seizingnew opportunities annual report

Transcription

1 seizingnew opportunities annual report 20 17

2 Annual Report twenty second Notice of Annual General Meeting resintech berhad ( X) Place: Concorde Hotel Shah Alam, Gallery 1, Level 3, No. 3, Jalan Tengku Ampuan Zabedah, Shah Alam, Selangor Darul Ehsan. Time: wednesday, 30 August at 9.00 a.m.

3 02 Corporate Information 03 Corporate Structure 04 Notice of Annual General Meeting 08 Directors Profile 11 Chairman s Statement 12 Management Discussion & Analysis 13 Group Financial Highlights 14 Audit Committee Report 17 Statement on Corporate Governance 30 Additional Compliance Information 31 Statement on Risk Management and Internal Control 33 Directors Responsibilities Statement contents 34 Corporate Social Responsibility Statement 35 Financial Statements 109 Analysis of Shareholdings 111 List of Properties Form of Proxy

4 resintech berhad ( X) Corporate Information BOARD OF DIRECTORS Dato Abu Sujak bin Mahmud (Senior Independent Non-Executive Chairman) Dato Dr. Teh Kim Poo (Managing Director) Datin Gan Jew (Executive Director) Teh Leng Kang (Executive Director) Wei Hwei Hong (Executive Director) Khairul Anuar bin Shaharudin (Independent Non-Executive Director) Kok Wee Wah (Independent Non-Executive Director) AUDIT COMMITTEE Chairman Dato Abu Sujak bin Mahmud (Senior Independent Non-Executive Chairman) Members Khairul Anuar bin Shaharudin (Independent Non-Executive Director) Kok Wee Wah (Independent Non-Executive Director) NOMINATION COMMITTEE Chairman Dato Abu Sujak bin Mahmud (Senior Independent Non-Executive Chairman) Member Khairul Anuar bin Shaharudin (Independent Non-Executive Director) REMUNERATION COMMITTEE Chairman Dato Dr. Teh Kim Poo (Managing Director) Members Dato Abu Sujak bin Mahmud (Senior Independent Non-Executive Chairman) Khairul Anuar bin Shaharudin (Independent Non-Executive Director) COMPANY SECRETARIES Teo Mee Hui (MAICSA ) Lim Lee Kuan (MAICSA ) REGISTERED OFFICE Lot 3 & 5, Jalan Waja 14 Kawasan Perindustrian Telok Panglima Garang, Telok Panglima Garang Selangor Darul Ehsan Tel : Fax : WEBSITE & sales@resintechmalaysia.my CORPORATE OFFICE Lot 3 & 5, Jalan Waja 14 Kawasan Perindustrian Telok Panglima Garang, Telok Panglima Garang Selangor Darul Ehsan Tel : Fax : AUDITORS Crowe Horwath Chartered Accountants Level 16, Tower C Megan Avenue II No. 12, Jalan Yap Kwan Seng Kuala Lumpur SHARE REGISTRAR Symphony Share Registrars Sdn. Bhd. Level 6, Symphony House Pusat Dagangan Dana 1 Jalan PJU 1A/ Petaling Jaya Selangor Darul Ehsan Tel : Fax : PRINCIPAL BANKERS Hong Leong Bank Berhad No 90 Jalan Persiaran Raja Muda Musa Pelabuhan Klang Selangor Darul Ehsan United Overseas Bank (Malaysia) Berhad Jalan 3/6D Medan Putra Business Centre Sri Manjalara Off Jalan Damansara Kuala Lumpur CIMB Bank Malaysia Berhad No 22A Lorong Batu Nilam 4B Bandar Bukit Tinggi Klang Selangor Darul Ehsan STOCK EXCHANGE LISTING Main Market of Bursa Malaysia Securities Berhad ( Bursa Securities ) Shares: Stock Name : RESINTC Stock Code :

5 Annual Report corporate structure 100% Resintech Biowood (Malaysia) Sdn Bhd Resintech (Sabah) Sdn Bhd Resintech Plastics (M) Sdn Bhd 100% 100% PT Resintech Indomas Vision Mould Specialist (M) Sdn Bhd Resintech- Kapar Sdn Bhd 100% 100% 100% Resintech Engineering Sdn Bhd RT Water Technology Sdn Bhd Sarpino s (M) Sdn Bhd 100% 60% 100% 100% Sarpino s Pizzeria (Cambodia) Co. Ltd 100% Resintech Products Marketing Sdn Bhd Exact Link Sdn Bhd 100% 03

6 resintech berhad ( X) notice of annual general meeting NOTICE IS HEREBY GIVEN that the Twenty-Second Annual General Meeting of RESINTECH BERHAD will be held at Concorde Hotel Shah Alam, Gallery 1, Level 3, No. 3, Jalan Tengku Ampuan Zabedah, Shah Alam, Selangor Darul Ehsan on Wednesday, 30 August at 9.00 a.m. for the following purposes: A G E N D A As Ordinary Business 1. To table the Audited Financial Statements for the financial year ended 31 March together with the Reports of Directors and Auditors thereon. Please refer to Explanatory Note 1 2. To re-elect the following Directors, who retire pursuant to Article 126 of the Constitution of the Company: 2.1 Mr Teh Leng Kang Ordinary Resolution Encik Khairul Anuar Bin Shaharudin Ordinary Resolution 2 3. To approve the payment of Directors Fees amounting to RM127, for the financial year ended 31 March. Ordinary Resolution 3 4. To approve the payment of Directors Remuneration (excluding Directors Fees) payable to the Board of the Company and its subsidiaries up to an amount of RM300, for the financial period from 1 January until the conclusion of next Annual General Meeting. Ordinary Resolution 4 5. To re-appoint Messrs Crowe Horwath as Auditors of the Company and to authorise the Directors to fix their remuneration. Ordinary Resolution 5 As Special Business To consider and, if thought fit, to pass the following resolutions with or without any modification: 6. AUTHORITY TO ISSUE AND ALLOT SHARES THAT subject to Section 75 of the Companies Act,, Constitution of the Company, and approvals of the relevant governmental / regulatory authorities, the Directors be and are hereby empowered to issue and allot shares in the Company, at any time to such persons and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fit, provided that the aggregate number of shares issued pursuant to this resolution does not exceed ten per centum (10%) of the issued and paid-up share capital (excluding treasury shares) of the Company for the time being and the Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad; AND THAT such authority shall commence immediately upon the passing of this resolution and continue to be in force until the conclusion of the next Annual General Meeting of the Company pursuant to Section 76 of the Companies Act,. Ordinary Resolution 6 04

7 Annual Report Notice of Annual General Meeting 7. CONTINUING IN OFFICE AS INDEPENDENT NON-EXECUTIVE DIRECTORS (i) THAT authority be and is hereby given to Encik Khairul Anuar Bin Shaharudin who has served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine (9) years, to continue to act as an Independent Non-Executive Director of the Company. Ordinary Resolution 7 (ii) THAT authority be and is hereby given to Mr Kok Wee Wah who has served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine (9) years, to continue to act as an Independent Non-Executive Director of the Company. Ordinary Resolution 8 8. To transact any other business of which due notice shall have been given. By Order of the Board TEO MEE HUI (MAICSA ) LIM LEE KUAN (MAICSA ) Company Secretaries Selangor Darul Ehsan Date: 31 July Notes: 1. Member entitled to attend and vote at the meeting may appoint another person as his proxy to attend and vote in his stead. A proxy may but need not be a member of the Company. If the proxy is not a member, the proxy need not be an advocate, an approved company auditor or a person approved by the Registrar of Companies. 2. A Member may appoint only one (1) proxy or attorney or authorised representative. Where a member is an authorised nominee as defined under the Securities Industry (Central Depositories) Act, 1991, it may appoint only one (1) proxy in respect of each securities account it holds with ordinary shares of the company standing to the credit of the said securities account. 3. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account ( omnibus account ), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds. 4. The instrument appointing a proxy shall be in writing (in the common or usual form) under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation, either under seal or under the hand of an officer or attorney duly authorised. 5. The instrument appointing a proxy and the power of attorney or other attorney, if any, under which it is signed or a notarially certified copy of that power or authority shall be deposited at Symphony Share Registrars Sdn Bhd, Level 6, Symphony House, Pusat Dagangan Dana 1, Jalan PJU 1A/46, Petaling Jaya, Selangor Darul Ehsan not less than forty-eight (48) hours before the time for holding of the meeting or adjourned meeting. 6. The Date of Record of Depositors for the purpose of determining members entitlement to attend, vote and speak at the meeting is 22 August. 05

8 resintech berhad ( X) Notice of Annual General Meeting Explanatory Notes to Special Business: 1. Item 1 of the Agenda - Directors Report, Audited Financial Statements and the Auditors Report for the financial year ended 31 March The Audited Financial Statements under this agenda item is meant for discussion only as the provision of Sections 248 and 340(i)(a) of the Companies Act does not require a formal approval of the shareholders and hence this item is not put forward for voting. 2. Item 4 of the Agenda - Ordinary Resolution 4 - Payment of Directors remuneration (excluding Directors Fee) and benefits payable to the Board of the Company and its subsidiaries Pursuant to Section 230(1) of the Companies Act, the fee of the Directors, and any benefits payable to the Directors including any compensation for loss of employment of a director or former director of a public company or a listed company and its subsidiaries, shall be approved at a general meeting. In this respect, the Board agreed that the shareholders approval shall be sought at the 22nd Annual General Meeting on the Directors remuneration (excluding the Directors fee) payable to the Directors of the Company and its subsidiaries for the financial period from 1 January until the next Annual General Meeting ( Relevant Period ). The Directors remuneration (excluding Directors fee) comprises the allowances and other emoluments payable to the Non- Executive Directors as set out below: Description Chairman Non-Executive Director Meeting Allowance Fixed Allowance Note: - There are no Non-Executive Directors in the subsidiaries. In determining the estimated total amount of the directors remuneration (excluding Directors fee), the Board considered various factors including the number of scheduled meetings for the Board and Board Committees as well as the number of Directors involved in these meetings. Payment of Directors remuneration (excluding Directors fee) will be made by the Company and its subsidiaries on a monthly basis and/or as and when incurred if the proposed resolution 4 has been passed at the 22nd Annual General Meeting. The Board is of the view that it is just and equitable for the Directors to be paid the Directors remuneration (excluding Directors fee) on a monthly basis and/or as and when incurred, particularly after they have discharged their responsibilities and rendered their services to the Company throughout the Relevant Period. 3. Item 6 of the Agenda - Ordinary Resolution 6 - Authority to Issue and Allot Shares The proposed resolution 6, if passed, will give flexibility to the Directors to issue shares to such persons at any time in their absolute discretion without convening a general meeting. This authorisation will expire at the conclusion of next Annual General Meeting of the Company. This is the renewal of the mandate obtained from the members at the last Annual General Meeting ( the previous mandate ). The previous mandate was not utilised and accordingly no proceeds were raised. The purpose of this general mandate is for possible fund raising exercises including but not limited to further placement of shares for purpose of funding current and/or future investment projects, working capital, repayment of borrowings and/or acquisitions. 06

9 Annual Report Notice of Annual General Meeting Explanatory Notes to Special Business (Cont d): 4. Item 7 of the Agenda - Ordinary Resolutions 7 & 8 - Continuing in Office as Independent Non-Executive Directors The Nomination Committee has assessed the independence of Encik Khairul Anuar Bin Shaharudin and Mr Kok Wee Wah, who have served as Independent Non-Executive Directors of the Company for a cumulative term of more than nine (9) years and thus, the Board recommended them to continue act as an Independent Non-Executive Director of the Company based on the following justifications:- a. they fulfilled the criteria under the definition of Independent Director as stated in the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, and thus, they would able to provide check and balance and bring an element of objectivity to the Board; b. they are familiar with the Company s business operations and are able to advise the Board diligently on business legacy matters before the change in controlling interest; c. they were not appointed by the current controlling shareholder and hence the issue on special relationship with or loyalty to the controlling shareholder does not arise; d. they have devoted sufficient time and attention to their professional obligations for informed and balanced decision making by actively participated in board discussion and provided an independent voice to the Board; and e. they have exercised their due care during their tenure as Independent Non-Executive Directors of the Company and carried out their professional duties in the best interest of the Company and shareholders. 07

10 resintech berhad ( X) directors profile Y. Bhg. Dato Abu Sujak bin Mahmud a Malaysian, male, aged 78, is the Independent Non-Executive Chairman of the Company and was appointed to the Board on 25 July He is also the Chairman of the Audit Committee and Nomination Committee and a member of the Remuneration Committee. Dato Abu Sujak began his career as an audit clerk in Jabatan Pembangunan Koperasi Malaysia in He then joined the Maktab Perguruan Bahasa in 1960 and taught for a period of five (5) years before pursuing his degree in the University of Malaya. He obtained a Bachelor of Arts in Malay Studies in Dato Abu Sujak joined Dewan Bandaraya Kuala Lumpur in 1971 and subsequently appointed as Secretary of Majlis Perbandaran Klang and Majlis Perbandaran Shah Alam. In 1986, he was chosen to stand for election, which marked his career as a politician. He served as a member of the Selangor State Legislative Council for three (3) terms and was also a member of the Selangor State Executive Council from 1986 to He was also appointed as Timbalan Menteri Besar Selangor in 1990 until 1995 and as the Datuk Bandar Majlis Bandaraya Shah Alam in 2000 until Dato Abu Sujak also sits on the Board of Brem Holding Berhad. Y. Bhg. Dato Dr. Teh Kim Poo a Malaysian, male, aged 66, the founder and Managing Director of the Company, was appointed to the Board on 24 April He is also the Chairman of the Remuneration Committee. Dato Dr. Teh obtained a PhD in Total Quality Management (TQM) from Newport University USA in He also possesses a Diploma in Accounting (LCCI), Post Graduate Diploma in Marketing (CIM, UK) and Master in Business Administration in Marketing from University of Hull, UK. He is also a chartered marketer of the Chartered Institute of Marketing (CIM, UK). Dato Dr. Teh possesses in-depth knowledge and vast experience in the plastics industry and has successfully built up the Group into one of the more prominent plastic pipe manufacturers in Malaysia. As the Managing Director, he is responsible for the overall management and strategic direction of the Group. Dato Dr. Teh was the State Assemblyman of Kawasan Pandamaran Selangor from 2004 to Dato Dr. Teh was also the Port Klang Authority Chairman from 2011 to He is currently the Chairman of Barisan Nasional Bahagian Klang and Chairman of Malaysia Chinese Association (MCA) Klang Division. Dato Dr. Teh was appointed as the Port Klang Free Zone Chairman since April 2014 to He does not hold any directorship in other public companies and listed issuers. Y. Bhg. Datin Gan Jew a Malaysian, female, aged 63, the co-founder and Executive Director of the Company was appointed to the Board on 24 April She has vast experience in the handling of manufacturing operations of the Group. She is well versed with all the operations on the production floor and her management style encompasses a very hands-on approach. She is also experienced in human resource matters and has been very much involved in the selection and co-ordination of the Group s employees. She is currently oversees the cost savings operations of the Group, a role where she is able to leverage upon her experience of over thirty (30) years in the industry. Datin Gan was the Chairman of Wanita Gan Association Selangor. Datin Gan is currently the Vice Chairman of Wanita MCA Selangor, Chairman of Wanita MCA Klang Division, Chairman of Rukun Tetangga Southern Park Selangor, Treasurer of Rukun Tetangga Klang Division and Adviser to Wanita Hin Ann Association Selangor. She does not hold any directorship in other public companies and listed issuers. 08

11 Annual Report Directors Profile Teh Leng Kang a Malaysian, male, aged 41, was appointed to the Board on 25 July 2006 as an Executive Director. He graduated from Western Michigan University with a degree in Mechanical Engineering. He joined Resintech Plastics (M) Sdn. Bhd. in He was in the Production Department during the first two (2) years of his service, where he gained invaluable knowledge and experience in the machineries and production processes. Subsequently, he joined the Group s Sales and Marketing Department, wherein he expanded his knowledge in our sales and marketing activities. Mr Teh was one of the key persons involved in the launching and marketing of the HDPE corrugated sewer pipe in Over the years, he has continued to play a significant role in the managing production operations and has set his sights now on expanding the Group s business. He is currently oversees the Group s entire operation and also a member of Research & Development team, where he plays an important role in defining the scope of research and its objectives. He was appointed as the Management Representative position of Resintech Plastics (M) Sdn. Bhd. s ISO team in 2003 and led the Company through the ISO renewal audits. He does not hold any directorship in other public companies and listed issuers. Khairul Anuar bin Shaharudin a Malaysian, male, aged 43, was appointed to the Board on 25 July 2006 as an Independent Non-Executive Director of the Company. He is also a member of the Audit Committee, Nomination Committee and Remuneration Committee. Encik Khairul Anuar obtained a LL.B (Hons) from the Universiti Kebangsaan Malaysia in 1998 and was duly admitted as an Advocate and Solicitor to the High Court of Malaya in He began his career by chambering in Messrs. Azmah & Maishiah from 1998 to Subsequently, he was made a partner in the legal firms of Messrs. Hanif Hassan & Co and Messrs. Khairul Anuar, Suhaila & Co. in 1999 and 2000 respectively. In 2001, Encik Khairul Anuar was appointed as the Managing Partner in the legal firm of Messrs. Jefrizal & Co. and this was followed by being a Managing Partner in Messrs. Khairul, Suhaila & Hazlina in 2002, a post he holds until now. He does not hold any directorship in other public companies and listed issuers. Wei Hwei Hong a Malaysian, female, aged 41, is an Executive Director and also a Financial Controller. She was appointed to the Board on 25 July She graduated from the University of Sheffield with a Bachelor of Arts (Hons). She is a fellow member of Association of Certified Chartered Accountants (ACCA) and also a member of Malaysia Institute of Accountants (MIA). Ms Wei possesses hands-on audit experience in one of the big four (4) accounting firms for a period of three (3) years, working on a vast array of projects. She joined Resintech Plastics (M) Sdn. Bhd. in May 2003 and currently, is responsible for overseeing the Accounts and Finance Department of the Group. She does not hold any directorship in other public companies and listed issuers. 09

12 resintech berhad ( X) Directors Profile Kok Wee Wah a Malaysian, male, aged 51, is an Independent Non-Executive Director of the Company. He was appointed to the Board on 22 February He is also a member of the Audit Committee. Mr Kok is a fellow member of Association of Certified Chartered Accountants (ACCA) and also a member of Malaysia Institute of Accountants (MIA). He has many years of experience in one of the big four (4) accounting firms and has worked in many other industries before he joined Resintech-Kapar Sdn. Bhd. in Mr Kok resigned as the General Manager of Resintech-Kapar Sdn. Bhd. in February 2008 and took on the position in the Board of Directors as Non- Independent Non-Executive Director. He was then re-designated to Independent Non-Executive Director on 15 June He does not hold any directorship in other public companies and listed issuers. Notes to Directors Profile 1. Family Relationships Save for the following, none of the Directors have any family relationships with any other Directors and/or major shareholders:- Dato Dr. Teh Kim Poo is the spouse of Datin Gan Jew, a Director and major shareholder of the Company. He is also the father to Mr Teh Leng Kang, a Director of the Company. Mr Teh Leng Kang is the spouse of Ms Wei Hwei Hong, a Director of the Company and the son of Dato Dr. Teh Kim Poo and Datin Gan Jew. 2. Conflict of Interest None of the Directors have any conflict of interest with the Company. 3. Conviction of Offences None of the Directors have been convicted any offences (other than traffic offences) within the past 5 years and there were no public sanction or penalty imposed on them by the relevant regulatory bodies during the financial year ended 31 March. 4. Attendances at Board Meetings The details of the Directors attendance at the board meetings are set out on page 25 of this Annual Report. 5. Directors Shareholdings The details of the Directors Shareholdings are set out on page 109 of this Annual Report. 10

13 Annual Report chairman s statements OUTLOOK Globally, world growth is expected to rise from 3.1% previously to 3.5% this year mainly due to stronger activities and expectation of more robust economy. World economy is expected to improve further in the following year. Locally, gross domestic product growth forecast had been revised from 4.3% to 5%, basing on stronger private sector expenditure domestically as well as strengthening external demand. GDP is forecast to moderate 4.9% next year. As GE14 is drawing nearer, due by 2018, we can also expect more Government stimulus packages so as to bolster consumer sentiment. Dear Valued Shareholders, On behalf of the Board of Directors of Resintech Berhad, I am pleased to present to you the Annual Report and Financial Statements of Resintech Berhad for the financial year ended 31 March. FINANCIAL AND OPERATIONAL HIGHLIGHTS For the financial year ended 31 March, the Group recorded higher total revenue of RM78million as compared to RM77million for the financial year ended 31 March. Current year profit before taxation jumped to RM10million from RM3.0million achieved last year. Profit after taxation of RM8.7million is doubled that recorded in previous year. Its revenue recorded is derived mainly from manufacturing and trading segment which had improved slightly by approximately 2% due to stronger local demand. Overall performance improved mainly due to stronger demand, less volatile foreign currencies and better cost efficiency. Performance is also partly contributed by fair value gain on its investment properties. Construction growth momentum continues to be sustained by ongoing large-scale infrastructures such as Pan-Borneo Highway. We are also upbeat over the projects in the pipeline such as East Coast Rail Link, which is 600km long and value at over RM55billions, and Sungai Buloh-Serdang-Putrajaya Line, value at over RM31billions. This sector is the fastest-growing infrastructure sub-sector at home. These are high multiplier projects which will create positive spill-over effects to help boost the domestic activities. Bank Negara Malaysia s accommodative monetary policy will also continue to support our economic growth. The Management undertakes to always monitor and implement strings of control to ensure operational efficiency as well as cost effectiveness. ACKNOWLEDGEMENT On behalf of the Board, I wish to express our sincerest appreciation to the Group s Management and staff for their unwavering commitments, guidance, support and loyalty. Likewise, we would also like to thank our clients, financiers, suppliers, and all other stakeholders for their continuous support and loyalty. Dato Abu Sujak bin Mahmud (Senior Independent Non-Executive Chairman) DIVIDENDS During the year, the Group declared a single tier interim dividend of 1.2 sen (2.4%) per ordinary share amounting to a total of RM1.65million. did not recommend any final dividend. 11

14 resintech berhad ( X) management discussion & analysis GROUP OVERVIEW Resintech Berhad is a company listed on Bursa Securities in December s main business is in the manufacturing and trading of a diversified plastics building materials, which accounts to most of its revenues and profits. Earnings from other smaller divisions are insignificant. FINANCIAL RESULTS Revenue 77,585 77,215 91,927 86,165 84,683 Profit before taxation 10,257 3,006 9,914 5,792 3,021 Finance costs 1,524 1,660 1,918 1,905 1,967 Profit attributable to owners of parent 8,715 4,330 5,856 4,962 2,841 Shareholders equity 129, , ,084 91,415 86,424 Total assets 171, , , , ,576 Borrowings 18,486 21,846 24,288 27,238 32,049 Debt / Equity (%) 14% 18% 20% 30% 37% Earnings per share (sen) Net assets per share Dividend per share N/A N/A N/A FINANCIAL POSITIONS As at 31 March, the Group has trade and other receivables of RM28.7million, a decrease of 5.0% as compared to RM30,230,000 as at 31 March mainly due to lower trade receivables during the financial year end. As at 31 March, the Group has trade and other payables of RM9.4million, an increase of 74.1% as compared to RM5,398,000 as at 31 March mainly due to higher trade payables at year end. maintains group cash management system which enables the funding of operations of the entire Group of Companies. has credit facilities as required in support of manufacturing and trading activities as well as working capital requirements and capital expenditures which is required to sustain and expand our businesses. anticipates sufficient liquidity for the year ahead. PRICE AND FOREIGN CURRENCY RISK The inputs of the Group s manufacturing activities is depending on the price of crude oil as well as the movements in US Dollar. Crude oil price tend to be cyclical and subject to fluctuations. The Group is exposed to foreign currency risk on such transactions and balances that are denominated in US Dollar. Unfavourable fluctuations will affect our cost competitiveness, financial results and financial commitments. The foreign currency risk is partially managed through a natural hedge between the sales and purchases in the same currencies, and remaining being monitored closely on an on-going basis to ensure that the net exposure is at an acceptable level. DIVIDEND POLICY The Company does not have a fixed long term dividend policy. In deciding the dividend payout for each year, the Board considers the strength of cash flow from operating activities, the cash outlay commitments and the future plans of the Group. For the financial year under review, the Company paid 1.2 sen per share to its shareholders. PROPSECT MOVING FORWARD s prospects can be found in the Chairman s Statement. 12

15 Annual Report group financial highlights Revenue () 77,585 77,215 91,927 86,165 84,683 Profit before taxation () 10,257 3,006 9,914 5,792 3,021 Total assets () 171, , , , ,576 Earnings per share (sen) Shareholders equity () 129, , ,084 91,415 86,424 Net assets per share (sen) ,000 90,000 85,000 80,000 75,000 70,000 65,000 REVENUE () 200, , , , , ,000 80,000 60,000 40,000 20,000 TOTAL ASSETS () ,000 10,000 8,000 6,000 4,000 2,000 0 PROFIT BEFORE TAXATION () EARNINGS PER SHARE (Sen) SHAREHOLDERS EQUITY () NET ASSETS PER SHARE (Sen) 140, , ,000 80,000 60,000 40,000 20,

16 resintech berhad ( X) audit committee report OBJECTIVE The objective of the Audit Committee ( AC ) is to assist Board of Directors ( the Board ) in fulfilling its fiduciary responsibilities relating to internal controls, financial and accounting records and policies as well as integrity in financial reporting practices of the Company and its subsidiaries ( the Group ). COMPOSITION AND MEETING ATTENDANCE During the financial year ended 31 March, a total of five (5) AC meetings were conducted and the members of the AC and details of their attendance of the meetings during the financial period are as follows: Attendance of meetings % Chairman: Members: Dato Abu Sujak bin Mahmud (Senior Independent Non-Executive Chairman) Khairul Anuar bin Shaharudin (Independent Non-Executive Director) Kok Wee Wah (Independent Non-Executive Director) 5/ / /5 100 The Board assesses the performance of the AC and its members through Nomination Committee and an annual Board Committee effectiveness evaluation and is satisfied that they are able to discharge their functions, duties and responsibilities in accordance with the Terms of Reference of the AC thereby supporting the Board in ensuring appropriate Corporate Governance Standards within the Group. TERMS OF REFERENCE The Terms of Reference of the AC is available on the corporate website of the Company at SUMMARY OF works of the ac during the financial year The works carried out by the AC during the financial year ended 31 March are summarised as follows: a) Financial Results Clarifications or explanations were sought from Management in particular on any significant changes to the items or transactions that would affect the financial position of the Company and the Group. The AC had reviewed the unaudited quarterly results to ensure that the quarterly financial reporting and disclosures are presented in a true and fair view of the Group s financial performance in accordance with the applicable Malaysian Financial Reporting Standards and International Accounting Standards as well as the applicable disclosure provisions of the Main Market Listing Requirement ( MMLR ) before the AC recommended the same to the Board for their approval and subsequent release to Bursa Securities. Prior to the issuance of the finalised audited financial statements of the Company and the Group, the AC had reviewed the audit status update presented by the External Auditors comprising amongst others, areas of audit emphasis, audit materiality, significant adjustments resulting from the audit, going concern assumption and impairment arising from the audit during the year under review. The AC had reviewed any changes in the implementation of major accounting policies and practices to the Group. 14

17 Annual Report Audit Committee Report SUMMARY OF works of the ac during the financial year (Cont d) b) External Audit The AC had reviewed the audit plan of the External Auditors in terms of their scope of audit, methodology and timetable, audit materiality, areas of focus prior to the commencement of their annual audit; The AC had reviewed and discussed the External Auditors audit report and areas of concern highlighted therein including management s response to the concerns raised by the External Auditors and evaluation of the system of internal controls; The AC had met up with the External Auditors without the presence of Management to further discuss matters arising from audit; The AC had considered the re-appointment of External Auditors and their audit fees, after taking into consideration of the independence and objectivity of the External Auditors vide a written assurance of independence and the cost effectiveness of their audit, before recommending to the Board for approval. c) Internal Audit The AC had reviewed and approved the internal audit plan, methodology, functions and resources to ensure adequate audit scope and coverage of the key risk areas of business operations of the Group are carried out. The AC had reviewed and discussed the internal audit reports which outlined the recommendations towards correcting areas of weaknesses and ensured that there were Management action plans established for the implementation of the Internal Auditors recommendations. Management was invited to attend the AC meeting to provide clarification on specific issues raised in the internal auditor reports. Summary of internal audit reports presented to the AC provided status updates for management action plans to address the findings reported in the previous audit cycles. The Internal Auditors monitored the implementation of the Management s action plan on outstanding issues through follow-up reports to ensure all audit findings were adequately dealt with by the Management. The AC had reviewed of the adequacy of the scope, functions and competency of the internal audit function, and the results of the internal audit process to ensure the appropriate actions are taken upon the recommendations of the internal audit function. d) Related Party Transactions The AC had reviewed the system for identifying, monitoring and disclosing related party transactions for the Group and to ensure that related party transactions are not to the detriment of minority shareholders of the Company. The report of Related Party Transactions of the Group was tabled and reviewed by the AC at every quarterly meeting. e) Annual Reporting The AC had reviewed and recommended the Report of the AC and Statement on Risk Management and Internal Control for inclusion in the Annual Report for the financial year ended 31 March to the Board for approval. INTERNAL AUDIT FUNCTION AND ACTIVITIES The principal role of the internal auditors is to undertake independent, regular and systematic reviews of the systems of internal control so as to provide reasonable assurance that such systems continue to operate satisfactorily and effectively. The internal auditors carry out audit assignments based on an audit plan that was reviewed and approved by the AC. The reports of the audits undertaken were forwarded to the management for attention and necessary action and presented to the AC for deliberation and approval. The internal audit review on the system of internal controls was outsourced to an independent professional firm. The outsourced internal auditors report directly to the AC. The terms of engagement of the outsourced internal auditors is governed by a formal engagement letter reviewed by the AC and includes engagement objectives and scope, reporting structure, internal audit methodology, independence and objectivity, authorities and responsibilities. 15

18 resintech berhad ( X) Audit Committee Report INTERNAL AUDIT FUNCTION AND ACTIVITIES (Cont d) The activities carried out by the internal auditors during the financial year ended 31 March include: developed the internal audit plan for year /2018; issuance of reports on the results of the internal audit review, identifying key weaknesses with suggested recommendations to the management for further action; attended AC meetings to table and discuss the internal audit reports; and internal controls review on Inventory Management for Resintech-Kapar Sdn. Bhd. and Production Cycle for Resintech Plastics (M) Sdn Bhd. The management was made responsible for ensuring that corrective actions where necessary were taken within the required timeframes. The cost incurred for the internal audit function in respect of the financial year ended 31 March amounted to RM50,000. Further details of the Internal Audit Function are set out in the Statement on Risk Management and Internal Control on page 31 of this Annual Report. 16

19 Annual Report statement on corporate governance The Board of Resintech Berhad ( the Company ) is committed in cultivating a responsible organisation by instilling corporate conscience through excellence in corporate governance ( CG ) standards at all times, including accountability and transparency are observed throughout the Group as a fundamental part of building a sustainable business and discharging its responsibilities to protect and enhance shareholder value and financial performance of the Group. This statement provides an insight into the CG practices of the Company pursuant to the Principles and Recommendations as set out in the Malaysian Code on Corporate Governance 2012 ( MCCG 2012 ). 1. Establish clear roles and responsibilities 1.1 Clear functions of the Board and those delegated to Management The Board is responsible for formulating and reviewing the strategic plans and key policies of the Company, and charting the course of the Group s business operations whilst providing effective oversight of Management s performance, risk assessment and controls over business operations. The Board delegates and confers some of its authorities and discretion on the Chairman, Executive Directors, and Management as well as on properly constituted Board Committees comprising mainly/exclusively Non-Executive Directors. There is a clear division of responsibilities between the Chairman of the Board and the Managing Director ( MD ). The Chairman leads strategic planning at the Board level, while the Executive Directors are responsible for the implementation of the policies laid down and executive decision-making. The role of Management is to support the Executive Directors and implement the running of the general operations and financial business of the Company, in accordance with the delegated authority of the Board. The Board Committees made up of AC, Nomination Committee ( NC ) and Remuneration Committee ( RC ); and are entrusted with specific responsibilities to oversee the Group s affairs, with authority to act on behalf of the Board in accordance with their respective Terms of Reference. At each Board meeting, the Chairman of the relevant Board Committees report to the Board on key issues deliberated by the Board Committees at their respective meetings. In general, the Non-Executive Directors are independent of Management. Their roles are to constructively challenge Management and monitor the success of Management in delivering the approved targets and business plans within the risk appetite set by the Board. They have free and open contact with Management at all levels, and they engage with the External and Internal auditors to address matters concerning Management and oversight of the Company s business and operations. Key matters reserved for the Board s approval include the annual business plan and budget, capital management and investment policies, authority limits/levels, risk management policies, declaration of dividends, business continuity plan, issuance of new securities, business restructuring, expenditure above a certain limit, material acquisitions and disposition of assets. 1.2 Clear roles and responsibilities in discharging fiduciary and leadership functions The Board has discharged its responsibilities in the best interests of the Company. The following are among the key responsibilities of the Board: (a) Reviewing and adopting the Company s strategic plans The Board has in place a strategy planning process, whereby MD presents to the Board its recommended strategy annually, together with the proposed business plans for the ensuing year for the Board s review and approval. The Board will deliberate both Management s and its own perspectives, and challenge Management s views and assumptions to ensure the best outcome. 17

20 resintech berhad ( X) Statement on Corporate Governance 1. Establish clear roles and responsibilities (Cont d) 1.2 Clear roles and responsibilities in discharging fiduciary and leadership functions (Cont d) (b) Overseeing the conduct of the Company s business The MD is responsible for the day-to-day management of the business and operations of the Group in respect of both its regulatory and commercial functions. He is supported by Management and the Executive Directors. Management s performance, under the leadership of MD, is assessed by the Board through monitoring the success in delivering the approved targets and business plans against the performance of the Group. (c) Identifying principal risks and ensuring the implementation of appropriate internal controls and mitigation measures The AC, through guidance by the internal auditors, advises the Board on areas of high risk faced by the Group and the adequacy and effectiveness of the governance, risk and control structures and processes throughout the Group. The Board deliberates the recommendations made by the AC on the action plans implemented and ensures the appropriate implementation of internal controls and mitigation measures to manage risks. Further explanation on such process are disclosed in the Statement on Risk Management and Internal Control on pages 31 to 32. (d) Succession Planning The Board has entrusted the NC and RC with the responsibility to review candidates for the Board and key management positions and to determine remuneration packages for these appointments, and to formulate nomination, selection, remuneration and succession policies for the Group. As part of the Company s succession planning the Board has worked with the NC to evaluate the performance of the potential successor i.e. Mr Teh Leng Kang, the Executive Director of the Company, having taken into consideration of the challenges and opportunities facing the Company, and the skills and expertise needed on the Board in the future. (e) Overseeing the development and implementation of a shareholder communications policy for the Company The Company strongly believes that effective and timely communication is essential in maintaining good relations with the shareholders, investors and investment community. To that end, the Board strives to provide shareholders and investors accurate, useful and timely information about the Company, its businesses and its activities via the timely release of quarterly financial results, press releases and announcements. Whilst the Company endeavours to provide as much information as possible, it is aware of the legal and regulatory framework governing the release of material and price sensitive information. The Company has identified Dato Abu Sujak bin Mahmud, as the Senior Independent Non-Executive Director to whom concerns of shareholders and other stakeholders may be conveyed. In addition to the above, shareholders and investors can make inquiries about Investor Relations ( IR ) matters with designated management personnel directly responsible for IR, via dedicated addresses available on the corporate website. (f) Reviewing the adequacy and integrity of management information and internal control system of the Company The Board is ultimately responsible for the adequacy and integrity of the Company s internal control system. Details pertaining to the Company s internal control system and the reviews of its effectiveness are set out in the Statement on Risk Management and Internal Control of this Annual Report. 18

21 Annual Report Statement on Corporate Governance 1. Establish clear roles and responsibilities (Cont d) 1.3 Formalised ethical standards through Codes of Conduct The Board is guided by the Codes of Conduct for Directors and Employees in discharging its oversight role effectively. The Codes of Conduct require all Directors to observe high ethical business standards, and to apply these values to all aspects of the Group s business and professional practice and act in good faith in the best interests of the Group and its shareholders. A summary of the Codes of Conduct was published on the corporate website. In addition, the Company s Whistleblowing Policy as published on the Company s website seek to foster an environment where integrity and ethical behaviour are maintained and any illegal or improper action and/or wrong doing in the Company may be exposed. 1.4 Strategies promoting sustainability The Board formalises the Company s strategies on promoting sustainability. Discussion was held amongst the Directors to explore future investment and expansion of business in other countries. The Board promotes good corporate governance in the application of sustainability practices throughout the Company, the benefits of which are believed to translate into better corporate performance. Accordingly, the Company takes cognisance of the global environmental, social, governance and sustainability agenda. The Company recognises the value of a diversed and skilled workforce and is committed to creating and maintaining an inclusive and collaborative workplace culture that will provide sustainability for the Company into the future. The Company is committed to leveraging the diverse backgrounds in terms of gender, ethnicity and age, experiences and perspectives of our workforce, to provide good customer service to an equally diverse customer base. The Company s commitment to recognising the importance of diversity extends to all areas of our business including recruitment, skills, enhancement, appointment to roles, retention of employees, succession planning and training and development. 1.5 Access to information and advice The Directors have individual and independent access to the advice and dedicated support services of the Company Secretaries in ensuring the effective functioning of the Board. The Directors may seek advice from Management on issues under their respective purview. The Directors may also interact directly with Management, or request further explanation, information or updates on any aspect of the Company s operations or business concerns from them. In addition, the Board may seek independent professional advice at the Company s expense on specific issues to enable it to discharge its duties in relation to matters being deliberated. Schedule of Board and Committee meetings are determined in advance before the new financial year. This enables Management to plan ahead the yearly business and corporate affairs and ensure timely preparation of information for dissemination to the Board members. 1.6 Qualified and competent company secretaries The Board in delivering their duties and responsibilities, is supported by suitably qualified and competent Company Secretaries who are members of professional bodies namely the Malaysian Institute of Chartered Secretaries and Administrators (MAICSA). The Company Secretaries were entrusted to record the Board s deliberations, in terms of issues discussed, and the conclusions and the minutes of the previous Board meeting is distributed to the Directors prior to the Board meeting for their perusal before confirmation of the minutes at the commencement of the following Board meeting. The Directors may comment or request clarification before the minutes are tabled for confirmation as a correct record of the proceedings of the meeting. The Company Secretaries also ensure that there is good information flow within the Board and between the Board, Board Committees and Management. 19

22 resintech berhad ( X) Statement on Corporate Governance 1. Establish clear roles and responsibilities (Cont d) 1.6 Qualified and competent company secretaries (Cont d) The Board is regularly updated by the Company Secretaries on new changes to relevant legislation and Bursa Securities MMLR and the resultant implications to the Company and the Board. All Directors have direct access to the advice and services of the Company Secretaries in discharging their duties effectively. The appointment and removal of the Company Secretaries is a matter for the Board as a whole. 1.7 Board Charter In discharging its duties, the Board is constantly mindful of the need to safeguard the interests of the Group s stakeholders. In order to facilitate the effective discharge of its duties, the Board is guided by the Board Charter which was adopted by the Board on 15 March 2013 and the same was published on the corporate website. The Board Charter serves to ensure that all Board members acting on the Group s behalf are aware of their expanding roles and responsibilities. It sets out the strategic intent and specific responsibilities to be discharged by the Board members collectively and individually. It also regulates on how the Board conducts business in accordance with CG principles. The Board Charter is reviewed regularly to ensure that it complies with the best practices and regulation. 1.8 Conflict of Interest Members of the Board are required to make a declaration to that effect at the Board meeting in the event that they have interests in proposals being considered by the Board, including where such interest arises through close family members, in line with various statutory requirements on the disclosure of Director s interest. Any interested Directors would abstain from deliberations and decision of the Board on the subject proposal and, where appropriate, excuse themselves from being present in the deliberations. 2. Strengthen Composition 2.1 NC The NC consists of entirely Independent Non Executive Directors and the Chairman of the NC is the Senior Independent Non-Executive Director of the Company which is in compliance with Recommendation 2.1 of the MCCG The NC has worked to ensure that the right balance of skills, knowledge, experience and diversity is reflected in the composition of the Board. The NC assisted the Board in assessing the contributions of each individual Director including that of the Financial Controller, who is primarily responsible for the financial management of the Company. One meeting was held during the financial year under review with full attendance from the members of the Nomination Committee. At the meeting during financial year, the Committee deliberated over the following:- Assessed the contribution of each individual Director; Reviewed the Board structure, composition and the balance between Executive Directors, Non-Executive Directors and Independent Directors to ensure that the Board has the appropriate mix of skills and experience including core competencies which Directors should bring to the Board and other qualities to function effectively and efficiently; Reviewed the independence of Independent Directors; Established and implemented processes for assessing the effectiveness of the Board as a whole, the Committees of the Board and assessing the contribution of each Director; and Discussed the annual retirement by rotation and re-election of Directors at the forthcoming Annual General Meeting ( AGM ) and recommended the same for re-appointment/re-election by the shareholders. 20

23 Annual Report Statement on Corporate Governance 2. Strengthen Composition (Cont d) 2.2 Senior Independent Non-Executive Director The Board has identified the Independent Non-Executive Director, Dato Abu Sujak Bin Mahmud, as the Senior Independent Non-Executive Director to whom concerns of shareholders and other stakeholders may be conveyed. The NC was chaired by Dato Abu Sujak Bin Mahmud. Dato Abu Sujak Bin Mahmud can be contacted at 2.3 Develop, maintain and review criteria for recruitment and annual assessment of Directors Board appointment process The NC is responsible for identifying and recommending suitable candidates for Board membership and also for assessing the performance of the Directors on an on-going basis. The Board will have the ultimate responsibility and final decision on the appointment. This process shall ensure that the Board membership was accurately reflects the long-term strategic direction and needs of the Company and determines skills matrix to support strategic direction and needs of the Company. Management shall then engage broadly to develop a pool of interested potential candidates meeting the skills, expertise, personal qualities and diversity requirements for both the Board and the Committee appointments. The NC evaluates and matches the criteria of the candidate, and will consider diversity, including gender, where appropriate, and recommends to the Board for appointment. Consideration will be given to those individuals possessing the identified skill, talent and experience. The NC will contact those persons identified to determine interest in serving the Company. This communication will ensure that prospective Board members have clarity regarding the nominating process as well as Director/Board profiles, roles and responsibilities, expectations of time commitments and other information as required. According to the Constitution of the Company, all Directors are required to submit themselves for re-election at intervals of not more than three (3) years. The Constitution also states that one-third (1/3) of the Board members shall retire from office at the AGM and shall be eligible for re-election at the same AGM. The new Director(s) duly appointed by the Board are then recommended for re-election at the AGM. The Company shall then provide orientation and on-going education to the Board. In making the selection, the Board is assisted by the NC to consider the following aspects: Probity, personal integrity and reputation - the person must have the personal qualities such as honesty, integrity, diligence and independence of mind and fairness. Competence and capability - the person must have the necessary skills, ability and commitment to carry out the role. Dato Abu Sujak bin Mahmud who is over the age of 70 years was re-appointed under Section 129 of the Companies Act, 1965 at the 21st AGM held on 30 August and subject to re-appointment at the forthcoming AGM, has indicated his intention not to seek for re-appointment and accordingly, he shall cease as a Director of the Company at the conclusion of the 22nd AGM. Annual Assessment The Board reviews and evaluates its own performance and the performance of its Committees on an annual basis. The Board evaluation comprises a Board Assessment, an Individual Director Assessment and an Assessment of Independence of Independent Directors. The assessment of the Board is based on specific criteria, covering areas such as the Board structure, Board operations, roles and responsibilities of the Board, the Board Committee and the Chairman s role and responsibilities. 21

24 resintech berhad ( X) Statement on Corporate Governance 2. Strengthen Composition (Cont d) 2.3 Develop, maintain and review criteria for recruitment and annual assessment of Directors (Cont d) Annual Assessment (Cont d) For Individual Director Assessment, the assessment criteria include contribution to interaction, quality of inputs, and understanding of role. As for the performance evaluation of board committees, the Board assesses the performance of the AC, NC and RC based on the recommended evaluation criteria adopted from Corporate Governance Guide issued by Bursa Malaysia Berhad, which includes committees composition, contribution to the board s decision making, expertise, appointment as well as timeliness and quality of communication and minutes. Review of the performance of the board committees was conducted by the NC during the financial year. Based on the above assessments, the NC was satisfied with the existing Board composition and was of the view that all Directors and Board Committees of the Company had discharged their responsibilities in a commendable manner and had performed competently and effectively. All assessments and evaluations carried out by the NC in the discharge of all its functions were properly documented. The Board is of the view that its present size and composition is optimal based on the Group s operations and that it reflects a fair mix of financial, technical and business experiences that are important to the stewardship of the Group. Gender diversity policy The Board acknowledges the importance of boardroom diversity and the recommendation of the MCCG 2012 pertaining to the establishment of a gender diversity policy. Hence, the Board has always been in support of the Company s policy of non-discrimination on the basis of race, age, religion and gender. The Board encourages a dynamics and diverse composition by nurturing suitable and potential candidates equipped with competency, skills, experience, character, time commitment, integrity and other qualities in meeting future needs of the Company. Presently, there are two (2) female directors in the Company. 2.4 Remuneration Policies and Procedures The RC and the Board ensure that the Company s remuneration policy remains supportive of the Company s corporate objectives and is aligned with the interest of shareholders, and further that the remuneration packages of Directors and key Senior Management Officers are sufficiently attractive to attract and to retain persons of high calibre. The RC reviews annually the performance of the Executive Directors and submits recommendations to the Board on specific adjustments in remuneration and/or reward payments that reflect their respective contributions for the year, depending on the performance of the Group, achievement of the goals and/or quantified organisational targets as well as strategic initiatives set at the beginning of each year. The Board as a whole determines the remuneration of Non-Executive Directors and recommends the same for shareholders approval. The Executive Directors are not entitled to the above Director s fee and any meeting allowance for Board or Board Committee Meetings they attend. The remuneration package of the Executive Directors consists of monthly salary, bonus and benefitsin-kind such as company car and the benefit of Directors and Officers Liability Insurance in respect of any liabilities arising from acts committed in their capacity as Directors and Officers of the Company. The Directors and principal officers are required to contribute jointly towards the premium of the said policy. 22

25 Annual Report Statement on Corporate Governance 2. Strengthen Composition (Cont d) 2.4 Remuneration Policies and Procedures (Cont d) Details of the Directors remuneration (including benefits-in-kind) of each Director during the financial year ended 31 March are as follows: Categories of Remuneration Executive Directors Group Non-Executive Directors Executive Directors Company Non-Executive Directors Directors Fees Salary, Bonus and Incentive 1, Meeting Allowance Travelling Allowance EPF Contribution Benefit-in-kind Total: 1, The Number of Directors whose remuneration fall within the following bands is tabulated as below:- Range of Remuneration (RM) Executive Directors () Group Non-Executive Directors () Executive Directors () Company Non-Executive Directors () Below RM50, RM50,001 RM100, RM100,001 RM150, RM250,001 RM300, RM350,001 RM400, RM750,001 to RM800, Total The details of individual Director s remuneration are not disclosed as the Board considers the above disclosures on the Directors remuneration are sufficient to cater to the transparency and accountability aspects of the MCCG

26 resintech berhad ( X) Statement on Corporate Governance 3.0 Reinforce Independence 3.1 Annual Assessment of Independence The Board, through the NC, assesses the independence of Independent Directors annually. The criteria for assessing the independence of an Independent Director include the relationship between the Independent Director and the Company and his involvement in any significant transaction with the Company. Based on the assessment for the financial year ended 31 March, the Board is generally satisfied with the level of independence demonstrated by all the Independent Directors, and their ability to bring independent and objective judgement to board deliberations. 3.2 Tenure of Independent Directors The Board has adopted a nine-year policy for Independent Non-Executive Directors. An Independent Director may continue to serve on the Board subject to the director s re-designation as a Non-Independent Director. Otherwise, the Board will justify and seek shareholders approval at the AGM in the event it retains the director as an Independent Director. 3.3 Shareholders approval for the Continuance in Office as Independent Directors The NC will assess the independence of the Independent Directors based on the assessment criteria developed by the NC, and recommended to the Board for recommendation to shareholders for approval. Justification for the Board s recommendation would be provided to shareholders. Currently, there are three (3) long serving Independent Directors namely, Dato Abu Sujak Bin Mahmud, Encik Khairul Anuar Bin Shaharudin and Mr Kok Wee Wah, whose tenure are more than nine (9) years. The Board, is unanimous in its opinion that the three (3) Independent Directors, have fulfilled the criteria under the definition of an Independent Director as set out under Paragraph 1.01 of the MMLR of Bursa Securities. The Board believes that the independence of the three (3) Independent Directors remains unimpaired and their judgement over business dealings of the Company were not influenced by the interest of the other Directors or Substantial Shareholders. Dato Abu Sujak bin Mahmud, the Senior Independent Non-Executive Director has indicated his intention not to seek for re-appointment at the forthcoming AGM. Thus, the Board recommends to the shareholders for approval at the forthcoming AGM for Mr Kok Wee Wah and Encik Khairul Anuar Bin Shaharudin to continue acting as Independent Directors. 3.4 Separation of the Positions of the Chairman and the MD The positions of the Chairman and the MD are held by two different individuals. Dato Abu Sujak bin Mahmud, a Senior Independent Non-Executive Director, is the Chairman whereas Dato Dr. Teh Kim Poo is the Company s MD. The distinct and separate roles of the Chairman and MD, with a clear division of responsibilities, ensure a balance of power and authority, such that no one individual has unfettered powers of decision-making. 3.5 Composition of the Board The Board of Directors currently comprises seven (7) members, of whom three (3) are Independent Non-Executive Directors (including the Chairman), and four (4) Executive Directors. The three (3) Independent Non-executive Directors fulfilled the criteria of independence as defined in the MMLR. The Independent Non-Executive Directors do not participate in the day-to-day management of the Company and do not involve themselves in business transactions or relationships with the Company, in order not to compromise their objectivity. In staying clear of any potential conflict of interest, the Independent Non-Executive Directors remain in a position to fulfil their responsibility to provide check and balance to the Board. The Board composition has met the MMLR and the MCCG 2012 for a balanced board with Independent Directors constituting more than one-third of the Board. 24

27 Annual Report Statement on Corporate Governance 3.0 Reinforce Independence (Cont d) 3.5 Composition of the Board (Cont d) The Independent Non-Executive Directors are of the calibre necessary to provide an independent judgment on the issues of strategy, performance and resource allocation. They carry sufficient weight in Board decisions to ensure long-term interest of the shareholders, employees, customers and other stakeholders. The seven (7) members of the Board are persons of high calibre and integrity, and they possess the appropriate skills and provide a wealth of knowledge, experience and skills in the key areas of accountancy, business operations and development, finance and risk management, amongst others. Jointly with the Financial Controller, the MD is accountable to the Board over the daily management and development of the Company. The profile of each of the Member of the Board is presented on the pages 8 to 10 of this Annual Report. 4.0 Foster Commitment 4.1 Time Commitment The Board meets at least five (5) times a year or more when circumstance require. Where appropriate, decisions are also made by way of circular resolutions in between scheduled meetings during the financial year. The Board is satisfied with the level of time commitment given by the Directors towards fulfilling their roles and responsibilities as Directors of the Company. This is evidenced by the attendance record of the Directors at Board of Directors Meetings, as set out in the table below:- Name of Director Designation No. of Board Meetings attended % Dato Abu Sujak bin Mahmud Independent Non-Executive Chairman 5/5 100 Dato Dr. Teh Kim Poo Managing Director 4/5 80 Datin Gan Jew Executive Director 4/5 80 Teh Leng Kang Executive Director 5/5 100 Wei Hwei Hong Executive Director 5/5 100 Khairul Anuar bin Shaharudin Independent Non-Executive Director 5/5 100 Kok Wee Wah Independent Non-Executive Director 5/5 100 The Board has also agreed for the 50.0% minimum attendance requirement to be adopted for Board and Board Committees. Overall, all Committee members complied with the attendance threshold. To ensure that the Directors have the time to focus and fulfil their roles and responsibilities effectively, the Directors must not hold directorships at more than five (5) public listed companies and shall notify the Chairman before accepting any new directorship. To facilitate the Directors time planning, an annual meeting schedule is prepared and circulated at the beginning of every year, as well as the tentative closed periods for dealings in securities by Directors based on the targeted date of announcements of the Group s quarterly results. 25

28 resintech berhad ( X) Statement on Corporate Governance 4.0 Foster Commitment (Cont d) 4.2 Training All Directors have completed the Mandatory Accreditation Programme ( MAP ) as prescribed by Bursa Securities. The Company will continue to identify suitable training for the Directors to equip and update themselves with the necessary knowledge in discharging their duty and responsibilities as Directors. Directors are also encouraged to participate in seminars and/or conferences organised by relevant regulatory authorities, professional bodies and commercial entities providing training. This is part of their Continuous Education Programme to keep abreast with relevant new developments on a continuous basis on the general regulatory, economic, industry and technical developments to further enhance their skills, knowledge and experience as well as update themselves on new developments in the business environment in order to fulfil their duties as Directors. There were also briefings by the External Auditors, Internal Auditors and the Company Secretary on the relevant updates on statutory and regulatory requirements from time to time during the Board meetings. The Directors are also encouraged to evaluate their own training needs on a continuous basis and to determine on the relevant programmes, seminars, briefings or dialogues available that would best enable them to enhance their knowledge and contributions to the Board. During the financial year ended 31 March, save for Dato Abu Sujak bin Mahmud due to his hertic schedule, the Directors have attended the following training, seminars and conferences which they considered vital in keeping abreast with changes in laws and regulation, business environment, and corporate government development:- Directors Date of Course Seminar / Course Dato Dr. Teh Kim Poo 9-11 Nov 8-10 Oct VietWater CamWater Datin Gan Jew June ISO Awareness Khairul Anuar bin Shaharudin 21 Nov How to Leverage on AGMs for Better Engagement with Shareholders Teh Leng Kang August Internal Quality Audit Wei Hwei Hong 5-6 November An Overview of Malaysian Private Entities Reporting Kok Wee Wah 16 March Companies Act - Unlocked 5.0 Uphold Integrity in Financial Reporting 5.1 Compliance with applicable financial reporting standards The Board is committed to provide a balanced, clear and meaningful assessment of the financial performance and prospects of the Company via all disclosures and announcements made. The Board is assisted by the AC to oversee and scrutinise the process and quality of the financial reporting, includes reviewing and monitoring the integrity of the financial statements and the appropriateness of the Company s accounting policies to ensure accuracy, adequacy and completeness of the report, as well as in compliance with the relevant accounting standards. 5.2 Assessment of suitability and independence of External Auditors The AC is responsible for reviewing audit, recurring audit-related and non-audit services provided by the External Auditors. These recurring audit-related and non-audit services comprise regulatory reviews and reporting, interim reviews, tax advisory and compliance services. The terms of engagement for services provided by the External Auditors are reviewed by the AC prior to submission to the Board for approval. 26

29 Annual Report Statement on Corporate Governance 5.0 Uphold Integrity in Financial Reporting (Cont d) 5.2 Assessment of suitability and independence of External Auditors (Cont d) All the AC members, who are financially literate and have direct communication channels with the External and Internal Auditors, reviewed the Company s financial statements prior to recommending them for approval by the Board. The Financial Controller updates the AC regularly on the Group s financial performance and highlights key issues in connection with the preparation of the financial results, including adoption of new accounting standard/policies. As part of the governance process in reviewing the quarterly and yearly financial statements by the AC, the MD and the Financial Controller provided assurance to the AC that adequate processes and controls were in place for effective and efficient financial reporting and disclosures. The AC has reviewed the provision of non-audit services by the External Auditors during the year and concluded that the provision of these services did not compromise the External Auditors independence and objectivity as the amount of the fees paid for these services was not significant when compared to the total fees paid to the External Auditors. Having satisfied itself with Messrs Crowe Horwath s performance, competency and audit independence as well as fulfilment of criteria as set out in the Auditors Independence Policy, the AC will recommend their re-appointment to the Board, upon which the shareholders approval will be sought at the AGM. The Company has evaluated the performance of the External Auditors via External Auditors Performance and Independent Checklist, including the review of the caliber of the audit firm, quality of processes, audit team, independence and objectivity, audit scope and planning, audit fees and audit communications. 6.0 Recognise and manage risks 6.1 Sound framework to manage risks The Board oversees, reviews and monitors the operation, adequacy and effectiveness of the Group s system of internal controls. The AC is tasked to oversee the risk management framework of the Group, review the risk assessment and management policies formulated by Management together with the Internal Auditors and makes relevant recommendations to Management to update the Group Risk Profile. The AC also discusses with the Board on areas of high risk faced by the Group and the adequacy of compliance and control throughout the organisation, and makes relevant recommendations to the Board to manage residual risks. The Board has been integrating the risk issues into their decision making process whilst maintaining the flexibility to lead the business of the Group through the ever-changing internal and external environments. The Company continues to maintain and review its internal control procedures to ensure the protection of its assets and its shareholders investment. 6.2 Internal Audit Function The Company has outsourced its internal audit function to a professional services firm namely, BDO Advisory Sdn. Bhd. to assist the AC in discharging its duties and responsibilities in respect of reviewing the adequacy and effectiveness of the Group s risk management and internal control systems. The internal auditor primarily acts as an assurance unit highlighting significant audit findings, areas for improvement, management comment on the audit findings and subsequently monitors the implementation of its recommended corrective actions. The Statement on Risk Management and Internal Control as included on pages 31 to 32 of this Annual Report provides the overview of the internal control framework adopted by the Company during the financial year ended 31 March. 27

30 resintech berhad ( X) Statement on Corporate Governance 7.0 Ensure timely and high quality disclosure 7.1 Corporate Disclosure Policy and Procedures The Company has put in place a Corporate Disclosure Policy with the objective to ensure communications to the public are timely, factual, accurate, complete, broadly disseminated and where necessary, filed with regulators in accordance with applicable laws. The MD and Financial Controller are responsible for determining materiality of information and ensuring timely, complete and accurate disclosure of material information to the investing public in accordance with securities laws and stock exchange rules and regulations, monitoring compliance with this policy and overseeing the disclosure controls and procedures. Sufficient information would be provided to the Company Secretary for drafting of necessary announcement. The Board is mindful that information which is expected to be material must be announced immediately, and that the confidential information should be handled properly to avoid leakage and improper use of such information. 7.2 Leverage on information technology for effective dissemination of information The Company s website provides all relevant corporate information and it is accessible by the public. The Company s website includes share price information, all announcements made by the Company, Annual Reports, financial results, corporate calendar as well as the corporate governance statement of the Company. Through the Company s website, the stakeholders are able to direct queries to the Company. 8.0 Strengthen relationship between Company and Shareholders 8.1 Encourage shareholders participation at general meetings In an effort to encourage greater shareholders participation at AGMs, the Board takes cognisance in serving longer than the required minimum notice period for AGMs, when possible. The Chairman cum the Senior Independent Director ensures that the Board is accessible to shareholders and an open channel of communication is cultivated. The Company encloses the Annual Report together with the notice of AGM with regard to, amongst others, details of the AGM, their entitlement to attend the AGM, the right to appoint proxy and also qualification of proxy. The Company allows a shareholder to appoint a proxy who may not be a member of the Company. If the proxy is not a member of the Company, he/she need not be an advocate, an approved company auditors or a person approved by the Registrar of Companies. To further promote participation of members through proxies, which in line with the MMLR, the Company had amended its Constitution to include explicitly the right of proxies to speak at general meetings. 28

31 Annual Report Statement on Corporate Governance 8.0 Strengthen relationship between Company and Shareholders (Cont d) 8.2 Effective communication and proactive engagement (Cont d) The AGM of the Company provides the principal forum of dialogue and interaction between the Board and the shareholders. At each AGM, the Board presents the progress or performance of the Company and shareholders are given the opportunities to raise questions or to seek clarifications of pertinent and relevant information of the Company. During the meeting, the Chairman, Board members and External Auditors are available to respond to shareholders queries. Pursuant to the amendments to the MMLR of the Bursa Securities announced on 24 March, the Board will put to vote all the resolutions set out in the notice of the AGM by poll at the Company s AGM. Each item of special business included in the notice of AGM will be accompanied by an explanation of the proposed resolutions. All shareholders or proxies will be briefed on the voting procedures prior to the poll voting by the share registrar. The outcome of the resolutions tabled and passed at the AGM is released to Bursa Securities on the same day of the meeting. COMPLIANCE STATEMENT The Board is satisfied that the Company has in / complied with the principles and recommendations of the MCCG 2012 save for otherwise indicated in this Statement. This statement is made in accordance with the resolution of the Board dated 13 July. 29

32 resintech berhad ( X) additional compliance information 1. AUDIT AND NON-AUDIT FEES The auditors remuneration including non-audit fees for the Company and the Group for the financial year ended 31 March are as follows:- Details Statutory Auditors: Group (RM) Company (RM) - Audit Fees 187,000 37,000 - Non-Audit Fees 10,000 10,000 Corporation Related to Auditors Firm: - Tax Agent Fees 60,000 4,000 Total 257,000 51, MATERIAL CONTRACTS INVOLVING DIRECTORS, chief executive s who is not a director AND MAJOR SHAREHOLDERS INTEREST There were no material contracts entered into by the Company and its subsidiaries involving the interest of the Directors, Chief Executive who is not a Director or major shareholders, either still subsisting at the end of the financial year, or which was entered into since the end of the previous financial year. 3. UTILISATION OF PROCEEDS There were no proceeds raised from any corporate proposals during the financial year. 4. RECURRENT RELATED PARTY TRANSACTIONS OF REVENUE NATURE ( RRPT ) There was no shareholders mandate obtained in respect of RRPT of revenue or trading nature during the financial year end. However, details of transactions with related parties undertaken by the Group during the financial year end are disclosed in Note 39 of the Financial Statements. 30

33 Annual Report statement on risk management and internal control The Board is committed to maintaining a sound system of internal control and risk management practices and is pleased to present herewith its Statement on Risk Management and Internal Control within the Group during the financial year ended 31 March, in accordance with the Paragraph 15.26(b) of the MMLR of Bursa Securities. BOARD RESPONSIBILITY The Board of Directors recognises the importance of sound system of internal control to safeguard shareholders investment and the Group s assets against potential shortcomings. The Board is also aware of the limitations inherent in any internal control systems. As such, a sound internal control system manages the potential risk of failure to achieve corporate objectives rather than totally eliminating it. Therefore, the system of internal control can only provide reasonable assurance, not absolute assurance, against any material misstatements or losses. With such benefits and limitations, due consideration was given to weigh the cost as compared to the expected benefits from the devising and implementing the control procedures. Additionally, the Managing Director and the Financial Controller have given assurance to the Board that the Group s risk management and internal control system is operating adequately and effectively to meet the Group s objectives. The Board also ensure that a review on the adequacy and effectiveness of the risk management and internal control system has been undertaken. RISK MANAGEMENT The Board acknowledges that there is an underlying and ongoing process in the Group for the identification, evaluation and mitigation of its significant risks. Management from each department identifies their risks within the defined parameters and standards. Such process was exercised through periodic management meetings held to communicate and deliberate key issues and risks amongst Management team members. Where appropriate, controls are devised, revised, improved and implemented. INTERNAL AUDIT FUNCTION The Board has continued to be assisted by the outsourced external consultants in carrying out the internal audit function. The Board reviews and evaluates the reports presented by the consultants on the implementation of the system and on the recommendations of best practices. During the financial year under review, two (2) internal audit reviews were carried out. For the financial year under review, the cost incurred for the internal audit function amounted to RM50,000. OTHER KEY ELEMENTS OF INTERNAL CONTROLS The other key elements of the Group s internal control system are as follows:- a) Well Defined Organisational Structure Key responsibilities are clearly defined and authorisation policy sets out appropriate authorisation limit. b) Operating Manual Internal policies and procedures are properly documented in the Standard Operating Procedures manuals. c) Management Meetings Regular management meetings are conducted to review and discuss on relevant progresses and reports. d) Internal Audit Activities Internal Audit activities are conducted to assess the adequacy of controls and monitor of compliance with the Group s Policies and Procedures. 31

34 resintech berhad ( X) Statement on Risk Management and Internal Control OTHER KEY ELEMENTS OF INTERNAL CONTROLS (Cont d) e) Management Visits Members of the senior management team carried out inspections regularly as a check to ensure that operations are running smoothly and problems arisen are solved without delay. f) Financial Results Financial results are reviewed and approved quarterly by the Audit Committee and the Board. REVIEW OF THIS STATEMENT by external auditors Pursuant to paragraph of the MMLR, the External Auditors have reviewed this Statement on Risk Management and Internal Control for inclusion in Annual Report of the Group for the financial year ended 31 March. Their reviews were performed in accordance with Recommended Practice Guide (RPG) 5 (revised 2015): Guidance for Auditors on Engagements to Report on the Statement on Risk Management and Internal Control included in the Annual Report issued by the Malaysian Institute of Accountants. Based on their review, nothing has come to their attention that causes them to believe that this Statement is no prepared, in all material respects, in accordance with the disclosures required by paragraph 41 and 42 of the Statement of Risk Management and Internal Control: Guidance for Directors of Listed Issuers to be set out, nor is factually inaccurate. CONCLUSION The Board is of the view that the risk management and internal control system in place for the financial year under review, and up to the date of approval of this Statement, is satisfactory. During the financial year under review, a number of internal control weaknesses were identified and presented for improvement discussion. These are not expected to result in any material loss. will continue improving and enhancing the existing system of internal control pertaining to the identified risks with the anticipation of changing business environment. This Statement is made in accordance with the resolution of the Board dated 13 July. 32

35 Annual Report directors responsibilities statement The Board of Directors of the Company is responsible in preparing financial statements which are in accordance with the applicable Approved Accounting Standards in Malaysia and the MMLR of Bursa Securities. The Directors are responsible for ensuring that the Company and the Group keep proper accounting records to enable the Company and the Group to disclose, with reasonable accuracy and without any material misstatement, so as to give a true and fair view on the financial position of the Company and the Group as at 31 March and the results and cash flows of the Company and the Group for the financial year ended on that date. In preparing the financial statements for the financial year ended 31 March, the Directors have: a) adopted the relevant and appropriate accounting policies consistently; b) made judgements and estimates that are reasonable and prudent; c) adopted applicable accounting standards, subjects to any material departures, if any, which will be disclosed and explained in the financial statements; and d) prepared the financial statements on the assumption that the Company and the Group will operate as going concern. 33

36 resintech berhad ( X) corporate social responsibilities statement Resintech Group is fully aware of its corporate responsibilities for the community, employees, the environment and other stakeholders. The Company incorporates corporate social responsibility ( CSR ) concepts into its operations and decision making through a transparent approach by communicating to its stakeholders and encouraging their feedback through prompt and detailed disclosure. constantly reviews its employee well-being by ensuring continuous learning through on-the-job training, external training and seminars. also provides practical training for university students. The Company made effort to provide health and safe working environment which includes periodic inspections on firefighting equipment, conducting fire drill training, providing safety wear, to name a few. As we do so, our actions improve the quality of life for the people of Resintech Group as well as the community at large. In short, the Company strongly supports CSR practices as a contribution to society, environment and human resource which would enable the organisation to generate value and hope to continue contributing actively in future. 34

37 36 Directors Report 41 Statement by Directors 41 Statutory Declaration 42 Independent Auditors Report 46 Statements of Financial Position 48 Statements of Profit or Loss and Other Comprehensive Income 50 Statements of Changes in Equity 52 Statements of Cash Flows 54 Notes to the Financial Statements financial statements

38 resintech berhad ( X) directors report The directors of Resintech Berhad hereby submit 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 the business of investment holding and the provision of management services. The principal activities of the subsidiaries are set out in Note 5 to the financial statements. RESULTS The Company Profit after taxation for the financial year 8,715 1,208 Attributable to:- Owners of the Company 8,715 1,208 Non-controlling interests -* - 8,715 1,208 * The amount represent RM35. DIVIDENDS The Company paid an interim dividend of 1.2 sen (2.4%) per ordinary share amounting to RM1,646,000 for the financial year ended 31 March on 30 September. The directors do not recommend the payment of any further dividends for the financial year. RESERVES AND PROVISIONS There were no material transfers to or from reserves or provisions during the financial year other than those disclosed in the financial statements. ISSUES OF SHARES AND DEBENTURES During the financial year:- (a) (b) the Company increased its issued and paid-up share capital from RM68,600,000 to RM68,602,450 by an issuance of 4,900 new ordinary shares from the exercise of warrant 2011/ at the exercise price of RM0.50 each in accordance with the Deed Poll dated 12 September The shares were issued for cash consideration. there were no issues of debentures by the Company. 36

39 Annual Report Directors Report WARRANTS Number of Ordinary Shares At 1.4. Exercised Lapsed At / Warrants 68,600,000 (4,900) (68,595,100) - The main features of the Warrants are detailed in Note 18 to the financial statements. The 2011/ Warrants lapsed on 9 September. OPTIONS GRANTED OVER UNISSUED SHARES During the financial year, no options were granted by the Company to any person to take up any unissued shares in the Company. BAD AND DOUBTFUL DEBTS Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps to ascertain that action had been taken in relation to the writing off of bad debts and the making of allowance for impairment losses on receivables, and satisfied themselves that all known bad debts had been written off and that adequate allowance had been made for impairment losses on receivables. At the date of this report, the directors are not aware of any circumstances that would require the further writing off of bad debts, or the additional allowance for impairment losses on receivables in the financial statements of the Group and of the Company. CURRENT ASSETS Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps to ensure that any current assets, which were unlikely to be realised in the ordinary course of business, including their values as shown in the accounting records of the Group and of the Company, 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 which would render the values attributed to the current assets in the financial statements misleading. VALUATION METHODS At the date of this report, the directors are not aware of any circumstances which have arisen which render adherence to the existing methods of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate. CONTINGENT AND OTHER LIABILITIES The contingent liability is disclosed in Note 40 to the financial statements. At the date of this report, there does not exist:- (a) (b) any charge on the assets of the Group and of the Company that has arisen since the end of the financial year which secures the liabilities of any other person; or any contingent liability of the Group and of the Company which has arisen since the end of the financial year. No contingent or other liability of the Group and of the Company 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 when they fall due. 37

40 resintech berhad ( X) Directors Report CHANGE OF CIRCUMSTANCES At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report or the financial statements of the Group and of the Company which would render any amount stated in the financial statements misleading. ITEMS OF AN UNUSUAL NATURE The results of the operations of the Group and of the Company during the financial year were not, in the opinion of the directors, substantially affected by any item, transaction or event of a material and unusual nature. 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, in the opinion of the directors, to affect substantially the results of the operations of the Group and of the Company for the financial year. DIRECTORS The names of the directors of the Company who served during the financial year until the date of this report are as follows:- Dato Dr. Teh Kim Poo, DSSA, PJK, JP Datin Gan Jew, PJK Dato Abu Sujak Bin Mahmud Khairul Anuar Bin Shaharudin Teh Leng Kang, PJK Wei Hwei Hong Kok Wee Wah The name of the director of the Company s subsidiaries who served during the financial year until the date of this report, not including those directors mentioned above, is as follows:- Teh Hooi Ching DIRECTORS INTERESTS According to the register of directors shareholdings, the interests of directors holding office at the end of the financial year in shares in the Company and its related corporations during the financial year are as follows:- Number of Ordinary Shares At 1.4. Bought Sold At Direct Interests in the Company Dato Dr. Teh Kim Poo, DSSA, PJK, JP 58,975, ,975,599 Datin Gan Jew, PJK 9,868, ,868,600 Teh Leng Kang, PJK 6,200, ,200,002 Deemed Interests in the Company Dato Dr. Teh Kim Poo, DSSA, PJK, JP 16,173, ,173,602 Datin Gan Jew, PJK 65,280, ,280,601 Wei Hwei Hong 6,200, ,200,002 38

41 Annual Report Directors Report DIRECTORS INTERESTS (Cont d) Number of Warrants 2011/ At 1.4. Bought Expired At Direct Interests in the Company Dato Dr. Teh Kim Poo, DSSA, PJK, JP 28,203,000-28,203,000 - Datin Gan Jew, PJK 4,934,300-4,934,300 - Dato Abu Sujak Bin Mahmud 2,284,800-2,284,800 - Teh Leng Kang, PJK 2,100,001-2,100,001 - Deemed Interests in the Company Dato Dr. Teh Kim Poo, DSSA, PJK, JP 7,086,801-7,086,801 - Datin Gan Jew, PJK 30,355,501-30,355,501 - Wei Hwei Hong 2,100,001-2,100,001 - By virtue of their shareholdings in the Company, Dato Dr. Teh Kim Poo, DSSA, PJK, JP and Datin Gan Jew, PJK are deemed to have interests in shares in its related corporations during the financial year to the extent of the Company s interest, in accordance with Section 8 of the Companies Act. The other directors holding office at the end of the financial year had no interest in shares and options over unissued shares of the Company or its related corporations during the financial year. DIRECTORS BENEFITS 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 shown in the financial statements, or the fixed salary of a full-time employee 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 for any benefits which may be deemed to arise from transactions entered into in the ordinary course of business with a company in which certain directors have substantial financial interests as disclosed in Note 38 to the financial statements. Neither during nor at the end of the financial year was the Group or the Company a party to any arrangements whose object is to enable the directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate. DIRECTORS REMUNERATION The details of the directors remuneration paid or payable to the directors of the Company during the financial year are disclosed in Note 32 to the financial statements. SUBSIDIARIES The details of the Group s subsidiaries are disclosed in Note 5 to the financial statements. 39

42 resintech berhad ( X) Directors Report INDEMNITY AND INSURANCE COST During the financial year, the total amount of indemnity coverage and insurance premium paid for the directors of the Company were RM25,000,000 and RM8,600 respectively. SIGNIFICANT EVENT DURING THE FINANCIAL YEAR The significant event during the financial year is disclosed in Note 43 to the financial statements. AUDITORS The auditors, Messrs. Crowe Horwath, have expressed their willingness to continue in office. The details of the auditors remuneration are disclosed in Note 32 to the financial statements. To the extent permitted by law, the Company has agreed to indemnify its auditor as part of the terms of its audit engagement against any claims by third parties arising from the audit. No payment has been made to indemnify the auditors during or since the financial year. Signed in accordance with a resolution of the directors dated 27 July. Dato Dr. Teh Kim Poo, DSSA, PJK, JP teh Leng Kang, PJK 40

43 Annual Report statement by directors Pursuant to Section 251(2) of the Companies Act We, Dato Dr. Teh Kim Poo, DSSA, PJK, JP and Teh Leng Kang, PJK, being two of the directors of Resintech Berhad, state that, in the opinion of the directors, the financial statements set out on pages 46 to 107 are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as of 31 March and of their financial performance and cash flows for the financial year ended on that date. The supplementary information set out in Note 44, which is not part of the financial statements, is prepared in all material respects, 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 and the directive of Bursa Malaysia Securities Berhad. Signed in accordance with a resolution of the directors dated 27 July. Dato Dr. Teh Kim Poo, DSSA, PJK, JP teh Leng Kang, PJK statutory declaration Pursuant to Section 251(1)(b) of the Companies Act I, Wei Hwei Hong, I/C No , being the director primarily responsible for the financial management of Resintech Berhad, do solemnly and sincerely declare that the financial statements set out on pages 46 to 107 are, to the best of my knowledge and belief, 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 Wei Hwei Hong, I/C No , at Kuala Lumpur in the Federal Territory on this 27 July Before me Lai Din W668 Commissioner for Oaths Wei Hwei Hong 41

44 resintech berhad ( X) independent auditors report To the Member of Resintech Berhad (Incorporated in Malaysia) Company No : X Report on the Financial Statements We have audited the financial statements of Resintech Berhad, which comprise the statements of financial position as at 31 March of the Group and of the Company, and the statements of profit or loss and other comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and notes to the financial statements, including a summary of significant accounting policies, as set out on pages 46 to 107. In our opinion, the accompanying financial statements give a true and fair view of the financial position of the Group and of the Company as at 31 March, and of their financial performance and their cash flows for the financial year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act in Malaysia. Basis for Opinion We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing. Our responsibilities under those standards are further described in the Auditors Responsibilities for the Audit of the Financial Statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence and Other Ethical Responsibilities We are independent of the Group and Company in accordance with the By-Laws (on Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants ( By-Laws ) and the International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants ( IESBA Code ), and we have fulfilled our other ethical responsibilities in accordance with the By-Laws and the IESBA Code. Key Audit Matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the Group and of the Company for the current financial year. These matters were addressed in the context of our audit of the financial statements of the Group and of the Company as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matter described below to be the key audit matter to be communicated in our report. Allowance for impairment of trade receivables Refer to Note 13 to the financial statements Key Audit Matter carried significant trade receivables and is exposed to credit risk, or the risk of counterparties defaulting. The assessment of the adequacy of the allowance for impairment losses involved judgement, which includes analysing historical bad debts, customer concentrations, customer creditworthiness, current economic trends and changes in the customer payment terms. How our audit addressed the Key Audit Matter Our procedures included, amongst others:- Obtained an understanding of:- - the Group s control over the trade receivables collection process; - how the Group identifies and assesses the impairment of trade receivables; and - how the Group makes the accounting estimates for impairment. Reviewed the ageing analysis of trade receivables and testing the reliability thereof; Reviewed subsequent cash collections for major trade receivables and overdue amounts; Made inquiries of management regarding the action plans to recover overdue amounts; Compared and challenged management s view on the recoverability of overdue amounts to historical patterns of collection; Examined other evidence including customer correspondences, proposed or existing settlement plans, repayment schedules; and Evaluating the reasonableness and adequacy of the allowance for impairment loss recognised. 42

45 Annual Report Independent Auditors Report To the Member of Resintech Berhad (Incorporated in Malaysia) Company No : X Key Audit Matters (Cont d) Recoverability of advances and investment in Green Rubber Plantation Co Ltd ( GRP ) Refer to Note 10 and Note 14 to the financial statements Key Audit Matter How our audit addressed the Key Audit Matter s invested RM1,639,000 for a 10% equity interest in GRP and has made advances of RM5,178,000 for the operations of GRP. As represented from the management, the advances made will be subsequently converted into cost of investment. GRP is involved in the plantation business and owns a piece of concession land of 6,000 hectares for a period of 70 years. An independent firm of professional valuers has been engaged to determine the recoverable amount of the plantation. The assessment of impairment is significant to our audit as it is highly subjective and involves significant judgement. Our procedures included, amongst others:- Performed site visit to the rubber plantation; Made inquiries with GRP s management regarding their action plans on planting and recovery of the investment made; Obtained management s impairment analysis and gained an understanding of their impairment assessment process; Evaluated the objectivity, independence and capabilities of the professional valuers and obtained understanding of the work of the professional valuers; and Assessed the appropriateness of the valuation model, property related data, including estimates used by the professional valuers. Information Other than the Financial Statements and Auditors Report Thereon The directors of the Company are responsible for the other information. The other information comprises the information included in the annual report, but does not include the financial statements of the Group and of the Company and our auditors report thereon. Our opinion on the financial statements of the Group and of the Company does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements of the Group and of the Company, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements of the Group and of the Company or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Directors for the Financial Statements The directors of the Company are responsible for the preparation of the financial statements of the Group and of the Company that give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act in Malaysia. The directors are also responsible for such internal control as the directors determine is necessary to enable the preparation of financial statements of the Group and of the Company that are free from material misstatement, whether due to fraud or error. In preparing the financial statements of the Group and of the Company, the directors are responsible for assessing the Group s and the Company s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so. 43

46 resintech berhad ( X) Independent Auditors Report To the Member of Resintech Berhad (Incorporated in Malaysia) Company No : X Auditors Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements of the Group and of the Company as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with approved standards on auditing in Malaysia and International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. As a part of an audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing, we exercise professional judgement and maintain professional skepticism throughout the audit. We also:- Identify and assess the risks of material misstatement of the financial statements of the Group and of the Company, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Obtain an understanding of internal control relevant to the audit 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 Group s and the Company s internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. Conclude on the appropriateness of the directors use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group s or the Company s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the financial statements of the Group and of the Company or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Group or the Company to cease to continue as a going concern. Evaluate the overall presentation, structure and content of the financial statements of the Group and of the Company, including the disclosures, and whether the financial statements of the Group and of the Company represent the underlying transactions and events in a manner that achieves fair presentation. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial statements of the Group. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the financial statements of the Group and of the Company for the current financial year and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. 44

47 Annual Report Independent Auditors Report To the Member of Resintech Berhad (Incorporated in Malaysia) Company No : X REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS In accordance with the requirements of the Companies Act in Malaysia, we report that the subsidiaries of which we have not acted as auditors, are disclosed in Note 5 to the financial statements. OTHER REPORTING RESPONSIBILITIES The supplementary information set out in Note 44 on page 108 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 266 of the Companies Act in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report. Crowe Horwath Firm No: AF 1018 Chartered Accountants chin Kit Seong Approval No: 03030/01/2019 J Chartered Accountant 27 July Kuala Lumpur 45

48 resintech berhad ( X) statements of financial position As at 31 March Note The Company ASSETS NON-CURRENT ASSETS Investments in subsidiaries ,060 43,060 Investment in an associate Property, plant and equipment 7 88,398 89, Investment properties 8 29,339 25, Intangible assets Other investments 10 1,677 1, , ,304 43,060 43,220 CURRENT ASSETS Inventories 11 18,668 11, Short-term investment Trade receivables 13 20,479 22, Other receivables, deposits and prepayments 14 8,265 7, Amount owing by subsidiaries ,818 24,158 Current tax assets Fixed deposits with licensed banks , Cash and bank balances 3,943 1, ,194 48,465 23,870 24,188 TOTAL ASSETS 171, ,769 66,930 67,408 EQUITY AND LIABILITIES EQUITY Share capital 17 68,602 68,600 68,602 68,600 Revaluation reserve 19 32,008 33, Foreign exchange translation reserve 20 (975) (518) - - Retained profits 29,762 21,401 (1,724) (1,286) EQUITY ATTRIBUTABLE TO THE OWNERS OF THE COMPANY 129, ,783 66,878 67,314 NON-CONTROLLING INTERESTS 5 (21) (21) - - TOTAL EQUITY 129, ,762 66,878 67,314 46

49 Annual Report Statements of Financial Position As at 31 March Note The Company NON-CURRENT LIABILITIES Long-term borrowings 21 1,119 1, Deferred tax liabilities 24 13,779 13, ,898 15, CURRENT LIABILITIES Trade payables 25 6,641 2, Other payables and accruals 26 2,763 2, Amount owing to a related party Current tax liabilities Short-term borrowings 28 14,390 15, Bank overdrafts 29 2,977 4, ,334 26, TOTAL LIABILITIES 42,232 42, TOTAL EQUITY AND LIABILITIES 171, ,769 66,930 67,408 The annexed notes form an integral part of these financial statements. 47

50 resintech berhad ( X) statement of profit or loss and other comprehensive income For the financial year ended 31 March Note The Company REVENUE 30 77,585 77,215 1,685 5,500 COST OF SALES (61,382) (65,224) - - GROSS PROFIT 16,203 11,991 1,685 5,500 OTHER INCOME 31 8,251 5, ,454 17,041 1,698 5,717 SELLING AND DISTRIBUTION EXPENSES (2,049) (2,238) - - ADMINISTRATIVE EXPENSES (7,136) (6,310) (326) (371) OTHER EXPENSES (3,328) (3,569) (161) (1,186) (12,513) (12,117) (487) (1,557) 11,941 4,924 1,211 4,160 FINANCE COSTS (1,524) (1,660) ,417 3,264 1,211 4,160 SHARE OF RESULTS OF AN ASSOCIATE, NET OF TAX (160) (258) - - PROFIT BEFORE TAXATION 32 10,257 3,006 1,211 4,160 INCOME TAX EXPENSE 33 (1,542) 1,322 (3) (43) PROFIT AFTER TAXATION 8,715 4,328 1,208 4,117 OTHER COMPREHENSIVE INCOME, NET OF TAX Item that Will Not be Reclassified Subsequently to Profit or Loss - Revaluation surplus arising during the financial year Items that May be Reclassified Subsequently to Profit or Loss - Foreign currency translation differences (457) (210) - - TOTAL OTHER COMPREHENSIVE EXPENSES (457) (201) - - TOTAL COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR 8,258 4,127 1,208 4,117 48

51 Annual Report Statement of Profit or Loss and Other Comprehensive Income For the financial year ended 31 March Note The Company PROFIT AFTER TAXATION ATTRIBUTABLE TO:- Owners of the Company 8,715 4,330 1,208 4,117 Non-controlling interests - (2) - - 8,715 4,328 1,208 4,117 TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO:- Owners of the Company 8,258 4,129 1,208 4,117 Non-controlling interests - (2) - - 8,258 4,127 1,208 4,117 EARNINGS PER SHARE (SEN) 34 - Basic Diluted 6 3 The annexed notes form an integral part of these financial statements. 49

52 resintech berhad ( X) statements of changes in equity For the financial year ended 31 March Share Capital Revaluation Reserve Foreign Exchange Translation Reserve Retained Profits Attributable To Owners Of The Company Non- Controlling Interests Total Equity Balance at ,600 33,735 (308) 20, ,084 (19) 122,065 Profit after taxation for the financial year ,330 4,330 (2) 4,328 Other comprehensive income for the financial year, net of tax: - Foreign currency translation - - (210) - (210) - (210) - Realisation of revaluation reserve - (444) Revaluation surplus during the financial year Total comprehensive income for the financial year - (435) (210) 4,774 4,129 (2) 4,127 Contributions by and distributions to owners of the Company: - Dividend by the Company (Note 35) (3,430) (3,430) - (3,430) Total transaction with owners (3,430) (3,430) - (3,430) Balance at 31.3./ ,600 33,300 (518) 21, ,783 (21) 122,762 Profit after taxation for the financial year ,715 8,715-8,715 Other comprehensive income for the financial year, net of tax: - Foreign currency translation - - (457) - (457) - (457) - Realisation of revaluation reserve - (675) Recycle to retained earnings arising from the disposal of freehold land - (617) Total comprehensive income for the financial year - (1,292) (457) 10,007 8,258-8,258 Contributions by and distributions to owners of the Company: - Dividend by the Company (Note 35) (1,646) (1,646) - (1,646) - Issuance of shares upon exercise of warrants Total transaction with owners (1,646) (1,644) - (1,644) Balance at ,602 32,008 (975) 29, ,397 (21) 129,376 50

53 Annual Report Statement of Changes in Equity For the financial year ended 31 March Share Capital Retained Profits Total Equity The Company Balance at ,600 (1,973) 66,627 Profit after taxation/total comprehensive income for the financial year - 4,117 4,117 Contributions by and distributions to owners of the Company: - Dividend by the Company (Note 35) - (3,430) (3,430) Total transaction with owners - (3,430) (3,430) Balance at 31.3./ ,600 (1,286) 67,314 Profit after taxation/total comprehensive income for the financial year - 1,208 1,208 Contributions by and distributions to owners of the Company: - Dividend by the Company (Note 35) - (1,646) (1,646) - Issuance of shares upon exercise of warrants 2-2 Total transaction with owners 2 (1,646) (1,644) Balance at ,602 (1,724) 66,878 The annexed notes form an integral part of these financial statements. 51

54 resintech berhad ( X) statements of cash flows For the financial year ended 31 March Note The Company CASH FLOWS FROM OPERATING ACTIVITIES Profit before taxation 10,257 3,006 1,211 4,160 Adjustments for:- Allowance for impairment loss: - trade receivables 1, amount owing by a subsidiary investment in an associate Amortisation of intangible assets Bad debts recovered (10) (10) - - Depreciation of property, plant and equipment 5,491 5, Deposits written off Property, plant and equipment written off Interest expense 1,347 1, Unrealised foreign exchange loss Share of loss of an associate Writeback of impairment loss: - trade receivables (113) (74) - - Fair value adjustment on investment properties (4,078) (445) - - Loss/(Gain) on disposal of: - property, plant and equipment (123) (355) investment properties 120 (207) - - Unrealised foreign exchange gain (326) (246) - - Interest income (73) (153) - - Dividend income (4) (4) - - Operating profit before working capital changes 14,054 10,024 1,371 5,346 (Increase)/Decrease in inventories (6,949) 2, Decrease in trade and other receivables 299 5, Increase/(Decrease) in trade and other payables 4,051 (3,311) - 9 NET CASH FROM OPERATIONS 11,455 14,481 1,390 5,362 Income tax (paid)/refunded (1,558) (2,790) (90) 1 Interest paid (1,347) (1,549) - - NET CASH FROM OPERATING ACTIVITIES CARRIED FORWARD 8,550 10,142 1,300 5,363 52

55 Annual Report Statements of Cash Flows For the financial year ended 31 March Note The Company NET CASH FROM OPERATING ACTIVITIES BROUGHT FORWARD 8,550 10,142 1,300 5,363 CASH FLOWS (FOR)/FROM INVESTING ACTIVITIES Proceeds from disposal of: - property, plant and equipment investment properties 1,030 1, Placement of deposits pledged to a licensed bank and with maturity period of more than three months - (40) - - Repayment from/(advances to) subsidiaries (1,957) Dividend received Interest received Purchase of other investment - (30) - - Purchase of property, plant and equipment 36 (4,026) (1,371) - - NET CASH (FOR)/FROM INVESTING ACTIVITIES (2,796) (1,957) CASH FLOWS FOR FINANCING ACTIVITIES Drawdawn of term loan 1, Dividend paid (1,646) (3,430) (1,646) (3,430) Repayment to a related party (297) (99) - - Net repayment of bills payable (1,617) (1,249) - - Net repayment of term loans (1,674) (2,221) - - Net repayment of hire purchase payables (543) (448) - - Proceeds from issuance of ordinary shares NET CASH FOR FINANCING ACTIVITIES (4,475) (7,447) (1,644) (3,430) NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 1,279 3,566 (4) (24) Effects of foreign exchange translation (1,851) (738) - - CASH AND CASH EQUIVALENTS AT BEGINNING OF THE FINANCIAL YEAR 2,176 (652) CASH AND CASH EQUIVALENTS AT END OF THE FINANCIAL YEAR 37 1,604 2, The annexed notes form an integral part of these financial statements. 53

56 resintech berhad ( X) notes to the financial statements For the financial year ended 31 March 1. GENERAL INFORMATION The Company is a public company limited by shares, incorporated and domiciled in Malaysia. The registered office, which is also the principal place of business, is at Lot 3 & 5, Jalan Waja 14, Kawasan Perindustrian Telok Panglima Garang, Telok Panglima Garang, Selangor Darul Ehsan. The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors dated 27 July. 2. PRINCIPAL ACTIVITIES The Company is principally engaged in the business of investment holding and the provision of management services. The principal activities of the subsidiaries are set out in Note 5 to the financial statements. 3. BASIS OF PREPARATION The financial statements of the Company are prepared under the historical cost convention and modified to include other bases of valuation as disclosed in other sections under significant accounting policies, and in compliance with Malaysian Financial Reporting Standards ( MFRSs ), International Financial Reporting Standards and the requirements of the Companies Act in Malaysia. 3.1 During the current financial year, the Group has adopted the following new accounting standards and/or interpretations (including the consequential amendments, if any):- MFRSs and IC Interpretations (Including The Consequential Amendments) MFRS 14 Regulatory Deferral Accounts Amendments to MFRS 10, MFRS 12 and MFRS 128: Investment Entities Applying the Consolidation Exception Amendments to MFRS 11: Accounting for Acquisitions of Interests in Joint Operations Amendments to MFRS 101: Disclosure Initiative Amendments to MFRS 116 and MFRS 138: Clarification of Acceptable Methods of Depreciation and Amortisation Amendments to MFRS 116 and MFRS 141: Agriculture Bearer Plants Amendments to MFRS 127: Equity Method in Separate Financial Statements Annual Improvements to MFRSs Cycle The adoption of the above accounting standards and/or interpretations (including the consequential amendments, if any) did not have any material impact on the Company s financial statements. 3.2 has not applied in advance the following accounting standards and/or interpretations (including the consequential amendments, if any) that have been issued by the Malaysian Accounting Standards Board (MASB) but are not yet effective for the current financial year:- MFRSs and IC Interpretations (Including The Consequential Amendments) Effective Date MFRS 9 Financial Instruments (IFRS 9 issued by IASB in July 2014) 1 January 2018 MFRS 15 Revenue from Contracts with Customers 1 January 2018 MFRS 16 Leases 1 January 2019 IC Interpretation 22 Foreign Currency Transactions and Advance Consideration 1 January 2018 Amendments to MFRS 2: Classification and Measurement of Share-based Payment Transactions 1 January 2018 Amendments to MFRS 4: Applying MFRS 9 Financial Instruments with MFRS 4 Insurance Contracts 1 January 2018 Amendments to MFRS 10 and MFRS 128: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture Deferred until further notice Amendments to MFRS 15: Effective Date of MFRS 15 1 January 2018 Amendments to MFRS 15: Clarifications to MFRS 15 Revenue from Contracts with Customers 1 January 2018 Amendments to MFRS 107: Disclosure Initiative 1 January 54

57 Annual Report Notes to the Financial Statements For the financial year ended 31 March 3. BASIS OF PREPARATION (Cont d) 3.2 has not applied in advance the following accounting standards and/or interpretations (including the consequential amendments, if any) that have been issued by the Malaysian Accounting Standards Board (MASB) but are not yet effective for the current financial year (Cont d):- MFRSs and IC Interpretations (Including The Consequential Amendments) Effective Date Amendments to MFRS 112: Recognition of Deferred Tax Assets for Unrealised Losses 1 January Amendments to MFRS 140 Transfers of Investment Property 1 January 2018 Annual Improvements to MFRS Standards 2014 Cycles: 1 January Amendments to MFRS 12: Clarification of the Scope of Standard Annual Improvements to MFRS Standards 2014 Cycles: 1 January 2018 Amendments to MFRS 1: Deletion of Short-term Exemptions for First-time Adopters Amendments to MFRS 128: Measuring an Associate or Joint Venture at Fair Value The adoption of the above accounting standards and/or interpretations (including the consequential amendments, if any) is expected to have no material impact on the financial statements of the Group upon their initial application. 4. SIGNIFICANT ACCOUNTING POLICIES 4.1 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS Estimates and judgements are continually evaluated by the directors and management and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The estimates and judgements that affect the application of the Group s accounting policies and disclosures, and have a significant risk of causing a material adjustment to the carrying amounts of assets, liabilities, income and expenses are discussed below:- (a) Depreciation of Property, Plant and Equipment The estimates for the residual values, useful lives and related depreciation charges for the property, plant and equipment are based on commercial factors which could change significantly as a result of technical innovations and competitors actions in response to the market conditions. anticipates that the residual values of its property, plant and equipment will be insignificant. As a result, residual values are not being taken into consideration for the computation of the depreciable amount. Changes in the expected level of usage and technological development could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised. (b) Income Taxes There are certain transactions and computations for which the ultimate tax determination may be different from the initial estimate. recognises tax liabilities based on its understanding of the prevailing tax laws and estimates of whether such taxes will be due in the ordinary course of business. Where the final outcome of these matters is different from the amounts that were initially recognised, such difference will impact the income tax expense and deferred tax balances in the year in which such determination is made. (c) Impairment of Non-Financial Assets When the recoverable amount of an asset is determined based on the estimate of the value in use of the cashgenerating unit to which the asset is allocated, the management is required to make an estimate of the expected future cash flows from the cash-generating unit and also to apply a suitable discount rate in order to determine the present value of those cash flows. 55

58 resintech berhad ( X) Notes to the Financial Statements For the financial year ended 31 March 4. SIGNIFICANT ACCOUNTING POLICIES (Cont d) 4.1 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (Cont d) (d) Classification between Investment Properties and Owner-occupied Properties Some properties comprise a portion that is held to earn rentals or for capital appreciation and another portion that is held for use in the production or supply of goods or services or for administrative purposes. If these portions could be sold separately (or leased out separately under a finance lease), the Group accounts for the portions separately. If the portions could not be sold separately, the property is an investment property only if an insignificant portion is held for use in the production or supply of goods or services or for administrative purposes. Judgement is made on an individual property basis to determine whether ancillary services are so significant that a property does not qualify as investment property. (e) Impairment of Trade Receivables An impairment loss is recognised when there is objective evidence that a financial asset is impaired. Management specifically reviews its loans and receivables financial assets and analyses historical bad debts, customer concentrations, customer creditworthiness, current economic trends and changes in the customer payment terms when making a judgement to evaluate the adequacy of the allowance for impairment losses. Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience for assets with similar credit risk characteristics. If the expectation is different from the estimation, such difference will impact the carrying value of receivables. (f) Write-down of Inventories Reviews are made periodically by management on damaged, obsolete and slow-moving inventories. These reviews require judgement and estimates. Possible changes in these estimates could result in revisions to the valuation of inventories. (g) Fair Value Estimates for Certain Financial Assets and Financial Liabilities carries certain financial assets and financial liabilities at fair value, which requires extensive use of accounting estimates and judgement. While significant components of fair value measurement were determined using verifiable objective evidence, the amount of changes in fair value would differ if the Group uses different valuation methodologies. Any changes in fair value of these assets and liabilities would affect profit and/or equity. (h) Revaluation of Properties Certain properties of the Group are reported at valuation which is based on valuations performed by independent professional valuers. The independent professional valuers have exercised judgement in determining discount rates, estimates of future cash flows, capitalisation rate, terminal year value, market freehold rental and other factors used in the valuation process. Also, judgement has been applied in estimating prices for less readily observable external parameters. Other factors such as model assumptions, market dislocations and unexpected correlations can also materially affect these estimates and the resulting valuation estimates. (i) Classification of Leasehold Land The classification of leasehold land as a finance lease or an operating lease requires the use of judgement in determining the extent to which risks and rewards incidental to its ownership lie. Despite the fact that there will be no transfer of ownership by the end of the lease term and that the lease term does not constitute the major part of the indefinite economic life of the land, management considered that the present value of the minimum lease payments approximated to the fair value of the land at the inception of the lease. Accordingly, management judged that the Group has acquired substantially all the risks and rewards incidental to the ownership of the land through a finance lease. 56

59 Annual Report Notes to the Financial Statements For the financial year ended 31 March 4. SIGNIFICANT ACCOUNTING POLICIES (Cont d) 4.1 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (Cont d) (j) Impairment of Available-for-sale Financial Assets reviews its available-for-sale financial assets at the end of each reporting period to assess whether they are impaired. also records impairment loss on available-for-sale equity investments when there has been a significant or prolonged decline in the fair value below their cost. The determination of what is significant or prolonged requires judgement. In making this judgement, the Group evaluates, among other factors, historical share price movements and the duration and extent to which the fair value of an investment is less than its cost. 4.2 BASIS OF CONSOLIDATION The consolidated financial statements include the financial statements of the Company and its subsidiaries made up to the end of the reporting period. Subsidiaries are entities (including structured entities, if any) controlled by the Group. controls an entity when the Group is exposed to, 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. 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. Subsidiaries are consolidated from the date on which control is transferred to the Group up to the effective date on which control ceases, as appropriate. Intragroup transactions, balances, income and expenses are eliminated on consolidation. Intragroup losses may indicate an impairment that requires recognition in the consolidated financial statements. Where necessary, adjustments are made to the financial statements of subsidiaries to ensure consistency of accounting policies with those of the Group. (a) Business Combinations Acquisitions of businesses are accounted for using the acquisition method. Under the acquisition method, the consideration transferred for acquisition of a subsidiary is the fair value of the assets transferred, liabilities incurred and the equity interests issued by the Group at the acquisition date. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs, other than the costs to issue debt or equity securities, are recognised in profit or loss when incurred. In a business combination achieved in stages, previously held equity interests in the acquiree are remeasured to fair value at the acquisition date and any corresponding gain or loss is recognised in profit or loss. Non-controlling interests in the acquiree may be initially measured either at fair value or at the non-controlling interests proportionate share of the fair value of the acquiree s identifiable net assets at the date of acquisition. The choice of measurement basis is made on a transaction-by-transaction basis. (b) Non-controlling Interests Non-controlling interests are presented within equity in the consolidated statement of financial position, separately from the equity attributable to owners of the Company. Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance. (c) Changes in Ownership Interests in Subsidiaries Without Change of Control All changes in the parent s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. Any difference between the amount by which the non-controlling interest is adjusted and the fair value of consideration paid or received is recognised directly in equity of the Group. 57

60 resintech berhad ( X) Notes to the Financial Statements For the financial year ended 31 March 4. SIGNIFICANT ACCOUNTING POLICIES (Cont d) 4.2 BASIS OF CONSOLIDATION (d) Loss of Control Upon the loss of control of a subsidiary, the Group recognises any gain or loss on disposal in profit or loss which is calculated as the difference between:- (i) (ii) the aggregate of the fair value of the consideration received and the fair value of any retained interest in the former subsidiary; and the previous carrying amount of the assets (including goodwill), and liabilities of the former subsidiary and any non-controlling interests. 4.3 GOODWILL Amounts previously recognised in other comprehensive income in relation to the former subsidiary are accounted for in the same manner as would be required if the relevant assets or liabilities were disposed of (i.e. reclassified to profit or loss or transferred directly to retained profits). The fair value of any investments retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under MFRS 139 or, when applicable, the cost on initial recognition of an investment in an associate or a joint venture. Goodwill is measured at cost less accumulated impairment losses, if any. The carrying value of goodwill is reviewed for impairment annually or more frequently if events or changes in circumstances indicate that the carrying amount may be impaired. The impairment value of goodwill is recognised immediately in profit or loss. An impairment loss recognised for goodwill is not reversed in a subsequent period. Under the acquisition method, any excess of the sum of the fair value of the consideration transferred in the business combination, the amount of non-controlling interests recognised and the fair value of the Group s previously held equity interest in the acquiree (if any), over the net fair value of the acquiree s identifiable assets and liabilities at the date of acquisition is recorded as goodwill. Where the latter amount exceeds the former, after reassessment, the excess represents a bargain purchase gain and is recognised in profit or loss immediately. In respect of equity-accounted associates, the carrying amount of goodwill is included in the carrying amount of the investment and an impairment loss on such an investment is not allocated to any asset, including goodwill, that forms part of the carrying amount of the equity-accounted associates. 4.4 FUNCTIONAL AND FOREIGN CURRENCIES (a) Functional and Presentation Currency The individual financial statements of each entity in the Group are presented in the currency of the primary economic environment in which the entity operates, which is the functional currency. The consolidated financial statements are presented in Ringgit Malaysia ( RM ), which is the Company s functional and presentation currency and has been rounded to the nearest thousand, unless otherwise stated. (b) Foreign Currency Transactions and Balances Transactions in foreign currencies are converted into the respective functional currencies on initial recognition, using the exchange rates at the transaction dates. Monetary assets and liabilities at the end of the reporting period are translated at the exchange rates ruling as of that date. Non-monetary assets and liabilities are translated using exchange rates that existed when the values were determined. All exchange differences are recognised in profit or loss. 58

61 Annual Report Notes to the Financial Statements For the financial year ended 31 March 4. SIGNIFICANT ACCOUNTING POLICIES (Cont d) 4.4 FUNCTIONAL AND FOREIGN CURRENCIES (Cont d) (c) Foreign Operations Assets and liabilities of foreign operations (Including any goodwill and fair value adjustments arising on acquisition) are translated to the Group s presentation currency at the exchange rates at the end of the reporting period. Income, expenses and other comprehensive income of foreign operations are translated at exchange rates at the dates of the transactions. All exchange differences arising from translation are taken directly to other comprehensive income and accumulated in equity; attributed to the owners of the Company and non-controlling interests, as appropriate. Goodwill and fair value adjustments arising from the acquisition of foreign operations are treated as assets and liabilities of the foreign operations and are recorded in the functional currency of the foreign operations and translated at the closing rate at the end of the reporting period. On the disposal of a foreign operation (i.e. a disposal of the Group s entire interest in a foreign subsidiary, or a partial disposal involving loss of control over a subsidiary that includes a foreign operation, or a partial disposal of an interest in an associate that includes a foreign operation of which the retained interest becomes a financial asset), all of the exchange differences accumulated in equity in respect of that foreign operation attributable to the owners of the Company are reclassified to profit or loss as part of the gain or loss on disposal. The portion that related to noncontrolling interests is derecognised but is not reclassified to profit or loss. In addition, in relation to a partial disposal of a subsidiary that does not result in the Group losing control over the subsidiary, the proportionate share of accumulated exchange differences are reattributed to non-controlling interests and are not recognised in profit or loss. When the Group disposes of only part of its investment in an associate that includes a foreign operation while retaining significant influence, the proportionate share of the accumulative exchange differences is reclassified to profit or loss. In the consolidated financial statements, when settlement of an intragroup loan is neither planned nor likely to occur in the foreseeable future, the exchange differences arising from translating such monetary item are considered to form part of a net investment in the foreign operation and are recognised in other comprehensive income. The principal closing rates used in the translation of foreign currencies are as follows: RM RM 1 United States Dollar Indonesian Rupiah FINANCIAL INSTRUMENTS Financial assets and financial liabilities are recognised in the statements of financial position when the Group has become a party to the contractual provisions of the instruments. Financial instruments are classified as financial assets, financial liabilities or equity instruments in accordance with the substance of the contractual arrangement and their definitions in MFRS 132. Interest, dividends, gains and losses relating to a financial instrument classified as a liability are reported as an expense or income. Distributions to holders of financial instruments classified as equity are charged directly to equity. Financial instruments are offset when the Group has a legally enforceable right to offset and intends to settle either on a net basis or to realise the asset and settle the liability simultaneously. A financial instrument is recognised initially at its fair value. Transaction costs that are directly attributable to the acquisition or issue of the financial instrument (other than a financial instrument at fair value through profit or loss) are added to/deducted from the fair value on initial recognition, as appropriate. Transaction costs on the financial instrument at fair value through profit or loss are recognised immediately in profit or loss. Financial instruments recognised in the statements of financial position are disclosed in the individual policy statement associated with each item. 59

62 resintech berhad ( X) Notes to the Financial Statements For the financial year ended 31 March 4. SIGNIFICANT ACCOUNTING POLICIES (Cont d) 4.5 FINANCIAL INSTRUMENTS (CONT D) (a) Financial Assets On initial recognition, financial assets are classified as either financial assets at fair value through profit or loss, held-tomaturity investments, loans and receivables financial assets, or available-for-sale financial assets, as appropriate. (i) Financial Assets at Fair Value through Profit or Loss Financial assets are classified as financial assets at fair value through profit or loss when the financial asset is either held for trading or is designated to eliminate or significantly reduce a measurement or recognition inconsistency that would otherwise arise. Derivatives are also classified as held for trading unless they are designated as hedges. Financial assets at fair value through profit or loss are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. Dividend income from this category of financial assets is recognised in profit or loss when the Group s right to receive payment is established. Financial assets at fair value through profit or loss could be presented as current assets or non-current assets. Financial assets that are held primarily for trading purposes are presented as current assets whereas financial assets that are not held primarily for trading purposes are presented as current assets or non-current assets based on the settlement date. (ii) Held-to-maturity Investments Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the management has the positive intention and ability to hold to maturity. Held-to-maturity investments are measured at amortised cost using the effective interest method less any impairment loss, with interest income recognised in profit or loss on an effective yield basis. Held-to-maturity investments are classified as non-current assets, except for those having maturity within 12 months after the reporting date which are classified as current assets. (iii) Loans and Receivables Financial Assets Trade receivables and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables financial assets. Loans and receivables financial assets are measured at amortised cost using the effective interest method, less any impairment loss. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial. The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial asset, or (where appropriate) a shorter period, to the net carrying amount on initial recognition. Loans and receivables financial assets are classified as current assets, except for those having settlement dates later than 12 months after the reporting date which are classified as non-current assets. 60

63 Annual Report Notes to the Financial Statements For the financial year ended 31 March 4. SIGNIFICANT ACCOUNTING POLICIES (Cont d) 4.5 FINANCIAL INSTRUMENTS (CONT D) (a) Financial Assets (Cont d) (iv) Available-for-sale Financial Assets Available-for-sale financial assets are non-derivative financial assets that are designated in this category or are not classified in any of the other categories. After initial recognition, available-for-sale financial assets are remeasured to their fair values at the end of each reporting period. Gains and losses arising from changes in fair value are recognised in other comprehensive income and accumulated in the fair value reserve, with the exception of impairment losses. On derecognition, the cumulative gain or loss previously accumulated in the fair value reserve is reclassified from equity into profit or loss. Dividends on available-for-sale equity instruments are recognised in profit or loss when the Group s right to receive payments is established. Investments in equity instruments whose fair value cannot be reliably measured are measured at cost less accumulated impairment losses, if any. Available-for-sale financial assets are classified as non-current assets unless they are expected to be realised within 12 months after the reporting date. (b) Financial Liabilities (i) Financial Liabilities at Fair Value through Profit or Loss Fair value through profit or loss category comprises financial liabilities that are either held for trading or are designated to eliminate or significantly reduce a measurement or recognition inconsistency that would otherwise arise. Derivatives are also classified as held for trading unless they are designated as hedges. (ii) Other Financial Liabilities Other financial liabilities are initially measured at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method. The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period. Financial liabilities are classified as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. (c) Equity Instruments Equity instruments classified as equity are measured initially at cost and are not remeasured subsequently. Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from proceeds. Dividends on ordinary shares are recognised as liabilities when approved for appropriation. 61

64 resintech berhad ( X) Notes to the Financial Statements For the financial year ended 31 March 4. SIGNIFICANT ACCOUNTING POLICIES (Cont d) 4.5 FINANCIAL INSTRUMENTS (CONT D) (d) Derivative Financial Instruments Derivative financial instruments are initially recognised at fair value on the date on which a derivative contract is entered into and are subsequently remeasured at fair value. Derivatives are carried as financial assets when the fair value is positive and as financial liabilities when the fair value is negative. Any gains or losses arising from changes in fair value on derivatives during the reporting period, other than those accounted for under hedge accounting, are recognised directly in profit or loss. 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 categorised as at 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 host contract. (e) Derecognition A financial asset or part of it is derecognised when, and only when, the contractual rights to the cash flows from the financial asset expire or the financial asset is transferred to another party without retaining control or substantially all risks and rewards of the asset. On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in equity is recognised in profit or loss. A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract is discharged or cancelled or expires. On derecognition of a financial liability, the difference between the carrying amount of the financial liability extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss. 4.6 INTANGIBLE ASSETS An intangible asset shall be recognised if, and only if it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and that the cost of the asset can be measured reliably. An entity shall assess the probability of the expected future economic benefits using reasonable and supportable assumptions that represent management s best estimate of the set of economic conditions that will exist over the useful life of the asset. An intangible asset shall be measured initially at cost. The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are amortised over their useful economic lives and assessed for impairment whenever there is an indication that the intangible assets may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each financial period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted for by changing the amortisation period or method, as appropriate, and treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in profit or loss in the expense category consistent with the function of the intangible asset. The principal amortisation rates used for this purpose are:- Franchisor fee Patent rights 5 years 10 years Intangible assets with indefinite useful lives are tested for impairment annually either individually or at the cash generating unit level. Such intangibles are not amortised. The useful life of an intangible asset with an indefinite life is reviewed annually to determine whether indefinite life assessment continues to be supportable. If not, the change in the useful life assessment from indefinite to finite is made on a prospective basis. 62

65 Annual Report Notes to the Financial Statements For the financial year ended 31 March 4. SIGNIFICANT ACCOUNTING POLICIES (Cont d) 4.7 INVESTMENTS IN SUBSIDIARIES Investments in subsidiaries are stated at cost in the statement of financial position of the Company, and are reviewed for impairment at the end of the reporting period if events or changes in circumstances indicate that the carrying values may not be recoverable. The cost of the investments includes transaction costs. On the disposal of the investments in subsidiaries, the difference between the net disposal proceeds and the carrying amount of the investments is recognised in profit or loss. 4.8 INVESTMENTS IN ASSOCIATES An associate is an entity in which the Group have a long-term equity interest and where it exercises significant influence over the financial and operating policies. The investment in an associate is accounted for in the consolidated financial statements using the equity method based on the financial statements of the associate made up to the end of the reporting period. s share of the post acquisition profits and other comprehensive income of the associate is included in the consolidated statement of profit or loss and other comprehensive income, after adjustment if any, to align the accounting policies with those of the Group, from the date that significant influence commences up to the effective date on which significant influence ceases or when the investment is classified as held for sale. s interest in the associate is carried in the consolidated statement of financial position at cost plus the Group s share of the post acquisition retained profits and reserves. The cost of investment includes transaction costs. When the Group s share of losses exceeds its interest in an associate, the carrying amount of that interest is reduced to zero, and the recognition of further losses is discontinued except to the extent that the Group has an obligation. Unrealised gains or losses on transactions between the Group and the associate are eliminated to the extent of the Group s interest in the associate. Unrealised losses are eliminated unless cost cannot be recovered. When the Group ceases to have significant influence over an associate and the retained interest in the former associate is a financial asset, the Group measures the retained interest at fair value at that date and the fair value is regarded as the initial carrying amount of the financial asset in accordance with MFRS 139. Furthermore, the Group also reclassifies its share of the gain or loss previously recognised in other comprehensive income of that associate to profit or loss when the equity method is discontinued. 4.9 PROPERTY, PLANT AND EQUIPMENT All items of property, plant and equipment are initially measured at cost. Cost includes expenditure that are directly attributable to the acquisition of the asset and other costs directly attributable to bringing the asset to working condition for its intended use. Subsequent to initial recognition, all property, plant and equipment, other than freehold land and buildings, are stated at cost less accumulated depreciation and any impairment losses. Freehold land is stated at valuation less impairment losses recognised after the date of the revaluation. Freehold buildings are stated at revalued amount less accumulated depreciation and impairment losses recognised after the date of the revaluation. Leasehold land is stated at revalued amount less amortisation and impairment losses, if any. Freehold land and buildings are revalued periodically, at least once in every five years. Surpluses arising from the revaluation are recognised in other comprehensive income and accumulated in equity under the revaluation reserve to the extent that it reverses a revaluation deficit of the same asset previously recognised in profit or loss. Deficits arising from the revaluation, to the extent that they are not supported by any previous revaluation surpluses, are recognised in profit or loss. Subsequent costs are included in the asset s carrying amount or recognised as a separate asset, as appropriate, only when the cost is incurred and it is probable that the future economic benefits associated with the asset will flow to the Group and the cost of the asset can be measured reliably. The carrying amount of parts that are replaced is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred. 63

66 resintech berhad ( X) Notes to the Financial Statements For the financial year ended 31 March 4. SIGNIFICANT ACCOUNTING POLICIES (Cont d) 4.9 PROPERTY, PLANT AND EQUIPMENT (Cont d) Freehold land is not depreciated. Depreciation on other property, plant and equipment is charged to profit or loss (unless it is included in the carrying amount of another asset) on a straight-line method to write off the depreciable amount of the assets over their estimated useful lives. Depreciation of an asset does not cease when the asset becomes idle or is retired from active use unless the asset is fully depreciated. The principal annual rates used for this purpose are:- Leasehold land Over the lease period Buildings 2% Plant and machinery 10% Tools and equipment 10% - 20% Moulds 10% Furniture and fittings 10% Office equipment 10% - 12% Motor vehicles and forklifts 20% Electrical installation 10% Renovation 10% Store 20% The depreciation method, useful lives and residual values are reviewed, and adjusted if appropriate, at the end of each reporting period to ensure that the amounts, method and periods of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of the property, plant and equipment. Any changes are accounted for as a change in estimate. When significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising from derecognition of the asset, being the difference between the net disposal proceeds and the carrying amount, is recognised in profit or loss. The revaluation reserve included in equity is transferred directly to retained profits on retirement or disposal of the asset. In addition, the Group also makes an annual transfer of the revaluation reserve to retained profits as the asset is used by the Group. In such a case, the amount of the revaluation reserve transferred would be the difference between depreciation based on the revalued carrying amount of the asset and depreciation based on the asset s original cost IMPAIRMENT (a) Impairment of Financial Assets All financial assets (other than those categorised at fair value through profit or loss, investments in subsidiaries and investments in associates), are assessed at the end of each reporting period 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 asset. For an equity instrument, a significant or prolonged decline in the fair value below its cost is considered to be an objective evidence of impairment. An impairment loss in respect of held-to-maturity investments and loans and receivables financial assets 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 financial asset s original effective interest rate. An impairment loss in respect of available-for-sale financial assets is recognised in profit or loss and is measured as the difference between its cost (net of any principal payment and amortisation) and its current fair value, less any impairment loss previously recognised in the fair value reserve. In addition, the cumulative loss recognised in other comprehensive income and accumulated in equity under fair value reserve, is reclassified from equity into profit or loss. 64

67 Annual Report Notes to the Financial Statements For the financial year ended 31 March 4. SIGNIFICANT ACCOUNTING POLICIES (Cont d) 4.10 IMPAIRMENT (Cont d) (a) Impairment of Financial Assets With the exception of available-for-sale debt instruments, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the financial asset at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised. In respect of available-for-sale equity instruments, impairment losses previously recognised in profit or loss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss made is recognised in other comprehensive income. 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 financial asset s carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment losses are not reversed in subsequent periods. (b) Impairment of Non-Financial Assets The carrying values of assets, other than those to which MFRS 136 Impairment of Assets does not apply, are reviewed at the end of each reporting period for impairment when an annual impairment assessment is compulsory or there is an indication that the assets might be impaired. Impairment is measured by comparing the carrying values of the assets with their recoverable amounts. When the carrying amount of an asset exceeds its recoverable amount, the asset is written down to its recoverable amount and an impairment loss shall be recognised. The recoverable amount of an asset is the higher of the assets fair value less costs to sell and its value in use, which is measured by reference to discounted future cash flows using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Where it is not possible to estimate the recoverable amount of an individual asset, the Group determines the recoverable amount of the cash-generating unit to which the asset belongs. An impairment loss is recognised in profit or loss immediately unless the asset is carried at its revalued amount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of a previously recognised revaluation surplus for the same asset. Any impairment loss recognised in respect of a cash-generating unit is allocated first to reduce the carrying amount of any goodwill allocated to the cash-generating units and then to reduce the carrying amounts of the other assets in the cash-generating unit on a pro rata basis. In respect of assets other than goodwill, and when there is a change in the estimates used to determine the recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as a reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the asset that would have been determined (net of amortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in profit or loss immediately, unless the asset is carried at its revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase LEASED ASSETS (a) Finance Assets A lease is recognised as a finance lease if it transfers substantially to the Group all the risks and rewards incidental to ownership. Upon initial recognition, the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset. The corresponding liability is included in the statement of financial position as hire purchase payables. Minimum lease payments made under finance leases are apportioned between the finance costs and the reduction of the outstanding liability. The finance costs, which represent the difference between the total leasing commitments and the fair value of the assets acquired, are recognised in the profit or loss and allocated over the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability for each accounting period. 65

68 resintech berhad ( X) Notes to the Financial Statements For the financial year ended 31 March 4. SIGNIFICANT ACCOUNTING POLICIES (Cont d) 4.11 LEASED ASSETS (Cont d) (b) Operating Lease All leases that do not transfer substantially to the Group all the risks and rewards incidental to ownership are classified as operating leases and, the leased assets are not recognised on the statement of financial position of the Group and of the Company. Payments made under operating leases are recognised as an expense in the profit or loss on a straight-line method over the term of the lease. Lease incentives received are recognised as a reduction of rental expense over the lease term on a straight-line method. Contingent rentals are charged to profit or loss in the reporting period in which they are incurred INVESTMENT PROPERTIES Investment properties are properties which are owned or held under a leasehold interest to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes. Investment properties are initially measured at cost. Cost includes expenditure that is directly attributable to the acquisition of the investment property. Subsequent to initial recognition, investment properties are stated at fair value with fair value changes recognised in profit or loss. Investment properties are derecognised when they have either been disposed of or when the investment property is permanently withdrawn from use and no future benefit is expected from its disposal. On the derecognition of an investment property, the difference between the net disposal proceeds and the carrying amount is recognised in profit or loss. Transfers are made to or from investment property only when there is a change in use. For a transfer from investment property to owner-occupied property or inventories, the fair value at the date of change becomes the cost for subsequent accounting purposes. If owner-occupied property becomes an investment property, such property shall be accounted for in accordance with the accounting policy for property, plant and equipment up to date of change in use INVENTORIES Inventories are stated at the lower of cost and net realisable value. Cost is determined on the weighted average cost method, and comprises the purchase price and incidentals incurred in bringing the inventories to their present location and condition. The cost of finished goods and work-in-progress includes cost of materials, labour and an appropriate proportion of production overheads. Net realisable value represents the estimated selling price less the estimated costs of completion and the estimated costs necessary to make the sale REVALUATION RESERVE Surpluses arising from the revaluation of properties are credited to the revaluation reserve account. Deficits arising from the revaluation, to the extent that they are not supported by any previous revaluation surpluses, are charged to profit or loss. In the year of disposal of the revalued asset, the attributable remaining revaluation surplus is transferred from the revaluation reserve account to retained profits. 66

69 Annual Report Notes to the Financial Statements For the financial year ended 31 March 4. SIGNIFICANT ACCOUNTING POLICIES (Cont d) 4.15 INCOME TAXES (a) Current Tax Current tax assets and liabilities are expected amount of income tax recoverable or payable to the taxation authorities. Current taxes are measured using tax rates and tax laws that have been enacted or substantively enacted at the end of the reporting period and are recognised in profit or loss except to the extent that the tax relates to items recognised outside profit or loss (either in other comprehensive income or directly in equity). (b) Deferred Tax Deferred tax are recognised using the liability method for all temporary differences other than those that arise from goodwill or from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on the tax rates that have been enacted or substantively enacted at the end of the reporting period. Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. The carrying amounts of deferred tax assets are reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that the related tax benefits will be realised. Current and deferred tax items are recognised in correlation to the underlying transactions either in profit or loss, other comprehensive income or directly in equity. Deferred tax arising from a business combination is adjusted against goodwill or negative goodwill. Current tax assets and liabilities or deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred taxes relate to the same taxable entity (or on different tax entities but they intend to settle current tax assets and liabilities on a net basis) and the same taxation authority. (c) Goods and Services Tax ( GST ) Revenues, expenses and assets are recognised net of GST except for the GST in a purchase of assets or services which are not recoverable from the taxation authorities, the GST are included as part of the costs of the assets acquired or as part of the expense item whichever is applicable. In addition, receivables and payables are also stated with the amount of GST included (where applicable). The net amount of the GST recoverable from or payable to the taxation authorities at the end of the reporting period is included in other receivables or other payables EARNINGS PER ORDINARY SHARE Basic earnings per ordinary share is calculated by dividing the consolidated profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the reporting period, adjusted for own shares held. Diluted earnings per ordinary share is determined by adjusting the consolidated profit or loss attributable to ordinary shareholders of the Company and the weighted average number of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares. 67

70 resintech berhad ( X) Notes to the Financial Statements For the financial year ended 31 March 4. SIGNIFICANT ACCOUNTING POLICIES (Cont d) 4.17 OPERATING SEGMENTS An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group s other components. An operating segment s operating results are reviewed regularly by the chief operating decision maker to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available CASH AND CASH EQUIVALENTS Cash and cash equivalents comprise cash in hand, bank balances, demand deposits and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value with original maturity periods of three months or less. For the purpose of the statement of cash flows, cash and cash equivalents are presented net of bank overdrafts EMPLOYEE BENEFITS (a) Short-term Benefits Wages, salaries, paid annual leave and bonuses are measured on an undiscounted basis and are recognised in profit or loss in the period in which the associated services are rendered by employees of the Group. (b) Defined Contribution Plans s contributions to defined contribution plans are recognised in profit or loss in the period to which they relate. Once the contributions have been paid, the Group has no further liability in respect of the defined contribution plans RELATED PARTIES A party is related to an entity (referred as the reporting entity ) if:- (a) A person or a close member of that person s family is related to a reporting entity if that person:- (i) (ii) (iii) has control or joint control over the reporting entity; has significant influence over the reporting entity; or is a member of the key management personnel of the reporting entity or of a parent of the reporting entity. Close members of the family of a person are those family members who may be expected to influence, or be influenced by, that person in their dealings with the reporting entity. (b) An entity is related to a reporting entity if any of the following conditions applies:- (i) The entity and the reporting entity are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others). (ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member). (iii) Both entities are joint ventures of the same third party. (iv) One entity is a joint venture of a third entity and the other entity is an associate of the third entity. (v) The entity is a post-employment benefit plan for the benefit of employees of either the reporting entity or an entity related to the reporting entity. If the reporting entity is itself such a plan, the sponsoring employers are also related to the reporting entity. (vi) The entity is controlled or jointly controlled by a person identified in (a) above. (vii) A person identified in (a)(i) above has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity). (viii) The entity, or any member of a group of which it is a part, provides key management personnel services to the reporting entity or to the parent of the reporting entity. 68 Related parties also include key management personnel defined as those persons having authority and responsibility for planning, directing and controlling the activities of the reporting entity either directly or indirectly, including any director (whether executive or otherwise) of that entity.

71 Annual Report Notes to the Financial Statements For the financial year ended 31 March 4. SIGNIFICANT ACCOUNTING POLICIES (Cont d) 4.21 REVENUE AND OTHER INCOME Revenue is measured at the fair value of the consideration received or receivable, net of returns, cash and trade discounts. (a) Sale of Goods Revenue from sale of goods is recognised when significant risks and rewards of ownership of the goods have been transferred to the buyer and where the Group does not have continuing managerial involvement and effective control over the goods sold. (b) Services Revenue is recognised upon the rendering of services and when the outcome of the transaction can be estimated reliably by reference to the labour hours incurred for work performed to date as a percentage of the estimated total labour hours. In the event the outcome of the transaction could not be estimated reliably, revenue is recognised to the extent of the expenses incurred that are recoverable. (c) Interest Income Interest income is recognised on an accrual basis using the effective interest method. (d) Dividend Income Dividend income from investment is recognised when the right to receive dividend payment is established. (e) Rental Income Rental income is accounted for on a straight-line method over the lease term CONTINGENT LIABILITIES A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed by the occurrence of one or more uncertain future events not wholly within the control of the Group. It can also be a present obligation arising from past events that is not recognised because it is not probable that an outflow of economic resources will be required or the amount of obligation cannot be measured reliably. A contingent liability is not recognised but is disclosed in the notes to the financial statements, unless the probability of outflow of economic benefits is remote. When a change in the probability of an outflow occurs so that the outflow is probable, it will then be recognised as a provision PROVISIONS Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of past events, when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and when a reliable estimate of the amount can be made. Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate. Where the effect of the time value of money is material, the provision is the present value of the estimated expenditure required to settle the obligation. The unwinding of the discount is recognised as interest expense in profit or loss. 69

72 resintech berhad ( X) Notes to the Financial Statements For the financial year ended 31 March 4. SIGNIFICANT ACCOUNTING POLICIES (Cont d) 4.24 BORROWING COSTS Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective interest method. Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of the cost of those assets, until such time as the assets are ready for their intended use or sale. The capitalisation of borrowing costs is suspended during extended periods in which active development is interrupted. All other borrowing costs are recognised in profit or loss as expenses in the period in which they are incurred. Investment income earned on the temporary investment of specific borrowing pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation FAIR VALUE MEASUREMENTS Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using a valuation technique. The measurement assumes that the transaction takes place either in the principal market or in the absence of a principal market, in the most advantageous market. For non-financial asset, the fair value measurement takes into account a market participant s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. For financial reporting purposes, the fair value measurements are analysed into level 1 to level 3 as follows:- Level 1: Level 2: Level 3: Inputs are quoted prices (unadjusted) in active markets for identical assets or liability that the entity can access at the measurement date; Inputs are inputs, other than quoted prices included within level 1, that are observable for the asset or liability, either directly or indirectly; and Inputs are unobservable inputs for the asset or liability. The transfer of fair value between levels is determined as of the date of the event or change in circumstances that caused the transfer. 5. INVESTMENTS IN SUBSIDIARIES The Company Unquoted shares, at cost 44,418 44,418 Less: Accumulated impairment losses (1,358) (1,358) 43,060 43,060 70

73 Annual Report Notes to the Financial Statements For the financial year ended 31 March 5. INVESTMENTS IN SUBSIDIARIES (Cont d) Details of the subsidiaries are as follows:- Name of Subsidiary Principal Place of Business Effective Equity Interest Principal Activities Direct subsidiaries:- Resintech Plastics (M) Sdn. Bhd. Malaysia 100% 100% Designing, manufacturing, trading and marketing of a diversified range of plastic pipes, water tanks and fittings, and investment holding. Resintech-Kapar Sdn. Bhd. Malaysia 100% 100% Designing, manufacturing, trading and marketing of a diversified range of Polyethylene, Polypropylene and Acrylonitrile Butadiene Styrene pipes and fittings. Resintech Biowood (Malaysia) Sdn. Bhd. Malaysia 100% 100% Dormant. Sarpino s (M) Sdn. Bhd. Malaysia 100% 100% Dormant. Sarpino s Pizzeria (Cambodia) Co., Ltd. Cambodia 100% 100% Property holding. Indirect subsidiaries:- Resintech Engineering Sdn. Bhd.^ Malaysia 100% 100% Dormant. Resintech (Sabah) Sdn. Bhd.^ Malaysia 100% 100% Trading and marketing of a diversified range of plastic pipes, water tanks and fittings. Resintech Products Marketing Sdn. Bhd.^ Vision Mould Specialist (M) Sdn. Bhd.^ Malaysia 100% 100% Trading and marketing of a diversified range of plastic pipes, water tanks and fittings and children s playground equipment. Malaysia 100% 100% Dormant. Exact Link Sdn. Bhd.^ Malaysia 100% 100% Property holding. RT Water Technology Sdn. Bhd.# Malaysia 60% 60% Dormant. PT Resintech Indomas* Indonesia 100% 100% Designing and manufacturing a range of plastic pipes, water tanks and fittings. ^ Interest held by Resintech Plastics (M) Sdn. Bhd. # Interest held by Resintech Engineering Sdn. Bhd. * Interest held by Resintech Plastics (M) Sdn. Bhd. and Resintech-Kapar Sdn. Bhd. Not audited by Messrs. Crowe Horwath Summarised financial information of non-controlling interests has not been presented as the non-controlling interests of the subsidiary is not individually material to the Group. 71

74 resintech berhad ( X) Notes to the Financial Statements For the financial year ended 31 March 6. INVESTMENT IN AN ASSOCIATE The Company Unquoted shares, at cost:- At 1 April Transfer to other investment (Note 10) (420) - (420) - At 31 March Share of post-acquisition losses At 1 April (260) (2) - - For the financial year (160) (258) - - Transfer to other investment (Note 10) At 31 March - (260) - - Accumulated impairment losses At 1 April - - (260) - For the financial year - - (160) (260) Transfer to other investment (Note 10) At 31 March (a) The details of the associate are as follows:- Name of Associate Principal Place of Business Effective Equity Interest Principal Activities Asia Herbal Biotech Sdn. Bhd. ( AHB ) Malaysia - 21% Provision of health and herbal centre for health food and drinks, herbal products, organic food products and other environmentally friendly products. (a) (b) (c) recognised its share of results in Asia Herbal Biotech Sdn. Bhd. based on the unaudited financial statements of the associate as the share of results is not material to the Group. On 27 January, the Company s effective interest in Asia Herbal Biotech Sdn. Bhd. was diluted from 21% to 18%. In consequent thereof, Asia Herbal Biotech Sdn. Bhd. was reclassified as an investment of the Company. Summarised financial information has not been presented as the associate is not individually material to the Group. 72

75 Annual Report Notes to the Financial Statements For the financial year ended 31 March 7. PROPERTY, PLANT AND EQUIPMENT At 1.4. Additions (Note 36) Written Off Depreciation Charge Foreign Exchange Differences At Net Book Value Land and buildings 76, (1,588) ,197 Plant, machinery, tools, equipment and moulds 11,004 3,759 (59) (3,419) 40 11,325 Furniture, fittings and office equipment (1) (49) Motor vehicles and forklifts (272) 1 1,067 Electrical installation and renovation (160) Store (3) ,232 4,226 (60) (5,491) ,398 At Additions (Note 36) Revaluation Reclassified to Investment Properties (Note 8) Disposals Written Off Depreciation Charge Foreign Exchange Differences At Net Book Value Land and buildings 79, (2,294) - - (1,585) ,348 Plant, machinery, tools, equipment and moulds 13,842 1, (225) (5) (3,813) 18 11,004 Furniture, fittings and office equipment (5) (2) (51) Motor vehicles and forklifts (286) Electrical installation and renovation (158) Store (12) ,469 1, (2,294) (230) (7) (5,905) ,232 73

76 resintech berhad ( X) Notes to the Financial Statements For the financial year ended 31 March 7. PROPERTY, PLANT AND EQUIPMENT (CONT D) At Cost At Valuation Accumulated Depreciation Net Book Value Land and buildings - 87,634 (12,437) 75,197 Plant, machinery, tools, equipment and moulds 65,610 - (54,285) 11,325 Furniture, fittings and office equipment 1,246 - (1,068) 178 Motor vehicles and forklifts 5,631 - (4,564) 1,067 Electrical installation and renovation 3,790 - (3,163) 627 Store (104) 4 76,385 87,634 (75,621) 88,398 Land and buildings - 87,050 (10,702) 76,348 Plant, machinery, tools, equipment and moulds 69,680 - (58,676) 11,004 Furniture, fittings and office equipment 1,210 - (1,019) 191 Motor vehicles and forklifts 5,544 - (4,636) 908 Electrical installation and renovation 3,762 - (2,988) 774 Store (101) 7 80,304 87,050 (78,122) 89,232 (a) The net book values of the freehold and leasehold land and buildings at the end of the reporting period were as follows:- Freehold land 2,248 2,248 Leasehold land 37,882 38,370 Buildings 35,067 35,730 75,197 76,348 (b) The net book values of the property, plant and equipment at the end of the reporting period pledged as security with the banks for credit facilities granted to the Group were as follows:- Freehold land 1,300 1,300 Leasehold land 24,805 31,082 Buildings 24,548 24,820 Plant and machinery 3,585 4,077 54,238 61,279 74

77 Annual Report Notes to the Financial Statements For the financial year ended 31 March 7. PROPERTY, PLANT AND EQUIPMENT (CONT D) (c) Included in the net book values of property, plant and equipment at the end of the reporting period were the following assets acquired under hire purchase terms:- Motor vehicles Machinery 2,098 2,358 3,006 3,085 (d) The titles to the following assets have not yet been issued by the relevant authorities:- Leasehold land 18,469 18,699 (e) Land and buildings have been revalued in financial year 2015 by independent valuers. The surpluses arising from the revaluation, net of deferred taxation, have been credited to other comprehensive income and accumulated in equity under the revaluation reserve. The fair value of land and building are analysed as follows:- Level 1 Level 2 Level 3 Total Freehold land - 2,248-2,248 Leasehold land - 37,882-37,882 Buildings - 35,067-35,067-75,197-75,197 Freehold land - 2,248-2,248 Leasehold land - 38,370-38,370 Buildings - 35,730-35,730-76,348-76,348 The level 2 fair values have been determined based on the market comparison approach that reflects recent transaction prices for similar properties. The most significant input into this valuation approach is price per square foot of comparable properties. There has been no change to the valuation technique during the financial year. There were no transfers between level 1 and level 2 during the financial year. (f) The carrying amount, had the revalued freehold and leasehold land and building of the Group been carried at cost less accumulated depreciation, would have been RM26,952,414 ( - RM27,174,292). 75

78 resintech berhad ( X) Notes to the Financial Statements For the financial year ended 31 March 8. INVESTMENT PROPERTIES At 1.4. Fair Value Adjustments Disposal Foreign Exchange Differences At At fair value:- Freehold land 19,866 4,299 (990) ,000 Leasehold land Buildings 5,279 (221) (160) 386 5,284 25,200 4,078 (1,150) 1,211 29,339 At Reclassified from Property, Plant and Equipment (Note 7) Fair Value Adjustments Disposal Foreign Exchange Differences At At fair value:- Freehold land 18,629 1, (1,363) ,866 Leasehold land Buildings 4, (195) ,279 23,469 2, (1,363) ,200 (a) (b) The freehold land and building with a total carrying value of approximately RM17,120,000 ( - RM16,000,000) have been pledged as security with the bank for the credit facilities granted to the Group. The fair values of investment properties are analysed as follows:- Level 1 Level 2 Level 3 Total Freehold land - 24,000-24,000 Leasehold land Buildings - 5,284-5,284-29,339-29,339 Freehold land - 19,866-19,866 Leasehold land Buildings - 5,279-5,279-25,200-25,200 76

79 Annual Report Notes to the Financial Statements For the financial year ended 31 March 8. INVESTMENT PROPERTIES (Cont d) (b) The fair values of investment properties are analysed as follows (Cont d):- The level 2 fair values of the freehold and leasehold land and buildings have been derived using the market comparison approach performed by independent valuers. Sale prices of comparable properties in close proximity are adjusted for differences in key attributes such as property size. The most significant input into this valuation approach is price per square foot of comparable properties. There has been no change to the valuation technique during the financial year. There were no transfers between level 1 and level 2 during the financial year. (c) Direct operating expenses arising from the investment properties are as follows:- Assessment Quit rent INTANGIBLE ASSETS Licence fees At cost: Accumulated amortisation:- At 1 April (425) (379) Amortisation during the financial year (35) (46) At 31 March (460) (425) - 35 The intangible assets are in respect of patents for manufacturing of specific range of plastic pipes, and belong to the Group s Manufacturing and Trading reportable segment. Their amortisation charges are recognised in profit or loss under the Cost of Sales line item. The licence fees represent the following:- (a) (b) the licensing rights to use a design patent acquired from KWH Pipe Ltd; and the grant of master franchise licences by Sarpino s World Pte. Ltd. 77

80 resintech berhad ( X) Notes to the Financial Statements For the financial year ended 31 March 10. OTHER INVESTMENT The Company Unquoted shares, at cost:- At 1 April 1,677 1, Addition Transfer from associate (Note 6) -^ At 31 March 1,677 1, Accumulated impairment losses:- At 1 April Transfer from associate (Note 6) - - (420) - At 31 March - - (420) - (1,677) (1,677) - - ^ - The cost of investment in AHB is RM420,000 and the Group has shared the losses of AHB up to the cost of investment, before transferring to other investment. Therefore, the carrying amount to the Group level is RM Nil. The Company Unquoted shares, at cost:- (a) outside Malaysia 1,639 1, (b) within Malaysia ,677 1, Less: Accumulated impairment losses - - (420) - 1,677 1, Investment in unquoted shares of the Group and the Company are designated as available-for-sale financial assets but are stated at cost as their fair values cannot be reliably measured using valuation techniques due to the lack of marketability of the shares. 11. INVENTORIES At cost:- Materials-in-transit Raw materials 6,337 2,911 Finished goods 12,065 8,808 18,668 11,719 Recognised in profit or loss Inventories recognised as cost of sales 49,748 50,183 78

81 Annual Report Notes to the Financial Statements For the financial year ended 31 March 12. SHORT-TERM INVESTMENT Quoted shares in Malaysia, at fair value The short-term investment is classified as financial asset at fair value through profit or loss, measured at fair value. 13. TRADE RECEIVABLES Trade receivables 22,366 23,409 Allowance for impairment losses (1,887) (759) 20,479 22,650 Allowance for impairment losses:- At 1 April (759) (245) Addition during the financial year (Note 32) (1,308) (598) Writeback during the financial year (Note 31) Write-off during the financial year At 31 March (1,887) (759) s normal trade credit terms range from 30 to 120 ( - 30 to 120) days. 14. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS The Company Other receivables 7,767 7, Deposits Prepayments ,265 7, Included in other receivables are advances of RM5,178,000 and RM2,345,000 ( - RM4,534,000 and RM2,345,000) for its two other investments which will be subsequently converted as part of the cost of investment. The amounts are unsecured, interest-free and will be converted into equity interest and classified as other investment. 79

82 resintech berhad ( X) Notes to the Financial Statements For the financial year ended 31 March 15. AMOUNT OWING BY SUBSIDIARIES The Company Amount owing by:- Non-trade balances 26,146 26,486 Allowance for impairment losses (2,328) (2,328) 23,818 24,158 Allowance for impairment losses:- At 1 April 2,328 1,402 Addition At 31 March 2,328 2,328 The amount owing is non-trade in nature, unsecured, interest-free and repayable on demand. The amount owing is to be settled in cash. 16. FIXED DEPOSITS WITH LICENSED BANKS The fixed deposit of RM100,000 ( - RM100,000) has been pledged to licensed bank as security for banking facilities granted to the Group and is held in trust by a director of the Group. The effective interest rates of the deposits with licensed banks at the end of the reporting period ranged from 2.8% to 3.3% ( % to 3.65%) per annum. The fixed deposits have maturity periods ranging from 1 to 12 months ( - 1 to 12 months). 17. SHARE CAPITAL Authorised /The Company Number Of Shares ( 000) Ordinary Shares Of RM0.50 Each:- Authorised N/A 400,000 N/A 200,000 N/A - Not applicable due to the adoption of the Companies Act as disclosed in item (ii) below. Issued and Fully Paid-Up Ordinary shares with no par value ( - par value of RM0.50 each) At 1 April 137, ,200 68,600 68,600 Issuance of shares upon exercise of warrants At 31 March 137, ,200 68,602 68,600 (i) (ii) The holders of ordinary shares are entitled to receive dividends as and when declared by the Company, and are entitled to one vote per ordinary share at meetings of the Company. On 31 January, the concepts of authorised share capital and par value of share capital were abolished in accordance with the Companies Act. There is no impact on the numbers of ordinary shares in issue or the relative entitlement of any of the members as a result of this transition 80

83 Annual Report Notes to the Financial Statements For the financial year ended 31 March 18. WARRANTS The Company had on 30 September 2011, issued 68,600, / Warrants to all entitled shareholders of the Company on the basis of one (1) free Warrant for every two (2) existing ordinary shares of RM0.50 each held in the Company. The Warrants were listed on the Main Market of Bursa Malaysia Securities Berhad on 6 October The Warrants are constituted under a Deed Poll executed on 12 September 2011, and each Warrant entitles the registered holder the right at any time during the exercise period from 30 September 2011 to 29 September to subscribe for in cash one new ordinary share of RM0.50 each of the Company at an exercise price of RM0.50 each. The main features of the Warrants are as follows:- (i) (ii) (iii) Each Warrant will entitle the registered holder to subscribe for one (1) new ordinary share of par value of RM0.50 each in the Company at an exercise price of RM0.50 each subject to adjustment in accordance with the conditions stipulated in the Deed Poll; The Warrants may be exercised at any time on or before the maturity date falling five years (2011/) from the date of issue of the Warrants on 30 September Warrants not exercised after the exercise period will thereafter lapse and cease to be valid; The new shares to be issued pursuant to the exercise of the Warrants shall, upon allotment and issue, rank pari passu in all respects with the existing ordinary shares of the Company in issue except that they will not be entitled to any dividends, rights, allotments and/or other distributions, the entitlement date of which is before the allotment and issuance of the new shares; and (iv) The persons to whom the Warrants have been granted have no rights to participate in any distribution and/or offer of further securities in the Company until/and unless Warrant holders exercise their Warrant for new shares. The movement of Warrant 2011/ during the financial year is as follows:- Units Units At 1 April 68,600,000 68,600,000 Exercise of Warrants (4,900) - Lapsed of Warrants (68,595,100) - At 31 March - 68,600,000 The 2011/ Warrants lapsed on 9 September. 19. REVALUATION RESERVE At 1 April 33,300 33,735 Addition - 9 Realisation of revaluation reserve (675) (444) Recycle to retained earnings arising from the disposal of freehold land (617) - At 31 March 32,008 33,300 The revaluation reserve represents the surplus arising from the revaluation of the land and buildings of the Group, net of deferred tax and is not distributable by way of cash dividends. 81

84 resintech berhad ( X) Notes to the Financial Statements For the financial year ended 31 March 20. FOREIGN EXCHANGE TRANSLATION RESERVE The foreign exchange translation reserve arose from the translation of the financial statements of foreign subsidiaries. 21. LONG-TERM BORROWINGS Secured:- Hire purchase payables (Note 22) 1,114 1,553 Term loans (Note 23) ,119 1, HIRE PURCHASE PAYABLES Minimum hire purchase payments: - not later than 1 year later than 1 year and not later than 5 years 1,286 1,772 1,975 2,389 Future finance charges (264) (335) Present value of hire purchase payables 1,711 2,054 Current (Note 28): - not later than 1 year Non-Current (Note 21): - later than 1 year and not later than 5 years 1,114 1,553 1,711 2,054 The hire purchase payables of the Group at the end of the reporting period bore effective interest rates ranging from 4.31% to 6.72% ( % to 6.72%). The interest rates are fixed at the inception of the hire purchase arrangements. 23. TERM LOANS Current (Note 28): - not later than 1 year 1,678 1,686 Non-current (Note 21): - later than 1 year and not later than 2 years later than 2 years and not later than 5 years ,683 2,057 82

85 Annual Report Notes to the Financial Statements For the financial year ended 31 March 23. TERM LOANS (Cont d) Number Of Effective Term Monthly Monthly Date Of Loan Instalments Instalment Repayment RM ,487 February ,638 March #1 October ,546 November ,697 May ,399 April #2 March 1,304-1,683 2,057 The term loans of the Group at the end of the reporting period bore effective interest rates ranging from 5.46% to 7.2% ( % to 7.35%) per annum and are secured in the same manner as the bills payable disclosed in Note 28 to the financial statements. The term loans 2, 3 and 4 have been fully repaid during the financial year. #1 - Term loan 3 is repayable as follows:- (i) RM42,916 per month from date of the first drawdown to month 12; (ii) RM44,583 from month 13 to month 24; and (iii) RM45,123 from month 25 to month 60. #2 - Term loan 7 is an Islamic loan. The monthly instalment for term loan 7 is the principal amount of RM121,213 plus profit. 24. DEFERRED tax liabilities At 1 April 13,644 16,856 Recognised in profit or loss (Note 33) 107 (3,219) Arising from revaluation of properties - 3 Translation differences 28 4 At 31 March 13,779 13,644 The deferred tax consists of the tax effects of the following items:- Deferred tax liabilities:- Accelerated capital allowances 1,928 2,038 Revaluation of properties 11,851 11,606 13,779 13,644 83

86 resintech berhad ( X) Notes to the Financial Statements For the financial year ended 31 March 24. DEFERRED TAXATION (Cont d) Unabsorbed capital allowances 28 6 Unutilised tax losses 1,435 5,702 Allowance for impairment losses Accelerated capital allowances (45) (2,541) Unrealised foreign exchange gain (2) (580) 1,750 2, TRADE PAYABLES The normal trade credit terms granted to the Group range from 30 to 90 ( - 30 to 90) days. 26. OTHER PAYABLES AND ACCRUALS The Company Other payables 1,687 1, Accruals Deposit received ,763 2, AMOUNT OWING TO A RELATED PARTY The amount owing is non-trade in nature, unsecured, interest-free and repayable on demand. The amount owing has been fully settled in cash. 28. SHORT-TERM BORROWINGS No deferred tax assets/(liabilities) are recognised on the following items:- Secured:- Bills payable 12,115 13,732 Hire purchase payables (Note 22) Term loans (Note 23) 1,678 1,686 14,390 15,919 84

87 Annual Report Notes to the Financial Statements For the financial year ended 31 March 28. SHORT-TERM BORROWINGS (CONT D) The bills payable of the Group at the end of the reporting period bore effective interest rates ranging from 4.25% to 5.44% ( % to 6.5%) per annum and are secured by:- (a) (b) (c) (d) (e) legal charges over certain long leasehold land and buildings of certain subsidiaries and of a related party; legal charges over certain freehold land and buildings of certain subsidiaries, as disclosed in Notes 7 and 8 to the financial statements; a debenture over certain plant and machinery of a subsidiary; a joint and several guarantee of certain directors; and a corporate guarantee of the Company. Certain short-term borrowings totalling to RM3,009,242 ( - RM8,509,176) imposed covenants on a subsidiary that has received the loans. The significant covenants of the short-term loans are as follows:- (a) (b) the subsidiary s tangible net worth must not be less than RM72,000,000 at all times; and the subsidiary s debt servicing ratio must not be less than 2.50 times. 29. BANK OVERDRAFTS The bank overdrafts of the Group at the end of the reporting period bore an effective interest rate of 7.96% ( %) per annum and are secured in the same manner as the bills payable disclosed in Note 28 to the financial statements. 30. REVENUE The Company Sale of goods 77,585 76, Food and beverage Dividend income - - 1,685 5,500 77,585 77,215 1,685 5,500 85

88 resintech berhad ( X) Notes to the Financial Statements For the financial year ended 31 March 31. OTHER INCOME The Company Bad debts recovered Dividend income from short-term investment Fair value adjustment on investment properties 4, Gain on disposal of: - property, plant and equipment investment properties Gain on foreign exchange: - realised 2,113 1, unrealised Interest income Rental income 942 1, Writeback of impairment loss: - trade receivables Others 469 1, ,251 5, PROFIT BEFORE TAXATION In addition to those disclosed in Note 31 to the financial statements, profit before taxation is arrived at after charging:- The Company Allowance for impairment loss: - trade receivables 1, amount owing by a subsidiary investment in an associate Amortisation of intangible assets Audit fee: - statutory audit underprovision in the previous financial year other non-statutory services other auditors Bad debts written off Deposits written off Depreciation of property, plant and equipment (Note 7) 5,491 5, Directors fee Directors non-fee emoluments: - salaries, bonuses and allowances 1,658 1, defined contribution plan other benefits

89 Annual Report Notes to the Financial Statements For the financial year ended 31 March 32. PROFIT BEFORE TAXATION In addition to those disclosed in Note 31 to the financial statements, profit before taxation is arrived at after charging (Cont d):- The Company Directors of the subsidiaries: - salaries, bonuses and allowances defined contribution plan other benefits Interest expense on financial liabilities not at fair value: - bank overdrafts bills payable hire purchase term loans Loss on foreign exchange: - realised 346 1, unrealised Property, plant and equipment written off Loss on disposal of investment property Research expenses Staff costs: - salaries, wages, bonuses and allowances 4,841 4, defined contribution plan other benefits INCOME TAX EXPENSE The Company Current tax: - for the financial year 1,823 1, (over)/underprovision in the previous financial year (388) (7) 1,435 1, Deferred tax (Note 24): - origination and reversal of temporary differences 111 (736) effect of change in income tax rate from 25% to 24% - (423) overprovision in the previous financial year (4) (2,060) (3,219) - - 1,542 (1,322)

90 resintech berhad ( X) Notes to the Financial Statements For the financial year ended 31 March 33. INCOME TAX EXPENSE (CONT D) A reconciliation of the income tax expense applicable to the profit before taxation at the statutory tax rate to the income tax expense at the effective tax rate of the Group and the Company is as follows:- The Company Profit before taxation 10,257 3,006 1,211 4,160 Tax at the statutory tax rate of 24% 2, Tax effects of:- Effect of different tax rates in other country (160) (16) - - Non-taxable gain (573) (570) (404) (1,320) Non-deductible expenses Double deduction (20) (6) - - Deferred tax assets not recognised during the financial year Utilisation of deferred tax assets not recognised in the previous financial year (301) (65) - - Utilisation of reinvestment allowances (531) (381) - - Remeasurement of deferred tax on investment properties at fair value arising from change in tax rates - (423) - - (Over)/Underprovision in the previous financial year: - current tax (388) (7) - deferred tax (4) (2,060) - - Income tax expense for the financial year 1,542 (1,322) 3 43 Tax savings during the financial year arising from:- Utilisation of capital allowances claimed during the financial year 2,815 1,606 Utilisation of tax losses previously not recognised Utilisation of reinvestment allowances 2,212 1,586 88

91 Annual Report Notes to the Financial Statements For the financial year ended 31 March 34. EARNINGS PER SHARE The basic earnings per ordinary share has been calculated based on the consolidated profit for the financial year attributable to the equity holders of the Company divided by the weighted average number of ordinary shares in issue during the financial year. Earnings attributable to owners of the Company () 8,715 4,330 Weighted average number of ordinary shares at 31 March ( 000) 137, ,200 Basic earnings per share (Sen) Diluted earnings per share (Sen) In the previous financial year, the Warrants 2011/ are anti-dilutive as the Warrants 2011/ exercise price is higher than the average market price of the Company s shares during the current and prior financial year. Accordingly, the exercise of Warrants 2011/ had been ignored in the calculation of dilutive earnings per ordinary share. Therefore, the diluted earnings per ordinary share is the same as basic earnings per ordinary share. 35. DIVIDENDS The Company Interim dividend of 1.2 ( - 2.5) sen per ordinary share in respect of the current financial year 1,646 3, PURCHASE OF PROPERTY, PLANT AND EQUIPMENT Cost of property, plant and equipment purchased (Note 7) 4,226 1,901 Amount financed through hire purchase (200) (530) Cash disbursed for the purchase of property, plant and equipment 4,026 1,371 89

92 resintech berhad ( X) Notes to the Financial Statements For the financial year ended 31 March 37. CASH AND CASH EQUIVALENTS For the purpose of the statements of cash flows, cash and cash equivalents comprise the following:- The Company Fixed deposits with licensed banks (Note 16) 738 4, Cash and bank balances 3,943 1, Bank overdrafts (Note 29) (2,977) (4,003) - - 1,704 2, Less: Fixed deposits pledged with licensed bank and with maturity period of more than 3 months (100) (100) - - 1,604 2, KEY MANAGEMENT PERSONNEL COMPENSATION The key management personnel of the Group and of the Company include executive directors and non-executive directors of the Company and certain members of senior management of the Group and of the Company. (a) The key management personnel compensation during the financial year are as follows:- The Company Directors Directors of the Company Executive Directors Short-term employee benefits: - salaries, bonuses, allowances 1,658 1, defined contribution benefits other benefits ,816 1, Non-executive Directors Short-term employee benefits: - fees other benefits ,965 1,

93 Annual Report Notes to the Financial Statements For the financial year ended 31 March 38. KEY MANAGEMENT PERSONNEL COMPENSATION (CONT D) (a) The key management personnel compensation during the financial year are as follows (Cont d):- The Company Directors Directors of the Subsidiaries Non-executive Directors Short-term employee benefits: - salaries, bonuses, allowances defined contribution benefits other benefits Total directors remuneration (Note 32) 2,067 1, Other Key Management Personnel Short-term employee benefits Defined contribution benefits Other benefits Total compensation for other key management personnel 1, (b) The number of the Company s directors with total remuneration falling in bands of RM50,000 are as follows:- The Company Executive directors: RM150,001 - RM200,000-1 RM250,001 - RM300, RM350,001 - RM400, RM500,001 - RM550,000-1 RM750,001 - RM800, Non-Executive directors: Below RM50, RM50,001 - RM100,

94 resintech berhad ( X) Notes to the Financial Statements For the financial year ended 31 March 39. RELATED PARTY DISCLOSURES (a) Identities of Related Parties Parties are considered to be related to the Group if the Group or the Company has the ability, directly or indirectly, to control or jointly control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group or the Company and the party are subject to common control. In addition to the information detailed elsewhere in the financial statements, the Group has related party relationships with its directors, key management personnel and entities within the same group of companies. (b) Significant Related Party Transactions and Balances Other than those disclosed elsewhere in the financial statements, the Group and the Company also carried out the following significant transactions with the related parties during the financial year:- The Company (i) Subsidiaries Advances from Advances to ,000 Payment on behalf of ,058 Payment on behalf by Dividend received - - 1,685 5,500 (ii) Related party Rental paid/payable Payment on behalf of - 2, Payment on behalf by Advances to - 1, Advances from - 3,

95 Annual Report Notes to the Financial Statements For the financial year ended 31 March 40. OPERATING SEGMENTS Operating segments are prepared in a manner consistent with the internal reporting provided to the Board of Directors as its chief operating decision maker in order to allocate resources to segments and to assess their performance. For management purposes, the Group is organised into business units based on their products and services provided. is organised into three main reportable segments as follows:- Manufacturing and Trading Segment - involved in manufacturing and trading of diversified range of plastics pipes, water tanks and fittings. Services - involved in property holding. Investment Holding - involved in investment holding. Others - dormant. (a) The Board of Directors assesses the performance of the reportable segments based on their profit before interest expense and taxation. The accounting policies of the reporting segments are the same as the Group s accounting policies. Borrowings and investment-related activities are managed on a group basis and are not allocated to reportable segments. (b) (c) Each reportable segment assets is measured based on all assets of the segment other than investments in associates and tax-related assets. Each reportable segment liabilities is measured based on all liabilities of the segment other than borrowings and tax-related liabilities. (d) Assets, liabilities and expenses which are common and cannot be meaningfully allocated to the reportable segments are presented under unallocated items. Unallocated items comprise mainly current tax assets, current tax liabilities and deferred tax liabilities. Transactions between reportable segments are carried out on agreed terms between both parties. Transfer prices between operating segments are at arm s length basis in a manner similar to transactions with third parties. The effects of such intersegment transactions are eliminated on consolidation. 93

96 resintech berhad ( X) Notes to the Financial Statements For the financial year ended 31 March 40. OPERATING SEGMENTS (CONT D) Manufacturing and Trading Services Investment Holding Others Group Revenue External revenue 77, ,585 Inter-segment revenue 62, , , ,635 Consolidation adjustments (63,050) Consolidated revenue 77,585 Results Segment profit before interest and taxation 7,922 4,793 1, ,153 Finance costs (1,524) (1,524) Share of results of an associate (160) Consolidation adjustments (2,212) Consolidated profit before taxation 10,257 Segment profit before interest and taxation includes the followings:- Fair value adjustment on investment properties 1,120 2, ,078 Gain on disposal of property, plant and equipment Interest income Reversal of impairment of trade receivables Unrealised foreign exchange gain Amortisation of intangible assets (34) (34) Deposits written off (3) (3) Depreciation of property, plant and equipment (5,273) (218) - - (5,491) Interest expenses (1,347) (1,347) Impairment of trade receivables (1,308) (1,308) Share of results of an associate (160) 94

97 Annual Report Notes to the Financial Statements For the financial year ended 31 March 40. OPERATING SEGMENTS (CONT D) Manufacturing and Trading Services Investment Holding Others Group Revenue External revenue 76, ,215 Inter-segment revenue 65, , ,833 1, ,072 Consolidation adjustments (65,857) Consolidated revenue 77,215 Results Segment profit before interest and taxation 5,067 1,425 4,161 (19) 10,634 Finance costs (1,660) (1,660) Share of results of an associate (258) Consolidation adjustments (5,710) Consolidated profit before taxation 3,006 Segment profit before interest and taxation includes the followings:- Fair value adjustment on investment properties Gain on disposal of property, plant and equipment Gain on disposal of investment properties Interest income Reversal of impairment of trade receivables Unrealised foreign exchange gain Amortisation of intangible assets (46) (46) Deposits written off (131) (131) Depreciation of property, plant and equipment (5,430) (230) - (245) (5,905) Interest expenses (1,549) (1,549) Impairment of trade receivables (598) (598) Impairment on investment properties (195) (195) Share of results of an associate (258) 95

98 resintech berhad ( X) Notes to the Financial Statements For the financial year ended 31 March 40. OPERATING SEGMENTS (CONT D) Geographical Information The following is an analysis of the Group s revenue and non-current assets by geographical markets:- Revenue Non-Current Assets Malaysia 67,988 64,118 97,358 98,539 Indonesia 4,495 4,016 7,705 7,479 Cambodia 1,715 2,675 14,351 10,286 Singapore 1,594 4, Others 1,793 1, ,585 77, , ,304 There are no major customers with revenue equal to or more than 10% of the Group revenue. 41. CAPITAL COMMITMENTS The Company Contracted but not Provided for Purchase of property, plant and equipment FINANCIAL INSTRUMENTS s activities are exposed to a variety of market risk (including foreign currency risk, interest rate risk and equity price risk), credit risk and liquidity risk. s overall financial risk management policy focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group s financial performance FINANCIAL RISK MANAGEMENT POLICIES s policies in respect of the major areas of treasury activity are as follows:- (a) Market Risk (i) Foreign Currency Risk is exposed to foreign currency risk on transactions and balances that are denominated in currencies other than the respective functional currencies of entities within the Group. The currencies giving rise to this risk are primarily United States Dollar ( USD ) and Indonesian Rupiah ( IDR ). Foreign currency risk is monitored closely on an ongoing basis to ensure that the net exposure is at an acceptable level. does not have any transactions or balances denominated in foreign currencies and hence is not exposed to foreign currency risk. 96

99 Annual Report Notes to the Financial Statements For the financial year ended 31 March 42. FINANCIAL INSTRUMENTS (CONT D) 42.1 FINANCIAL RISK MANAGEMENT POLICIES (CONT D) (a) Market Risk (Cont d) (i) Foreign Currency Risk (Cont d) s exposure to foreign currency risk (a currency which is other than the functional currency of the entities within the Group) based on the carrying amounts of the financial instruments at the end of the reporting period is summarised below:- Foreign Currency Exposure Ringgit Malaysia United States Dollar Indonesian Rupiah Others Total Financial Assets Other investments 38 1, ,677 Short-term investment Trade receivables 18,177 1, ,479 Other receivables and deposits 2,974 5, ,196 Fixed deposits with licensed banks Cash and bank balances 3, ,943 25,475 8, ,134 Financial Liabilities Trade payables 1,144 5, ,641 Other payables and accruals 2, ,763 Amount owing to a related party Bills payable 12, ,115 Hire purchase payables 1, ,711 Term loans 1, ,683 Bank overdrafts 2, ,977 22,245 5, ,890 Net financial assets 3,230 3, ,244 Less: Net financial liabilities/(assets) denominated in the Company s functional currency 3, ,975 Currency exposure - 3,183 (4) 90 3,269 97

100 resintech berhad ( X) Notes to the Financial Statements For the financial year ended 31 March 42. FINANCIAL INSTRUMENTS (CONT D) 42.1 FINANCIAL RISK MANAGEMENT POLICIES (CONT D) (a) Market Risk (Cont d) (i) Foreign Currency Risk (Cont d) Foreign Currency Exposure (Cont d) Ringgit Malaysia United States Dollar Indonesian Rupiah Others Total Financial Assets Other investments 38 1, ,677 Short-term investment Trade receivables 19,742 1,023 1, ,650 Other receivables and deposits 2,725 4, ,415 Fixed deposits with licensed banks 4, ,625 Cash and bank balances 1, ,654 28,266 7,628 1, ,122 Financial Liabilities Trade payables 1,182 1, ,619 Other payables and accruals 2, ,779 Amount owing to a related party Bills payable 13, ,732 Hire purchase payables 2, ,054 Term loans 1, ,057 Bank overdrafts 4, ,003 24,979 1, ,541 Net financial assets 3,287 6, ,581 Less: Net financial liabilities/(assets) denominated in the Company s functional currency 3,287 (90) (217) - 2,980 Currency Exposure - 6, ,601 98

101 Annual Report Notes to the Financial Statements For the financial year ended 31 March 42. FINANCIAL INSTRUMENTS (CONT D) 42.1 FINANCIAL RISK MANAGEMENT POLICIES (CONT D) (a) Market Risk (Cont d) (i) Foreign Currency Risk (Cont d) Foreign Currency Risk Sensitivity Analysis The following table details the sensitivity analysis to a reasonably possible change in the foreign currencies at the end of the reporting period, with all other variables held constant:- Effects on Profit/(Loss) After Taxation/Other Comprehensive Income Increase/ (Decrease) Increase/ (Decrease) United States Dollar: - strengthened by 5% weakened by 5% (121) (237) Indonesian Rupiah: - strengthened by 5% weakened by 5% - (20) Others: - strengthened by 5% weakened by 5% (3) (32) (ii) Interest Rate Risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. s exposure to interest rate risk arises mainly from long-term borrowings with variable rates. s policy is to obtain the most favourable interest rates available and by maintaining a balanced portfolio mix of fixed and floating rate borrowings. s fixed rate borrowings are carried at amortised cost. Therefore, they are not subject to interest rate risk as defined in MFRS 7 since neither the carrying amount nor the future cash flows will fluctuate because of a change in market interest rates. s exposure to interest rate risk based on the carrying amounts of the financial instruments at the end of the reporting period is disclosed in Notes 23 and 29 to the financial statements. 99

102 resintech berhad ( X) Notes to the Financial Statements For the financial year ended 31 March 42. FINANCIAL INSTRUMENTS (CONT D) 42.1 FINANCIAL RISK MANAGEMENT POLICIES (CONT D) (a) Market Risk (Cont d) (ii) Interest Rate Risk (Cont d) Exposure to Interest Rate Risk Fixed Rate Instruments Bills payable (12,115) (13,732) Hire purchase payables (1,711) (2,054) Fixed deposits with licensed banks 738 4,625 (13,088) (11,161) Floating Rate Instruments Term loans (1,683) (2,057) Bank overdrafts (2,977) (4,003) Interest Rate Risk Sensitivity Analysis (4,660) (6,060) The following table details the sensitivity analysis to a reasonably possible change in the interest rates as at the end of the reporting period, with all other variables held constant:- Effects on Profit/(Loss) After Tax/Other Comprehensive Income Increase/ (Decrease) Increase/ (Decrease) Increase of 100 basis points (bp) (35) (46) Decrease of 100 bp (iii) Equity Price Risk s principal exposure to equity price risk arises mainly from changes in quoted investment prices. The Group manages its exposure to equity price risk by maintaining a portfolio of equities with different risk profiles. A 5% strengthening/weakening of the prices for quoted investment as at the end of the reporting period would have immaterial impact on profit after tax and equity. This assumes that all other variables remain constant. 100

103 Annual Report Notes to the Financial Statements For the financial year ended 31 March 42. FINANCIAL INSTRUMENTS (CONT D) 42.1 FINANCIAL RISK MANAGEMENT POLICIES (CONT D) (b) Credit Risk s exposure to credit risk, or the risk of counterparties defaulting, arises mainly from trade and other receivables. manages its exposure to credit risk by the application of credit approvals, credit limits and monitoring procedures on an ongoing basis. For other financial assets (including quoted investments, cash and bank balances and derivatives), the Group minimises credit risk by dealing exclusively with high credit rating counterparties. uses ageing analysis to monitor the credit quality of the trade receivables. Any receivables having significant balances past due or more than 90 days, which are deemed to have higher credit risk, are monitored individually. establishes an allowance for impairment that represents its estimate of incurred losses in respect of the trade and other receivables as appropriate. The main components of this allowance are a specific loss component that relates to individually significant exposures, and a collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet identified (where applicable). Impairment is estimated by management based on prior experience and the current economic environment. Credit Risk Concentration Profile s major concentration of credit risk relates to an amount owing by a receivable which constituted approximately 18% of its total receivables (including related parties) at the end of the reporting period. Exposure to Credit Risk At the end of the reporting period, the maximum exposure to credit risk is represented by the carrying amount of each class of financial assets recognised in the statement of financial position of the Group and of the Company after deducting any allowance for impairment losses (where applicable). Ageing Analysis The ageing analysis of the Group s trade receivables (including amount owing by related parties) is as follows:- Gross Amount Individual Impairment Collective Impairment Carrying Value Not past due 15, ,424 Past due: - less than 3 months 1, ,574-3 to 5 months 1, ,118 - over 5 months more than 1 year 3,375 (1,887) - 1,488 22,366 (1,887) - 20,

104 resintech berhad ( X) Notes to the Financial Statements For the financial year ended 31 March 42. FINANCIAL INSTRUMENTS (CONT D) 42.1 FINANCIAL RISK MANAGEMENT POLICIES (CONT D) (b) Credit Risk (Cont d) Ageing Analysis (Cont d) Gross Amount Individual Impairment Collective Impairment Carrying Value Not past due 15, ,758 Past due: - less than 3 months 2, ,138-3 to 5 months over 5 months 2, ,324 - more than 1 year 2,371 (759) - 1,612 23,409 (759) - 22,650 At the end of the reporting period, trade receivables that are individually impaired were those in significant financial difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit enhancement. believes that no additional impairment allowance is necessary in respect of trade receivables that are past due but not impaired because they are companies with good collection track record and no recent history of default. (c) Liquidity Risk Liquidity risk arises mainly from general funding and business activities. practises prudent risk management by maintaining sufficient cash balances and the availability of funding through certain committed credit facilities. Maturity Analysis The following table sets out the maturity profile of the financial liabilities at the end of the reporting period based on contractual undiscounted cash flows (including interest payments computed using contractual rates or, if floating, based on the rates at the end of the reporting period):- Contractual Interest Rate % Carrying Amount Contractual Undiscounted Cash Flows Within 1 Year 1-5 Years Over 5 Years Non-derivative Financial Liabilities Trade payables - 6,641 6,641 6, Other payables and accruals - 2,763 2,763 2, Bills payable ,115 12,115 12, Hire purchase payables ,711 1, ,286 - Term loans ,683 1, ,179 - Bank overdrafts ,977 2,977 2, ,890 28,142 25,677 2,

105 Annual Report Notes to the Financial Statements For the financial year ended 31 March 42. FINANCIAL INSTRUMENTS (CONT D) 42.1 FINANCIAL RISK MANAGEMENT POLICIES (CONT D) (c) Liquidity Risk (Cont d) Maturity Analysis (Cont d) Contractual Interest Rate % Carrying Amount Contractual Undiscounted Cash Flows Within 1 Year 1-5 Years Over 5 Years Non-derivative Financial Liabilities Trade payables - 2,619 2,619 2, Other payables and accruals - 2,779 2,779 2, Amount owing to a related party Bills payable ,732 13,732 13, Hire purchase payables ,054 2, ,772 - Term loans ,057 2,161 1, Bank overdrafts ,003 4,003 4, ,541 27,980 25,830 2,150 - The Company Contractual Interest Rate % Carrying Amount Contractual Undiscounted Cash Flows Within 1 Year 1-5 Years Over 5 Years Non-derivative Financial Liabilities Other payables and accruals Financial guarantee contracts in relation to corporate guarantees extended to subsidiaries ,626 48, Non-derivative Financial Liabilities Other payables and accruals Financial guarantee contracts in relation to corporate guarantees extended to subsidiaries ,382 33,

106 resintech berhad ( X) Notes to the Financial Statements For the financial year ended 31 March 42. FINANCIAL INSTRUMENTS (CONT D) 42.2 CAPITAL RISK MANAGEMENT manages its capital to ensure that entities within the Group will be able to maintain an optimal capital structure so as to support its businesses and maximise shareholders value. To achieve this objective, the Group may make adjustments to the capital structure in view of changes in economic conditions, such as adjusting the amount of dividend payment, returning of capital to shareholders or issuing new shares. manages its capital based on debt-to-equity ratio that complies with debt covenants and regulatory, if any. The debt-to-equity ratio is calculated as net debt divided by total equity. includes within net debt, loans and borrowings from financial institutions less cash and cash equivalents. Capital includes equity attributable to the owners of the parent and non-controlling interest. The debt-to-equity ratio of the Group at the end of the reporting period was as follows:- Bills payable (Note 28) 12,115 13,732 Hire purchase payables (Note 22) 1,711 2,054 Term loans (Note 23) 1,683 2,057 Bank overdrafts (Note 29) 2,977 4,003 18,486 21,846 Less: Fixed deposits with licensed banks (Note 16) (738) (4,625) Less: Cash and bank balances (3,943) (1,654) Net debt 13,805 15,567 Total equity 129, ,762 Debt-to-equity ratio is also required to comply with certain loan covenants as disclosed in Note 28 to the financial statements, failing which, the banks may call an event of default. has complied with this requirement. 104

107 Annual Report Notes to the Financial Statements For the financial year ended 31 March 42. FINANCIAL INSTRUMENTS (CONT D) 42.3 CLASSIFICATION OF FINANCIAL INSTRUMENTS The Company Financial Assets Available-for-sale Financial Assets Other investment (Note 10) 1,677 1, Loans and Receivables Financial Assets Trade receivables (Note 13) 20,479 22, Other receivables and deposits (Note 14) 8,196 7, Amount owing by subsidiaries (Note 15) ,818 24,158 Fixed deposits with licensed Banks (Note 16) 738 4, Cash and bank balances 3,943 1, ,356 36,344 23,825 24,188 Fair Value through Profit or Loss: Held-for-trading Short-term investments (Note 12) Financial Liabilities Other Financial Liabilities Trade payables (Note 25) 6,641 2, Other payables and accruals (Note 26) 2,763 2, Amount owing to a related party (Note 27) Bills payable (Note 28) 12,115 13, Hire purchase payables (Note 22) 1,711 2, Term loans (Note 23) 1,683 2, Bank overdrafts (Note 29) 2,977 4, ,890 27, FAIR VALUE INFORMATION The fair values of the financial assets and financial liabilities of the Group which are maturing within the next 12 months approximated their carrying amounts due to the relatively short-term maturity of the financial instruments or repayable on demand terms. The fair value of the Group s investment in unquoted shares that with carrying amount of RM1,677,000 ( - RM1,677,000) is not presented due to the lack of marketability of the shares and the fair value cannot be reliably measured. 105

108 resintech berhad ( X) Notes to the Financial Statements For the financial year ended 31 March 42. FINANCIAL INSTRUMENTS (CONT D) 42.4 FAIR VALUE INFORMATION (Cont d) The following table sets out the fair value profile of financial instruments that are carried at fair value and those not carried at fair value at the end of the reporting period:- Fair Value of Financial Instruments Carried At Fair Value Level 1 Level 2 Level 3 Fair Value of Financial Instruments Not Carried At Fair Value Total Fair Carrying Level 1 Level 2 Level 3 Value Amount Financial Assets Short-term investments: - quoted shares Financial Liabilities Term loans ,683-1,683 1,683 Hire purchase payables ,711-1,711 1,711 Financial Assets Short-term investments: - quoted shares Financial Liabilities Term loans ,057-2,057 2,057 Hire purchase payables ,054-2,054 2,

109 Annual Report Notes to the Financial Statements For the financial year ended 31 March 42. FINANCIAL INSTRUMENTS (CONT D) 42.4 FAIR VALUE INFORMATION (CONT D) Fair Value of Financial Instruments Carried at Fair Value (i) The fair values above are for disclosure purposes and have been determined using the following basis:- (aa) The fair values of quoted investments is determined at their quoted closing bid prices at the end of the reporting period. (bb) The fair values of hire purchase payables and term loans are determined by discounting the relevant cash flow using interest rates for similar instruments at the end of the reporting period. The interest rates used to discount the estimated cash flows are as follows:- % % Hire purchase payables Term loans (ii) There were no transfer between level 1 and level 2 during the financial year. 43. SIGNIFICANT EVENT DURING THE FINANCIAL YEAR The Companies Act came into effect on 31 January (except for Section 241 and Division 8 of Part III of the said Act) and replaces the existing Companies Act Amongst the key changes introduced under the Companies Act that have affected the financial statements of the Group and of the Company upon its initial adoption are:- (i) (ii) (iii) Removal of the authorised share capital; and Ordinary shares will cease to have par value. Share premium account will become part of the share capital. The adoption of the Companies Act had been applied prospectively and the impacts of adoption are disclosed in the respective notes to the financial statements. 107

110 resintech berhad ( X) Notes to the Financial Statements For the financial year ended 31 March 44. SUPPLEMENTARY INFORMATION DISCLOSURE OF REALISED AND UNREALISED PROFITS/LOSSES The breakdown of retained profits of the Group and of the Company as at the end of the reporting period into realised and unrealised profits are presented in accordance with the directive issued by Bursa Malaysia Securities Berhad and prepared 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, as follows:- The Company Total retained profits: - realised 70,768 66,423 (1,724) (1,286) - unrealised 3,067 (409) ,835 66,014 (1,724) (1,286) Total share of retained profits of an associate: - realised - (258) ,835 65,756 (1,724) (1,286) Less: Consolidated adjustments (44,073) (44,355) ,762 21,401 (1,724) (1,286) 108

111 analysis of Annual Report shareholdings As at 30 June Number of Issued Shares : 137,204,900 ordinary shares Class of Shares : Ordinary shares Voting Rights : Every member of the Company, present in person or by proxy or by attorney or other duly authorised representative, shall have on a show of hands, one (1) vote or on a poll, one (1) vote for each ordinary share held Number of Shareholders : 1,371 DISTRIBUTION OF SHAREHOLDINGS Size of Shareholdings No. of Holders % No. of Shares % Less than , to 1, , ,001 to 10, ,399, ,001 to 100, ,743, ,001 to 6,860,244* ,818, ,860,245 and above** ,203, , ,204, Notes: * Less than 5% of issued shares ** 5% and above of issued shares LIST OF SUBSTANTIAL SHAREHOLDERS ACCORDING TO THE REGISTER OF SUBSTANTIAL SHAREHOLDERS No. Substantial Shareholders Direct Interest % Indirect Interest % 1 Dato Dr. Teh Kim Poo 58,975, ,173,602* Tema Evolusi Sdn. Bhd. 16,158, Datin Gan Jew 9,868, ,280,601* * Deemed interested by virtue of shareholdings held by spouse and/or children. LIST OF DIRECTORS SHAREHOLDING ACCORDING TO THE REGISTER OF DIRECTORS SHAREHOLDINGS Directors Direct Interest % Indirect Interest % Dato Abu Sujak Bin Mahmud Dato Dr. Teh Kim Poo 58,975, ,173,602* Datin Gan Jew 9,868, ,280,601* Teh Leng Kang 6,200, Khairul Anuar Bin Shaharudin Wei Hwei Hong - - 6,200,002* 4.52 Kok Wee Wah * Deemed interested by virtue of shareholdings held by spouse and/or children. 109

112 resintech berhad ( X) Analysis of Shareholdings As at 30 June THIRTY (30) LARGEST SECURITIES ACCOUNT HOLDERS FOR ORDINARY SHARES (without aggregating securities from different securities accounts belonging to the same person) No. Name No. of Shares Held % 1 Dato Dr. Teh Kim Poo 35,982, HLB Nominees (Tempatan) Sdn. Bhd. [Qualifier: Pledged Securities Account for Dato Dr. Teh Kim Poo (PJCAC)] 20,423, Tema Evolusi Sdn. Bhd. 16,158, Datin Gan Jew 9,868, Teh Leng Kang 4,200, Techvilla Engineering Sdn. Bhd. 3,352, Dato Dr. Teh Kim Poo 2,569, Teh Leng Kang 2,000, Chee Kwai Heong 1,409, Yap Han Lian 1,166, Affin Hwang Nominees (Tempatan) Sdn. Bhd. [Qualifier: Pledged Securities Account for Lee Heng Chan (LEE0925C)] 709, Tng Su May 700, Lai Thiam Poh 685, RHB Nominees (Tempatan) Sdn. Bhd. [Qualifier: Pledged Securities Account for Koay Kai Beng] 650, Chong Yoon Fook 625, Lim Boon Siong 622, CIMB Group Nominees (Tempatan) Sdn. Bhd. [Qualifier: Hong Leong Asset Management Bhd for Ngam Mun Choon (EC100)] 18 HLB Nominees (Tempatan) Sdn. Bhd. [Qualifier: Pledged Securities Account for Chee Sai Mun] 600, , Ong Lai Wah 530, Tew Shau Yeng 523, Ei Kim Hock 500, Lee Jam 494, Kenanga Nominees (Tempatan) Sdn. Bhd. [Qualifier: Rakuten Trade Sdn. Bhd. for Yeo Jin Hui] 24 Maybank Nominees (Tempatan) Sdn. Bhd. [Qualifier: Pledged Securities Account for Beh Hang Kong] 425, , Mohamad Nizam bin Yaacob 420, Ong Seng Ong Ah Bah 400, Lim Gaik Lim Chiew Ah 386, Teo Chow Seng 381, Kenanga Nominees (Tempatan) Sdn. Bhd. [Qualifier: Rakuten Trade Sdn. Bhd. for Ng Chee Kuan] 350, Tan Guat Tuan 330,

113 Annual Report list of properties As at 30 June Location Description/ Existing Use Build-up Area/ Land Area* (sq.ft.) Tenure Registered Owner Approximate Age of Buildings Net Book Value (RM) Date of Last valuation Lot 5, Jalan Waja 14 Kawasan Perindustrian Telok Panglima Garang Telok Panglima Garang Selangor Darul Ehsan Single-storey detached factory, a three-storey office block and single storey hall with additional 2 floors 177,139 / 237,185* To be issued with a 99-year leasehold qualified title. RPSB 17 years 21,732, March 2015 Lot PT Pandamaran Port Klang Selangor Darul Ehsan Vacant commercial land 1,600* Leasehold 99 years expiring on 26 August 2087 RPSB n/a 213, March 2015 Lot PT Pandamaran Jaya Industrial Mukim Klang Selangor Darul Ehsan Single-storey semi-detached warehouse 6,000 / 9,075* Leasehold 60 years expiring on 16 Mac 2068 RPSB 9 years 1,986, March 2015 Lot PT Pandamaran Jaya Industrial Mukim Klang Selangor Darul Ehsan Single-storey semi-detached warehouse 6,000 / 9,075* Leasehold 60 years expiring on 16 Mac 2068 RPSB 9 years 525, March 2015 Lot 1851 Jalan Camp, Port Klang Selangor Darul Ehsan Vacant industrial land 215,056* Leasehold 99 years expiring on 7 April 2090 RPSB n/a 4,171, March 2015 Lot 107 Block 14 Batu 24, Kuching/Serian Road Sentah/ Segu Land District Kuching Division Sarawak Single-storey detached factory 12,680 / 150,898* Leasehold 60 years expiring on 14 December 2070 RPSB 8 year 2,572, March 2015 Lot 24 & 25 Export Oriented Industrial Zone Phase 2 Kota Kinabalu Industrial Park Sabah Single-storey detached warehouse and a double-storey office block 36,152 / 175,547* 31 December 2096 RPSB 9 year 9,778, March 2015 Lot 3 Jalan Waja 15 Kawasan Perindustrian Telok Panglima Garang Telok Panglima Garang Selangor Darul Ehsan 4 single-storey warehouses 117,600 / 240,508* Leasehold 99 years expiring on 9 September 2103 ELSB 17 years 20,500, April Lot 6461 Batu 5¾ Jalan Kapar Kapar Selangor Darul Ehsan Double-storey factory building cum office block, a double storey canteen block cum store, a guard house and a motorcycle shed 41,924 / 219,978* Freehold RPSB 24 years 17,120, April 111

114 resintech berhad ( X) List of Properties As at 30 June Location Sub-Lot 298, Kawasan Perindustrian Gebeng, Mukim Sungai Karang, Daerah Kuantan, Pahang Description/ Existing Use Vacant industrial land Build-up Area/ Land Area* (sq.ft.) Tenure 27,975* Leasehold 99 years expiring on 15 January 2102 Registered Owner Approximate Age of Buildings Net Book Value (RM) Date of Last valuation RPMSB n/a 683, March 2015 Sub-Lot 302, Kawasan Perindustrian Gebeng, Mukim Sungai Karang, Daerah Kuantan, Pahang Vacant industrial land 28,363* Leasehold 99 years expiring on 15 January 2102 RPMSB n/a 693, March 2015 No 906, Jalan IKS Juru, Juru, Simpang Ampat, Pulau Pinang Single-storey store and office 6,000 / 47,899* Freehold RPMSB 7 year 2,761, March 2015 Lot 3911 Jalan Riang 21/6 Taman Gembira Johor Bahru Two and half Storey detached factory 31,484 / 29,554* Freehold RPMSB 9 year 4,616, March 2015 No 13, Jalan AP 1 Taman Alai Perdana Melaka Three-storey commercial office 3,914 / 1,323* Leasehold 99 years expiring 1 October 2096 RPSB 13 year 200, May Blok E2 Latrade Industrial Park Jl Sei Binti Tanjung Uncang Batam Indonesia Single-storey factory with attached twostorey office 6,743/6,753* Leasehold expiring 25 March 2030 PTRI 11 year 4,328, March 2015 Blok E4 Latrade Industrial Park Jl Sei Binti Tanjung Uncang Batam Indonesia Vacant industrial land 8,612* Leasehold expiring 28 September 2036 PTRI n/a 1,964, March 2015 Blok D No 1 Top100 Mall Batam Single-storey commercial shop lot 1,345/1,152* Leasehold expiring 13 April 2034 PTRI 8 year 464, March 2015 Blok D No 2 Top100 Mall Batam Single-storey commercial shop lot 1,485/893* Leasehold expiring 13 April 2034 PTRI 8 year 414, March 2015 No 20 EO & 22EO Street No 1019 Northbridge Phnom Penh Kingdom of Cambodia Two a djoining three-storey shop flats 8,267/1,959* Freehold SPCCL 4 year 2,685, April 112

115 Annual Report List of Properties As at 30 June Location Samdech Tep Vong Street Village of Mondol 1 Commune of Svay Dangkum Siem Reap Kingdom of Cambodia Description/ Existing Use Two adjoining three-storey shop flats Build-up Area/ Land Area* (sq.ft.) Tenure Registered Owner Approximate Age of Buildings Net Book Value (RM) Date of Last valuation 5,877/2,164* Freehold SPCCL 4 year 2,805, April Ekarech Boulevard Village of 3 Commune of 2 Vacant land 3,810* Freehold SPCCL n/a 1,520, April PP13504 National Road No 5 Village of 3 Commune of Chrang Chamres 1 Kingdom of Cambodia Two adjoining three-storey shop flats 1,367/6,986 Freehold SPCCL 5 year 1,685, April PP13363 National Road No 5 Village of 3 Commune of Chrang Chamres 1 Kingdom of Cambodia Three adjoining three-storey shop flats 3,380/10,441* Freehold SPCCL 5 year 2,536, April 113

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117 CDS Account No. form of proxy No. of Shares held *I/We NRIC No. /Passport No. /Company No. of being a member/members of RESINTECH BERHAD ( X), hereby appoint, NRIC No. / Passport No. of *and/ or failing *him/her,, NRIC No. / Passport No. of or failing *him/her, *the Chairman of the Meeting as *my/our proxy to attend and vote on *my/our behalf at the Twenty-Second Annual General Meeting of the Company to be held at Concorde Hotel Shah Alam, Gallery 1, Level 3, No. 3 Jalan Tengku Ampuan Zabedah, Shah Alam, Selangor Darul Ehsan on Wednesday, 30 August at 9.00 a.m. and at any adjournment thereof and to vote as indicated below: Ordinary Resolutions For Against Ordinary Business 1 To re-elect Mr Teh Leng Kang as a Director of the Company 2 To re-elect Encik Khairul Anuar Bin Shaharudin as a Director of the Company 3 To approve the payment of Directors Fees 4 To approve the payment of Directors Remuneration (excluding Directors Fees) payable to the Board of the Company and its subsidiaries 5 To re-appoint Messrs Crowe Horwath as Auditors of the Company Special Business 6 To approve the Authority to Issue and Allot Shares 7 To approve Encik Khairul Anuar bin Shaharudin to continue act as an Independent Non-Executive Director 8 To approve Mr Kok Wee Wah to continue act as an Independent Non-Executive Director (Please indicate with an X in the appropriate boxes on how you wish your vote to be cast. Unless voting instructions are indicated in the space above, the proxy will vote as he/she thinks fit.) * Delete where applicable For appointment of two proxies by exempt authorised Signed this day of nominee, percentage if shareholdings to be represented by the proxies: Signature/Common Seal of Member No. of shares Percentage Proxy 1 Proxy 2 Total 100% Notes: 1. Member entitled to attend and vote at the meeting may appoint another person as his proxy to attend and vote in his stead. A proxy may but need not be a member of the Company. If the proxy is not a member, the proxy need not be an advocate, an approved company auditor or a person approved by the Registrar of Companies. 2. A Member may appoint only one (1) proxy or attorney or authorised representative. Where a member is an authorised nominee as defined under the Securities Industry (Central Depositories) Act, 1991, it may appoint only (1) proxy in respect of each securities account it holds with ordinary shares of the company standing to the credit of the said securities account. 3. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account ( omnibus account ), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds. 4. The instrument appointing a proxy shall be in writing (in the common or usual form) under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation, either under seal or under the hand of an officer or attorney duly authorised. 5. The instrument appointing a proxy and the power of attorney or other attorney, if any, under which it is signed or a notarially certified copy of that power or authority shall be deposited at Symphony Share Registrars Sdn Bhd, Level 6, Symphony House, Pusat Dagangan Dana 1, Jalan PJU 1A/46, Petaling Jaya, Selangor Darul Ehsan not less than forty-eight (48) hours before the time for holding of the meeting or adjourned meeting. 6. The Date of Record of Depositors for the purpose of determining members entitlement to attend, vote and speak at the meeting is 22 August.