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RAYA INTERNATIONAL BERHAD 2014ANNUALREPORT

1

CORPORATE INFORMATION 2

DIRECTORS’ PROFILE 3

CHAIRMAN’S STATEMENT 11

CORPORATE GOVERNANCE STATEMENT 12

AUDIT COMMITTEE REPORT 19

STATEMENT ON RISK MANAGEMENT & INTERNAL CONTROL 25

ADDITIONAL COMPLIANCE STATEMENT 26

FINANCIAL STATEMENTS

• Directors’Report 28 • StatementbyDirectorsandStatutoryDeclaration 32 • IndependentAuditors’Report 33 • StatementsofProfit&LossandOtherComprehensiveIncome 35 • StatementsofFinancialPosition 36 • ConsolidatedStatementofChangesinEquity 37 • StatementofChangesinEquity 38 • StatementsofCashFlows 39 • NotestoFinancialStatements 41

LISTOFPROPERTIES 80

ANALYSISOFSHAREHOLDINGS 81

NOTICEOFEIGHTEENTHANNUALGENERALMEETING 83

PROXYFORM Enclosed

CONTENTS

RAYA INTERNATIONAL BERHAD2014 ANNUALREPORT

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BOARD OF DIRECTORS

Dato’ Izham Bin Yusoff Chen Hian LoongIndependentNon-ExecutiveChairman ExecutiveDirector Dato’ Tan Seng Hu Yee Chee Seng @ Yee YenManagingDirector Non-IndependentNon-ExecutiveDirector

Abdul Latif Bin Abdul Rahim Ho Fook MengNon-IndependentNon-ExecutiveDirector IndependentNon-ExecutiveDirector

Mohd Fikry Bin Rahman Tony Tan Han (Chen Han)IndependentNon-ExecutiveDirector IndependentNon-ExecutiveDirector

AUDIT COMMITTEE

Mohd Fikry Bin Rahman - Chairman IndependentNon-ExecutiveDirector

Ho Fook Meng IndependentNon-ExecutiveDirector

Yee Chee Seng @ Yee Yen Non-IndependentNon-ExecutiveDirector

NOMINATION COMMITTEE

Dato’ Izham Bin Yusoff - ChairmanIndependentNon-ExecutiveDirector

Abdul Latif Bin Abdul RahimNon-IndependentNon-ExecutiveDirector

Ho Fook MengIndependentNon-ExecutiveDirector

REMUNERATION COMMITTEE

Dato’ Izham Bin Yusoff - ChairmanIndependentNon-ExecutiveDirector

Abdul Latif Bin Abdul RahimNon-IndependentNon-ExecutiveDirector

Ho Fook MengIndependentNon-ExecutiveDirector

REGISTERED ADDRESS

No:149A,149B,151BPersiaranRajaMudaMusa42000PortKlang,SelangorDarulEhsan.Tel:603-31673830Fax:603-31683830

BUSINESS ADDRESS

3rdFloor,No:66,JalanKampungAttap,50460KualaLumpurTel:603-22766664Fax:603-22766661Website:www.raya.com.my

CORPORATE INFORMATION

COMPANY SECRETARIES

Wan Haslinda Wan YusoffMAICSA7055478

Sangar NallappanMACS01413

AUDITORS

STYLAssociatesAF 1929CharteredAccountantsUnitNo:902,9thFloorBlockA,DamansaraIntanNo:1,JalanSS20/2747400PetalingJayaTel:603-77242128/77242130/77242136Fax:603-77332125

SHARE REGISTRAR

TricorInvestorServicesSdnBhdLevel17,TheGardensNorthTowerMidValleyCity,LingkaranSyedPutra59200KualaLumpur.Tel:603-22643883Fax:603-22821886Email:[email protected]

PRINCIPAL BANKERS

PublicBankBerhadCIMBBankBerhad

STOCK EXCHANGE LISTING

ACEMarketofBursaMalaysiaSecuritiesBerhad

STOCK NAME - RAYA

STOCK CODE - 0080


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DIRECTORS’ PROFILE

DATO’ IZHAM BIN YUSOFFIndependent Non-Executive Chairman

Malaysian,aged48,wasappointedtotheBoardon1October2013asanIndependentNon-ExecutiveDirectoroftheCompany.Hewasre-designatedasIndependentNon-ExecutiveChairmanon14May2015.

Qualifications & Working Experience and Occupation

He graduated with Bachelor of Accounting and Master of Business Administration (Accounting andInternationalBusiness),bothfromUniversityofMiami,UnitedStatesofAmerica.HeisalsoanAssociateMemberofInstituteofInternalAuditorsMalaysia.

Dato’Izhamhasmorethan20yearsexperiencesinlargeandmultinationalcompanieswithvariousseniormanagementpositions,specialisingincorporateplanningandfinance.HewastheManagingDirectorandChiefExecutiveOfficerofPercetakanNasionalMalaysiaBerhad(PNMB)fromFebruary2010until31January2014.HewasExecutiveDirector/ChiefOperatingOfficerofNinebioSdnBhd.HewasalsotheManagingDirector/ChiefOperatingOfficerofKUBMalaysiaBerhadandAmanahRakyatBerhad.HesatonnumerouslistedcompaniesandwastheformerDirectorofBursaMalaysiaSecuritiesBerhad.

Board Committees

HewasappointedasChairmanoftheNominationandRemunerationCommitteeon30June2014.

Family Relationship with any Director and / or Major Shareholder of the Company

HehasnofamilyrelationshipwithotherDirectorsormajorshareholdersoftheCompany.

Conflict of Interest with the Company

HehasnoconflictofinterestwiththeCompanyoritssubsidiarycompanies.

Directorship of Public Companies (if any)

CurrentlyheistheManagingDirectorofBinaDarulamanBerhadandaDirectorofMalaysianAllianceofCorporateDirectors(MACD).

Conviction of Offences

Withinthelast10years,hehasnotbeenconvictedforanyoffencesotherthantrafficoffences,ifany.

Shareholdings in the Company

HedoesnotholdanysharesintheCompany.

No. of Board Meetings Attended from 1 January 2014 to 31 December 2014

Duringthefinancialyear,heattendedfiveoutofsevenmeetingsoftheBoard.


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DIRECTORS’ PROFILE (Cont’d)

DATO’ TAN SENG HUManaging Director

Malaysian,aged38,wasappointedasanExecutiveDirectorof theCompanyon19June2014andhewasre-designatedastheManagingDirectoron30June2014.


HegraduatedwithaBachelorofArts,BusinessAdministration,HumanResourceandPersonnelfromtheWashingtonStateUniversity in2001andobtainedaMasterofScience,Economics fromtheUniversityofIdahoin2003.Hehasbeeninvolvedintheconstructionindustryforeightyearsandiscurrentlymanaginghisownprojectmanagementcompanysince2006.

Board Committees

HeisnotamemberofanyBoardCommitteeoftheCompany.


DrTanChengKiat,beinghis father, isa substantial shareholderof theCompanyandMrYeeCheeSeng,Non-IndependentNon-ExecutiveDirectoroftheCompanyishisuncle.


HeisanAlternateDirectortoDrTanChengKiat,aFoundingDirectorofBinaPuriHoldingsBhd.






Duringthefinancialyear,heattendedfouroutoffourmeetingsoftheBoard.


Hisshareholdingisdisclosedonpage81oftheAnnualReport.


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CHEN HIAN LOONG Executive Director

Malaysian,aged43,isanExecutiveDirectoroftheCompany.HewasappointedtotheBoardon30June2014.


HeholdsaDiplomaInBusinessandhasbeeninvolvedintele-communication,technicalandsalesformorethantwenty(20)yearsandiscurrentlymanaginghisownITCompany.

Board Committees







Hedoesnotholdanydirectorshipsinotherpubliccompanies.




AsatthedateofthisAnnualReport,hedoesnotholdanysharesintheCompany


Duringthefinancialyear,heattendedthreeoutofthreemeetingsoftheBoard.


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ABDUL LATIF BIN ABDUL RAHIMNon-Independent Non-Executive Director

Malaysian,aged57,isaNon-IndependentNon-ExecutiveDirectoroftheCompany.HewasappointedtotheBoardon1October2013.


HeholdsaDiplomainBusinessAdministration.

EncikAbdulLatifbeganhiscareerinyear1982withMalaysianTobaccoasaSeniorExecutive.Inyear1992,hejoinedRegalMarketingSdn.Bhd.,asBusinessExecutiveandworkeduntil1998.HeiscurrentlytheGeneralManagerofAzeeraManagementConsultant(M)SdnBhdwhichhehasjoinedsinceyear1998.

Board Committees

HewasappointedasMembersoftheNominationandRemunerationCommitteeon30June2014.












Duringthefinancialyear,heattendedsevenoutofsevenmeetingsoftheBoard.


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CAPTAIN TONY TAN HAN (CHEN HAN)Independent Non-Executive Director

Singaporean,aged39,isanIndependentNon-ExecutiveDirectoroftheCompany.HewasappointedtotheBoardon24March2015.


HeobtainedhisDiplomainNauticalStudiesfromSingaporePolytechnicsin1999.In2009,heobtainedaSpecialistDiplomainworkplaceSafetyandHealthfromNgeeAnnPolytechnics.

CaptainTonyTanhasaCertificateofCompetency(“COC”)Class1MasterMariner(foreign-going)issuedbytheMaritimeandPortAuthorityofSingaporeandisalsoaRegisteredSafetyOfficerissuedbytheMinistryofManpowerin2011.

CaptainTonyTan started his career as aMarine Superintendent/SeniorMarketingExecutivewith EZRAMarine ServicesPteLtd in 2007. He joinedHakoOffshorePteLtd in 2010 as a Senior SafetyManager/DesignatedPersonAshore.HeestablishedSkipsMarineServicesinSingaporein2011andistheManagingDirector.

Captain Tony Tan is well versed in themaritime industry and has over 18 years of professionalmarineexperienceinbothsea-goingandshore-basedoperationswhichincludecontainer,tanker,oilandgas,offshorefleetandshipmanagement,shipoperationsandmarinesafetyoperations.Heisalsoinvolvedinaudit,incidentinvestigationaswellasimplementationofInternationalSafetyManagement(“ISM”)appointments.

Board Committees



HehasnofamilyrelationshipwithotherDirectorsormajorshareholdersoftheCompany. Conflict of Interest with the Company









NotApplicableashewasappointedon24March2015.

SinceMarch2015,hehadattendedoneoutofonemeetingoftheBoardheldfromMarch2015toApril2015.


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HO FOOK MENG Independent Non-Executive Director

Malaysian,aged57, isan IndependentNon-ExecutiveDirectorof theCompany.Hewasappointed to theBoardon24March2015.


HegraduatedfromtheUniversityofMalaya,KualaLumpurwithaBachelorofEconomics(Honours)degreein1981andholdsaMastersofBusinessAdministrationfromKenStateUniversity,Ohio,USA.

MrHostartedhiscareerinthebankingandfinancialservicesindustryin1981.HestartedasaBankOfficeratBankofCommerce(M)Berhadin1981.In1993,hejoinedUnitedOverseasBankasaTeamLeaderintheCommercialBankingDepartment.Subsequently,MrHojoinedAmBank(M)BerhadasaGeneralManagerintheBusinessBankingDivisionfrom2002to2014.

MrHohasover30yearsexperienceinthebankingandfinancialservicesindustryofwhichhespecializedinemergingmid-capcorporations.Asaseniorbanker,heisveryoftentappedforhisexpertiseandwiderangingexperiencebyhisbankingclientsandinvestorsintheirgrowthandexpansionstrategies.

Hehasestablishedaverywidebusinessnetworkthatwasbuiltovertheyearsasbankerandadvisortoawiderangeofhisbankingcustomers.

Board Committees

HewasappointedasMembersoftheAuditCommittee,NominationandRemunerationCommitteeon24March2015.


HehasnofamilyrelationshipwithotherDirectorsormajorshareholdersoftheCompany. Conflict of Interest with the Company







NotApplicableashewasappointedon24March2015.

SinceMarch2015,hehadattendedoneoutofonemeetingoftheBoardheldfromMarch2015toApril2015.


Hisshareholdingisdisclosedonpage81oftheAnnualReport.



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YEE CHEE SENG @ YEE YENNon-Independent Non-Executive Director

Malaysian,aged75,isaNon-IndependentNon-ExecutiveDirectoroftheCompany.HewasappointedtotheBoardon27January2015.


He is a qualified Accountant since 1965 and he is also a Fellow Member of the Chartered Institute ofManagementAccountantsofUnitedKingdom(U.K).

He has worked as an Internal Auditor for 2 years and later acquired extensive experience in accountingandfinanceworking for28years inFELDA(FederalLandDevelopmentAuthority) inwhichheheld theseniorpositionsasFinancialControllerandFinanceDirector.HeretiredfromFELDAin1995astheDeputyDirector-General.

Betweenyear2004-2008,hewasaBoardDirectorandChairmanofAuditCommitteeofPrestarResourceBhd,alistedcompanyinBursaMalaysia.

Board Committees

HewasappointedasMemberoftheAuditCommitteeon27January2015.


MrYeeCheeSengistheUncletoDato’TanSengHu,theManagingDirectoroftheCompany. Conflict of Interest with the Company









NotApplicableashewasappointedon27January2015.

SinceJanuary2015,hehadattendedtwooutoftwomeetingsoftheBoardheldfromJanuary2015toApril2015.


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MOHD FIKRY BIN RAHMAN Independent Non-Executive Director

Malaysian,aged29, isan IndependentNon-ExecutiveDirectorof theCompany.Hewasappointed to theBoardon18June2014.


HegraduatedwithBachelorofEngineeringTechnologyinSupplyChainManagement.HestartedhiscareeratSeicomSystemSdnBhdasaProjectManagerresponsibleinmanagingaprojectdevelopmentfrominitiationstagetoitsclosure.

InSeptember2013tilltodate,heisservingasSeniorProcurementExecutiveatHalliburtonServices(M)SdnBhdresponsibleinmonitoring,processingandcontrollingallprocurementactivities.

Board Committees

HewasappointedasamemberofAuditCommitteeon18June2014andwasre-designatedasChairmanoftheAuditCommitteeon23June2014.












Duringthefinancialyear,heattendedthreeoutoffourmeetingsoftheBoard.


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CHAIRMAN’S STATEMENT

DearShareholders,

OnbehalfoftheBoardofDirectorsofRayaInternationalBerhad(“Raya”or“theCompany”),itgivesmegreatpleasuretopresenttheAnnualReportandAuditedFinancialStatementsofRayaanditssubsidiaries(“theGroup’)forthefinancialyearended(“FYE”)31December2014.

FINANCIAL REVIEW

TheGroup’s revenue forFYE2014wasRM2.935million representing a 21.1%growth compared to thepreviousyearduetohigherrevenueingeneraltrading.

TheprofitabilityoftheGroupslippedintotheredduetohigheroperatingexpensesincurredanddepositswrittenoffaswellasareductioninthewaiverfromdirectorand/orshareholder.

PROSPECTS

TheGroupisoptimisticinitsgeneraltradingactivitiesbutexpectstofacechallengesinitsfiltrationactivitiesforthecomingfinancialyear.TheGroupiscurrentlydeliberatingontheviabilityoftheexistingbusinessoftheGroupandreviewitsstrategiesandbusinessoperationsandareconsideringoptionsavailabletoimproveitslongtermandsustainablefuturegrowth.

APPRECIATION

OnbehalfoftheBoardofDirectorsofRaya,Iwishtoconveymyheartfeltappreciationtothemanagementteamfortheirdedicationandhardwork.IalsowishtosincerelythankmycolleaguesontheBoardfortheirwisecounselandinsightsinhelpingtoguidetheGroupthroughthechallengesandtonewavenuesofopportunity.

Last but not least, our utmost gratitude to all our valued shareholders, customers, business associates,financiers,relevantauthoritiesandotherstakeholdersfortheconfidence,supportandtrustinus.

Together,wewillcontinuetoshareabetterfutureandlookforwardtoyourcontinuoussupportfortheyear2015.

Thankyou.

DATO’ IZHAM BIN YUSOFFIndependent Non-Executive Chairman


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TheBoardofDirectors (“theBoard”)ofRayaInternationalBerhad(“Raya”)recognizes the importanceofupholdingthehigheststandardsofcorporategovernanceinconductingtheGroup’sbusinessactivitiesanddischargingtheBoard’sfiduciaryresponsibilitiestoprotectandenhancetheshareholder’svalue.TheBoardreaffirmsitssupportstotheCodeandbelievesthatgoodcorporategovernanceisfundamentalinachievingtheGroup’sobjectives.Inordertoensurethatthebestinterestsofshareholdersandotherstakeholdersareeffectivelyserved,theBoardcontinuestoplayanactiveroleinimprovinggovernancepracticesandmonitorsthedevelopmentincorporategovernanceincludingtheCode.

ThisstatementdescribestheCompany’scompliancewiththeprinciplesoftheCode.

A. DIRECTORS

i. The Board

The Board is primarily responsible for the strategic directions of the Company. In addition, theBoardalsooversees the conductof theCompany‘sbusiness,whereby itdevises andputs inplaceadequatesystemsofcontrol,focusesprimarilyonthemitigationofanyforeseeableorpotentialriskbesettingtheCompany.TheGroupisledandcontrolledbyaneffectiveBoard.AllBoardmemberscarryanindependentjudgementtobearonissuesofstrategy,performance,resourcesandstandardsofconduct.TheBoardunderstandstheBoard’sphilosophy,principles,ethics,missionandvisionandreflectsthisunderstandingonkeyissuesthroughouttheyear.

ii. Board Balance

ThecurrentBoardhaseight(8)directorscomprisingtwo(2)ExecutiveDirectors,two(2)areNon-IndependentNon-ExecutiveDirectorsandfour(4)IndependentNon-ExecutiveDirectors.

More than one-third (1/3) of the current Board is represented by Independent Non-Executive

Directorswho are independent ofmanagement and free from any business or other relationshipwhichcould interferewith the exerciseof independent judgmenton theBoard’sdeliberationanddecisionmaking,eachofwhombringswithhimvastandvariedexperiences,exposureandexpertise.

TheprofileofeachmemberofthecurrentBoardissetoutinDirectors’profileofthisAnnualReport.

The ExecutiveDirector oversees the day to daymanagement and running of theGroup and theimplementationoftheBoard’sdecisionandpolicies.

Thepresenceof four (4) IndependentNon-ExecutiveDirectors is essential inprovidingunbiasedviews and impartiality to the Board’s deliberation and decision-making process. In addition, thenon-executivedirectorsensurethatmattersandissuesbroughttotheBoardarefullydiscussedandexamined, taking intoaccount the interestofall stakeholders in theGroupinorder toensuretheeffectivenessoftheIndependentDirectors.

In line with the Code, the tenure of an Independent Director shall not exceed nine (9) yearsconsecutively.Uponcompletionofthenine(9)years,anIndependentDirectormaycontinuetoserveontheBoardsubjecttohisredesignationasaNon-IndependentNon-ExecutiveDirectorshouldanIndependentDirectorberetainedafter9years,hisretentionmustbeapprovedbytheshareholders.

CORPORATE GOVERNANCE STATEMENT


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TheBoardhasnotappointedaSeniorIndependentDirectorasthereisnocombinationoroverlappingof roles between the current Chairman who is an Independent Non-Executive Director and theManagingDirectoroftheCompanyasthesetwo(2)positionsareheldbyseparateindividuals.

TherolesoftheIndependentNon-ExecutiveChairmanandtheManagingDirectorareseparatedwithcleardivisionofresponsibilitiesandthedecisionmakingprocessoftheBoardisbasedoncollectivedecisionswithoutany individualexercisinganyconsiderableconcentrationofpoweror influence.ToensurethatnoonepersondominatestheBoard,theBoard’scompositioniscomprisedofsix(6)Non-ExecutiveDirectorsoutofaBoardsizeofeight(8)Directorsofwhich,four(4)areIndependentNon-ExecutiveDirectorswhichensuresthatastrongelementofIndependenceispresent.

TheBoardtakesnotethattheCoderecommendsthattheChairmanoftheNominationCommitteeshouldbe theSenior IndependentDirector identifiedby theBoard,whichwill fromtimeto timereviewtherecommendationandmakethenecessaryappointmentasandwhenitdeemsfit.

TheCompanyalsoadoptsnon-discriminatorypolicyinemployingtalentstofulfillitshumanresource

needsatalllevelsincludingBoardespeciallyinensuringgenderdiversity.Presently,theBoardisoftheopinionthatthecurrentsizeandcompositionoftheBoardisappropriatetocommensuratethegroup’sbusinessskillrequirementandeffectivedecisionmaking.

iii. Board Meetings

ToensurethattheRayaGroupismanagedproperly,thecurrentBoardisscheduledtomeetatleastfour (4) times a year,with additionalmeetingsbeing convenedwhennecessary.Besides that, theBoardalsoapprovesmattersthroughthecirculationofDirector’CircularResolutioninaccordancewiththeArticlesofAssociationoftheCompany.

Duringthefinancialyearended31December2014,theBoardmetseven(7)times.ThedetailsoftheDirector’sattendancesattheBoardMeetingsduringtheirtenureinofficearesetoutbelow:-

No Name of Directors No of Meetings attended % during the time the Directors hold office

1. JeneralTanSriAbdulAzizBinZainal(Rtd) 5/7 72 IndependentNon-ExecutiveDirector (Resignedon27November2014)

2. Dato’IzhamBinYusoff 5/7 72 IndependentNon-ExecutiveDirector 3. Dato’MalekRadzuanBinSaharin 1/3 30 Non-IndependentNon-ExecutiveDirector (Resignedon18June2014)

4. DeepakJaikishanA/LJaikishanRewachand 3/3 100 ManagingDirector (Resignedon30May2014) 5. ArulampalamA/LSMariampillai 0/3 0 IndependentNon-ExecutiveDirector (Resignedon30May2014)

CORPORATE GOVERNANCE STATEMENT (Cont’d)


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No Name of Directors No of Meetings attended % during the time the Directors hold office 6. EzrulEhsanBinIsmail 4/4 100 ExecutiveDirector (Resignedon30June2014) 7. MohdShukriBinAbdullah 0/3 0 IndependentNon-ExecutiveDirector (Resignedon18June2014)

8. AbdulLatifBinAbdulRahim 7/7 100 Non-IndependentNon-ExecutiveDirector

9. RajeshA/LJaikishan 3/3 100 Non-IndependentNon-ExecutiveDirector (Resignedon30May2014) 10. MejarIsmailBinAhmad(Rtd) 6/7 86 Non-IndependentNon-ExecutiveDirector (Resignedon27November2014)

11. Mr.NareshKumarKukereja@LenderLalA/L 3/3 100 K.Lal IndependentNon-ExecutiveDirector (Resignedon30May2014) 12. Dato’TanSengHu 4/4 100 ManagingDirector (Appointedon19June2014)

13. MdYaakobBinMdShariff 4/4 100 IndependentDirector (Appointedon25June2014andsubsequently resignedon23March2015)

14. MohdFikryBinRahman 3/4 75 IndependentDirector (Appointedon18June2014)

15. ChenHianLoong 3/3 100 ExecutiveDirector (Appointedon30June2014) 16. YeeCheeSeng@YeeYen N/A Non-IndependentNon-ExecutiveDirector (Appointedon27January2015)

17. HoFookMeng N/A IndependentNon-ExecutiveDirector (Appointedon24March2015)

18. CaptTonyTanHan(ChenHan) N/A IndependentNon-ExecutiveDirector (Appointedon24March2015)



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iv. Supply of Information and Access to Advice TheBoardisprovidedwithcomprehensiveboardpapersonatimelymannerpriortoboardmeetings.

ThisistoensureandenablethemembersoftheBoardtodischargetheirdutiesandresponsibilitiescompetently in a well-informed manner. All members of the Board have unhindered access tothe advice and services of the Company Secretary, and where necessary, may seek independentprofessionaladvisersforadviceforthepurposeofdischargingtheirstatutoryandfiduciaryduties.

Alldirectorshave therightandduty tomake furtherenquirieswhere theyconsidernecessary. Inmostinstances,membersofSeniorManagementareinvitedtobeinattendanceatBoardmeetingstoprovideinsightandtofurnishclarificationonissuesthatmayberaisedbytheBoard.EveryDirectoralsohasunrestrictedaccesstoallinformationwithregardtotheactivitiesoftheRayaGroup.

v. Directors Training

AllDirectorshadattendedtheMandatoryAccreditationProgrammeforDirectorsofPublicListedCompanies (“MAP”)except thenewlyappointedDirectors i.eHoFookMengandTonyTanHan(ChenHan).TheywillattendtheMAPinduecoursepursuanttotheListingRequirementspendingregistrationwithBursatraSdnBhd.

vi. Re-election of Directors

InaccordancewiththeCompany’sArticlesofAssociation,one-third(1/3)ofthedirectorsshallretirefromoffice andbe eligible for re-election at eachAnnualGeneralMeeting andall directors shallretirefromofficeatleastonceineverythree(3)yearsbutshallbeeligibleforre-election.Directorsappointedduringtheyearwillbesubjecttoretirementandre-electionbyshareholdersintheAnnualGeneralMeeting.

Directorsoverseventy(70)yearsofagearerequiredtoretireandsubmitthemselvesforre-appointmentannuallyinaccordancewithSection129(6)oftheCompaniesAct,1965.

B. BOARD COMMITTEES

TheBoardhassetupthefollowingCommitteestoassisttheBoardindischargingtheirdutiesanddecisionmaking:-

(a) Audit Committee

TheexistingAuditCommitteecomprisesthree(3)membersasfollows:-

Chairman : MohdFikryBinRahman IndependentNon-ExecutiveDirector

Member : YeeCheeSeng@YeeYen Non-IndependentNon-ExecutiveDirector

: HoFookMeng IndependentNon-ExecutiveDirector

TheAuditCommitteeReportissetoutonpage19to24ofthisAnnualReport.


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(b) Nomination Committee

TheNominationCommitteecomprisesthefollowingmembers:-

Chairman : Dato’IzhamBinYusoff IndependentNon-ExecutiveDirector

Members : AbdulLatifBinAbdulRahim Non-IndependentNon-ExecutiveDirector : HoFookMeng IndependentNon-ExecutiveDirector

ThetermsofreferenceoftheNominationCommitteeareasfollows:-

• ToregularlyreviewtheBoardstructure,sizeandcomposition. • TorecommendcandidatesfortheapprovaloftheBoardtofillvacanciesintheBoard. • Toannuallyreviewtherequiredmixofskillsandexperienceandotherqualitiesandcompetencies

whichnon-executivedirectorsshouldbringtotheBoard. • Toannually assess the effectivenessof theBoardas awhole, the committeeof theBoardand

contributionsofeachindividualdirectoroftheBoard. • Identifyingandrecommendingdirectorswhoaretobeputforwardforretirementbyrotation. • ConsidergenderdiversitygenerallywhenmakingappointmentstotheBoard.

(c) Remuneration Committee

The Company has an established framework of principles to evaluate performance and rewardfor executive directors. Remuneration packages for the executive directors are formulated to becompetitive and realistic, emphasis being placed on performance, with aims to attract, motivateandretainexecutivedirectorsofhighcalibertotheGroup.Fornon-executivedirectors,thelevelofremunerationcommensuratewiththelevelofresponsibilitiesundertakenbythemfortheCompany.

TheRemunerationCommitteecomprisesthefollowingmembers:-

Chairman : Dato’IzhamBinYusoff IndependentNon-ExecutiveDirector

Members : AbdulLatifBinAbdulRahim Non-IndependentNon-ExecutiveDirector : HoFookMeng IndependentNon-ExecutiveDirector

ThetermofreferenceoftheRemunerationCommitteeareasfollows:-

• To review and determine, at least once annually, adjustments to the remuneration packageincludingbenefits-in-kindofeachexecutivedirector,takingintoaccounttheperformanceoftheindividual,theinflationpriceindexandwherenecessary,informationfromindependentsourcesonremunerationpackagesfortheequivalentjobsintheindustry.

• To review and determine the quantum of performance related bonuses, benefits-in-kind andEmployeeShareOptions,ifavailable,tobegiventotheexecutivedirectors.

• Toconsiderandexecutetherenewaloftheservicecontractofexecutivedirectorsasandwhendue,aswellastheservicecontractsandremunerationpackagesfornewlyappointedexecutivedirectorspriortotheirappointments.



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C. DIRECTORS’ REMUNERATION

The Directors are satisfied that the current level of remuneration is in line with the responsibilitiesexpected.

TheaggregateDirectors’remunerationpaidorpayabletoallDirectorsoftheCompanycategorisedintoappropriatecomponentsforthefinancialyearended31December2014areasfollows:-

Remuneration (RM’000) Non-Executive Executive Total Directors (“RM’000) Directors (RM’000) (RM’000) Salaries - - - Fees 84 - 84 Bonuses - - - Payrollbasedexpenses-EPF - - - MeetingAllowance - - - Benefits-in-kind - - - Total 84 - 84

Number of Director Range of Remuneration Non-Executive Executive Total

Directors Directors BelowRM50,000 - - - RM50,000–RM100,000 1 - 1 RM100,000–RM150,000 - - - RM150,000–RM200,000 - - -

D. RELATIONSHIP WITH SHAREHOLDERS

TheCompanymaintainsvariousmethodsofdisseminationofinformationimportanttoshareholders, stakeholdersandthepublicatlargethroughtimelyannouncementofevents,quarterlyannouncementof

financialresultsandproductinformationontheCompany’swebsite.

TheAnnualGeneralMeetingalsoprovidesanopportunityfortheshareholderstoseekandclarifyanyissuesrelevanttotheCompany.ShareholdersareencouragedtomeetandcommunicatewiththeBoardatAnnualGeneralMeetingsandtovoteonallresolutions.

E. ACCOUNTABILITY AND AUDIT

i. Financial Reporting

TheBoardaimstoprovideabalancedandunderstandableassessmentoftheGroup’sfinancialpositionandprospectsthroughtheannualreportaswellasquarterlyfinancialresultstoitsshareholders.

It is theBoard’s responsibility to ensure that the financial statements are prepared in accordancewiththeCompaniesAct,1965andtheapplicableapprovedaccountingstandardssetbyMalaysianAccountingStandardBoardsoastopresentabalancedandfairassessmentoftheGroup’sfinancialpositionandprospects.TheDirectorsarealsoresponsible forkeepingproperaccountingrecords,safeguardingtheassetsoftheCompanyandtakingreasonablestepstopreventandenabledetectionoffraudandotherirregularities.


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ii. Statement of Directors’ Responsibility in respect of the Financial Statements

TheMalaysianCompanyLawrequirestheDirectorstopreparefinancialstatementsforeachfinancialyear,whichgiveatrueandfairviewofthestateofaffairsoftheCompanyandtheresultsandcashflowoftheCompanyforthatperiod.

Inpreparingthosefinancialstatements,theDirectorsarerequiredto:-

a) Selectsuitableaccountingpoliciesandthenapplythemconsistently; b) Statewhetherapplicableaccountingstandardshavebeenfollowed; c) Makejudgmentsandestimatesthatarereasonableandprudent;and d) Preparethefinancialstatementsonagoingconcernbasisunlessitisinappropriatetopresume

thattheCompanywillcontinueinbusiness.

TheDirectorsareresponsibleforkeepingproperaccountingrecords,whichdisclosewithreasonableaccuracy, at any time, the financial position of the Company.TheDirectors are also responsibleforsafeguardingtheassetsoftheCompanyandfortakingreasonablestepsforthepreventionanddetectionoffraudandirregularities.

iii. Internal Control

TheBoardacknowledgesitsoverallresponsibilityformaintainingasoundsystemofinternalcontrol,whichencompassesriskmanagement,financial,organisational,operationalandcompliancecontrolsnecessary for the Group to achieve its objectives within an acceptable risk profile to safeguardshareholders’investmentandtheGroup’sassets.However,theBoardrecognizesthatsuchsystemisstructuredtomanageratherthaneliminatethepossibilityofencounteringriskoffailuretoachievecorporateobjectives.

TheStatementofRiskManagementandInternalControlsissetoutonpage25oftheAnnualReportprovidinganoverviewofthestateofinternalcontrolswithintheGroup.

iv. Relationships with Auditors TheBoardhasestablishedaformalandtransparentrelationshipwiththeauditor,Messrs.STYL&

AssociatesappointedbytheCompanyanditssubsidiarieswithinitsfold.

TheAuditCommittee,hasbeenaccordedtheauthoritytocommunicatedirectlywiththeexternalauditors.TheauditorsinturnareabletohighlightmatterswhichrequiretheattentionoftheBoardeffectivelytotheAuditCommitteeintermsofcompliancewiththeaccountingstandardsandotherrelatedregulatoryrequirements.

v. Corporate Social Responsibilities TheCompanydidnotundertakeanycorporatesocialresponsibilityactivitiesorpracticesduringthe

financialyearunderreview.



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TheAuditCommitteewasestablishedwiththeprimaryobjectivetoprovideassistancetotheBoardinfulfillingitsfiduciaryresponsibilitiesrelatingtothecorporategovernanceandpracticesfortheGroup,toimprovethebusinessefficiencyandenhancetheindependentroleofexternalandinternalauditors.

1. Composition of Audit Committee

TheexistingAuditCommitteecomprisesthree(3)membersasfollows:-

Chairman : MohdFikryBinRahman IndependentNon-ExecutiveDirector

Member : YeeCheeSeng@YeeYen Non-IndependentNon-ExecutiveDirector

: HoFookMeng IndependentNon-ExecutiveDirector

2. Terms Of Reference

Composition

TheAuditCommittee shall be appointedby theBoard fromamongst theirmembers,who fulfils thefollowingrequirements:-

a) TheAuditCommitteemustbecomposedofnofewerthanthree(3)members.IntheeventofanyvacancyintheAuditCommitteeresultinginthenon-complianceoftheabove,theCompanymustfillthevacancywithinthree(3)months.

b) AlltheAuditCommitteemembersmustbenon-executivedirectors,withamajorityofthembeingindependentdirectors.

c) AlltheAuditCommitteemembersmustbefinanciallyliterate,withatleastonemember:-

• mustbeamemberoftheMalaysianInstituteofAccountants;or • ifheisnotamemberoftheMalaysianInstituteofAccountants,hemusthaveatleastthree(3)

years’workingexperienceand:- • hemusthavepassedtheexaminationsspecifiedinPartIofthe1stScheduleoftheAccountants

Act1967;or • hemustbeamemberofoneoftheAssociationsofAccountantsspecifiedinPartIIof the1st

ScheduleoftheAccountantsAct1967;or • fulfilssuchotherrequirementsasprescribedorapprovedbytheExchange.

d) NoalternatedirectorshallbeappointedasamemberoftheAuditCommittee.

e) ThememberoftheAuditCommitteeshallelectaChairmanfromamongthemselveswhoshallbeanIndependentDirector.TheChairmanoftheAuditCommitteeshouldengageonacontinuousbasiswith seniormanagement, theheadof internalauditand theexternalauditors inorder tobekeptinformedofmattersaffectingtheCompany.

AUDIT COMMITTEE REPORT


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AllmembersoftheAuditCommittee,includingtheChairman,willholdofficeonlysolongastheyserveasDirectorsoftheCompany.TheBoardmustreviewthetermofofficeandperformanceoftheAuditCommitteeandeachofitsmembersatleastonceeverythree(3)yearstodeterminewhethertheAuditCommitteehascarriedoutitsdutiesinaccordancewithitstermsofreference.

Secretary of the Audit Committee

TheCompanySecretaryoftheCompanyshallbetheSecretaryoftheAuditCommittee.

Duties and Responsibilities of the Audit Committee

ThefollowingarethemaindutiesandresponsibilitiesoftheAuditCommitteecollectively:-

(a) ReviewthefollowingandreportthesametotheBoardoftheCompany:-

(i) overseetheCompany’sinternalcontrol; (ii) withtheexternalauditors,theauditplan; (iii) withtheexternalauditors,hisevaluationofthesystemofinternalcontrols; (iv) withtheexternalauditors,hisauditreport; (v) theassistancegivenby theemployeesof theCompany to theexternalauditorsand the internal

auditors; (vi) theadequacyofthescope,functions,competencyandresourcesoftheinternalauditfunctionsand

thatithasthenecessaryauthoritytocarryoutitswork (vii) theinternalauditprogramme,processes,theresultsoftheinternalauditprogramme,processesor

investigationundertakenandwhetherornotappropriateactionistakenontherecommendationsoftheinternalauditfunction;

(viii) thequarterlyresultsandyearendfinancialstatements,priortotheapprovalbytheBoard,focusingparticularlyon:-

• changesinorimplementationofmajoraccountingpolicychanges; • significantandunusualevents;and • compliancewithaccountingstandardsandotherlegalrequirements; (ix) anyrelatedpartytransactionandconflictofinterestsituationthatmayarisewithintheCompany

or group including any transaction, procedure or course of conduct that raises questions ofmanagementintegrity;

(x) anyletterofresignationfromtheexternalauditorsandanyquestionsofresignationordismissal;and

(xi) whetherthereisreason(supportedbygrounds)tobelievethattheCompany’sexternalauditorisnotsuitableforre-appointment;

(b) Oversee the Company’s internal control structure to ensure operational effectiveness and efficiency,reduceriskofinaccuratefinancialreporting,protecttheCompany’sassetsfrommisappropriationandencouragelegalandregulatorycompliance;

(c) AssisttheBoardinidentifyingtheprincipalrisksintheachievementoftheCompany’sobjectivesandensuringtheimplementationofappropriatesystemstomanagetheserisks;

(d) Recommend to theBoardon theappointmentandre-appointmentof theexternalauditorsand theirauditfee,aftertakingintoconsiderationtheindependenceandobjectivityoftheexternalauditorsandthecosteffectivenessoftheaudit;

(e) Discusswiththeexternalauditorsbeforetheauditcommencesthenatureandscopeof theauditandensureco-ordinationwheremorethanoneauditfirmisinvolved;

AUDIT COMMITTEE REPORT (Cont’d)


21

(f) Discuss problems and reservations arising from the audits and anymatter the auditorsmaywish todiscussintheabsenceofthemanagementwherenecessary;

(g) Reviewtheexternalauditor’smanagementletterandmanagement’sresponsetherein;

(h) Inrelationtotheinternalauditfunction:-

a. reviewtheadequacyofthescope,functionsandresourcesoftheinternalauditfunctionandthatithasthenecessaryauthoritytocarryoutitswork;

b. reviewtheinternalauditprogrammeandresultsoftheinternalauditprocessand,wherenecessary,ensurethatappropriateactionsaretakenontherecommendationsoftheinternalauditfunction;

c. reviewanyappraisalorassessmentoftheperformanceofmembersoftheinternalauditfunction; d. approveanyappointmentofterminationofseniorstaffmembersoftheinternalauditfunction;and e. take cognizance of resignations of internal audit staffmembers and provide the resigning staff

memberanopportunitytosubmithisreasonsforresigning;

(i) Considerthemajorfindingsofinternalinvestigationsandmanagement’sresponse;

(j) ToreviewtheeffectivenessoftheinternalcontrolsandriskmanagementprocessesoftheCompany;and

(k) ConsiderothermattersasdefinedbytheBoard.

Rights of the Audit Committee

Incarryingoutitsdutiesandresponsibilities,theAuditCommitteewill:-

• havetheauthoritytoinvestigateanymatterwithinitstermsofreference;• havetheresourceswhicharerequiredtoperformitsduties;• havefullandunrestrictedaccesstoanyinformationpertainingtotheCompany;• havedirectcommunicationchannelswiththeexternalauditorsandperson(s)carryingouttheinternal

auditfunctionoractivity;• beabletoobtainindependentprofessionalorotheradviceandtoinviteoutsiderswithrelevantexperience

andexpertisetoattendtheAuditCommitteemeeting(ifrequired)andtobrieftheAuditCommittee;and• be able to convenemeetingswith the external auditors, the internal auditors or both, excluding the

attendanceofotherdirectorsandemployeesoftheCompany,wheneverdeemednecessary.

Conduct of Meetings

a) TheAuditCommitteewillmeetatleastfour(4)timesineachfinancialyearalthoughadditionalmeetingsmaybecalledatanytime,atthediscretionoftheChairmanoftheAuditCommittee.

b) Thequorumshallconsistofamajorityofindependentcommitteemembersandshallnotbelessthantwo(2).

c) RecommendationstotheAuditCommitteearesubmittedtotheBoardforapproval.

d) The Company Secretary shall be in attendance at each Audit Committee meeting and record theproceedingsofthemeetingthereat.



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e) MinutesofeachmeetingshallbekeptaspartofthestatutoryrecordoftheCompanyuponconfirmationbytheAuditCommitteeandacopyshallbedistributedtoeachmemberoftheBoard.

f) TheManagingDirectorandotherofficersmaybeinvitedtoattendwheretheirpresenceareconsideredappropriateasdeterminedbytheAuditCommitteeChairman.

g) Theinternalauditorsand/orexternalauditorshavetherighttoappearandbeheardatanymeetingoftheAuditCommittee.

h) Upontherequestoftheinternalauditorsand/orexternalauditors,theAuditCommitteeChairmanshallalsoconveneameetingoftheAuditCommitteetoconsideranymattertheauditor(s)believesshouldbebroughttotheattentionoftheBoardortheshareholders.

i) TheAuditCommitteemustbeabletoconvenemeetingswithexternalauditorswithoutthepresenceoftheexecutiveboardmembersandmanagementatleasttwiceayearandwheneverdeemednecessary.

j) Where the Audit Committee is of the view that amatter reported by it to the Board has not beensatisfactorilyresolvedresultinginabreachorBursaMalaysiaSecuritiesBerhadrequirements,theAuditCommitteemustpromptlyreportsuchmattertoBursaMalaysiaSecuritiesBerhad.

k) The attendance at any particularAuditCommitteemeeting by other directors and employees of theCompanyshallbeattheAuditCommittee’sinvitationanddiscretionandmustbespecifictotherelevantmeeting.

SUMMARY OF ACTIVITIES

TheAuditCommittee is scheduled tomeet at least four (4) times a year,with additionalmeetings beingconvenedwhennecessary.

Detailsoftheattendanceduringthefinancialyearended31December2014areasfollows:-

No Name of Directors No of Meetings attended during % the time the Directors hold office 1. EncikMohdShukriBinAbdullah 3/3 100 IndependentNon-ExecutiveDirector (Resignedon18June2014)

2. Dato’MalekRadzuanBinSaharin 1/3 30 Non-IndependentNon-ExecutiveDirector (Resignedon18June2014)

3. Mr.ArulampalamA/LSMariampillai 0/3 0 IndependentNon-ExecutiveDirector (Resignedon30May2014)



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No Name of Directors No of Meetings attended during % the time the Directors hold office

4. Mr.NareshKumarKukereja 3/3 100 @LenderLalA/LK.Lal IndependentNon-ExecutiveDirector (Resignedon30May2014)

5. MohdFikryBinRahman 2/2 100 IndependentNon-ExecutiveDirector (Appointedon18June2014)

6. MdYaakobBinMdShariff 2/2 100 IndependentDirector (Appointedon25June2014andsubsequently resignedon23March2015)

7. YeeCheeSeng@YeeYen N/A Non-IndependentNon-ExecutiveDirector (Appointedon27January2015) 8. HoFookMeng N/A IndependentNon-ExecutiveDirector (Appointedon24March2015)

Duringtheyearunderreview,thefollowingweretheactivitiesoftheAuditCommittee:-

(a) Reviewed the quarterly financial results and ensured that the financial reporting and disclosurerequirementsofrelevantauthoritieshadbeencompliedwith,focusingparticularlyon:-

(1)changesinorimplementationofmajoraccountingpoliciesandpractices; (2)thegoingconcernassumption; (3)significantandunusualevent;and

(4) compliancewithaccountingstandardsandotherlegalpoliciesandrequirements.

(b) Reviewedtherelatedpartytransactionsandconflictofinterestsituation,ifany,withintheCompanyorGroupincludinganytransactions,proceduresorcourseofconductthatraisedquestionsofmanagementintegrityintheordinarycourseofbusiness.

(c) Reviewedtheauditstrategyandplanoftheexternalauditors.

(d) Meetingswithexternalauditors.


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INTERNAL AUDIT FUNCTION

TheInternalAuditfunctionisoutsourcedtoMessrs.ChungWanLing&Co.

Duringthefinancialyearunderreview,theInternalAuditorshadassessedtheeffectivenessoftheinternalcontrolenvironmentoftheAccountsandFinancefunctionoftheCompanyandtheGroup.AllthefindingsraisedbytheInternalAuditorshavebeenappropriatelyaddressedbymanagement.

TheAuditCommitteeChairmanhasdirectaccesstotheInternalAuditors.TheymeetregularlytodiscussinternalcontrolandauditrelatedissueswithoutthepresenceofthemanagementandtheExternalAuditors.

In discharging its duties and responsibilities, the InternalAuditors receives instruction from and reportsdirectlytotheAuditCommittee.

ThefeeinrespectoftheInternalAuditfunctionforthefinancialyearended31December2014isapproximatelyRM6,000.00.



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INTRODUCTION TheBoardiscommittedtomaintainingasoundsystemofinternalcontroloftheCompanyandispleasedtoprovidethefollowingstatement,whichoutlinesthenatureandscopeofinternalcontroloftheCompanyduringtheyear.

THE BOARD’S RESPONSIBILITIES

The Board of Directors recognizes the importance of sound internal controls and risk management insafeguardingtheassetsoftheGroup.However,suchsystemsaredesignedtomanageratherthaneliminatethebusinessrisktotally.Itshouldbenotedthatanysystemcouldprovideonlyreasonableandnotabsoluteassuranceagainstmaterialmisstatementorfraud. TheGrouphasinplaceanon-goingprocesstoidentify,evaluate,monitorandmanageanysignificantrisksthroughtheinternalcontrolssetoutinordertoattainareasonableassurancethatbusinessobjectiveshavebeenmet.ThesecontrolsareregularlyreviewedbytheBoardandsubjecttocontinuousimprovement.

THE RISK MANAGEMENT PROCESS

Apartfromfinancialcontrols,theGroup’ssystemofinternalcontrolsalsocoveroperationalandcompliancecontrolsandmostimportantly,riskmanagement.Aspartoftheriskmanagementprocess,theBoardassistedbytheAuditCommittee,iscontinuouslyidentifying,assessingandmanagingsignificantbusinessrisksfacedbytheGroupthroughoutthefinancialyear.

TheprocesswillberegularlyreviewedbytheBoardthroughtheAuditCommitteeandisinaccordancewiththeguidanceascontainedintheInternalControlGuidelines.

THE INTERNAL CONTROL PROCESS

TheotherkeyfeaturesoftheGroup’sinternalcontrolsystemincludethefollowing: • An organization structure with defined lines of responsibility and appropriate reporting structure

includingproperapprovalandauthorizationlimitforapprovingcapitalexpenditureandexpenseswithintheGroup;

• The Audit Committee had appointed an outsourced independent professional internal audit serviceprovidertodischargetheinternalauditfunctionwhichperformsregularandsystematicreviewoftheinternalcontrolstoassessandprovidesufficientassuranceontheeffectivenessofthesystemsofinternalcontrolandtohighlightsignificantrisksimpactingtheGroupwithrecommendationforimprovement;and

• TheAuditCommitteewillregularlyreviewreportsbytheindependentprofessionalinternalauditserviceproviderandconductsannualassessmentontheadequacyofthefunction’sscopeofworkandresources.

TheGroupcontinuestotakemeasurestoenhanceandstrengthentheinternalcontrolenvironment.

TheBoardisoftheviewthatthereisnosignificantbreakdownorweaknessesinthesystemofinternalcontroloftheGroupthatmayhavematerialimpactagainsttheoperationsoftheGroupforthefinancialyearended31December2014.

STATEMENT ON RISK MANAGEMENT & INTERNAL CONTROL


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1. UTILISATION OF PROCEEDS

InSeptember2014,atotalof11,855,580newordinarysharesofRM0.10eachwereissuedpursuanttothePrivatePlacementatanissuepriceofRM0.16inaccordancewiththeShareholders’MandateatthelastAnnualGeneralMeetingandtotalproceedsofRM1,896,892.00hadbeenraisedfromthesaidPrivatePlacementexerciseoftheCompany.

Asat30April2015, theCompany hadutilized theaboveproceeds for theexpenses incurred for the

placementexpensesamountingtoRM133,000andbalanceofRM1,763,892.00forworkingcapital.

2. SHARE BUYBACK

Duringthefinancialyear,theCompanydidnotenterintoanysharebuybacktransaction.

3. OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES

Duringthefinancialyear,nooption,warrantsorconvertiblesecuritieswereissuedbytheCompany.

4. DEPOSITORY RECEIPT PROGRAMME

Duringthefinancialyear,theCompanydidnotsponsoranyDepositoryReceiptprogramme.

5. SANCTIONS AND/OR PENALTIES

During thefinancialyear, therewerenosanctionsand/orpenalties imposedon theCompanyand itssubsidiaries,directorsormanagementbytherelevantregulatorybodies.

6. NON-AUDIT FEES Therewerenonon-auditfeespaidtotheexternalauditorsbytheGroupforthefinancialyear.

7. PROFIT ESTIMATE, FORECAST OR PROJECTION

Therewasnoprofitestimate,forecastorprojectionissuedbytheCompanyand/oritssubsidiariesforthefinancialyear.

8. VARIATION OF RESULTS

Thevariancebetweentheauditedresults(netprofitaftertax)andtheunauditedresultsannouncedislessthan10%.

9. PROFIT GUARANTEE

TherewasnoprofitguaranteeissuedbytheCompanyand/oritssubsidiariesforthefinancialyear.

10. MATERIAL CONTRACTS

TherewerenomaterialcontractsenteredintobytheCompanyanditssubsidiarieswhichinvolvedthedirectorsandsubstantialshareholders’interestduringthefinancialyearended31December2014.

11. REVALUATION POLICY ON LANDED PROPERTIES

TheGroup’spolicyonrevaluationisdisclosedinNote4(f)tothefinancialStatements.

ADDITIONAL COMPLIANCE STATEMENT


27FINANCIAL

STATEMENTS


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ThedirectorsherebysubmittheirreporttogetherwiththeauditedfinancialstatementsoftheGroupandoftheCompanyforthefinancialyearended31stDecember2014. PRINCIPAL ACTIVITIES TheCompanyisprincipallyengagedininvestmentholdingandtheprovisionofmanagementservices. TheprincipalactivitiesofthesubsidiariesareasdisclosedinNote14totheFinancialStatements. There have been no significant changes in the nature of the principal activities of the Company and itssubsidiariesduringthefinancialyear. FINANCIAL RESULTS TheresultsoftheoperationsoftheGroupandoftheCompanyforthefinancialyearareasfollows: GROUP COMPANY RM RM Netlossforthefinancialyear (1,531,636) (393,830) Attributable to: OwnersoftheCompany (1,532,601) (393,830)Non-Controllinginterests 965 - (1,531,636) (393,830) Intheopinionofthedirectors,theresultsofoperationsoftheGroupandoftheCompanyduringthefinancialyearwerenotsubstantiallyaffectedbyanyitem,transactionoreventofamaterialandunusualnatureotherthantheexceptionalitemsasdisclosedintheFinancialStatements. DIVIDENDS Nodividendhasbeenpaidordeclaredby theCompany since theendof thepreviousfinancialyear.Thedirectorsalsodonotrecommendthepaymentofanydividendinrespectofthecurrentfinancialyear. RESERVES AND PROVISIONS TherewerenomaterialtransferstoorfromreservesorprovisionsduringthefinancialyearotherthanthosedisclosedintheFinancialStatements. ISSUE OF SHARES AND DEBENTURES

AsapprovedbytheshareholdersattheAnnualGeneralMeetingheldon30thJune2014,theissuedandpaid-upsharecapitalof theCompanywas increasedfromRM11,855,580toRM13,041,138duringthefinancialyearbytheallotmentof11,855,580newordinarysharesofRM0.10eachintheCompanyatanissuepriceofRM0.16pernewordinaryshareforcashbywayofprivateplacement. TheresultantsharepremiumarisingfromthesharesissuedduringthefinancialyearofRM711,335hasbeencredited to the sharepremiumaccount.All thenewordinary shares issuedrankparipassuwith the thenexistingordinarysharesoftheCompany. TheCompanyhasnotissuedanydebenturesduringthefinancialyear.

DIRECTORS’ REPORT


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SHARE OPTIONS NooptionshavebeengrantedbytheCompanytoanypartiesduringthefinancialyeartotakeupunissuedsharesoftheCompany. NoshareshavebeenissuedduringthefinancialyearbyvirtueoftheexerciseofanyoptionstotakeupunissuedsharesoftheCompany.Asattheendofthefinancialyear,therewerenounissuedsharesoftheCompanyunderoptions. DIRECTORS Thenamesofthedirectorsinofficesincethedateofthelastreport: Dato’IzhamBinYusoffAbdulLatifBinAbdulRahim MohdFikryBinRahman (appointedon18.6.2014)MdYaakobBinMdShariff (appointedon25.6.2014,resignedon23.3.2015) Dato’TanSengHu (appointedon19.6.2014)ChenHianLoong (appointedon30.6.2014)YeeCheeSeng@YeeYen (appointedon27.1.2015)HoFookMeng (appointedon24.3.2015)TonyTanHan(ChenHan) (appointedon24.3.2015)ArulampalamA/LSMariampillai (resignedon30.5.2014) DeepakJaikishanA/LJaikishanRewachand (resignedon30.5.2014) RajeshA/LJaikishan (resignedon30.5.2014) NareshKumarKukeraja@LenderLalA/LK.Lal (resignedon30.5.2014)MohdShukriBinAbdullah (resignedon18.6.2014)EzrulEhsanBinIsmail (resignedon30.6.2014)Dato’MalekRadzuanBinSaharin (resignedon18.6.2014) MejarIsmailBinAhmad(B) (resignedon27.11.2014)JeneralTanSriAbdulAzizBinZainal(B) (resignedon27.11.2014) DIRECTORS’ BENEFITS Sincetheendofthepreviousfinancialyear,noneofthedirectorsoftheCompanyhasreceivedorbecomeentitled to receive anybenefits (other than thebenefits included in the aggregate amountof emolumentsreceivedordueandreceivablebydirectorsasdisclosedinthefinancialstatementsorthefixedsalaryoffull-timeemployeesoftheCompany)byreasonofacontractmadebytheCompanyorarelatedcorporationwiththedirectororwithafirmofwhichthedirectorisamember,orwithacompanyinwhichthedirectorhasasubstantialfinancialinterest.

Neitherduringnorat theendof thefinancialyear,was theCompanyaparty toanyarrangementswhoseobjectistoenablethedirectorstoacquirebenefitsbymeansoftheacquisitionofsharesinordebenturesoftheCompanyoranyotherbodycorporate.

DIRECTORS’ INTERESTS TheshareholdingsintheCompanyandintherelatedcompaniesofthosewhoweredirectorsattheendofthefinancialyear,asrecordedintheRegisterofDirectors’ShareholdingskeptbytheCompanyunderSection134oftheCompaniesAct,1965,areasfollows:

DIRECTORS’ REPORT (Cont’d)


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NumberofordinarysharesofRM0.10each Balanceas at1.1.2014/ dateof Balanceasat appointment Bought Sold 31.12.2014Shares in the Company

Direct interest

Dato’TanSengHu 5,000,000 850,000 - 5,850,000ChenHianLoong 5,500,000 - - 5,500,000 MdYaakobBinMdShariff 5,196,800 - - 5,196,800

Indirect interest Dato’TanSengHu 11,000,000 - - 11,000,000 Byvirtueoftheabovedirectors’interestinthesharesoftheCompany,theabovementioneddirectorsarealsodeemedtohaveaninterestinthesharesofthesubsidiariestotheextentthattheCompanyhasaninterest. NoneoftheotherdirectorsinofficeattheendofthefinancialyearheldsharesorhadbeneficialinterestinthesharesoftheCompanyoritsrelatedcompaniesduringoratthebeginningandendofthefinancialyear. OTHER STATUTORY INFORMATION

a) Before the statements of profit or loss and other comprehensive income and statements of financialpositionoftheGroupandoftheCompanyweremadeout,thedirectorstookreasonablesteps:

(i) toascertainthatproperactionhadbeentaken inrelationto thewritingoffofbaddebtsandthemakingofallowancefordoubtfuldebtsandsatisfiedthemselvesthatallknownbaddebtshadbeenwrittenoffandthatadequateallowancehadbeenmadefordoubtfuldebts;and

(ii) toensurethatanycurrentassetswhichwereunlikelytorealiseintheordinarycourseofbusinesstheirvaluesasshowninthefinancialstatementsoftheGroupandoftheCompanyhavebeenwrittendowntoanamountwhichtheymightbeexpectedtorealise.

Asat31stDecember2014,theaccumulatedlossesoftheGroupandoftheCompanywereRM17,879,465andRM8,338,046respectivelywhicharosefromlossessustainedincurrentandprioryears.AsmentionedinNote4a)totheFinancialStatements,thefinancialstatementshavebeenpreparedonthebasisofaccountingprinciplesapplicabletoagoingconcernwhichpresumesthatfutureoperatingresultswillimproveandconsequently,therealisationofassetsandsettlementofliabilitieswilloccurintheordinarycourseofbusiness.

b) Otherthanasstated,atthedateofthisreport,thedirectorsarenotawareofanycircumstances:

(i) whichwouldrendertheamountwrittenoffforbaddebtsortheamountoftheallowancefordoubtfuldebts inthefinancialstatementsoftheGroupandoftheCompanyinadequatetoanysubstantialextent;or

(ii) whichwouldrenderthevaluesattributabletocurrentassetsinthefinancialstatementsoftheGroupandoftheCompanymisleading;or



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(iii)whichhavearisenwhichrenderadherencetotheexistingmethodofvaluationofassetsorliabilitiesoftheGroupandoftheCompanymisleadingorinappropriate.

c) Atthedateofthisreport,theredoesnotexist:

(i) anychargeontheassetsoftheGroupandoftheCompanywhichhasarisensincetheendofthefinancialyearwhichsecurestheliabilityofanyotherperson;or

(ii) anycontingent liabilityof theGroupandof theCompanywhichhas arisen since the endof thefinancialyear.

d) NocontingentliabilityorotherliabilityoftheGroupandoftheCompanyhasbecomeenforceable,oris likely tobecomeenforceablewithin theperiodof twelvemonthsafter theendof thefinancialyearwhichintheopinionofthedirectors,willormaysubstantiallyaffecttheabilityoftheGroupandoftheCompanytomeettheirobligationsasandwhentheyfalldueotherthanthoseasdisclosedinNote29totheFinancialStatements.

e) Atthedateofthisreport,thedirectorsarenotawareofanycircumstancesnototherwisedealtwithinthisreportorthefinancialstatementsoftheGroupandoftheCompanywhichwouldrenderanyamountstatedinthefinancialstatementsmisleading.

f) Intheopinionofthedirectors,therehasnotarisenintheintervalbetweentheendofthefinancialyearandthedateofthisreportanyitem,transactionoreventofamaterialandunusualnaturelikelytoaffectsubstantiallytheresultsoftheoperationsoftheGroupandoftheCompanyforthefinancialyearinwhichthisreportismade.

AUDITORS

Theauditors,STYLAssociates,haveindicatedtheirwillingnesstocontinueinoffice.

SignedonbehalfoftheBoardinaccordancewitharesolutionofthedirectors,

DATO’ TAN SENG HU CHEN HIAN LOONG Director Director KualaLumpur Date:28thApril2015



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We,DATO’TANSENGHUandCHENHIANLOONG,beingtwoof thedirectorsofRayaInternationalBerhad,doherebystatethat,intheopinionofthedirectors,theaccompanyingfinancialstatementsaredrawnupinaccordancewithMalaysianFinancialReportingStandards,InternationalFinancialReportingStandardsandtherequirementsoftheCompaniesAct,1965inMalaysiasoastogiveatrueandfairviewofthefinancialpositionoftheGroupandoftheCompanyasat31stDecember2014andoftheirfinancialperformanceandcashflowsoftheGroupandoftheCompanyfortheyearthenended. ThesupplementaryinformationsetoutinNote31hasbeenpreparedinallmaterialrespects,inaccordancewithGuidanceonSpecialMatterNo.1DeterminationofRealisedandUnrealisedProfitsorLosses in theContextofDisclosurePursuanttoBursaMalaysiaSecuritiesBerhadListingRequirements,asissuedbytheMalaysianInstituteofAccountants.

SignedonbehalfoftheBoardinaccordancewitharesolutionofthedirectors, DATO’ TAN SENG HU CHEN HIAN LOONG Director Director KualaLumpur

Date:28thApril2015 STATUTORY DECLARATION I,DATO’TANSENGHU,being thedirectorprimarily responsible for thefinancialmanagementofRayaInternationalBerhad,dosolemnlyandsincerelydeclarethattheaccompanyingfinancialstatementsare,inmyopinion,correctandImakethissolemndeclarationconscientiouslybelievingthesametobetrue,andbyvirtueoftheprovisionsoftheStatutoryDeclarationsAct,1960.

DATO’ TAN SENG HU

Subscribedandsolemnlydeclaredbythe abovenamedDATO’TANSENGHU, atPetalingJaya,on28thApril2015 Beforeme: S.ArokiadassA.M.N No.B460

STATEMENT BY DIRECTORS


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REPORT ON THE FINANCIAL STATEMENTS Wehaveaudited thefinancial statementsofRaya InternationalBerhad,whichcomprise the statementsoffinancialpositionasat31stDecember2014oftheGroupandoftheCompany,andthestatementsofprofitorlossandothercomprehensiveincome,statementsofchangesinequityandstatementsofcashflowsoftheGroupandoftheCompanyfortheyearthenended,andasummaryofsignificantaccountingpoliciesandotherexplanatoryinformation,assetoutonpages35to79.

Directors’ Responsibility for the Financial Statements

ThedirectorsoftheCompanyareresponsibleforthepreparationoffinancialstatementssoastogiveatrueandfairviewinaccordancewithMalaysianFinancialReportingStandards,InternationalFinancialReportingStandardsandtherequirementsoftheCompaniesAct,1965inMalaysia.Thedirectorsarealsoresponsibleforsuchinternalcontrolasthedirectorsdetermineisnecessarytoenablethepreparationoffinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror.

Auditors’ Responsibility

Ourresponsibilityistoexpressanopiniononthesefinancialstatementsbasedonouraudit.WeconductedourauditinaccordancewithapprovedstandardsonauditinginMalaysia.Thosestandardsrequirethatwecomplywithethicalrequirementsandplanandperformtheaudittoobtainreasonableassuranceaboutwhetherthefinancialstatementsarefreefrommaterialmisstatement. Anauditinvolvesperformingprocedurestoobtainauditevidenceabouttheamountsanddisclosuresinthefinancial statements.Theproceduresselecteddependonour judgement, includingtheassessmentofrisksofmaterialmisstatementof thefinancial statements,whetherdue to fraudor error. Inmaking those riskassessments,weconsiderinternalcontrolrelevanttotheentity’spreparationoffinancialstatementsthatgiveatrueandfairviewinordertodesignauditproceduresthatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheentity’sinternalcontrol.Anauditalsoincludesevaluatingtheappropriatenessofaccountingpoliciesusedandthereasonablenessofaccountingestimatesmadebythedirectors,aswellasevaluatingtheoverallpresentationofthefinancialstatements.

Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopinion.

Opinion Inouropinion,thefinancialstatementsgiveatrueandfairviewofthefinancialpositionoftheGroupandof theCompanyasat31stDecember2014andof theirfinancialperformanceandcashflows for theyearthenendedinaccordancewithMalaysianFinancialReportingStandards,InternationalFinancialReportingStandardsandtherequirementsoftheCompaniesAct,1965inMalaysia.

INDEPENDENT AUDITORS’ REPORTtothemembersofRayaInternationalBerhad


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INDEPENDENT AUDITORS’ REPORT (Cont’d)

Emphasis of Matter

Withoutqualifyingouropinion,wedrawattentiontoNote4a)totheFinancialStatementswhichindicatesthatthe accumulated losses of theGroup and of theCompany as at 31stDecember 2014wereRM17,879,465 andRM8,338,046respectively.ThesuccessfulturnaroundplanfortheGroupandtheCompanyisoneofthekeyfactorsforthesustainabilityoftheGroup’sandoftheCompany’soperationsandfortheGroupandtheCompanytocontinueasgoingconcernsintheforeseeablefuture.Thevalidityofthegoingconcernassumptionisthereforedependentonthesuccessfulimplementationoftheturnaroundplaninthefuture.Intheeventthegoingconcernassumptionisnolongervalid,theGroupandtheCompanymaynotbeabletodischargeitsliabilitiesinthenormalcourseofbusinessandadjustmentsmayhavetobemadetoreflectsuchsituation.ThefinancialstatementsoftheGroupandoftheCompanydonotincludeanyadjustmentrelatingtotheamountsandclassificationofassetsandliabilitiesthatmightbenecessaryshouldtheGroupandtheCompanybeunabletocontinueasgoingconcerns.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

InaccordancewiththerequirementsoftheCompaniesAct,1965inMalaysia,wealsoreportthefollowing:

(a) Inouropinion,theaccountingandotherrecordsandtheregistersrequiredbytheActtobekeptbytheCompanyhavebeenproperlykeptinaccordancewiththeprovisionsoftheAct.

(b) Wehaveconsideredthefinancialstatementsandtheauditors’reportsofallthesubsidiariesofwhichwehavenotactedasauditors,whichareindicatedinNote14totheFinancialStatements.

(c) WearesatisfiedthatthefinancialstatementsofthesubsidiariesthathavebeenconsolidatedwiththeCompany’sfinancialstatementsareinformandcontentappropriateandproperforthepurposesofthepreparationoftheconsolidatedfinancialstatementsoftheGroupandwehavereceivedsatisfactoryinformationandexplanationsrequiredbyusforthosepurposes.

(d) Theauditors’reportsonthefinancialstatementsofthesubsidiariesdidnotcontainanyqualificationoranyadversecommentmadeunderSection174(3)oftheActotherthanasdisclosedinNote14totheFinancialStatements.

OTHER REPORTING RESPONSIBILITIES ThesupplementaryinformationsetoutinNote31isdisclosedtomeettherequirementofBursaMalaysiaSecuritiesBerhadandisnotpartofthefinancialstatements.ThedirectorsareresponsibleforthepreparationofthesupplementaryinformationinaccordancewithGuidanceonSpecialMatterNo.1,DeterminationofRealisedandUnrealisedProfitsorLossesintheContextofDisclosurePursuanttoBursaMalaysiaSecuritiesBerhadListingRequirements,asissuedbytheMalaysianInstituteofAccountants(“MIAGuidance”)andthedirectiveofBursaMalaysiaSecuritiesBerhad.Inouropinion,thesupplementaryinformationisprepared,inallmaterialrespects,inaccordancewiththeMIAGuidanceandthedirectiveofBursaMalaysiaSecuritiesBerhad.

OTHER MATTERS ThisreportismadesolelytothemembersoftheCompany,asabody,inaccordancewithSection174oftheCompaniesAct,1965inMalaysiaandfornootherpurpose.Wedonotassumeresponsibilitytoanyotherpersonforthecontentofthisreport. STYL ASSOCIATES FirmNo.AF1929 CharteredAccountants

SI CHAY BENG ApprovalNo:1200/08/16(J) CharteredAccountant Date:28thApril2015 PetalingJaya


35

GROUP COMPANY 2014 2013 2014 2013 Note RM RM RM RM Revenue 6 2,935,475 2,424,165 - -Otheroperatingincome 7 265,815 834,842 121,529 831,000Rawmaterialsandconsumablesused (224,783) (625,279) - -Changesininventoriesoffinishedgoods (5,314) (169,023) - -Purchasesandotherdirectcosts (2,564,889) (373,950) - -Staffcosts 8 (56,290) (175,689) (56,290) (175,689)Depreciationofproperty, plantandequipment (331,397) (563,155) (12,161) (8,412)Directors’remuneration 9 (84,000) (51,931) (84,000) (51,931)Otheroperatingexpenses 7 (834,402) (452,925) (362,908) (220,453)

Profit/(Loss)fromoperations (899,785) 847,055 (393,830) 374,515

Financecosts 10 (491,066) (495,767) - -

Profit/(Loss)beforetax (1,390,851) 351,288 (393,830) 374,515

Incometaxexpense 11 (140,785) (262,123) - -

Profit/(Loss)forthefinancialyear (1,531,636) 89,165 (393,830) 374,515

Othercomprehensiveincome,netoftax: Itemthatwillnotbereclassifiedsubsequently toprofitorloss Gainonrevaluationof property,plantandequipment - 173,755 - -

Totalcomprehensiveincome/(loss)forthefinancialyear (1,531,636) 262,920 (393,830) 374,515

Profit/(Loss)attributableto: OwnersoftheCompany (1,532,601) 89,165 (393,830) 374,515 Non-Controllinginterests 965 - - - (1,531,636) 89,165 (393,830) 374,515Totalcomprehensiveincome/(loss)attributableto: OwnersoftheCompany (1,532,601) 262,920 (393,830) 374,515 Non-Controllinginterests 965 - - - (1,531,636) 262,920 (393,830) 374,515Earnings/(Loss) per share attributable to owners of the Company: Basic(sen) 12 (1.26) 0.08Diluted(sen) 12 N/A N/A

TheaccompanyingNotesformanintegralpartoftheFinancialStatements.

STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMEFORTHEYEARENDED31STDECEMBER2014


36

GROUP COMPANY 2014 2013 2014 2013 Note RM RM RM RMASSETSNon-Current Assets Property,plantandequipment 13 206,661 8,626,058 130,570 11,881Investmentsinsubsidiaries 14 - - 599,800 599,800Deferredtaxassets 15 52,991 195,383 - -Goodwillonconsolidation 16 95,527 95,527 - -TotalNon-CurrentAssets 355,179 8,916,968 730,370 611,681

Current AssetsInventories 17 745,240 975,337 - -Tradereceivables 18 4,400,025 2,851,135 - -Otherreceivablesand prepaidexpenses 18 66,320 485,355 640 59,675Taxrecoverable 14,988 42,810 - -Amountowingbysubsidiaries 14 - - 12,471,309 11,925,058Cashandbankbalances 612,906 45,162 599,196 15,514 5,839,479 4,399,799 13,071,145 12,000,247Assetheldforsale 19 8,196,984 - - -TotalCurrentAssets 14,036,463 4,399,799 13,071,145 12,000,247

TotalAssets 14,391,642 13,316,767 13,801,515 12,611,928

EQUITY AND LIABILITIES Capital and Reserves Sharecapital 20 13,041,138 11,855,580 13,041,138 11,855,580Reserves 21 (6,325,790) (5,432,190) 487,942 242,771EquityAttributabletoOwners oftheCompany 6,715,348 6,423,390 13,529,080 12,098,351Non-Controllinginterests 2,882 1,917 - -TotalEquity 6,718,230 6,425,307 13,529,080 12,098,351

Non-Current Liabilities Financeleaseliabilities 22 - 17,612 - -Termloans 23 3,821,184 3,963,472 - -Deferredtaxliabilities 15 - 3,629 - -TotalNon-CurrentLiabilities 3,821,184 3,984,713 - -

Current Liabilities Tradepayables 24 2,551,508 686,663 - -Otherpayablesand accruedexpenses 24 393,061 370,556 248,693 264,694Bankborrowings 25 903,761 996,865 - -Amountowingtodirectors 26 - 850,787 - 247,007Amountowingtosubsidiaries 14 - - 21,866 -Taxliabilities 3,898 1,876 1,876 1,876TotalCurrentLiabilities 3,852,228 2,906,747 272,435 513,577TotalLiabilities 7,673,412 6,891,460 272,435 513,577

TotalEquityandLiabilities 14,391,642 13,316,767 13,801,515 12,611,928


STATEMENTS OF FINANCIAL POSITIONASAT31STDECEMBER2014


37

CO

NSO

LIDAT

ED S

TATE

MEN

T O

F C

HA

NG

ES IN

EQ

UIT

YFO

RTH

EYE

AREN

DED

31STDEC

EMBE

R2014

<-----------------Attributableto

OwnersoftheCom

pany----------------->

<-------Non

Distrib

utable------->

Share

Accum

ulated

Share

Revaluation

Non

-Con

trollin

gTo

tal

capital

loss

prem

ium

reserve

Total

interests

equity

RM

RM

RM

RM

RM

RM

RM

GRO

UP

Ba

lanceasat1stJanu

ary2013

11,855,580

(16,436,029)

8,186,987

2,553,932

6,160,470

-6,160,470

Profi

tforth

eyear

-89,165

--

89,165

-89,165

Otherco

mprehensiv

eincomefortheyear

neto

ftax

--

-173,755

173,755

-173,755

Totalcom

prehensiv

eincomeforthe

financialyear

-89,165

-173,755

262,920

-262,920

Transactionwith

OwnersoftheCom

pany

:

Acquisitionofsu

bsidiary

--

--

-1,917

1,917

Ba

lanceasat31stD

ecem

ber2

013

11,855,580

(16,346,864)

8,186,987

2,727,687

6,423,390

1,917

6,425,307

Profi

t/(Lo

ss)forth

eyearre

presentin

g

totalcom

prehensiv

eincome/(lo

ss)forth

e

financialyear

-(1,532,601)

--

(1,532,601)

965

(1,531,636)

Transactionwith

OwnersoftheCom

pany

:

Issuanceofsharesd

uringthefin

ancialyear

1,185,558

-

711,335

-1,896,893

-1,896,893

Shareissueexp

enses

--

(72,334)

-(72,334)

-(72,334)

Totaltransactio

nswith

OwnersoftheCom

pany

1,185,558

-639,001

-1,824,559

-1,824,559

Balanceasat31stD

ecem

ber2

014

13,041,138

(17,879,465)

8,825,988

2,727,687

6,715,348

2,882

6,718,230

TheaccompanyingNotesfo

rmanintegralparto

ftheFinancialStatements.

37


38

STAT

EMEN

T O

F C

HA

NG

ES IN

EQ

UIT

Y

<---------Attributableto

OwnersoftheCom

pany--------->

Non

Distrib

utable-

Share

Accum

ulated

Share

Total

capital

loss

prem

ium

equity

RM

RM

RM

RM

CO

MPA

NY

Balanceasat1stJanu

ary2013

11,855,580

(8,318,731)

8,186,987

11,723,836

Profi

tforth

eyearre

presentin

gtotalcom

prehensiv

eincomefortheyear

-374,515

-374,515

Balanceasat31stD

ecem

ber2

013

11,855,580

(7,944,216)

8,186,987

12,098,351

Lossfo

rtheyearrepresentingtotalcom

prehensiv

elossfo

rtheyear

-(393,830)

-(393,830)

Transactionswith

OwnersoftheCom

pany

:

Issuanceofsharesd

uringthefin

ancialyear

1,185,558

-711,335

1,896,893

Shareissueexp

enses

--

(72,334)

(72,334)

Totaltransactio

nswith

OwnersoftheCom

pany

1,185,558

-639,001

1,824,559

Balanceasat31stD

ecem

ber2

014

13,041,138

(8,338,046)

8,825,988

13,529,080


rmanintegralparto


38


39

STAT

EMEN

T O

F C

HA

NG

ES IN

EQ

UIT

Y

<---------Attributableto

OwnersoftheCom

pany--------->

Non

Distrib

utable-

Share

Accum

ulated

Share

Total

capital

loss

prem

ium

equity

RM

RM

RM

RM

CO

MPA

NY

Balanceasat1stJanu

ary2013

11,855,580

(8,318,731)

8,186,987

11,723,836

Profi

tforth

eyearre

presentin

gtotalcom

prehensiv

eincomefortheyear

-374,515

-374,515

Balanceasat31stD

ecem

ber2

013

11,855,580

(7,944,216)

8,186,987

12,098,351

Lossfo

rtheyearrepresentingtotalcom

prehensiv

elossfo

rtheyear

-(393,830)

-(393,830)

Transactionswith

OwnersoftheCom

pany

:

Issuanceofsharesd

uringthefin

ancialyear

1,185,558

-711,335

1,896,893

Shareissueexp

enses

--

(72,334)

(72,334)

Totaltransactio

nswith

OwnersoftheCom

pany

1,185,558

-639,001

1,824,559

Balanceasat31stD

ecem

ber2

014

13,041,138

(8,338,046)

8,825,988

13,529,080


rmanintegralparto


GROUP COMPANY 2014 2013 2014 2013 RM RM RM RM CASH FLOWS FROM OPERATING ACTIVITIES Profit/(Loss)beforetax (1,390,851) 351,288 (393,830) 374,515Adjustmentsfor: Baddebtswrittenoff - 507 - - Depreciationofproperty,plantand equipment 331,397 563,155 12,161 8,412 Impairmentlossonreceivables - 156,575 - - Inventorieswrittendown - 107,706 - - Inventorieswrittenoff 8,659 - - - Exceptionalitems: Depositswrittenoff 400,000 - - - Waiverofshareholder’sadvance (265,815) (831,000) (121,529) (831,000) Reversalofimpairmentlossontrade receivables (540) - - - Financecosts 491,066 495,767 - -Operatingprofit/(loss)beforeworking capitalchanges (426,084) 843,998 (503,198) (448,073)Changesinworkingcapital: Decreaseininventories 221,438 686,596 - - Increaseintradereceivables (1,548,350) (1,770,822) - - (Increase)/Decreaseinotherreceivables andprepaidexpenses 19,035 122,528 59,035 (7,485) (Increase)/Decreaseinamountowing bysubsidiaries - - (546,251) 382,673 Increaseintradepayables 1,864,845 369,381 - - Increase/(Decrease)inotherpayablesand accruedexpenses 22,505 (1,062,033) (16,001) (873,909) Increase/(Decrease)in amountowingtodirectors (584,972) 1,681,787 (125,478) 1,078,007 Increaseinamountowingtosubsidiaries - - 21,866 -CashGeneratedFrom/(UsedIn)Operations (431,583) 871,435 (1,110,027) 131,213 Interestpaid (491,066) (495,767) - - Taxrefunded 27,822 - - -Net Cash From/(Used In) Operating Activities (894,827) 375,668 (1,110,027) 131,213

(Forward)

STATEMENTS OF CASH FLOWSFORTHEYEARENDED31STDECEMBER2014


40

STATEMENTS OF CASH FLOWS (Cont’d)

GROUP COMPANY 2014 2013 2014 2013 RM RM RM RM CASH FLOWS FROM INVESTING ACTIVITIES Purchaseofproperty,plantandequipment (108,984) (1,100) (130,850) (1,100) Acquisitionofinvestmentin subsidiary(Note14) - (92,010) - (100,000)Net Cash Used In Investing Activities (108,984) (93,110) (130,850) (101,100) CASH FLOWS FROM FINANCING ACTIVITIES Repaymentoftermloans (105,532) (57,348) - - Repaymentoffinanceleaseobligations (44,042) (59,471) - - Proceedsfromissuanceofshares 1,896,893 - 1,896,893 - Paymentofshareissueexpenses (72,334) - (72,334) -Net Cash From/(Used In) Financing Activities 1,674,985 (116,819) 1,824,559 - NET INCREASE IN CASH AND CASH EQUIVALENTS 671,174 165,739 583,682 30,113 CASH AND CASH EQUIVALENTS BROUGHT FORWARD (751,487) (917,226) 15,514 (14,599) CASH AND CASH EQUIVALENTS CARRIED FORWARD (80,313) (751,487) 599,196 15,514 Cashandcashequivalentscarried forwardconsistof: Cashandbankbalances 612,906 45,162 599,196 15,514 Bankoverdraft(Note25) (693,219) (796,649) - - (80,313) (751,487) 599,196 15,514



41

NOTES TO THE FINANCIAL STATEMENTS

1) GENERAL INFORMATION

TheCompanyisapubliclimitedliabilitycompany,incorporatedanddomiciledinMalaysia,andislistedontheACEMarketofBursaMalaysiaSecuritiesBerhad.

TheCompanyisprincipallyengagedininvestmentholdingandtheprovisionofmanagementservices.TheprincipalactivitiesofthesubsidiariesareasdisclosedinNote14totheFinancialStatements.TherehavebeennosignificantchangesinthenatureoftheprincipalactivitiesoftheCompanyanditssubsidiariesduringthefinancialyear.

Theregisteredofficeof theCompany is locatedatNo:149A,149B,151B,PersiaranRajaMudaMusa,42000PortKlang,SelangorDarulEhsan.

TheprincipalplaceofbusinessoftheCompanyislocatedatNo:6-1PlazaDanau2,Jalan5/109F,TamanDanauDesa,58100KualaLumpur.

ThefinancialstatementsarepresentedinRinggitMalaysia(RM).

ThefinancialstatementshavebeenauthorisedbytheBoardofDirectorsforissuanceon28thApril2015.

2) BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS

The financial statements of theGroup and of the Company have been prepared in accordance withMalaysianFinancialReportingStandards(MFRS),InternationalFinancialReportingStandards(IFRS)andtherequirementsoftheCompaniesAct,1965inMalaysia.

Atthebeginningofthecurrentfinancialyear,theGroupandtheCompanyadoptedthenewandrevisedMFRSswhicharemandatoryforfinancialperiodbeginningonorafter1stJanuary2014.

Adoption of Amendments to MFRSs and Issues Committee (“IC”) Interpretations

TheaccountingpoliciesadoptedbytheGroupandtheCompanyareconsistentwiththoseadoptedinthepreviousyear,exceptasfollows:

AmendmentstoMFRS10 ConsolidatedFinancialStatements:InvestmentEntities AmendmentstoMFRS12 DisclosureofInterestinOtherEntities:InvestmentEntities

AmendmentstoMFRS127 SeparateFinancialStatements:InvestmentEntities AmendmentstoMFRS132 FinancialInstruments:Presentation-OffsettingFinancial

AssetsandFinancialLiabilities AmendmentstoMFRS136 ImpairmentofAssets-RecoverableAmountDisclosures

forNon-FinancialAssets AmendmentstoMFRS139 NovationofDerivativesandContinuationofHedgeAccounting ICInterpretation21 Levies

The adoption of the above standards and interpretations did not have any significant impact on thefinancialstatementsoftheGroupandoftheCompany.


42

Standards issued but not yet effective

Asatthedateofauthorisationofthesefinancialstatements,thefollowingStandards,AmendmentsandAnnualImprovementshavebeenissuedbytheMalaysianAccountingStandardsBoard(“MASB”)butarenotyeteffectiveandhavenotbeenadoptedbytheGroupandtheCompany: Effectivefor

annualperiod beginningonor

after AmendmentstoMFRS119 DefinedBenefitPlans:EmployeeContribution 1stJuly2014 AnnualImprovementstoMFRSs2010-2012Cycle 1stJuly2014 AnnualImprovementstoMFRSs2011-2013Cycle 1stJuly2014 MFRS14 RegulatoryDeferralAccounts 1stJanuary2016 AmendmentstoMFRS11 AccountingforAcquisitionsofInterestsin JointOperations 1stJanuary2016 AmendmentstoMFRS127 EquityMethodinSeparateFinancialStatements 1stJanuary2016 AmendmentstoMFRS10 SaleorContributionofAssetsbetweenanInvestor 1stJanuary2016 andMFRS128 anditsAssociateorJointVenture

AmendmentstoMFRS116 ClarificationofAcceptableMethodsofDepreciation 1stJanuary2016 andMFRS138 andAmortisation

AmendmentstoMFRS116 Agriculture:BearerPlants 1stJanuary2016 andMFRS141

AnnualImprovementstoMFRSs2012-2014Cycle 1stJanuary2016 AmendmentstoMFRS101 DisclosureInitiative 1stJanuary2016 AmendmentstoMFRS10,

InvestmentEntities:ApplyingtheConsolidationException MFRS12andMFRS128 1stJanuary2016

MFRS15 RevenuefromContractswithCustomers 1stJanuary2017 MFRS9 FinancialInstruments(IFRS9issuedbyIASB 1stJanuary2018 inJuly2014)

TheGroupandtheCompanywilladopttheabovepronouncementswhentheybecomeeffectiveinthe

respectivefinancialperiods.ThesepronouncementsarenotexpectedtohaveanyeffecttothefinancialstatementsoftheGroupandoftheCompanyupontheirinitialapplication,exceptasdescribedbelow:

MFRS 9 Financial Instruments

InNovember2014,MASBissuedthecompleteversionofMFRS9replacingMFRS139.MFRS9retainsbutsimplifiesthemixedmeasurementmodelinMFRS139andestablishesthreeprimarymeasurementcategoriesforfinancialassets:amortisedcost,fairvaluethroughprofitorlossandfairvaluethroughothercomprehensiveincome(“OCI”).Thebasisofclassificationdependsontheentity’sbusinessmodelandthecontractualcashflowcharacteristicsofthefinancialasset.InvestmentsinequityinstrumentsarealwaysmeasuredatfairvaluethroughprofitorlosswithanirrevocableoptionatinceptiontopresentchangesinfairvalueinOCI(providedtheinstrumentisnotheldfortrading).Adebtinstrumentismeasuredatamortisedcostonlyiftheentityisholdingittocollectcontractualcashflowsandthecashflowsrepresentprincipalandinterest. Forliabilities,thestandardretainsmostoftheMFRS139requirements.Theseincludeamortisedcostaccountingformostfinancialliabilities,withbifurcationofembeddedderivatives.Themainchangeisthat,incaseswherethefairvalueoptionistakenforfinancialliabilities,thepartofafairvaluechangedue toanentity’sowncredit risk is recorded inothercomprehensive incomerather than the incomestatement,unlessthiscreatesanaccountingmismatch.

NOTES TO THE FINANCIAL STATEMENTS (Cont’d)


43

ThereisnowanewexpectedcreditlossesmodelonimpairmentforallfinancialassetsthatreplacestheincurredlossimpairmentmodelusedinMFRS139.Theexpectedcreditlossesmodelisforward-lookingandeliminatestheneedforatriggereventtohaveoccurredbeforecreditlossesarerecognised.

TheGroup and theCompany are currently assessing the impactof the adoptionof this standards inrelationtothenewrequirementsforclassification,measurementandimpairment.

3) FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The operations of theGroup are subject to a variety of financial risks, includingmarket risk (foreigncurrencyexchange riskand interest rate risk), credit risk, and liquidity risk.TheGrouphasadoptedafinancialriskmanagementframeworkwiththeprincipalobjectiveofeffectivelymanagingtheserisksandminimisinganypotentialadverseeffectsonthefinancialperformanceoftheGroupandoftheCompany.

Market risk

Marketriskistheriskthatchangesinmarketprices,suchasforeigncurrencyexchangerisk,interestrateriskandotherpriceswillaffecttheGroup’sfinancialpositionandcashflows.

TheGrouphasinplacepoliciestomanageitscompetitiverisksfromitscompetitorsinprovidingbetteralternativesintermsofbetterservices.

(i) Interest rate risk

InterestrateriskistheriskthatthefairvalueorfuturecashflowsoftheGroup’sfinancialinstrumentswillfluctuatebecauseofchangesinmarketinterestrates.

TheGroup’svariablerateborrowingsareexposedtoariskofchangeincashflowsduetochangesininterestrates.TheGroup’sinvestmentinfinancialassetsaremainlyshortterminnatureandmostlyplacedinfinancialdeposits.

ChangesininterestratesarenotexpectedtohaveasignificantimpactontheGroup’sprofitorloss.

Cashflowsensitivityanalysisforvariablerateinstruments

An increaseof100basispointat thereportingdatewouldhave increase in lossbefore taxby theamountshownbelowandadecreasewouldhaveanequalbutoppositeeffect.Thisanalysisassumesthatallothervariables,remainconstant.

GROUP RM

Increaseinlossbeforetax 40,884 Credit risk

CreditriskistheriskofafinanciallosstotheGroupifacustomerorcounterpartytoafinancialinstrument

fails tomeet itscontractualobligations.TheGroup’sexposuretocreditriskarisesprincipally fromitsreceivables fromcustomers.TheCompany’s exposure to credit risk arises principally from loans andadvancestosubsidiary.



44

Managementhasacreditpolicyinplaceandtheexposuretocreditriskismonitoredonanongoingbasis.Asattheendofthereportingperiod,themaximumexposuretocreditriskarisingfromreceivablesisrepresentedbythecarryingamountsinthestatementsoffinancialposition.

Managementhastakenreasonablestepstoensurethatreceivablesthatareneitherpastduenorimpairedaremeasuredattheirrealisablevalues.AsignificantportionofthesereceivablesareregularcustomersthathavebeentransactingwiththeGroup.TheGroupusesageinganalysistomonitorthecreditqualityofthereceivables.Anyreceivableshavingsignificantbalancespastduemorethan120days,whicharedeemedtohavehighercreditrisk,aremonitoredindividually.

Theageinganalysisoftradereceivablesasattheendofthereportingperiodareasfollows:

GROUP 2014 2013 RM RM

Neitherpastduenorimpaired 2,703,028 812,345 Pastdue31-120daysnotimpaired - 344,482 Pastduemorethan120daysnotimpaired 1,696,996 1,694,308 1,696,996 2,038,790 Impaired 2,796,566 2,861,602 7,196,590 5,712,737 i) Receivables that are neither past due nor impaired

Trade receivables that are neither past due nor impaired are creditworthy receivables with good

paymentrecordswiththeGroup.

NoneoftheGroup’stradereceivablesthatareneitherpastduenorimpairedhavebeenrenegotiatedduringthefinancialyear.

ii)Receivables that are past due but not impaired

TheGrouphastradereceivablesamountingtoRM1,696,996(2013:RM2,038,790)thatispastdueatthereportingdatebutnotimpaired.

Thesereceivablesareunsecured.Managementisconfidentthatthesereceivablesarerecoverableastheseaccountsarestillactive.

iii)Receivables that are impaired The Group’s trade receivables and the movement of the allowance accounts used to record the

impairmentisasfollow: GROUP 2014 2013 RM RM Tradereceivables-Norminalamount 2,796,565 2,861,602 Allowancefordoubtfuldebts (2,796,565) (2,861,602) - -



45

Themovementsintheallowanceforimpairmentlossesofreceivablesduringthefinancialyearwere: GROUP 2014 2013 RM RM Asatbeginningofyear 2,861,602 2,769,746 Baddebtswrittenoff (64,497) - Impairmentlossrecognised - 91,856 Reversalofimpairmentloss (540) - Asatendofyear 2,796,565 2,861,602

Liquidity risk

LiquidityriskistheriskthattheGroupwillnotbeabletomeetitsfinancialobligationsasandwhentheyfalldue.

TheGrouppractisesprudentliquidityriskmanagementtominimisethemismatchoffinancialassetsandliabilitiesandtomaintainsufficientfundsforcontingentfundingrequirementofworkingcapital.

The table below summaries the maturity profile of the Group’s and the Company’s liabilities at thereportingdatebasedoncontractualundiscountedrepaymentobligations.

Contractual Ondemand Carrying undiscounted orwithin Twotofive Morethan

amount cashflows oneyear years fiveyears RM RM RM RM RM GROUP 2014

Financial liabilities Tradepayables 2,551,508 2,551,508 2,551,508 - -

Otherpayables 255,749 255,749 255,749 - - Termloans 4,031,726 3,821,184 210,542 820,881 2,789,761 6,838,983 6,628,441 3,017,799 820,881 2,789,761 2013

Financial liabilities Tradepayables 686,663 686,663 686,663 - -

Otherpayables 231,838 231,838 231,838 - - Amountowingtodirectors 850,787 850,787 850,787 - - Financeleaseliabilities 44,042 56,992 32,646 24,346 - Termloans 4,137,258 3,963,472 173,786 912,999 2,876,687 5,950,588 5,789,752 1,975,720 937,345 2,876,687



46

Contractual Ondemand Carrying undiscounted orwithin Twotofive

amount cashflows oneyear years RM RM RM RM

COMPANY

2014 Financial liabilities Otherpayables 169,322 169,322 169,322 -

Amountowingtosubsidiaries 21,866 21,866 21,866 - 191,188 191,188 191,188 - 2013

Financial liabilities Otherpayables 150,735 150,735 150,735 -

Amountowingtodirectors 247,007 247,007 247,007 - 397,742 397,742 397,742 -

Capital Risk Management

TheprimaryobjectiveoftheGroup’scapitalmanagementistosafeguardtheGroup’sabilitytocontinueasagoingconcern,andtomaintainanoptimalcapitalstructuresoastoprovidereturnsforshareholders.

TheGroupmanages itscapital structureandmakesadjustments to it in lightofchanges ineconomicconditions.Tomaintainoradjustthecapitalstructure,theGroupmayadjustthedividendpaymenttoshareholders,returncapitaltoshareholdersorissuenewshares.Nochangesweremadeintheobjectives,policiesorprocessescomparedtothepreviousfinancialyear.

TheGroupisnotsubjecttoanyexternallyimposedcapitalrequirements.

Thedebt-to-equityratiosasat31stDecember2014andasat31stDecember2013wereasfollows:


Totalborrowings 4,724,945 4,977,949 Less:Cashandcashequivalents (612,906) (45,162) Netdebt 4,112,039 4,932,787 Totalequity 6,718,230 6,425,307

Debt-to-equityratio 0.61 0.77



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4) SIGNIFICANT ACCOUNTING POLICIES

a) Basis of Accounting

Thefinancialstatementsarepreparedunderthehistoricalcostconventionunlessotherwiseindicatedintheaccountingpoliciesbelowandexceptforcertainnon-currentassetsthataremeasuredatrevaluedamounts.Thefinancialstatementsarealsopreparedonthebasisofaccountingprinciplesapplicabletoagoing-concern.Asat31stDecember2014,theGroup’sandtheCompany’saccumulatedlosseswereRM17,879,465andRM8,338,046 respectively.Thesuccessful turnaroundplan for theGroupandtheCompanyisoneofthekeyfactorsforthesustainabilityoftheGroup’sandoftheCompany’soperationsand for theGroupand theCompany tocontinueasgoingconcerns in the foreseeablefuture.The validity of the going concerns assumption is therefore dependent on the successfulimplementationoftheturnaroundplaninthefuture.Intheeventthegoingconcernassumptionisnolongervalid,theGroupandtheCompanymaynotbeabletodischargeitsliabilitiesinthenormalcourseofbusinessandadjustmentsmayhavetobemadetoreflectsuchsituation.

Historicalcostisgenerallybasedonthefairvalueoftheconsiderationgiveninexchangeforassets.Fairvalueisthepricethatwouldbereceivedtosellanassetorpaidtotransferaliabilityinanorderlytransactionbetweenmarketparticipantsatthemeasurementdate,regardlessofwhetherthatpriceisdirectlyobservableorestimatedusinganothervaluation technique. Inestimating the fairvalueofanassetora liability, theGrouptakes intoaccount thecharacteristicsof theassetor liability ifmarketparticipantswouldtakethosecharacteristicsintoaccountwhenpricingtheassetorliabilityatthemeasurementdate.

Inaddition,forfinancialreportingpurposes,fairvaluemeasurementsarecategorisedintoLevel1,2or3basedonthedegreetowhichtheinputstothefairvaluemeasurementsareobservableandthesignificanceof the inputs to the fairvaluemeasurement in itsentirety,whicharedescribedasfollows:

(i) Level1inputsarequotedprices(unadjusted)inactivemarketsforidenticalassetsorliabilitiesthattheentitycanaccessatthemeasurementdate;

(ii) Level2areinputs,otherthanquotedpricesincludedwithinLevel1,thatareobservablefortheassetorliability,eitherdirectlyorindirectly;and

(iii)Level3inputsareunobservableinputsfortheassetorliability.

b) Revenue Recognition

Revenueisrecognisedwhenitisprobablethattheeconomicbenefitsassociatedwiththetransactionwill flow to the enterprise and the amount of the revenue can bemeasured reliably. Revenue ismeasuredatthefairvalueofconsiderationreceivedorreceivable,netofreturns,allowancesandtradediscounts.

Gross dividend income from investment is recognised when the right to received payment isestablished. Management fee, administrative charges, rental income and interest income arerecognisedonaccrualbasis,takingintoaccounttheeffectiveyieldonasset.



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c) Employee Benefits

(i) Shorttermbenefits

Wages,salaries,bonusesandsocialsecuritycontributionsarerecognisedasanexpenseintheyearinwhichassociatedservicesarerenderedbyemployeesoftheGroup.Shorttermaccumulatingcompensatedabsencessuchaspaidannualleavearerecognisedwhenservicesarerenderedbyemployeesthatincreasetheirentitlementtofuturecompensatedabsences,andshorttermnon-accumulatingcompensatedabsencessuchassickleavearerecognisedwhentheabsencesoccur.

(ii) Definedcontributionsplans

As required by law, companies inMalaysiamake contributions to the state pension scheme,EmployeesProvidentFund.Suchcontributionsarerecognisedasanexpenseinprofitorlossasincurred.

d) Foreign Currency Conversion

(i) FunctionalandPresentationCurrency

TheindividualfinancialstatementsofeachentityintheGrouparemeasuredusingtheprimaryeconomicenvironmentinwhichtheentityoperates(“thefunctionalcurrency”).Theconsolidatedfinancial statements are presented in Ringgit Malaysia (RM), which is also the Company’sfunctionalcurrency.

(ii) ForeignCurrencyTransactions

Foreigncurrencytransactionsaretranslatedintothefunctionalcurrencyusingtheexchangeratesprevailingatthedatesofthetransactions.Foreignexchangegainsandlossesresultingfromthesettlementofsuchtransactionsandfromthetranslationatyearendexchangeratesofmonetaryassetsandliabilitiesdenominatedinforeigncurrenciesarerecognisedinprofitorloss.

e) Income Taxes

(i) Currenttax

Currenttaxassetsandliabilitiesaremeasuredattheamountexpectedtoberecoveredfromorpaidtothetaxationauthorities.Thetaxratesandtaxlawsusedtocomputetheamountarethosethatareenactedorsubstantiallyenactedbythefinancialyearend.

Currenttaxesarerecognisedinprofitorloss,excepttotheextentthatthetaxrelatestoitemsrecognisedoutsideprofitorloss,eitherinothercomprehensiveincomeordirectlyinequity.

(ii) Deferredtax

Deferredtaxisrecognisedontemporarydifferencesbetweenthecarryingamountsofassetsandliabilitiesinthefinancialstatementsandthecorrespondingtaxbasesusedinthecomputationof taxable profit. Deferred tax liabilities are generally recognised for all taxable temporarydifferences.Deferredtaxassetsaregenerallyrecognisedforalldeductibletemporarydifferences,unusedtaxlossesandunusedtaxcreditstotheextentthatitisprobablethattaxableprofitwillbeavailableagainstwhichthosedeductibletemporarydifferences,unusedtaxlossesandunusedtaxcreditscanbeutilised.



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Thecarryingamountofdeferredtaxassetsisreviewedattheendofeachreportingperiodandreducedtotheextentthatitisnolongerprobablethatsufficienttaxableprofitswillbeavailabletoallowallorpartoftheassettoberecovered.

Deferredtaxassetsandliabilitiesaremeasuredatthetaxratesthatareexpectedtoapplyintheperiodinwhichtheliabilityissettledortheassetrealised,basedontaxrates(andtaxlaws)thathavebeenenactedorsubstantivelyenactedbytheendofthereportingperiod.Themeasurementofdeferred tax liabilities andassets reflects the tax consequences thatwould follow from themanner inwhich theGroupand theCompanyexpect, at theendof the reportingperiod, torecoverorsettlethecarryingamountofitsassetsandliabilities.

Deferred taxassetsand liabilitiesareoffsetwhenthere isa legallyenforceableright tosetoffcurrenttaxassetsagainstcurrenttaxliabilitiesandwhentheyrelatetoincometaxesleviedbythesametaxationauthorityandtheGroupandtheCompanyintendtosettleitscurrenttaxassetsandliabilitiesonanetbasis.

f) Property, Plant and Equipment

Allitemsofproperty,plantandequipmentareinitiallyrecordedatcost.Thecostofanitemofproperty,plant and equipment is recognised as an asset if, andonly if, it is probable that future economicbenefitsassociatedwiththeitemwillflowtotheGroupandthecostoftheitemcanbemeasuredreliably.

Subsequent costs are included in theasset’s carryingamountor recognisedas a separate asset, asappropriate, onlywhen it is probable that future economic benefits associatedwith the itemwillflowto theGroupand thecostof the itemcanbemeasuredreliably.Thecarryingamountof thereplacedpartisderecognised.Allotherrepairsandmaintenancearechargedtoprofitorlossduringthefinancialyearinwhichtheyareincurred.

Subsequent to recognition, property, plant and equipment are stated at cost less accumulateddepreciationandanyaccumulatedimpairmentlosses.

Freeholdlandandbuildingarestatedatvaluationandarerevaluedatregularintervalsofatleastonceineverythreeyearsbythedirectorsbasedonthevaluationreportsofindependentprofessionalvaluersusingthe“openmarketvalueonexistinguse”basiswithadditionalvaluationintheinterveningyearswheremarketconditionsindicatethatthecarryingvaluesoftherevaluedassetsdiffermateriallyfromthemarketvalue.

An increase in the carryingamount arising fromrevaluationofproperty,plant andequipment iscreditedtotherevaluationreserveaccountasrevaluationsurplus.Anydeficitarisingfromrevaluationis charged against the revaluation reserve account to the extent of a previous surplusheld in therevaluationreserveaccountforthesameasset.Inallothercases,adecreaseincarryingamountischargedtoprofitorloss.Anincreaseinrevaluationdirectlyrelatedtoapreviousdecreaseincarryingamountforthatsameassetthatwasrecognisedasanexpense,iscreditedtoprofitorlosstotheextentthatitoffsetsthepreviouslyrecordeddecrease.



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Freeholdlandisnotdepreciatedasithasaninfinitelife.Depreciationofproperty,plantandequipment,otherthanrenovation-in-progresswhichisnotdepreciated,iscalculatedtowriteoffthecostoftheproperty,plantandequipmentonastraight-linebasisovertheexpectedusefullivesoftheproperty,plantandequipmentconcerned.Theannualdepreciationratesusedareasfollows:

%

Freeholdbuildingandrenovation 2-10 Furniture,fittingsandotherequipment 15 Toolsandequipment 15 Motorvehicles 20 Computers 15 Officeequipment 15 The carrying values of property, plant and equipment are reviewed for impairment when events

or change in circumstances indicate that the carryingvaluemaynotbe recoverable.The residualvalues,usefullivesanddepreciationmethodsarereviewedateachfinancialyearend,andadjustedprospectively,ifappropriate.

Anitemofproperty,plantandequipmentisderecognisedupondisposalorwhennofutureeconomicbenefitsareexpectedfromitsuseordisposal.Gainor lossarisingfromthedisposalofanasset isdeterminedasthedifferencebetweentheestimatednetdisposalproceedandthecarryingamountoftheasset,andisrecognisedinprofitorloss.

g) Subsidiaries and Basis of Consolidation

TheconsolidatedfinancialstatementscomprisethefinancialstatementsoftheCompanyandentitiescontrolledbytheCompany.ControlisachievedwhentheGroup:

(i) haspowerovertheinvestee;

(ii) isexposed,orhasrights,tovariablereturnsfromitsinvolvementwiththeinvestee;and

(iii)hastheabilitytouseitspowertoaffectitsreturns.

WhentheGrouphaslessthanamajorityofthevotingorsimilarrightsofaninvestee,theGroupconsidersallrelevant factsandcircumstances inassessingwhether ithaspowerover the investee,including:

(i) thecontractualarrangementwiththeothervoteholdersoftheinvestee;

(ii) rightsarisingfromothercontractualarrangements;and

(iii)theGroup’svotingrightsandpotentialvotingrights.

SubsidiariesarefullyconsolidatedfromthedateonwhichcontrolistransferredtotheGroup.Theyaredeconsolidatedfromthedatethatcontrolceases.Specifically,incomeandexpensesofasubsidiaryacquiredordisposedofduringtheyearareincludedintheconsolidatedstatementofprofitorlossandother comprehensive income from thedate theGroupgains control until thedatewhen theGroupceasestocontrolthesubsidiary.



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ProfitorlossandeachcomponentofothercomprehensiveincomeareattributedtotheownersoftheCompanyand to thenon-controlling interests.Total comprehensive incomeof subsidiaries isattributedtotheownersoftheGroupandtothenon-controllinginterestsevenifthisresultsinthenon-controllinginterestshavingadeficitbalance.

When necessary, adjustments aremade to the financial statements of subsidiaries to bring theiraccounting policies into line with the Group’s accounting policies. Inter-company transactions,balances,incomeandexpensesontransactionsbetweenGroupcompaniesareeliminated.

Changes in the Group’s ownership interests in existing subsidiaries

Changes in theGroup’sownership interests in subsidiaries thatdonot result in theGroup losingcontrolareaccountedforasequitytransactions.ThecarryingamountsoftheGroup’sinterestsandthe non-controlling interests are adjusted to reflect the changes in their relative interests in thesubsidiaries.Anydifferencebetweentheamountbywhichthenon-controllinginterestsareadjustedandthefairvalueoftheconsiderationpaidorreceivedisrecogniseddirectlyinequityandattributedtoownersoftheCompany.

Disposal of Subsidiaries

When theGroup losescontrolofa subsidiary,againor loss is recognised inprofitor lossand iscalculatedasthedifferencebetween(i)theaggregateofthefairvalueoftheconsiderationreceivedandthefairvalueofanyretainedinterestand(ii)thepreviouscarryingamountoftheassets(includinggoodwill),andliabilitiesofthesubsidiaryandanynon-controllinginterests.AllamountspreviouslyrecognisedinothercomprehensiveincomeinrelationtothatsubsidiaryareaccountedforasiftheGrouphaddirectlydisposedoftherelevantassetsorliabilitiesofthesubsidiary(i.e.reclassifiedtoprofitorlossortransferredtoanothercategoryofequityasspecified/permittedbyapplicableMFRSs).ThefairvalueofanyinvestmentretainedintheformersubsidiaryatthedatewhencontrolislostisregardedasthefairvalueoninitialrecognitionforsubsequentaccountingunderMFRS139FinancialInstruments:RecognitionandMeasurementor,whenapplicable,thecostoninitialrecognitionofaninvestmentinanassociateorjointventure.

Transactions with Non-Controlling Interest

Non-Controlling interestrepresents theportionofprofitor lossandnetassets insubsidiariesnotheldbytheGroupandarepresentedseparatelyinprofitorlossoftheGroupandwithinequityinthe consolidated statements of financial position, separately from the parent shareholder’s equity.Transactions with non-controlling interest are accounted for using the entity concept method,whereby,transactionswithnon-controllinginterestsareaccountedforastransactionswithowners.Onacquisitionofnon-controllinginterest,thedifferencebetweentheconsiderationandbookvalueoftheshareofthenetassetsacquiredisrecogniseddirectlyinequity.Gainorlossondisposaltonon-controllinginterestisrecogniseddirectlyinequity.

h) Goodwill

GoodwillrepresentstheexcessofthecostofacquisitionofsubsidiariesandassociatesoverthefairvalueoftheGroup’sshareoftheiridentifiablenetassetsatthedateofacquisition.

Goodwillistestedannuallyforimpairmentandcarriedatcostlessaccumulatedimpairmentlosses.Impairment losses on goodwill (inclusive of impairment losses recognised in a previous interimperiod)arenotreversed.Gainsandlossesonthedisposalofasubsidiaryincludethecarryingamountofgoodwillrelatingtothesubsidiarysold.



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Goodwillisallocatedtocash-generatingunitsforthepurposeofimpairmenttesting.Theallocationismadetothosecash-generatingunitsorgroupsofcash-generatingunitsthatareexpectedtobenefitfromthesynergiesofthebusinesscombinationinwhichthegoodwillarose,identifiedaccordingtooperatingsegments.

AnyexcessoftheGroup’sshareoftheidentifiablenetassetsatthedateofacquisitionoverthecostofacquisitionisrecognisedimmediatelyinthestatementsofprofitorlossandothercomprehensiveincome.

i) Investments in Subsidiaries

In theCompany’s separatefinancial statements, investments in subsidiaries are stated at cost lessaccumulated impairment losses.Ondisposalofsuch investments, thedifferencebetweendisposalproceedsandtheircarryingamountsarerecognisedinprofitorloss.

j) Business Combinations

Acquisition of subsidiaries are accounted for using the acquisition method. The considerationtransferredinabusinesscombinationismeasuredatfairvalue,whichiscalculatedasthesumoftheacquisition-datefairvaluesofassettransferredbytheGroup,liabilitiesincurredbytheGrouptotheformerownersoftheacquireeandequityinstrumentsissuedbytheGroupinexchangeforcontroloftheacquiree.Acquisition-relatedcostsarerecognisedinprofitorlossasincurred.

Atacquisitiondate,theidentifiableassetsacquiredandliabilitiesassumedarerecognisedattheirfairvalues,exceptthat:

- deferredtaxassetsorliabilitiesandassetsorliabilitiesrelatedtoemployeebenefitarrangementsare recognised and measured in accordance with MFRS 112 Income Taxes and MFRS 119EmployeeBenefitsrespectively;

- liabilitiesorequityinstrumentsrelatedtotheshare-basedpaymentarrangementsoftheacquireeorshare-basedpaymentarrangementsoftheGroupenteredintotoreplaceshare-basedpaymentarrangementsoftheacquireearemeasuredinaccordancewithMFRS2Share-basedPaymentattheacquisitiondate;and

- assets(ordisposalgroups)thatareclassifiedasheldforsaleinaccordancewithMFRS5Non-CurrentAssetsHeldforSaleandDiscontinuedOperationsaremeasuredinaccordancewiththatStandard.

Goodwillismeasuredastheexcessofthesumoftheconsiderationtransferred,theamountofanynon-controllinginterestsintheacquiree,andthefairvalueoftheacquirer’spreviouslyheldequityinterestintheacquiree(ifany)overthenetoftheacquisition-dateamountsoftheidentifiableassetsacquiredandtheliabilitiesassumed.If,afterreassessment,thenetoftheacquisition-dateamountsof the identifiable assets acquired and liabilities assumed exceeds the sum of the considerationtransferred, the amountof anynon-controlling interests in the acquiree and the fair valueof theacquirer’spreviouslyheldequityinterestintheacquiree(ifany),theexcessisrecognisedimmediatelyinprofitorlossasabargainpurchasegain.



53

Non-Controlling interests that are present ownership interests and entitle their holders to aproportionateshareof theentity’snetassets in theeventof liquidationmaybe initiallymeasuredeitheratfairvalueoratthenon-controllinginterests’proportionateshareoftherecognisedamountsoftheacquiree’sidentifiablenetassets.Thechoiceofmeasurementbasisismadeonatransaction-by-transactionbasis.Other typesofnon-controlling interests aremeasuredat fair valueor,whenapplicable,onthebasisspecifiedinanotherStandard.

Where the consideration transferred by the Group in a business combination includes assets orliabilities resulting from a contingent consideration arrangement, the contingent consideration ismeasuredatitsacquisition-datefairvalue.Changesinthefairvalueofthecontingentconsiderationthat qualify asmeasurement period adjustments are adjusted retrospectively,with correspondingadjustments against goodwill. Measurement period adjustments are adjustments that arise fromadditionalinformationobtainedduringthe“measurementperiod”(whichcannotexceedoneyearfromtheacquisitiondate)aboutfactsandcircumstancesthatexistedattheacquisitiondate.

The subsequent accounting for changes in the fair value of contingent consideration that do notqualifyasmeasurementperiodadjustmentsdependsonhowthecontingentconsiderationisclassified.Contingent consideration that is classified as equity is not remeasured at subsequent reportingdatesanditssubsequentsettlementisaccountedforwithinequity.ContingentconsiderationthatisclassifiedasanassetorliabilityisremeasuredatsubsequentreportingdatesinaccordancewithMFRS137Provisions,ContingentLiabilitiesandContingentAssets,asappropriate,withthecorrespondinggainorlossbeingrecognisedinprofitorloss.

Whereabusinesscombinationisachievedinstages,theGroup’spreviouslyheldequityinterestsintheacquireeisremeasuredtoitsacquisitiondatefairvalueandtheresultinggainorloss,ifany,isrecognisedinprofitorloss.Amountsarisingfrominterestsintheacquireepriortotheacquisitiondatethathavepreviouslybeenrecognisedinothercomprehensiveincomearereclassifiedtoprofitorloss,wheresuchtreatmentwouldbeappropriateifthatinterestwasdisposedof.

Iftheinitialaccountingforabusinesscombinationisincompletebytheendofthereportingperiodinwhichthecombinationoccurs,theGroupreportsprovisionalamountsfortheitemsforwhichtheaccountingisincomplete.Thoseprovisionalamountsareadjustedduringthemeasurementperiod(seeabove),oradditionalassetsorliabilitiesarerecognised,toreflectnewinformationobtainedaboutfactsandcircumstancesthatexistedasoftheacquisitiondatethat,ifknown,wouldhaveaffectedtheamountsrecognisedatthatdate.

k) Finance Lease

LeasesintermsofwhichtheGroupassumessubstantiallyalltherisksandrewardsofownershipareclassifiedasfinanceleases.Oninitialrecognition,theleasedassetismeasuredatanamountequaltothelowerofitsfairvalueandthepresentvalueoftheminimumleasepayments.Subsequenttoinitialrecognition,theasset isaccountedfor inaccordancewiththeaccountingpolicyapplicabletothatasset.

Minimumleasepaymentsmadeunderfinanceleasesareapportionedbetweenthefinanceexpensesandthereductionoftheoutstandingliability.Thefinanceexpenseisallocatedtoeachperiodduringtheleasetermsoastoproduceaconstantperiodicrateofinterestontheremainingbalanceoftheliability.Contingentleasepaymentsareaccountedforbyrevisingtheminimumleasepaymentsovertheremainingtermoftheleasewhentheleaseadjustmentisconfirmed.



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l) Inventories

Inventoriesarevaluedatthelowerofcost(determinedprincipallyonthefirst-in,first-outmethod)andnetrealisablevalue.Costconsistsofpurchasesandotherdirectcostsincurredinbringingtheinventoriestoitspresentconditionandlocation.

Netrealisablevalueistheestimatedsellingpriceintheordinarycourseofbusiness,lessthecostsofcompletionandsellingexpenses.

m) Financial Instruments

i) Initial recognition and measurement

Financialinstrumentsarerecognisedinthefinancialstatementswhen,andonlywhen,theGroupandtheCompanybecomeapartytothecontractualprovisionsoftheinstruments.

Financialassetsandfinancialliabilitiesareinitiallymeasuredatfairvalue.Transactioncoststhataredirectlyattributabletotheacquisitionorissueofthefinancialassetsandfinancialliabilities(otherthanfinancialassetsandfinancialliabilitiesatfairvaluethroughprofitorloss)areaddedtoordeductedfromthefairvalueofthefinancialassetsorfinancialliabilities,asappropriate,oninitialrecognition.Transactioncoststhataredirectlyattributabletotheacquisitionoffinancialassetsorfinancial liabilitiesat fairvalue throughprofitor lossare recognised immediately inprofitorloss.

ii) Financial instrument categories and subsequent measurement

TheGroupcategoriesfinancialinstrumentsasfollows:

Financial assets

TheGroupclassifiesitsfinancialassetsinthefollowingcategories:atfairvaluethroughprofitorloss(FVTPL),held-to-maturity, loansandreceivablesandavailable-for-sale.Theclassificationdependsonthepurposeforwhichthefinancialassetswereacquired.Managementdeterminestheclassificationatinitialrecognition.

a) Financial assets at fair value through profit or loss

Financialassetsareclassifiedasfinancialassetsat fairvalue throughprofitor loss if theyareheldfortradingoraredesignatedassuchuponinitialrecognition.Financialassetsheldfor trading are derivatives (including separated embedded derivatives) or financial assetsacquiredprincipallyforthepurposeofsellinginthenearterm.

Subsequent to initial recognition, financial assets at fair value through profit or loss aremeasuredatfairvalue.Anygainsorlossesarisingfromchangesinfairvaluearerecognisedinprofitorloss.Netgainsornetlossesonfinancialassetsatfairvaluethroughprofitorlossdonot include exchangedifferences, interest anddividend income.Exchangedifferences,interest and dividend income on financial assets at fair value through profit or loss arerecognisedseparatelyinprofitorlossaspartofotherlossesorotherincome.



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Financialassetsat fairvalue throughprofitor losscouldbepresentedascurrentornon-current.Financialassetsthatareheldprimarilyfortradingpurposesarepresentedascurrentwhereasfinancial assets that arenotheldprimarily for tradingpurposesarepresentedascurrentornon-currentbasedonthesettlementdate.

b) Held-to-maturity investments

Held-to-maturityinvestmentsarenon-derivativefinancialassetswithfixedordeterminablepaymentsandfixedmaturitydatesthattheGrouphasthepositiveintentandabilitytoholdtomaturity.Subsequenttoinitialrecognition,held-to-maturityinvestmentsaremeasuredatamortisedcostusingtheeffectiveinterestmethodlessanyimpairment.

c) Loans and receivables

Loansandreceivablesarenon-derivativefinancialassetswithfixedordeterminablepaymentsthatarenotquotedinanactivemarket.Loansandreceivablesaremeasuredatamortisedcostusingtheeffective interestmethod, lessany impairment. Interest incomeisrecognisedbyapplyingtheeffectiveinterestrate,exceptforshort-termreceivableswhentherecognitionofinterestwouldbeimmaterial.

d) Available-for-sale (AFS) financial assets

Available-for-sale financial assets are non-derivatives that are either designated in thiscategoryornotclassifiedinanyoftheothercategories.Afterinitialrecognition,available-for-salefinancialassetsaremeasuredatfairvalue.Anygainsorlossesfromchangesinfairvalue of the financial assets are recognised in other comprehensive income, except thatimpairmentlosses,foreignexchangegainsandlossesonmonetaryinstrumentsandinterestcalculatedusingtheeffectiveinterestmethodarerecognisedinprofitorloss.Thecumulativegainorlosspreviouslyrecognisedinothercomprehensiveincomeisreclassifiedfromequityto profit or loss as a reclassification adjustmentwhen the financial asset is derecognised.Interestincomecalculatedusingtheeffectiveinterestmethodisrecognisedinprofitorloss.Dividendsonavailable-for-saleequityinstrumentarerecognisedinprofitorlosswhentheCompany’srighttoreceivepaymentisestablished.

Available-for-salefinancialassetsareincludedinnon-currentassetsunlesstheinvestmentmaturesormanagementintendstodisposeofitwithin12monthsoftheendofthereportingperiod.

Financialassetsarede-recognisedwhentherightstoreceivecashflowsfromtheinvestmentshaveexpiredorhavebeentransferredandtheGrouphastransferredsubstantiallyallrisksandrewardsofownership.

Financial liabilities

Financialliabilitiesareclassifiedaseitherfinancialliabilitiesatfairvaluethroughprofitorlossorotherfinancialliabilities.

a) Financial liabilities at fair value through profit or loss

Financial liabilities are classified as financial liabilities at fair value throughprofit or losswhenthefinancialliabilityiseitherheldfortradingoritisdesignatedasfinancialliabilitiesatfairvaluethroughprofitorloss.



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Afinancialliabilityisclassifiedasheldfortradingif:

a) ithasbeenacquiredprincipallyforthepurposeofrepurchasingitinthenearterm;or

b) oninitialrecognitionitispartofaportfolioofidentifiedfinancialinstrumentsthattheGroupmanagestogetherandhasarecentactualpatternofshort-termprofit-taking;or

c) itisaderivativethatisnotdesignatedandeffectiveasahedginginstrument.

A financial liability other than a financial liability held for tradingmay be designated asfinancialliabilitiesatfairvaluethroughprofitorlossuponinitialrecognitionif:

a)such designation eliminates or significantly reduces a measurement or recognitioninconsistencythatwouldotherwisearise;or

b) thefinancialliabilityformspartofagroupoffinancialassetsorfinancialliabilitiesorboth,whichismanagedanditsperformanceisevaluatedonafairvaluebasis,inaccordancewiththeGroup’sdocumentedriskmanagementorinvestmentstrategy,andinformationaboutthegroupingisprovidedinternallyonthatbasis;or

c) it forms part of a contract containing one ormore embedded derivatives, andMFRS139FinancialInstruments:RecognitionandMeasurementpermitstheentirecombinedcontract (assetor liability) tobedesignatedasfinancial liabilitiesat fairvalue throughprofitorloss.

Financialliabilitiesatfairvaluethroughprofitorlossarestatedatfairvalue,withanygainsorlossesarisingonremeasurementrecognisedinprofitorloss.Thenetgainorlossrecognisedinprofitorlossincorporatesanyinterestpaidonthefinancialliabilityandisincludedinthe‘othergainsandlosses’lineiteminthestatementsofcomprehensiveincome.

b) Other financial liabilities

Otherfinancial liabilities,includingborrowings,areinitiallymeasuredatfairvalue,netoftransactioncostsandaresubsequentlymeasuredatamortisedcostusingtheeffectiveinterestmethod,withinterestexpenserecognisedonaneffectiveyieldbasis.

Theeffective interestmethod is amethodof calculating the amortised costof afinancialliability and of allocating interest expense over the relevant period.The effective interestrateistheexactlydiscountsestimatedfuturecashpaymentsthroughtheexpectedlifeofthefinancial liability,or (whereappropriate)a shorterperiod, to thenetcarryingamountoninitialrecognition.

TheGroupderecognisesfinancial liabilitieswhen,andonlywhen, theGroup’sobligationsaredischarged,cancelledortheyexpire.Thedifferencebetweenthecarryingamountofthefinancialliabilityderecognisedandtheconsiderationpaidorpayableisrecognisedinprofitorloss.



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iii) Impairment of Financial Assets

Financialassets,otherthanthoseatFVTPL,areassessedforindicatorsofimpairmentattheendofeachreportingperiod.Financialassetsareconsideredtobeimpairedwhenthereisobjectiveevidencethat,asaresultofoneormoreeventsthatoccurredaftertheinitialrecognitionofthefinancialasset,theestimatedfuturecashflowsoftheinvestmenthavebeenaffected.

ForequityinvestmentsclassifiedasAFS,asignificantorprolongeddeclineinthefairvalueofthesecuritybelowitscostisconsideredtobeobjectiveevidenceofimpairment.

For all otherfinancial assets, including redeemablebonds classifiedasAFSandfinance leasereceivables,objectiveevidenceofimpairmentcouldinclude:

-significantfinancialdifficultyoftheissuerorcounterparty;or -defaultordelinquencyininterestorprincipalpayments;or -itbecomingprobablethattheborrowerwillenterbankruptcyorfinancialre-organisation.

Forcertaincategoriesoffinancialasset,suchastradereceivables,assetsthatareassessednottobeimpairedindividuallyare,inaddition,assessedforimpairmentonacollectivebasis.ObjectiveevidenceofimpairmentforaportfolioofreceivablescouldincludetheGroup’spastexperienceofcollectingpayments,anincreaseinthenumberofdelayedpaymentsintheportfoliopasttheaveragecreditperiodof60days, aswell asobservablechanges innationalor local economicconditionsthatcorrelatewithdefaultonreceivables.

Forfinancialassetscarriedatamortisedcost,theamountoftheimpairmentlossrecognisedisthedifferencebetweentheasset’scarryingamountandthepresentvalueofestimatedfuturecashflows,discountedatthefinancialasset’soriginaleffectiveinterestrate.

The carrying amount of thefinancial asset is reducedby the impairment loss directly for allfinancialassetswiththeexceptionoftradereceivables,wherethecarryingamountisreducedthroughtheuseofanallowanceaccount.Whenatradereceivableisconsidereduncollectible,itiswrittenoffagainsttheallowanceaccount.Subsequentrecoveriesofamountspreviouslywrittenoffarecreditedagainsttheallowanceaccount.Changesinthecarryingamountoftheallowanceaccountarerecognisedinprofitorloss.

WhenanAFSfinancialassetisconsideredtobeimpaired,cumulativegainsorlossespreviouslyrecognisedinothercomprehensiveincomearereclassifiedtoprofitorlossintheperiod.

With the exceptionofAFSequity instruments, if, in a subsequentperiod, theamountof theimpairmentlossdecreasesandthedecreasecanberelatedobjectivelytoaneventoccurringaftertheimpairmentwasrecognised,thepreviouslyrecognisedimpairmentlossisreversedthroughprofitorlosstotheextentthatthecarryingamountoftheinvestmentatthedatetheimpairmentisreverseddoesnotexceedwhattheamortisedcostwouldhavebeenhadtheimpairmentnotbeenrecognised.

InrespectofAFSequitysecurities,impairmentlossespreviouslyrecognisedinprofitorlossarenotreversedthroughprofitorloss.Anyincreaseinfairvaluesubsequenttoanimpairmentlossisrecognisedinothercomprehensiveincome.



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n) Impairment of Non-Financial Assets

Attheendofeachreportingperiod,theGroupreviewsthecarryingamountsofitsnon-currentassetstodeterminewhetherthereisanyindicationthatthoseassetshavesufferedanimpairmentloss.Ifanysuchindicationexists,therecoverableamountoftheassetisestimatedinordertodeterminetheextentoftheimpairmentloss(ifany).Whereitisnotpossibletoestimatetherecoverableamountofanindividualasset,theGroupestimatestherecoverableamountofthecash-generatingunittowhichtheassetbelongs.

Recoverableamountisthehigheroffairvaluelesscoststosellandvalue-in-use.Inassessingvalue-in-use,theestimatedfuturecashflowsarediscountedtotheirpresentvalueusingapre-taxdiscountratethatreflectscurrentmarketassessmentsofthetimevalueofmoneyandtheriskspecifictotheasset.Iftherecoverableamountofanasset(orcash-generatingunit)isestimatedtobelessthanitscarryingamount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverableamount.Animpairmentlossisrecognisedimmediatelyinprofitorlossunlesstheassetiscarriedatarevaluedamount.Anyimpairmentlossofarevaluedassetistreatedasarevaluationdecreasetotheextentofanyunutilisedpreviouslyrecognisedrevaluationsurplusforthesameasset.

Whereanimpairmentlosssubsequentlyreverses,thecarryingamountoftheasset(orcash-generatingunit)isincreasedtotherevisedestimateofitsrecoverableamount,butsothattheincreasedcarryingamountdoesnotexceedthecarryingamountthatwouldhavebeendeterminedhadnoimpairmentlossbeenrecognisedfortheasset(orcash-generatingunit)inprioryears.Areversalofanimpairmentlossisrecognisedimmediatelyinprofitorloss.

o) Provisions

ProvisionsarerecognisedwhentheGrouphasapresentobligation(legalorconstructive)asaresultofapastevent, it isprobable thatanoutflowofeconomic resourceswillbe required to settle theobligationandtheamountoftheobligationcanbeestimatedreliably.

Provisionsarereviewedateachreportingdateandadjustedtoreflectthecurrentbestestimate.Ifitisnolongerprobablethatanoutflowofeconomicresourceswillberequiredtosettletheobligation,theprovisionisreversed.Iftheeffectofthetimevalueofmoneyismaterial,provisionsarediscountedusingacurrentpretaxratethatreflects,whereappropriate,therisksspecifictotheliability.Whendiscountingisused,theincreaseintheprovisionduetothepassageoftimeisrecognisedasafinancecost.

p) Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifyingassets,whichareassetsthatnecessarilytakeasubstantialperiodoftimetogetreadyfortheirintendeduseorsale,areaddedtothecostofthoseassets,untilsuchtimeastheassetsaresubstantiallyreadyfortheirintendeduseorsale.

Investment income earned on the temporary investment of specific borrowings pending theirexpenditureonqualifyingassetsisdeductedfromtheborrowingcostseligibleforcapitalisation.

Allotherborrowingcostsarerecognisedinprofitorlossintheperiodinwhichtheyareincurred.



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q) Cash and Cash Equivalents

Cashandcash equivalents comprise cashatbankand inhand,demanddeposits and short term,highlyliquidinvestmentsthatarereadilyconvertibletoknownamountofcashandwhicharesubjecttoaninsignificantriskofchangesinvalue.

r) Equity Instruments

AnequityinstrumentisanycontractthatevidencesaresidualinterestintheassetsoftheGroupandtheCompanyafterdeductingallofitsliabilities.Ordinarysharesareequityinstruments.

Ordinary shares are recorded at the proceeds received, net of directly attributable incrementaltransactioncosts.Ordinarysharesareclassifiedasequity.Dividendsonordinarysharesarerecognisedinequityintheperiodinwhichtheyaredeclared.

s) Contingencies

Acontingentliabilityorassetisapossibleobligationorassetthatarisesfrompasteventsandwhoseexistencewillbeconfirmedonlybytheoccurrenceornon-occurrenceofuncertainfutureevent(s)notwhollywithinthecontroloftheGroup.

ContingentliabilitiesandassetsarenotrecognisedinthestatementsoffinancialpositionoftheGroupinthecurrentandpreviousfinancialyearends.

t) Operating Segments

AnoperatingsegmentisacomponentoftheGroupthatengagesinbusinessactivitiesfromwhichitmayearnrevenuesandincurexpenses,includingrevenuesandexpensesthatrelatetotransactionswithanyoftheGroup’sothercomponents.Anoperatingsegment’soperatingresultsarereviewedregularlybythechiefoperatingdecisionmaker,whichinthiscaseistheManagingDirectoroftheGroup,tomakedecisionsaboutresourcestobeallocatedtothesegmentandassessitsperformance,andforwhichdiscretefinancialinformationisavailable.

Operatingsegmentsarereportedinamannerconsistentwiththeinternalreportingprovidedtothechiefoperatingdecision-maker.

5) CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

Thepreparation of financial statements in conformitywithMalaysian Financial Reporting Standardsrequirestheuseofcertaincriticalaccountingestimatesandassumptionsthataffectthereportedamountsofassetsandliabilities,andthereportedresultsduringthereportedperiod.ItalsorequiresdirectorstoexercisetheirjudgementintheprocessofapplyingtheGroup’sandtheCompany’saccountingpolicies.Althoughtheseestimatesandjudgementarebasedonthedirector’sbestknowledgeofcurrenteventsandactions,actualresultsmaydiffer.

Critical Judgements in Applying the Group’s and the Company’s Accounting Policies

In theprocessofapplying theGroup’sand theCompany’saccountingpolicies, thedirectorareof theopinionthattherearenoinstancesofapplicationofjudgementwhichareexpectedtohavesignificanteffectontheamountsrecognisedinthefinancialstatements.



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Key Sources of Estimation Uncertainty

Thekeyassumptionsmadeconcerningthefuture,andotherkeysourcesofestimationuncertaintyatthereportingdatethathaveasignificantriskofcausingamaterialadjustmenttothecarryingamountsofassetsandliabilitieswithinthenextfinancialyearisdescribedbelow:

(i) Impairment on Receivables

TheGroupassessesateachreportingdatewhetherthere isanyobjectiveevidencethatafinancialasset is impaired. To determine whether there is objective evidence of impairment, the Groupconsidersfactorssuchastheprobabilityofinsolvencyorsignificantfinancialdifficultiesofthedebtoranddefaultorsignificantdelayinpayments.Wherethereisobjectiveevidenceofimpairment,theamountandtimingoffuturecashflowsareestimatedbasedonhistoricallossexperienceforassetswithsimilarcreditriskcharacteristics.ThecarryingamountoftheGroup’sloansandreceivableatthereportingdateisdisclosedinNote18totheFinancialStatements.

(ii)Write-down of Inventories

Reviewsaremadeperiodicallybymanagementondamaged,obsoleteandslow-movinginventories.Thesereviewsrequirejudgementandestimates.Possiblechangesintheseestimatescouldresultinrevisionstothevaluationofinventories.

(iii) Deferred Tax Assets

Deferredtaxassetsarerecognisedforallunutilisedtaxlossesandunabsorbedcapitalallowancestotheextentthatisprobablethattaxableprofitwillbeavailableagainstwhichthelossescanbeutilised.Significantmanagementjudgementisrequiredtodeterminetheamountofdeferredtaxassetsthatcanberecognised,baseduponthelikelytimingandleveloffuturetaxableprofittogetherwithfuturetaxplanningstrategies.

6) REVENUE

GROUP COMPANY 2014 2013 2014 2013 RM RM RM RM Continuing operations

Airfilter 331,710 854,424 - - Cleanroom - 408,037 - - Waterfilter - 318,704 - - Generaltrading 2,603,765 843,000 - - 2,935,475 2,424,165 - -



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7) OTHER OPERATING EXPENSES/(INCOME)

Includedinotheroperatingexpenses/(income)arethefollowingcharges/(credits):

GROUP COMPANY 2014 2013 2014 2013 RM RM RM RM Auditors’remuneration 33,300 33,300 20,000 20,000 Baddebtswrittenoff - 507 - - Exceptionalitem:

Depositswrittenoff 400,000 - - - Inventorieswrittenoff 8,659 - - - Impairmentlossonreceivables - 156,575 - - Inventorieswrittendown - 107,706 - - Rentalofpremises 14,400 11,800 14,400 11,800

GROUP COMPANY

2014 2013 2014 2013 RM RM RM RM Andcrediting:

Exceptionalitem: Waiverofshareholder’sadvance (265,815) (831,000) (121,529) (831,000)

Reversalofimpairmentlossontrade receivables (540) - - -

8) STAFF COSTS

GROUP AND COMPANY 2014 2013 RM RM

Salariesandallowance 54,718 148,846 Definedcontributionplan-EPF 1,572 17,913 Socialsecuritycontributions - 930 Otherbenefits - 8,000 56,290 175,689



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9) DIRECTORS’ REMUNERATION

GROUP AND COMPANY 2014 2013 RM RM Executivedirectors: Salariesandotheremoluments - 38,113 Definedcontributionplan-EPF - 4,818 - 42,931 Non-Executivedirectors: Fees 84,000 9,000 84,000 51,931 ThenumberofdirectorsoftheCompanywhosetotalremunerationduringthefinancialyearfellwithin

thefollowingbandsisanalysedbelow:

Numberofdirectors 2014 2013 Executivedirectors:

BelowRM50,000 - 1

Non-executivedirectors:

RM50,001-RM100,000 1 2

10) FINANCE COSTS

GROUP 2014 2013 RM RM Intereston: Bankoverdraft 73,675 83,823 Financelease - 14,889 Termloans 417,391 397,055 491,066 495,767



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11) INCOME TAX EXPENSE GROUP COMPANY

2014 2013 2014 2013 RM RM RM RM Estimatedcurrenttaxpayable 2,022 - - - Deferredtaxinrespectof:

Taxassets(Note15) 142,392 267,674 - - Taxliabilities(Note15) (3,629) (5,551) - - 138,763 262,123 - - 140,785 262,123 - -

Anumericalreconciliationbetweentheincometaxexpenseandtheproductofaccountingprofit/(loss)multipliedbytheapplicablestatutoryincometaxrate,isasfollows:

GROUP COMPANY 2014 2013 2014 2013 RM RM RM RM Accountingprofit/(loss) (1,390,851) 351,288 (393,830) 374,515 Taxattheapplicablestatutoryincometax rateof25% (347,713) 87,822 (98,458) 93,629 Taxeffectsinrespectof:

Expensesthatarenotdeductiblefor taxpurposes 256,040 134,622 72,936 36,443 Overprovisionofdeferredtaxassets

inprioryear 76,423 - - - Recognitionofpreviouslyunrecognised

deferredtaxassets - (114,267) - - Incomenotsubjecttotax (66,319) (207,750) (30,382) (207,750) Netdeferredtaxassetsnotrecognised 222,354 361,696 55,904 77,678 Incometaxexpense 140,785 262,123 - -

Malaysianincometaxiscalculatedatthestatutorytaxrateat25%(2013:25%)oftheestimatedtaxableprofitfortheyear.The2015Budgetannouncedon10thOctober2014reducedthecorporateincometaxratefrom25%to24%effectivefromyearofassessment2016.



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12) EARNINGS/(LOSS) PER ORDINARY SHARE

Basic earnings/(loss) per share

Basicearnings/(loss)pershareiscalculatedbydividingtheprofit/(loss)fortheyearattributabletoownersoftheCompanybytheweightedaveragenumberofordinarysharesinissueduringthefinancialyearasfollows: GROUP

2014 2013

Earnings/(Loss)attributabletoownersoftheCompany(RM) (1,532,601) 89,165 Weightedaveragenumberofordinarysharesinissue 121,706,461 118,555,800 Basicearnings/(loss)pershare(sen) (1.26) 0.08 Diluted

Thedilutedearnings/(loss)pershareoftheGrouphasnotbeenpresentedastherearenodilutivepotential

ordinaryshares.

13) PROPERTY, PLANT AND EQUIPMENT

GROUP Freehold Furniture, building fittingsand Freehold and other Toolsand Motor

land renovation equipment equipment vehicles Total RM RM RM RM RM RM 2014

Cost/Valuation

Asat1stJanuary2014 4,360,000 5,472,840 2,617,894 146,780 182,120 12,779,634 Additions - 108,984 - - - 108,984 Reclassificationto

assetheldforsale (4,360,000) (5,353,170) - - - (9,713,170) Asat31stDecember2014 - 228,654 2,617,894 146,780 182,120 3,175,448

Accumulateddepreciation

Asat1stJanuary2014 - 1,396,138 2,435,694 139,624 182,120 4,153,576 Chargefortheyear - 239,718 89,311 2,368 - 331,397 Reclassificationto

assetheldforsale - (1,516,186) - - - (1,516,186) Asat31stDecember2014 - 119,670 2,525,005 141,992 182,120 2,968,787

Netcarryingamount Atcost - - 92,889 4,788 - 97,677

Atvaluation - 108,984 - - - 108,984 Asat31stDecember2014 - 108,984 92,889 4,788 - 206,661



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GROUP Freehold Furniture, building fittingsand Freehold and other Toolsand Motor

land renovation equipment equipment vehicles Total RM RM RM RM RM RM 2013

Cost/Valuation

Asat1stJanuary2013 2,900,000 6,702,165 2,822,926 322,158 250,621 12,997,870 Additions - - 1,100 - - 1,100 Writtenoff - - (319,647) (4,943) (68,501) (393,091) Revaluationsurplus 1,660,000 (1,486,245) - - - 173,755 Reclassification (200,000) 256,920 113,515 (170,435) - - Asat31stDecember2013 4,360,000 5,472,840 2,617,894 146,780 182,120 12,779,634

Accumulateddepreciation

Asat1stJanuary2013 - 992,401 2,507,836 322,158 161,117 3,983,512 Chargefortheyear - 212,568 317,169 3,416 30,002 563,155 Writtenoff - - (319,647) (4,943) (68,501) (393,091) Reclassification - 191,169 (69,664) (181,007) 59,502 - Asat31stDecember2013 - 1,396,138 2,435,694 139,624 182,120 4,153,576

Netcarryingamount Atcost - - 182,200 7,156 - 189,356

Atvaluation 4,360,000 4,076,702 - - - 8,436,702 Asat31stDecember2013 4,360,000 4,076,702 182,200 7,156 - 8,626,058

COMPANY

Office Computers equipment Renovation Total

RM RM RM RM 2014

Cost Asat1stJanuary2014 45,829 13,379 - 59,208

Additions - 21,866 108,984 130,850 Asat31stDecember2014 45,829 35,245 108,984 190,058 Accumulateddepreciation

Asat1stJanuary2014 38,781 8,546 - 47,327 Chargefortheyear 5,177 6,984 - 12,161 Asat31stDecember2014 43,958 15,530 - 59,488 Netbookvalueasat31stDecember2014 1,871 19,715 108,984 130,570



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Office Computers equipment Renovation Total

RM RM RM RM 2013

Cost

Asat1stJanuary2013 45,829 12,279 - 58,108 Additions - 1,100 - 1,100 Asat31stDecember2013 45,829 13,379 - 59,208 Accumulateddepreciation

Asat1stJanuary2013 31,907 7,008 - 38,915 Chargefortheyear 6,874 1,538 - 8,412 Asat31stDecember2013 38,781 8,546 - 47,327

Netbookvalueasat31stDecember2013 7,048 4,833 - 11,881 Includedinproperty,plantandequipmentoftheGroupandoftheCompanyarefullydepreciatedassets

whicharestill inuse,withacostofRM2,413,201(2013:RM837,819)andRM2,389(2013:RM2,389)respectively.

In2013,assetsoftheGroupwithatotalnetcarryingamountofRM69,738wereacquiredunderfinancelease.

TheabovelandedpropertiesarechargedtobanksforbankingfacilitiesgrantedtotheGroupasdisclosedinNotes23and25totheFinancialStatements.

ThedetailsofthevaluationoftheGroup’slandandbuildingareasfollows: GROUP

Revalued Detailsof Yearof amount property valuation Detailsofvaluers RM

Freeholdland 2009 JamsariMohamadAris,MIS(M)Registered 2,900,000 ValuerofTDAzizSdn.Bhd.

Freeholdbuilding 2009 JamsariMohamadAris,MIS(M)Registered 6,073,569 ValuerofTDAzizSdn.Bhd.

Freeholdland 2013 JAZInternationalMalaysiaSdn.Bhd. 4,360,000 Freeholdbuilding 2013 JAZInternationalMalaysiaSdn.Bhd. 4,061,183



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14) INVESTMENTS IN SUBSIDIARIES

COMPANY 2014 2013 RM RM

Unquotedshares-Atcost 1,490,000 1,490,000 Less:Impairmentloss (890,200) (890,200) Netcarryingamount 599,800 599,800 Thedetailsofthesubsidiariesareasfollows:

Countryof EquityInterest

NameofCompany Incorporation 2014 2013 % %

EnvairEnergySdn. Malaysia 100 100 Bhd.

QuestEquipment Malaysia 100 100 andServicesSdn.

Bhd.

QuestTechnology Malaysia 100 100 Sdn.Bhd.@

RayaConsumableSdn. Malaysia 100 100 Bhd.@

QuestSystemand Malaysia 100 100 EngineeringSdn.

Bhd.@

YoubicomMalaysia Malaysia 70 70 Sdn.Bhd.

AlltheabovesubsidiariesareauditedbyanotherfirmofauditorsotherthanauditorsoftheCompany.

PrincipalActivities

Distribution and manufacturing ofairfilters.However,thesubsidiaryistemporarilyinactivesince2011.

Installation of cleanroom systemsandsaleofairfiltersandcleanroomequipment.However, the subsidiaryistemporarilyinactivesince2012. Trading in air filters, cleanroomequipment and vinyl flooring andinstallation of cleanroom systems.Alsoprincipally involved in generaltrading. Manufacturing, and trading ofwaterandairfilters.Alsoprincipallyinvolved in trading of beautyproducts. Also involved in thetradingofhealthcareproducts. Selling, installation, maintenanceand servicing of water treatmentequipment and sale of cleanroomfilters and equipment.However, thesubsidiary is temporarily inactivesince2011.

Distribution of wireless energysavingproducts



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@Theauditors’reportsonthefinancialstatementsofthesesubsidiariesincludeanemphasisofmatterregardingtheabilityofthesesubsidiariestocontinueasagoing-concerninviewoftheircapitaldeficiencypositions as at the endof the financial year.Thefinancial statements of these subsidiaries have beenprepared on a going-concern basis as the Company has undertaken to continue providing financialsupporttothesesubsidiaries.

In2013,theGroupacquired70%equityinterestinYoubicomMalaysiaSdn.Bhd.,acompanyincorporatedinMalaysia,foratotalconsiderationofRM100,000.

TheeffectoftheacquisitiononthefinancialpositionoftheGroupasatendofthefinancialyearisasfollows:

GROUP 2013 RM

Netassetsacquired:

Cashandbankbalances 7,990 Accruedexpenses (1,600) Goodwillonconsolidation 95,527 Non-Controllinginterests (1,917) Totalcashconsideration 100,000 Less:Cashandbankbalances (7,990) Cashflowonacquisition,netofcashandcashequivalentsacquired 92,010

Theamountowingby/(to)subsidiaries,whicharosemainlyfromexpensespaidonbehalfandadvancegiven,isunsecured,interest-freeandrepayableondemand.

The summarised financial information of YoubicomMalaysia Sdn. Bhd. that has a non-controllinginterest,representing30percentofownershipinterest,isasfollows:

(a)Summarisedstatementoffinancialposition

2014 2013 RM RM

Assets Currentassets 29,856 7,990

Totalassets 29,856 7,990 Equityattributabletoownersofthecompany 9,607 6,390

Liabilities Currentliabilities 20,249 1,600

Totalliabilities 20,249 1,600 Totalequityandliabilities 29,856 7,990



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b) Summarisedstatementofcomprehensiveincome

2014 2013 RM RM

Revenue 21,866 - Expenses (16,627) (882) Profit/(Loss)fortheyear 5,239 (882) c) Summarisedstatementofcashflows

2014 2013 RM RM

Netcashusedinoperatingactivities - (12) Netdecreaseincashandcashequivalents - (12) Cashandcashequivalentsatthebeginningofyear 7,990 8,002 Cashandcashequivalentsattheendofyear 7,990 7,990 Thesummarisedfinancialinformationrepresentstheamountbeforeinter-companyeliminationsbetween

theCompanyandYoubicomMalaysiaSdn.Bhd.

15) DEFERRED TAXATION

GROUP

2014 2013 RM RM Deferredtaxassets

Balanceasatbeginningoftheyear 195,383 463,057 Recognisedinprofitorloss(Note11) (142,392) (267,674) Balanceasatendoftheyear 52,991 195,383 Deferredtaxliabilities

Balanceasatbeginningoftheyear 3,629 9,180 Recognisedinprofitorloss(Note11) (3,629) (5,551) Balanceasatendoftheyear - 3,629

Therecogniseddeferredtaxassetsaremadeupofunutilisedtaxlosseswhiletherecogniseddeferredtaxliabilitiesaremadeupoftemporarydifferencesbetweentaxcapitalallowancesandbookdepreciationofproperty,plantandequipment.

AsmentionedinNote4e),deferredtaxliabilitiesarerecognisedforalltaxabletemporarydifferencesanddeferredtaxassetsarerecognisedforalldeductibletemporarydifferences,unusedtaxlossesandunusedtaxcredittotheextentthatitisprobablethattaxableprofitwillbeavailableagainstwhichthedeductibletemporarydifferences, unused tax losses andunused tax credit canbeutilised.As at 31stDecember2014, thedeferredtaxassetswhichhavenotbeenrecognised in thefinancial statementsarising fromunutilisedtaxlossesandunabsorbedcapitalallowancesfortheGroupandfortheCompanyamountedtoapproximatelyRM2,418,354(2013:RM2,209,881)andRM361,374(2013:RM306,596)respectively.



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16) GOODWILL ON CONSOLIDATION

GROUP 2014 2013 RM RM Balanceasatbeginningoftheyear 95,527 - Arosefromacquisitionofsubsidiary - 95,527 Balanceasatendoftheyear 95,527 95,527 Key Assumptions Used in Value-In-Use Calculations GoodwillinrespectofacquisitionofthesubsidiarybytheGrouphasbeenallocatedtoitscash-generating

unit(CGU)wheretherecoverableamountofCGUhasbeenbasedonvalue-in-usecalculationsusingfive year financial projections. No revenue and expenses growth were projected from sixth year toperpetuity.

Thediscountrateof3.4%wasappliedindeterminingtherecoverableamountoftherespectiveCGU.Thediscountratewasbasedontheaverageinflationrate.

Sensitivity to Changes in Assumptions

ManagementbelievesthatnoreasonablepossiblechangesinanyofthekeyassumptionsabovewouldcausethecarryingvaluesoftheCGUstomateriallyexceedtheirrecoverableamounts.

17) INVENTORIES GROUP

2014 2013 RM RM Atnetrealisablevalue:

Rawmaterials 151,878 376,661 Finishedgoods 593,362 598,676 745,240 975,337

18) TRADE RECEIVABLES, OTHER RECEIVABLES AND PREPAID EXPENSES GROUP

2014 2013 RM RM

Tradereceivables 7,196,590 5,712,737 Less:Allowancefordoubtfuldebts (2,796,565) (2,861,602) Net 4,400,025 2,851,135

Tradereceivablescompriseamountsreceivablefromthesaleofgoods.Thecreditperiodgrantedtotheircustomersareassessedandapprovedonacasebycasebasis.



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Otherreceivablesandprepaidexpensesconsistof:

GROUP COMPANY 2014 2013 2014 2013 RM RM RM RM Otherreceivables 2,563,672 2,584,870 2,510,916 2,520,151 Less:Allowancefordoubtfuldebts (2,523,672) (2,575,635) (2,510,916) (2,510,916) Net 40,000 9,235 - 9,235 Refundabledeposits - 431,720 640 6,040 Prepaidexpenses 26,320 44,400 - 44,400 66,320 485,355 640 59,675 ThetradeandotherreceivablesarealldenominatedinRinggitMalaysia.

19) ASSET HELD FOR SALE

GROUP 2014 2013 RM RM Freeholdland 4,360,000 - Freeholdbuildingandrenovation 3,836,984 - 8,196,984 - On5thFebruary2015,theGroupenteredintoasaleandpurchaseagreementwithanindependentthird

partytodisposethefreeholdlandandbuildingforaconsiderationofRM8,300,000.

Asat31stDecember2014,pendingcompletionofthedisposaloffreeholdlandandbuilding,thefreeholdlandandbuildinghasbeenclassifiedasassetheld-for-sale.

20) SHARE CAPITAL

GROUP AND COMPANY 2014 2013 RM RM Authorised

250,000,000ordinarysharesofRM0.10each 25,000,000 25,000,000

GROUP AND COMPANY GROUP AND COMPANY No.ofordinarysharesof Amount RM0.10each 2014 2013 2014 2013 RM RM

Issuedandfullypaid Balanceasatbeginningofyear 118,555,800 118,555,800 11,855,580 11,855,580 Issuedduringtheyear 11,855,580 - 1,185,558 - Balanceasatendofyear 130,411,380 118,555,800 13,041,138 11,855,580



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AsapprovedbytheshareholdersattheAnnualGeneralMeetingheldon30thJune2014,theissuedandpaid-upsharecapitaloftheCompanywasincreasedfromRM11,855,580toRM13,041,138duringthefinancialyearbytheallotmentof11,855,580newordinarysharesofRM0.10eachintheCompanyatanissuepriceofRM0.16pernewordinaryshareforcashbywayofprivateplacement.

TheresultantsharepremiumarisingfromthesharesissuedduringthefinancialyearofRM711,335hasbeencreditedtothesharepremiumaccount.AllthenewordinarysharesissuedrankparipassuwiththethenexistingordinarysharesoftheCompany.

21) RESERVES GROUP COMPANY

2014 2013 2014 2013 RM RM RM RM Non-Distributablereserves:

Sharepremium 8,825,988 8,186,987 8,825,988 8,186,987 Revaluationreserve 2,727,687 2,727,687 - - 11,553,675 10,914,674 8,825,988 8,186,987

Accumulatedloss (17,879,465) (16,346,864) (8,338,046) (7,944,216) (6,325,790) (5,432,190) 487,942 242,771

Share premium reserve

ThereservecomprisesthepremiumpaidonsubscriptionofsharesintheCompanyoverandabovetheparvalueofthesharesnetofshareissueexpenses.

Revaluation reserve

Revaluation reserve arose from revaluation of the Group’s freehold land and building in 2009 and2013.

22) FINANCE LEASE LIABILITIES GROUP

2014 2013 RM RM Totalfinanceleaseinstalmentspayable - 56,992 Less:

Financeleaseinterestinsuspense - (12,950) Principaloutstanding - 44,042 Portionpayablewithinthenext12months(Note25) - 26,430 (includedincurrentliabilities)

Portionpayableafterthenext12months: Payablebetween1and2years - 17,612

- 44,042 Theinterestratesonfinanceleaserangefrom2.35%to4.20%(2013:2.35%to4.20%)perannum.



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23) TERM LOANS


Securedtermloans 4,031,726 4,137,258 Less:Portionpayablewithinthenext12months(Note25) (210,542) (173,786) Non-currentportion 3,821,184 3,963,472

Thenon-currentportionofthetermloansisrepayableasfollows: GROUP

2014 2013 RM RM

Financialyearsending31stDecember: 2015 - 225,565

2016 226,100 297,073 2017andthereafter 3,595,084 3,440,834

Theabove term loansbear interest at rates ranging from5.85% to8.60%(2013:5.85% to8.60%)perannumandaresecuredbythefollowing: i) Generalfacilityagreement;and ii) FirstlegalchargeoverthelandedpropertyoftheGroup.

The fair value of term loans of the Group at the end of reporting period are RM2,214,422 (2013:RM2,533,983).

24) TRADE PAYABLES, OTHER PAYABLES AND ACCRUED EXPENSES

Tradepayablescompriseamountsoutstandingfortradepurchases.ThenormalcredittermsgrantedtotheGroup and theCompany for trade purchases range from 30 to 60 days and certain credit termsgrantedbythesupplierswerebasedonnegotiation.

Otherpayablesandaccruedexpensescomprise:

GROUP COMPANY 2014 2013 2014 2013 RM RM RM RM

Otherpayables 255,749 231,838 169,322 150,735 Amountowingtoformershareholders/

directors - 15,000 - 15,000 Accruedexpenses 137,312 123,718 79,371 98,959 393,061 370,556 248,693 264,694

ThetradeandotherpayablesarealldenominatedinRinggitMalaysia.



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25) BANK BORROWINGS

GROUP 2014 2013 RM RM Bankoverdraft 693,219 796,649 Financelease-currentportion(Note22) - 26,430 Termloans-currentportion(Note23) 210,542 173,786

903,761 996,865 Asat31stDecember2014,theGrouphasbankoverdraftandothercreditfacilities(excludingfinancelease

andtermloansasmentionedinNotes22and23)totallingRM1,782,000(2013:RM2,025,000)obtainedfromlicensedbanks.Thesefacilitiesbearinterestrangefrom1.50%-7.05%(2013:1.25%-6.80%)perannumandaresecuredbythefollowing:

i) LegalchargeovertheGroup’slandedproperties;and

ii) AjointandseveralguaranteebycertaindirectorsoftheCompanyintheirpersonalcapacities.

26) AMOUNT OWING TO DIRECTORS

Theamountowingtodirectors,whicharosemainlyfromexpensespaidonbehalfandadvancesgiven,isunsecured,interest-freeandrepayableondemand.

27) SIGNIFICANT RELATED PARTY DISCLOSURES

a) Inadditiontorelatedpartydisclosuresmentionedelsewhereinthefinancialstatements,setoutbeloware other significant related party transactions and balances.The related party transactions listedbelowwerecarriedouton termsandconditionsobtainable in transactionswithunrelatedpartiesunlessotherwisestated.

Significantrelatedpartytransactionsundertakenduringthefinancialyearareasfollows:

COMPANY 2014 2013 RM RM PurchasesfromYoubicomMalaysiaSdn.Bhd.,asubsidiary 21,866 -



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b) Compensationofkeymanagementpersonnel

Theremunerationofdirectorsandothermembersofkeymanagementduringthefinancialyearareasfollow: GROUP AND COMPANY

2014 2013 RM RM

Short-termemployeebenefits 84,000 47,113 Definedcontributionplan-EPF - 4,818 Total 84,000 51,931

Key management personnel are those persons having authority and responsibility for planning,directingandcontrollingtheactivitiesoftheGroupandoftheCompany,directlyorindirectly.

Includedinthetotalkeymanagementpersonnelcostare:

GROUP AND COMPANY 2014 2013 RM RM Directors’remuneration(Note9) 84,000 51,931



76

Prim

aryrepo

rting-Businesssegments

Airfiltration

system

,fast

movingconsum

er

prod

uct,ancillary

supp

ortservices

Investment

andgeneral

Liqu

idfiltration

ho

lding

trading

system

Manufacturin

gTechno

logy

Elim

inations

Con

solid

ated

2014

RM

RM

RM

RM

RM

RM

RM

R

EVEN

UE

Externalsa

les

-1,298,814

-1,636,661

21,866

(21,866)

2,935,475

RES

ULT

S

Profi

t/(Lo

ss)fromoperatio

ns

(393,830)

(132,398)

(4,906)

(355,304)

5,239

(18,586)

(899,785)

Financecosts

-(21,837)

-(469,229)

-

(491,066)

Profi

t/(Lo

ss)b

eforetax

(393,830)

(154,235)

(4,906)

(824,533)

5,239

(1

,390,851)

Incometaxexpense

-

(138,763)

-

-

(2,022)

(140,785)

Profi

t/(Lo

ss)a

ftertax

(393,830)

(292,998)

(4,906)

(824,533)

3,217

(1

,531,636)

O

THER

INFO

RM

ATIO

N

Segm

entassets

13,801,515

6,612,155

310,957,499

29,856

(17,062,377)

14,338,651

Segm

entliabilities

272,435

6,368,677

517,447

17,034,122

20,249

(16,539,518)

7,673,412

Depreciation

12,161

18,399

-304,117

-(3,280)

331,397

Non

-cashexpensesotherth

andepreciation

-406,859

-1,800

-

408,659

(Forward)

NOTES TO THE FINANCIAL STATEMENTS (Cont’d)76


77

Prim

ary

repo

rtin

g- B

usin

ess s

egm

ents

Airfiltration

system

,fast

movingconsum

er

prod

uct,ancillary

supp

ortservices

Investment

andgeneral

Liqu

idfiltration

ho

lding

trading

system

Manufacturin

gTechno

logy

Elim

inations

Con

solid

ated

2013

RM

RM

RM

RM

RM

RM

RM

R

EVEN

UE

Ex

ternalsa

les

-2,105,461

-318,704

-

2,424,165

R

ESU

LTS

Profi

t/(Lo

ss)fromoperatio

ns

374,515

1,434,361

(2,114)

(959,707)

-

847,055

Financecosts

-

(40,871)

-(454,896)

-

(4

95,767)

Profi

t/(Lo

ss)b

eforetax

374,515

1,393,490

(2,114)

(1,414,603)

-

351,288

Incometaxexpense

-(262,123)

--

-

(262,123)

Profi

t/(Lo

ss)a

ftertax

374,515

1,131,367

(2,114)

(1,414,603)

-

89,165

O

THER

INFO

RM

ATIO

N

Segm

entassets

12,611,928

5,308,397

12

12,066,107

7,990

(16,873,050)

13,121,384

Segm

entliabilities

513,577

6,046,987

512,551

16,181,892

1,600

(16,368,776)

6,887,831

Depreciation

8,412

56,617

-498,126

--

563,155

Non

-cashexpensesotherth

andepreciation

-111,737

-153,051

--

264,788


77


78

28) SEGMENTALINFORMATION

SecondaryReporting-GeographicalSegments

TheGroup’soperationsareentirelylocatedinMalaysia.Therefore,informationongeographicalsegmentsisnotpresented.

29) CONTINGENTLIABILITIES

Asat31stDecember2014,theCompanyhascontingentliabilitiesinrespectofcorporateguaranteesissuedtofinancialinstitutionsamountingtoRM7,733,000(2013:RM7,733,000)forbankingfacilitiesextendedtocertainsubsidiaries.TheCompanyisalsocontingentlyliableinrespectofcorporateguaranteesissuedtosuppliersofcertainsubsidiariesinrespectofsupplyagreementstosupplyproducttothesubsidiaries.

30) FAIR VALUE OF FINANCIAL INSTRUMENTS

DeterminationofFairValue:

i) Financialinstrumentsthatarenotcarriedatfairvalueandwhosecarryingamountsarereasonableapproximationoffairvalue.

Thefollowingareclassesoffinancialinstrumentsthatarenotcarriedatfairvalueandwhosecarryingamountsarereasonableapproximationoffairvalue: Note

Tradereceivables 18 Otherreceivables 18 Amountowingbysubsidiaries 14 Tradepayables 24 Otherpayables 24 Amountowingtodirectors 26 Amountowingtosubsidiaries 14

Thecarryingamountsof thesefinancial assets and liabilities are reasonableapproximationof fairvaluesduetotheirrelativelyshort-termnature.

ii) UnquotedEquityInstruments

ItisnotpracticaltoestimatethefairvalueoftheCompany’sinvestmentinunquotedsharesbecauseofthelackofquotedmarketpricesandthevariabilitytoestimatefairvalue.However,themanagementbelievesthatthecarryingamountrepresentstherecoverablevalue.

iii) FairValueHierarchy Asat31stDecember2014,therewerenofinancialinstrumentscarriedatfairvalue.



79

31) SUPPLEMENTARY INFORMATION

Thebreakdownof theaccumulated lossof theGroupandof theCompanyasat31stDecember2014intorealisedandunrealisedlossispresentedinaccordancewiththedirectiveissuedbyBursaMalaysiaSecurities Berhad dated 25th March 2011 and prepared in accordance with Guidance on SpecialMatterNo.1,DeterminationofRealisedandUnrealisedProfitsorLossesintheContextofDisclosurePursuanttoBursaMalaysiaSecuritiesBerhadListingRequirements,asissuedbytheMalaysiaInstituteofAccountants.

GROUP COMPANY 2014 2013 2014 2013 RM RM RM RM Accumulatedlosscarriedforwardare

analysedasfollows: -Realised (18,851,715) (17,651,181) (8,338,046) (7,944,216) -Unrealised 52,991 365,509 - - (18,798,724) (17,285,672) (8,338,046) (7,944,216) Add:Consolidationadjustments 919,259 938,808 - - (17,879,465) (16,346,864) (8,338,046) (7,944,216)



80

LIST OF PROPERTIES

ThedetailsofthelandedpropertyoftheGroupasat31December2014aresetoutbelow:-

Location

RayaConsumableSdnBhd

No.6,JalanSalung33/26,ShahAlamTechnologyPark,

Section33,40400ShahAlam

SelangorDarulEhsan

ApproximateLand

Area/Built-upArea

Landarea:Approximately5,178square

metresBuilt-upfloor

area:Approximately5,137square

metres

Description/Use

Cornerthree(3)storeyofficeblock

annexedtoasinglestorey

warehousebuilding

Tenure/Date ofAcquisition

Tenure:Thelandonwhichthepropertyiserectedisafreeholdland

Dateofacquisition:9March2006

Net carryingamount as at31 December

2014

RM8,196,984

Age ofbuilding(years)

15


81

ANALYSIS OF SHAREHOLDINGS

AuthorisedShareCapital : RM25,000,000.00 (250,000,000OrdinarySharesofRM0.10each)IssuedandFullyPaid-upShareCapital : RM13,041,138.00 (130,411,380OrdinarySharesofRM0.10each)ClassofShares : OrdinarySharesofRM0.10EachVotingRights : One(1)voteperOrdinaryShare

DISTRIBUTION OF SHAREHOLDINGS AS AT 18 MAY 2015

Size of Shareholdings No of % No of Shares % Shareholders 1-99 21 1.62 936 0.00 100-1,000 121 9.35 42,060 0.03 1,001-10,000 389 30.06 2,749,400 2.11 10,001-100,000 585 45.21 24,755,400 18.98 100,001-lessthan5%oftheissuedshares 177 13.68 91,863,584 70.44 5%andaboveofissuedshares 1 0.08 11,000,000 8.44 Total 1,294 100.00 130,411,380 100.00

SUBSTANTIAL SHAREHOLDINGS AS PER THE REGISTER OF SUBSTANTIAL SHAREHOLDERS AS AT 18 MAY 2015

Direct Indirect No Name of Substantial Shareholder No of Shares % No of Shares % 1. TasecNominees(Tempatan)SdnBhd TACapitalSdnBhdForTanChengKiat 11,000,000 8.43 5,850,000 4.48

Note

*Deemedinterestbyvirtueofhisson,MrTanSengHu’sdirectshareholdingsinRaya

LIST OF DIRECTORS’ SHAREHOLDINGS AS AT 18 MAY 2015

Direct Indirect No Name of Substantial Shareholder No of Shares % No of Shares % 1. Dato’IzhamBinYusoff - - - - 2. Dato’TanSengHu 5,850,000 4.48 *11,000,000 8.43 3 ChenHianLoong - - - - 4. YeeCheeSeng@YeeYen - - - - 5. MohdFikryBinRahman - - - - 6. AbdulLatifBinAbdulRahim - - - - 7. HoFookMeng 2,000,000 1.53 - - 8. TonyTanHan(ChenHan) - - - -

*Deemedinterestbyvirtueofhisfather,MrTanChengKiat’sdirectshareholdingsinRaya


82

THIRTY (30) LARGEST SHAREHOLDERS AS AT 18 MAY 2015

No Name of Shareholders No of Shares %1. TasecNominees(Tempatan)SdnBhd 11,000,000 8.44 TACapitalSdnBhdforTanChengKiat2. AngTunYoung 5,500,000 4.223. ChiaBeeChin 5,196,800 3.984. ChiaGuitNga 5,000,000 3.835. TasecNominees(Tempatan)SdnBhd 5,000,000 3.83 TACapitalSdnBhdforTanSengHu6. AliranMawarSdnBhd 4,885,580 3.757. MaybankSecuritiesNominees(Tempatan)SdnBhdPledgedSecurities 2,120,000 1.62 AccountforJaikishanRewachandA/LRewachandBhojumall (REM822-Margin)8. WendyNgAiHoon 2,082,200 1.599. HoFookMeng 2,000,000 1.5310. ChoeYangChoon 1,978,500 1.5211. HLIBNominees(Tempatan)SdnBhd 1,725,000 1.32 HongLeongBankBhdforBehLianYim12. SuchaSingh@GurmejSingh 1,500,000 1.1513. DharminderSinghA/LAmarSingh 1,230,000 0.9414. RanjitSinghA/LHarchandSingh 1,100,000 0.8415. TangAhKau 1,000,000 0.7716. TohGaikBee 1,000,000 0.7717. AmsecNominees(Tempatan)SdnBhd 966,000 0.74 PledgedSecuritiesAccountForJayeskumarA/LChamanlalRugnath18. WongSowTing 900,000 0.6919. YowFookLeong 865,000 0.6620. MaybankNominees(Tempatan)SdnBhd 850,000 0.65 PledgedSecuritiesAccountforTanSengHu21. ChuaKeanKok 826,000 0.6322. WangFookWeng 812,100 0.6223. LimChinHock 811,900 0.6224. GanKongSeng 803,500 0.6225. YongBoonFook 776,700 0.6026. MaybankNominees(Tempatan)SdnBhd 720,000 0.55 PledgedSecuritiesAccountforTeeBeeLing27. WongJeeYai 707,500 0.5428. HLBNominees(Tempatan)SdnBhd 705,000 0.54 PledgedSecuritiesAccountForFrancisKong@KongFenShin29. LeeChayChye 700,000 0.5330. ChunSooChin 686,900 0.53 TOTAL 63,448,680 48.65

ANALYSIS OF SHAREHOLDINGS (Cont’d)


83

NOTICEISHEREBYGIVENTHATtheEighteenthAnnualGeneralMeeting(“AGM”)ofRayaInternationalBerhad(“Raya”orthe“Company”)willbeheldatCrystalHall3,Level4,CrystalCrownHotelPetalingJaya,No:12,LorongUtaraA,OffJalanUtara,46200PetalingJaya,SelangorDarulEhsanonThursday,25June2015at3.00p.m,oratanyadjournmentthereofforthepurposeofconsideringandifthoughtfit,passingthefollowingresolutionwithorwithoutmodification:-

AGENDA

ORDINARY BUSINESS

1. ToreceivetheAuditedFinancialStatementsoftheCompanyforthefinancialyearended31December2014togetherwiththeReportsoftheDirectorsandAuditorsthereon.

2. ToapprovethepaymentofDirectors’FeesamountingtoRM84,000.00forthefinancialyearended31December2014

3. Tore-electMr.MohdFikryBinRahmanwhoretirespursuanttoArticle92oftheCompany’sArticlesofAssociation.

4. To-re-elect the followingDirectorswho retire pursuant toArticle 98 of theCompany’sArticlesofAssociation:-

4.1 Mr.ChenHianLoong 4.2 Mr.HoFookMeng 4.3 Capt.TonyTanHan(ChenHan)

5. Tore-electMr.YeeCheeSeng@YeeYenwhoretirespursuanttoSection129(6)oftheCompaniesAct,1965andtoholdofficeuntiltheconclusionofthenextAnnualGeneralMeeting

6. Tore-appointMessrsSTYLAssociatesastheAuditorsoftheCompanyandtoauthorisetheBoardofDirectorstofixtheirremuneration.

RAYA INTERNATIONAL BERHAD(CompanyNo:412406-T)

(IncorporatedinMalaysiaundertheCompaniesAct,1965)

NOTICE OF EIGHTEENTH ANNUAL GENERAL MEETING

PleaserefertoExplanatoryNote1

Resolution1

Resolution2

Resolution3Resolution4Resolution5

Resolution6

Resolution7


84

SPECIAL BUSINESS

Toconsiderand,ifthoughtfit,topasswithorwithoutmodifications,thefollowingResolutions:-

7. ORDINARY RESOLUTION

AUTHORITY TO ALLOT SHARES PURSUANT TO SECTION 132D OF THE COMPANIES ACT, 1965

“THATpursuanttoSection132DoftheCompaniesAct,1965,theDirectorsbeandareherebyauthorisedtoallotandissuesharesintheCompanyatanytimeanduponsuchtermsandconditionsandforsuchpurposesastheDirectorsmayintheirabsolutediscretion,deemfit,providedthattheaggregatenumberofsharestobeissuedpursuanttothisresolutiondoesnotexceedtenpercentum(10%) of the total issued capital of theCompany at the time of issueANDTHATtheDirectorsbeandarealsoempoweredtoobtaintheapprovalforthelistingofandquotationfortheadditionalsharestobeissuedonBursaMalaysiaSecuritiesBerhadANDTHATsuchauthorityshallcontinuetobeinforceuntiltheconclusionofthenextAnnualGeneralMeetingoftheCompany.”

8. Totransactanyotherbusinessofwhichduenoticeshallhavebeengiven inaccordancewiththeCompaniesAct,1965.

ByOrderoftheBoardRAYA INTERNATIONAL BERHAD

WAN HASLINDA BINTI WAN YUSOFF (MAICSA 7055478)SANGAR NALLAPPAN (MACS 01413)CompanySecretaries

KualaLumpur29May2015

Notes:

1. A member of the Company who is entitled to attend and vote at this AGM is entitled to appoint a proxy/proxies, and in the case of a corporation, a duly authorised representative to attend and vote in its stead.

2. A proxy may but need not be a member of the Company. Where a member appoints more than one (1) proxy, he shall specify the proportions of his shareholdings to be represented by each proxy.

3. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), the exempt authorised nominee may appoint any number of proxy (no limit) in respect of each omnibus account it holds.

4. The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorised in writing or if the appointor is a corporation, either under its common seal or under the hand of its attorney duly authorised in writing.

Resolution8

NOTICE OF EIGHTEENTH ANNUAL GENERAL MEETING (Cont’d)


85

5. The instrument appointing a proxy must be deposited at the Registered Office of the Company situated at No: 149A, 149B, 151B, Persiaran Raja Muda Musa, 42000 Port Klang, Selangor Darul Ehsan, not less than 48 hours before the time set for holding this meeting or at any adjournment thereof.

6. For the purpose of determining a member who shall be entitled to attend this AGM, only members whose name appears on the Record of Depositors as at 18 June 2015 shall be entitled to attend the said meeting or appoint proxy to attend and / or vote on his / her behalf.

EXPLANATORY NOTE 1 Item 1 of the Agenda

ThisitemismeantfordiscussiononlyastheprovisionofSection169(1)oftheCompaniesAct,1965doesnotrequireaformalapprovaloftheshareholdersfortheAuditedFinancialStatements.Hence,thisAgendaisnotputforwardforvoting.

EXPLANATORY NOTE ON SPECIAL BUSINESS

OrdinaryResolution8

- AuthoritytoallotsharespursuanttoSection132DoftheCompaniesAct,1965

TheProposedOrdinaryResolution8,ifpassed,willempowertheDirectorsoftheCompanyfromthedateoftheaboveAnnualGeneralMeeting,authoritytoallotandissuesharesintheCompanyuptoanaggregateamountofnotexceeding10%oftheissuedsharecapitaloftheCompanyforthetimebeingforsuchpurposesastheyconsiderwouldbeinthebestinterestoftheCompanyandalsotoempowerDirectorstoobtainapprovalfromBursaMalaysiaSecuritiesBerhadforthelistingofandquotationforadditionalsharesissued.Thisauthority,unlessrevokedorvariedatageneralmeeting,willexpireatthenextAnnualGeneralMeetingoftheCompany.

TherenewalofthismandatewillprovideflexibilitytotheCompanyforanypossiblefundraisingactivities,including but not limited to further placing of shares, for the purpose of funding future investment,working capital and/or acquisition or to issue new shares as consideration for investments and/oracquisitionwhichtheDirectorsconsiderwouldbeinthebestinterestoftheCompany.

NOTICE OF EIGHTEENTH ANNUAL GENERAL MEETING (Cont’d)


86

This page has been intentionally left blank

(NRIC No./Company No. )

)

)

of

being a *member/*members of RAYA INTERNATIONAL BERHAD (Formerly known as ENVAIR HOLDING BERHAD)

(FULL NAME)

(FULL NAME)

(FULL ADDRESS)

*My/*our proxy(ies) *is/*are to vote as indicated below:-

CDS Account No.: Date this day of 2015

[Signature/Common Seal of Shareholder (s)]* Delete if not applicable

(Company No. 412406-T)

As *my/*our proxy(ies) to vote for *me/*us and on *my/*our behalf at the Eighteenth Annual General Meeting of the Company, to be held at Crystal Hall 3, Level 4, Crystal Crown Hotel Petaling Jaya, No: 12, Lorong Utara A, Off Jalan Utara, 46200 Petaling Jaya, Selangor Darul Ehsan on Thursday, 25 June 2015 at 3.00 p.m and, at every adjournment thereof for/against the resolution to be proposed thereat.

Notes:-

1. A member of the Company who is entitled to attend and vote at this EGM is entitled to appoint a proxy/proxies, and in the case of a corporation, a duly authorised representative to attend and vote in its stead.

2. A proxy may but need not be a member of the Company. Where a member appoints more than one (1) proxy, he shall specify the proportions of his shareholdings to be represented by each proxy.

3. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibus account”), the exempt authorised nominee may appoint any number of proxy (no limit) in respect of each omnibus account it holds.

4. The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorised in writing or if the appointor is a corporation, either under its common seal or under the hand of its attorney duly authorised in writing.

5. The instrument appointing a proxy must be deposited at the Registered Office of the Company situated at No: 149A, 149B, 151B, Persiaran Raja Muda Musa, 42000 Port Klang, Selangor Darul Ehsan, not less than forty-eight (48) hours before the time set for holding this meeting or at any adjournment thereof.

6. For the purpose of determining a member who shall be entitled to attend this EGM, only members whose name appears on the Record of Depositors as at 18 June 2015 shall be entitled to attend the said meeting or appoint proxy to attend and/or vote on his/her behalf.

Please indicate with an “X” in the appropriate spaces provided on how you wish your votes to be cast.If you do not indicate how you wish your proxy to vote at any resolution, the proxy may vote as he thinks fit.

NO RESOLUTION FOR AGAINST

Number of Ordinary Shares held:

I/We

of

of

or failing whom

hereby appoint *the Chairman of the meeting or

(FULL ADDRESS)

(FULL ADDRESS)(NRIC No.

(NRIC No.

(FULL NAME IN CAPITAL LETTERS)

RAYA INTERNATIONAL BERHAD

PROXY FORM

Ordinary Resolution 1 To approve the payment of Directors’ FeesOrdinary Resolution 2 To re-elect Mr. Mohd Fikry Bin Rahman as DirectorOrdinary Resolution 3 To re-elect Mr Chen Hian Loong as DirectorOrdinary Resolution 4 To re-elect Mr. Ho Fook Meng as DirectorOrdinary Resolution 5 To re-elect Capt . Tony Tan Han (Chen Han) as DirectorOrdinary Resolution 6 To re-elect Mr.Yee Chee Seng @ Yee Yen as DirectorOrdinary Resolution 7 To re-appoint Messrs STYL Associates as the Auditors of the Company and to authorise the Board of Directors to fix their remunerationOrdinary Resolution 8 Authority To Allot Shares

Then fold here

1st fold here

AFFIXSTAMP

RAYA INTERNATIONAL BERHAD (Company No. 412406-T)No: 149A, 149B, 151B

Persiaran Raja Muda Musa42000 Port Klang

Selangor Darul Ehsan

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