoftheacquiree’sidentifiablenetassets.Thechoiceofmeasurementbasisismadeonatransaction-by-transactionbasis.Other typesofnon-controlling interests aremeasuredat fair valueor,whenapplicable,onthebasisspecifiedinanotherStandard.
Where the consideration transferred by the Group in a business combination includes assets orliabilities resulting from a contingent consideration arrangement, the contingent consideration ismeasuredatitsacquisition-datefairvalue.Changesinthefairvalueofthecontingentconsiderationthat qualify asmeasurement period adjustments are adjusted retrospectively,with correspondingadjustments against goodwill. Measurement period adjustments are adjustments that arise fromadditionalinformationobtainedduringthe“measurementperiod”(whichcannotexceedoneyearfromtheacquisitiondate)aboutfactsandcircumstancesthatexistedattheacquisitiondate.
The subsequent accounting for changes in the fair value of contingent consideration that do notqualifyasmeasurementperiodadjustmentsdependsonhowthecontingentconsiderationisclassified.Contingent consideration that is classified as equity is not remeasured at subsequent reportingdatesanditssubsequentsettlementisaccountedforwithinequity.ContingentconsiderationthatisclassifiedasanassetorliabilityisremeasuredatsubsequentreportingdatesinaccordancewithMFRS137Provisions,ContingentLiabilitiesandContingentAssets,asappropriate,withthecorrespondinggainorlossbeingrecognisedinprofitorloss.
Whereabusinesscombinationisachievedinstages,theGroup’spreviouslyheldequityinterestsintheacquireeisremeasuredtoitsacquisitiondatefairvalueandtheresultinggainorloss,ifany,isrecognisedinprofitorloss.Amountsarisingfrominterestsintheacquireepriortotheacquisitiondatethathavepreviouslybeenrecognisedinothercomprehensiveincomearereclassifiedtoprofitorloss,wheresuchtreatmentwouldbeappropriateifthatinterestwasdisposedof.
Iftheinitialaccountingforabusinesscombinationisincompletebytheendofthereportingperiodinwhichthecombinationoccurs,theGroupreportsprovisionalamountsfortheitemsforwhichtheaccountingisincomplete.Thoseprovisionalamountsareadjustedduringthemeasurementperiod(seeabove),oradditionalassetsorliabilitiesarerecognised,toreflectnewinformationobtainedaboutfactsandcircumstancesthatexistedasoftheacquisitiondatethat,ifknown,wouldhaveaffectedtheamountsrecognisedatthatdate.
k) Finance Lease
LeasesintermsofwhichtheGroupassumessubstantiallyalltherisksandrewardsofownershipareclassifiedasfinanceleases.Oninitialrecognition,theleasedassetismeasuredatanamountequaltothelowerofitsfairvalueandthepresentvalueoftheminimumleasepayments.Subsequenttoinitialrecognition,theasset isaccountedfor inaccordancewiththeaccountingpolicyapplicabletothatasset.
Minimumleasepaymentsmadeunderfinanceleasesareapportionedbetweenthefinanceexpensesandthereductionoftheoutstandingliability.Thefinanceexpenseisallocatedtoeachperiodduringtheleasetermsoastoproduceaconstantperiodicrateofinterestontheremainingbalanceoftheliability.Contingentleasepaymentsareaccountedforbyrevisingtheminimumleasepaymentsovertheremainingtermoftheleasewhentheleaseadjustmentisconfirmed.
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l) Inventories
Inventoriesarevaluedatthelowerofcost(determinedprincipallyonthefirst-in,first-outmethod)andnetrealisablevalue.Costconsistsofpurchasesandotherdirectcostsincurredinbringingtheinventoriestoitspresentconditionandlocation.
Netrealisablevalueistheestimatedsellingpriceintheordinarycourseofbusiness,lessthecostsofcompletionandsellingexpenses.
m) Financial Instruments
i) Initial recognition and measurement
Financialinstrumentsarerecognisedinthefinancialstatementswhen,andonlywhen,theGroupandtheCompanybecomeapartytothecontractualprovisionsoftheinstruments.
Financialassetsandfinancialliabilitiesareinitiallymeasuredatfairvalue.Transactioncoststhataredirectlyattributabletotheacquisitionorissueofthefinancialassetsandfinancialliabilities(otherthanfinancialassetsandfinancialliabilitiesatfairvaluethroughprofitorloss)areaddedtoordeductedfromthefairvalueofthefinancialassetsorfinancialliabilities,asappropriate,oninitialrecognition.Transactioncoststhataredirectlyattributabletotheacquisitionoffinancialassetsorfinancial liabilitiesat fairvalue throughprofitor lossare recognised immediately inprofitorloss.
ii) Financial instrument categories and subsequent measurement
TheGroupcategoriesfinancialinstrumentsasfollows:
Financial assets
TheGroupclassifiesitsfinancialassetsinthefollowingcategories:atfairvaluethroughprofitorloss(FVTPL),held-to-maturity, loansandreceivablesandavailable-for-sale.Theclassificationdependsonthepurposeforwhichthefinancialassetswereacquired.Managementdeterminestheclassificationatinitialrecognition.
a) Financial assets at fair value through profit or loss
Financialassetsareclassifiedasfinancialassetsat fairvalue throughprofitor loss if theyareheldfortradingoraredesignatedassuchuponinitialrecognition.Financialassetsheldfor trading are derivatives (including separated embedded derivatives) or financial assetsacquiredprincipallyforthepurposeofsellinginthenearterm.
Subsequent to initial recognition, financial assets at fair value through profit or loss aremeasuredatfairvalue.Anygainsorlossesarisingfromchangesinfairvaluearerecognisedinprofitorloss.Netgainsornetlossesonfinancialassetsatfairvaluethroughprofitorlossdonot include exchangedifferences, interest anddividend income.Exchangedifferences,interest and dividend income on financial assets at fair value through profit or loss arerecognisedseparatelyinprofitorlossaspartofotherlossesorotherincome.
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
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Financialassetsat fairvalue throughprofitor losscouldbepresentedascurrentornon-current.Financialassetsthatareheldprimarilyfortradingpurposesarepresentedascurrentwhereasfinancial assets that arenotheldprimarily for tradingpurposesarepresentedascurrentornon-currentbasedonthesettlementdate.
b) Held-to-maturity investments
Held-to-maturityinvestmentsarenon-derivativefinancialassetswithfixedordeterminablepaymentsandfixedmaturitydatesthattheGrouphasthepositiveintentandabilitytoholdtomaturity.Subsequenttoinitialrecognition,held-to-maturityinvestmentsaremeasuredatamortisedcostusingtheeffectiveinterestmethodlessanyimpairment.
c) Loans and receivables
Loansandreceivablesarenon-derivativefinancialassetswithfixedordeterminablepaymentsthatarenotquotedinanactivemarket.Loansandreceivablesaremeasuredatamortisedcostusingtheeffective interestmethod, lessany impairment. Interest incomeisrecognisedbyapplyingtheeffectiveinterestrate,exceptforshort-termreceivableswhentherecognitionofinterestwouldbeimmaterial.
d) Available-for-sale (AFS) financial assets
Available-for-sale financial assets are non-derivatives that are either designated in thiscategoryornotclassifiedinanyoftheothercategories.Afterinitialrecognition,available-for-salefinancialassetsaremeasuredatfairvalue.Anygainsorlossesfromchangesinfairvalue of the financial assets are recognised in other comprehensive income, except thatimpairmentlosses,foreignexchangegainsandlossesonmonetaryinstrumentsandinterestcalculatedusingtheeffectiveinterestmethodarerecognisedinprofitorloss.Thecumulativegainorlosspreviouslyrecognisedinothercomprehensiveincomeisreclassifiedfromequityto profit or loss as a reclassification adjustmentwhen the financial asset is derecognised.Interestincomecalculatedusingtheeffectiveinterestmethodisrecognisedinprofitorloss.Dividendsonavailable-for-saleequityinstrumentarerecognisedinprofitorlosswhentheCompany’srighttoreceivepaymentisestablished.
Available-for-salefinancialassetsareincludedinnon-currentassetsunlesstheinvestmentmaturesormanagementintendstodisposeofitwithin12monthsoftheendofthereportingperiod.
Financialassetsarede-recognisedwhentherightstoreceivecashflowsfromtheinvestmentshaveexpiredorhavebeentransferredandtheGrouphastransferredsubstantiallyallrisksandrewardsofownership.
Financial liabilities
Financialliabilitiesareclassifiedaseitherfinancialliabilitiesatfairvaluethroughprofitorlossorotherfinancialliabilities.
a) Financial liabilities at fair value through profit or loss
Financial liabilities are classified as financial liabilities at fair value throughprofit or losswhenthefinancialliabilityiseitherheldfortradingoritisdesignatedasfinancialliabilitiesatfairvaluethroughprofitorloss.
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
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Afinancialliabilityisclassifiedasheldfortradingif:
a) ithasbeenacquiredprincipallyforthepurposeofrepurchasingitinthenearterm;or
b) oninitialrecognitionitispartofaportfolioofidentifiedfinancialinstrumentsthattheGroupmanagestogetherandhasarecentactualpatternofshort-termprofit-taking;or
c) itisaderivativethatisnotdesignatedandeffectiveasahedginginstrument.
A financial liability other than a financial liability held for tradingmay be designated asfinancialliabilitiesatfairvaluethroughprofitorlossuponinitialrecognitionif:
a)such designation eliminates or significantly reduces a measurement or recognitioninconsistencythatwouldotherwisearise;or
b) thefinancialliabilityformspartofagroupoffinancialassetsorfinancialliabilitiesorboth,whichismanagedanditsperformanceisevaluatedonafairvaluebasis,inaccordancewiththeGroup’sdocumentedriskmanagementorinvestmentstrategy,andinformationaboutthegroupingisprovidedinternallyonthatbasis;or
c) it forms part of a contract containing one ormore embedded derivatives, andMFRS139FinancialInstruments:RecognitionandMeasurementpermitstheentirecombinedcontract (assetor liability) tobedesignatedasfinancial liabilitiesat fairvalue throughprofitorloss.
Financialliabilitiesatfairvaluethroughprofitorlossarestatedatfairvalue,withanygainsorlossesarisingonremeasurementrecognisedinprofitorloss.Thenetgainorlossrecognisedinprofitorlossincorporatesanyinterestpaidonthefinancialliabilityandisincludedinthe‘othergainsandlosses’lineiteminthestatementsofcomprehensiveincome.
b) Other financial liabilities
Otherfinancial liabilities,includingborrowings,areinitiallymeasuredatfairvalue,netoftransactioncostsandaresubsequentlymeasuredatamortisedcostusingtheeffectiveinterestmethod,withinterestexpenserecognisedonaneffectiveyieldbasis.
Theeffective interestmethod is amethodof calculating the amortised costof afinancialliability and of allocating interest expense over the relevant period.The effective interestrateistheexactlydiscountsestimatedfuturecashpaymentsthroughtheexpectedlifeofthefinancial liability,or (whereappropriate)a shorterperiod, to thenetcarryingamountoninitialrecognition.
TheGroupderecognisesfinancial liabilitieswhen,andonlywhen, theGroup’sobligationsaredischarged,cancelledortheyexpire.Thedifferencebetweenthecarryingamountofthefinancialliabilityderecognisedandtheconsiderationpaidorpayableisrecognisedinprofitorloss.
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
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iii) Impairment of Financial Assets
Financialassets,otherthanthoseatFVTPL,areassessedforindicatorsofimpairmentattheendofeachreportingperiod.Financialassetsareconsideredtobeimpairedwhenthereisobjectiveevidencethat,asaresultofoneormoreeventsthatoccurredaftertheinitialrecognitionofthefinancialasset,theestimatedfuturecashflowsoftheinvestmenthavebeenaffected.
ForequityinvestmentsclassifiedasAFS,asignificantorprolongeddeclineinthefairvalueofthesecuritybelowitscostisconsideredtobeobjectiveevidenceofimpairment.
For all otherfinancial assets, including redeemablebonds classifiedasAFSandfinance leasereceivables,objectiveevidenceofimpairmentcouldinclude:
-significantfinancialdifficultyoftheissuerorcounterparty;or -defaultordelinquencyininterestorprincipalpayments;or -itbecomingprobablethattheborrowerwillenterbankruptcyorfinancialre-organisation.
Forcertaincategoriesoffinancialasset,suchastradereceivables,assetsthatareassessednottobeimpairedindividuallyare,inaddition,assessedforimpairmentonacollectivebasis.ObjectiveevidenceofimpairmentforaportfolioofreceivablescouldincludetheGroup’spastexperienceofcollectingpayments,anincreaseinthenumberofdelayedpaymentsintheportfoliopasttheaveragecreditperiodof60days, aswell asobservablechanges innationalor local economicconditionsthatcorrelatewithdefaultonreceivables.
Forfinancialassetscarriedatamortisedcost,theamountoftheimpairmentlossrecognisedisthedifferencebetweentheasset’scarryingamountandthepresentvalueofestimatedfuturecashflows,discountedatthefinancialasset’soriginaleffectiveinterestrate.
The carrying amount of thefinancial asset is reducedby the impairment loss directly for allfinancialassetswiththeexceptionoftradereceivables,wherethecarryingamountisreducedthroughtheuseofanallowanceaccount.Whenatradereceivableisconsidereduncollectible,itiswrittenoffagainsttheallowanceaccount.Subsequentrecoveriesofamountspreviouslywrittenoffarecreditedagainsttheallowanceaccount.Changesinthecarryingamountoftheallowanceaccountarerecognisedinprofitorloss.
WhenanAFSfinancialassetisconsideredtobeimpaired,cumulativegainsorlossespreviouslyrecognisedinothercomprehensiveincomearereclassifiedtoprofitorlossintheperiod.
With the exceptionofAFSequity instruments, if, in a subsequentperiod, theamountof theimpairmentlossdecreasesandthedecreasecanberelatedobjectivelytoaneventoccurringaftertheimpairmentwasrecognised,thepreviouslyrecognisedimpairmentlossisreversedthroughprofitorlosstotheextentthatthecarryingamountoftheinvestmentatthedatetheimpairmentisreverseddoesnotexceedwhattheamortisedcostwouldhavebeenhadtheimpairmentnotbeenrecognised.
InrespectofAFSequitysecurities,impairmentlossespreviouslyrecognisedinprofitorlossarenotreversedthroughprofitorloss.Anyincreaseinfairvaluesubsequenttoanimpairmentlossisrecognisedinothercomprehensiveincome.
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
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n) Impairment of Non-Financial Assets
Attheendofeachreportingperiod,theGroupreviewsthecarryingamountsofitsnon-currentassetstodeterminewhetherthereisanyindicationthatthoseassetshavesufferedanimpairmentloss.Ifanysuchindicationexists,therecoverableamountoftheassetisestimatedinordertodeterminetheextentoftheimpairmentloss(ifany).Whereitisnotpossibletoestimatetherecoverableamountofanindividualasset,theGroupestimatestherecoverableamountofthecash-generatingunittowhichtheassetbelongs.
Recoverableamountisthehigheroffairvaluelesscoststosellandvalue-in-use.Inassessingvalue-in-use,theestimatedfuturecashflowsarediscountedtotheirpresentvalueusingapre-taxdiscountratethatreflectscurrentmarketassessmentsofthetimevalueofmoneyandtheriskspecifictotheasset.Iftherecoverableamountofanasset(orcash-generatingunit)isestimatedtobelessthanitscarryingamount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverableamount.Animpairmentlossisrecognisedimmediatelyinprofitorlossunlesstheassetiscarriedatarevaluedamount.Anyimpairmentlossofarevaluedassetistreatedasarevaluationdecreasetotheextentofanyunutilisedpreviouslyrecognisedrevaluationsurplusforthesameasset.
Whereanimpairmentlosssubsequentlyreverses,thecarryingamountoftheasset(orcash-generatingunit)isincreasedtotherevisedestimateofitsrecoverableamount,butsothattheincreasedcarryingamountdoesnotexceedthecarryingamountthatwouldhavebeendeterminedhadnoimpairmentlossbeenrecognisedfortheasset(orcash-generatingunit)inprioryears.Areversalofanimpairmentlossisrecognisedimmediatelyinprofitorloss.
o) Provisions
ProvisionsarerecognisedwhentheGrouphasapresentobligation(legalorconstructive)asaresultofapastevent, it isprobable thatanoutflowofeconomic resourceswillbe required to settle theobligationandtheamountoftheobligationcanbeestimatedreliably.
Provisionsarereviewedateachreportingdateandadjustedtoreflectthecurrentbestestimate.Ifitisnolongerprobablethatanoutflowofeconomicresourceswillberequiredtosettletheobligation,theprovisionisreversed.Iftheeffectofthetimevalueofmoneyismaterial,provisionsarediscountedusingacurrentpretaxratethatreflects,whereappropriate,therisksspecifictotheliability.Whendiscountingisused,theincreaseintheprovisionduetothepassageoftimeisrecognisedasafinancecost.
p) Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifyingassets,whichareassetsthatnecessarilytakeasubstantialperiodoftimetogetreadyfortheirintendeduseorsale,areaddedtothecostofthoseassets,untilsuchtimeastheassetsaresubstantiallyreadyfortheirintendeduseorsale.
Investment income earned on the temporary investment of specific borrowings pending theirexpenditureonqualifyingassetsisdeductedfromtheborrowingcostseligibleforcapitalisation.
Allotherborrowingcostsarerecognisedinprofitorlossintheperiodinwhichtheyareincurred.
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
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q) Cash and Cash Equivalents
Cashandcash equivalents comprise cashatbankand inhand,demanddeposits and short term,highlyliquidinvestmentsthatarereadilyconvertibletoknownamountofcashandwhicharesubjecttoaninsignificantriskofchangesinvalue.
r) Equity Instruments
AnequityinstrumentisanycontractthatevidencesaresidualinterestintheassetsoftheGroupandtheCompanyafterdeductingallofitsliabilities.Ordinarysharesareequityinstruments.
Ordinary shares are recorded at the proceeds received, net of directly attributable incrementaltransactioncosts.Ordinarysharesareclassifiedasequity.Dividendsonordinarysharesarerecognisedinequityintheperiodinwhichtheyaredeclared.
s) Contingencies
Acontingentliabilityorassetisapossibleobligationorassetthatarisesfrompasteventsandwhoseexistencewillbeconfirmedonlybytheoccurrenceornon-occurrenceofuncertainfutureevent(s)notwhollywithinthecontroloftheGroup.
ContingentliabilitiesandassetsarenotrecognisedinthestatementsoffinancialpositionoftheGroupinthecurrentandpreviousfinancialyearends.
t) Operating Segments
AnoperatingsegmentisacomponentoftheGroupthatengagesinbusinessactivitiesfromwhichitmayearnrevenuesandincurexpenses,includingrevenuesandexpensesthatrelatetotransactionswithanyoftheGroup’sothercomponents.Anoperatingsegment’soperatingresultsarereviewedregularlybythechiefoperatingdecisionmaker,whichinthiscaseistheManagingDirectoroftheGroup,tomakedecisionsaboutresourcestobeallocatedtothesegmentandassessitsperformance,andforwhichdiscretefinancialinformationisavailable.
Operatingsegmentsarereportedinamannerconsistentwiththeinternalreportingprovidedtothechiefoperatingdecision-maker.
5) CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
Thepreparation of financial statements in conformitywithMalaysian Financial Reporting Standardsrequirestheuseofcertaincriticalaccountingestimatesandassumptionsthataffectthereportedamountsofassetsandliabilities,andthereportedresultsduringthereportedperiod.ItalsorequiresdirectorstoexercisetheirjudgementintheprocessofapplyingtheGroup’sandtheCompany’saccountingpolicies.Althoughtheseestimatesandjudgementarebasedonthedirector’sbestknowledgeofcurrenteventsandactions,actualresultsmaydiffer.
Critical Judgements in Applying the Group’s and the Company’s Accounting Policies
In theprocessofapplying theGroup’sand theCompany’saccountingpolicies, thedirectorareof theopinionthattherearenoinstancesofapplicationofjudgementwhichareexpectedtohavesignificanteffectontheamountsrecognisedinthefinancialstatements.
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
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Key Sources of Estimation Uncertainty
Thekeyassumptionsmadeconcerningthefuture,andotherkeysourcesofestimationuncertaintyatthereportingdatethathaveasignificantriskofcausingamaterialadjustmenttothecarryingamountsofassetsandliabilitieswithinthenextfinancialyearisdescribedbelow:
(i) Impairment on Receivables
TheGroupassessesateachreportingdatewhetherthere isanyobjectiveevidencethatafinancialasset is impaired. To determine whether there is objective evidence of impairment, the Groupconsidersfactorssuchastheprobabilityofinsolvencyorsignificantfinancialdifficultiesofthedebtoranddefaultorsignificantdelayinpayments.Wherethereisobjectiveevidenceofimpairment,theamountandtimingoffuturecashflowsareestimatedbasedonhistoricallossexperienceforassetswithsimilarcreditriskcharacteristics.ThecarryingamountoftheGroup’sloansandreceivableatthereportingdateisdisclosedinNote18totheFinancialStatements.
(ii)Write-down of Inventories
Reviewsaremadeperiodicallybymanagementondamaged,obsoleteandslow-movinginventories.Thesereviewsrequirejudgementandestimates.Possiblechangesintheseestimatescouldresultinrevisionstothevaluationofinventories.
(iii) Deferred Tax Assets
Deferredtaxassetsarerecognisedforallunutilisedtaxlossesandunabsorbedcapitalallowancestotheextentthatisprobablethattaxableprofitwillbeavailableagainstwhichthelossescanbeutilised.Significantmanagementjudgementisrequiredtodeterminetheamountofdeferredtaxassetsthatcanberecognised,baseduponthelikelytimingandleveloffuturetaxableprofittogetherwithfuturetaxplanningstrategies.
6) REVENUE
GROUP COMPANY 2014 2013 2014 2013 RM RM RM RM Continuing operations
Airfilter 331,710 854,424 - - Cleanroom - 408,037 - - Waterfilter - 318,704 - - Generaltrading 2,603,765 843,000 - - 2,935,475 2,424,165 - -
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
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7) OTHER OPERATING EXPENSES/(INCOME)
Includedinotheroperatingexpenses/(income)arethefollowingcharges/(credits):
GROUP COMPANY 2014 2013 2014 2013 RM RM RM RM Auditors’remuneration 33,300 33,300 20,000 20,000 Baddebtswrittenoff - 507 - - Exceptionalitem:
Depositswrittenoff 400,000 - - - Inventorieswrittenoff 8,659 - - - Impairmentlossonreceivables - 156,575 - - Inventorieswrittendown - 107,706 - - Rentalofpremises 14,400 11,800 14,400 11,800
GROUP COMPANY
2014 2013 2014 2013 RM RM RM RM Andcrediting:
Exceptionalitem: Waiverofshareholder’sadvance (265,815) (831,000) (121,529) (831,000)
Reversalofimpairmentlossontrade receivables (540) - - -
8) STAFF COSTS
GROUP AND COMPANY 2014 2013 RM RM
Salariesandallowance 54,718 148,846 Definedcontributionplan-EPF 1,572 17,913 Socialsecuritycontributions - 930 Otherbenefits - 8,000 56,290 175,689
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
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9) DIRECTORS’ REMUNERATION
GROUP AND COMPANY 2014 2013 RM RM Executivedirectors: Salariesandotheremoluments - 38,113 Definedcontributionplan-EPF - 4,818 - 42,931 Non-Executivedirectors: Fees 84,000 9,000 84,000 51,931 ThenumberofdirectorsoftheCompanywhosetotalremunerationduringthefinancialyearfellwithin
thefollowingbandsisanalysedbelow:
Numberofdirectors 2014 2013 Executivedirectors:
BelowRM50,000 - 1
Non-executivedirectors:
RM50,001-RM100,000 1 2
10) FINANCE COSTS
GROUP 2014 2013 RM RM Intereston: Bankoverdraft 73,675 83,823 Financelease - 14,889 Termloans 417,391 397,055 491,066 495,767
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
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11) INCOME TAX EXPENSE GROUP COMPANY
2014 2013 2014 2013 RM RM RM RM Estimatedcurrenttaxpayable 2,022 - - - Deferredtaxinrespectof:
Taxassets(Note15) 142,392 267,674 - - Taxliabilities(Note15) (3,629) (5,551) - - 138,763 262,123 - - 140,785 262,123 - -
Anumericalreconciliationbetweentheincometaxexpenseandtheproductofaccountingprofit/(loss)multipliedbytheapplicablestatutoryincometaxrate,isasfollows:
GROUP COMPANY 2014 2013 2014 2013 RM RM RM RM Accountingprofit/(loss) (1,390,851) 351,288 (393,830) 374,515 Taxattheapplicablestatutoryincometax rateof25% (347,713) 87,822 (98,458) 93,629 Taxeffectsinrespectof:
Expensesthatarenotdeductiblefor taxpurposes 256,040 134,622 72,936 36,443 Overprovisionofdeferredtaxassets
inprioryear 76,423 - - - Recognitionofpreviouslyunrecognised
deferredtaxassets - (114,267) - - Incomenotsubjecttotax (66,319) (207,750) (30,382) (207,750) Netdeferredtaxassetsnotrecognised 222,354 361,696 55,904 77,678 Incometaxexpense 140,785 262,123 - -
Malaysianincometaxiscalculatedatthestatutorytaxrateat25%(2013:25%)oftheestimatedtaxableprofitfortheyear.The2015Budgetannouncedon10thOctober2014reducedthecorporateincometaxratefrom25%to24%effectivefromyearofassessment2016.
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
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12) EARNINGS/(LOSS) PER ORDINARY SHARE
Basic earnings/(loss) per share
Basicearnings/(loss)pershareiscalculatedbydividingtheprofit/(loss)fortheyearattributabletoownersoftheCompanybytheweightedaveragenumberofordinarysharesinissueduringthefinancialyearasfollows: GROUP
2014 2013
Earnings/(Loss)attributabletoownersoftheCompany(RM) (1,532,601) 89,165 Weightedaveragenumberofordinarysharesinissue 121,706,461 118,555,800 Basicearnings/(loss)pershare(sen) (1.26) 0.08 Diluted
Thedilutedearnings/(loss)pershareoftheGrouphasnotbeenpresentedastherearenodilutivepotential
ordinaryshares.
13) PROPERTY, PLANT AND EQUIPMENT
GROUP Freehold Furniture, building fittingsand Freehold and other Toolsand Motor
land renovation equipment equipment vehicles Total RM RM RM RM RM RM 2014
Cost/Valuation
Asat1stJanuary2014 4,360,000 5,472,840 2,617,894 146,780 182,120 12,779,634 Additions - 108,984 - - - 108,984 Reclassificationto
assetheldforsale (4,360,000) (5,353,170) - - - (9,713,170) Asat31stDecember2014 - 228,654 2,617,894 146,780 182,120 3,175,448
Accumulateddepreciation
Asat1stJanuary2014 - 1,396,138 2,435,694 139,624 182,120 4,153,576 Chargefortheyear - 239,718 89,311 2,368 - 331,397 Reclassificationto
assetheldforsale - (1,516,186) - - - (1,516,186) Asat31stDecember2014 - 119,670 2,525,005 141,992 182,120 2,968,787
Netcarryingamount Atcost - - 92,889 4,788 - 97,677
Atvaluation - 108,984 - - - 108,984 Asat31stDecember2014 - 108,984 92,889 4,788 - 206,661
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
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GROUP Freehold Furniture, building fittingsand Freehold and other Toolsand Motor
land renovation equipment equipment vehicles Total RM RM RM RM RM RM 2013
Cost/Valuation
Asat1stJanuary2013 2,900,000 6,702,165 2,822,926 322,158 250,621 12,997,870 Additions - - 1,100 - - 1,100 Writtenoff - - (319,647) (4,943) (68,501) (393,091) Revaluationsurplus 1,660,000 (1,486,245) - - - 173,755 Reclassification (200,000) 256,920 113,515 (170,435) - - Asat31stDecember2013 4,360,000 5,472,840 2,617,894 146,780 182,120 12,779,634
Accumulateddepreciation
Asat1stJanuary2013 - 992,401 2,507,836 322,158 161,117 3,983,512 Chargefortheyear - 212,568 317,169 3,416 30,002 563,155 Writtenoff - - (319,647) (4,943) (68,501) (393,091) Reclassification - 191,169 (69,664) (181,007) 59,502 - Asat31stDecember2013 - 1,396,138 2,435,694 139,624 182,120 4,153,576
Netcarryingamount Atcost - - 182,200 7,156 - 189,356
Atvaluation 4,360,000 4,076,702 - - - 8,436,702 Asat31stDecember2013 4,360,000 4,076,702 182,200 7,156 - 8,626,058
COMPANY
Office Computers equipment Renovation Total
RM RM RM RM 2014
Cost Asat1stJanuary2014 45,829 13,379 - 59,208
Additions - 21,866 108,984 130,850 Asat31stDecember2014 45,829 35,245 108,984 190,058 Accumulateddepreciation
Asat1stJanuary2014 38,781 8,546 - 47,327 Chargefortheyear 5,177 6,984 - 12,161 Asat31stDecember2014 43,958 15,530 - 59,488 Netbookvalueasat31stDecember2014 1,871 19,715 108,984 130,570
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
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Office Computers equipment Renovation Total
RM RM RM RM 2013
Cost
Asat1stJanuary2013 45,829 12,279 - 58,108 Additions - 1,100 - 1,100 Asat31stDecember2013 45,829 13,379 - 59,208 Accumulateddepreciation
Asat1stJanuary2013 31,907 7,008 - 38,915 Chargefortheyear 6,874 1,538 - 8,412 Asat31stDecember2013 38,781 8,546 - 47,327
Netbookvalueasat31stDecember2013 7,048 4,833 - 11,881 Includedinproperty,plantandequipmentoftheGroupandoftheCompanyarefullydepreciatedassets
whicharestill inuse,withacostofRM2,413,201(2013:RM837,819)andRM2,389(2013:RM2,389)respectively.
In2013,assetsoftheGroupwithatotalnetcarryingamountofRM69,738wereacquiredunderfinancelease.
TheabovelandedpropertiesarechargedtobanksforbankingfacilitiesgrantedtotheGroupasdisclosedinNotes23and25totheFinancialStatements.
ThedetailsofthevaluationoftheGroup’slandandbuildingareasfollows: GROUP
Revalued Detailsof Yearof amount property valuation Detailsofvaluers RM
Freeholdland 2009 JamsariMohamadAris,MIS(M)Registered 2,900,000 ValuerofTDAzizSdn.Bhd.
Freeholdbuilding 2009 JamsariMohamadAris,MIS(M)Registered 6,073,569 ValuerofTDAzizSdn.Bhd.
Freeholdland 2013 JAZInternationalMalaysiaSdn.Bhd. 4,360,000 Freeholdbuilding 2013 JAZInternationalMalaysiaSdn.Bhd. 4,061,183
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
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14) INVESTMENTS IN SUBSIDIARIES
COMPANY 2014 2013 RM RM
Unquotedshares-Atcost 1,490,000 1,490,000 Less:Impairmentloss (890,200) (890,200) Netcarryingamount 599,800 599,800 Thedetailsofthesubsidiariesareasfollows:
Countryof EquityInterest
NameofCompany Incorporation 2014 2013 % %
EnvairEnergySdn. Malaysia 100 100 Bhd.
QuestEquipment Malaysia 100 100 andServicesSdn.
Bhd.
QuestTechnology Malaysia 100 100 Sdn.Bhd.@
RayaConsumableSdn. Malaysia 100 100 Bhd.@
QuestSystemand Malaysia 100 100 EngineeringSdn.
Bhd.@
YoubicomMalaysia Malaysia 70 70 Sdn.Bhd.
AlltheabovesubsidiariesareauditedbyanotherfirmofauditorsotherthanauditorsoftheCompany.
PrincipalActivities
Distribution and manufacturing ofairfilters.However,thesubsidiaryistemporarilyinactivesince2011.
Installation of cleanroom systemsandsaleofairfiltersandcleanroomequipment.However, the subsidiaryistemporarilyinactivesince2012. Trading in air filters, cleanroomequipment and vinyl flooring andinstallation of cleanroom systems.Alsoprincipally involved in generaltrading. Manufacturing, and trading ofwaterandairfilters.Alsoprincipallyinvolved in trading of beautyproducts. Also involved in thetradingofhealthcareproducts. Selling, installation, maintenanceand servicing of water treatmentequipment and sale of cleanroomfilters and equipment.However, thesubsidiary is temporarily inactivesince2011.
Distribution of wireless energysavingproducts
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
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@Theauditors’reportsonthefinancialstatementsofthesesubsidiariesincludeanemphasisofmatterregardingtheabilityofthesesubsidiariestocontinueasagoing-concerninviewoftheircapitaldeficiencypositions as at the endof the financial year.Thefinancial statements of these subsidiaries have beenprepared on a going-concern basis as the Company has undertaken to continue providing financialsupporttothesesubsidiaries.
In2013,theGroupacquired70%equityinterestinYoubicomMalaysiaSdn.Bhd.,acompanyincorporatedinMalaysia,foratotalconsiderationofRM100,000.
TheeffectoftheacquisitiononthefinancialpositionoftheGroupasatendofthefinancialyearisasfollows:
GROUP 2013 RM
Netassetsacquired:
Cashandbankbalances 7,990 Accruedexpenses (1,600) Goodwillonconsolidation 95,527 Non-Controllinginterests (1,917) Totalcashconsideration 100,000 Less:Cashandbankbalances (7,990) Cashflowonacquisition,netofcashandcashequivalentsacquired 92,010
Theamountowingby/(to)subsidiaries,whicharosemainlyfromexpensespaidonbehalfandadvancegiven,isunsecured,interest-freeandrepayableondemand.
The summarised financial information of YoubicomMalaysia Sdn. Bhd. that has a non-controllinginterest,representing30percentofownershipinterest,isasfollows:
(a)Summarisedstatementoffinancialposition
2014 2013 RM RM
Assets Currentassets 29,856 7,990
Totalassets 29,856 7,990 Equityattributabletoownersofthecompany 9,607 6,390
Liabilities Currentliabilities 20,249 1,600
Totalliabilities 20,249 1,600 Totalequityandliabilities 29,856 7,990
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
RAYA INTERNATIONAL BERHAD 2014ANNUALREPORT
69
b) Summarisedstatementofcomprehensiveincome
2014 2013 RM RM
Revenue 21,866 - Expenses (16,627) (882) Profit/(Loss)fortheyear 5,239 (882) c) Summarisedstatementofcashflows
2014 2013 RM RM
Netcashusedinoperatingactivities - (12) Netdecreaseincashandcashequivalents - (12) Cashandcashequivalentsatthebeginningofyear 7,990 8,002 Cashandcashequivalentsattheendofyear 7,990 7,990 Thesummarisedfinancialinformationrepresentstheamountbeforeinter-companyeliminationsbetween
theCompanyandYoubicomMalaysiaSdn.Bhd.
15) DEFERRED TAXATION
GROUP
2014 2013 RM RM Deferredtaxassets
Balanceasatbeginningoftheyear 195,383 463,057 Recognisedinprofitorloss(Note11) (142,392) (267,674) Balanceasatendoftheyear 52,991 195,383 Deferredtaxliabilities
Balanceasatbeginningoftheyear 3,629 9,180 Recognisedinprofitorloss(Note11) (3,629) (5,551) Balanceasatendoftheyear - 3,629
Therecogniseddeferredtaxassetsaremadeupofunutilisedtaxlosseswhiletherecogniseddeferredtaxliabilitiesaremadeupoftemporarydifferencesbetweentaxcapitalallowancesandbookdepreciationofproperty,plantandequipment.
AsmentionedinNote4e),deferredtaxliabilitiesarerecognisedforalltaxabletemporarydifferencesanddeferredtaxassetsarerecognisedforalldeductibletemporarydifferences,unusedtaxlossesandunusedtaxcredittotheextentthatitisprobablethattaxableprofitwillbeavailableagainstwhichthedeductibletemporarydifferences, unused tax losses andunused tax credit canbeutilised.As at 31stDecember2014, thedeferredtaxassetswhichhavenotbeenrecognised in thefinancial statementsarising fromunutilisedtaxlossesandunabsorbedcapitalallowancesfortheGroupandfortheCompanyamountedtoapproximatelyRM2,418,354(2013:RM2,209,881)andRM361,374(2013:RM306,596)respectively.
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
RAYA INTERNATIONAL BERHAD2014 ANNUALREPORT
70
16) GOODWILL ON CONSOLIDATION
GROUP 2014 2013 RM RM Balanceasatbeginningoftheyear 95,527 - Arosefromacquisitionofsubsidiary - 95,527 Balanceasatendoftheyear 95,527 95,527 Key Assumptions Used in Value-In-Use Calculations GoodwillinrespectofacquisitionofthesubsidiarybytheGrouphasbeenallocatedtoitscash-generating
unit(CGU)wheretherecoverableamountofCGUhasbeenbasedonvalue-in-usecalculationsusingfive year financial projections. No revenue and expenses growth were projected from sixth year toperpetuity.
Thediscountrateof3.4%wasappliedindeterminingtherecoverableamountoftherespectiveCGU.Thediscountratewasbasedontheaverageinflationrate.
Sensitivity to Changes in Assumptions
ManagementbelievesthatnoreasonablepossiblechangesinanyofthekeyassumptionsabovewouldcausethecarryingvaluesoftheCGUstomateriallyexceedtheirrecoverableamounts.
17) INVENTORIES GROUP
2014 2013 RM RM Atnetrealisablevalue:
Rawmaterials 151,878 376,661 Finishedgoods 593,362 598,676 745,240 975,337
18) TRADE RECEIVABLES, OTHER RECEIVABLES AND PREPAID EXPENSES GROUP
2014 2013 RM RM
Tradereceivables 7,196,590 5,712,737 Less:Allowancefordoubtfuldebts (2,796,565) (2,861,602) Net 4,400,025 2,851,135
Tradereceivablescompriseamountsreceivablefromthesaleofgoods.Thecreditperiodgrantedtotheircustomersareassessedandapprovedonacasebycasebasis.
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
RAYA INTERNATIONAL BERHAD 2014ANNUALREPORT
71
Otherreceivablesandprepaidexpensesconsistof:
GROUP COMPANY 2014 2013 2014 2013 RM RM RM RM Otherreceivables 2,563,672 2,584,870 2,510,916 2,520,151 Less:Allowancefordoubtfuldebts (2,523,672) (2,575,635) (2,510,916) (2,510,916) Net 40,000 9,235 - 9,235 Refundabledeposits - 431,720 640 6,040 Prepaidexpenses 26,320 44,400 - 44,400 66,320 485,355 640 59,675 ThetradeandotherreceivablesarealldenominatedinRinggitMalaysia.
19) ASSET HELD FOR SALE
GROUP 2014 2013 RM RM Freeholdland 4,360,000 - Freeholdbuildingandrenovation 3,836,984 - 8,196,984 - On5thFebruary2015,theGroupenteredintoasaleandpurchaseagreementwithanindependentthird
partytodisposethefreeholdlandandbuildingforaconsiderationofRM8,300,000.
Asat31stDecember2014,pendingcompletionofthedisposaloffreeholdlandandbuilding,thefreeholdlandandbuildinghasbeenclassifiedasassetheld-for-sale.
20) SHARE CAPITAL
GROUP AND COMPANY 2014 2013 RM RM Authorised
250,000,000ordinarysharesofRM0.10each 25,000,000 25,000,000
GROUP AND COMPANY GROUP AND COMPANY No.ofordinarysharesof Amount RM0.10each 2014 2013 2014 2013 RM RM
Issuedandfullypaid Balanceasatbeginningofyear 118,555,800 118,555,800 11,855,580 11,855,580 Issuedduringtheyear 11,855,580 - 1,185,558 - Balanceasatendofyear 130,411,380 118,555,800 13,041,138 11,855,580
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
RAYA INTERNATIONAL BERHAD2014 ANNUALREPORT
72
AsapprovedbytheshareholdersattheAnnualGeneralMeetingheldon30thJune2014,theissuedandpaid-upsharecapitaloftheCompanywasincreasedfromRM11,855,580toRM13,041,138duringthefinancialyearbytheallotmentof11,855,580newordinarysharesofRM0.10eachintheCompanyatanissuepriceofRM0.16pernewordinaryshareforcashbywayofprivateplacement.
TheresultantsharepremiumarisingfromthesharesissuedduringthefinancialyearofRM711,335hasbeencreditedtothesharepremiumaccount.AllthenewordinarysharesissuedrankparipassuwiththethenexistingordinarysharesoftheCompany.
21) RESERVES GROUP COMPANY
2014 2013 2014 2013 RM RM RM RM Non-Distributablereserves:
Sharepremium 8,825,988 8,186,987 8,825,988 8,186,987 Revaluationreserve 2,727,687 2,727,687 - - 11,553,675 10,914,674 8,825,988 8,186,987
Accumulatedloss (17,879,465) (16,346,864) (8,338,046) (7,944,216) (6,325,790) (5,432,190) 487,942 242,771
Share premium reserve
ThereservecomprisesthepremiumpaidonsubscriptionofsharesintheCompanyoverandabovetheparvalueofthesharesnetofshareissueexpenses.
Revaluation reserve
Revaluation reserve arose from revaluation of the Group’s freehold land and building in 2009 and2013.
22) FINANCE LEASE LIABILITIES GROUP
2014 2013 RM RM Totalfinanceleaseinstalmentspayable - 56,992 Less:
Financeleaseinterestinsuspense - (12,950) Principaloutstanding - 44,042 Portionpayablewithinthenext12months(Note25) - 26,430 (includedincurrentliabilities)
Portionpayableafterthenext12months: Payablebetween1and2years - 17,612
- 44,042 Theinterestratesonfinanceleaserangefrom2.35%to4.20%(2013:2.35%to4.20%)perannum.
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
RAYA INTERNATIONAL BERHAD 2014ANNUALREPORT
73
23) TERM LOANS
GROUP 2014 2013 RM RM
Securedtermloans 4,031,726 4,137,258 Less:Portionpayablewithinthenext12months(Note25) (210,542) (173,786) Non-currentportion 3,821,184 3,963,472
Thenon-currentportionofthetermloansisrepayableasfollows: GROUP
2014 2013 RM RM
Financialyearsending31stDecember: 2015 - 225,565
2016 226,100 297,073 2017andthereafter 3,595,084 3,440,834
Theabove term loansbear interest at rates ranging from5.85% to8.60%(2013:5.85% to8.60%)perannumandaresecuredbythefollowing: i) Generalfacilityagreement;and ii) FirstlegalchargeoverthelandedpropertyoftheGroup.
The fair value of term loans of the Group at the end of reporting period are RM2,214,422 (2013:RM2,533,983).
24) TRADE PAYABLES, OTHER PAYABLES AND ACCRUED EXPENSES
Tradepayablescompriseamountsoutstandingfortradepurchases.ThenormalcredittermsgrantedtotheGroup and theCompany for trade purchases range from 30 to 60 days and certain credit termsgrantedbythesupplierswerebasedonnegotiation.
Otherpayablesandaccruedexpensescomprise:
GROUP COMPANY 2014 2013 2014 2013 RM RM RM RM
Otherpayables 255,749 231,838 169,322 150,735 Amountowingtoformershareholders/
directors - 15,000 - 15,000 Accruedexpenses 137,312 123,718 79,371 98,959 393,061 370,556 248,693 264,694
ThetradeandotherpayablesarealldenominatedinRinggitMalaysia.
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
RAYA INTERNATIONAL BERHAD2014 ANNUALREPORT
74
25) BANK BORROWINGS
GROUP 2014 2013 RM RM Bankoverdraft 693,219 796,649 Financelease-currentportion(Note22) - 26,430 Termloans-currentportion(Note23) 210,542 173,786
903,761 996,865 Asat31stDecember2014,theGrouphasbankoverdraftandothercreditfacilities(excludingfinancelease
andtermloansasmentionedinNotes22and23)totallingRM1,782,000(2013:RM2,025,000)obtainedfromlicensedbanks.Thesefacilitiesbearinterestrangefrom1.50%-7.05%(2013:1.25%-6.80%)perannumandaresecuredbythefollowing:
i) LegalchargeovertheGroup’slandedproperties;and
ii) AjointandseveralguaranteebycertaindirectorsoftheCompanyintheirpersonalcapacities.
26) AMOUNT OWING TO DIRECTORS
Theamountowingtodirectors,whicharosemainlyfromexpensespaidonbehalfandadvancesgiven,isunsecured,interest-freeandrepayableondemand.
27) SIGNIFICANT RELATED PARTY DISCLOSURES
a) Inadditiontorelatedpartydisclosuresmentionedelsewhereinthefinancialstatements,setoutbeloware other significant related party transactions and balances.The related party transactions listedbelowwerecarriedouton termsandconditionsobtainable in transactionswithunrelatedpartiesunlessotherwisestated.
Significantrelatedpartytransactionsundertakenduringthefinancialyearareasfollows:
COMPANY 2014 2013 RM RM PurchasesfromYoubicomMalaysiaSdn.Bhd.,asubsidiary 21,866 -
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
RAYA INTERNATIONAL BERHAD 2014ANNUALREPORT
75
b) Compensationofkeymanagementpersonnel
Theremunerationofdirectorsandothermembersofkeymanagementduringthefinancialyearareasfollow: GROUP AND COMPANY
2014 2013 RM RM
Short-termemployeebenefits 84,000 47,113 Definedcontributionplan-EPF - 4,818 Total 84,000 51,931
Key management personnel are those persons having authority and responsibility for planning,directingandcontrollingtheactivitiesoftheGroupandoftheCompany,directlyorindirectly.
Includedinthetotalkeymanagementpersonnelcostare:
GROUP AND COMPANY 2014 2013 RM RM Directors’remuneration(Note9) 84,000 51,931
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
RAYA INTERNATIONAL BERHAD2014 ANNUALREPORT
76
Prim
aryrepo
rting-Businesssegments
Airfiltration
system
,fast
movingconsum
er
prod
uct,ancillary
supp
ortservices
Investment
andgeneral
Liqu
idfiltration
ho
lding
trading
system
Manufacturin
gTechno
logy
Elim
inations
Con
solid
ated
2014
RM
RM
RM
RM
RM
RM
RM
R
EVEN
UE
Externalsa
les
-1,298,814
-1,636,661
21,866
(21,866)
2,935,475
RES
ULT
S
Profi
t/(Lo
ss)fromoperatio
ns
(393,830)
(132,398)
(4,906)
(355,304)
5,239
(18,586)
(899,785)
Financecosts
-(21,837)
-(469,229)
-
(491,066)
Profi
t/(Lo
ss)b
eforetax
(393,830)
(154,235)
(4,906)
(824,533)
5,239
(1
,390,851)
Incometaxexpense
-
(138,763)
-
-
(2,022)
(140,785)
Profi
t/(Lo
ss)a
ftertax
(393,830)
(292,998)
(4,906)
(824,533)
3,217
(1
,531,636)
O
THER
INFO
RM
ATIO
N
Segm
entassets
13,801,515
6,612,155
310,957,499
29,856
(17,062,377)
14,338,651
Segm
entliabilities
272,435
6,368,677
517,447
17,034,122
20,249
(16,539,518)
7,673,412
Depreciation
12,161
18,399
-304,117
-(3,280)
331,397
Non
-cashexpensesotherth
andepreciation
-406,859
-1,800
-
408,659
(Forward)
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)76
RAYA INTERNATIONAL BERHAD 2014ANNUALREPORT
77
Prim
ary
repo
rtin
g- B
usin
ess s
egm
ents
Airfiltration
system
,fast
movingconsum
er
prod
uct,ancillary
supp
ortservices
Investment
andgeneral
Liqu
idfiltration
ho
lding
trading
system
Manufacturin
gTechno
logy
Elim
inations
Con
solid
ated
2013
RM
RM
RM
RM
RM
RM
RM
R
EVEN
UE
Ex
ternalsa
les
-2,105,461
-318,704
-
2,424,165
R
ESU
LTS
Profi
t/(Lo
ss)fromoperatio
ns
374,515
1,434,361
(2,114)
(959,707)
-
847,055
Financecosts
-
(40,871)
-(454,896)
-
(4
95,767)
Profi
t/(Lo
ss)b
eforetax
374,515
1,393,490
(2,114)
(1,414,603)
-
351,288
Incometaxexpense
-(262,123)
--
-
(262,123)
Profi
t/(Lo
ss)a
ftertax
374,515
1,131,367
(2,114)
(1,414,603)
-
89,165
O
THER
INFO
RM
ATIO
N
Segm
entassets
12,611,928
5,308,397
12
12,066,107
7,990
(16,873,050)
13,121,384
Segm
entliabilities
513,577
6,046,987
512,551
16,181,892
1,600
(16,368,776)
6,887,831
Depreciation
8,412
56,617
-498,126
--
563,155
Non
-cashexpensesotherth
andepreciation
-111,737
-153,051
--
264,788
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
77
RAYA INTERNATIONAL BERHAD2014 ANNUALREPORT
78
28) SEGMENTALINFORMATION
SecondaryReporting-GeographicalSegments
TheGroup’soperationsareentirelylocatedinMalaysia.Therefore,informationongeographicalsegmentsisnotpresented.
29) CONTINGENTLIABILITIES
Asat31stDecember2014,theCompanyhascontingentliabilitiesinrespectofcorporateguaranteesissuedtofinancialinstitutionsamountingtoRM7,733,000(2013:RM7,733,000)forbankingfacilitiesextendedtocertainsubsidiaries.TheCompanyisalsocontingentlyliableinrespectofcorporateguaranteesissuedtosuppliersofcertainsubsidiariesinrespectofsupplyagreementstosupplyproducttothesubsidiaries.
30) FAIR VALUE OF FINANCIAL INSTRUMENTS
DeterminationofFairValue:
i) Financialinstrumentsthatarenotcarriedatfairvalueandwhosecarryingamountsarereasonableapproximationoffairvalue.
Thefollowingareclassesoffinancialinstrumentsthatarenotcarriedatfairvalueandwhosecarryingamountsarereasonableapproximationoffairvalue: Note
Tradereceivables 18 Otherreceivables 18 Amountowingbysubsidiaries 14 Tradepayables 24 Otherpayables 24 Amountowingtodirectors 26 Amountowingtosubsidiaries 14
Thecarryingamountsof thesefinancial assets and liabilities are reasonableapproximationof fairvaluesduetotheirrelativelyshort-termnature.
ii) UnquotedEquityInstruments
ItisnotpracticaltoestimatethefairvalueoftheCompany’sinvestmentinunquotedsharesbecauseofthelackofquotedmarketpricesandthevariabilitytoestimatefairvalue.However,themanagementbelievesthatthecarryingamountrepresentstherecoverablevalue.
iii) FairValueHierarchy Asat31stDecember2014,therewerenofinancialinstrumentscarriedatfairvalue.
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
RAYA INTERNATIONAL BERHAD 2014ANNUALREPORT
79
31) SUPPLEMENTARY INFORMATION
Thebreakdownof theaccumulated lossof theGroupandof theCompanyasat31stDecember2014intorealisedandunrealisedlossispresentedinaccordancewiththedirectiveissuedbyBursaMalaysiaSecurities Berhad dated 25th March 2011 and prepared in accordance with Guidance on SpecialMatterNo.1,DeterminationofRealisedandUnrealisedProfitsorLossesintheContextofDisclosurePursuanttoBursaMalaysiaSecuritiesBerhadListingRequirements,asissuedbytheMalaysiaInstituteofAccountants.
GROUP COMPANY 2014 2013 2014 2013 RM RM RM RM Accumulatedlosscarriedforwardare
analysedasfollows: -Realised (18,851,715) (17,651,181) (8,338,046) (7,944,216) -Unrealised 52,991 365,509 - - (18,798,724) (17,285,672) (8,338,046) (7,944,216) Add:Consolidationadjustments 919,259 938,808 - - (17,879,465) (16,346,864) (8,338,046) (7,944,216)
NOTES TO THE FINANCIAL STATEMENTS (Cont’d)
RAYA INTERNATIONAL BERHAD2014 ANNUALREPORT
80
LIST OF PROPERTIES
ThedetailsofthelandedpropertyoftheGroupasat31December2014aresetoutbelow:-
Location
RayaConsumableSdnBhd
No.6,JalanSalung33/26,ShahAlamTechnologyPark,
Section33,40400ShahAlam
SelangorDarulEhsan
ApproximateLand
Area/Built-upArea
Landarea:Approximately5,178square
metresBuilt-upfloor
area:Approximately5,137square
metres
Description/Use
Cornerthree(3)storeyofficeblock
annexedtoasinglestorey
warehousebuilding
Tenure/Date ofAcquisition
Tenure:Thelandonwhichthepropertyiserectedisafreeholdland
Dateofacquisition:9March2006
Net carryingamount as at31 December
2014
RM8,196,984
Age ofbuilding(years)
15
RAYA INTERNATIONAL BERHAD 2014ANNUALREPORT
81
ANALYSIS OF SHAREHOLDINGS
AuthorisedShareCapital : RM25,000,000.00 (250,000,000OrdinarySharesofRM0.10each)IssuedandFullyPaid-upShareCapital : RM13,041,138.00 (130,411,380OrdinarySharesofRM0.10each)ClassofShares : OrdinarySharesofRM0.10EachVotingRights : One(1)voteperOrdinaryShare
DISTRIBUTION OF SHAREHOLDINGS AS AT 18 MAY 2015
Size of Shareholdings No of % No of Shares % Shareholders 1-99 21 1.62 936 0.00 100-1,000 121 9.35 42,060 0.03 1,001-10,000 389 30.06 2,749,400 2.11 10,001-100,000 585 45.21 24,755,400 18.98 100,001-lessthan5%oftheissuedshares 177 13.68 91,863,584 70.44 5%andaboveofissuedshares 1 0.08 11,000,000 8.44 Total 1,294 100.00 130,411,380 100.00
SUBSTANTIAL SHAREHOLDINGS AS PER THE REGISTER OF SUBSTANTIAL SHAREHOLDERS AS AT 18 MAY 2015
Direct Indirect No Name of Substantial Shareholder No of Shares % No of Shares % 1. TasecNominees(Tempatan)SdnBhd TACapitalSdnBhdForTanChengKiat 11,000,000 8.43 5,850,000 4.48
Note
*Deemedinterestbyvirtueofhisson,MrTanSengHu’sdirectshareholdingsinRaya
LIST OF DIRECTORS’ SHAREHOLDINGS AS AT 18 MAY 2015
Direct Indirect No Name of Substantial Shareholder No of Shares % No of Shares % 1. Dato’IzhamBinYusoff - - - - 2. Dato’TanSengHu 5,850,000 4.48 *11,000,000 8.43 3 ChenHianLoong - - - - 4. YeeCheeSeng@YeeYen - - - - 5. MohdFikryBinRahman - - - - 6. AbdulLatifBinAbdulRahim - - - - 7. HoFookMeng 2,000,000 1.53 - - 8. TonyTanHan(ChenHan) - - - -
*Deemedinterestbyvirtueofhisfather,MrTanChengKiat’sdirectshareholdingsinRaya
RAYA INTERNATIONAL BERHAD2014 ANNUALREPORT
82
THIRTY (30) LARGEST SHAREHOLDERS AS AT 18 MAY 2015
No Name of Shareholders No of Shares %1. TasecNominees(Tempatan)SdnBhd 11,000,000 8.44 TACapitalSdnBhdforTanChengKiat2. AngTunYoung 5,500,000 4.223. ChiaBeeChin 5,196,800 3.984. ChiaGuitNga 5,000,000 3.835. TasecNominees(Tempatan)SdnBhd 5,000,000 3.83 TACapitalSdnBhdforTanSengHu6. AliranMawarSdnBhd 4,885,580 3.757. MaybankSecuritiesNominees(Tempatan)SdnBhdPledgedSecurities 2,120,000 1.62 AccountforJaikishanRewachandA/LRewachandBhojumall (REM822-Margin)8. WendyNgAiHoon 2,082,200 1.599. HoFookMeng 2,000,000 1.5310. ChoeYangChoon 1,978,500 1.5211. HLIBNominees(Tempatan)SdnBhd 1,725,000 1.32 HongLeongBankBhdforBehLianYim12. SuchaSingh@GurmejSingh 1,500,000 1.1513. DharminderSinghA/LAmarSingh 1,230,000 0.9414. RanjitSinghA/LHarchandSingh 1,100,000 0.8415. TangAhKau 1,000,000 0.7716. TohGaikBee 1,000,000 0.7717. AmsecNominees(Tempatan)SdnBhd 966,000 0.74 PledgedSecuritiesAccountForJayeskumarA/LChamanlalRugnath18. WongSowTing 900,000 0.6919. YowFookLeong 865,000 0.6620. MaybankNominees(Tempatan)SdnBhd 850,000 0.65 PledgedSecuritiesAccountforTanSengHu21. ChuaKeanKok 826,000 0.6322. WangFookWeng 812,100 0.6223. LimChinHock 811,900 0.6224. GanKongSeng 803,500 0.6225. YongBoonFook 776,700 0.6026. MaybankNominees(Tempatan)SdnBhd 720,000 0.55 PledgedSecuritiesAccountforTeeBeeLing27. WongJeeYai 707,500 0.5428. HLBNominees(Tempatan)SdnBhd 705,000 0.54 PledgedSecuritiesAccountForFrancisKong@KongFenShin29. LeeChayChye 700,000 0.5330. ChunSooChin 686,900 0.53 TOTAL 63,448,680 48.65
ANALYSIS OF SHAREHOLDINGS (Cont’d)
RAYA INTERNATIONAL BERHAD 2014ANNUALREPORT
83
NOTICEISHEREBYGIVENTHATtheEighteenthAnnualGeneralMeeting(“AGM”)ofRayaInternationalBerhad(“Raya”orthe“Company”)willbeheldatCrystalHall3,Level4,CrystalCrownHotelPetalingJaya,No:12,LorongUtaraA,OffJalanUtara,46200PetalingJaya,SelangorDarulEhsanonThursday,25June2015at3.00p.m,oratanyadjournmentthereofforthepurposeofconsideringandifthoughtfit,passingthefollowingresolutionwithorwithoutmodification:-
AGENDA
ORDINARY BUSINESS
1. ToreceivetheAuditedFinancialStatementsoftheCompanyforthefinancialyearended31December2014togetherwiththeReportsoftheDirectorsandAuditorsthereon.
2. ToapprovethepaymentofDirectors’FeesamountingtoRM84,000.00forthefinancialyearended31December2014
3. Tore-electMr.MohdFikryBinRahmanwhoretirespursuanttoArticle92oftheCompany’sArticlesofAssociation.
4. To-re-elect the followingDirectorswho retire pursuant toArticle 98 of theCompany’sArticlesofAssociation:-
4.1 Mr.ChenHianLoong 4.2 Mr.HoFookMeng 4.3 Capt.TonyTanHan(ChenHan)
5. Tore-electMr.YeeCheeSeng@YeeYenwhoretirespursuanttoSection129(6)oftheCompaniesAct,1965andtoholdofficeuntiltheconclusionofthenextAnnualGeneralMeeting
6. Tore-appointMessrsSTYLAssociatesastheAuditorsoftheCompanyandtoauthorisetheBoardofDirectorstofixtheirremuneration.
RAYA INTERNATIONAL BERHAD(CompanyNo:412406-T)
(IncorporatedinMalaysiaundertheCompaniesAct,1965)
NOTICE OF EIGHTEENTH ANNUAL GENERAL MEETING
PleaserefertoExplanatoryNote1
Resolution1
Resolution2
Resolution3Resolution4Resolution5
Resolution6
Resolution7
RAYA INTERNATIONAL BERHAD2014 ANNUALREPORT
84
SPECIAL BUSINESS
Toconsiderand,ifthoughtfit,topasswithorwithoutmodifications,thefollowingResolutions:-
7. ORDINARY RESOLUTION
AUTHORITY TO ALLOT SHARES PURSUANT TO SECTION 132D OF THE COMPANIES ACT, 1965
“THATpursuanttoSection132DoftheCompaniesAct,1965,theDirectorsbeandareherebyauthorisedtoallotandissuesharesintheCompanyatanytimeanduponsuchtermsandconditionsandforsuchpurposesastheDirectorsmayintheirabsolutediscretion,deemfit,providedthattheaggregatenumberofsharestobeissuedpursuanttothisresolutiondoesnotexceedtenpercentum(10%) of the total issued capital of theCompany at the time of issueANDTHATtheDirectorsbeandarealsoempoweredtoobtaintheapprovalforthelistingofandquotationfortheadditionalsharestobeissuedonBursaMalaysiaSecuritiesBerhadANDTHATsuchauthorityshallcontinuetobeinforceuntiltheconclusionofthenextAnnualGeneralMeetingoftheCompany.”
8. Totransactanyotherbusinessofwhichduenoticeshallhavebeengiven inaccordancewiththeCompaniesAct,1965.
ByOrderoftheBoardRAYA INTERNATIONAL BERHAD
WAN HASLINDA BINTI WAN YUSOFF (MAICSA 7055478)SANGAR NALLAPPAN (MACS 01413)CompanySecretaries
KualaLumpur29May2015
Notes:
1. A member of the Company who is entitled to attend and vote at this AGM is entitled to appoint a proxy/proxies, and in the case of a corporation, a duly authorised representative to attend and vote in its stead.
2. A proxy may but need not be a member of the Company. Where a member appoints more than one (1) proxy, he shall specify the proportions of his shareholdings to be represented by each proxy.
3. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), the exempt authorised nominee may appoint any number of proxy (no limit) in respect of each omnibus account it holds.
4. The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorised in writing or if the appointor is a corporation, either under its common seal or under the hand of its attorney duly authorised in writing.
Resolution8
NOTICE OF EIGHTEENTH ANNUAL GENERAL MEETING (Cont’d)
RAYA INTERNATIONAL BERHAD 2014ANNUALREPORT
85
5. The instrument appointing a proxy must be deposited at the Registered Office of the Company situated at No: 149A, 149B, 151B, Persiaran Raja Muda Musa, 42000 Port Klang, Selangor Darul Ehsan, not less than 48 hours before the time set for holding this meeting or at any adjournment thereof.
6. For the purpose of determining a member who shall be entitled to attend this AGM, only members whose name appears on the Record of Depositors as at 18 June 2015 shall be entitled to attend the said meeting or appoint proxy to attend and / or vote on his / her behalf.
EXPLANATORY NOTE 1 Item 1 of the Agenda
ThisitemismeantfordiscussiononlyastheprovisionofSection169(1)oftheCompaniesAct,1965doesnotrequireaformalapprovaloftheshareholdersfortheAuditedFinancialStatements.Hence,thisAgendaisnotputforwardforvoting.
EXPLANATORY NOTE ON SPECIAL BUSINESS
OrdinaryResolution8
- AuthoritytoallotsharespursuanttoSection132DoftheCompaniesAct,1965
TheProposedOrdinaryResolution8,ifpassed,willempowertheDirectorsoftheCompanyfromthedateoftheaboveAnnualGeneralMeeting,authoritytoallotandissuesharesintheCompanyuptoanaggregateamountofnotexceeding10%oftheissuedsharecapitaloftheCompanyforthetimebeingforsuchpurposesastheyconsiderwouldbeinthebestinterestoftheCompanyandalsotoempowerDirectorstoobtainapprovalfromBursaMalaysiaSecuritiesBerhadforthelistingofandquotationforadditionalsharesissued.Thisauthority,unlessrevokedorvariedatageneralmeeting,willexpireatthenextAnnualGeneralMeetingoftheCompany.
TherenewalofthismandatewillprovideflexibilitytotheCompanyforanypossiblefundraisingactivities,including but not limited to further placing of shares, for the purpose of funding future investment,working capital and/or acquisition or to issue new shares as consideration for investments and/oracquisitionwhichtheDirectorsconsiderwouldbeinthebestinterestoftheCompany.
NOTICE OF EIGHTEENTH ANNUAL GENERAL MEETING (Cont’d)
RAYA INTERNATIONAL BERHAD2014 ANNUALREPORT
86
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(NRIC No./Company No. )
)
)
of
being a *member/*members of RAYA INTERNATIONAL BERHAD (Formerly known as ENVAIR HOLDING BERHAD)
(FULL NAME)
(FULL NAME)
(FULL ADDRESS)
*My/*our proxy(ies) *is/*are to vote as indicated below:-
CDS Account No.: Date this day of 2015
[Signature/Common Seal of Shareholder (s)]* Delete if not applicable
(Company No. 412406-T)
As *my/*our proxy(ies) to vote for *me/*us and on *my/*our behalf at the Eighteenth Annual General Meeting of the Company, to be held at Crystal Hall 3, Level 4, Crystal Crown Hotel Petaling Jaya, No: 12, Lorong Utara A, Off Jalan Utara, 46200 Petaling Jaya, Selangor Darul Ehsan on Thursday, 25 June 2015 at 3.00 p.m and, at every adjournment thereof for/against the resolution to be proposed thereat.
Notes:-
1. A member of the Company who is entitled to attend and vote at this EGM is entitled to appoint a proxy/proxies, and in the case of a corporation, a duly authorised representative to attend and vote in its stead.
2. A proxy may but need not be a member of the Company. Where a member appoints more than one (1) proxy, he shall specify the proportions of his shareholdings to be represented by each proxy.
3. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), the exempt authorised nominee may appoint any number of proxy (no limit) in respect of each omnibus account it holds.
4. The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorised in writing or if the appointor is a corporation, either under its common seal or under the hand of its attorney duly authorised in writing.
5. The instrument appointing a proxy must be deposited at the Registered Office of the Company situated at No: 149A, 149B, 151B, Persiaran Raja Muda Musa, 42000 Port Klang, Selangor Darul Ehsan, not less than forty-eight (48) hours before the time set for holding this meeting or at any adjournment thereof.
6. For the purpose of determining a member who shall be entitled to attend this EGM, only members whose name appears on the Record of Depositors as at 18 June 2015 shall be entitled to attend the said meeting or appoint proxy to attend and/or vote on his/her behalf.
Please indicate with an “X” in the appropriate spaces provided on how you wish your votes to be cast.If you do not indicate how you wish your proxy to vote at any resolution, the proxy may vote as he thinks fit.
NO RESOLUTION FOR AGAINST
Number of Ordinary Shares held:
I/We
of
of
or failing whom
hereby appoint *the Chairman of the meeting or
(FULL ADDRESS)
(FULL ADDRESS)(NRIC No.
(NRIC No.
(FULL NAME IN CAPITAL LETTERS)
RAYA INTERNATIONAL BERHAD
PROXY FORM
Ordinary Resolution 1 To approve the payment of Directors’ FeesOrdinary Resolution 2 To re-elect Mr. Mohd Fikry Bin Rahman as DirectorOrdinary Resolution 3 To re-elect Mr Chen Hian Loong as DirectorOrdinary Resolution 4 To re-elect Mr. Ho Fook Meng as DirectorOrdinary Resolution 5 To re-elect Capt . Tony Tan Han (Chen Han) as DirectorOrdinary Resolution 6 To re-elect Mr.Yee Chee Seng @ Yee Yen as DirectorOrdinary Resolution 7 To re-appoint Messrs STYL Associates as the Auditors of the Company and to authorise the Board of Directors to fix their remunerationOrdinary Resolution 8 Authority To Allot Shares
Then fold here
1st fold here
AFFIXSTAMP
RAYA INTERNATIONAL BERHAD (Company No. 412406-T)No: 149A, 149B, 151B
Persiaran Raja Muda Musa42000 Port Klang
Selangor Darul Ehsan