See Hup Consolidated Berhad (Company No V) (Incorporated in Malaysia) and its subsidiaries Financial statements for the year ended 31 March

Transcription

1 See Hup Consolidated Berhad (Company No V) (Incorporated in Malaysia) and its subsidiaries Financial statements for the year ended 31 March 2015

2 1 See Hup Consolidated Berhad (Company No V) (Incorporated in Malaysia) and its subsidiaries Directors report for the year ended 31 March 2015 The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the financial year ended 31 March Principal activities The Company is principally engaged in investment holding activities whilst the principal activities of its subsidiaries are as stated in Note 5 to the financial statements. There has been no significant change in the nature of these activities during the financial year. Results Group RM Company RM Profit for the year attributable to : Owners of the Company 411, ,702 Non-controlling interests 596,435-1,007, ,702 Reserves and provisions There were no material transfers to or from reserves and provisions during the financial year except as disclosed in the financial statements. Dividends No dividend was paid during the year and the Directors do not recommend any dividend to be paid for the financial year under review.

3 Company No V 2 Directors of the Company Directors who served since the date of the last report are: Lee Chor Min - Group Managing Director Haji Muhadzir Bin Mohd. Isa Lee Hean Huat Haji Shamsul Ariffin B. Mohd Nor Ng Shiek Nee Mak Cheow Yeong Lee Phay Chian Lim Swee Aun (Resigned on ) Directors interests in shares The interests and deemed interests in the shares, warrants and options over shares of the Company and of its related companies (other than wholly-owned subsidiaries) of those who were Directors at financial year end (including the interests of the spouses and/or children of the Directors who themselves are not Directors of the Company) as recorded in the Register of Directors Shareholdings are as follows : Interest in the Company : At 1 April 2014 Number of ordinary shares of RM1 each Bought Sold At 31 March 2015 Lee Hean Huat - own 581, ,330 - others # 1,116,000 30,000-1,146,000 Lee Chor Min - own 500, ,000 Mak Cheow Yeong - own 43, ,400 Lee Phay Chian - own 66, ,000 Interest in subsidiaries : Mazs Marketing (M) Sdn. Bhd. Haji Muhadzir Bin Mohd. Isa - own 170, ,000

4 Company No V 3 Directors interests in shares (continued) Interest in subsidiaries : SH Haulage Sdn. Bhd. Number of ordinary shares of RM1 each Balance at Bought (Sold) Balance at Haji Shamsul Ariffin B. Mohd Nor - own 300, ,000 Deemed interest in the Company : Lee Hean Huat - own 8,320, ,320,594 - others # 678, ,900 Interest in the Company : Number of warrants over ordinary shares of RM1 each Balance at Bought (Sold) Balance at Lee Chor Min - own 100, ,000 Lee Phay Chian - own 22, ,000 Interest in the Company : Number of options over ordinary shares of RM1 each Balance at Granted Exercised Expired/ Lapsed Balance at Lee Hean Huat - own 300, ,000 Haji Shamsul Ariffin B. Mohd Nor - own 100, ,000 Haji Muhadzir Bin Mohd. Isa - own 100, ,000 # These are shares held in the name of the spouse and children and are treated as interest of the Director in accordance with Section 134(12)(c) of the Companies Act, 1965.

5 Company No V 4 Directors interests in shares (continued) By virtue of his interests in the shares of the Company, Mr. Lee Hean Huat is also deemed to be interested in the shares of the subsidiaries to the extent that See Hup Consolidated Berhad has an interest. The other Director holding office at 31 March 2015 does not have any interest in the shares, warrants and options over ordinary shares of the Company and of its related companies during the financial year. Directors benefits Since the end of the previous financial year, no Director of the Company has received nor become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by Directors as shown in the financial statements or the fixed salary of a full time employee of the Company or of related companies) by reason of a contract made by the Company or a related company with the Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest other than those transactions entered into in the ordinary course of business between certain companies in the Group with companies in which certain Directors have substantial financial interests as disclosed in Note 31 to the financial statements. There were no arrangements during and at the end of the financial year which had the object of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate apart from the issue of warrants and the Employees Share Option Scheme ( ESOS ) granted to certain Directors. Issue of shares and debentures There were no changes in the authorised, issued and paid-up capital of the Company and no debentures were issued during the financial year. Options granted over unissued shares No options were granted to any person to take up unissued shares of the Company apart from the issue of options pursuant to the ESOS. At an extraordinary general meeting held on 16 September 2005, the Company s shareholders approved the establishment of an ESOS of not more than 15% of the issued share capital of the Company to eligible Directors and employees of the Group after the expiry of its previous ESOS on 22 May On 2 August 2010, the Board of Directors passed a resolution resolving that the ESOS be extended for a further 5 years until 22 September 2015 in accordance with the existing By- Laws of the ESOS.

6 Company No V 5 Options granted over unissued shares (continued) The options offered to take up unissued ordinary shares of RM1 each and the option price are as follows : Date of offer Option price RM Number of options over ordinary shares of RM1 each Lapsed due Balance at to Balance at Granted Exercised resignation ,230, (68,000) 2,162, , (12,000) 507, ,304, (78,000) 1,226,000 The main features of the ESOS are as follows : i) The total number of shares to be offered under the ESOS shall not exceed 15% of the issued and paid-up share capital of the Company at any point of time during the duration of the ESOS; ii) The ESOS shall continue to be in force for a period of ten years commencing from 23 September 2005 ( Option period ); iii) iv) The option is personal to the grantee and is not assignable, transferable, disposable or changeable except for certain conditions provided for in the Bye-Laws; Eligible persons are employees and Directors of the Group who have been confirmed in the employment with the Group for at least one year; v) The options shall be exercised in multiples of not less than 100 options; vi) The option price shall be the higher of the following : a) a discount of not more than 10% on the weighted average market price of the shares as quoted and shown in the daily official list issued by Bursa Malaysia Securities Berhad for the five (5) Market Days immediately preceding the date of the offer; and b) the par value of the ordinary shares. vii) The options granted do not confer any dividend or other distribution declared to the shareholders as at a date which precedes the date of allotment of the new shares in the Company and will be subject to all the provisions of the Articles of Association of the Company; and viii) In the event of any alteration in the capital structure of the Company during the Option period, whether by way of capitalisation of profits or reserves, rights issues, reduction of capital, subdivision or consolidation of shares or otherwise howsoever, taking places, such corresponding alterations (if any) shall be made to the number of shares relating to the unexercised Options and Option price.

7 Company No V 6 Options granted over unissued shares (continued) During the financial year 2013, the Company issued: a) 9,192,930 free warrants ( Warrants ) to subscribers of the Renounceable Rights Issue ( Rights Shares ) of 4,596,465 new ordinary shares of RM1.00 each in the Company on the basis of two (2) Warrants for every one (1) Rights Shares subscribed; and b) 11,200,000 free warrants ( Warrants ) to subscribers of private placement ( Placement Shares ) of 5,600,000 new ordinary shares of RM1.00 each in the Company on the basis of two (2) Warrants for every one (1) Placement Share subscribed. Each Warrant carries the entitlement, at any time during the exercise period, to subscribe for one (1) new ordinary share of RM1.00 each in the Company at the exercise price of RM1.00 per ordinary share, subject to adjustments in accordance with the provisions of the Deed Poll to be satisfied in cash. Any Warrant not exercised during the exercise period will lapse and thereafter cease to be valid for any purpose. The exercise period of the Warrant will expire on 22 December No warrants were exercised during the financial year. As at the end of reporting date, 20,392,930 warrants remained unexercised. Irredeemable convertible unsecured loan stocks ("ICULS") On 26 December 2012, the Company issued RM5,107,093 nominal value of 5-year 4.6% ICULS at 100% of its nominal value for working capital purposes and to partially repay the Group s bank borrowings. The salient features of the ICULS are disclosed in Note 27 to the financial statements. Other statutory information Before the financial statements of the Group and of the Company were made out, the Directors took reasonable steps to ascertain that: i) all known bad debts have been written off and adequate provision made for doubtful debts, and ii) any current assets which were unlikely to be realised in the ordinary course of business have been written down to an amount which they might be expected so to realise. At the date of this report, the Directors are not aware of any circumstances: i) that would render the amount written off for bad debts or the amount of the provision for doubtful debts in the Group and in the Company inadequate to any substantial extent, or ii) that would render the value attributed to the current assets in the financial statements of the Group and of the Company misleading, or

8 Company No V 7 Other statutory information (continued) iii) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate, or iv) not otherwise dealt with in this report or the financial statements that would render any amount stated in the financial statements of the Group and of the Company misleading. At the date of this report, there does not exist: i) any charge on the assets of the Group or of the Company that has arisen since the end of the financial year and which secures the liabilities of any other person, or ii) any contingent liability in respect of the Group or of the Company that has arisen since the end of the financial year. No contingent liability or other liability of any company in the Group has become enforceable, or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may substantially affect the ability of the Group and of the Company to meet their obligations as and when they fall due. In the opinion of the Directors, the financial performance of the Group and of the Company for the financial year ended 31 March 2015 have not been substantially affected by any item, transaction or event of a material and unusual nature nor has any such item, transaction or event occurred in the interval between the end of that financial year and the date of this report. Significant event Details of the significant event are disclosed in Note 35 to the financial statements. Subsequent events Details of the subsequent events are disclosed in Note 36 to the financial statements.

9 Company No V 8 Signed on behalf of the Board of Directors in accordance with a resolution of the Directors : Lee Chor Min Lee Hean Huat Penang, Date : 27 July 2015

10 9 See Hup Consolidated Berhad (Company No V) (Incorporated in Malaysia) and its subsidiaries Consolidated statement of financial position as at 31 March 2015 Assets Note RM RM Property, plant and equipment 3 46,117,664 45,608,041 Investment properties 4 16,338,808 16,702,017 Investments in associates 6 2,555,219 2,542,879 Other investments 7 178,677 1,434,797 Goodwill on consolidation 8 37, ,640 Deferred tax assets , ,479 Total non-current assets 65,377,860 66,980,853 Trading inventories, at cost 72,683 62,594 Receivables, deposits and prepayments 9 28,286,010 27,553,986 Current tax assets 591, ,300 Fixed deposits placed with a licensed bank 10 42,025 42,025 Cash and cash equivalents 11 4,386,593 5,165,041 Total current assets 33,379,263 33,660,946 Total assets 98,757, ,641,799 Equity Share capital 12 47,874,909 47,874,909 Treasury shares 13 (325,880) - Reserves 14 11,555,413 11,161,177 Total equity attributable to owners of the Company 59,104,442 59,036,086 Non-controlling interests , ,752 Total equity 59,386,017 59,144,838

11 Company No V 10 Consolidated statement of financial position as at 31 March 2015 (continued) Liabilities Note RM RM Loans and borrowings 16 10,843,604 11,534,691 Deferred tax liabilities 17 2,540,466 2,993,374 Total non-current liabilities 13,384,070 14,528,065 Payables and accruals 18 17,157,298 14,586,376 Loans and borrowings 16 8,649,627 12,300,120 Current tax liabilities 180,111 82,400 Total current liabilities 25,987,036 26,968,896 Total liabilities 39,371,106 41,496,961 Total equity and liabilities 98,757, ,641,799 The notes on pages 22 to 105 are an integral part of these financial statements.

12 11 See Hup Consolidated Berhad (Company No V) (Incorporated in Malaysia) and its subsidiaries Consolidated statement of profit or loss and other comprehensive income for the year ended 31 March 2015 Continuing operations Note RM RM Revenue 19 87,596,176 84,134,069 Other operating income 2,629,445 1,740,956 Trading inventories sold (4,257,951) (1,605,631) Staff costs 20 (16,090,733) (15,378,209) Depreciation 3 & 4 (6,239,596) (6,981,327) Other operating expenses (60,481,670) (60,641,100) Results from operating activities 21 3,155,671 1,268,758 Financing costs 22 (1,169,629) (1,492,321) Operating profit/(loss) 1,986,042 (223,563) Share of profit of equity accounted associates, net of tax 6 12, ,936 Profit before tax 1,998, ,373 Income tax expense 24 (990,711) (252,012) Profit for the year 1,007,671 81,361 Other comprehensive income for the year, net of tax Items that may be reclassified subsequently to profit or loss Fair value of available-for-sale financial assets (2,000) (27,667) Total comprehensive income for the year 1,005,671 53,694

13 Company No V 12 Consolidated statement of profit or loss and other comprehensive income for the year ended 31 March 2015 (continued) Profit/(Loss) attributable to : Note RM RM Owners of the Company 411, ,778 Non-controlling interests 596,435 (194,417) Profit for the year 1,007,671 81,361 Total comprehensive income/(expense) attributable to : Owners of the Company 409, ,411 Non-controlling interests 596,435 (202,717) Total comprehensive income for the year 1,005,671 53,694 Basic earnings per ordinary share (sen) The notes on pages 22 to 105 are an integral part of these financial statements.

14 13 See Hup Consolidated Berhad (Company No V) (Incorporated in Malaysia) and its subsidiaries Consolidated statement of changes in equity for the year ended 31 March 2015 Attributable to owners of the Company Non-distributable Share capital Treasury shares Share premium Equity component of ICULS Share options reserve Warrants reserve Fair value reserve Distributable Retained earnings Total Noncontrolling interests Total equity RM RM RM RM RM RM RM RM RM RM RM At 1 April ,874,909-1,826,933 4,368, ,820 3,589,156 12, ,234 58,803, ,013 59,036,144 Fair value of available-for-sale financial assets Reclassification adjustments for losses from impairment included in profit or loss (19,367) - (19,367) (8,300) (27,667) Total other comprehensive expense for the year (19,367) - (19,367) (8,300) (27,667) Profit for the year , ,778 (194,417) 81,361 Total comprehensive income/(expense) for the year (19,367) 275, ,411 (202,717) 53,694 Change in ownership interests in a subsidiary (Note 34) (23,456) (23,456) 78,456 55,000 Total transaction with owners (23,456) (23,456) 78,456 55,000 At 31 March ,874,909-1,826,933 4,368, ,820 3,589,156 (7,205) 973,556 59,036, ,752 59,144,838

15 Company No V 14 Consolidated statement of changes in equity for the year ended 31 March 2014 (continued) Attributable to owners of the Company Non-distributable Share capital Treasury shares Share premium Equity component of ICULS Share options reserve Warrants reserve Fair value reserve Distributable Retained earnings Total Noncontrolling interests Total equity RM RM RM RM RM RM RM RM RM RM RM At 1 April ,874,909-1,826,933 4,368, ,820 3,589,156 (7,205) 973,556 59,036, ,752 59,144,838 Fair value of available-for-sale financial assets (2,000) - (2,000) - (2,000) Total other comprehensive expense for the year (2,000) - (2,000) - (2,000) Profit for the year , , ,435 1,007,671 Total comprehensive income/(expense) for the year (2,000) 411, , ,435 1,005,671 Contributions by and distributions to owner of the Company - Disposal of a subsidiary (Note 35) (15,000) (15,000) (423,612) (438,612) - Own shares acquired (Note 13) - (325,880) (325,880) - (325,880) Total transaction with owners - (325,880) - - (15,000) (340,880) (423,612) (764,492) At 31 March ,874,909 (325,880) 1,826,933 4,368, ,820 3,589,156 (9,205) 1,384,792 59,104, ,575 59,386,017 The notes on pages 22 to 105 are an integral part of these financial statements.

16 15 See Hup Consolidated Berhad (Company No V) (Incorporated in Malaysia) and its subsidiaries Consolidated statement of cash flows for the year ended 31 March 2015 Cash flows from operating activities Note RM RM Profit before tax from continuing operations 1,998, ,373 Adjustments for : Depreciation of : - property, plant and equipment 3 6,162,012 6,916,623 - investment properties 4 77,584 64,704 Gain on disposal of : - property, plant and equipment (1,440,231) (200,896) - investment properties (80,125) (357,269) Loss on disposal of : - other investments 174, ,913 - investment in a subsidiary 139, investment in an associate - 212,813 Interest expense 22 1,169,629 1,492,321 Interest income (189,760) (157,959) Share of profit of equity accounted associates, net of tax (12,340) (556,936) Dividend income (700) (700) Impairment loss on property, plant and equipments - 411,223 Property, plant and equipment written off 3,074 - Impairment loss on goodwill 8 461,303 - Operating profit before changes in working capital 8,462,632 8,298,210 Changes in working capital : Receivables, deposits and prepayments (1,959,089) 201,333 Trading inventories (10,089) 221,642 Payables and accruals 3,010,948 1,916,104 Cash generated from operations 9,504,402 10,637,289

17 Company No V 16 Consolidated statement of cash flows for the year ended 31 March 2015 (continued) Cash flows from operating activities (continued) Note RM RM Income tax paid (1,049,904) (1,064,701) Dividends received Net cash from operating activities 8,455,198 9,573,288 Cash flows from investing activities Acquisition of property, plant and equipment A (6,100,543) (4,904,643) Acquisition of investment properties 4 (4,250) (2,000,000) Interest received 189, ,959 Proceeds from disposal of property, plant and equipment 4,911, ,145 Proceeds from disposal of investment properties 370, ,700 Proceeds from disposal of a subsidiary ,328 - Proceeds from disposal of investment in an associate - 1,320,000 Proceeds from disposal of other investments 1,080, ,256 Decrease in pledged deposits placed with licensed banks - 126,038 Net cash from/(used in) investing activities 734,317 (3,689,545) Cash flows from financing activities Net repayment of revolving credits (4,599,993) (3,792,214) Drawdown of term loans - 3,394,800 Repayment of term loans (2,665,943) (2,773,804) Repayment of finance lease liabilities (1,030,687) (776,390) Interest paid on borrowings (1,119,388) (1,431,299) Interest paid on ICULS (234,926) (234,926) Proceeds from issuance of shares in a subsidiary to non-controlling interests - 55,000 Purchase of treasury shares (325,880) - Net cash used in financing activities (9,976,817) (5,558,833)

18 Company No V 17 Consolidated statement of cash flows for the year ended 31 March 2015 (continued) Note RM RM Net(decrease)/increase in cash and cash equivalents (787,302) 324,910 Cash and cash equivalents at beginning of the year 5,165,041 4,840,131 Cash and cash equivalents at end of the year B 4,377,739 5,165,041 NOTES A. Acquisition of property, plant and equipment During the year, the Group acquired property, plant and equipment with an aggregate cost of RM10,263,943 (2014 : RM4,970,243) of which RM3,894,600 (2014 : RM65,600) was acquired by means of finance lease arrangements and RM268,800 (2014 : Nil) was acquired by means of term loans arrangements. The balance of RM6,100,543 (2014 : RM4,904,643) was made by cash payments. B. Cash and cash equivalents Cash and cash equivalents included in the consolidated statement of cash flows comprise the following amounts : Note RM RM Short term deposits placed with licensed banks ,000 - Cash and bank balances 11 4,026,593 5,165,041 Bank overdrafts 16 (8,854) - 4,377,739 5,165,041 The notes on pages 22 to 105 are an integral part of these financial statements.

19 18 See Hup Consolidated Berhad (Company No V) (Incorporated in Malaysia) Statement of financial position as at 31 March 2015 Assets Note RM RM Investments in subsidiaries 5 25,613,173 25,784,173 Investments in associates 6 965, ,432 Other investments 7 101, ,282 Deferred tax assets , ,479 Total non-current assets 26,830,042 27,045,366 Receivables, deposits and prepayments 9 26,372,462 26,362,650 Current tax assets 126, ,266 Cash and cash equivalents 11 29,894 32,564 Total current assets 26,529,322 26,522,480 Total assets 53,359,364 53,567,846 Equity Share capital 12 47,874,909 47,874,909 Treasury shares 13 (325,880) - Reserves 14 5,107,049 4,804,347 Total equity attributable to owners of the Company 52,656,078 52,679,256 Liabilities Liability component of ICULS , ,119 Total non-current liabilities 417, ,119 Payables and accruals 18 77,641 78,260 Liability component of ICULS , ,211 Total current liabilities 285, ,471 Total liabilities 703, ,590 Total equity and liabilities 53,359,364 53,567,846 The notes on pages 22 to 105 are an integral part of these financial statements.

20 19 See Hup Consolidated Berhad (Company No V) (Incorporated in Malaysia) Statement of profit or loss and other comprehensive income for the year ended 31 March 2015 Continuing operations Note RM RM Revenue Other operating income 550, ,030 Other operating expenses (138,533) (84,729) Results from operating activities , ,301 Financing costs 22 (50,241) (61,022) Profit before tax 362, ,279 Income tax expense 24 (44,324) (54,260) Profit for the year representing total comprehensive income for the year attributable to owners of the Company 317, ,019 The notes on pages 22 to 105 are an integral part of these financial statements.

21 20 See Hup Consolidated Berhad (Company No V) (Incorporated in Malaysia) Statement of changes in equity for the year ended 31 March 2015 Non-distributable Share Treasury Share Equity component Share options Warrants Accumulated Total capital shares Premium of ICULS reserve Reserve losses equity RM RM RM RM RM RM RM RM At 1 April ,874,909-1,826,933 4,368, ,820 3,589,156 (5,522,498) 52,547,237 Profit for the year representing total comprehensive income for the year , ,019 At 31 March 2014/1 April ,874,909-1,826,933 4,368, ,820 3,589,156 (5,390,479) 52,679,256 Profit for the year representing total comprehensive income for the year , ,702 Contributions by and distributions to owners of the Company - Disposal of a subsidiary (15,000) - - (15,000) - Own shares acquired (Note 13) - (325,880) (325,880) Total transactions with owners of the Company - (325,880) - - (15,000) - - (340,880) At 31 March ,874,909 (325,880) 1,826,933 4,368, ,820 3,589,156 (5,072,777) 52,656,078 The notes on pages 22 to 105 are an integral part of these financial statements.

22 21 See Hup Consolidated Berhad (Company No V) (Incorporated in Malaysia) Statement of cash flows for the year ended 31 March 2015 Cash flows from operating activities Note RM RM Profit before tax from continuing operations 362, ,279 Adjustments for : Interest income (334,200) (332,030) Interest expense 22 50,241 61,022 Gain on disposal of investment in subsidiary (216,600) - Operating loss before changes in working capital (138,533) (84,729) Changes in working capital : Receivables, deposits and prepayments (9,812) 48,360 Payables and accruals (619) (66,273) Cash used in operations (148,964) (102,642) Income tax refunded/(paid) 300 (2,444) Net cash used in operating activities (148,664) (105,086) Cash flows from investing activities Subscription of additional shares in a subsidiary - (45,000) Interest received 334, ,030 Proceeds from disposal of investment in subsidiary ,600 - Net cash from investing activities 706, ,030 Cash flows from financing activities Interest paid on ICULS (234,926) (234,926) Repurchase of treasury shares (325,880) - Net cash used in financing activities (560,806) (234,926) Net decrease in cash and cash equivalents (2,670) (52,982) Cash and cash equivalents at beginning of the year 32,564 85,546 Cash and cash equivalents at end of the year 11 29,894 32,564 The notes on pages 22 to 105 are an integral part of these financial statements.

23 22 See Hup Consolidated Berhad (Company No V) (Incorporated in Malaysia) and its subsidiaries Notes to the financial statements See Hup Consolidated Berhad is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Market of Bursa Malaysia Securities Berhad. The addresses of the principal place of business and registered office of the Company are as follows : Principal place of business 18, Jalan Limbungan Off Jalan Chain Ferry Butterworth Penang Registered office Suite 16-1 (Penthouse Upper) Menara Penang Garden 42A Jalan Sultan Ahmad Shah Penang The consolidated financial statements of the Company as at and for the financial year ended 31 March 2015 comprise the Company and its subsidiaries (together referred to as the Group and individually referred to as Group entities ) and the Group s interest in associates. The financial statements of the Company as at and for the financial year ended 31 March 2015 do not include other entities. The Company is principally engaged in investment holding activities whilst the principal activities of its subsidiaries as stated out in Note 5 to the financial statements. These financial statements were authorised for issue by the Board of Directors on 27 July Basis of preparation (a) Statement of compliance The financial statements of the Group and of the Company have been prepared in accordance with Malaysian Financial Reporting Standards ( MFRS ), International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.

24 Company No V Basis of preparation (continued) (a) Statement of compliance (continued) The following are accounting standards, amendments and interpretations that have been issued by the Malaysian Accounting Standards Board ( MASB ) but have not been adopted by the Group and the Company : MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 July 2014 Amendments to MFRS 1, First-time Adoption of Malaysian Financial Reporting Standards (Annual Improvements Cycle)* Amendments to MFRS 2, Share-based Payment (Annual Improvements Cycle) Amendments to MFRS 3, Business Combinations (Annual Improvements Cycle and Cycle) Amendments to MFRS 8, Operating Segments (Annual Improvements Cycle) Amendments to MFRS 13, Fair Value Measurement (Annual Improvements Cycle and Cycle) Amendments to MFRS 116, Property, Plant and Equipment (Annual Improvements Cycle) Amendments to MFRS 119, Employee Benefits Defined Benefit Plans: Employee Contributions* Amendments to MFRS 124, Related Party Disclosures (Annual Improvements Cycle) Amendments to MFRS 138, Intangible Assets (Annual Improvements Cycle) Amendments to MFRS 140, Investment Property (Annual Improvements Cycle) MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2016 Amendments to MFRS 5, Non-current Assets Held for Sale and Discontinued Operations (Annual Improvements Cycle)# Amendments to MFRS 7, Financial Instruments: Disclosures (Annual Improvements Cycle) Amendments to MFRS 10, Consolidated Financial Statements and MFRS 128, Investments in Associates and Joint Ventures - Sale or Contribution of Assets between an Investor and its Associate or Joint Venture Amendments to MFRS 10, Consolidated Financial Statements, MFRS 12, Disclosure of Interests in Other Entities and MFRS 128, Investments in Associates and Joint Ventures - Investment Entities: Applying the Consolidation Exception Amendments to MFRS 11, Joint Arrangements - Accounting for Acquisitions of Interests in Joint Operations# MFRS 14, Regulatory Deferral Accounts# Amendments to MFRS 101, Presentation of Financial Statements - Disclosure Initiative

25 Company No V Basis of preparation (continued) (a) Statement of compliance (continued) MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2016 (continued) Amendments to MFRS 116, Property, Plant and Equipment and MFRS 138, Intangible Assets - Clarification of Acceptable Methods of Depreciation and Amortisation Amendments to MFRS 116, Property, Plant and Equipment and MFRS 141, Agriculture - Agriculture: Bearer Plants# Amendments to MFRS 119, Employee Benefits (Annual Improvements Cycle)# Amendments to MFRS 127, Separate Financial Statements - Equity Method in Separate Financial Statements Amendments to MFRS 134, Interim Financial Reporting (Annual Improvements Cycle) MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2017 MFRS 15, Revenue from Contracts with Customers MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2018 MFRS 9, Financial Instruments (2014) The Group and the Company plan to apply the abovementioned accounting standards, amendments and interpretations: from the annual period beginning on 1 April 2015 for those accounting standards, amendments or interpretations that are effective for annual periods beginning on or after 1 July 2014, except for those marked with * which are not applicable to the Group and the Company. from the annual period beginning on 1 April 2016 for those accounting standards, amendments or interpretations that are effective for annual periods beginning on or after 1 January 2016, except for those marked with # which are not applicable to the Group and the Company. from the annual period beginning on 1 April 2017 for those accounting standards, amendments or interpretations that are effective for annual periods beginning on or after 1 January from the annual period beginning on 1 April 2018 for those accounting standards, amendments or interpretations that are effective for annual periods beginning on or after 1 January 2018.

26 Company No V Basis of preparation (continued) (a) Statement of compliance (continued) The initial application of the accounting standards, amendments or interpretations are not expected to have any material financial impacts to the current period and prior period financial statements of the Group and the Company except as mentioned below : (i) MFRS 9, Financial Instruments MFRS 9 replaces the guidance in MFRS 139, Financial Instruments: Recognition and Measurement on the classification and measurement of financial assets and financial liabilities, and on hedge accounting. The Group is currently assessing the financial impact that may arise from the adoption of MFRS 9. (ii) MFRS 15, Revenue from Contracts with Customers MFRS 15 replaces the guidance in MFRS 111, Construction Contracts, MFRS 118, Revenue, IC Interpretation 13, Customer Loyalty Programmes, IC Interpretation 15, Agreements for Construction of Real Estate, IC Interpretation 18, Transfers of Assets from Customers and IC Interpretation 131, Revenue - Barter Transactions Involving Advertising Services. The Group is currently assessing the financial impact that may arise from the adoption of MFRS 15. (b) Basis of measurement The financial statements have been prepared on the historical cost basis except as disclosed in the Note 2 to the financial statements. (c) Functional and presentation currency These financial statements are presented in Ringgit Malaysia ( RM ), which is the Company s functional currency. (d) Use of estimates and judgements The preparation of the financial statements in conformity with MFRSs requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected.

27 Company No V Basis of preparation (continued) (d) Use of estimates and judgements (continued) There are no significant areas of estimation uncertainty and critical judgements in applying accounting policies that have significant effect on the amounts recognised in the financial statements other than those disclosed in the following notes: Note 8 goodwill on consolidation Note 9 impairment loss on trade receivables Note 17 deferred tax assets / liabilities 2. Significant accounting policies The accounting policies set out below have been applied consistently to the periods presented in these financial statements and have been applied consistently by Group entities, unless otherwise stated. (a) Basis of consolidation (i) Subsidiaries Subsidiaries are entities, including structured entities, controlled by the Company. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. The Group controls an entity when it is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Potential voting rights are considered when assessing control only when such rights are substantive. The Group also considers it has de facto power over an investee when, despite not having the majority of voting rights, it has the current ability to direct the activities of the investee that significantly affect the investee s return. Investments in subsidiaries are measured in the Company s statement of financial position at cost less any impairment losses, unless the investment is classified as held for sale or distribution. The cost of investments includes transaction costs.

28 Company No V Significant accounting policies (continued) (a) Basis of consolidation (continued) (ii) Business combinations Business combinations are accounted for using the acquisition method from the acquisition date, which is the date on which control is transferred to the Group. For new acquisitions, the Group measures the cost of goodwill at the acquisition date as : the fair value of the consideration transferred; plus the recognised amount of any non-controlling interests in the acquiree; plus if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed. When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss. For each business combination, the Group elects whether it measures the non-controlling interests in the acquiree either at fair value or at the proportionate share of the acquiree s identifiable net assets at the acquisition date. Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred. (iii) Acquisitions of non-controlling interests The Group accounts for all changes in its ownership interest in a subsidiary that do not result in a loss of control as equity transactions between the Group and its non-controlling interest holders. Any difference between the Group s share of net assets before and after the change, and any consideration received or paid, is adjusted to or against Group reserves. (iv) Loss of control Upon the loss of control of a subsidiary, the Group derecognises the assets and liabilities of the former subsidiary, any non-controlling interests and the other components of equity related to the former subsidiary from the consolidated statement of financial position. Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the Group retains any interest in the former subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently, it is accounted for as an equityaccounted investee or as an available-for-sale financial asset depending on the level or influence retained.

29 Company No V Significant accounting policies (continued) (a) Basis of consolidation (continued) (v) Associates Associates are entities, including unincorporated entities, in which the Group has significant influence, but not control, over the financial and operating policies. Investments in associates are accounted for in the consolidated financial statements using the equity method less any impairment losses, unless it is classified as held for sale or distribution. The cost of the investment includes transaction costs. The consolidated financial statements include the Group s share of the profit or loss and other comprehensive income of the associates, after adjustments if any, to align the accounting policies with those of the Group, from the date that significant influence commences until the date that significant influence ceases. When the Group s share of losses exceeds its interest in an associate, the carrying amount of that interest including any long-term investments is reduced to zero, and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the associate. When the Group ceases to have significant influence over an associate, any retained interest in the former associate at the date when significant influence is lost is measured at fair value and this amount is regarded as the initial carrying amount of a financial asset. The difference between the fair value of any retained interest plus proceeds from the interest disposed of and the carrying amount of the investment at the date when equity method is discontinued is recognised in the profit or loss. When the Group s interest in an associate decreases but does not result in a loss of significant influence, any retained interest is not re-measured. Any gain or loss arising from the decrease in interest is recognised in profit or loss. Any gains or losses previously recognised in other comprehensive income are also reclassified proportionately to profit or loss if that gain or loss would be required to be reclassified to profit or loss on the disposal of the related assets or liabilities. Investments in associates are measured in the Company s statement of financial position at cost less any impairment losses, unless the investment is classified as held for sale or distribution. The cost of the investment includes transaction costs.

30 Company No V Significant accounting policies (continued) (a) Basis of consolidation (continued) (vi) Non-controlling interests Non-controlling interest at the end of the reporting period, being the equity in a subsidiary not attributable directly or indirectly to the equity holders of the Company, are presented in the consolidated statement of financial position and statement of changes in equity within equity, separately from equity attributable to the owners of the Company. Non-controlling interests in the results of the Group is presented in the consolidated statement of profit or loss and other comprehensive income as an allocation of the profit or loss and the comprehensive income for the year between non-controlling interests and the owners of the Company. Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the noncontrolling interests to have a deficit balance. (vii) Transactions eliminated on consolidation Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised gains arising from transactions with equity-accounted associates are eliminated against the investment to the extent of the Group s interest in the investees. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment. (b) Foreign currency transactions Transactions in foreign currencies are translated to the respective functional currencies of Group entities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the end of the reporting period are retranslated to the functional currency at the exchange rate at that date. Non-monetary assets and liabilities denominated in foreign currencies are not retranslated at the end of the reporting date, except for those that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Foreign currency differences arising on retranslation are recognised in profit or loss, except for differences arising on the retranslation of available-for-sale equity instruments or a financial instrument designated as a hedge of currency risk, which are recognised in other comprehensive income.

31 Company No V Significant accounting policies (continued) (b) Foreign currency transactions (continued) In the consolidated financial statements, when settlement of a monetary item receivable from or payable to a foreign operation is neither planned nor likely to occur in the foreseeable future, foreign exchange gains and losses arising from such a monetary item are considered to form part of a net investment in a foreign operation and are recognised in other comprehensive income, and are presented in the foreign currency translation reserve ( FCTR ) in equity. (c) Financial instruments (i) Initial recognition and measurement A financial asset or a financial liability is recognised in the statements of financial position when, and only when, the Group or the Company becomes a party to the contractual provisions of the instrument. A financial instrument is recognised initially, at its fair value plus, in the case of a financial instrument not at fair value through profit or loss, transaction costs that are directly attributable to the acquisition or issue of the financial instrument. An embedded derivative is recognised separately from the host contract and accounted for as a derivative if, and only if, it is not closely related to the economic characteristics and risks of the host contract and the host contract is not categorised as fair value through profit or loss. The host contract, in the event an embedded derivative is recognised separately, is accounted for in accordance with policy applicable to the nature of the host contract. (ii) Financial instrument categories and subsequent measurement The Group and the Company categorise financial instruments as follows: Financial assets (a) Financial assets at fair value through profit or loss Fair value through profit or loss category comprises financial assets that are held for trading, including derivatives (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument) or financial assets that are specifically designated into this category upon initial recognition. Derivatives that are linked to and must be settled by delivery of unquoted equity instruments whose fair values cannot be reliably measured are measured at cost.

32 Company No V Significant accounting policies (continued) (c) Financial instruments (continued) (ii) Financial instrument categories and subsequent measurement (continued) (a) Financial assets at fair value through profit or loss (continued) Other financial assets categorised as fair value through profit or loss are subsequently measured at their fair values with the gain or loss recognised in profit or loss. (b) Loans and receivables Loans and receivables category comprises debt instruments that are not quoted in an active market. Financial assets categorised as loans and receivables are subsequently measured at amortised cost using the effective interest method. (c) Available-for-sale financial assets Available-for-sale category comprises investment in equity and debt securities instruments that are not held for trading. Investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are measured at cost. Other financial assets categorised as available-for-sale are subsequently measured at their fair values with the gain or loss recognised in other comprehensive income, except for impairment losses, foreign exchange gains and losses arising from monetary items and gains and losses of hedged items attributable to hedge risks of fair value hedges which are recognised in profit or loss. On derecognition, the cumulative gain or loss recognised in other comprehensive income is reclassified from equity into profit or loss. Interest calculated for a debt instrument using the effective interest method is recognised in profit or loss. All financial assets, except for those measured at fair value through profit or loss, are subject to review for impairment (see Note 2(j)(i)). Financial liabilities All financial liabilities are subsequently measured at amortised cost other than those categorised as fair value through profit or loss. Fair value through profit or loss category comprises financial liabilities that are derivatives (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument) or financial liabilities that are specifically designated into this category upon initial recognition.

33 Company No V Significant accounting policies (continued) (c) Financial instruments (continued) (ii) Financial instrument categories and subsequent measurement (continued) Derivatives that are linked to and must be settled by delivery of equity instruments that do not have a quoted price in an active market for identical instruments whose fair values otherwise cannot be reliably measured are measured at cost. Other financial liabilities categorised as fair value through profit or loss are subsequently measured at their fair values with the gain or loss recognised in profit or loss. (iii) Financial guarantee contracts A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due in accordance with the original or modified terms of a debt instrument. Fair value arising from financial guarantee contracts are classified as deferred income and is amortised to profit or loss using a straight-line method over the contractual period or, when there is no specified contractual period, recognised in profit or loss upon discharge of the guarantee. When settlement of a financial guarantee contract becomes probable, an estimate of the obligation is made. If the carrying value of the financial guarantee contract is lower than the obligation, the carrying value is adjusted to the obligation amount and accounted for as a provision. (iv) Regular way purchase or sale of financial assets A regular way purchase or sale is a purchase or sale of a financial asset under a contract whose terms require delivery of the asset within the time frame established generally by regulation or convention in the marketplace concerned. A regular way purchase or sale of financial assets is recognised and derecognised, as applicable, using trade date accounting. Trade date accounting refers to: (a) the recognition of an asset to be received and the liability to pay for it on the trade date, and (b) derecognition of an asset that is sold, recognition of any gain or loss on disposal and the recognition of a receivable from the buyer for payment on the trade date.