There have been no significant changes in the nature of these activities during the financial year.

Transcription

1 VOIR HOLDINGS BERHAD ( V) DIRECTORS REPORT The Directors hereby submit their Report together with the audited financial statements of the and of the Company for the financial year ended 31 December. PRINCIPAL ACTIVITIES The Company is principally engaged in investment holding. The principal activities of the subsidiaries are described in Note 12 to the Financial Statements. There have been no significant changes in the nature of these activities during the financial year. FINANCIAL RESULTS Company Profit / (Loss) for the year attributable to :- Owners of the Company (1,264,360) (378,340) Non-controlling interests 3,038 - (1,261,322) (378,340) DIVIDEND No dividend has been paid or declared by the Company since the end of the previous financial year. The Board of Directors does not recommend any final dividend for the current financial year ended 31 December. 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. WARRANTS /2024 On 1 April, the Company issued 60,000,000 warrants pursuant to bonus issue of 1 warrant for every 2 existing ordinary shares held in the Company. The salient terms of the warrants are disclosed in Note 19 to the Financial Statements. The warrants were constituted under the Deed Poll dated 11 March, no warrant was exercised during the financial year and the total number of warrants that remain unexercised were 60,000,000 as at the reporting date. Details of warrants issued to Directors are disclosed in the section on Directors interests in this report. DIRECTORS The Directors who served on the Board of the Company since the date of the last Report and at the date of this Report are :- Seow Khim Soon Mohd. Amir Sharifuddin Bin Hashim Ham Hon Kit Yeoh Chin Hoe Leow Bock Lim Wong Seow Mooi Seow Mei Lee (resigned on ) Shaari Bin Haron Lee Yuet Sum 032

2 033 DIRECTORS REPORT DIRECTORS INTERESTS The Directors holding office at the end of the financial year and their interests in the share capital The Company Ordinary shares of 0.50 each Balance at 1.1. Acquired Disposed Balance at Seow Khim Soon - indirect 66,933, ,933,056 Ham Hon Kit - direct 800, ,000 Wong Seow Mooi - indirect 66,933, ,933,056 Mohd. Amir Sharifuddin Bin Hashim - indirect 13,264,392-3,345,334 9,919,058 Lee Yuet Sum - direct 133, ,332 Number of Warrants in the Company The Company Balance at 1.1. Bonus issue Exercised / Sold Balance at Seow Khim Soon - indirect - 33,466,528-33,466,528 Ham Hon Kit - direct - 400, ,000 Wong Seow Mooi - indirect - 33,466,528-33,466,528 Mohd. Amir Sharifuddin Bin Hashim - indirect - 4,959,529-4,959,529 Lee Yuet Sum - direct - 66,666-66,666 Ordinary shares of 1 each Balance at 1.1. Acquired Disposed Balance at Holding company - Marvellous Future Sdn. Bhd. Seow Khim Soon - direct 6,120,001 1,680,000-7,800,001 Wong Seow Mooi - direct 4,200, ,200,001 Seow Mei Lee - direct 840, ,000 - By virtue of Messrs. Seow Khim Soon s, Wong Seow Mooi s and Seow Mei Lee s interests in the holding company, they are deemed to be interested in the shares of the Company and all the subsidiaries of the Company to the extent of the Company s interests in the respective subsidiaries as disclosed in Note 12 to the Financial Statements. Mohd. Amir Sharifuddin Bin Hashim has deemed interest in the shares of the Company and all the subsidiaries. None of the other Directors holding office as at 31 December had any interest in the shares of the Company and its related corporations during the financial year. ANNUAL REPORT

3 VOIR HOLDINGS BERHAD ( V) DIRECTORS REPORT DIRECTORS BENEFITS During and at the end of the financial year, no arrangement subsisted to which the Company is a party, with the object or objects 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, other than the Warrants /2024 of the Company. Since the end of the previous financial year, no Director has received or become entitled to receive any benefit (other than a benefit included in the aggregate amount of remuneration received or due and receivable by Directors as shown in the financial statements of the and of the Company) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest except as disclosed in the notes to the financial statements. STATUTORY INFOATION ON THE FINANCIAL STATEMENTS Before the financial statements of the and of the Company were made out, the Directors took reasonable steps :- (a) (b) to ascertain that proper action has been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts and satisfied themselves that all known bad debts have been written off and that adequate allowance has been made for doubtful debts; and to ensure that any current assets which were unlikely to realise their values as shown in the accounting records of the and of the Company 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 :- (a) (b) (c) which would render the amount writing off for bad debts or the amount of the allowance for doubtful debts in the financial statements of the and of the Company inadequate to any substantial extent; or which would render the values attributed to current assets in the financial statements of the and of the Company misleading; or which have arisen which render adherence to the existing method of valuation of assets or liabilities of the and of the Company misleading or inappropriate. At the date of this Report, there does not exist :- (a) (b) any charge on the assets of the and of the Company which has arisen since the end of the financial year which secures the liability of any other person; or any contingent liability of the and of the Company which has arisen since the end of the financial year. No contingent or other liability 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 affect the ability of the and of the Company to meet their obligations as and when they fall due. 034

4 035 DIRECTORS REPORT OTHER STATUTORY INFOATION ON THE FINANCIAL STATEMENTS The Directors state that :- At the date of this Report, they are not aware of any circumstances not otherwise dealt with in this Report or the financial statements of the and of the Company which would render any amount stated in the respective financial statements misleading. In their opinion, (a) (b) the results of the operations of the and of the Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature; and there has not arisen in the interval between the end of the financial year and the date of this Report any item, transaction or event of a material and unusual nature likely to affect substantially the results of the operations of the and of the Company for the financial year in which this Report is made. HOLDING COMPANY The Directors regard Marvellous Future Sdn. Bhd., a company incorporated in Malaysia as the Company s holding company. AUDITORS The auditors, Messrs. HLB Ler Lum, Chartered Accountants, have expressed their willingness to continue in office. Signed on behalf of the Board in accordance with a resolution of the Directors, Seow Khim Soon Dated : 29 April 2015 Kuala Lumpur Ham Hon Kit ANNUAL REPORT

5 VOIR HOLDINGS BERHAD ( V) STATEMENT BY DIRECTORS We, SEOW KHIM SOON and HAM HON KIT, being two of the Directors of VOIR HOLDINGS BERHAD, do hereby state that, in the opinion of the Directors, the accompanying financial statements are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the and of the Company as at 31 December and of their financial performance and cash flows for the year then ended. The supplementary information set out in the financial statements has been prepared in accordance with the Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad ( Bursa Malaysia ) Listing Requirements, as issued by the Malaysian Institute of Accountants and the directive of Bursa Malaysia. Signed on behalf of the Board in accordance with a resolution of the Directors, Seow Khim Soon Dated : 29 April 2015 Kuala Lumpur Ham Hon Kit STATUTORY DECLARATION I, TANG KIAN HIONG, being the officer primarily responsible for the financial management of VOIR HOLDINGS BERHAD, do solemnly and sincerely declare that to the best of my knowledge and belief the accompanying financial statements are correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, Subscribed and solemnly declared by the abovenamed TANG KIAN HIONG at Kuala Lumpur on 29 April 2015 Tang Kian Hiong Before me : Commissioner for Oaths 036

6 037 INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF VOIR HOLDINGS BERHAD Report on the Financial Statements We have audited the financial statements of Voir Holdings Berhad, which comprise the Statements of Financial Position of the and of the Company as at 31 December, and the Statements of Profit or Loss and Other Comprehensive Income, Statements of Changes in Equity and Statements of Cash Flows of the and of the Company for the year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 39 to 90. Directors Responsibility for the Financial Statements The Directors of the Company are responsible for the preparation of financial statements so as to give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia. The Directors are also responsible for such internal control as the Directors determine are necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements give a true and fair view of the financial position of the and of the Company as of 31 December and of their financial performance and cash flows for the year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia. Report on Other Legal and Regulatory Requirements In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the following: a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries have been properly kept in accordance with the provisions of the Act. b) We are satisfied that the accounts of the subsidiaries that have been consolidated with the Company s financial statements are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the and we have received satisfactory information and explanations required by us for those purposes. c) Our audit reports on the accounts of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Act. ANNUAL REPORT

7 VOIR HOLDINGS BERHAD ( V) INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF VOIR HOLDINGS BERHAD Other Reporting Responsibilities The supplementary information set out on page 91 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the financial statements. The Directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants ( MIA Guidance ) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad. Other Matters This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report. HLB LER LUM (AF 0276) Chartered Accountants Dated : 29 April 2015 Kuala Lumpur LUM TUCK CHEONG 1005/3/17(J/PH) Chartered Accountant 038

8 039 STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 31 DECEMBER Note Company Revenue 4 172,785, ,848,867-6,130,000 Cost of sales 5 (90,220,662) (93,125,644) - - Gross profit 82,564,406 88,723,223-6,130,000 Other operating income 2,516,929 2,899, Selling & distribution costs (71,747,371) (75,048,679) - - Administration expenses (12,019,983) (12,664,876) (378,340) (398,836) Finance costs 6 (2,063,482) (2,115,311) - - Share of results of an associate (27,965) (80,479) - - Profit / (Loss) before tax 7 (777,466) 1,713,194 (378,340) 5,731,164 Income tax expense 8 (483,856) (1,410,556) - (1,464,157) Profit / (Loss) for the year (1,261,322) 302,638 (378,340) 4,267,007 Other comprehensive income, net of tax Total comprehensive income / (loss) for the year (1,261,322) 302,638 (378,340) 4,267,007 Profit / (Loss) and total comprehensive income / (loss) attributable to: Owners of the Company (1,264,360) 270,751 (378,340) 4,267,007 Non-controlling interests 3,038 31, Earnings / (Loss) per share for the year attributable to owners of the Company (sen) - Basic 9 (1.05) 0.23 (1,261,322) 302,638 (378,340) 4,267,007 The accompanying accounting policies and explanatory notes form an integral part of the financial statements. ANNUAL REPORT

9 VOIR HOLDINGS BERHAD ( V) STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER Note Company ASSETS Non-current assets Property, plant & equipment 10 16,950,526 19,515, Investment properties 11 3,321,319 4,502, Investment in a subsidiary ,830,126 69,432,987 Investment in an associate 13 30,622 58, Other investments 14 17,484 17, Intangible assets , , ,879,631 24,727,961 68,830,126 69,432,987 Current assets Inventories 16 84,778,072 92,598, Trade receivables 17 21,850,906 24,503, Other receivables, deposits & prepayments 17 12,772,204 14,234,106 22,338 95,532 Income tax assets 274, , , ,358 Cash & bank balances 2,880,608 2,184,194 61,049 50, ,556, ,766, , ,789 Total assets 143,435, ,494,546 69,152,871 69,818,776 EQUITY AND LIABILITIES Equity Share capital 19 60,000,000 60,000,000 60,000,000 60,000,000 Share premium , , , ,898 Retained earnings 26,966,479 28,487,367 7,471,638 8,106,506 Equity attributable to owners of the Company 87,068,377 88,589,265 67,573,536 68,208,404 Non-controlling interests 145, , Total equity 87,214,144 88,731,994 67,573,536 68,208,404 Non-current liabilities Borrowings 21 2,555,423 3,762, Deferred tax liabilities , , ,670,080 4,294, The accompanying accounting policies and explanatory notes form an integral part of the financial statements. 040

10 041 STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER Note Company Current liabilities Trade payables 24 18,368,492 18,963, Other payables, deposits & accruals 24 10,067,137 10,503,322 85,120 95,756 Borrowings 21 24,863,165 35,664, Amount due to subsidiaries ,494,215 1,514,616 Income tax liabilities 252, , ,551,505 65,468,152 1,579,335 1,610,372 Total liabilities 56,221,585 69,762,552 1,579,335 1,610,372 Total equity and liabilities 143,435, ,494,546 69,152,871 69,818,776 The accompanying accounting policies and explanatory notes form an integral part of the financial statements. ANNUAL REPORT

11 VOIR HOLDINGS BERHAD ( V) CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER Attributable to owners of the Company Non-distributable Distributable Share capital Share premium Retained earnings Total Noncontrolling interests Total equity Balance at 1 January 60,000, ,898 28,216,616 88,318, ,842 88,429,356 Total comprehensive income for the year , ,751 31, ,638 Balance at 31 December 60,000, ,898 28,487,367 88,589, ,729 88,731,994 Total comprehensive income for the year - - (1,264,360) (1,264,360) 3,038 (1,261,322) Transactions with owners of the Company: Warrant issuance expenses - - (256,528) (256,528) - (256,528) Balance at 31 December 60,000, ,898 26,966,479 87,068, ,767 87,214,144 The accompanying accounting policies and explanatory notes form an integral part of the financial statements. 042

12 043 STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER Attributable to owners of the Company Non-distributable Share capital Share premium Distributable Retained earnings Total equity Balance at 1 January 60,000, ,898 3,839,499 63,941,397 Total comprehensive income for the year - - 4,267,007 4,267,007 Balance at 31 December 60,000, ,898 8,106,506 68,208,404 Total comprehensive income for the year - - (378,340) (378,340) Transactions with owners of the Company: Warrant issuance expenses - - (256,528) (256,528) Balance at 31 December 60,000, ,898 7,471,638 67,573,536 The accompanying accounting policies and explanatory notes form an integral part of the financial statements. ANNUAL REPORT

13 VOIR HOLDINGS BERHAD ( V) STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER Company Cash flows from operating activities Profit / (Loss) before tax (777,466) 1,713,194 (378,340) 5,731,164 Adjustment for:- Allowance for impairment on receivables & payables 265, , Amortisation 74,624 74, Bad debts written off 197,670 2, Depreciation 7,810,566 8,855, Dividend income - (213) (202) - (6,130,000) Inventories written down 453, , Inventories written off 88, , Interest expenses 2,063,482 2,115, Interest income - (846) - - Gain on disposal of property, plant & equipment (2,000,527) (1,511,095) - - Property, plant & equipment written off 846,496 2,722, Share of loss of equity-accounted investee 27,965 80, Unrealised loss on foreign exchange - net 16,461 13, Operating profit/(loss) before working capital changes 9,067,270 15,358,464 (378,340) (398,836) Decrease/(Increase) in inventories 7,277,586 (4,090,516) - - Decrease/(increase) in receivables 7,321, ,714 73,194 (90,780) (Decrease)/increase in payables (1,689,066) (4,616,090) (10,636) 18,266 Changes in inter-company balances ,460 (4,237,551) Cash generated from/ (absorbed by) operations 21,977,148 7,257, ,678 (4,708,901) Dividends received ,597,500 Interest received Interest paid (2,034,642) (2,142,831) - - Income tax paid (1,031,860) (2,647,760) - - Income tax refunded 19, , ,084 Net cash from operating activities 18,930,231 2,701, ,678 2,683 Cash flows from investing activities Proceeds from disposal of property, plant & equipment 973, , Purchase of property, plant & equipment (6,671,674) (4,906,515) - - Net cash used in investing activities (5,698,448) (4,192,680) - - The accompanying accounting policies and explanatory notes form an integral part of the financial statements. 044

14 045 STATEMENTS OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER Company Cash flows from financing activities Warrant issuance expenses (256,528) - (256,528) - Proceeds from borrowings 592,947 3,892, Repayment of borrowings (6,211,902) (3,318,382) - - Net cash from / (used in) financing activities (5,875,483) 574,489 (256,528) - Net changes in cash and cash equivalents 7,356,300 (917,119) 10,150 2,683 Effect of exchange rate change on cash held (16,461) Cash and cash equivalents brought forward (4,900,499) (3,983,661) 50,899 48,216 Cash and cash equivalents carried forward 2,439,340 (4,900,499) 61,049 50,899 NOTES TO THE STATEMENTS OF CASH FLOWS (a) Cash and cash equivalents comprise:- Cash & bank balances 2,880,608 2,184,194 61,049 50,899 Bank overdrafts (441,268) (7,084,693) - - (b) Analysis of foreign currency exposure profile of cash and cash equivalents is as follows:- 2,439,340 (4,900,499) 61,049 50,899 Ringgit Malaysia () 2,434,902 (4,904,668) 61,049 50,899 United States Dollar (USD) 4,438 4, ,439,340 (4,900,499) 61,049 50,899 (c) Analysis of purchase of property, plant & equipment:- Cash 6,671,674 4,906, Finance lease arrangements 254, , Other accruals 231, ,156,821 5,106, The accompanying accounting policies and explanatory notes form an integral part of the financial statements. ANNUAL REPORT

15 VOIR HOLDINGS BERHAD ( V) 1 GENERAL INFOATION The Company is principally engaged in investment holding. The principal activities of the subsidiaries are described in Note 12 to the Financial Statements. The Company is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Market of Bursa Malaysia Securities Berhad ( Bursa Securities ). The address of the registered office of the Company is as follows :- B-3-9, 3rd Floor, Block B Megan Avenue II 12, Jalan Yap Kwan Seng Kuala Lumpur The address of the principal place of business of the Company is as follows :- Lot 1878, Jalan KPB 9 Kawasan Perindustrian Kampung Baru Balakong Off Jalan Balakong Seri Kembangan Selangor Darul Ehsan 2 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES The s operations are subject to a variety of financial risks, including market risk (which comprises of equity price risk, interest rate risk and foreign currency risk), credit risk and liquidity risk. The s financial risk management policy seeks to ensure that adequate resources are available to manage the above risks and to create value for its shareholders. The Board regularly reviews these risks and approves treasury policies, which covers the management of these risks. It is not the s policy to engage in speculative transactions. (a) Credit risk Credit risk is the potential exposure of the to losses in the event of non-performance by counterparties. The is exposed to credit risk mainly from its receivables and advances. The minimises credit risk by extending credit to the entities that are creditworthy. The uses the available financial information supplied by independent rating agencies to rate its major customers where available and, to base upon its own established credit evaluation and monitoring guidelines. The detailed information regarding the ageing of trade receivables is disclosed in Note 17 to the Financial Statements. (b) Liquidity risk Liquidity risk is the risk that an entity will encounter difficulty in meeting its financial obligations as result of funds shortage. The practises prudent liquidity risk management policies and maintains sufficient levels of cash and credit facilities for working capital and contingent funding requirements. The maturity analysis of the s and the Company s financial liabilities based on undiscounted contractual payments are as disclosed in Note 29 to the Financial Statements. 046

16 047 2 FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont d) (c) Interest rate risk Interest rate risk is the risk that the value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The is exposed to interest rate risk because companies in the borrow funds at floating interest rates. The manages interest rate risk by obtaining the most favourable interest rates in the market. The sensitivity analyses is determined based on the exposure to interest rate for the s and the Company s borrowings (excluding finance lease obligations) at end of the reporting period. The analysis is prepared assuming the amount of the borrowings was outstanding for the whole year. An increase/decrease of 50 basis points in interest rate and all other variables were held constant, it would result a variance of approximately 134,720 (: 194,680) in the s profit before tax. (d) Foreign currency risk Foreign currency risk is the risk that the value of a financial instrument will fluctuate because of changes in foreign exchange rates. The is exposed to foreign currency risk primarily through the outstanding amount from its trade payable accounts. The does not hedge its currency exposures. The carrying amounts of trade payables which are unhedged are as disclosed in Note 24 to the Financial Statements. The sensitivity analysis includes outstanding foreign currency denominated monetary items and adjusts their translation at the period end. A 5% strengthening/weakening of Ringgit Malaysia ( ) against the relevant foreign currencies would has increased/decreased the s profit before tax by approximately 20,680 (: 14,060). 3 SIGNIFICANT ACCOUNTING POLICIES (A) Basis of preparation The financial statements of the and of the Company have been prepared under the historical cost convention (unless stated otherwise in the significant accounting policies below) and comply with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia. The preparation of financial statements in conformity with Malaysian Financial Reporting Standards, requires the Directors to make estimates and exercise of judgement that affect the reported amounts of assets and liabilities and disclosure of contingent assets, liabilities, revenue and expenses. Actual results could differ from those estimates. The areas involving a higher degree of judgment or complexity or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 3(B) to the Financial Statements. The financial statements are presented in Ringgit Malaysia, which is the s and the Company s functional currency. ANNUAL REPORT

17 VOIR HOLDINGS BERHAD ( V) 3 SIGNIFICANT ACCOUNTING POLICIES (cont d) (B) Change in accounting policies The accounting policies and method of computation adopted are consistent with those of the previous financial year except for the adoption of the amendments to MFRSs and IC Intepretation( IC Int ) that are applicable to the Company for the financial year beginning 1 January. The adoption of these amendments to MFRSs and IC Int does not have any significant impact to the and the Company. (C) Significant accounting estimates and judgments The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the reported amounts of assets, liabilities, income and expenses within the next financial year are discussed below :- (i) Estimated residual values and useful lives of property, plant & equipment The s businesses are fairly capital intensive. The depreciation charges form a component of the total cost of the profit or loss. The reviews the residual values and useful lives of property, plant & equipment at each reporting date in accordance with the accounting policy. The review is based on factors such as expected level of usage, business plans and strategies and future regulatory changes. The estimation of the residual values and useful lives involves significant judgment. Changes in the expected useful lives could impact the future depreciation charges. The carrying amount of the s property, plant and equipment is as disclosed in Note 10 to the Financial Statements. A variance of 5% in depreciation charge based on carrying amount of the s property, plant & equipment as at reporting date would affect the s profit or loss by approximately 847,530 (: 975,780). (ii) Impairment of loans and receivables The assesses at each reporting date whether there is objective evidence that a financial asset has been impaired. Impairment loss is calculated based on a review of the current status of existing receivables and historical collections experience. The carrying amount of the s and the Company s loans and receivables (other than cash & bank balances) at the reporting date are disclosed in Note 29 to the Financial Statements. If the present value of estimated future cash flows varies by 1% from management s estimates, the s and the Company s allowance for impairment will be increased by approximately 338,174 (: 376,390) and 196 (: 24) respectively. (iii) Estimated net realisable value of inventories When assessing inventories, estimates for their recoverability that arise from the expected consumption of the corresponding items are neccessary. The adjustments for the inventories are calculated for each item using a stock coverage analysis. The parameters are checked annually and modified if necessary. Changes in sales or other circumstances can lead to the book value having to be adjusted accordingly. 048

18 049 3 SIGNIFICANT ACCOUNTING POLICIES (cont d) (D) Property, plant & equipment and depreciation Property, plant & equipment are stated at cost less accumulated depreciation and accumulated impairment lossess. Cost includes expenditure that is directly attributable to the acquisition of the items. The cost of certain property, plant & equipment include the cost of dismantling, removal and restoration, the obligation of which was included as a consequence of installing the asset. Subsequent costs are included in the asset s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to profit or loss during the financial year in which they are incurred. Property, plant & equipment retired from active use and held for disposal are stated at the lower of net book value and net realisable value. Depreciation on property, plant & equipment is calculated on the straight line basis at rates required to write off the cost of the property, plant & equipment over their estimated useful lives. Capital in progress is not depreciated until the asset is ready for its intended use. The principal annual rates of depreciation used are as follows :- Long term leasehold land Over the remaining period of the respective leases Freehold building 2% Leasehold building 2% Leasehold condominium 2% Counter equipment, furniture & fittings 10% % Furniture & fittings 10% % Motor vehicles 10% - 20% Office equipment 10% % Renovation & improvement 10% % Tools & equipment 20% % Residual value, useful life and depreciation method of assets are reviewed at each reporting date to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of property, plant & equipment. Gains and losses on disposals are determined by comparing net disposal proceeds with net carrying amount and are recognised in profit or loss. (E) Investment properties Investment properties consist of land and buildings that are held for long-term either to earn rental income or for capital appreciation and are not occupied by the. Investment properties are stated at cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the investment properties. ANNUAL REPORT

19 VOIR HOLDINGS BERHAD ( V) 3 SIGNIFICANT ACCOUNTING POLICIES (cont d) (E) Investment properties (cont d) Investment in freehold land is not depreciated as it has an indefinite life. Depreciation on other investment properties is calculated using the straight line basis at rates required to write off the cost of the investment properties over their estimated useful lives as follows: Long term leasehold land Freehold building 2% Leasehold building 2% Over the remaining period of the respective leases Gain or loss on the retirement or disposal of an investment property is recognised in the profit or loss in the year in which it arises. (F) Investment in subsidiaries and basis of consolidation Subsidiaries are all entities (including structured entities) over which the has control. The controls an entity when the 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. Subsidiaries are fully consolidated from the date on which control is transferred to the. They are deconsolidated from the date control ceases. Subsidiaries are consolidated using the acquisition method of accounting except for certain business combinations which were accounted for using the merger method as for the acquisition of a subsidiary under common control. Intragroup transactions, balances and unrealised gains on transactions between companies are eliminated. Unrealised losses are also eliminated but considered an impairment indicator of the asset transferred. Where necessary, adjustments are made to the financial statements of subsidiaries to ensure consistency of accounting policies with those of the. The gain or loss on disposal of a subsidiary is the difference between net disposal proceeds and the s share of its net assets as of the date of disposal including the cumulative amount of any exchange differences that relate to the subsidiary is recognised in the consolidated profit or loss. Investment in subsidiaries is measured in the Company s financial statements at cost less any impairment losses, unless the investment is classified as held for sale or distribution. The cost of investments includes transaction costs. (i) Acquisition method Under the acquisition method of accounting, subsidiaries are fully consolidated from the date of which control is transferred to the and are deconsolidated from the date that control ceased. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any non-controlling interest. On an acquisition-by-acquisition basis, the group recognises any non-controlling interest in the acquiree either at fair value or at the non-controlling interest s proportionate share of the acquiree s net assets. The excess of the cost of acquisition over the fair value of the s share of the subsidiaries identifiable net assets acquired is reflected as goodwill. Goodwill is retained in the Consolidated Statement of Financial Position at cost. Where an indication of impairment exists, the carrying amount of the net asset is assessed and written down immediately to its recoverable amount. 050

20 051 3 SIGNIFICANT ACCOUNTING POLICIES (cont d) (F) Investment in subsidiaries and basis of consolidation (cont d) (i) Acquisition method (cont d) The excess of the fair value of the s share of the subsidiaries identifiable net assets over the cost of acquisition at the date of acquisition is recognised directly in the profit or loss. (ii) Merger method Acquisition of a subsidiary, Kumpulan Voir Sdn. Bhd., is accounted for using merger accounting principles. Under the merger method of accounting, the results of subsidiary are presented as if the merger had been effected throughout the current and previous years. The assets and liabilities combined are accounted for based on the carrying amounts from the perspective of the common control shareholder at the date of transfer. On consolidation, the cost of the merger is cancelled with the values of the shares received. Any resulting credit difference is classified as equity and regarded as a non-distributable reserve. Any resulting debit difference is adjusted against any suitable reserve. Any share premium, capital redemption reserve and any other reserves which are attributable to share capital of the merged enterprises, to the extent that they have not been capitalised by a debit difference, are reclassified and presented as movement in other capital reserves. (iii) Loss of control When the ceases to have control or significant influence, any retained interest in the entity is remeasured to its fair value, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss. (iv) Non-controlling interests Non-controlling interests 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. Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance. (v) Acquisition of non-controlling interests The treats all changes in its ownership interest in a subsidiary that do not result in a loss of control as equity transactions between the and its non-controlling interest holders. Any difference between the s share of net assets before and after the change, and any consideration received or paid, is adjusted to or against s reserves. ANNUAL REPORT

21 VOIR HOLDINGS BERHAD ( V) 3 SIGNIFICANT ACCOUNTING POLICIES (cont d) (G) Associate Associate is entity, including unincorporated entity, in which the has significant influence, but not control, over the financial and operating policies. Investment in associate is 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 s share of the profit or loss and other comprehensive income of the associate, after adjustments if any, to align the accounting policies with those of the, from the date that significant influence commences until the date that significant influence ceases. When the s share of losses exceeded 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 extent that the has an obligation or has made payments on behalf of the associate. When the ceases to have significant influence over an associate, it is accounted for as a disposal of the entire interest in that associate, with resulting gain or loss being recognised in profit or loss. Any retained interest in the former associate at the date when significant influence is lost is re-measured at fair value and this amount is regarded as the initial carrying amount of a financial asset. When the 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 the profit or loss. Investment in an associate is measured in the Company s financial statements at cost less any impairment losses, unless the investment is classified as held for sale or distribution. The cost of investment includes transaction costs. (H) Intangible assets Trademark is recognised as intangible asset if it is probable that the future economic benefits that are attributable to such asset will flow to the enterprise and the costs of such asset can be measured reliably. Trademarks of the are measured at cost less accumulated amortisation and any accumulated impairment losses. Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the trademark to which it relates, all other expenditure is recognised in profit or loss as incurred. Amortisation is recognised in profit or loss on the straight line basis over the estimated useful lives of the trademarks. Amortisation methods, useful lives and residual values are reviewed at the end of each reporting period and adjusted if appropriate. The s trademarks are amortised on the straight line basis over its estimated useful lives of 10 years. The policy for the recognition and measurement of impairment losses is in accordance with Note 3(J) to the Financial Statements. 052

22 053 3 SIGNIFICANT ACCOUNTING POLICIES (cont d) (I) Financial instruments A financial instrument is any contract that gives rise to both a financial asset of one enterprise and a financial liability or equity instrument of another enterprise. The and the Company categorise financial instruments as follows: (i) A financial asset is any asset that is cash, a contractual right to receive cash or another financial asset from another enterprise, a contractual right to exchange financial instruments with another enterprise under conditions that are potentially favourable, or an equity instrument of another enterprise. (a) Loans and receivables Loans and receivables category comprises debt instruments that are not quoted in an active market, trade and other receivables and cash and cash equivalents. Subsequent to initial recognition, loans and receivables are measured at amortised cost using effective interest method. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, and through the amortisation process. Loans and receivables are classified as current assets, except for those having maturity dates later than twelve months after the reporting date which are classified as non-current. (b) Available-for-sale financial assets Available-for-sale category comprises investment in equity, club membership and debt securities instruments that are not held for trading. Available-for-sale financial assets that do not have a quoted market price in an active market and whose fair value can not reliably measured are stated at cost. Other financial assets are subsequently measured at their fair values with the gain or loss recognised in other comprehensive income, except for when the recognition of the fair value is insignificant. Available-for-sale financial assets are classified as non-current assets unless they are expected to be realised within twelve months after the reporting date. A financial asset is derecognised when the contractual right to receive cash flows from the asset has expired. On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss that had been recognised in other comprehensive income is recognised in profit or loss. Regular way purchases or sales are purchases or sales of financial assets that require the delivery of assets within the period generally established by regulation or convention in the marketplace concerned. All regular way purchases and sales of financial assets are recognised or derecognised on the trade date i.e. the date that the and the Company commit to purchase or sell the asset. (ii) A financial liability is any liability that is a contractual obligation to deliver cash or another financial asset to another enterprise, or to exchange financial instruments with another enterprise under conditions that are potentially unfavourable. 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 held for trading including derivatives (except for a derivative that is a financial guarantee contract or a designated and effective hedging instrument) or are specifically designated as such upon initial recognition. Financial liabilities categorised as fair value through profit or loss are subsequently measured at their fair value with the gain or loss recognised in profit or loss. ANNUAL REPORT

23 VOIR HOLDINGS BERHAD ( V) 3 SIGNIFICANT ACCOUNTING POLICIES (cont d) (I) Financial instruments (cont d) (ii) A financial liability is derecognised when the obligation under the liability is extinguished. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss. (J) Impairment (i) Financial assets All financial assets (except for financial assets categorised as fair value through profit or loss, investment in subsidiary and investment in associate) are assessed at each reporting date whether there is any objective evidence of impairment as a result of one or more events having an impact on the estimated future cash flows of the assets. Losses expected as a result of future events, no matter how likely, are not recognised. For an equity instrument, a significant decline in the fair value below its cost is an objective evidence of impairment. An impairment loss in respect of loans and receivables is recognised in profit or loss and is measured as the difference between the asset s carrying amount and the present value of estimated future cash flows discounted at the asset s original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account. An impairment loss in respect of available-for-sale financial assets is recognised in profit or loss and measured as the difference between the asset s acquisition cost (net of any principal repayment and amortisation), less any impairment loss previously recognised and the asset s current fair value. Where a decline in the fair value of an available-for-sale financial asset has been recognised in the other comprehensive income, the cumulative loss in other comprehensive income is classified from equity and recognised to profit or loss. An impairment loss in respect of unquoted equity instrument that is carried at cost is recognised in profit or loss and is measured as the difference between the asset s carrying amount and the present value of estimated future cash flows discounted at the current rate of return for similar financial asset. Impairment loss recognised in profit or loss for an investment in an equity instrument is not reversed through profit or loss. If in a subsequent period, the fair value of a debt instrument increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed, to the extent that the asset s carrying amount does not exceed what the carrying amount would have been had the impairment not been recognised at the date the impairment is reversed. The amount of the reversal is recognised in profit or loss. (ii) Non-financial assets The carrying values of non-financial assets, other than inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the asset s recoverable amount is estimated to determine the amount of impairment loss. An impairment loss is recognised for the amount by which the carrying amount of the asset exceeds its recoverable amount. The recoverable amount is the higher of an asset s fair value less cost to sell and valuein-use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there is separately identifiable cash flows (cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each reporting date. 054