MUAR BAN LEE GROUP BERHAD (Company No: P) (Incorporated in Malaysia) REPORTS AND FINANCIAL STATEMENTS 31 DECEMBER 2013

Transcription

1 MUAR BAN LEE GROUP BERHAD (Company No: P) (Incorporated in Malaysia) REPORTS AND FINANCIAL STATEMENTS 31 DECEMBER 2013 Registered office: 87 Lebuh Muntri Penang Principal place of business: No JR52 Lot 1818 Jalan Raja Kawasan Perindustrian Bukit Pasir Muar Johor

2 MUAR BAN LEE GROUP BERHAD (Incorporated in Malaysia) REPORTS AND FINANCIAL STATEMENTS 31 DECEMBER 2013 INDEX ***** Page No. DIRECTORS REPORT 1-6 STATEMENT BY DIRECTORS 7 STATUTORY DECLARATION 8 INDEPENDENT AUDITORS REPORT TO THE MEMBERS 9-11 CONSOLIDATED STATEMENT OF FINANCIAL POSITION CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 14 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY CONSOLIDATED STATEMENT OF CASH FLOWS STATEMENT OF FINANCIAL POSITION 20 STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 21 STATEMENT OF CHANGES IN EQUITY 22 STATEMENT OF CASH FLOWS 23 NOTES TO THE FINANCIAL STATEMENTS SUPPLEMENTARY INFORMATION BREAKDOWN OF RETAINED PROFITS INTO REALISED AND UNREALISED 87

3 - 1 - MUAR BAN LEE GROUP BERHAD (Incorporated in Malaysia) DIRECTORS REPORT The Directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the financial year ended 31 December Principal Activities The Company is an investment holding. The principal activities of the subsidiaries are disclosed in Note 6 to the financial statements. There have been no significant changes in the nature of these principal activities during the financial year. Financial Results Group RM Company RM Profit for the financial year 6,282,986 5,443,906 Profit attributable to: Owners of the parent 6,305,836 5,443,906 Non-controlling interests (22,850) - 6,282,986 5,443,906 Dividends Since the end of last financial year, the Company paid: (a) (b) Final single tier dividend of 3.0 sen per share of RM0.50 each totalling RM2,760,000 in respect of the financial year ended 31 December 2012 on 23 July 2013; and First interim single tier dividend of 4.0 sen per share of RM0.50 each totalling RM3,680,000 in respect of the financial year ended 31 December 2013 on 28 November A second interim single tier dividend of 3.0 sen per share of RM0.50 each totalling RM2,760,000 in respect of the financial year ended 31 December 2013 will be paid on 30 April The Directors do not recommend any final dividend in respect of the financial year ended 31 December Reserves and Provisions There were no material transfers to or from reserves or provisions during the financial year.

4 - 2 - Issue of Shares and Debentures There was no issuance of shares or debentures during the financial year. Options Granted Over Unissued Shares No options were granted to any person to take up unissued shares of the Company during the financial year. Directors The Directors in office since the date of the last report are: Dato Chua Ah Chua Eng Ka Chua En Hom Chua Eng Hui Chua Heok Wee Tan Sri Dato Seri Tan King Tan Khoon Hai Teh Eng Aun Khairilanuar Bin Tun Abdul Rahman Hj Ismail Bin Hj Ahmad Directors Interests The interest of the Directors who held office at the end of the financial year in shares in the Company and its related companies are as follows: Number of ordinary shares of RM0.50 each At At The Company Addition Disposed Direct Interest Dato' Chua Ah Chua Eng Ka 150, , ,000 Chua En Hom 150, ,000 Chua Eng Hui 150, ,000 Chua Heok Wee 150, ,000 Tan Sri Dato' Seri Tan King Tan Khoon Hai 7,463,300 12,200-7,475,500 Khairilanuar Bin Tun Abdul Rahman 150, ,000 Hj Ismail Bin Hj Ahmad 30, ,000

5 - 3 - Directors Interests (Cont d) Number of ordinary shares of RM1 each Holding Company At At (MBL Realty Sdn. Bhd.) Addition Disposed Direct Interest Dato' Chua Ah Chua Eng Ka 40, ,000 Chua En Hom 20, ,000 Chua Eng Hui 20, ,000 Chua Heok Wee 20, ,000 By virtue of their interest in the Company, Dato Chua Ah Chua Eng Ka, Chua En Hom, Chua Eng Hui and Chua Heok Wee are deemed to have interest in all the related companies to the extent that the Company has an interest under Section 6A of the Companies Act, Directors Benefits Since the end of the previous financial year, no Director of the Company has received or become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by Directors as shown in the financial statements) by reason of a contract made by the Company or a related corporations with the Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest, other than certain Directors who have significant financial interests in companies which traded with certain companies in the Group in the ordinary course of business as disclosed in Note 34 to the financial statements. Neither during nor at the end of the financial year, was the Company a party to any arrangement the object of which 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.

6 - 4 - Other Statutory Information (a) Before the statements of profit or loss and other comprehensive income and statements of financial position of the Group and of the Company were made out, the Directors took reasonable steps: (i) (ii) to ascertain that action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts and satisfied themselves that there were no known bad debts to be written-off and no allowance for doubtful debts was required; and to ensure that any current assets which were unlikely to realise their values as shown in the accounting records in the ordinary course of business had been written down to an amount which they might be expected so to realise. (b) At the date of this report, the Directors are not aware of any circumstances: (i) (ii) which would render it necessary to write off any bad debts or to make any allowance for doubtful debts in the financial statements of the Group and of the Company; or which would render the values attributed to the current assets in the financial statements of the Group and of the Company misleading; or (iii) which have arisen which would render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate; or (iv) not otherwise dealt with in this report or the financial statements which would render any amount stated in the financial statements misleading. (c) At the date of this report, there does not exist: (i) (ii) any charge on the assets of the Group and of the Company which has arisen since the end of the financial year which secures the liabilities of any other person; or any contingent liability in respect of the Group and of the Company which has arisen since the end of the financial year. (d) In the opinion of the Directors: (i) (ii) no contingent or other liabilities of the Group and of the Company have become enforceable or are likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may affect the ability of the Group and of the Company to meet their obligations as and when they fall due; the results of the operations of the Group and of the Company during the financial year were not substantially affected by any item, transaction or event of a material and unusual nature; and (iii) there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely to affect substantially the results of the operations of the Group and of the Company for the financial year in which this report is made.

7 - 5 - Subsequent Event The subsequent event is disclosed in Note 38 to the financial statements. Holding Company The Directors regard MBL Realty Sdn. Bhd., a company incorporated in Malaysia as the holding company.

8 - 6 - Auditors The auditors, Messrs UHY, have expressed their willingness to continue in office. Signed on behalf of the Board of Directors in accordance with a resolution dated 25 April CHUA ENG HUI CHUA EN HOM

9 - 7 - MUAR BAN LEE GROUP BERHAD (Incorporated in Malaysia) STATEMENT BY DIRECTORS Pursuant to Section 169(15) of the Companies Act, 1965 We, the undersigned, being two of the Directors of MUAR BAN LEE GROUP BERHAD, do hereby state that, in the opinion of the Directors, the financial statements set out on pages 12 to 86 are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2013 and of their financial performance and the cash flows for the financial year then ended. The supplementary information set out in page 87 have been compiled 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 on behalf of the Board of Directors in accordance with a resolution dated 25 April CHUA ENG HUI CHUA EN HOM

10 - 8 - MUAR BAN LEE GROUP BERHAD (Incorporated in Malaysia) STATUTORY DECLARATION Pursuant to Section 169(16) of the Companies Act, 1965 I, CHUA ENG HUI, being the Director primarily responsible for the financial management of MUAR BAN LEE GROUP BERHAD, do solemnly and sincerely declare that the financial statements set out on pages 12 to 86 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 the abovenamed at Kuala Lumpur in the Federal Territory on 25 April 2014 ) ) ) ) CHUA ENG HUI Before me, No. W 521 MOHAN A.S. MANIAM COMMISSIONER FOR OATHS

11 - 9 - INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF MUAR BAN LEE GROUP BERHAD (Company No.: P) (Incorporated in Malaysia) Report on the Financial Statements We have audited the financial statements of MUAR BAN LEE GROUP BERHAD, which comprise the statements of financial position as at 31 December 2013 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 a summary of significant accounting policies and other explanatory information, as set out on pages 12 to 86. Directors Responsibility for the Financial Statements The Directors of the Company are responsible for the preparation of financial statements 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, 1965 in Malaysia, and for such internal control as the Directors determine are necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

12 INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF MUAR BAN LEE GROUP BERHAD (CONT D) (Company No.: P) (Incorporated in Malaysia) Opinion In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company as of 31 December 2013 and of their financial performance and 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, 1965 in Malaysia. Report on Other Legal and Regulatory Requirements In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report the followings: (a) (b) (c) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act. We are satisfied that the accounts of the subsidiaries that have been consolidated with the Company s financial statements are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group and we have received satisfactory information and explanations required by us for those purposes. The audit reports on the accounts of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Act. Other Reporting Responsibilities The supplementary information set out on page 87 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad ( Bursa Malaysia ) 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 Securities. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia.

13 INDEPENDENT AUDITORS REPORT TO THE MEMBERS OF MUAR BAN LEE GROUP BERHAD (CONT D) (Company No.: P) (Incorporated in Malaysia) Other Matters The financial statements of the Group and of the Company for the financial year ended 31 December 2012 were audited by another auditor who expressed an unqualified opinion on those statements on 25 April This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report. UHY Firm Number: AF 1411 Chartered Accountants NG WEE TEIK Approved Number: 1817/12/14(J) Chartered Accountant KUALA LUMPUR 25 April 2014

14 MUAR BAN LEE GROUP BERHAD (Incorporated in Malaysia) CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2013 ASSETS Non-Current Assets Note RM RM Property, plant and equipment 4 23,641,222 17,799,566 Investment properties 5 326,613 - Intangible assets 7 2,942, ,071 Other investments 8 450, ,000 Current Assets 27,360,013 18,679,637 Inventories 9 22,607,924 17,150,642 Trade receivables 10 8,883,107 22,708,909 Other receivables 11 2,541,308 2,362,863 Fixed deposits with licensed banks, bank and cash balances 13 35,826,062 37,476,777 69,858,401 79,699,191 Total Assets 97,218,414 98,378,828 EQUITY Share capital 14 46,000,000 46,000,000 Share premium 15 1,157,846 1,157,846 Revaluation reserve 16 2,653,280 2,653,280 Discount on shares 17 (13,340,000) (13,340,000) Warrant reserves 17 17,940,000 17,940,000 Retained earnings 18 27,038,313 27,172,477 Equity attributable to owners of the parent 81,449,439 81,583,603 Non-controlling interests 49,732 72,582 Total Equity 81,499,171 81,656,185

15 MUAR BAN LEE GROUP BERHAD (Incorporated in Malaysia) CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2013 (CONT D) LIABILITIES Non-Current Liabilities Note RM RM Deferred tax liabilities 19 1,239,000 1,139,000 Hire purchase payables , ,081 Bank borrowing 21 3,997,409 - Current Liabilities 5,577,301 1,604,081 Trade payables 22 3,308,663 4,182,493 Other payables 23 6,118,238 10,566,164 Hire purchase payables , ,931 Bank borrowing ,880 - Tax liabilities 158, ,974 10,141,942 15,118,562 Total Liabilities 15,719,243 16,722,643 Total Equity and Liabilities 97,218,414 98,378,828 The accompanying notes form an integral part of the financial statements.

16 MUAR BAN LEE GROUP BERHAD (Incorporated in Malaysia) CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 31 DECEMBER Note RM RM Revenue 25 50,334,866 78,799,266 Cost of sales (26,404,213) (45,603,549) Gross profit 23,930,653 33,195,717 Other income 1,669,065 2,512,761 Distribution and administration expenses (17,984,684) (18,358,224) Profit from operations 7,615,034 17,350,254 Finance costs 26 (75,425) (16,335) Profit before tax 27 7,539,609 17,333,919 Taxation 29 (1,256,623) (949,053) Profit for the financial year 6,282,986 16,384,866 Other comprehensive income Disposal of revalued land - 280,360 Other comprehensive income for the financial year - 280,360 Total comprehensive income for the financial year 6,282,986 16,665,226 Profit attributable to: Owners of the parent 6,305,836 16,414,919 Non-controlling interests (22,850) (30,053) 6,282,986 16,384,866 Total comprehensive income attributable to: Owners of the parent 6,305,836 16,695,279 Non-controlling interests (22,850) (30,053) 6,282,986 16,665,226 Basic earnings per share (sen) 30(a) Diluted earnings per share (sen) 30(b) The accompanying notes form an integral part of the financial statements.

17 MUAR BAN LEE GROUP BERHAD (Incorporated in Malaysia) CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013 Non-distributable Attributable to owners of the parent Distributable Share capital Share premium Revaluation reserve Discount on shares Warrant reserves Retained earnings Total Noncontrolling interests Total equity Note RM RM RM RM RM RM RM RM RM At 1 January ,000,000 1,157,846 2,933, ,677,198 69,768,684 52,602 69,821,286 Profit for the financial year ,414,919 16,414,919 (30,053) 16,384,866 Other comprehensive income for the financial year - - (280,360) , Total comprehensive income for the financial year Transaction with owners: - - (280,360) ,695,279 16,414,919 (30,053) 16,384,866 Fair value on right issue of warrants (13,340,000) 17,940,000-4,600,000-4,600,000 Dividends to owners of the Company (9,200,000) (9,200,000) - (9,200,000) (13,340,000) 17,940,000 (9,200,000) (4,600,000) - (4,600,000) Acquisition of subsidiaries ,033 50,033 Total transactions with owners (13,340,000) 17,940,000 (9,200,000) (4,600,000) 50,033 (4,549,967) At 31 December ,000,000 1,157,846 2,653,280 (13,340,000) 17,940,000 27,172,477 81,583,603 72,582 81,656,185

18 MUAR BAN LEE GROUP BERHAD (Incorporated in Malaysia) CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013 (CONT D) Non-distributable Attributable to owners of the parent Distributable Share capital Share premium Revaluation reserve Discount on shares Warrant reserves Retained earnings Total Noncontrolling interests Total equity Note RM RM RM RM RM RM RM RM RM At 1 January ,000,000 1,157,846 2,653,280 (13,340,000) 17,940,000 27,172,477 81,583,603 72,582 81,656,185 Total comprehensive income for the financial year ,305,836 6,305,836 (22,850) 6,282,986 Transaction with owners: Dividends to owners of the Company (6,440,000) (6,440,000) - (6,440,000) At 31 December ,000,000 1,157,846 2,653,280 (13,340,000) 17,940,000 27,038,313 81,449,439 49,732 81,499,171 The accompanying notes form an integral part of the financial statements.

19 MUAR BAN LEE GROUP BERHAD (Incorporated in Malaysia) CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER Note RM RM Cash Flows From Operating Activities Profit before tax 7,539,609 17,333,919 Adjustments for: Depreciation of investment properties 3,601 - Depreciation of property, plant and equipment 1,551,679 1,515,682 Impairment loss on: - goodwill 6,072 12,684 - trade receivables - 200,000 Interest expenses 75,425 16,335 Interest income (992,657) (598,262) Gain on disposal of property, plant and equipment - (413,257) Net fair value loss on derivative liabilities - (97,482) Unrealised gain on foreign exchange (481,297) - Operating profit before working capital changes 7,702,432 17,969,619 Changes in working capital Inventories (5,457,282) 8,991,990 Receivables 13,828,716 (5,584,158) Payables (5,347,910) 1,233,386 3,023,524 4,641,218 Cash generated from operations 10,725,956 22,610,837 Tax (paid)/refunded (1,172,999) 24,518 Net cash generated from operating activities 9,552,957 22,635,355 Cash Flows From Investing Activities Acquisition of intangible assets (512,109) - Acquisition of property, plant and equipment (i) (7,623,549) (1,538,562) Acquisition of subsidiaries, net of cash and cash equivalents acquired (ii) (1,999,998) 50,033 Interest received 992, ,262 Proceeds from disposal of property, plant and equipment - 1,931,328 Net cash (used in)/generated from investing activities (9,142,999) 1,041,061

20 MUAR BAN LEE GROUP BERHAD (Incorporated in Malaysia) CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013 (CONT D) Note RM RM Cash Flows From Financing Activities Dividends paid (6,440,000) (9,200,000) Interest paid (75,425) (16,335) (Placement)/Withdrawal of pledged fixed deposits (11,787) 1,211,401 Proceeds from bank borrowing 4,450,000 - Proceeds from rights issue of warrants - 4,600,000 Repayments of bank borrowing (96,711) - Repayments of hire purchase payables (218,557) (144,139) Net cash used in financing activities (2,392,480) (3,549,073) Net (decrease)/increase in cash and cash equivalents (1,982,522) 20,127,343 Unrealised gain on foreign exchange 320,020 - Cash and cash equivalents at beginning of the financial year Cash and cash equivalents at end of the financial year 37,089,588 35,427,086 16,962,245 37,089,588 Cash and cash equivalents at end of the financial year comprise: Fixed deposits with licensed banks 23,776,253 10,111,974 Cash and bank balances 12,049,809 27,364,803 35,826,062 37,476,777 Less: Fixed deposits pledged (398,976) (387,189) 35,427,086 37,089,588

21 MUAR BAN LEE GROUP BERHAD (Incorporated in Malaysia) CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013 (CONT D) Notes: (i) Acquisition of property, plant and equipment During the financial year, the Group acquired property, plant and equipment with an aggregate cost of RM7,723,549 (2012: RM2,038,562) of which RM100,000 (2012: RM500,000) were financed by means of hire purchase arrangement. (ii) Acquisition of subsidiaries, net of cash and cash equivalents acquired RM RM Total purchase consideration discharged by cash (2,000,002) (150,000) Cash and cash equivalents of subsidiaries acquired 4 200,033 Net cash (outflow)/inflow on acquisition of subsidiaries (1,999,998) 50,033 The accompanying notes form an integral part of the financial statements.

22 ASSETS MUAR BAN LEE GROUP BERHAD (Incorporated in Malaysia) STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER Note RM RM Non-Current Assets Investments in subsidiary companies 6 36,524,999 36,424,999 Other investments 8 250, ,000 36,774,999 36,674,999 Current Assets Other receivables 11 33, ,072 Amounts owing by subsidiary companies 12 3,843, ,540 Tax assets 79,116 97,620 Fixed deposits with licensed banks, bank and cash balances 13 11,422,849 15,776,567 15,378,597 17,213,799 Total Assets 52,153,596 53,888,798 EQUITY Share capital 14 46,000,000 46,000,000 Share premium 15 1,157,846 1,157,846 Discount on shares 17 (13,340,000) (13,340,000) Warrant reserves 17 17,940,000 17,940,000 Retained earnings ,749 1,097,843 Total Equity 51,859,595 52,855,689 LIABILITIES Current Liabilities Other payables , ,109 Amounts owing to subsidiary companies ,000 Total liabilities 294,001 1,033,109 Total Equity and Liabilities 52,153,596 53,888,798 The accompanying notes form an integral part of the financial statements.

23 MUAR BAN LEE GROUP BERHAD (Incorporated in Malaysia) STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 31 DECEMBER Note RM RM Revenue 25 6,000,000 10,000,000 Other income 264,341 79,893 General and administration expenses (775,614) (1,155,458) Profit before tax 27 5,488,727 8,924,435 Taxation 29 (44,821) (671,273) Profit for the financial year, representing total comprehensive income for the financial year 5,443,906 8,253,162 The accompanying notes form an integral part of the financial statements.

24 MUAR BAN LEE GROUP BERHAD (Incorporated in Malaysia) STATEMENT OF CHANGES IN EQUITY FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2013 Non-distributable Distributable Share Share Discount Warrant Retained Total capital premium on shares reserves earnings equity Note RM RM RM RM RM RM At 1 January ,000,000 1,157, ,044,681 49,202,527 Total comprehensive income for the financial year ,253,162 8,253,162 Transaction with owners: Fair value of right issue of warrants (13,340,000) 17,940,000-4,600,000 Dividends to owners of the Company (9,200,000) (9,200,000) - - (13,340,000) 17,940,000 (9,200,000) (4,600,000) At 31 December ,000,000 1,157,846 (13,340,000) 17,940,000 1,097,843 52,855,689 At 1 January ,000,000 1,157,846 (13,340,000) 17,940,000 1,097,843 52,855,689 Total comprehensive income for the financial year ,443,906 5,443,906 Transaction with owners: Dividends to owners of the Company (6,440,000) (6,440,000) At 31 December ,000,000 1,157,846 (13,340,000) 17,940, ,749 51,859,595 The accompanying notes form an integral part of the financial statements.

25 MUAR BAN LEE GROUP BERHAD (Incorporated in Malaysia) STATEMENT OF CASH FLOWS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER RM RM Cash Flows From Operating Activities Profit before tax 5,488,727 8,924,435 Adjustments for: Dividend income (6,000,000) (10,000,000) Interest income (264,341) (79,893) Operating loss before working capital changes (775,614) (1,155,458) Changes in working capital Receivables 750,072 1,757,928 Payables 10,892 45, ,964 1,803,604 Cash (used in)/generated from operation (14,650) 648,146 Tax paid (26,317) (13,981) Net cash (used in)/generated from operating activities (40,967) 634,165 Cash Flows From Investing Activities Dividends received 6,000,000 10,000,000 Interest received 264,341 79,893 Investments in subsidiary companies (100,000) (95,000) Net cash generated from operating activities 6,164,341 9,984,893 Cash Flows From Financing Activities (Advances to)/repayment from subsidiary companies (4,037,092) 8,145,341 Dividend paid (6,440,000) (9,200,000) Proceeds from right issue of warrants - 4,600,000 Net cash (used in)/generated from financing activities (10,477,092) 3,545,341 Net (decrese)/increase in cash and cash equivalents (4,353,718) 14,164,399 Cash and cash equivalents at beginning of the financial year Cash and cash equivalents at end of the financial year 15,776,567 1,612,168 11,422,849 15,776,567 Cash and cash equivalents at end of the financial year comprise: Fixed deposits with licensed banks 4,000,000 11,500,000 Cash and bank balances 7,422,849 4,276,567 11,422,849 15,776,567 The accompanying notes form an integral part of the financial statements.

26 Corporate Information MUAR BAN LEE GROUP BERHAD (Incorporated in Malaysia) NOTES TO THE FINANCIAL STATEMENTS The Company is a public limited liability company, incorporated and domiciled in Malaysia and listed on the Main Market of Bursa Malaysia Securities Berhad ( Bursa Malaysia ). The registered office is located at 87 Lebuh Muntri, Penang. The Company's principal place of business is located at JR52, Lot 1818 Jalan Raja, Kawasan Perindustrian Bukit Pasir, Muar, Johor Darul Takzim. The Company is principally engaged in investment holding. The principal activities of its subsidiary companies are disclosed in Note 6. There have been no significant changes in the nature of these principal activities during the financial year. The holding company is MBL Realty Sdn. Bhd., a company incorporated and domiciled in Malaysia. 2. Basis of Preparation (a) Statement of compliance The financial statements of the Group and of the Company have been prepared in accordance with Malaysian Financial Reporting Standards ( MFRSs ), International Financial Reporting Standards ( IFRSs ) and the Companies Act, 1965 in Malaysia. The financial statements of the Group and of the Company have been prepared under the historical cost convention, unless otherwise indicated in the summary of significant accounting policies. During the financial year, the Group and the Company have adopted the following applicable new MFRSs, Issues Committee ( IC ) Interpretations and amendments to MFRSs issued by the Malaysian Accounting Standards Board ( MASB ) that are mandatory for current financial year: MFRS 10 MFRS 11 MFRS 12 MFRS 13 MFRS 119 (2012) MFRS 127 (2012) MFRS 128 (2012) MFRS 3 Consolidated Financial Statements Joint Arrangements Disclosure of Interests in Other Entities Fair Value Measurement Employee Benefits Separate Financial Statements Investments in Associates and Joint Ventures Business Combinations (IFRS 3 issued by IASB in March 2004)

27 Basis of Preparation (Cont d) (a) Statement of compliance (Cont d) MFRS 127 Consolidated and Separate Financial Statements (IAS 27 revised by IASB in December 2003) IC Interpretation 20 Stripping Costs in the Production of a Surface Mine Amendments to Government Loans MFRS 1 Amendments to Disclosure - Offsetting Financial Assets and Financial MFRS 7 Liabilities Amendments to Consolidated Financial Statements, Joint Arrangements and MFRSs 10, 11 and 12 Disclosure of Interests in Other Entities: Transition Amendments to MFRS 101 Guidance Presentation of Items of Other Comprehensive Income Amendments to MFRSs contained in the document entitled Annual Improvements Cycle The effects of the adoption of applicable MFRSs and amendments to MFRSs above are summarised below: (a) MFRS 10 Consolidated Financial Statements Under MFRS 10, an investor controls an investee when the investor has: (i) The power by investor over an investee; (ii) Exposure, or rights, to variable returns from investor s involvement with the investee; and (iii) Ability to affect those returns through its power over investee. This new control model differs from how previously companies were assessed to be a subsidiary. Under MFRS 127, control was defined as the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. Upon adoption of the two new MFRSs, the Group has reviewed the relationships with its investments in other entities to assess whether the conclusion to consolidate is different under MFRS 10 than under MFRS 127, and noted no material differences were found for any of the investments. As required under MFRS 10, the change in policy has been applied retrospectively.

28 Basis of Preparation (Cont d) (a) Statement of compliance (Cont d) The effects of the adoption of applicable MFRSs and amendments to MFRSs above are summarised below: (Cont d) (b) MFRS 12 Disclosure of Interests in Other Entities MFRS 12 includes all disclosure requirements for interests in subsidiaries, joint arrangements, associates and structured entities. A number of new disclosures are required. This standard affects disclosures only and has no impact on the Group s financial position or performance. (c) MFRS 127 Separate Financial Statements (as amended by IASB in May 2011) As a consequence of the new MFRS 10 and MFRS 12, MFRS 127 is limited to accounting for subsidiaries, joint controlled entities and associates in separate financial statements. This standard affects disclosures only and has no impact on the Group s financial position or performance. (d) MFRS 13 Fair Value Measurement MFRS 13 establishes a single source of guidance under MFRS for all fair value measurements. MFRS 13 does not change when an entity is required to use fair value, but rather provides guidance on how to measure fair value under MFRS. MFRS 13 defines fair value as an exit price. As a result of the guidance in MFRS 13, the Group re-assessed its policies for measuring fair values, in particular, its valuation inputs such as non-performance risk for fair value measurement of liabilities. MFRS 13 also requires additional disclosures. Application of MFRS 13 has not materially impacted the fair value measurement of the Group. Additional disclosures where required, are provided in the individual notes relating to the assets and liabilities whose fair values were determined. (e) MFRS 119 Employee Benefits (as amended by IASB in June 2011) The adoption of the revised MFRS 119 has affected the accounting treatment of certain items such as the timing of the recognition of actuarial gains and losses arising from defined benefit plans and the presentation of changes in defined benefit liability or asset. The key changes include: Actuarial gains and losses (renamed as remeasurements ) are recognised immediately in other comprehensive income, and are not subsequently recycled to statement of profit or loss. The corridor approach for accounting for unrecognised actuarial gains in prior years is discontinued. Past service costs, whether unvested or already vested, are recognised immediately in the statement of profit or loss as incurred and the annual defined benefit costs in the statement of profit or loss will include net interest expense/ income on the defined benefit asset/liability.

29 Basis of Preparation (Cont d) (a) Statement of compliance (Cont d) The effects of the adoption of applicable MFRSs and amendments to MFRSs above are summarised below: (Cont d) (e) MFRS 119 Employee Benefits (as amended by IASB in June 2011) (Cont d) The adoption of this revised MFRS 119 has resulted in changes to the recognition and measurement of defined benefit pension expense and termination benefits, and to the disclosures for all employee benefits. This change in accounting policy has been accounted for retrospectively. (f) Amendments to MFRS 101: Presentation of Items of Other Comprehensive Income The amendments to MFRS 101 introduce a grouping of items presented in other comprehensive income. Items that will be reclassified ( recycled ) to profit or loss at a future point in time (e.g. net loss or gain on available-for-sale financial assets) have to be presented separately from items that will not be reclassified (e.g. revaluation of land and buildings). The amendments affect presentation only and have no impact on the Group s financial position or performance. The Group and the Company have not applied the following MFRSs that have been issued by the MASB but are not yet effective for the Group and the Company: Amendments to MFRS 10, 12 and 127 Amendments to MFRS 132 Amendments to MFRS 136 Amendments to MFRS 139 Effective date for financial periods beginning on or after Investment Entities 1 January 2014 Offsetting Financial Assets and Financial Liabilities Recoverable Amount Disclosure for Non-Financial Assets Novation of Derivatives and Continuation of Hedge Accounting 1 January January January 2014 IC Interpretation 21 Levies 1 January 2014 Amendments to MFRS 2, MFRS 3, MFRS 8, MFRS 116, MFRS 124 and MFRS 138 Annual Improvements to MFRSs Cycle 1 July 2014 Amendments to MFRS 3, MFRS 13 and MFRS 140 Amendment to MFRS 119 Annual Improvements to MFRSs Cycle Defined Benefit Plans: Employee Contributions 1 July July 2014

30 Basis of Preparation (Cont d) (a) Statement of compliance (Cont d) Effective date for financial periods beginning on or after MFRS 9 (IFRS 9 (2009)) Financial Instruments (IFRS 9 issued by IASB in September 2009) MFRS 9 (IFRS 9 (2010)) Financial Instruments (IFRS 9 issued by IASB in October 2010) MFRS 9 (Mandatory Effective Date of MFRS 9 and Transition Disclosures) MFRS 9 Financial Instrument Amendments to MFRS 9 (IFRS 9 issued by IASB in November 2009), MFRS 9 (IFRS 9 issued by IASB in October 2010) and MFRS 7 Hedge Accounting and amendments to MFRS 9, MFRS 7 and MFRS 139 To be announced by MASB To be announced by MASB To be announced by MASB To be announced by MASB The Group and the Company intend to adopt the abovementioned accounting standards, amendments and interpretations when they become effective. The initial applications of the abovementioned accounting standards, amendments and interpretations are not expected to have any financial impacts to the financial statements of the Group and of the Company except as discussed below:- MFRS 9 Financial Instruments MFRS 9 (IFRS 9 (2009)) replaces the guidance in MFRS 139 Financial Instruments: Recognition and Measurement on classification and measurement of financial asset. MFRS 9 requires financial asset to be measured at fair value or amortised cost. The classification depends on the entity s business model for managing its financial instruments and the contractual cash flow characteristics of the instrument. MFRS 9 (IFRS 9 (2010)) includes the requirements for the classification and measurement of financial liabilities and for derecognition. Measurement for financial liability designated as at fair value through profit or loss, requires the amount of change in the fair value of the financial liability, that is attributable to the change of credit risk of that liability, is presented in other comprehensive income, unless the recognition of the effects of changes in the liability s credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss. Under MFRS 139, the entire amount of the change in fair value of the financial liability designated as fair value through profit or loss was presented in profit or loss.

31 Basis of Preparation (Cont d) (a) Statement of compliance (Cont d) MFRS 9 Financial Instruments (Cont d) The adoption of MFRS 9 will result in a change in accounting policy. The Group is currently examining the financial impact of adopting MFRS 9. (b) Functional and presentation currency These financial statements are presented in Ringgit Malaysia (RM), which is the Group s and the Company s functional currency. (c) Significant accounting estimates and judgements The summary of accounting policies as described in Note 3 are essential to understand the Group s and the Company s results of operations, financial position, cash flows and other disclosures. Certain of these accounting policies require critical accounting estimates that involve complex and subjective judgements and the use of assumptions, some of which may be for matters that are inherently uncertain and susceptible to change. Directors exercise their judgement in the process of applying the Group s accounting policies. Estimates, assumptions concerning the future and judgements are made in the preparation of the financial statements. They affect the application of the Group s accounting policies and reported amounts of assets, liabilities, income and expenses, and disclosures made. Estimates and underlying assumptions are assessed on an on-going basis and are based on experience and relevant factors, including expectations of future events that are believed to be reasonable under the circumstances. The actual results may differ from the judgements, estimates and assumptions made by management, and will seldom equal the estimated results. The key assumptions concerning the future and other key sources of estimation or uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are set out below: Depreciation of property, plant and equipment The estimates for the residual values, useful lives and related depreciation charges for 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. The Group 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.

32 Basis of Preparation (Cont d) (c) Significant accounting estimates and judgements (Cont d) Impairment of loan and receivables The Group assesses at each reporting date whether there is any objective evidence that a financial asset is impaired. To determine whether there is objective evidence of impairment, the Group considers factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments. 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. Income taxes There are certain transactions and computations for which the ultimate tax determination may be different from the initial estimate. The Group and the Company recognise tax liabilities based on this 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 and deferred tax provisions in the year in which such determination is made. Fair value of financial instruments Management uses valuation techniques in measuring the fair value of financial instruments where active market quotes are not available. Details of the assumptions used are given in the notes regarding financial assets and liabilities. In applying the valuation techniques management makes maximum use of market inputs, and uses estimates and assumptions that are, as far as possible, consistent with observable data that market participants would use in pricing the instrument. Where applicable data is not observable, management uses its best estimate about the assumptions that market participants would make. These estimates may vary from the actual prices that would be achieved in an arm s length transaction at the end of the reporting period. Development costs Initial capitalisation of development costs is based on management s judgement that technical and economical feasibility is confirmed, usually when a product development project has reached a defined milestone according to an established project management model. In determining the amounts to be capitalised, management makes assumptions regarding the expected future cash generations of the project, discount rates to be applied and the expected period of benefits.

33 Significant Accounting Policies (a) Basis of consolidation (i) Subsidiaries Subsidiaries are entities, including structured entities, controlled by the Company. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. Investments in subsidiary companies are measured in the Company s statement of financial position at cost less any impairment losses, unless the investment is classified as held for sale or distribution. The cost of investment includes transaction costs. (ii) Business combination Business combinations are accounted for using the acquisition method from the acquisition date, which is the date on which control is transferred to the Group. For new acquisitions, the Group measures the cost of goodwill at the acquisition date as: The fair value of the consideration transferred; plus The recognised amount of any non-controlling interests in the acquiree; plus If the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less The net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed. When the excess is negative, a bargain purchase gain is recognised immediately in profit or loss. For each business combination, the Group elects whether it measures the noncontrolling interests in the acquiree either at fair value or at the proportionate share of the acquiree s identifiable net assets at the acquisition date. Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred. (iii) Acquisitions of non-controlling interest The Group treats all changes in its ownership interest in a subsidiary that do not result in a loss of control as equity transactions between the Group and its noncontrolling interest holders. Any difference between the Group s share of net assets before and after the change, and any consideration received or paid, is adjusted to or against Group reserves.

34 Significant Accounting Policies (Cont d) (a) Basis of consolidation (Cont d) (iv) Loss of control Upon the loss of control of a subsidiary, the Group derecognises the assets and liabilities of the former subsidiary, any non-controlling interests and the other components of equity related to the former subsidiary from the consolidated statement of financial position. Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the Group retains any interest in the former subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently, it is accounted for as equity accounted investee or as an available-for-sale financial asset depending on the level of influence retained. (v) Non-controlling interests Non-controlling interests at the end of the reporting period, being the equity in a subsidiary not attributable directly or indirectly to the equity holders of the Company, are presented in the consolidated statement of financial position and statement of changes in equity within equity, separately from equity attributable to the owners of the Company. Non-controlling interests in the results of the Group is presented in the consolidated statement of profit or loss and the other comprehensive income as an allocation of the profit or loss and the comprehensive income for the year between non-controlling interests and owners of the Company. (vi) Transactions eliminated on consolidated Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements. Unrealised gain arising from transactions with equity-accounted associates and joint ventures are eliminated against the investment to the extent of the Group s interest in the investees. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment. (b) Foreign currency Foreign currency transactions and balances Transactions in foreign currency are recorded in the functional currency of the respective Group entities using the exchange rates prevailing at the dates of the transactions. At each reporting date, monetary items denominated in foreign currencies are retranslated at the rates prevailing on that date.

35 Significant Accounting Policies (Cont d) (b) Foreign currency (Cont d) Foreign currency transactions and balances (Cont d) Non-monetary items denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date on which the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the rate at the date of transaction. Exchange differences arising on the settlement of monetary items, and on the translation of monetary items, are included in profit or loss for the period. Exchange differences arising on the translation of non-monetary items carried at fair value are included in profit or loss for the period except for the differences arising on the translation of non-monetary items in respect of which gains and losses are recognised directly in equity. Exchange differences arising from such non-monetary items are also recognised directly in equity. (c) Financial assets Financial assets are recognised on the statements of financial position when, and only when, the Group and the Company become a party to the contractual provisions of the financial instrument. When financial assets are recognised initially, they are measured at fair value, plus in the case of financial assets not at fair value through profit or loss, directly attributable transaction costs. Financial assets are initially recognised at fair value plus transaction costs except for financial assets at fair value through profit or loss, which are recognised at fair value. Transaction costs for financial assets at fair value through profit or loss are recognised immediately in profit or loss. The Group and the Company classify their financial assets depending on the purpose for which it was acquired at initial recognition, into the following categories: (i) Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are presented as current assets, except for those maturing later than 12 months after the end of the reporting period which are presented as non-current assets. After initial recognition, financial assets categorised as loans and receivables are measured at amortised cost using the effective interest method, less impairment. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, and through the amortisation process.