table of - malaysiastock.biz table of content 02 notice of annual general meeting 08 corporate...

TABLE OFCONTENT

02 Notice of Annual General Meeting

08 Corporate Information

09 Corporate Structure

10 Board of Directors

12 Group Financial Highlights

13 Chairman’s Statement

17 Directors’Profile

21 Statement of Corporate Governance

36 Audit Committee Report

41 Statement on Risk Management Internal Control

44 Directors’ Responsibility Statement

45 Financial Statements

126 List of Landed Properties

128 Statistics of Shareholdings

130 Top Thirty Securities Account Holders Proxy Form

JAYCORP BERHAD ANNUAL REPORT 2014 02

NOTICE OF ANNUAL GENERAL MEETINGNOTICE IS HEREBY GIVEN THAT the Sixteenth Annual General Meeting of JAYCORP BERHAD will be held at Room Bunga Melati, 7th Floor, Ramada Plaza Melaka, Jalan Bendahara, 75100 Melaka, Malaysia on Thursday, 18 December 2014 at 10.30 a.m. for the following purposes:-

AGENDA

As Ordinary Business

1. To receive the Audited Financial Statements for the financial year ended 31 July 2014 together with the Reports of the Directors and Auditors thereon. Note 6

2. To declare a first and final single tier dividend of 3.5 sen per ordinary share for the financial year ended 31 July 2014. Ordinary Resolution 1

3. To approve the payment of Directors’ Fees for the financial year ended 31 July 2014. Ordinary Resolution 2

4. To re-elect Mr Yeo Eck Liong, a Director who retires by rotation in accordance with Article 113 of the Articles of Association of the Company. Ordinary Resolution 3

5. To re-elect Mr Chia Lai Joo, a Director who retires by rotation in accordance with Article 113 of the Articles of Association of the Company. Ordinary Resolution 4

6. To consider and if thought fit, to pass the following Ordinary Resolution in accordance with Section 129 of the Companies Act, 1965:- “THAT Tan Sri Abdul Majid Khan, retiring pursuant to Section 129 of the Companies Act, 1965, be and is hereby re-appointed a Director of the Company to hold office until the next Annual General Meeting.” Ordinary Resolution 5

7. To re-appoint Messrs Crowe Horwath as Auditors of the Company and to authorise the Directors to fix their remuneration. Ordinary Resolution 6

As Special Business

To consider and if thought fit, to pass the following Resolutions:-

8. Authority under Section 132D of the Companies Act, 1965 for the Directors to allot and issue shares

“THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and are hereby authorised to allot and issue shares in the Company at any time until the conclusion of the next Annual General Meeting upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fit provided that the aggregate number of shares to be issued does not exceed ten per centum (10%) of the issued share capital of the Company for the time being, subject always to the approval of all the relevant regulatory bodies being obtained for such allotment and issuance.” Ordinary Resolution 7


9. Proposed Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature (“Proposed Shareholders’ Mandate”)

“THAT, subject to the Listing Requirements of Bursa Malaysia Securities Berhad, approval be and is hereby given for the Company and its subsidiaries (“Jaycorp Group”) to enter into the recurrent transactions of a revenue or trading nature as set out in Section 2.3 of the Circular to Shareholders dated 26 November 2014 (“Circular”) with the related parties mentioned therein which are necessary for the Jaycorp Group’s day-to-day operations.

THAT the Jaycorp Group be and is hereby authorised to enter into the recurrent transactions with the related parties mentioned therein provided that:-

(a) the transactions are in the ordinary course of business and on normal commercial terms which are not more favourable to the related parties than those generally available to the public and are not to the detriment of the minority shareholders of the Company; and

(b) the disclosure of the aggregate value of the transactions concluded during a financial year will be disclosed in the Annual Report for the said financial year.

THAT authority conferred by such renewed mandate shall continue to be in force until:-

(i) the conclusion of the next Annual General Meeting (“AGM”) of Jaycorp at which time it will lapse, unless by a resolution passed at a general meeting, the authority is again renewed;

(ii) the expiration of the period within which the next AGM after the date it is required to be held pursuant to Section 143(1) of the Companies Act, 1965 (“the Act”) (but shall not extend to such extensions as may be allowed pursuant to Section 143(2) of the Act);

(iii) revoked or varied by resolution passed by the shareholders in general meeting; or

whichever is the earliest.

AND THAT the Directors of the Company be and are hereby authorised to complete and do all such acts and things (including executing all such documents as may be required) as they may consider expedient or necessary to give effect to this resolution.” Ordinary Resolution 8 10. Proposed Renewal of Authority for the Company to Purchase its Own Shares (“Proposed Renewal of Authority for Share Buy-Back”)

“THAT subject to the Companies Act, 1965 (“the Act”), the Memorandum and Articles of Association of the Company, the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) and the approval of all relevant governmental and/or regulatory authorities (if any), the Company be and is hereby authorised to utilise an amount not exceeding the total retained profits available for dividend and the share premium account of the Company, for the purpose of and to purchase such amount of ordinary shares of RM0.50 each in the Company as may be determined by the Directors of the Company from time to time through Bursa Securities upon such terms and conditions as the Directors may deem fit and expedient in the interest of the Company provided that the aggregate number of shares purchased and/or held pursuant to this resolution does not exceed ten per centum (10%) of the total issued and paid-up share capital of the Company;

THAT an amount not exceeding the share premium account of the Company and retained profits account be allocated by the Company for the proposed share buy-back;

THAT authority be and is hereby given to the Directors of the Company to decide at their absolute discretion to either retain the shares so purchased as treasury shares (as defined in Section 67A of the Act) and/or to cancel the shares so purchased and if retained as treasury shares, may resell the treasury shares and/or to distribute them as share dividend and/or subsequently cancel them;

NOTICE OF ANNUAL GENERAL MEETING (cont’d)



THAT the authority conferred by this Resolution will be effective immediately upon the passing of this Resolution and will expire at:-

(i) the conclusion of the next Annual General Meeting (“AGM”) of the Company following the forthcoming AGM at which the Proposed Renewal of Authority for Share Buy-Back was passed, at which time it will lapse unless by a resolution passed at a general meeting of the Company, the authority is renewed;

(ii) the expiration of the period within which the next AGM after the date it is required to be held pursuant to Section 143(1) of the Act but shall not extend to such extension as may be allowed pursuant to Section 143(2) of the Act; or

(iii) revoked or varied by resolution passed by the shareholders in a general meeting;

whichever is the earlier but not so as to prejudice the completion of the purchase(s) by the Company before the aforesaid expiry date and in any event, in accordance with the provisions of the guidelines issued by Bursa Securities and/or any other relevant governmental and/or regulatory authorities (if any);

And that the Directors of the Company be authorised to take all steps necessary to implement, complete and do all such acts and things (including executing all such documents as may be required) as they may consider expedient or necessary to give effect to the Proposed Renewal of Authority for Share Buy-Back as may be agreed or allowed by any relevant governmental and/or regulatory authorities.” Ordinary Resolution 9

11. Retention of Independent Directors

“THAT the following Directors be retained as Independent Non-Executive Directors, in accordance with the Malaysian Code on Corporate Governance 2012 until the conclusion of the next Annual General Meeting:-

(i) Encik Omar bin Musa Ordinary Resolution 10 (ii) Encik Asgari bin Mohd Fuad Stephens Ordinary Resolution 11

NOTICE OF DIVIDEND PAYMENT

NOTICE IS ALSO HEREBY GIVEN THAT, subject to the approval of the shareholders at the Sixteenth Annual General Meeting,afirstandfinalsingletierdividendof3.5senperordinaryshareinrespectofthefinancialyearended31July2014willbepaidtoshareholderson29December2014.Theentitlementdateforthesaiddividendshallbe18December2014.

A Depositor shall qualify for entitlement to the Dividend only in respect of:

(a) Shares transferred to the Depositor’s securities account before 4.00 p.m. on 18December2014in respect of ordinary transfers.

(b) Shares bought on the Bursa Malaysia Securities Berhad on a cum entitlement basis according to the Rules of Bursa Malaysia Securities Berhad.

BY ORDER OF THE BOARD

TAI YIT CHAN (MAICSA 7009143)CHAN SU SAN (MAICSA 6000622)SecretariesMelakaDate: 26 November 2014



NOTES:

1. A member of the Company entitled to attend and vote at the meeting is entitled to appoint not more than two (2) proxies to attend and vote in his/her stead at the same meeting. Where a member of the Company is an authorised nominee as defined in accordance with the provisions of the Securities Industry (Central Depositories) Act, 1991, it may appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account. A proxy may but need not be a member of the Company and the provisions of Section 149 (1) (b) of the Companies Act, 1965 shall not apply to the Company.

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

An exempt authorised nominee refers to an authorised nominee defined under the Securities Industry (Central Depositories) Act 1991 (“SICDA”) which is exempted from compliance with the provisions of subsection 25A(1) of SICDA.

3. The instrument appointing a proxy or proxies must be deposited at the Registered Office of the Company at JA 1880, Batu 22 1/2, Parit Perawas, Sungai Rambai, 77400 Melaka, Malaysia not less than 48 hours before the time set for holding the meeting or any adjournment thereof.

4. A power of attorney or certified copy thereof or the instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly appointed under a power of attorney or, if the appointer is a corporation, either under its common seal or under the hand of an officer or attorney duly appointed under a power of attorney.

5. For the purpose of determining who shall be entitled to attend this meeting, the Company shall be requesting Bursa Malaysia Depository Sdn Bhd to make available to the Company, a Record of Depositors as at 11 December 2014 and only a Depositor whose name appears on such Record of Depositors shall be entitled to attend, speak and vote at the meeting and entitled to appoint proxy or proxies.

6. The Audited Financial Statements in Agenda 1 is meant for discussion only as approval from shareholders is not required pursuant to the provision of Section 169 (1) of the Companies Act, 1965. Hence, this agenda is not put forward for voting by shareholders of the Company.

7. EXPLANATORY NOTES ON SPECIAL BUSINESS

(i) Ordinary Resolution 7 pursuant to Section 132D of the Companies Act, 1965 The Company had obtained its shareholders’ approval for the general mandate for issuance of shares pursuant to Section 132D of the Companies Act, 1965 (“the Act”) at the Fifteenth Annual General Meeting held on 18 December 2013. The Company did not issue any shares pursuant to this mandate obtained.

The Ordinary Resolution is a renewal of the general mandate for the issuance of shares by the Company pursuant to Section 132D of the Act. The mandate, if passed, will provide flexibility for the Company and empower the Directors to allot and issue shares in the Company up to an amount not exceeding in total 10% of the issued share capital of the Company for purpose of funding future investments or working capital of the Group on a timely basis. This authority, unless revoked or varied by the Company at a general meeting, will expire at the next Annual General Meeting.

At this juncture, there is no decision to issue new shares. If there should be a decision to issue new shares after the general mandate is obtained, the Company will make an announcement in respect thereof.

(ii) Ordinary Resolution 8 on Proposed Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature Please refer to the Circular to Shareholders dated 26 November 2014 for further information.

(iii) Ordinary Resolution 9 on Proposed Renewal of Authority for Share Buy-Back

The explanatory notes for Ordinary Resolution 10 on Proposed Renewal of Authority for Share Buy-Back are set out in the Statement to Shareholders dated 26 November 2014.

(iv) Ordinary Resolutions 10 and 11 on Retention of Independent Directors

a) Encik Omar bin Musa Encik Omar bin Musa was appointed an Independent Non-Executive Director on 19 July 2002. Encik Omar has served the Company for more than ten (10) years as at the date of the notice of the Sixteenth Annual General (“16th AGM”). However, Encik Omar has met the independence guidelines as set out in Chapter 1 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad. The Board, therefore, considers Encik Omar to be independent and recommends Encik Omar to remain as an Independent Non-Executive Director. b) Encik Asgari bin Mohd Fuad Stephens

Encik Asgari bin Mohd Fuad Stephens was appointed an Independent Non-Executive Director on 16 September 2004. Encik Asgari has served the Company for more than ten (10) years as at the date of the notice of the 16th AGM. However, Encik Asgari has met the independence guidelines as set out in Chapter 1 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad. The Board, therefore, considers Encik Asgari to be independent and recommends Encik Asgari to remain as an Independent Non-Executive Director.


06 JAYCORP BERHAD ANNUAL REPORT 2014

JAYCORP BERHAD ANNUAL REPORT 2014 08CORPORATE INFORMATION

Board of DirectorsTan Sri Abdul Majid Khan(Executive Chairman)

Mr Yeo Eck Liong(Managing Director)

Mr Yeo Ayk Ke(Executive Director)

Mr Lim Poh Teot(Executive Director)

Mr Chia Lai Joo(Executive Director)

Encik Asgari bin Mohd Fuad Stephens(Senior Independent Non-Executive Director)

Mr Kong Chee Weng, Harold(Independent Non-Executive Director)

Encik Omar bin Musa (Independent Non-Executive Director)

Mr Yeo Aik Tan(Alternate Director to Mr Yeo Ayk Ke)

Audit CommitteeMr Kong Chee Weng, Harold (Chairman)Encik Omar bin Musa Encik Asgari bin Mohd Fuad Stephens

Nomination CommitteeEncik Asgari bin Mohd Fuad Stephens (Chairman) Encik Omar bin Musa Mr Kong Chee Weng, Harold

Remuneration Committee Encik Omar bin Musa (Chairman)Mr Yeo Eck LiongMr Kong Chee Weng, Harold

Investment CommitteeEncik Asgari bin Mohd Fuad Stephens (Chairman)Mr Yeo Ayk Ke Mr Lim Poh TeotMr Kong Chee Weng, HaroldEncik Muaz bin Jema Anton Khan

Enterprise Risk Management CommitteeMr Yeo Ayk Ke (Chairman) Encik Omar bin Musa Mr Lim Poh TeotMr Paul Yong Pow ChoyEncik Muaz bin Jema Anthon Khan

Registered Office and Principal Place of BusinessJA 1880, Batu 22 ½ Parit Perawas Sungai Rambai, 77400 Melakawww.jaycorp.com.myemail: [email protected] : 606-2650111 Fax : 606-2659999

Stock Exchange ListingMain Market of the Bursa Malaysia Securities Berhad

AuditorsCrowe Horwath AF 1018 Chartered AccountantsMelaka Office 52 Jalan Kota Laksamana 2/15Taman Kota Laksamana, Seksyen 275200 Melakawww.crowehorwath.com.myTel : 606-2825995 Fax : 606-2836449

Principal BankersAmBank (M) BerhadHong Leong Bank BerhadHSBC Bank Malaysia BerhadMalayan Banking Berhad OCBC Bank (Malaysia) BerhadPublic Bank BerhadPT. Bank Mandiri (Persero) Tbk, Indonesia

Secretaries Tai Yit Chan (MAICSA 7009143)Chan Su San (MAICSA 6000622)

Advocates & SolicitorsBen & Partners7-2, Level 2, Block D2Dataran Prima, Jalan PJU 1/3947301 Petaling Jaya, Selangor Darul Ehsanwww.benpartners.comTel: 603-78052922 Fax: 603-78053922

RegistrarsBoardroom Corporate Services (KL) Sdn BhdLot 6.05, Level 6, KPMG Tower8 First Avenue Bandar Utama47800, Petaling Jaya, Selangor Darul EhsanTel : 603-77201188 Fax : 603-77201111 / 77

JAYCORP BERHAD ANNUAL REPORT 2014 09CORPORATE STRUCTURE

100%

100%

100%

90%

100%

60%

51%

100%

100%

70%

FURNITURE Yeo Aik Wood Sdn Bhd Manufacturing and sale of rubberwood furniture

Winshine Holdings Sdn Bhd Investment holding and provision of management services

Winshine Industries Sdn Bhd Manufacturing and sale of rubberwood furniture

Digital Furniture Sdn BhdManufacturing and sale of rubberwood furniture

PROCESSING RUBBER WOOD PT Tiga Mutiara NusantaraPressure treatment and kiln-drying of rubberwood

Yeo Aik Hevea (M) Sdn BhdPressure treatment, processing and kiln-drying of rubberwood

PACKAGINGPine Packaging (M) Sdn BhdConversion of corrugated board into carton boxes

BIOMASSJaycorp Green Energy Sdn BhdRenewable energy, biomass and enviromentally friendly waste treatment

TRADING & OTHERSJaycorp Trading Sdn BhdGeneral trading, property letting, transportation and printing

Jaycorp Home Furnishings IncTrading in home furnishings and furniture related projects

Jaycorp Limited(Dormant)

INVESTMENT HOLDINGJaycorp Properties Sdn Bhd Bongawan Solo Sdn Bhd

100%

100%

60%

1 4

7

32

1. Tan Sri Abdul Majid Khan Executive Chairman

2. Mr Yeo Eck Liong Managing Director

3. Mr Yeo Ayk Ke Executive Director

4. Mr Lim Poh Teot Executive Director

5. Mr Chia Lai Joo Executive Director

5 9

8

6

6. Mr Yeo Aik Tan Alternate Director to Mr Yeo Ayk Ke

7. Mr Kong Chee Weng, Harold Independent Non-Executive Director

8. Encik Omar Bin Musa Independent Non-Executive Director

9. Encik Asgari Bin Mohd Fuad Stephens Senior Independent Non-Executive Director

* First and final single tier dividend of 3.5 sen per share is recommended by the Board of Directors and is subject to shareholders’ approval at the forthcoming Annual General Meeting.

GROUP FINANCIAL HIGHLIGHTS

209,281

236,612

192,059

227,414

Revenue (RM’000)

2013

2012

2011

2010

9,916

13,594

15,381

9,378

18,229

Profit Before Taxation (RM’000)

3.72

7.50

1.86

10.41

Earnings Per Share - net (sen)

121,632

121,456

114,166

116,775

Shareholders’ Funds (RM’000)

3.50

3.50

2.00

7.50

Net Dividend Per Share (sen)

0.89

0.89

0.83

0.87

Net Tangible Asset Per Share (RM)

2013

2012

2011

2010

2014

2013

2012

2011

2010

6.312014

2013

2012

2011

2010

125,5112014

2013

2012

2011

2010

3.502014

2013

2012

2011

2010

0.922014

236,3272014


2010 2011 2012 2013 2014

Revenue (RM’000) 227,414 192,059 236,612 209,281 236,327

Profit before taxation (RM’000) 18,229 9,378 15,381 9,916 13,594

Net profit before tax (%) 8.02% 4.88% 6.50% 4.74% 5.75%

Profit after taxation and minority interests (RM’000)

13,924 2,548 10,261 5,086 8,625

Earnings per share - net (sen) 10.41 1.86 7.50 3.72 6.31

Shareholders’ funds (RM ‘000) 116,775 114,166 121,456 121,632 125,511

Net dividend per share (sen) 7.50 2.00 3.50 3.50 3.50 *

Net tangible asset per share (RM) 0.87 0.83 0.89 0.89 0.92

CHAIRMAN’S STATEMENT

On Behalf of the Board of Directors, I am again pleased to present the Annual Report and Financial Statements of the Company for the financial year ended 31 July 2014.

The performance of the Group for the financial year ended 31 July 2014 (FY14) has demonstrated substantial improvement from last year. The Group’s revenue for FY14 stood at RM236.3 million, in comparison to RM209.2 million in financial year ended 31 July 2013 (FY13), registering an increase of 13%. Profit after tax also increased in FY14 to RM10.5 million as compared to RM7 million in FY13, equating to a percentage increase of 50%. The Board continues to work closely with our senior management team to ensure the smooth implementation of our philosophy and strategies across our subsidiaries in what remains a challenging environment.

A Competitive Landscape

The performance from the Group, showed a marked improvement for FY14. Nevertheless, the competitive landscape of the rubberwood furniture and processing industries remained challenging. Our manufacturing businesses were under constant pressure to reduce costs and pricing in order to remain competitive with manufacturers in countries with a lower cost base such as Vietnam and China.

As manufacturers in these countries continue to thrive, our businesses have also faced increased competition with innovation in the manufacturing process as well as in the design and marketing of our furniture.

In facing the competition, moving forward, our strategies will be focusing on cost control, increase production efficiency and productivity and deepening our relationship with customers to keep us competitive.


JAYCORP BERHAD ANNUAL REPORT 2014 14CHAIRMAN’S STATEMENT (cont’d)

FINANCIAL HIGHLIGHTS

The Group remains in a strong financial position with improved financial results this year.

Group ResultsRM’000 2014 2013

Revenue 236,327 209,281

Profit Before Tax 13,594 9,916

Profit After Tax 10,537 7,088

Profit After Tax and Minority Interests 8,625 5,086

Summary of Segment Results

RM’000 2014 2013

Furniture 12,898 3,966

Packaging 1,774 2,568

Rubber Wood Processing 2,533 4,963

Green Energy (1,501) (529)

Others 960 1,145

The Furniture Division demonstrated significant improvement for FY14 contributing RM12.9 million to the Group’s operating profit. The improvement in the division was a result of a recovery in the US and European markets as well as increased sales to Asian markets such as Taiwan. Similarly, stringent cost control has contributed to the improvement in the performance of this division.

The Packaging Division registered a weaker performance in FY14, mainly due to the loss of high volume customers that went into administration. We expect the performance of this division to improve next year as we work on securing new customers as well as improving efficiency through the purchase of new machinery.

The Rubberwood Processing Division also recorded a weaker performance for FY14 due to low rubber tree extraction yield and clearance of low grade stocks in order to reduce stock holding costs. Going forward, this division is poised to improve its performance as it focus of improving the yield of high grade stocks, improve control on processing costs and emphasize on downstream products.

The Green Energy Division completed its first full operating year registering a loss of RM1.5 million. As this is a new business for the Group, FY14 was a period of learning curve for this division as it seek to achieve production consistency, reduction in plant and machinery downtime and managing the supply chain of the biomass feed stocks. The division has now shown considerable operational improvements in production and has strengthened its supply chain. Henceforth, we are confident that this division will show an improvement in operating performance next year.

JAYCORP BERHAD ANNUAL REPORT 2014 15CHAIRMAN’S STATEMENT (cont’d)

INVESTMENTS

In FY14, our 60% owned subsidiary, Bongawan Solo Sdn Bhd acquired 160.02 hectares of land in Sabah for a total purchase consideration of RM19.5 million. The land is located approximately 70km away from the capital Kota Kinabalu. The location is ideal for tourism, situated next to a golf course and in close proximity to the beach. The Sabah government has also re-zoned the area for tourism. We see huge potential to develop the land to cater for tourism, a sector of the Sabah economy that continues to enjoy growth. We are confident that the price we paid was much lower than the current market value for Tourism land in Sabah, which will create substantial value for the shareholders of the Group.

OUTLOOK

Looking ahead, we expect consumer sentiment to improve in the US and Europe as key economic indicators remain positive. We also expect this trend to carry over into many Asian economies. This bodes well for our furniture business and will likely increase demand for our products. A strengthening of the US dollar against the Malaysian Ringgit will also make our products more competitive in the export market.

We are optimistic that the Green Energy business will further improve despite competition with the natural gas price. We are encouraged by the Government’s commitment towards subsidy rationalization programme, as evidenced by the recent revisions of natural gas tariffs by an average of 20% in May 2014 and a further 2% in November 2014. And, we believe the Government will continue on its roadmap in 2015 to further liberalize subsidy rationalization programme in order to alleviate the country’s fiscal imbalances. This will augurs well for our green energy business as this will push the gas market towards its natural equilibrium making biomass an economically attractive alternative energy source.

DIVIDEND

The Board recommends a first and final single tier dividend of 3.5 sen per ordinary share for the financial year ended 31 July 2014 which will be tabled at the forthcoming Annual General Meeting.


CORPORATE SOCIAL REPONSIBILITY

The Group continuously strives to ensure that our activities benefit the community as a whole and our wider stakeholders. Our primary focus is to ensure that our operations are managed in a sustainable way that will cause no harm to the community or environment.

One of our key initiatives is to ensure the sustainability of our environment. Using rubber wood trees ensures that trees which are regularly cleared for replanting do not go to waste. We place strong emphasis on making sure all our activities are in compliance with regulations and the best practices in the industry.

APPRECIATION AND ACKNOWLEDGEMENTS

On Behalf of the Board of Directors, I wish to extend our appreciation to members of our management team and employees of the Group. Your effective execution of the Group’s strategies through sheer hard work, commitment and team work in a demanding and challenging business environment have contributed much to the success of the Group.

Our sincere gratitude to our shareholders, customers, joint venture partners, business associates, suppliers, bankers and government authorities for their confidence and support to the Board and Management.

Last but not least, to my fellow Board members, thank you for your effort, professional advice and contributions in making the Board more effective and efficient.

Thank you,Executive Chairman

CHAIRMAN’S STATEMENT (cont’d)


DIRECTORS’ PROFILE

Tan Sri Abdul Majid Khan, a Malaysian, aged 71, was appointed to the Board on 6 November 2003 and is presently the Executive Chairman (Non-Independent Executive Director) of the Company. Currently he does not hold any shares in the Company but deemed to have interest in 31,787,500 shares in the Company held by Jawala Corporation Sdn Bhd by virtue of Section 6A(4) of the Companies Act, 1965.

Tan Sri is an established businessman and a well known entrepreneur. He has vast experience in banking, corporate sectors, politics and public service. He served as Political Secretary to the late Tun Fuad Stephens from 1964 to 1965. He was the Information Chief of Party Berjaya Sabah from 1979 to 1985. From 1981 to 1985, he was a member of Sabah State Legislative Assembly. He was the Chairman of Sabah Timber Association from 1978 to 1985. He was also the Founder , Director and Chairman of Sabah Development Bank (1978 to 1985), Founder and Director of Sabah Bank Berhad (1979 to 1985) and Chairman of Sabah Finance Berhad (1977 to 1985). He also sat on the Board of Directors of Malaysian Airline System Berhad from 1980 to 1985. Currently, Tan Sri Abdul Majid Khan is the Chairman of Jawala Corporation Sdn Bhd.

Tan Sri has no family relationship with any director and is a major shareholder of the Company. Currently, he is a director of Ranhill Power Sdn Bhd. He has no conflict of interest with the Company and has never been convicted of any offence within the past 10 years.

Mr Yeo Eck Liong, a Malaysian, aged 54 was appointed to the Board on 19 July 2002 and is presently the Managing Director (Non-Independent Executive Director) of the Company. He is also a member of the Remuneration Committee. Currently, he has direct interest in 3,389,547. shares and deemed interest in 30,275,000 shares in the Company held by Central Glamour Sdn Bhd by virtue of Section 6A (4) of the Companies Act, 1965.

Mr Yeo started his career in 1977 as a printing technician in Muar and has been involved in the printing industry for eight years. His enthusiasm in doing business prompted him to start his own business, Pioneer Packing Industries in 1985, a partnership with his brother, Mr Yeo Aik Tan, set up to supply carton boxes to the furniture industry in Muar and Batu Pahat. Since then he has established strong relationships with these furniture customers and learnt the furniture trade. He founded Yeo Aik Wood Sdn Bhd in 1992, the main operating subsidiary of the Group. He is the main driving force and instrumental pertaining to the expansion and operations of the Group.

Mr Yeo is not a director of any other public company. He is the brother of Mr Yeo Ayk Ke, an Executive Director and Mr Yeo Aik Tan, an alternate director, and major shareholder of the Company. He has no conflict of interest with the Company and has never been convicted of any offence within the past 10 years.

Mr Yeo Ayk Ke, a Malaysian, aged 45 was appointed to the Board as Director on 19 July 2002 and is presently the Non-Independent Executive Director of the Company. Currently, he has direct interest 719,175 shares and deemed interest in 30,275,000 shares in the Company held by Central Glamour Sdn Bhd by virtue of Section 6A (4) of the Companies Act, 1965. He started his career as Marketing Executive with Pioneer Packing Industries in 1990. He joined Yeo Aik Wood Sdn Bhd as Marketing Manager in 1992. Since then, he has been involved in developing the marketing master plan for Group’s products, especially in penetrating the overseas market. His good interpersonal skill has enabled him to build up strong relationships with the customers. He traveled extensively to participate in trade fairs and to meet up with customers overseas. This has given him wide exposure to furniture trade designs, customers buying patterns, trends and behaviour in various countries. He oversees marketing plan and strategies for the Group. His extensive marketing network enables him to perform the marketing function for the group’s furniture products.

Mr Yeo is not a director of any other public company. He is the brother of Mr Yeo Eck Liong, the Managing Director and Mr Yeo Aik Tan, an alternate director, and major shareholder of the Company. He has no conflict of interest with the Company and has never been convicted of any offence within the past 10 years.


Mr Chia Lai Joo, a Malaysian, aged 54, was appointed to the Board as Director on 19 July 2002 and is presently the Non-Independent Executive Director of the Company. Currently, he has direct interest in 2,578,032 shares in the Company.

He started his career as Junior Mechanic in a furniture company, Sin Yi in 1974. He was there for three years before he moved to a Singapore based furniture factory in 1977 as its production supervisor. He returned to Malaysia in 1983 to work as factory superintendent of Sin Huat Hing Sdn. Bhd, a well-established furniture company in Muar for six years. He left in 1989 to join Perindustrian Perabot Anda Sdn. Bhd as factory manager. In 1992, he joined Yeo Aik Wood Sdn Bhd as a factory manager and was subsequently appointed as one of the company’s director. He has more than 30 years of experience in the furniture manufacturing industry. He is the driving force in ensuring the smooth running of the production process and has led the production team in achieving the predetermined target standard with high quality output. Presently, he is overseeing the whole production department. He is also responsible for designing the production process to reduce wastage and enhance the efficiency of the production process.

Mr Chia is not a director of any other public company. He does not have any family relationship with any directors and/or major shareholders of the Company. He has no conflict of interest with the Company and has never been convicted of any offence within the past 10 years.

Mr Lim Poh Teot, a Malaysian, aged 50, was appointed to the Board as Director on 19 July 2002 is presently the Non-Independent Executive Director of the Company. Currently, he has direct interest of 3,284,225 shares of the Company.

He graduated from Kolej Tunku Abdul Rahman with a Diploma in Commerce (Management Accounting) in 1987. In 1988, he attained his Professional Accountancy Certificate from the Chartered Institute of Management Accountants (“CIMA”). He has been a member of the Malaysia Institute of Accountants (“MIA”) since 1991 and has been a Fellow of CIMA since 1993. He started his career in 1987 as an Assistant Accountant with Perusahaan Chan Choo Sing Sdn Bhd (“PCCS”). In 1989, he was responsible in setting up Harta Packaging Industries Sdn. Bhd. (“Harta”), the packaging operation of the PCCS group of companies. Subsequently, in 1992, he was promoted as Deputy Managing Director of Harta. In 1995, he was appointed as Group General Manager of PCCS Group Berhad when it was listed on the Bursa Malaysia Securities Berhad (“Bursa Securities”) Main Board. In 1997, he was involved in the listing of Harta on the Bursa Securities Second Board. Subsequently, he left the PCCS Group in 1999. He was the Chairman of the Batu Pahat Furniture Association from 2004 to 2010 and Vice President of the Johor Furniture Association (“JFA”) for the same period. During that period, he was also the Governing Committee of the Malaysia Furniture Industry Council (“MFIC”) and the Joint Council of MFIC and Malaysia Furniture Entrepreneur Association’s (“MFEA”) Head of Market Development Sub Committee. He is the Vice President, Batu Pahat Chinese Chamber of Commerce and the Committee Member of the Commerce and International Trade and Industry Committee of the Associated Chinese Chamber of Commerce and Industry Malaysia. Since January 2010, he was appointed by the Johor State Government as the Ex Officio representing the Batu Pahat Chinese Chamber of Commerce to the Majlis Perbandaran Batu Pahat. Mr Lim is not a director of any other public company. He does not have any family relationship with any directors and/or major shareholders of the Company. He has no conflict of interest with the Company and has never been convicted of any offence within the past 10 years.

DIRECTORS’ PROFILE (cont’d)


Encik Asgari bin Mohd Fuad Stephens, a Malaysian, aged 54, was appointed to the Board as an Independent Non-Executive Director on 16 September 2004 and was redesignated as a Senior Independent Non-Executive Director on 30 March 2011. He is presently the Chairman of the Investment Committee and Nomination Committee, and a member of the Audit Committee of the Company. Currently, he does not hold any shares of the Company.

Encik Asgari holds a Bachelor of Commerce (Honours) from University of Melbourne, Australia and a Master of Business Administration degree from Cranfield University, UK. He has extensive experience in both public and private equity investing in Malaysia. He is the co-founder of Kumpulan Sentiasa Cemerlang Sdn Bhd (“KSC”), an investment advisory and fund management group. He started two venture capital firms, iSpring Venture Management Sdn Bhd and Intelligent Capital Sdn Bhd while continuing to work with KSC. He was previously the chairman of the Malaysian Venture Capital Association.

Encik Asgari is a director of other public company; ie Privasia Technology Berhad. He does not have any family relationship with any directors and/or major shareholders of the Company. He has no conflict of interest with the Company and has never been convicted of any offence within the past 10 years.

Encik Omar Bin Musa, a Malaysian, aged 52 was appointed to the Board as an Independent Non-Executive Director on 19 July 2002 and is presently the Chairman of the Remuneration Committee. He is also a member of the Audit Committee and Nomination Committee of the Company. Currently, he does not hold any shares in the Company. He graduated from the State University of New York with a Bachelor of Engineering Technology in 1986 and the Ohio University with a Master in Business Administration in 1988. He started his career as Assistant Registrar, Academic and Student Affairs Division, International Islamic University in 1989. From 1991 until 1997, he was a lecturer in the Faculty of Economics and Management Sciences, Department of Business Administration, International Islamic University. He then worked for Universiti Tun Abdul Razak initially as Senior Manager, Technical in 1997 and then as the Deputy Head, Technology Division in 2003. Currently he is an Associate Professor in the Faculty of Business and Information Technology of UNITAR International University. En. Omar is not a director of any other public company. He does not have any family relationship with any directors and/or major shareholders of the Company. He has no conflict of interest with the Company and has never been convicted of any offence within the past 10 years.

Mr Kong Chee Weng, Harold, a Malaysian, aged 54, was appointed to the Board as an Independent Non-Executive Director on 13 December 2012. He is presently the Chairman of the Audit Committee of the Company and a member of Investment Committee, Nomination Committee and Remuneration Committee. Currently, he does not hold any shares of the Company.

Mr Kong holds a Bachelor of Commerce (Honours) in Accounting and Master of Commerce in Finance, both from the University of Melbourne and a Master of Taxation from Monash University. He has extensive professional and corporate experience in Malaysia and the Asia Pacific region, having held Asia Pacific taxation and strategic finance leadership roles in North American multinationals for many years. He is a member of the Institute of Chartered Accountants Australia & New Zealand, the Malaysian Institute of Certified Public Accountants and the Malaysian Institute of Accountants.

He does not have any family relationship with any directors and/or major shareholders of the Company. He has no conflict of interest with the Company and has never been convicted of any offence within the past 10 years.


Mr Yeo Aik Tan, alternate Director to Mr Yeo Ayk Ke, a Malaysian, aged 51 was appointed to the Board as Alternate Director on 16 April 2007. Currently, he has direct interest of 764,593 shares and deemed to have interest in 30,275,000 shares in the Company held by Central Glamour Sdn Bhd by virtue of Section 6A (4) of the Companies Act, 1965. He started his career as a chef Genting Highland Hotel in 1980. Two years later, he joined Apollo Hotel as a western cuisine chef for two years. He joined his brother in setting up the family’s packaging business, Pioneer Packing Industries in 1985. His involvement in the well-established organization in the hospitality industry has trained him to be disciplined in delivering products that meet customers’ expectations. This skill has enabled him to handle the customer service and marketing roles for the packaging business effectively. His drive to continuously find solutions to improve the operational efficiency and enhance productivity has prompted him to computerize the company’s production planning and control function, and apply the cutting edge technology in block making and tracking system.

Mr Yeo is not a director of any other public company. He is the brother of Mr Yeo Eck Liong, the Managing Director and Mr Yeo Ayk Ke, the Executive Director, both are major shareholders of the Company. He has no conflict of interest with the Company and has never been convicted of any offence within the past 10 years.



STATEMENT OF CORPORATE GOVERNANCEThe Board of Directors of Jaycorp Berhad appreciates the importance of adopting high standards of corporate governance within the Group. The Board is fully dedicated to continuously evaluating the Group’s corporate governance practices and procedures with a view to ensure the principles and recommendations in corporate governance as stipulated by the Malaysian Code on Corporate Governance 2012 (‘the Code’) are applied and adhered to safeguard shareholders’ investments and protect the interests of all stakeholders.

The Board of Directors is pleased to make this disclosure on the manners in which the Group has applied and complied with the principles and recommendations as set out in the Code.

Establish Clear Roles and Responsibilities

Board Roles and Responsibilities

The Group acknowledges the key role played by the Board of Directors in the stewardship of its direction and operations, with the ultimate objective of enhancing its long–term shareholders value. To achieve this objective and effectively discharge its responsibility, the Board has set the Group’s strategic direction, establishing goals for management and monitoring the achievement of these goals, business sustainability, identifying principal risks and ensuring the implementation of appropriate systems to manage these risks, overseeing the review of effectiveness of internal controls and developing investor relations programmes.

The Board has adopted a Board Charter on 13 November 2013 which sets out its roles, functions, composition, operation and processes, having regard to the principles of good corporate governance and requirements of Main Market Listing Requirements (“MMLR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”). The Board Charter further defines the roles and responsibilities of the Chairman and the Managing Director. The Board Charter is available on the Company’s website (www.jaycorp.com.my).

As set out in the Board Charter, the Board is responsible for:

• reviewing and adopting a strategic plan for the Group;• overseeing the conduct of the Group’s Business to evaluate whether the Business is being properly managed;• identifying principal risks and ensuring the implementation of appropriate systems to manage these risks;• succession planning, including appointing, training, fixing the compensation of and where appropriate, replacing executive directors and Senior Management;• developing and implementing an investor relations programme or Shareholder communications policy for the Group;• reviewing the adequacy and the integrity of the Group’s internal control systems and Management information systems, including systems for compliance with applicable laws, regulations, rules, directives and guidelines;• determining the remuneration of non-executive directors, with the individuals concerned abstaining from discussions of their own remuneration;• ensuring that the Group adheres to high standards of ethics and corporate behavior;• monitoring and reviewing management processes aimed at ensuring the integrity of financial and other reporting; and• ensuring that the Company’s financial statements are true and fair and conform with the accounting standards.



The Board has delegated certain responsibilities to Board Committees which operate in accordance with the Terms of Reference approved by the Board and delegated the day-to-day management of the business of the Group to Executive Directors and Management subject to an agreed authority limit.

The following diagram shows a brief overview of the Board Committees of the Company:

Code of Conduct and Whistle-Blower Policy

The Board acknowledges and emphasizes the importance for all Directors and employees in maintaining the highest standards of corporate governance practices and ethical standards.

The Board has formalized a Code of Ethics and Code of Conduct on 13 November 2013 and these codes are aimed to emphasize the Company’s commitment to ethics and compliance with applicable laws and regulations, set forth basic standards of ethical behavior within the Group.

The Group has established a Whistle-Blowing Policy so that any officer or employee of the Group can report genuine concerns relating to any malpractice or improper conduct of the Group’s businesses. Disclosure can be made in writing to the Senior Independent Director. Any whistle blowing officer or employee acting in good faith is protected from retaliation for raising such allegations. Procedures are in place for investigations and appropriate follow-up action.

The Code of Conduct, Code of Ethics and Whistle-Blower Policy are available on the Company’s website at www.jaycorp.com.my.

STATEMENT OF CORPORATE GOVERNANCE (cont’d)

BOARD OF DIRECTORS

Audit Committee

Nomination Committee

Remuneration Committee

Enterprise Risk Management Committee

Investment Committee

RESPONSIBILITIES• Oversight on the Group’s financial reporting

• Review quarterly financial results, unaudited and audited financial statements • Monitoring of internal control systems

• Nomination of new Directors

• Annual assessment of the Board, the Board Committees and the contribution of each individual Director

• Recommending to the Board the remuneration of Executive Directors and Non-Executive Directors

• Identification, monitoring and control of all risks faced by the Group

• Formulate and implement risk management policies and strategy

• Oversight and appraise the quality of the investment projects


Sustainability

The Group is committed to sustainable development. Safety, health and environment as well as community responsibilities are integral to the way in which the Group conducts its business. The Group’s commitment to corporate social responsibility extends beyond corporate philanthropy as the Group actively seeks the participation of its employees in such programmes.

The Board has adopted the Sustainability Policy on 13 November 2013. This policy aims to integrate the principles of sustainability into the Group’s strategies, policies and procedures, ensure that the Board and senior management are involved in implementation of sustainability practices and monitor the sustainability performance. This policy also aim to create a culture of sustainability within the Group, and the community, with an emphasis on integrating the environmental, social and governance considerations into decision making and the delivery of outcomes.

The Sustainability Policy is available on the Company’s website at www.jaycorp.com.my.

Supply and Access to Information

All Directors are provided with notice of agenda together with previous minutes and other relevant information on a timely basis. This is to ensure all Directors have sufficient time to obtain further explanation, where necessary, in order to be fully informed of the matters to be discussed during the meeting. Every Director has also unhindered access to the advice and services of the Company Secretaries. The Board members have unrestricted and timely access to all information necessary for the discharge of their duties and responsibilities. The Board paper contains all relevant information and reports on financial, operational, corporate, regulatory, marketing and minutes of meetings. These documents are comprehensive and include qualitative and quantitative information to enable the Board members to make informative decisions.

The Directors meet, review and approve all corporate announcements, including the announcement of the quarterly financial results, prior to releasing them to Bursa Securities.

There is a formal schedule of matters reserved specifically for Board’s decision. These include approval of key policies, significant acquisitions and disposals of assets, investments, budgeting and corporate plans.

As and when it is necessary and where appropriate, the Directors may take independent professional advice, in furtherance of their duties at the Group’s expense.

Company Secretaries

The key role of the Company Secretary is to provide unhindered advice and services for the directors as and when the need arises, to enhance the effective functioning of the Board and to ensure regulatory compliance.

The appointment and removal of the Company Secretary is a matter for the Board as a whole. The Board recognizes the fact that the Company Secretary should be suitably qualified and capable of carrying out the duties required for the post. The Board believes that the current Company Secretaries are capable of carrying out their duties efficiently to ensure the effective functioning of the Board.

The Company Secretaries circulate relevant guidelines and updates on statutory and regulatory requirements from time to time for the Directors’ reference and brief the Board members on the updates quarterly. They also ensure that all Board meetings are properly convened and that accurate and proper records of the deliberations, proceedings and resolutions passed are recorded and maintained in the statutory register at the registered office of the Company.



Strengthen Composition

As the date of this statement, the Board consists of eight (8) members; comprising one (1) Executive Chairman, one (1) Managing Director, three (3) Executive Directors, one (1) Senior Independent Non-Executive Director and two (2) Independent Non-executive Directors. This composition complies with the Para 15.02 of the MMLR which requires that at least two Directors or one-third of the Board of the Company, whichever is the higher, are independent Directors.

The Directors have a wide range of business, legal, manufacturing, marketing, finance, audit, information technology and technical experience. The wide mix of different skill sets and professional diversity of the members provides an atmosphere where deliberations draw a wide range of viewpoints and are at times challenged before a decision is arrived at. The Board acknowledges that a well-balanced board will benefit the Group in promptly appraising matters and to competently arrive at decisions which will enhance the performance of the Group.

A brief profile of each Director is presented on pages 17 to 20 of the Annual Report.

Nomination Committee

The composition of the Nomination Committee (“NC”) comprises the following members:

Encik Asgari Bin Mohd Fuad Stephens(Chairman, Senior Independent Non–Executive Director)

Encik Omar Bin Musa(Independent Non–Executive Director)


The NC consists of entirely Independent Non–Executive Directors.

The NC is empowered by the Board and its terms of reference are to bring to the Board recommendations as to the appointment of new Directors. In making these recommendations, the Committee will consider the required mix of skills and experience, which the Directors should bring to the Board.

Annual review has been conducted by the NC to assess and evaluate the contributions, mix of skills and experience including core competencies of the members of the Board. The NC had also reviewed and conducted assessment in respect of the effectiveness of the Board as a whole and the effectiveness of the Committees of the Board.

The NC met two (2) times during the financial year ended 31 July 2014.

Board Membership Criteria

The NC is responsible to determine the appropriate characteristics, skills, and experience for the Board as a whole and its individual members with the objective of having a Board with diverse backgrounds and experience in business. Characteristics expected of all Directors include independence, integrity, high personal and professional ethics, sound business judgment, and the ability and willingness to commit sufficient time to the Board.

In evaluating the suitability of individual Board members, the Board takes into account factors, including skills, knowledge, expertise, experience, professionalism and time commitment to effectively discharge his or her role as a Director, contribution, background, character, integrity and competence.

STATEMENT OF CORPORATE GOVERNANCE (cont’d)STATEMENT OF CORPORATE GOVERNANCE (cont’d)


The Board evaluates each individual in the context of the Board as a whole, with the objective of recommending a group that can best perpetuate the success of the Company’s businesses and represent shareholders’ interests through the exercise of sound judgment, using its diversity of experience.

The Board has no specific policy on setting targets on female candidates to be appointed to the Board. With the current composition, the Board feels that its members have the necessary knowledge, experience, diverse range of skills and competence to enable them to discharge their duties and responsibilities effectively. The NC will however continue to take steps to ensure suitable female candidates are sought as part of its recruitment exercise.

The Articles of Association of the Company provide that at least one-third of the Board shall be subject to retirement by rotation at each Annual General Meeting (“AGM”).

The Directors to retire in each year shall be the Directors who have been the longest in office since their last election. All Directors shall retire from office once at least in every three years but shall be eligible for re–election. This provides an opportunity for the shareholders to review and approve their tenure in office. The re–election of each Director is voted on separately. To assist shareholders in their decision, sufficient information such as personal profile, meetings attendance and shareholdings in the Company of each Director standing for re-election are furnished in the Annual Report.

Names of Directors who are seeking re-election at the coming AGM are shown in the notice of the AGM on pages 02 to 06.

Board Evaluation

The NC is responsible for conducting an annual evaluation of the performance of the Board and Board Committees. The annual evaluation includes the assessment of independence of Independent Directors.

The NC has performed the annual evaluation for financial year ended 31 July 2014 in 13 November 2014. The NC had reviewed and assessed the mix of skills and experience of the Board including the core competencies of both Executive and Non-executive Directors, size of the Board, contribution of each Director and effectiveness of the Board, including Independent Non-executive Directors, and Board Committees and also evaluated the level of independence of the Directors.

Based on the assessment, the NC was satisfied with the existing Board composition and was of the view that all Directors and Board Committees of the Company had discharged their responsibilities in a commendable manner and had performed competently and effectively. All assessments and evaluations carried out by the NC in the discharge of all its functions were properly documented.

The Board is of the view that its present size and composition is optimal based on the Group’s operations and that it reflects a fair mix of financial, technical and business experiences that are important to the stewardship of the Group.

The Directors’ Assessment Policy which set out the procedures and criteria used in the assessment of Board, Board Committees, Directors and independence of Independent Directors is available on the Company website at www.jaycorp.com.my.



Remuneration Committee

The composition of the Remuneration Committee (“RC”) comprises the following members:

Encik Omar Bin Musa(Chairman, Independent Non-Executive Director)

Mr Yeo Eck Liong(Managing Director)


The RC consists of majority Non–Executive Directors.

The RC is responsible for recommending the remuneration framework for Directors as well as the remuneration packages of Executive Directors to the Board for its approval. Individual Directors shall abstain from decisions in respect of their individual remuneration.

The RC recommends the Director’s fee payable to Non-executive Directors of the Board and are deliberated and decided at the Board before it is presented at the AGM for shareholders’ approval.

The Directors’ Remuneration Policy, which aims to attract, develop and retain high performing and motivated Directors with a competitive remuneration package is available on the Company’s website at www.jaycorp.com.my.

The details of the directors’ remuneration are as follows:–

Non-Independent Executive Directors

Independent Non-Executive Directors

RM’000 RM’000

Fees 484 156

Salaries and Other Emoluments

2,270 27

Total 2,754 183



The number of Directors of the Company whose total remuneration falls within the following band for the financial year ended 31 July 2014 is as follows:

RangeNumber of Directors

Non-Independent Executive Directors

Independent Non-Executive Directors

RM50,000 – RM100,000 - 3

RM250,001 – RM300,000 1 -

RM300,001 – RM350,000 1 -

RM500,001 – RM550,000 1 -

RM700,001 – RM750,000 1 -

RM850,001 – RM900,000 1 -

The Boards feels that disclosure of total directors’ remuneration in the above bandwidth is sufficient for security reasons.

The RC met two (2) times during the financial year ended 31 July 2014.

Reinforce Independence

Annual Assessment of Independence

An independent Director of the company is a Director who is independent of management and free from any business or other relationship which could interfere with the exercise of independent judgment or the ability to act in the best interests of an applicant or the company. The concept of independence adopted by the Board is in tandem with the definition of an independent Director in paragraph 1.01 of the Main Market Listing Requirements of Bursa Securities.

The Board, via the NC assesses Independent Director’s independence to ensure on-going compliance with this requirement annually.

For the financial year ended 31 July 2014, the Board assessed the independence of its Independent Non-executive Directors based on the criteria set out in the MMLR of Bursa Securities. The Board is satisfied with the level of independence demonstrated by all the Independent Directors and their ability to act in the best interest of the Company.

Tenure of Independent Directors

The Board is mindful of the recommendation of the Code on limiting the tenure of Independent Directors to nine (9) years of service. However, the Board may, in appropriate cases and subject to the assessment of the NC on an annual basis, retain an Independent Director who has served a consecutive or cumulative term of nine (9) years to continue to serve as Independent Director subject to shareholders’ approval.



Currently, the Company has two (2) long serving Independent Non-executive Directors, Encik Omar Bin Musa and Encik Asgari Bin Mohd Fuad Stephens, whose tenure is more than nine (9) years. The NC has reviewed and recommended to the Board for them to continue to act as Independent Directors of the Company. The NC is of the view that the Independent Directors have carried out their responsibilities in good faith in the best interest of the Company and have safeguarded the interests of the minority shareholders of the Company. There are significant advantages to be gained from the long serving Independent Directors who possess tremendous insight and knowledge of the Company’s affair.

In this respect, the Board recommended that they continue to serve as Independent Directors subject to shareholders’ approval at the forthcoming AGM of the Company.

Chairman and Managing Director

The role of the Executive Chairman and the Managing Director are separated and clearly defined, so as to ensure that there is a balance of power and authority. The Executive Chairman is responsible for ensuring Board’s effectiveness and conduct, monitoring the monthly result so as to ensure it meets the budget and goals. The Managing Director, with the assistance of the Executive Directors, is responsible for the day-to-day management of the business as well as the implementation of Board’s policies and decisions.

Tan Sri Abdul Majid Khan is the Chairman of the Board whilst the Group Managing Director is Mr Yeo Eck Liong.

The Senior Independent Non–Executive Director, with the support of the other Independent Non–Executive Directors, provide the independent judgment to the decision making of the Board and provide an independent check and balance for the Executive Directors.

Foster Commitment

Time Commitment

The Board meets at least four (4) times a year or more when circumstances require. Where appropriate, decisions are also made by way of circular resolutions in between scheduled meetings during the financial year.

The Board meetings have a pre-determined set of matters for the Board’s review. Among these are the financial performance of the Group, the operating performances and achievement of objectives and goals of the Group. All Board papers for consideration and discussion will be circulated to members at least three (3) days prior to the meetings to ensure Directors have sufficient time to study them and be prepared for meaningful discussions.

The company secretary issues a notice of meeting prior to each Board meeting together with relevant Board papers and any corporate announcement for release to Bursa Securities. Management and professional advisor may be invited by the Board if there is a need for information or advice on matters that require expertise knowledge.



The Board met five (5) times during the financial year under review. The details of Directors’ attendance are set out as follows:

Name of Director Designation TotalAttendance

%

Tan Sri Abdul Majid Khan Executive Chairman 4/5 80%

Mr Yeo Eck Liong Managing Director 3/5 60%

Mr Yeo Ayk Ke Executive Director 5/5 100%

Mr Chia Lai Joo Executive Director 5/5 100%

Mr Lim Poh Teot Executive Director 5/5 100%

Encik Asgari Bin Mohd Fuad Stephens Senior Independent Non-Executive Director 4/5 80%

Encik Omar Bin Musa Independent Non-Executive Director 5/5 100%

Mr Kong Chee Weng, Harold Independent Non-Executive Director 5/5 100%

Mr Yeo Aik Tan Alternate Director to Mr Yeo Ayk Ke N/A N/A

The attendance of all the Directors at Board meetings held during the financial year ended 31 July 2014 surpassed the minimum requirements stipulated under the Main Market Listing Requirements.

It is the Board’s policy for Directors to notify the Chairman before accepting any new directorship notwithstanding that the MMLR of Bursa Securities allows a Director to sit on the boards of five (5) listed issuers.

Directors’ Training

The Board acknowledges that continuous education is essential for the Directors to further enhance their skills and knowledge. As an integral part of the training programme, the Directors are provided with updates from time to time on relevant new laws and regulations, including briefings on the operations of the Group, financial systems and site visits.

There were also briefings by the Internal and External Auditors and the Company Secretary on the relevant updates on statutory and regulatory requirements from time to time during the Board meetings.

In addition, members of the Board are well informed of various development programmes and encouraged to attend these programmes to keep abreast with the development in the industry and relevant regulatory updates in furtherance of their duties.



Details of training attended by Directors during the financial year ended 31 July 2014 are as follows:

NAME OF DIRECTORS SEMINARS/WORKSHOPS/COURSES

Tan Sri Abdul Majid Khan(Executive Chairman) • 11th ASEAN Leadership Forum 2014

Mr Yeo Eck Liong (Managing Director) • Understanding Goods & Services Tax (GST) in Malaysia

Mr Yeo Ayk Ke (Executive Director) • Understanding Goods & Services Tax (GST) in Malaysia

Mr Chia Lai Joo (Executive Director) • Understanding Goods & Services Tax (GST) in Malaysia

Mr Lim Poh Teot (Executive Director)

• Understanding Goods & Services Tax (GST) in Malaysia• Workshop on ASEAN Corporate Governance Scorecard

Encik Asgari Bin Mohd Fuad Stephens(Senior Independent Non-executive Director)

• Biomass SMEs Recognition Programme & Knowledge Exchange Seminar• International Institutional Investor Series (IIIS) 2013• Ensuring continuity of Reforms• 36 Red Flags in Financial Reports• The Asia Mining Congress 2014• 28th Asia Pacific Roundtable

Encik Omar Bin Musa (Independent Non-executive Director)

• Workshop on ASEAN Corporate Governance Scorecard• Audit Committee Conference

Mr Kong Chee Weng, Harold(Independent Non-executive Director)

• Biomass Asia Conference 2014 (BAC2014)

Mr Yeo Aik Tan(Alternate Director to Mr Yeo Ayk Ke) • Understanding Goods & Services Tax (GST) in Malaysia

Uphold Integrity in Financial Reporting

Financial Reporting

It is the Board’s commitment to present a balanced and meaningful assessment of the Group’s financial performance and prospects at the end of the financial year, primarily through the annual financial statements, quarterly announcement of financial results to Bursa Securities, the Chairman’s statement and review of operations in the Annual Report.

The Board is responsible for ensuring that the financial statements give a true and fair view of the state of affairs of the Group and of the Company as at the end of the accounting period and of their operations results and cash flows for the period then ended. In preparing the financial statements, the Directors have ensured that applicable approved accounting standards for entities other than private entities issued by the Malaysia Accounting Standard Board (“MASB”) and the provisions of the Companies Act, 1965 have been applied.

In preparing the financial statements, the Directors have selected and applied consistently suitable accounting policies and made reasonable and prudent judgments and estimates. The Directors also have a general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

The Board is assisted by the Audit Committee (“AC”) to oversee the Group’s financial reporting process and the quality of its financial reporting.

The Audit Committee Report is presented and separately set out in this Annual Report.

A summary of the activities of the AC during the year are set out in the Audit Committee Report on pages 36 to 40 of the Annual Report.



Suitability and Independence of Internal and External Auditors

The External Auditors are invited to attend the AC meetings to give their views on the state of affairs of the Company during the review period.

During the financial year under review, the outsourced internal auditors met the AC three (3) times for the financial year ended 31 July 2014. During such meeting, the auditors highlight and discuss the nature, scope of the audit, audit programme, internal controls and issues that may require the attention of the AC or the Board.

In compliance with MMLR of Bursa Securities and the Code, the AC within its duties reviews the scope of work, independence, objectivity and findings and recommendations of the audits conducted by both the external and internal auditors.

The AC ensures external audit function is independent of the activities it audits and reviews the contracts for the provision of non-audit services by the external auditors and ensures it does not give rise to conflict of interests. The excluded contracts should include management consulting, strategic decision, internal audit and standard operating policies and procedures documentation.

During the financial year under review, the fees for external auditors for the Group were RM157,000 and did not incur any non-audit fee for services rendered by the external auditors to the Group for the financial year ended 31 July 2014. The external auditors have confirmed to the AC that they are, and have been, independent throughout the conduct of the audit engagement in accordance with the independence criteria set out by the Malaysian Institute of Accountants.

The AC also makes arrangements to meet and discuss with the external auditors separately without the presence of Management on any matters relating to the Group and its audit activities.

Recognise and Manage Risks

Enterprise Risk Management Committee

The composition of the Enterprise Risk Management Committee (“ERMC”) comprises the following members:

Mr Yeo Ayk Ke(Chairman, Executive Director)

Mr Lim Poh Teot(Executive Director)

Encik Omar Bin Musa(Independent Non-Executive Director)

Mr Paul Yong Pow Choy(Chief Operation & Finance Officer)

Encik Muaz Bin Jema Anton Khan(Head of Business Development)

The representatives from key operating subsidiaries attend the ERMC meetings upon invitation.

The Board is ultimately responsible for the establishment of a sound framework to manage risks. The ERMC is responsible to formulate and implement risk management policies and strategy. It monitors and manages principal risks exposure by ensuring Management has taken necessary steps to mitigate such risks and recommends actions, where necessary.

The periodic updated key risk profile of the Group would be reviewed by the ERMC prior to it being tabled to the AC.

The Statement on Risk Management and Internal Control set out on pages 41 to 43 of this Annual Report provides an overview of the state of risk management activities within the Group.


Internal Audit Function

The Board maintains a sound system of Internal Controls to manage the day-to-day running of the business activities of the Group. The internal control system is a mechanism of checks and balances in the operating and financial processes wherein the transactions and processes and carried out and are subjected to this self checking mechanism. The management of the companies has embedded such control mechanism within their Standard Operating Procedures to ensure its continuous and effective operations.

The Board has mandated the AC with the overall responsibility of ensuring adequacy, completeness and effectiveness of these internal control systems. The AC undertakes periodic reviews and monitors the compliance to these systems via the Internal Audit Department who carries out audit checks on such control processes and provides feedback on its effectiveness and compliance at the operating level. Any weaknesses or variances reported by the Internal Auditor to the AC will be turned into management actions to rectify any weaknesses in those control processes.

The membership, terms of reference and activities of AC as well as the activities of the internal audit function are detailed in the AC Report of this Annual Report.

Ensure Timely and High Quality Disclosure

Corporate Disclosure Policies and Procedures

The Board has formalised a Shareholder Communication Policy which is aimed at developing an effective Investor Relations programme and strategy to communicate fairly and accurately, the corporate vision, strategies, developments, financial results and prospects to investors, financial community and other stakeholders and to obtain feedback from the stakeholders.

The Board and Management ensure timely dissemination of information on the Company’s performance and other matters affecting shareholders’ interests to shareholders and investors through appropriate announcement (where necessary), quarterly announcements, relevant circulars, press releases and distribution of annual reports.

Leverage on Information Technology for Effective Dissemination of Information

The Company recognises the importance of accountability to shareholders and effective communication between the Company and investors. In compliance with Para 9.21 of the MMLR of Bursa Securities, the Company has established its own website at www.jaycorp.com.my which contains vital information concerning the Group and is updated on a regular basis. Shareholders and investors are able to direct their queries to the Company through the Company’s website.

Strengthen Relationship between Company and Shareholders

The Annual General Meeting and Extraordinary General Meeting are the principal forums for dialogue with private shareholders and institutional investors that allows the stakeholders to have a clear and complete picture of the Group’s performance and position. These are crucial mechanisms in shareholder communication for the Company.

It is the Company’s practice to send the Notice of Annual General Meeting and related papers to shareholders at least twenty one (21) days before the meeting date. The Annual General Meeting is generally well attended whilst shareholders have direct access to the Board and are given the opportunity to participate and vote on resolutions. Both private and institutional shareholders are invited to ask questions about the resolutions being proposed or about the Group’s operations in general.

The Board encourages participation at general meetings and encourages poll voting by informing the shareholders of their right to demand for poll.




Additional Compliance Information

Share Buy-back

The Company had at the Fifteen Annual General Meeting held on 18 December 2013 obtained approval from its shareholders for the Company to purchase up to a maximum of ten per centum (10%) of the issued and paid-up share capital of the Company.

During the financial year ended 31 July 2014, the Company repurchased a total of 15,000 ordinary shares of RM0.50 each as follows:-

MonthNumber

of shares purchased and

retained as treasury shares

Lowest price paid per share

RM

Highest price paid per share

RM

Average price per share

RM

Total consideration

paidRM

August 2013 - - - - -

September 2013 - - - - -

October 2013 - - - - -

November 2013 - - - - -

December 2013 5,000 0.540 0.540 0.540 2,744

January 2014 - - - - -

February 2014 - - - - -

March 2014 - - - - -

April 2014 - - - - -

May 2014 - - - - -

June 2014 - - - - -

July 2014 10,000 0.735 0.735 0.735 7,404

As at 31 July 2014, 467,900 ordinary shares of RM0.50 each were retained as treasury shares.

Option, Warrants or Convertible Securities

The Company has not issued any options, warrants or convertible securities in respect of the financial year ended 31 July 2014.

American Depository Receipt (ADR) or Global Depository Receipt (GDR) Programme

The Company does not have any ADR or GDR programme in place for the financial year ended 31 July 2014.

Sanctions and / or Penalties

There were no material sanctions and/or penalties imposed on the Company, its subsidiaries’ directors or management during the financial year ended 31 July 2014.

Non-audit Fee

There were no non-audit fees paid to external auditor for the financial year ended 31 July 2014 other than fees of RM3,000 paid for the review of Statement on Risk Management and Internal Control.



Variation in Results, Profit Estimate Forecast and Projection

There were no profit estimates, forecast or projection made by the Company during the financial year ended 31 July 2014.

There were no material variance between the results for the financial year ended 31 July 2014 and the unaudited results previously announced by the Company.

Profit Guarantees

No profit guarantee was given by the Company and/or subsidiaries in respect of the financial year ended 31 July 2014.

Material Contracts Involving Directors’ or Major Shareholders’ Interest

There were no material contracts entered into by the Company and its subsidiaries which involved directors’ or major shareholders’ interest subsisting as at the end of the financial year ended 31 July 2014 other than those disclosed under notes to financial statements.

Recurrent Related Party Transactions of Revenue Nature

Recurrent related party transactions of a revenue and trading nature of the Group conducted during the financial year ended 31 July 2014 are as follows:-

Company in the Jaycorp Berhad (“Jaycorp”) and/or

its subsidiaries

Transacting parties Nature of transaction RM’000

Jaycorp Jawala Corporation Sdn Bhd (“Jawala”)

Monthly rental of RM7,492 to be paid by Jaycorp to Jawala for tenancy of the demised

premise known as Lot 17.03, 17th Floor, Menara KH, Jalan Sultan Ismail, 50250 Kuala

Lumpur measuring an area of about 1,873 square feet.

90

Yeo Aik Hevea (M) Sdn Bhd (“YAHSB”)

Jawala Payment of commission by YAHSB to Jawala for the successful tender of rubberwood

28

Jaycorp Green Energy Sdn Bhd (“JGESB”)

Jawala Sale of biomass feed stock by Jawala to JGESB

19

Pine Packaging (M) Sdn Bhd (“PPSB”)

Jawala Purchase of carton boxes by Jawala from PPSB 44

Digital Furniture Sdn Bhd (“DFSB”)

PPSB

Winshine Industries Sdn Bhd (“WISB”)

Yeo Aik Wood Sdn Bhd (“YAWSB”)

Janpang Enterprise Sdn Bhd (“Janpang”)

Purchase of machinery and machinery parts from Janpang

254

Revaluation Policy

The Group does not have a revaluation policy to revalue its landed properties.



AUDIT COMMITTEE REPORTThe principle objective of the Audit Committee is to assist the Board in discharging its statutory and fiduciary duties and responsibilities in relation to the Group’s business activities.

MEMBERSHIP

The current members of Audit Committee (the “Committee”) are as follows:-

Mr Kong Chee Weng, Harold (Chairman, Independent Non-Executive Director)Encik Asgari Bin Mohd Fuad Stephens (Member, Senior Independent Non-Executive Director) Encik Omar Bin Musa (Member, Independent Non-Executive Director)

SUMMARY OF THE TERMS OF REFERENCE

Objectives

The primary function of the Committee is to assist the Board in fulfilling its fiduciary responsibilities and overall responsibilities for the Group’s activities. Consistent with this function, the Committee should encourage continuous improvement of, and shall foster adherence to the Group’s policies, procedures, and practices as well as applicable laws and regulations.

The Committee shall primarily fulfil these responsibilities by carrying out the activities enumerated in the terms of reference as set out herein.

Composition

The Audit Committee shall be appointed by the Board amongst its members and consists of at least three (3) members, all of whom shall be Independent Non-Executive Directors. All members of the Audit Committee are financially literate.

The Board shall at all times ensure that at least one (1) member of the Committee:

• must be a member of the Malaysian Institute of Accountants; or

• if not a member of Malaysian Institute of Accountants; must have at least three (3) years of working experience and;

- he must have passed the examinations specified in Part I of the First Schedule of the Accountants Act, 1967; or

- he must be a member of one of the associations of accountants specified in Part II of the First Schedule of the Accountants Act, 1967; or

• must have at least three (3) years’ post qualification experience in accounting or finance;

- has a degree/masters/doctorate in accounting or finance; or

- is a member of one (1) of the professional accountancy organizations which has been admitted as a full member of the International Federation of Accountants; or

• must have at least seven (7) years’ experience being a chief financial officer of a corporation or having the function of being primarily responsible for the management of the financial affairs of a corporation; or

• fulfills such other requirements as prescribed or approved by the Bursa Malaysia.


AUDIT COMMITTEE REPORT (cont’d)

Frequency of Meetings and Quorum

• Meetings shall be held not less than four (4) times a year. However, additional meetings may be called at any time depending on the scope of activities of the Audit Committee.

• Other Board members, senior management personnel, internal and external auditors may be invited to attend the meetings.

• The Committee shall meet the external auditors without any Executive Director or senior management personnel being present at least twice a financial year.

• Minutes of each meeting shall be kept and distributed to each member of the Committee and of the Board. The Chairman of the Committee shall report on each meeting to the Board. The Secretary to the Committee shall be the Company Secretary.

• The quorum shall consist of not less than 50% of the members.

Authority

The Committee is authorised by the Board:-

• to investigate any activity within its terms of reference and shall have unrestricted access to the external auditors and to all employees of the Group;

• to have the resources in order to perform its duties as set out in its terms of reference;

• to have full and unrestricted access to information pertaining to the Group and the Company;

• to obtain external legal or other independent professional advice when necessary;

• to convene meetings with the external auditors, internal auditors or both, excluding the attendance of other directors and employees of the Company, whenever deemed necessary.

The Chairman of the Committee shall engage on a continuous basis with senior management, such as the Chairman, the Managing Director, the Executive Director, the Chief Operation and Finance Officer, the internal auditors and the external auditors in order to be kept informed of matters affecting the Company.

Notwithstanding anything to the contrary hereinbefore stated, the Committee does not have executive powers and shall report to the Board of Directors on all matters considered and its recommendations thereon, pertaining to the Group and the Company.


Responsibilities and Duties

To fulfil its responsibilities and duties, the Committee shall review the following:

• The terms of reference for the Committee at least annually, as conditions dictate;

• The audit scope and plan of the external auditors and the internal auditors, including any changes in the planned scope of the audit plan;

• Significant audit findings during the year with Management, external auditors and internal audit, including the status of previous audit recommendations;

• The external and internal audit reports to ensure that where major deficiencies in controls or procedures have been identified, appropriate and prompt remedial action is taken by Management;

• Any difficulties encountered in the course of audit work, including any restrictions on the scope of activities or access to required information;

• The nomination, appointment, resignation and performance of the external auditors;

• Business risk assessment and internal controls instituted;

• The establishment of an appropriate internal control framework, including information systems and potential enhancements;

• Investigation reports on any major defalcations, frauds and thefts from the Group;

• The quarterly results and year end financial statements, prior to the approval by the Board of Directors, focusing on:

-changes in or implementation of major accounting policies; - significant or unusual events; - going concern assumption; and - compliance with accounting standards and other legal requirements.

• Procedures in place to ensure that the Group is in compliance with the Companies Act, 1965, BSLR and other legislative and reporting requirements;

• Related party transactions and conflict of interest situations that may arise within the Company and/or the Group including any transaction, procedure or course of conduct that raises questions of management integrity;

• Any other activities consistent with its terms of reference, as the Committee or the Board deem necessary or appropriate;

• Internal audit function as follows:

-Review the adequacy of the scope, functions, competency and resources of the internal audit function, and that it has the necessary authority to carry out its work;

-Review the internal audit programme and results of the internal audit process and where necessary, ensure that appropriate action is taken on the recommendations of the internal audit function;

-Review any appraisal or assessment of the performance of outsourced internal audit function;

-Take cognizance of resignations or change in internal audit function service provider and provide the service provider an opportunity to submit their reasons for resigning.

• Where the Committee is of the view that a matter reported to the Board of Directors of the Company has not been satisfactorily resolved resulting in a breach of the requirement, the Committee must promptly report such matter to the Bursa Malaysia Securities Berhad.



Summary of Activities During The Year

In line with the terms of reference of the Committee, the following activities were carried out by the Committee during the financial year ended 31 July 2014 in the discharge of its functions and duties:-

• Review and evaluate the scope of works and audit plans for the Group, prepared by the internal auditors and external auditors.

• Review the quarterly unaudited financial statements of the Group and ensure compliance with approved accounting standards, other legal and regulatory requirements, prior to deliberation and approval by Board.

• Review the Financial Statements of the Group and of the Company for the financial year ended 31 July 2014.

• Review and assess the significant issues as highlighted by the external auditors arising out of the audit of the Group for the financial year and corresponding management response to those issues.

• Review the internal auditors’ reports pertaining to the state of internal control of the various operating units within the Group and appraised the adequacy and effectiveness of Management’s response in resolving the audit issues reported.

• Review of the related party transactions entered into by the Group and the Company and all the disclosure of all such transactions in the annual report.

• Consideration and recommendation to the Board for approval of the audit fees payable to the external auditors.

• Consideration and recommendation to the Board for approval of the audit fees payable to the internal auditors.

• Consider the resignation of the existing external auditors and the appointment of new external auditors for recommendation to shareholders for their approval.

• Met with external auditor without the presence of the management and Executive Directors twice during the financial year on the audit planning and audit findings for the financial year ended 31 July 2014.

Attendance of Audit Committee Functions

During the financial year ended 31 July 2014, the Audit Committee held a total of five (5) meetings. The meetings were appropriately structured through the use of agendas which were distributed to members with sufficient notification. The Group Chief Operation and Finance Officer and the Company Secretary were present by invitation at all the meetings. The Executive Directors and the representatives of the external auditors and internal auditors also attend the meetings upon invitation.

The details of attendance of the Committee members are as follows:-

Name of Committee Member Total Percentage (%)

Mr Kong Chee Weng, Harold 5/5 100

Encik Asgari Bin Mohd Fuad Stephens 4/5 80

Encik Omar Bin Musa 5/5 100



INTERNAL AUDIT FUNCTION

The principal role of the internal auditors is to undertake independent, regular and systematic reviews of the systems of internal contral so as to provide reasonable assurance that such systems continue to operate satisfactorily and effectively. The internal auditors carries out audit assignments based on an audit plan that was reviewed and approved by the Audit Committee. The reports of the audits undertaken were forwarded to the management for attention and necessary action and presented to the Audit Committee for deliberation and approval.

During the first half of the financial year as in recent financial years, the internal audit review on the systems of internal control was outsourced to an independent professional firm. The outsourced internal auditors reported directly to the Audit Committee. Examples of activities carried out by the internal auditors during the first half of the financial year includes:

• Performed internal audit review of PT Tiga Mutiara Nusantara.• Issue reports on the results of the internal audit review, identifying key weaknesses with suggested recommendations to management for further action.• Attended Audit Committee meetings to table and discuss the internal audit reports.

During the second half of the financial year, no further internal audit review on the systems of internal control was undertaken because the Board was of the view that the internal control environment is stable and directed management to address specific internal control and risk management issues. Addressing those issues generated sufficient and more forcus internal control activity in the second half of the financial year. This process has been completed and improvements to process and controls have been suggested. To-date, there are no findings of a material financial impact arising from this review. This transition in internal audit forcus is a prelude to the establishment of an in-sourced internal audit function in the following financial year. ie the financial year ending 31 July 2015.

The cost incurred for the internal audit function in respect of the financial year ended 31 July 2014 amounted to RM53,682.



STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROLIntroduction

The Malaysian Code on Corporate Governance 2012 (“the Code”) requires public listed companies to maintain a sound system of risk management and internal controls to safeguard shareholders’ investment and the Group’s assets. The Board is pleased to present the Statement on Risk Management and Internal Control (“the Statement”) which is in compliance with paragraph 15.26(b) of Bursa Malaysia Securities Berhad’s Main Market Listing Requirements.

Responsibilities of the Board

The Board of Directors acknowledges its responsibility for maintaining a sound system of risk management and internal control by ensuring its adequacy and integrity through the process of constant monitoring. The system of risk management and internal control, while designed to safeguard shareholders’ investments and the Group’s assets, by its nature can only manage rather than eliminate risk of failure to achieve business objectives. Accordingly, it can only provide reasonable and not absolute assurance against material misstatement or loss, fraud or breaches of laws or regulations.

The Board confirms that there is continuous effort to enhance the overall risk management process of identifying, evaluating and managing significant risks by pursuing various initiatives and to enhance the tools and processes for effective management of risks face by the Group in its achievement of objective and strategies. This is in accordance with the guidance as contained in the “Statement on Risk Management and Internal Control – Guidelines for Directors of Listed Issuers”.

The Board has received assurances from the Executives Directors and the Group’s Chief Operation and Finance Officer that the Group’s risk management and internal control systems are operating adequately, in all material aspects, based on the risk management and internal control system of the Group.

Risk Management Policy

The Board’s primary objective and direction in managing the Group’s risks are focused on the achievement of the Group’s business objectives. In this regard, the Enterprise Risk Management Committee (“the ERM Committee”) is responsible for the purpose of monitoring the effective application of risk management policies, processes and activities. The ERM Committee consists of two (2) Executive Directors, one (1) Independent Non-Executive Director, Chief Operation and Finance Officer, Head of Business Development and the appointed representatives of subsidiaries within the Group. The ERM Committee, which is chaired by an Executive Director, reports directly to the AC who reports to the Board. There were three (3) ERM Committee meetings held during the financial year.


STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL (cont’d)

Internal Control

Key elements of the Group’s system of internal control include:

(a) Group annual budget is prepared and tabled to the Board for approval as a performance measurement of the Group. Continuous monitoring is carried out to measure actual performance against budget to identify significant variances and devise action plan;

(b) Management review of subsidiaries results and performances via management meetings are on a monthly basis;

(c) Regular visits to subsidiaries by senior management;

(d) Clearly defined Standard Operating Procedures and Group Human Resource Manual as the key framework for good internal control practices;

(e) Regular management and ERM Committee meetings were conducted to ensure activities and risk mitigation actions were implemented as recommended;

(f) Enhancing the quality and ability of employees through continuous training and development based on annual training plan; and

(g) Clearly defined authority limits at appropriate levels to ensure accountability and responsibility.

Control and Monitoring Process

The Board is responsible for setting the Group’s long term business objectives and monitors the conduct of the Group’s operations through various board committees. The process adopted by the Board to monitor the effectiveness of the Group’s risk management and internal control system are as follows:

(a) The Board, Audit Committee and the ERM Committee meet to discuss matters raised by management, internal auditors and external auditors on business and operational matters;

(b) The Board has delegated the responsibilities to the management to implement and monitor the Board’s policies on control;

(c) Internal control procedures and policies are documented and reviewed from time to time; and

(d) Meetings are held during the financial year in order to assess Group’s performance.


STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL (cont’d)

Internal Audit Function

The Group outsourced its internal audit function to an independent professional consulting firm as part of its effort to provide the Audit Committee and the Board with much of the assurance it requires regarding the adequacy and integrity of the system of internal control. The role of the internal auditors, which report directly to the Audit Committee, is to review the adequacy, integrity and effectiveness of the Group’s system of risk management and internal controls to mitigate the risks of the Group including financial, operational and compliance risks.

During the second half of the financial year, the Group ceased to outsource its internal audit function to an independent professional consulting firm. The Group was of the view that the internal control environment is stable and is focussed on addressing specific internal control and risk management issues. This transition in internal audit focus is a prelude to the establishment of an in-sourced internal audit function. The Group plan to establish an in-sourced internal audit function in the financial year ending 31 July 2015.

Review by External Auditors

As required by paragraph 15.23 of the Main Market Listing Requirement of the Bursa Malaysia Securities Berhad, the external auditors have reviewed this Statement. Their review was performed in accordance with Recommended Practice Guide 5 (“RPG 5”): Guidance for Auditors on the Review of Directors’ Statement on Internal Control, issued by the Malaysian Institute of Accountants. Based on their review, the external auditors have reported to the Board that nothing has come to their attention that causes them to believe that the Statement is inconsistent with their understanding of the process adopted by the Board in reviewing the adequacy and integrity of the Group’s internal control system. RPG 5 does not require the external auditors to, and they did not, consider whether this Statement covers all risk and controls, or to form an opinion on the effectiveness of the Group’s risk and control procedures.

Conclusion

For the financial year under review and up to the date of issuance of the financial statements, the Board is satisfied with the adequacy and effectiveness of the Group’s risk management and internal control system. There were no material losses that have arisen from any inadequacy or failure of the Group’s system of internal control which required additional disclosure in the financial statements. The Group maintains on-going commitment to continue strengthening its risk management and internal controls systems.

This Statement is made in accordance with the resolution of the Board of Directors dated 13 November 2014.

44

In preparing the annual financial statements of the Group and of the Company, the Directors are collectively responsible to ensure that these financial statements have been prepared to give a true and fair view of the state of affairs of the Group and the Company at the end of the financial year and the results and cash flows of the Group and the Company in accordance with applicable approved accounting standards in Malaysia, the provisions of the Companies Act, 1965 and the Main Market Listing Requirements of Bursa Malaysia Securities Berhad.

In preparing the financial statements, the Directors have applied appropriate accounting policies on a consistent basis and made judgements and estimates that are reasonable and prudent.

The Directors have responsibility for ensuring that proper accounting records are kept which disclose with reasonable accuracy the financial position of the Group and the Company and which enable them to ensure that the financial statements comply with the Companies Act, 1965.

The Directors have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the Group and to prevent and detect fraud and other irregularities.

This statement is made in accordance with a resolution of the Board dated 13 November 2014.

DIRECTORS’ RESPONSIBILITY STATEMENT

JAYCORP BERHAD ANNUAL REPORT 2014

46 Director’s Report

51 Statements Of Financial Position

53 Statements Of Comprehensive Income

54 Statements Of Changes in Equity

56 StatementsOfCashFlows

59 Notes to the Financial Statements

122 Statement by Directors

123 Statutory Declaration

124 Independent Auditor’s Report

TABLE OF CONTENT

FINANCIAL STATEMENTS



DIRECTORS’ REPORT FOR THE YEAR ENDED31 JULY 2014The Directors hereby submit their report and the audited financial statements of the Group and of the Company for the year ended 31 July 2014.

Principal activities

The Company is principally engaged in investment holding and provision of management services, whilst the principal activities of the subsidiaries are as stated in Note 6 to the financial statements. There has been no significant change in the nature of these activities during the financial year.

Results

Group RM’000

Company RM’000

Profit attributable to:

Shareholders of the Company 8,625 6,322

Non-controlling interests 1,912 –

10,537 6,322

Reserves and provisions

There were no material transfers to or from reserves and provisions during the year under review except as disclosed in the financial statements.

Dividend

Since the end of the previous financial year, the Company paid a first and final single tier dividend of 3.5 sen per ordinary share totalling RM4,787,897 in respect of the financial year ended 31 July 2013 on 27 December 2013.

The Directors recommend a first and final single tier dividend of 3.5 sen per ordinary share totalling RM4,803,750 in respect of the financial year ended 31 July 2014, which is subject to the approval of shareholders at the forthcoming Annual General Meeting.


DIRECTORS’ REPORT FOR THE YEAR ENDED31 JULY 2014Directors of the Company

Directors who served since the date of the last report are:

Tan Sri Abdul Majid KhanMr Yeo Eck LiongMr Yeo Ayk KeMr Yeo Aik Tan (Alternate Director to Mr Yeo Ayk Ke)Mr Chia Lai JooMr Lim Poh TeotEncik Omar Bin MusaEncik Asgari Bin Mohd Fuad StephensMr Kong Chee Weng, Harold

Directors’ interests

The interests and deemed interests in the ordinary shares of the Company and of its related corporations of those who were Directors at year end as recorded in the Register of Directors’ Shareholdings are as follows:

Number of ordinary shares of RM0.50 each

At 1.8.2013 Bought Sold

At31.7.2014

Interest in the Company:

Mr Yeo Eck Liong:– direct interest– deemed interest– others

3,389,54730,275,000

32,500

––

20,000

–––

3,389,54730,275,000

52,500

Mr Yeo Ayk Ke:– direct interest– deemed interest– others

719,17530,275,000

77,750

––

5,000

–––

719,17530,275,000

82,750

Mr Yeo Aik Tan(Alternate Director to Mr Yeo Ayk Ke):– direct interest– deemed interest

764,59330,275,000

––

––

764,59330,275,000

Mr Chia Lai Joo:– direct interest 2,578,032 – – 2,578,032

Mr Lim Poh Teot:– direct interest 3,284,225 – – 3,284,225

Tan Sri Abdul Majid Khan:– deemed interest 31,787,500 – – 31,787,500


DIRECTORS’ REPORT FOR THE YEAR ENDED31 JULY 2014 (cont’d)

Directors’ interests (cont’d)

By virtue of their interests in the shares of the Company, Tan Sri Abdul Majid Khan, Mr Yeo Eck Liong, Mr Yeo Ayk Ke, Mr Yeo Aik Tan, Mr Chia Lai Joo, and Mr Lim Poh Teot are also deemed interested in the shares of the subsidiaries

during the financial year to the extent that Jaycorp Berhad has an interest.

None of the other Directors holding office at 31 July 2014 had any interest in the ordinary shares of the Company and of its related corporations during the financial year.

Directors’ benefits

Since the end of the previous financial year, no Director of the Company has received nor become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by Directors as shown in the financial statements or the fixed salary of full time employees of the Company or of related corporations) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which the Director has a substantial financial interest except for any benefits which may be deemed to arise from transactions entered into in the ordinary course of business with companies in which certain Directors have substantial financial interests as disclosed in Note 26 to the financial statements.

There were no arrangements during and at the end of the financial year which had the object of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any

other body corporate.

Issue of shares and debentures

During the financial year,

a) there were no changes in the authorised and issued and paid-up share capital of the Company, andb) there were no issues of debentures by the Company.

Options granted over unissued shares

No options were granted to any person to take up unissued shares of the Company during the financial year.


Other statutory information

Before the financial statements of the Group and of the Company were made out, the Directors took reasonable steps to ascertain that:

i) all known bad debts have been written off and adequate allowance had been made for impairment losses on receivables, and

ii) all current assets have been stated at the lower of cost and net realisable value.

At the date of this report, the Directors are not aware of any circumstances:

i) that would render the amount written off for any additional bad debts, or the amount of the allowance for impairment losses on receivables, in the Group and in the Company inadequate to any substantial extent, or

ii) that would render the value attributed to the current assets in the financial statements of the Group and of the Company misleading, or

iii) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate, or

iv) not otherwise dealt with in this report or the financial statements, that would render any amount stated in the financial statements of the Group and of the Company misleading.

At the date of this report, there does not exist:

i) any charge on the assets of the Group or of the Company that has arisen since the end of the financial year and which secures the liabilities of any other person, or

ii) any contingent liability in respect of the Group or of the Company that has arisen since the end of the financial year.

No contingent liability or other liability of any company in the Group has become enforceable, or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may substantially affect the ability of the Group and of the Company to meet their obligations as and when they fall due.

In the opinion of the Directors, the financial performance of the Group and of the Company for the financial year ended 31 July 2014 have not been substantially affected by any item, transaction or event of a material and unusual nature nor has any such item, transaction or event occurred in the interval between the end of that financial year and the date of this report.

DIRECTORS’ REPORT FOR THE YEAR ENDED 31 JULY 2014 (cont’d)


Auditors

The auditors, Messrs. Crowe Horwath, have expressed their willingness to continue in office.

Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:

Tan Sri Abdul Majid Khan

Yeo Eck Liong

Melaka,

Date: 13 November 2014

DIRECTORS’ REPORT FOR THE YEAR ENDED 31 JULY 2014 (cont’d)


STATEMENTS OF FINANCIAL POSITION AT 31 JULY 2014

Group Company

Note2014

RM’0002013

RM’0002014

RM’0002013

RM’000

Assets

Property, plant and equipment 3 69,656 71,256 222 312

Investment properties 4 21,073 – – –

Intangible assets 5 712 712 – –

Investment in subsidiaries 6 – – 85,754 85,754

Other investments 7 16 7 – –

Deferred tax assets 8 566 436 – –

Total non-current assets 92,023 72,411 85,976 86,066

Receivables, deposits and prepayments 9 28,406 36,636 19,605 7,113

Inventories 10 46,666 45,850 – –

Derivative assets 11 23 – – –

Current tax assets 1,469 1,543 819 460

Cash and bank balances 12 30,557 33,289 352 267

Total current assets 107,121 117,318 20,776 7,840

Total assets 199,144 189,729 106,752 93,906

Equity

Share capital 68,625 68,625 68,625 68,625

Reserves 56,886 53,007 23,172 21,648

Total equity attributable to shareholders of the Company 13 125,511 121,632 91,797 90,273

Non-controlling interests 15,423 14,118 – –

Total equity 140,934 135,750 91,797 90,273

The annexed notes form an integral part of these financial statements.


STATEMENTS OF FINANCIAL POSITION AT 31 JULY 2014 (cont’d)

Group Company

Note2014

RM’0002013

RM’0002014

RM’0002013

RM’000

Liabilities

Payables and accruals 14 696 1,653 – –

Loan and borrowings 15 6,256 7,685 98 159

Deferred tax liabilities 8 1,809 1,775 – –

Total non-current liabilities 8,761 11,113 98 159

Payables and accruals 14 32,459 23,664 14,796 3,415

Loan and borrowings 15 16,644 17,812 61 59

Derivative liabilities 11 4 544 – –

Current tax payable 342 846 – –

Total current liabilities 49,449 42,866 14,857 3,474

Total liabilities 58,210 53,979 14,955 3,633

Total equity and liabilities 199,144 189,729 106,752 93,906



STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 JULY 2014

Group Company

Note2014

RM’0002013

RM’0002014

RM’0002013

RM’000

Revenue 16 236,327 209,281 11,494 29,476

Operating profit 16 14,169 10,544 7,725 26,591

Interest income 817 977 197 90

Finance costs 17 (1,392) (1,605) (58) (11)

Profit before tax 13,594 9,916 7,864 26,670

Tax expense 19 (3,057) (2,828) (1,542) (6,766)

Profit for the year 10,537 7,088 6,322 19,904

Other comprehensive income, net of taxItems that may be reclassified

subsequently to profit or loss– Fair value changes in other investment– Foreign currency translation differences

9(834)

(1)(222)

––

––

Total comprehensive income for the financial year

9,712

6,865

6,322

19,904

Profit attributable to: Shareholders of the Company Non-controlling interests

8,6251,912

5,0862,002

6,322–

19,904–

10,537 7,088 6,322 19,904

Total comprehensive income attributable to: Shareholders of the Company Non-controlling interests

8,2051,507

4,9721,893

6,322–

19,904–

9,712 6,865 6,322 19,904

Basic earnings per ordinary share (sen) 20 6.31 3.72

Dividend per ordinary share – net (sen) 21 3.50 3.50 3.50 3.50



STATEMENTS OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 JULY 2014

Attributable to the shareholders of the Company

Non– controlling

interests RM’000

Non–distributable Distributable

Note

Share capital

RM’000

Treasury shares

RM’000

Share premium

RM’000

Translation reserves RM’000

Fair value reserve RM’000

Unappropriated profits

RM’000Subtotal RM’000

Total RM’000

Group

At 1 August 2012 68,625 (280) 1,301 (334) – 52,144 121,456 12,625 134,081Profit after tax for the

financial year – – – – – 5,086 5,086 2,002 7,088Other comprehensive

income for the financial year– Fair value changes in

other investment – – – – (1) – (1) – (1)– Foreign currency

translation differences – – – (113) – – (113) (109) (222)Total comprehensive

income for the financial year – – – (113) (1) 5,086 4,972 1,893 6,865

Purchase of treasury shares at cost 13 – (8) – – – – (8) – (8)

Dividends to shareholders 21 – – – – – (4,788) (4,788) – (4,788)

Dividends to minority shareholders

–

–

–

–

–

–

–

(400)

(400)

At 31 July 2013/ 1 August 2013 68,625 (288) 1,301 (447) (1) 52,442 121,632 14,118 135,750

Profit after tax for the financial year – – – – – 8,625 8,625 1,912 10,537

Other comprehensive income for the financial year– Fair value changes in

other investment – – – – 9 – 9 – 9– Foreign currency

translation differences – – – (429) – – (429) (405) (834)Total comprehensive

income for the financial year – – – (429) 9 8,625 8,205 1,507 9,712

Dilution in equity interest in subsidiary – – – – – 472 472 398 870

Purchase of treasury shares at cost 13 – (10) – – – – (10) – (10)

Dividends to shareholders 21 – – – – – (4,788) (4,788) – (4,788)

Dividends to minority shareholders

–

–

–

–

–

–

–

(600) (600)

At 31 July 2014 68,625 (298) 1,301 (876) 8 56,751 125,511 15,423 140,934

Note 13 Note 13 Note 13 Note 13 Note 13 Note 13



STATEMENTS OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 JULY 2014 (cont’d)

Non-distributable Distributable

Note

Share capital

RM’000

Treasury shares

RM’000

Share premium

RM’000


RM’000Total

RM’000

Company

At 1 August 2012 68,625 (280) 1,301 5,519 75,165

Purchase of treasury shares at cost 13 – (8) – – (8)

Total comprehensive income for the financial year – – – 19,904 19,904

Dividends to shareholders 21 – – – (4,788) (4,788)

At 31 July 2013 / 1 August 2013 68,625 (288) 1,301 20,653 90,273

Purchase of treasury shares at cost 13 – (10) – – (10)

Total comprehensive income for the financial year – – – 6,322 6,322

Dividends to shareholders 21 – – – (4,788) (4,788)

At 31 July 2014 68,625 (298) 1,301 22,169 91,797

Note 13 Note 13 Note 13 Note 13


STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED 31 JULY 2014

Group Company

Note2014

RM’0002013

RM’0002014

RM’0002013

RM’000

Cash flows from operating activities

Profit before tax 13,594 9,916 7,864 26,670

Adjustments for:

Impairment loss on receivables 177 244 – 340

Deposits written off – 349 – 349

Depreciation of property, plant and equipment 3 6,167 5,716 94 93

Depreciation of investment properties 53 - – –

Fair value (gain)/ loss on derivatives (563) 711 – –

Gain on disposal on property, plant and equipment (348) (241) – –

Interest expense 1,392 1,605 58 11

Interest income (817) (977) (197) (90)

Property, plant and equipment written off 32 40 – –

Loss from disposal of extractions rights – 395 – –

Write down of inventories 488 568 – –

Reversal of defective claim – (156) – –

Reversal of impairment loss on receivables – (349) – –

Reversal of write down of inventories (232) (1) – –

Operating profit before changes in working capital 19,943 17,820 7,819 27,373

Changes in working capital

Inventories (2,593) 604 - -

Receivables, deposits and prepayments 3,123 2,131 1,027 (2,288)

Payables and accruals 13,094 (5,957) (21) 86

Cash generated from operations 33,567 14,598 8,825 25,171

Tax paid (3,913) (2,869) (2,002) (6,889)

Tax refund 856 580 101 257

Net cash from operating activities 30,510 12,309 6,924 18,539



Group Company

Note2014

RM’0002013

RM’0002014

RM’0002013

RM’000

Cash flows (for)/from investing activities

Interest received 817 977 197 90

Acquisition of property, plant and equipment (i) (5,870) (13,537) (4) (3)

Acquisition of subsidiaries – – Ω Ω

Acquisition of investment properties (21,126) – – –

Issuance of additional shares in subsidiaries – – – (4,500)

Proceeds from disposal of property, plant and equipment 530 534 – –

Placements of pledged deposits with licensed banks

(71)

(68)

–

–

Net cash (used in)/generated from investing activities

(25,720)

(12,094) 193

(4,413)

Cash flows for financing activities

Interest paid (1,392) (1,605) (58) (11)

Advances to subsidiaries – – (2,117) (10,149)

Dividends paid to shareholders of the Company (4,788) (4,788) (4,788) (4,788)

Dividends paid to minority shareholders (600) (400) – –

Drawdown of term loan – 6,600 – –

Payment of hire purchase (216) (189) (59) (55)

Proceeds from issuance of shares by subsidiary to non–controlling interest 870 – – –

Repayment of term loans and other borrowings (2,032) (1,449) – –

Repurchase of treasury shares (10) (8) (10) (8)

Net drawdown/(repayment) of bankers acceptances

1,013

(5,309)

–

–

Net cash used in financing activities (7,155) (7,148) (7,032) (15,011)


STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED 31 JULY 2014 (cont’d)


Group Company

Note2014

RM’0002013

RM’0002014

RM’0002013

RM’000

Net (decrease)/increase in cash and cash equivalents (2,365) (6,933) 85 (885)

Effect of exchange rate fluctuations on cash held 1,105 364 – –

Cash and cash equivalents at 1 August 21,281 27,850 267 1,152

Cash and cash equivalents at 31 July (ii) 20,021 21,281 352 267

Ω – Less than RM 1,000

(i) Acquisition of property, plant and equipment

During the financial year, the Group and the Company acquired property, plant and equipment with an aggregate cost of RM6,050,000 (2013 – RM13,597,000) and RM4,000 (2013 – RM3,000) respectively of which RM180,000 (2013 – RM60,000) and RM NIL (2013 – RM NIL) respectively, were acquired by means of hire purchase arrangement.

(ii) Cash and cash equivalents

Cash and cash equivalents included in the statements of cash flows comprise the following balances at the end of the reporting period:

Group Company

Note2014

RM’0002013

RM’0002014

RM’0002013

RM’000

Cash and bank balances 12 15,523 10,192 352 267

Deposits with licensed banks 12 11,939 17,244 – –

Short term funds 12 3,095 5,853 – –

Bank overdrafts 15 (8,147) (9,690) – –

22,410 23,599 352 267

Deposits pledged with licensed banks 12 (2,389) (2,318) – –

20,021 21,281 352 267


STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED 31 JULY 2014 (cont’d)


Jaycorp Berhad is a company limited by shares, incorporated and domiciled in Malaysia and is listed on the Main Market of Bursa Malaysia Securities Berhad. The addresses of its registered office and principal place of business

are as follows:

JA 1880, Batu 22½

Parit Perawas

Sungai Rambai

77400 Melaka

The consolidated financial statements as at and for the year ended 31 July 2014 comprise the Company and its subsidiaries (together referred to as the Group). The financial statements of the Company as at and for the year ended 31 July 2014 do not include other entities.

The Company is principally engaged in investment holding and provision of management services, whilst the principal activities of other entities in the Group are as stated in Note 6 to the financial statements.

The financial statements were approved by the Board of Directors on 13 November 2014.

1. Basis of preparation

The financial statements of the Group are prepared under the historical cost convention and modified to include other bases of valuation as disclosed in other sections under significant accounting policies, and in compliance with Malaysian Financial Reporting Standards (“MFRSs”), International Financial Reporting Standards and the requirements of the Companies Act 1965 in Malaysia.

(a) During the current financial year, the Group has adopted the following new accounting standards and interpretations (including the consequential amendments, if any):-

MFRSs and IC Interpretations (Including the Consequential Amendments)MFRS 10 Consolidated Financial StatementsMFRS 11 Joint ArrangementsMFRS 12 Disclosure of Interests in Other EntitiesMFRS 13 Fair Value MeasurementMFRS 119 (2011) Employee BenefitsMFRS 127 (2011) Separate Financial StatementsMFRS 128 (2011) Investments in Associates and Joint VenturesAmendments to MFRS 7: Disclosures – Offsetting Financial Assets and Financial LiabilitiesAmendments to MFRS 10, MFRS 11 and MFRS 12: Transition GuidanceIC Interpretation 20: Stripping Costs in the Production Phase of a Surface MineAnnual Improvements to MFRS 2009 – 2011 Cycle

The adoption of the above accounting standards and interpretations (including the consequential amendments) did not have any material impact on the Group’s financial statements.

NOTES TO THE FINANCIAL STATEMENTS



1. Basis of preparation (cont’d)

(b) The Group has not applied in advance the following accounting standards and interpretations (including the consequential amendments, if any) that have been issued by the Malaysian Accounting Standards Board (MASB) but are not yet effective for the current financial year:–

MFRSs and IC Interpretations (Including The Consequential Amendments) Effective Date

MFRS 9 (2009) Financial Instruments

MFRS 9 (2010) Financial Instruments

MFRS 9 Financial Instruments (Hedge Accounting and

Amendments to MFRS 7, MFRS 9 and MFRS 139)

Amendments to MFRS 9 and MFRS 7:

Mandatory Effective Date of MFRS 9 and Transition Disclosures

MFRS 14 Regulatory Deferral Accounts

MFRS 15 Revenue from Contracts with Customers

Amendments to MFRS 10, MFRS 12 and MFRS 127 (2011):

Investment Entities

Amendments to MFRS 11 : Accounting for Acquisitions of Interests in Joint Operations

Amendments to MFRS 116 and MFRS 138:

Clarification of Acceptable Methods of Depreciation and Amortisation

Amendments to MFRS 116 and MFRS 143: Agriculture – Bearer Plants

Amendments to MFRS 119: Defined Benefit Plans: Employee Contributions

Amendments to MFRS 132: Offsetting Financial Assets and Financial Liabilities

Amendments to MFRS 136:

Recoverable Amount Disclosures for Non-financial Assets

Amendments to MFRS 139:

Novation of Derivatives and Continuation of Hedge Accounting

IC Interpretation 21 Levies

Annual Improvements to MFRSs 2010-2012 Cycle

Annual Improvements to MFRSs 2011-2013 Cycle

The above accounting standards and interpretations (including the consequential amendments) are not

expected to have any material impact on the Group’s financial statements upon their initial application.

NOTES TO THE FINANCIAL STATEMENTS (cont’d)

To be announced by MASB




1 January 2016

1 January 2017

1 January 2014

1 January 2016

1 January 2016

1 January 2016

1 January 2014

1 January 2014

1 January 2014

1 January 2014

1 July 2014

1 July 2014

1 July 2014


1 January 2016

1 January 2017

1 January 2014

1 January 2016

1 January 2016

1 January 2016

1 January 2014

1 January 2014

1 January 2014

1 January 2014

1 July 2014

1 July 2014

1 July 2014

1. Basis of preparation (cont’d)

(c) Basis of measurement

The financial statements have been prepared on the historical cost basis.

(d) Functional and presentation currency

Items included in the financial statements of each of the Group’s entities are measured using the

currency of the primary economic environment in which the entity operates (“the functional currency”).

The consolidated financial statements are presented in the Company’s functional currency.

(e) Use of estimates and judgements

The preparation of financial statements requires management to make judgements, estimates and

assumptions that affect the application of accounting policies and the reported amounts of assets,

liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting

estimates are recognised in the period in which the estimate is revised and in any future periods affected.

There are no significant areas of estimation uncertainty and critical judgements in applying accounting

policies that have significant effect on the amounts recognised in the financial statements other than

those disclosed in the following notes: • Note 5 – Measurement of the recoverable amount of goodwill• Note 8 – Recognition of unutilised tax losses and capital allowances• Note 25 – Contingencies

2. Significant accounting policies

The accounting policies set out below have been applied consistently to the periods presented in these

financial statements, and have been applied consistently by Group entities, unless otherwise stated.

(a) Basis of consolidation

The consolidated financial statements include the financial statements of the Company and its

subsidiaries made up to the end of the reporting period.

Subsidiaries are entities (including structured entities) controlled by the Group. The Group controls an

entity when the Group is exposed to, or has rights to, variable returns from its involvement with the

entity and has the ability to affect those returns through its power over the entity.



2. Significant accounting policies (cont’d)

(a) Basis of consolidation (cont’d)

Subsidiaries are consolidated from the date on which control is transferred to the Group up to the effective date on which control ceases, as appropriate.

Intragroup transactions, balances, income and expenses are eliminated on consolidation. Where necessary, adjustments are made to the financial statements of subsidiaries to ensure consistency of accounting policies with those of the Group.

(i) Business Combinations

Acquisitions of businesses are accounted for using the acquisition method. Under the acquisition method, the consideration transferred for acquisition of a subsidiary is the fair value of the assets transferred, liabilities incurred and the equity interests issued by the Group at the acquisition date. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs, other than the costs to issue debt or equity securities, are recognised in profit or loss when incurred.

In a business combination achieved in stages, previously held equity interests in the acquiree are remeasured to fair value at the acquisition date and any corresponding gain or loss is recognised in profit or loss.

Non-controlling interests in the acquiree may be initially measured either at fair value or at the non-controlling interests’ proportionate share of the fair value of the acquiree’s identifiable net assets at the date of acquisition. The choice of measurement basis is made on a transaction-by-transaction basis.

(ii) Non-controlling Interests

Non-controlling interests are presented within equity in the consolidated statement of financial position, separately from the equity attributable to owners of the Company. Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance.

At the end of each reporting period, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests’ share of subsequent changes in equity.

(iii) Changes In Ownership Interests In Subsidiaries Without Change of Control

All changes in the parent’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. Any difference between the amount by which the non-controlling interest is adjusted and the fair value of consideration paid or received is recognised directly in equity of the Group.




(a) Basis of consolidation (cont’d)

(iv) Loss of Control

Upon loss of control of a subsidiary, the profit or loss on disposal is calculated as the difference between:-

(i) the aggregate of the fair value of the consideration received and the fair value of any retained interest in the former subsidiary; and

(ii) the previous carrying amount of the assets (including goodwill), and liabilities of the former subsidiary and any non-controlling interests.

Amounts previously recognised in other comprehensive income in relation to the former subsidiary are accounted for (i.e. reclassified to profit or loss or transferred directly to retained profits) in the same manner as would be required if the relevant assets or liabilities were disposed off. The fair value of any investments retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under MFRS 139 or, when applicable, the cost on initial recognition of an investment in an associate or a joint venture.

(b) Functional and foreign currency

(i) Functional and Presentation Currency

The individual financial statements of each entity in the Group are presented in the currency of the primary economic environment in which the entity operates, which is the functional currency. The consolidated financial statements are presented in Ringgit Malaysia (“RM”) which is the Company’s functional and presentation currency.

(ii) Transactions and Balances

Transactions in foreign currencies are converted into the respective functional currencies on initial recognition, using the exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities at the end of the reporting period are translated at the rates ruling as of that date. Non-monetary assets and liabilities are translated using exchange rates that existed when the values were determined. All exchange differences are recognised in profit or loss.

(iii) Foreign Operations

Assets and liabilities of foreign operations are translated to RM at the rates of exchange ruling at the end of the reporting period. Revenues and expenses of foreign operations are translated at exchange rates ruling at the dates of the transactions. All exchange differences arising from translation are taken directly to other comprehensive income and accumulated in equity under the translation reserve. On the disposal of a foreign operation, the cumulative amount recognised in other comprehensive income relating to that particular foreign operation is reclassified from equity to profit or loss.




(b) Functional and foreign currency (cont’d)

(iii) Foreign Operations (cont’d)

Goodwill and fair value adjustments arising from the acquisition of foreign operations are treated as assets and liabilities of the foreign operations and are recorded in the functional currency of the foreign operations and translated at the closing rate at the end of the reporting period.

(c) Financial instruments

Financial instruments are recognised in the statement of financial position when the Group has become a party to the contractual provisions of the instruments.

Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. Interest, dividends, gains and losses relating to a financial instrument classified as a liability, are reported as an expense or income. Distributions to holders of financial instruments classified as equity are charged directly to equity.

Financial instruments are offset when the Group has a legally enforceable right to offset and intends to settle either on a net basis or to realise the asset and settle the liability simultaneously.

A financial instrument is recognised initially at its fair value. Transaction costs that are directly attributable to the acquisition or issue of the financial instrument (other than a financial instrument at fair value through profit or loss) are added to/deducted from the fair value on initial recognition, as appropriate. Transaction costs on the financial instrument at fair value through profit or loss are recognised immediately in profit or loss.

Financial instruments recognised in the statement of financial position are disclosed in the individual policy statement associated with each item.

(i) Financial assets

On initial recognition, financial assets are classified as either financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments, or available-for-sale financial assets, as appropriate.

• Financial assets at fair value through profit or loss

Financial assets are classified as financial assets at fair value through profit or loss when the financial asset is either held for trading or is designated to eliminate or significantly reduce a measurement or recognition inconsistency that would otherwise arise. Derivatives are also classified as held for trading unless they are designated as hedges.

Financial assets at fair value through profit or loss are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss. Dividend income from this category of financial assets is recognised in profit or loss when the Group’s right to receive payment is established.

Financial assets at fair value through profit or loss could be presented as current or non-current. Financial assets that are held primarily for trading purposes are presented as current whereas financial assets that are not held primarily for trading purposes are presented as current or non-current based on the settlement date.




(c) Financial instruments (cont’d)

(i) Financial assets (cont’d)


• Held-to-maturity investments

Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the management has the positive intention and ability to hold to maturity. Held-to-maturity investments are measured at amortised cost using the effective interest method less any impairment loss, with revenue recognised on an effective yield basis.

Held-to-maturity investments are classified as non-current assets, except for those having maturity within 12 months after the reporting date which are classified as current assets.

• Loansandreceivablesfinancialassets

Trade receivables and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables financial assets. Loans and receivables financial assets are measured at amortised cost using the effective interest method, less any impairment loss. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest would be immaterial.

Loans and receivables financial assets are classified as current assets, except for those having settlement dates later than 12 months after the reporting date which are classified as non-current assets.

• Available-for-salefinancialassets

Available-for-sale financial assets are non-derivative financial assets that are designated in this category or are not classified in any of the other categories.

After initial recognition, available-for-sale financial assets are remeasured to their fair values at the end of each reporting period. Gains and losses arising from changes in fair value are recognised in other comprehensive income and accumulated in the fair value reserve, with the exception of impairment losses.

On derecognition, the cumulative gain or loss previously accumulated in the fair value reserve is reclassified from equity into profit or loss.

Dividends on available-for-sale equity instruments are recognised in profit or loss when the Group’s right to receive payments is established.

Investments in equity instruments whose fair value cannot be reliably measured are measured at cost less accumulated impairment losses, if any.

Available-for-sale financial assets are classified as non-current assets unless they are expected to be realised within 12 months after the reporting date.



(c) Financial instruments (cont’d)

(ii) Financial liabilities

All financial liabilities are initially at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method other than those categorised as fair value through profit or loss.

Fair value through profit or loss category comprises financial liabilities that are either held for trading or are designated to eliminate or significantly reduce a measurement or recognition inconsistency that would otherwise arise. Derivatives are also classified as held for trading unless they are designated as hedges.

Financial liabilities are classifies as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

(iii) Equity instruments

(i) OrdinaryShares

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from proceeds.

Dividends on ordinary shares are recognised as liabilities when approved for appropriation.

(ii) TreasuryShares

When the Company’s own shares recognised as equity are bought back, the amount of the consideration paid, including all costs directly attributable, are recognised as a deduction from equity. Own shares purchased that are not subsequently cancelled are classified as treasury shares and are presented as a deduction from total equity. Where such shares are subsequently sold or reissued, any consideration received, net of any direct costs, is included in equity.

(iv) Derecognition

A financial asset or part of it is derecognised when, and only when, the contractual rights to the cash flows from the financial asset expire or the financial asset is transferred to another party without retaining control or substantially all risks and rewards of the asset. On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in equity is recognised in profit or loss.

A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract is discharged or cancelled or expires. On derecognition of a financial liability, the difference between the carrying amount of the financial liability extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.




(d) Property, plant and equipment

(i) Recognition and measurement

Items of property, plant and equipment are stated at cost less accumulated depreciation and impairment losses, if any.

Cost includes expenditures that are directly attributable to the acquisition of the asset and any other costs directly attributable to bringing the asset to working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. The cost of self-constructed assets also includes the cost of materials and direct labour. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.

The cost of property, plant and equipment recognised as a result of a business combination is based on fair value at acquisition date.

When significant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant and equipment.

Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and are recognised net within “other operating income” or “other operating expenses” respectively in profit or loss.

(ii) Subsequent costs

The cost of replacing part of an item of property, plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied within the part will flow to the Group and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.

(iii) Depreciation

Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property, plant and equipment. Freehold land is not depreciated. Leased assets are depreciated over the shorter of the lease term or their useful lives unless it can be reasonably certain that the Group will obtain ownership by the end of the lease term. Property, plant and equipment under construction are not depreciated until the assets are ready for their intended use.

The estimated useful lives are as follows:

• Buildings 10, 20 and 50 years• Plant and machinery 5 – 16 years• Motor vehicles 4 – 8 years• Office equipment, furniture and fittings 4 – 10 years• Tools and equipment 5 – 10 years• Renovation 10 years

The depreciable amount is determined after deducting the residual value.

Depreciation methods, useful lives and residual values are reassessed at the end of the reporting period.




(e) Assets under hire purchase

Assets acquired under hire purchase are capitalised in the financial statements and are depreciated in accordance with the policy set out above. Each hire purchase payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding. Finance charges are recognised in profit or loss over the period of the respective hire purchase agreements.

(f) Intangible assets

Goodwill

Goodwill is measured at cost less accumulated impairment losses, if any. The carrying value of goodwill is reviewed for impairment annually or more frequently if events or changes in circumstances indicate that the carrying amount may be impaired. The impairment value of goodwill is recognised immediately in profit or loss. An impairment loss recognised for goodwill is not reversed in a subsequent period.

Under the acquisition method, any excess of the sum of the fair value of the consideration transferred in the business combination, the amount of non-controlling interests recognised and the fair value of the Group’s previously held equity interest in the acquiree (if any), over the net fair value of the acquiree’s identifiable assets and liabilities at the date of acquisition is recorded as goodwill.

Where the latter amount exceeds the former, after reassessment, the excess represents a bargain purchase gain and is recognised as a gain in profit or loss.

(g) Investments in subsidiaries

Investments in subsidiaries are stated at cost in the statement of financial position of the Company, and are reviewed for impairment at the end of the reporting period if events or changes in circumstances indicate that the carrying values may not be recoverable.

On the disposal of the investments in subsidiaries, the difference between the net disposal proceeds and the carrying amount of the investments is recognised in profit or loss.

(h) Investment properties

Investment properties are properties which are owned or held under a leasehold interest to earn rental income or for capital appreciation or for both. These include land held for a currently undetermined future use. Properties that are occupied by the Group are accounted for as owner-occupied rather than as investment properties.

Investment properties are stated at cost less accumulated depreciation and impairment losses, consistent with the accounting policy for property, plant and equipment as stated in accounting policy note 2(d).

Depreciation is charged to the profit or loss on a straight-line basis over the estimated useful lives of sixty six (66) years for lands.




(i) Impairment

(i) Impairmentoffinancialassets

All financial assets (other than those categorised at fair value through profit or loss), are assessed at the end of each reporting period whether there is any objective evidence of impairment as a result of one or more events having an impact on the estimated future cash flows of the asset. For an equity instrument, a significant or prolonged decline in the fair value below its cost is considered to be objective evidence of impairment.

An impairment loss in respect of held-to-maturity investments and loans and receivables financial assets is recognised in profit or loss and is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.

An impairment loss in respect of available-for-sale financial assets is recognised in profit or loss and is measured as the difference between its cost (net of any principal payment and amortisation) and its current fair value, less any impairment loss previously recognised in the fair value reserve. In addition, the cumulative loss recognised in other comprehensive income and accumulated in equity under fair value reserve, is reclassified from equity to profit or loss.

With the exception of available-for-sale equity instruments, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised. In respect of available-for-sale equity instruments, impairment losses previously recognised in profit or loss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss made is recognised in other comprehensive income.

(ii) Impairment of Non-Financial Assets

The carrying values of assets, other than those to which MFRS 136 - Impairment of Assets does not apply, are reviewed at the end of each reporting period for impairment when there is an indication that the assets might be impaired. Impairment is measured by comparing the carrying values of the assets with their recoverable amounts. The recoverable amount of the assets is the higher of the assets’ fair value less costs to sell and their value-in-use, which is measured by reference to discounted future cash flow.

An impairment loss is recognised in profit or loss.

When there is a change in the estimates used to determine the recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as a reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the asset that would have been determined (net of amortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in profit or loss immediately.




(j) Inventories

(i) Rubberwood furniture, Processing of rubberwood, General trading

Inventories are measured at the lower of cost and net realisable value. The cost of raw material is based on the weighted average principle being the main basis for cost and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition. In the case of work-in-progress and manufactured inventories, cost includes an appropriate share of production overheads based on normal operating capacity. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sales.

(ii) Packaging

Inventories are measured at the lower of cost and net realisable value. The cost of raw materials is based on specific identification while the cost of consumables is based on the weighted average principle and both costs include expenditure incurred in acquiring the inventories and bringing them to their existing location and condition. In the case of work-in-progress and manufactured inventories, cost includes an appropriate share of production overheads based on normal operating capacity. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sales.

Where necessary, write down or write off is made for all damaged, obsolete and slow-moving items.

(k) Payments made for the right to extract rubberwood trees

Payments made for the right to extract rubberwood trees are treated as advances for rubberwood purchased in the statement of financial position. The costs of rubberwood to be supplied/extracted shall be deducted from the advances.

(l) Cash and cash equivalents

Cash and cash equivalents comprise cash in hand, bank balances, demand deposits, deposits pledged with financial institutions, bank overdrafts and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value with original maturity periods of three months or less. For the purpose of the statement of cash flows, cash and cash equivalents are presented net of bank overdrafts and pledged deposits.

(m) Loans and borrowings

Loans and borrowings are stated at amortised cost with any difference between cost and redemption value being recognised in profit or loss over the period of the loans and borrowings using the effective interest method.




(n) Employee benefits

(i) Short-termBenefits

Wages, salaries, paid annual leave and sick leave, bonuses and non-monetary benefits are measured on an undiscounted basis and are recognised in profit or loss in the period in which the associated services are rendered by employees of the Group.

(ii) DefinedContributionPlans

The Group’s contributions to defined contribution plans are recognised in profit or loss in the period to which they relate. Once the contributions have been paid, the Group has no further liability in respect of the defined contribution plans.

(o) Provisions

A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability.

(p) Contingent liabilities

A contingent liabilities is a possible obligation that arises from past events and whose existence will only be confirmed by the occurrence of one or more uncertain future events not wholly within the control of the Group. It can also be a present obligation arising from past events that is not recognised because it is not probable that an outflow of economic resources will be required or the amount of obligation cannot be measured reliably.

A contingent liability is not recognised but is disclosed in the notes to financial statements. When a change in the probability of an outflow occurs so that the outflow is probable, it will then be recognised as a provision.

(q) Revenue recognition

(i) Sales of goods

Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates. Revenue is recognised when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, and there is no continuing management involvement with the goods.




(q) Revenue recognition (cont’d)

(ii) Services

Revenue from services rendered is recognised in profit or loss based on the value of work performed and invoiced to customers.

(iii) Management fees

Management fees are recognised in profit or loss on an accrual basis.

(iv) Rental income

Rental income from investment properties is recognised in profit or loss on a straight line basis over the term of the lease.

(v) Dividend income

Dividend income is recognised when the right to receive payment is established.


(r) Interest income and borrowing costs

Interest income is recognised as it accrues, using the effective interest method.

Borrowing costs, directly attributable to the acquisition and construction of property, plant and equipment are capitalised as part of the cost of those assets, until such time as the assets are ready for their intended use or sale. Capitalisation of borrowing costs is suspended during extended periods in which active development is interrupted.

All other borrowing costs are recognised in profit or loss as expenses in the period in which they incurred.

(s) Income tax

Income taxes for the year comprise current and deferred tax.

Current tax is the expected amount of income taxes payable in respect of the taxable profit for the year and is measured using the tax rates that have been enacted or substantively enacted at the end of the reporting period. Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements.

Deferred tax liabilities are recognised for all taxable temporary differences other than those that arise from goodwill or excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over the business combination costs or from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit.



(s) Income tax (cont’d)

Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. The carrying amounts of deferred tax assets are reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient future taxable profits will be available to allow all or part of the deferred tax assets to be utilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on the tax rates that have been enacted or substantively enacted at the end of the reporting period.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred income taxes relate to the same taxation authority.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transactions either in other comprehensive income or directly in equity and deferred tax arising from a business combination is included in the resulting goodwill or excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over the business combination costs.

(t) Earnings per share (“EPS”)

The Group presents basic EPS data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the year.

(u) Segment reporting

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. An operating segment’s operating results are reviewed regularly by the chief operating decision maker, which in this case is the Board of Directors, to make decisions about resources to be allocated to segment and assess its performance, and for which discrete financial information is available.

(v) Related parties

A party is related to an entity (referred to as the “reporting entity”) if:-

(a) A person or a close member of that person’s family is related to a reporting entity if that person:-

(i) has control or joint control over the reporting entity;(ii) has significant influence over the reporting entity; or(iii) is a member of the key management personnel of the reporting entity or of a parent of the reporting entity.



(v) Related parties (cont’d)

(b) An entity is related to a reporting entity if any of the following conditions applies:-

(i) The entity and the reporting entity are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others).

(ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member).

(iii) Both entities are joint ventures of the same third party.(iv) One entity is a joint venture of a third entity and the other entity is an associate of the third entity.(v) The entity is a post-employment benefit plan for the benefit of employees of either the reporting

entity or an entity related to the reporting entity. If the reporting entity is itself such a plan, the sponsoring employers are also related to the reporting entity.

(vi) The entity is controlled or jointly controlled by a person identified in (a) above.(vii) A person identified in (a)(i) above has significant influence over the entity or is a member of the

key management personnel of the entity (or of a parent of the entity).

(w) Fair Value Measurements

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using a valuation technique. The measurement assumes that the transaction takes place either in the principal market or in the absence of a principal market, in the most advantageous market. For non-financial asset, the fair value measurement takes into account a market’s participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

For financial reporting purposes, the fair value measurements are analysed into level 1 to level 3 as follows:-

Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets or liability that the entity can access at the measurement date;

Level 2: Inputs are inputs, other than quoted prices included within level 1, that are observable for the asset or liability, either directly or indirectly; and

Level 3: Inputs are unobservable inputs for the asset or liability.

The transfer of fair value between levels is determined as of the date of the event or change in circumstances that caused the transfer.



Close members of the family of a person are those family members who may be expected to influence, or be influenced by, that individual in their dealings with the entity.



3. Property, plant and equipment

FreeholdRM’000

Leasehold land

BuildingsRM’000

Plantand

equipmentRM’000

MotorvehiclesRM’000

Officeequipment,

furniture and fittings

RM’000

Tools and

equipment RM’000

RenovationsRM’000

Construction in progress

RM’000Total

RM’000

GroupShortterm

RM’000

Longterm

RM’000

Cost

At 1 August 2012 9,166 542 3,074 40,017 64,923 8,767 4,034 4,335 2,184 3,201 140,243

Additions – – 2,237 2,252 2,725 309 151 110 – 5,813 13,597

Disposals – – – (3) (777) (606) (9) – – – (1,395)

Write off – – – – (124) (182) (30) (56) – – (392)

Reclassification – – (76) 2,619 955 – – – – (3,498) –

Effect of movements in exchange rates

(49)

–

–

(77)

(316)

(40)

(6)

(2)

–

(186)

(676)

At 31 July 2013 / 1 August 2013 9,117 542 5,235 44,808 67,386 8,248 4,140 4,387 2,184 5,330 151,377

Additions – – 27 181 3,769 1,065 408 54 – 546 6,050

Disposals – – – – (650) (720) (1) (11) – – (1,382)

Write off – – – – (135) – (49) – (1) – (185)

Reclassification – 673 (673) 767 4,881 – – – – (5,648) –


(130)

–

–

(787)

(908)

(111)

(17)

(7)

–

–

(1,960)

At 31 July 2014 8,987 1,215 4,589 44,969 74,343 8,482 4,481 4,423 2,183 228 153,900



3. Property, plant and equipment (cont’d)

FreeholdRM’000

Leasehold land

BuildingsRM’000

Plantand

equipmentRM’000


Officeequipment,

furniture and fittings

RM’000

Tools and

equipment RM’000

RenovationsRM’000

Construction in progress

RM’000Total

RM’000

Shortterm

RM’000

Longterm

RM’000

Accumulated Depreciation

At 1 August 2012 – 150 657 12,803 48,123 6,265 3,434 3,184 1,464 – 76,080

Depreciation for the year – 9 59 1,128 3,098 819 211 239 153 – 5,716

Disposals – – – – (510) (583) (9) – – – (1,102)

Write off – – – – (110) (182) (27) (33) – (352)


–

–

–

(74)

(109)

(30) (6)

(2)

–

–

(221)

At 31 July 2013 / 1 August 2013

–

159

716

13,857

50,492

6,289

3,603

3,388

1,617

–

80,121

Depreciation for the year – 20 75 1,052 3,532 860 225 277 126 – 6,167

Disposals – – – – (471) (718) (1) (10) – – (1,200)

Write off – – – – (118) – (34) – (1) – (153)

Reclassification – 186 (186) – – – – – – – –


–

–

–

(236)

(344)

(91)

(15)

(5)

–

– (691)

At 31 July 2014 – 365 605 14,673 53,091 6,340 3,778 3,650 1,742 – 84,244

Carrying amounts

At 1 August 2012 9,166 392 2,417 27,214 16,800 2,502 600 1,151 720 3,201 64,163

At 31 July 2013 9,117 383 4,519 30,951 16,894 1,959 537 999 567 5,330 71,256

At 31 July 2014 8,987 850 3,984 30,296 21,252 2,142 703 773 441 228 69,656



Company

Office equipment,

furniture and fittingsRM’000


RenovationRM’000

TotalRM’000

Cost

At 1 August 2012 143 368 224 735Additions 3 – – 3

31 July 2013 / 1 August 2013 146 368 224 738Additions 4 – – 4

31 July 2014 150 368 224 742

Accumulated depreciation

At 1 August 2012 97 43 193 333Depreciation for the year 12 74 7 93

At 31 July 2013 / 1 August 2013 109 117 200 426Depreciation for the year 13 73 8 94

At 31 July 2014 122 190 208 520

Carrying amounts

At 1 August 2012 46 325 31 402

At 31 July 2013 37 251 24 312

At 31 July 2014 28 178 16 222




Security

At 31 July 2014, the carrying amount of property, plant and equipment of the Group that are charged to licensed banks amounted to RM48,126,000 (2013 – RM48,254,000) to secure credit facilities granted to the Group (Note 15).

Assets under hire purchase

Included in the carrying amount of property, plant and equipment of the Group are motor vehicles acquired under hire purchase agreements amounting to RM641,000 (2013 – RM561,000).

4. Investment Properties

Group Leasehold landRM’000

Cost31 July 2013 / 1 August 2013 –Additions 21,126

At 31 July 2014 21,126

Accumulated depreciation31 July 2013 / 1 August 2013 –Additions 53

At 31 July 2014 53

Carrying amount

At 31 July 2013 –

At 31 July 2014 21,073

Fair value

At 31 July 2014 29,600



5. Intangible assets

Group Goodwill RM’000

Cost

At 1 August 2012 / 31 July 2013 / 1 August 2013 / 31 July 2014 712

Carrying amount

At 1 August 2012 / 31 July 2013 / 1 August 2013 / 31 July 2014 712

Impairment testing for cash-generating units containing goodwill

The recoverable amount of the goodwill in the above subsidiary is based on its value in use. The value in use was determined by discounting the future cash flows generated from the continuing use of the unit and was based on the following key assumptions:

• There will be no material changes in the structure and principal activities of the subsidiary.• There will not be any significant changes in economic conditions or other abnormal factors, which will

adversely affect the operation of the subsidiary.• Cash flows were projected based on actual operating results for the financial year ended July 2014

(“FY2014”) and the subsequent 10 years projected cash flows.• Financial year ended July 2015 (“FY2015”) budget was used as a base where no significant changes in

profitability is anticipated in view of the current economic situation and an incremental revenue growth of 5% year-on-year from year 2015 to year 2019 has been projected in line with economic growth projected. From year 2020 onwards, the management has projected there will be no growth.

• Discount rate of 7.70% was applied on the projected cash flows in determining the recoverable amount of the above investment. The discount rate was estimated based on the subsidiary’s existing rate of borrowing.

6. Investment in subsidiaries

Company2014 2013

RM’000 RM’000At cost:

Unquoted shares 74,554 74,554Quasi loans 11,200 11,200

85,754 85,754



6. Investment in subsidiaries (cont’d)

Details of the subsidiaries are as follows:

Name of subsidiariesCountry of

incorporation Principal activities

Effective ownership interest

2014%

2013%

Yeo Aik Wood Sdn. Bhd. (“YAW”)

Malaysia Manufacture and sale of rubberwood furniture

100 100

Winshine Holdings Sdn. Bhd. (“WHSB”)+

Malaysia Investment holding and provision of management services

100 100

Winshine Industries Sdn. Bhd. (“WISB”)++

Malaysia Manufacture and sale of rubberwood furniture

100 100

Yeo Aik Hevea (M) Sdn. Bhd. (“YAH”)

Malaysia Pressure treatment, processing and kiln-drying of rubberwood

100 100

Pine Packaging (M) Sdn. Bhd. (“PPSB”)

Malaysia Conversion of corrugated boards into carton boxes

100 100

Jaycorp Trading Sdn. Bhd. (“JTSB”)

Malaysia General trading, transportation, property letting and printing

100 100

PT Tiga Mutiara Nusantara (“PTTMN”)*

Indonesia Pressure treatment and kiln-drying of rubberwood

51 51

Digital Furniture Sdn. Bhd. (“DFSB”)

Malaysia Manufacture and sales of rubberwood furniture

60 60

Jaycorp Home Furnishings Inc. (“JHFI”) #

Malaysia Trading in home furnishings and furniture related project

100 100

Jaycorp Properties Sdn Bhd (“JPSB”)

Malaysia Investment holding 100 –

Bongawan Solo Sdn Bhd (“BSSB”) +++

Malaysia Investment holding 60 –

Jaycorp Limited (“JL”)** Malaysia Dormant 70 70

Jaycorp Green Energy Sdn. Bhd. (“JGESB”)

Malaysia Renewable energy, biomass and environmentally friendly waste treatment

90 100




(a) The non-controlling interests at the end of the reporting period comprise the following:-

The Group2014

RM’0002013

RM’000

PT Tiga Mutiara Nusantara 3,373 3,002Digital Furniture Sdn. Bhd. 11,781 11,116Other individually immaterial subsidiaries 269 –

15,423 14,118

(b) The summarised financial information (before intra-group elimination) for each subsidiary that has non-controlling interests that are material to the Group is as follows:-

PT Tiga Mutiara Nusantara2014

RM’0002013

RM’000At 31 JulyNon-current assets 8,292 10,025

Current assets 13,245 14,946

Non-current liabilities (696) (1,653)

Current liabilities (13,957) (17,191)

6,884 6,127

Financial year ended 31 July

Revenue 24,808 17,410


Profit for the financial year/Total comprehensive income 1,584 2,133

Total comprehensive income attributable to non controlling interests 776 1,045

Net cash flows from/(for) operating activities 3,387 (1,491)Net cash flows for investing activities (383) (1,152)Net cash flows (for)/from financing activities (1,463) 782



(b) The summarised financial information (before intra-group elimination) for each subsidiary that has non-controlling interests that are material to the Group is as follows:- (cont’d)

Digital Furniture Sdn. Bhd.2014

RM’0002013

RM’000

At 31 July

Non-current assets 18,668 18,469Current assets 27,293 24,435Non-current liabilities (2,714) (3,554)Current liabilities (13,795) (11,560)

29,452 27,790

Financial year ended 31 JulyRevenue 70,776 66,503Profit for the financial year/Total comprehensive income 3,162 2,393

Total comprehensive income attributable to non-controlling interests 1,265 957

Net cash flows from operating activities 4,960 6,921Net cash flows for investing activities (1,512) (1,780)Net cash flows for financing activities (1,574) (4,877)

+ Held through YAW++ Held through WHSB+++ Held through JPSB* This subsidiary was audited by a member firm of Crowe Horwath International of which Crowe

Horwath is a member** Consolidated using management accounts as at 31 July 2014 as subsidiary was dormant during

the financial year# Auditors’ report on the financial statements of JHFI for the year ended 31 July 2014 has been

modified with an emphasis on going concern matter




On 1 March 2014, JGESB, a wholly-owned subsidiary of the Company, had allotted 500,000 new ordinary shares of RM1.00 each to a 3rd party for a total cash consideration of Ringgit Malaysia Eight Hundred Seventy Thousand (RM870,000) only (“Allotment”). Subsequent to the allotment, JGESB became a 90%-owned subsidiary of Jaycorp.

On 1 April 2014, the Company had acquired 2 ordinary shares of RM1.00 each, representing 100% of the issued and paid-up share capital of JPSB from Haw Seong Deow and Tek Koon Seng, for a total cash consideration of Ringgit Malaysia Two only (RM2.00) (“Acquisition”). Subsequent to the Acquisition, JPSB became a wholly-owned subsidiary of Jaycorp. JPSB in turn, holds 60% in the issued and paid-up share capital of Bongawan Solo Sdn Bhd.

The net cash outflow arising from acquisition of subsidiaries is insignificant and hence there is no further disclosure.

7. Other investments

Group2014 2013

RM’000 RM’000

Quoted shares in Malaysia 16 7

Represented by:

At fair value 16 7



8. Deferred tax assets and liabilities

Recognised deferred tax assets and liabilities

Deferred tax assets and liabilities are attributable to the following:

Assets Liabilities Net

Group2014

RM’0002013

RM’0002014

RM’0002013

RM’0002014

RM’0002013

RM’000

Property, plant and equipment 209 117 (2,043) (1,769) (1,834) (1,652)Provisions 416 377 – (8) 416 369Tax losses carry-forward 233 2 (43) (58) 190 (56)Write down of inventories – – (13) – (13) –Others – – (2) – (2) –

Tax assets/(liabilities) 858 496 (2,101) (1,835) (1,243) (1,339)

Set off of tax (292) (60) 292 60 – –

Net tax assets/(liabilities) 566 436 (1,809) (1,775) (1,243) (1,339)

Movement in temporary differences during the financial year

GroupAt 1.8.2012

RM’000

Recognised in profit or loss

(Note 19)RM’000

At 31.7.2013RM’000


(Note 19)RM’000

At 31.07.2014RM’000

Property, plant and equipment (1,710) 58 (1,652) (182) (1,834)

Provisions 358 11 369 47 416

Tax losses carry-forward (3) (53) (56) 246 190

Write down of inventories – – – (13) (13)

Others – – – (2) (2)

(1,355) 16 (1,339) 96 (1,243)



8. Deferred tax assets and liabilities (cont’d)

No deferred tax had been recognised in the statement of financial position for the following items as it is not probable that future taxable profit will be available for offsetting:-

2014 RM’000

2013 RM’000

Unabsorbed tax losses 7,992 9,206Unutilised capital allowances 346 –Other temporary differences 1,804 1,505

10,142 10,711

9. Receivables, deposits and prepayments

Group Company

Note2014

RM’0002013

RM’0002014

RM’0002013

RM’000

Non-tradeAmount due from subsidiaries – – 943 943Less: Impairment loss – – (943) (943)

– – – –

– – – –

CurrentTradeTrade receivables b 21,732 22,788 – –Less: Impairment loss b (489) (397) – –

21,243 22,391 – –


a


9. Receivables, deposits and prepayments (cont’d)

Group Company

Note2014

RM’0002013

RM’0002014

RM’0002013

RM’000CurrentNon-tradeAmount due from subsidiaries

– dividend receivable c – – 600 600– management fees c – – 117 123– advances c – – 16,280 2,754Other receivables– advances for rubberwood [net of

impairment loss of RM3,119,000 (2013 – RM3,119,000)]

d

247

7,095

–

–

– others [net of impairment loss of RM140,000 (2013 – RM140,000)]

1,751

624

47

42

Deposits 3,931 5,482 2,560 3,593Prepayments 1,234 1,044 1 1

7,163 14,245 19,605 7,113

28,406 36,636 19,605 7,113

Note aThe receivables due from subsidiaries were unsecured, interest free and not repayable within next twelve (12) months.

Note bSignificant trade receivables outstanding at year end that are not in Ringgit Malaysia are as follows:

Group Company 2014 RM’000

2013 RM’000

2014 RM’000

2013 RM’000

Functional currency

Foreign currency

RM USD* 6,434 9,302 – –IDR* IDR* 1,865 1,361 – –

Trade receivables’ normal trade terms range from 30 days to 60 days. Other trade terms are assessed and approved on a case-by-case basis.



9. Receivables, deposits and prepayments (cont’d)

Note cThe receivables due from subsidiaries were unsecured, interest free and repayable on demand other than loan advancement of RM2,628,000 (2013 – RM2,628,000) and RM500,000 (2013 – RM NIL) which bear interest at 8.00% (2013 – 8.00%) and 4.00% (2013 – NIL) per annum respectively.

Note dAdvances for rubberwood represent payments made for the right to extract rubberwood trees. The cost of rubberwood extracted/supplied will be progressively deducted from these advance payments.

*USD – United State Dollar IDR – Indonesia Rupiah

10. Inventories

Group2014

RM’0002013

RM’000At cost:Raw materials 7,944 7,211Work-in-progress 24,947 26,196Finished goods 13,205 11,523

46,096 44,930

At net realisable value:Raw materials 21 57Work-in-progress 441 677Finished goods 108 186

570 920

46,666 45,850



11. Derivative assets/(liabilities)

Contract/Notional Amount Group

Group2014

RM’0002013

RM’0002014

RM’0002013

RM’000

Derivative Assets

Forward foreign currency contracts 3,574 – 23 –

Derivative Liabilities

Forward foreign currency contracts 637 23,225 (4) (544)

The Group does not apply hedge accounting.

(a) Forward foreign currency contracts are used to hedge the Group’s sales denominated in United States Dollar (USD) for which firm commitments existed at the end of the reporting period. The settlement dates on forward foreign currency contracts range between 1 to 3 months (2014 – 1 to 7 months) after the end of the reporting period.

(b) During the financial year, the Group recognised a gain of RM563,000 (2014 – a loss of RM711,000) arising from fair value changes of derivative assets. The fair value changes are attributable to changes in foreign exchange spot and forward rate. The method and assumptions applied in determining the fair value of derivative are disclosed in Note 23(d) to the financial statements.

12. Cash and bank balances

Group Company2014

RM’0002013

RM’0002014

RM’0002013

RM’000

Deposits placed with licensed banks 11,939 17,244 – –Short term funds 3,095 5,853 – –Cash and bank balances 15,523 10,192 352 267

30,557 33,289 352 267



12. Cash and bank balances (cont’d)

Included in deposits placed with licensed banks is RM2,389,000 (2013 – RM2,318,000) pledged for bank facilities granted to the Group (Note 15).

Short term funds comprised investment in fixed income trust funds in Malaysia which are highly liquid and subject to an insignificant risk of changes in value.

Cash and bank balances denominated in currencies other than Ringgit Malaysia comprise RM4,241,000 (2013 – RM1,085,000) and RM306,000 (2013 – RM347,000) of cash and cash equivalents denominated in US Dollar and IDR respectively.

13. Capital and reserves

Share capital

Company

Amount2014

RM’000

Amount2013

RM’000

Numberof shares

2014’000

Number of shares

2013’000

Authorised:

Ordinary shares of RM0.50 each 100,000 100,000 200,000 200,000

Issued and fully paid:Ordinary shares of RM0.50 each 68,625 68,625 137,250 137,250

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. In respect of the Company’s treasury shares that are held by the Company (see below), all rights are suspended until those shares are reissued.

Treasury shares

Acquisition

The shareholders of the Company, by a resolution passed in Annual General Meeting held on 18 December 2013, approved the Company’s proposal to continue to repurchase its own shares provided that the aggregate number of shares purchased does not exceed ten per centum (10%) of the total issued and paid up share capital of the Company at the point of purchase.



13. Capital and reserves (cont’d)

Treasury shares (cont’d)

Acquisition (cont’d)

For the year ended 31 July 2014, the Company repurchased 15,000 (2013 – 15,000) of its issued shares from the open market. The average price paid for the shares repurchased was RM0.68 (2013 – RM0.51) per ordinary share. The repurchase transactions were financed by internally generated funds. The shares repurchased were retained as treasury shares.

Averagebuy-back

priceRM

Highestbuy-back

priceRM

Lowestbuy-back

priceRM

Number oftreasury

sharesbuy-back

Totalconsideration

paidRM

31 July 2014 0.68 0.74 0.54 15,000 10,000

31 July 2013 0.51 0.53 0.48 15,000 8,000

Share Premium

The share premium is not distributable by way of dividends and may be utilised in the manner set out in Section 60(3) of the Companies Act 1965.

Translation reserve

The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations.

Fair value reserve

The fair value reserve represents the cumulative fair value changes (net of tax, where applicable) of available-for-sale financial assets until they are disposed of or impaired.


Under the single tier tax system, tax on the Company’s profits is the final tax and accordingly, any dividends to the shareholders are not subject to tax.

Tax exempt income

Subject to agreement by the Inland Revenue Board, the Company has tax exempt income to frank up to RM5,031,000 (2013 – RM5,031,000) of its distributable reserves at 31 July 2014, if paid out as dividends.



14. Payables and accruals

Note

Group Company2014

RM’0002013

RM’0002014

RM’0002013

RM’000Non-currentTradeTrade payable a 696 1,653 – –

CurrentTradeTrade payables a 13,381 12,849 – –

Non-tradeAmount due to– subsidiaries b – – 14,606 3,204– related party c 8,696 – – –Other payables a 4,561 4,513 51 22Accrued expenses 5,821 6,302 139 189

19,078 10,815 14,796 3,415

32,459 23,664 14,796 3,415

Note aSignificant trade and other payables that are not in Ringgit Malaysia are as follows:

Group Company 2014

RM’0002013

RM’0002014

RM’0002013

RM’000

Functional currency

Foreign currency

RM USD 617 1,177 – –

IDR IDR 5,542 6,188 – –

The normal trade terms granted to the Group range from 30 days to 60 days. Other trade terms are assessed and approved on a case-by-case basis.

Note bThe payables due to subsidiaries were unsecured, interest free and repayable on demand other than loan payable of RM13,906,000 (2013 – RM NIL) which bear interest at 4.00% (2013 – NIL) per annum.

Note cThe payables due to related party were unsecured, interest free and repayable on demand.



15. Loans and borrowings

This note provides information about the contractual terms of the Group’s and the Company’s interest-bearing loans and borrowings. For more information about the Group’s and the Company’s exposure to interest rate risk, see Note 23.

Group Company2014

RM’0002013

RM’0002014

RM’0002013

RM’000

Non-currentHire purchase liabilities 223 257 98 159Secured term loans 6,033 7,428 – –

6,256 7,685 98 159

CurrentSecured bank overdraft 8,147 9,690 – –Secured banker’s acceptance 6,892 5,879 – –Hire purchase liabilities 176 177 61 59Secured term loans 1,429 2,066 – –

16,644 17,812 61 59

Loans and borrowings of the Group denominated in US Dollar comprise RM6,732,000 (2013 - RM9,505,000).

Security

The bank overdrafts, bankers’ acceptances, revolving credit and term loans of the Group are secured by way of:

i) a legal charge over freehold land and certain buildings and leasehold lands with a total carrying amount of RM48,126,000 (2013 - RM48,254,000) of the Group (Note 3);

ii) fixed deposits of the Group amounting to RM2,389,000 (2013 - RM2,318,000) (Note 12);

iii) debentures creating fixed and floating charges over all the present and future assets of certain subsidiaries; and

iv) a corporate guarantee by the Company.



15. Loans and borrowings (cont’d)

Terms and debt repayment schedule

2014

Basis ofinterest rate

%Year of

maturity

Carrying amountRM’000

Under 1year

RM’000

1 – 2years

RM’000

2 – 5years

RM’000

Over 5 years

RM’000

GroupBank

overdrafts 5.20 – 7.60 2015 8,147 8,147 – – –Bankers’

acceptances* 4.17 – 8.00 2015 6,892 6,892 – – –Hire purchase

liabilities 2.40 – 4.61 2015 – 2017 399 176 174 49 –Term loans 6.35 – 7.60 2015 – 2023 7,462 1,429 1,238 3,138 1,657

22,900 16,644 1,412 3,187 1,657

CompanyHire purchase

liabilities

2.40%

2017

59

61

64

34 –

2013

GroupBank overdrafts 2.05 – 8.00 2014 9,690 9,690 – – –Bankers’

acceptances* 4.17 – 4.73 2014 5,879 5,879 – – –Hire purchase

liabilities 2.40 – 4.92 2014 – 2017 434 177 132 125 –Term loans 6.16 - 7.40 2014 – 2023 9,494 2,066 1,587 2,863 2,978

25,497 17,812 1,719 2,988 2,978

CompanyHire purchase

liabilities

2.40%

2017

218

59

61

98 –

* – Credit facility with interest rate that varies in line with the market interest rate for similar type of facility with comparable terms.


Basis ofinterest rate

%Year of

maturity

Carrying amountRM’000

Under 1year

RM’000

1 – 2years

RM’000

2 – 5years

RM’000

Over 5 years

RM’000


15. Loans and borrowings (cont’d)

Hire purchase liabilities

Hire purchase liabilities are payable as follows:

2014 2013Minimum

leasepayments

RM’000InterestRM’000

PrincipalRM’000

Minimumlease

paymentsRM’000

InterestRM’000

PrincipalRM’000

GroupLess than one year 190 14 176 192 15 177Between one and

five years

232 9

223

271

14 257

422 23 399 463 29 434

CompanyLess than one year 67 6 61 67 8 59Between one and

five years

101 3

98

168

9

159

168 9 159 235 17 218

16. Operating profit Group Company

2014 2013 2014 2013RM’000 RM’000 RM’000 RM’000

RevenueSale of goods 236,153 209,141 – –Rental income 174 140 – –Dividend income from

subsidiaries –

–

10,174

28,156

Management fees – – 1,320 1,320

236,327 209,281 11,494 29,476

Cost of salesCost of sales (195,486) (174,280)Cost of rental (42) (38) – –

(195,528) (174,318) – –



16. Operating profit (cont’d)Group Company

2014 2013 2014 2013Note RM’000 RM’000 RM’000 RM’000

Gross profit 40,799 34,963 11,494 29,476Distribution costs (7,709) (6,147) – –Administration expenses (19,895) (18,650) (3,844) (2,395)Other operating expenses (1,108) (2,256) – (689)Other operating income 2,082 2,634 75 199

Operating profit 14,169 10,544 7,725 26,591

Operating profit is arrived at after charging/(crediting):

Auditors’ remuneration

– auditors of the Company 157 141 26 25– other auditors 69 56 – –Deposits written off – 349 – 349Depreciation of property, plant and

equipment 3 6,167 5,716 94 93Depreciation of investment properties 4 53 – – –Fair value loss on derivatives – 711 – –Impairment loss on

– trade receivables 177 140 – – – other receivables – 104 – –– related company – – – 340

Loss from disposal of extraction rights – 395 – –Loss on foreign exchange 832 437 – –Property, plant and equipment

written off 32 40 – –Personnel expenses (including key

management personnel) – contribution to defined

contribution plans 1,680 1,297 190 107– wages, salaries and others 34,382 29,596 2,453 1,337

Rental expenses on property leases 849 919 99 94Rental of equipment 25 17 – –Write down of inventories 488 568 – –



16. Operating profit (cont’d)Group Company

2014 2013 2014 2013RM’000 RM’000 RM’000 RM’000

Operating profit is arrived at after charging/(crediting) (cont’d):

Fair value gain on derivatives (563) – – –Gain on disposal of property, plant

and equipment (348) (241) – –Interest income (817) (977) (197) (90)Gain on foreign exchange (187) (212) – –Reversal of impairment loss on

receivables – (349) – –Reversal of write down of

inventories (232) (1) – –Reversal of defective claim – (156) – –

17. Finance costsGroup Company

2014 2013 2014 2013RM’000 RM’000 RM’000 RM’000

Interest expense on:

– Bank overdrafts 204 517 – –

– Bankers’ acceptances 484 289 – –

– Hire purchase liabilities 22 24 8 11

– Letter of credit 10 – – –

– Related party 87 305 – –

– Term loans 487 317 – –

– Inter companies – – 50 –

– Others 98 153 – –

1,392 1,605 58 11



18. Key management personnel compensations

The key management personnel compensations are as follows:

Group Company2014

RM’0002013

RM’0002014

RM’0002013

RM’000

Directors

– Fees 768 665 396 309– Remuneration 3,185 2,417 1,024 507– Other short term employee benefits

(including estimated monetary value of benefits-in-kind)

27

60

–

27– Post-employment employee benefit 361 236 109 53

4,341 3,378 1,529 896

Other key management personnel:– Short-term employee benefits 454 204 251 184– Post-employment employee benefit 56 22 31 20

Total short-term employee benefits 4,851 3,604 1,811 1,100

Other key management personnel comprise persons other than the Directors of Group entities, having authority and responsibility for planning, directing and controlling the activities of the entity either directly or indirectly.



19. Tax expense


Group Company2014

RM’0002013

RM’0002014

RM’0002013

RM’000

Current tax expenseMalaysian – current year 2,621 2,386 1,571 6,817 – prior years (29) (179) (29) (51)Overseas – current year 561 637 – –

3,153 2,844 1,542 6,766

Deferred tax expenseEffect of change in corporate income tax

from 25% to 24%

(51) –

–

–

Origination and reversal of temporary differences (7) 116 – –

Over provision in prior years (38) (132) – –

(96) (16) – –

Total tax expense 3,057 2,828 1,542 6,766



19. Tax expense (cont’d)Group Company

2014RM’000

2013RM’000

2014RM’000

2013RM’000

Reconciliation of effective tax expenseProfit for the year 10,537 7,088 6,322 19,904Total tax expense 3,057 2,828 1,542 6,766

Profit excluding tax 13,594 9,916 7,864 26,670

Tax calculated using Malaysian tax rate of 25% (2013 – 25%) 3,412 2,571 1,966 6,667

Deferred tax assets not recognised during the year – 153 – –

Effect of change in corporate income tax from 25% to 24% (51) – – –

Non-deductible expenses 560 1,082 191 300Non taxable income (563) (171) (45) –Reversal of deferred tax assets not recognised

in prior year

(142) –

–

–

Tax exempt income – (150) (541) (150)Tax incentives (92) (346) – –

3,124 3,139 1,571 6,817

(67) (311) (29) (51)

3,057 2,828 1,542 6,766

Subject to agreement by the Inland Revenue Board, the Group has estimated unutilised reinvestment allowance of RM16,616,000 (2013 – RM17,780,000) available at the end of the reporting period to be carried forward to set off against future taxable business income.


Over provision in prior years


20. Earnings per ordinary share

Basic earnings per ordinary share

The calculation of basic earnings per ordinary share at 31 July 2014 was based on the profit attributable to ordinary shareholders and a weighted average number of ordinary shares outstanding calculated as follows:

Group2014

RM’0002013

RM’000

Profit for the year attributable to the ordinary shareholders 8,625 5,086

Group2014’000

2013’000

Issued ordinary shares at beginning of the year 136,797 136,812

Effect of shares repurchased (4) (2)

Weighted average number of ordinary shares 136,793 136,810

Group2014sen

2013sen

Basic earnings per ordinary share 6.31 3.72

21. DividendSen

per share(net of tax)

TotalamountRM’000

2014Final 2013 ordinary (single tier) 3.50 4,788

2013Final 2012 ordinary (single tier) 3.50 4,788

The proposed first and final single tier dividend of 3.5 sen per ordinary share totalling RM4,803,750 in respect of the financial year ended 31 July 2014 has not been accounted for in the financial statements and it is subject to the approval of shareholders at the forthcoming Annual General Meeting.



22. Segment reporting

Segment information is presented based on the Group’s management and internal reporting structure.

Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly loans and borrowings, head office expenses and tax assets and liabilities.

Segment capital expenditure is the total cost incurred during the year to acquire property, plant and equipment.

Inter-segment pricing is determined on negotiated basis.

The Group comprises the following main business segments:

Rubberwood furniture Manufacture and sale of rubberwood furniture Packaging Conversion of corrugated boards into carton boxesProcessing of rubberwood Pressure treatment and kiln-drying of rubberwoodRenewable energy Renewable energy, biomass and environmentally friendly waste treatmentOthers Provision of transportation services, property letting and printing


[ This page is intentionally left blank ]


22. Segment reporting (cont’d)

The Group operates principally within Malaysia. The processing of rubberwood segment is also operated in Indonesia during the financial year.

Rubberwood furniture RM’000

Packaging RM’000

Processing of rubberwood

RM’000

Renewable energy

RM’000Others

RM’000Eliminations

RM’000Consolidated

RM’000

2014

Business segments

Total external revenue 185,584 19,763 29,606 1,206 168 – 236,327

Inter-segment revenue

5,935

5,492

14,078

–

2,048

(27,553)

–

Total segment revenue

191,519

25,255

43,684

1,206

2,216

(27,553) 236,327

Segment result 12,898 1,774 2,533 (1,501) 960 1,320 17,984

Unallocated expenses (3,815)

Results from operating activities 14,169

Interest income 817

Interest expense (1,392)

Tax expense (3,057)

Profit for the year 10,537





Packaging RM’000


RM’000

Renewable energy

RM’000Others



RM’000

2014

Segment assets 134,462 15,677 46,342 10,770 40,782 (50,924) 197,109

Unallocated assets 2,035

Total assets 199,144

Segment liabilities 27,732 2,254 20,964 1,162 33,780 (50,924) 34,968

Unallocated liabilities 23,242

Total liabilities 58,210

Capital expenditure 2,976 847 458 1,746 21,149 – 27,176

Depreciation of property, plant and equipment and investment properties

3,906

352

1,322

379

261

–

6,220

Non-cash expense other than depreciation

584

–

113

–

–

–

697





Packaging RM’000


RM’000

Renewable energy

RM’000Others



RM’000

2013Business segments

Total external revenue 168,490 21,221 19,428 – 142 – 209,281

Inter-segment revenue

–

5,114

14,435

–

2,017

(21,566)

–

Total segment revenue

168,490

26,335

33,863

–

2,159

(21,566)

209,281

Segment result 3,966 2,568 4,963 (529) 1,145 1,447 13,560

Unallocated expenses (3,016)

Results from operating activities 10,544

Interest income 977

Interest expense (1,605)

Tax expense (2,828)

Profit for the year 7,088





Packaging RM’000


RM’000

Renewable energy

RM’000Others



RM’000

2013

Segment assets 148,577 21,719 55,460 9,393 22,455 (69,855) 187,749

Unallocated assets 1,980

Total assets 189,729

Segment liabilities 49,607 6,508 25,974 3 15,397 (69,855) 27,634

Unallocated liabilities 26,345

Total liabilities 53,979

Capital expenditure 2,602 621 1,668 8,452 254 – 13,597

Depreciation of property, plant and equipment and investment properties

3,993

216

1,285

27

195

–

5,716

Non-cash expense other than depreciation

1,291

–

140

–

–

–

1,431




MalaysiaRM’000

Rest of Asia

RM’000

North AmericaRM’000

EuropeRM’000

OthersRM’000

TotalRM’000

2014

Geographical segmentsRevenue from external

customers by location of customers

106,948

44,347

65,438

14,605

4,989

236,327

Segment assets by location of assets

177,607

21,537

–

–

–

199,144

2013

Geographical segmentsRevenue from external

customers by location of customers

101,929

31,763

53,557

16,201

5,831

209,281

Segment assets by location of assets

165,021

24,708

–

–

–

189,729

During the year, revenue from one single customer amounted to approximately RM29,792,000 (2013 – RM25,120,000) contributed to more than 10% of the Group’s revenue. Revenue from the United States of America amounted to approximately RM60,834,000 (2013 – RM50,455,000).



23. Financial instruments

The Group’s activities are exposed to a variety of market risks (including foreign currency risk, interest rate risk and equity price risk), credit risk and liquidity risk. The Group’s overall financial risk management policy focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial performance.

(a) Financial risk management policies

The Group’s policies in respect of the major areas of treasury activity are as follows:-

(i) Market risk

(i) Foreigncurrencyrisk

The Group is exposed to foreign currency risk on transactions and balances that are denominated in foreign currencies. The currency giving rise to this risk is primarily United States Dollar. Foreign currency risk is monitored closely and managed to an acceptable level.

The Group’s exposure to foreign currency is as follows:-

Group

2014United States

DollarRM’000

2013United States

DollarRM’000

Financial assetsTrade receivables 6,434 9,302Cash and bank balances 4,241 1,085

10,675 10,387

Financial liabilitiesTrade payables 5 120Other payables and accrued expenses 612 1,057Bank overdrafts 6,732 9,505

7,349 10,682

Net financial assets/(liabilities) 3,326 (295)

Currency exposure 3,326 (295)



23. Financial instruments (cont’d)

(a) Financial risk management policies (cont’d)

(i) Market risk (cont’d)

(i) Foreigncurrencyrisk(cont’d)

Foreign currency risk sensitivity analysis

The following table details the sensitivity analysis to a reasonably possible change in the foreign currencies as at the end of the reporting period, with all other variables held constant:-

Group Company2014

Increase/(Decrease)

RM’000

2013(Decrease)/

IncreaseRM’000

2014Increase/

(Decrease)RM’000

2013Increase/

(Decrease)RM’000

Effects on profit after taxation

United States Dollar:

– strengthened by 1% (2013 : 4%) 25 (9) – –

– weakened by 1% (2013 : 4%)

(25)

9

–

–

(ii) Interestraterisk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group’s exposure to interest rate risk arises mainly from its interest-bearing borrowing. The Group’s policy is to obtain the most favourable interest rate available. As Group’s exposure to interest rate risk is immaterial, sensitivity analysis is not disclosed.

(iii) Equitypricerisk

The Group’s principal exposure to equity price risk arises mainly from changes in quoted investment prices. Information relating to the Group’s exposure to the equity price risk of the financial assets is not disclosed as the impact is immaterial.





(ii) Credit risk

The Group’s exposure to credit risk, or the risk of counterparties defaulting, arises mainly from trade and other receivables. The Group manages its exposure to credit risk by the application of credit approvals, credit limits and monitoring procedures on an ongoing basis.

The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of the trade and other receivables as appropriate. The main components of this allowance are a specific loss component that relates to individually significant exposures. Impairment is estimated by management based on prior experience and the current economic environment.

Credit risk concentration profile

The Group does not have any major concentration of credit risk related to any individual customer or counterparty.

Exposure to credit risk

As the Group does not hold any collateral, the maximum exposure to credit risk is represented by the carrying amount of the financial assets as at the end of the reporting period.

The exposure of credit risk for trade receivables by geographical region is as follows:-

The Group2014

RM’000 2013

RM’000

Malaysia 13,287 12,963Rest of Asia 3,217 1,734North America 4,245 6,914Europe 352 559Others 142 221

21,243 22,391





(ii) Credit risk (cont’d)

Ageing analysis

The ageing analysis of the Group’s trade receivables as at the end of the reporting period are as follows:-

Group

GrossamountRM’000

Individualimpairment

RM’000

Carryingvalue

RM’0002014

Not past due 18,702 – 18,702

Past due:– Less than 3 months 2,378 – 2,378– 3 to 6 months 73 – 73– Over 6 months 579 (489) 90

21,732 (489) 21,243

Group2013

Not past due 18,452 – 18,452

Past due:– Less than 3 months 3,705 – 3,705– 3 to 6 months 156 – 156– Over 6 months 475 (397) 78

22,788 (397) 22,391





(ii) Credit risk (cont’d)

Ageing analysis (cont’d)

Tradereceivablesthatarepastduebutnotimpaired

The Group believes that no impairment allowance is necessary in respect of these trade receivables. They are substantially companies with good collection track record and no recent history of default.

Tradereceivablesthatareneitherpastduenorimpaired

A significant portion of trade receivables that are neither past due nor impaired are regular customers that have been transacting with the Group. The Group uses ageing analysis to monitor the credit quality of the trade receivables. Any receivables having significant balances past due or more than 60 days, which are deemed to have higher credit risk, are monitored individually.

(iii) Liquidity risk

Liquidity risk arises mainly from general funding and business activities. The Group practises prudent risk management by maintaining sufficient cash balances and the availability of funding through certain committed credit facilities.





(iii) Liquidity risk (cont’d)

The following table sets out the maturity profile of the financial liabilities as at the end of the reporting period based on contractual undiscounted cash flows (including interest payments computed using contractual rates or, if floating, based on the rates at the end of the reporting period):-

Group

Interestrate

%

CarryingamountRM’000

Contractualundiscounted

cash flowsRM’000

Within1 year

RM’000

1 – 2years

RM’000

2 – 5years

RM’000

Over5

yearsRM’000

2014

Hire purchase liabilities 2.40 – 4.61 399 422 190 189 43 –

Term loans 6.35 – 7.60 7,462 9,871 2,356 1,611 3,876 2,028

Bankers’ acceptances 4.17 – 5.85 6,892 6,892 6,892 – – –

Trade payables – 14,077 14,077 14,077 – – –

Other payables and accrued expenses – 10,382 10,382 10,382 – – –

Bank overdrafts 5.20 – 8.00 8,147 8,147 8,147 – – –

Amount owing to related party – 8,696 8,696 8,696 – – –

Forward currency contracts:Gross payments

– Outflow 4 641 641 – – –

– Inflow – (637) (637) – – –

56,059 58,491 50,744 1,800 3,919 2,028






Group

Interestrate

%



cash flowsRM’000

Within1 year

RM’000

1 – 2years

RM’000

2 – 5years

RM’000

Over5

yearsRM’000

2013

Hire purchase liabilities 2.40 – 4.92 434 463 192 141 130 –

Term loans 6.16 – 7.40 9,494 12,520 2,649 2,356 4,494 3,021

Bankers’ acceptances 4.17 – 4.73 5,879 5,879 5,879 – – –

Trade payables – 14,502 14,502 14,502 _ _ _

Other payables and accrued expenses

–

10,815

10,815

10,815

–

–

–

Bank overdrafts 2.05 – 8.00 9,690 9,690 9,690 – – –Forward currency contracts:

Gross payments– Outflow 544 23,769 23,769 – – –

– Inflow – (23,225) (23,225) – – –

51,358 54,413 44,271 2,497 4,624 3,021






The following table sets out the maturity profile of the financial liabilities as at the end of the reporting period based on contractual undiscounted cash flows (including interest payments computed using contractual rates or, if floating, based on the rates at the end of the reporting period):-

CompanyInterest

rate%



cash flowsRM’000

Within1 year

RM’000

1 – 2years

RM’000

2 – 5years

RM’0002014

Hire purchase liabilities 2.40 159 168 67 67 34

Other payables and accrued expenses – 190 190 190 – –

Amount due to subsidiaries – 14,606 14,606 14,606 – –

14,955 14,964 14,863 67 34

CompanyInterest

rate%



cash flowsRM’000

Within1 year

RM’000

1 – 2years

RM’000

2 – 5years

RM’0002013

Hire purchase liabilities 2.40 218 235 67 67 101

Other payables and accrued expenses – 211 211 211 – –

Amount due to subsidiaries – 3,204 3,204 3,204 – –

3,633 3,650 3,482 67 101




(b) Capital risk management

The Group manages its capital by maintaining an optimal capital structure so as to support its businesses and maximise shareholder(s) value. To achieve this objective, the Group may make adjustments to the capital structure in view of changes in economic conditions, such as adjusting the amount of dividend payment, returning of capital to shareholders or issuing new shares.

The Group manages its capital based on debt-to-equity ratio. The Group’s strategies were unchanged from the previous financial year. The debt-to-equity ratio is calculated as net debt divided by total equity. Net debt is calculated as borrowings plus trade and other payables less cash and cash equivalents.

The debt-to-equity ratio of the Group as at the end of the reporting period was as follows:-

2014RM’000

2013RM’000

Trade payables 14,077 14,502Other payables and accrued expenses 10,382 10,815Derivative liabilities 4 544Term loans 7,462 9,494Hire purchase liabilities 399 434Bank overdrafts 8,147 9,690Bankers’ acceptances 6,892 5,879Amount owing to related party 8,696 -

56,059 51,358

Less: Deposits with licensed banks 11,939 17,244Less: Short term funds 3,095 5,853Less: Cash and bank balances 15,523 10,192

30,557 33,289

Net debt 25,502 18,069

Total equity 140,934 135,750

Debt-to-equity ratio 0.18 0.13

Under the requirement of Bursa Malaysia Practice Note No. 17/2005, the Company is required to maintain a consolidated shareholders’ equity (total equity attributable to owners of the Company) equal to or not less than the 25% of the issued and paid-up share capital (excluding treasury shares) and such shareholders’ equity is not less than RM40 million. The Company has complied with this requirement.




(c) Classification of financial instruments

Group Company 2014RM’000

2013RM’000

2014RM’000

2013RM’000

Financial assetsLoans and receivables financial assets

Amount due from subsidiaries – - 16,997 3,477Trade receivables 21,243 22,391 – –Other receivables 1,998 7,719 47 42Deposits placed with licensed banks 11,939 17,244 – –Short term funds 3,095 5,853 – –Cash and bank balances 15,523 10,192 352 267

53,798 63,399 17,396 3,786

Available-for-sales financial assetsOther investments

16

7

–

–

Fair value through profit or loss

Derivative assets 23 – – –

Financial liabilities

Other financial liabilities

Hire purchase liabilities 399 434 159 218Term loans 7,462 9,494 – –Bankers’ acceptances 6,892 5,879 – –Trade payables 14,077 14,502 – –Amount due to subsidiaries – – 14,606 3,204Other payables and accrued expenses 10,382 10,815 190 211Bank overdrafts 8,147 9,690 – –Amount owing to related company 8,696 – – –

56,055 50,814 14,955 3,633

Fair value through profit or loss

Derivative liabilities 4 544 – –




(d) Fair values informations

Other than those disclosed below, the fair values of the financial assets and financial liabilities maturing within the next 12 months approximated their carrying amounts due to the relatively short-term maturity of the financial instruments.

As at 31 July 2014, the Group’s financial instrument carried at fair value is analysed as below:-

2014

Level 1RM’000

Level 2RM’000

TotalRM’000

Financial assets Other investment:

– quoted shares in Malaysia 16 – 16

Derivative assets:

– forward foreign currency contracts – 23 23

16 23 39

Financial liabilitiesDerivative liabilities:

– forward foreign currency contracts – (4) (4)

2013

Level 1RM’000

Level 2RM’000

TotalRM’000

Financial assets Other investment:– quoted shares in Malaysia 7 – 7

7 – 7

Financial liabilitiesDerivative liabilities:– forward foreign currency contracts – (544) (544)

The fair values of quoted investments are measured at their quoted closing bid prices at the end of the reporting period.

The fair value of forward currency contracts are determined using forward exchange rates at the end of the reporting period with the resulting value discounted back to present value.



24. Capital commitments

Group2014

RM’0002013

RM’000

Authorised and contracted for

– Building in progress 322 –– Motor vehicle 349 184Authorised but not contracted for– Plant and machinery 87 1,682– Motor vehicle – 280

758 2,146

25. Contingencies – unsecured

Corporateguarantee

Company 2014RM’000

2013RM’000

Corporate guarantee issued to financial institutions for credit facilities granted to

– the subsidiaries by the Company 113,010 111,691

The facilities utilised by the subsidiaries as of year end amounted to RM22,501,000 (2013 - RM25,063,000).



26. Related parties

Identity of related parties

For the purposes of these financial statements, parties are considered to be related to the Group or the Company if the Group or the Company has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group or the Company and the party are subject to common control or common significant influence. Related parties may be individuals or other entities.

Key management personnel are defined as those persons having authority and responsibility for planning, directing and controlling the activities of the Group either directly or indirectly. The key management personnel includes all the Directors of the Group and of the Company, and certain members of senior management of the Group.

Controlling related party relationships are as follows:

(a) its subsidiaries as disclosed in Note 6.(b) the substantial shareholders of the Company, Tan Sri Abdul Majid Khan, Mr. Yeo Eck Liong, Mr. Yeo Ayk

Ke, Mr. Yeo Aik Tan who are also the Directors of the Company.

The amount due from/(to) subsidiaries are disclosed in Note 9 and Note 14 to the financial statements.

Transactions with related parties

Significant transactions with related parties other than disclosed elsewhere in the financial statements are as follows:

2014RM’000

2013RM’000Company

SubsidiariesDividend income receivable 10,174 28,156Management fees receivable 1,320 1,320

2014RM’000

2013RM’000Group

A company in which certain directors have significant financial interests

Commission paid 28 246Purchase of biomass feeds stocks 19 –Purchase of machinery and machinery parts 254 –Rental paid 90 90Sales of carton box 44 –



26. Related parties (cont’d)

Transactions with related parties (cont’d)

2014RM’000

2013RM’000Group

A company in which a shareholder of a subsidiary has significant financial interest

Interest paid/payable

87

305




27. Supplementary Information – Disclosure Of Realised And Unrealised Profits/Losses

The breakdown of the retained profits of the Group and of the Company as at the end of the reporting period into realised and unrealised profits/(losses) are presented in accordance with the directive issued by Bursa Malaysia Securities Berhad and prepared in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants, as follows:-

Group Company 2014RM’000

2013RM’000

2014RM’000

2013RM’000

Total retained profits:-

– realised 116,262 111,323 22,169 20,635– unrealised (1,128) (1,351) – –

115,134 109,972 22,169 20,635

Less:

Consolidation adjustments (58,383) (57,530) – –

56,751 52,442 22,169 20,635



Jaycorp Berhad(Company No. 459789-X)(Incorporated in Malaysia)

and its subsidiaries Statement by Directors pursuant to Section 169(15)of the Companies Act 1965

In the opinion of the Directors, the financial statements set out on pages 51 to 120 are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the state of affairs of the Group and of the Company as of 31 July 2014 and the results of their operations and cash flows for the year then ended on that date.

The supplementary information set out in Note 27, which is not part of the financial statements, is prepared in all material respects, in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants and the directive of Bursa Malaysia Securities Berhad.

Signed on behalf of the Board of Directors in accordance with a resolution of the Directors:

Tan Sri Abdul Majid Khan Yeo Eck Liong

Melaka,


JAYCORP BERHAD ANNUAL REPORT 2014 123Statutory declaration pursuant toSection 169(16) of the Companies Act 1965

I, Paul Yong Pow Choy, the officer primarily responsible for the financial management of Jaycorp Berhad, do solemnly and sincerely declare that the financial statements set out on pages 51 to 120 are, to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act 1960.

Subscribed and solemnly declared by the above named in Melaka on 13 November 2014

Paul Yong Pow Choy

Before me:

Ong San Kee (M015)Commissioner for Oaths


Independent auditors’ report to the members of Jaycorp Berhad (Company No. 459789-X)(Incorporated in Malaysia)

Report on the financial statements

We have audited the financial statements of Jaycorp Berhad, which comprise statements of financial position as at 31 July 2014 of the Group and of the Company, and statements of profit or loss and other comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 51 to 120.

Directors’responsibilityforthefinancialstatements

The directors of the Company are responsible for the preparation of financial statements so as to give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 1965 in Malaysia. The directors are also responsible for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company as of 31 July 2014 and of their financial performance and cash flows for the financial year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 1965 in Malaysia.


Independent auditors’ report to the members of Jaycorp Berhad (cont’d)(Company No. 459789-X)(Incorporated in Malaysia)

Report on other legal and regulatory requirements

In accordance with the requirements of the Companies Act 1965 in Malaysia, we also report the following:

(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.

(b) We have considered the financial statements and the auditors’ reports of a subsidiary of which we have not acted as auditors, which are indicated in Note 6 to the financial statements.

(c) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company’s financial statements are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group and we have received satisfactory information and explanations required by us for those purposes.

(d) The audit reports on the financial statements of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Act.

The supplementary information set out in Note 27 on page 121 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the financial statements. The directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

Other matters

This report is made solely to the member of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

Crowe Horwath Tan Lin ChunFirm Number: AF 1018 Approval Number: 2839/10/15(J)Chartered Accountants Chartered Accountant


Melaka


Details of the properties of the Group are as follows:

Registered/ Beneficial Owner

Property Tenure Description/Existing Use

Age of Building

(years)

Land area (sq. meter)

Built-up area(sq.

meter)

Net book value as

at31 July

2014RM’000

Jaycorp TradingSdn Bhd

H.S.(M) 308 P.T. No. 269, Freehold Factory & Office Building

23 1,070

3,951

32

GM241 Lot No. 4027, Freehold Factory Building 23 2,920 476

GM240 Lot No. 4026, Freehold Warehouse (Packaging)

18 4,653 3,986 434

GM242 Lot No. 4028 and Freehold Factory Building 17 6,238 5,279 573

GM243 Lot No. 4029, Mukim of Sungai Rambai, Melaka

Freehold Warehouse*(Furniture)

11 2,077 1,431 184

Lot 2611, No 2-9631, Mukim Sg Rambai

Freehold Car Park, Ware-house & Factory

Building

5 21,626 4,382 3,615

Yeo AikWoodSdn Bhd

H.S.D. 25808 P.T.D. No. 11656 and H.S.D. 5809 P.T.D. No. 11657, Mukim of Grisek, District of Ledang, Johor

Freehold Industrial LandFactory Building**(Owned by YAH)

- 11,840 - 800

13 - 6,711 2,128

H.S.(M) 1183, P.T.No. 1644 and H.S.(M) 1531, PT No. 2051Mukim of Merlimau, Melaka

Freehold Factory Building 17 4,794 3,389 148


H.S.D. 0025805 P.T.D. No. 11653 Mukim of Grisek, District of Ledang, Johor


GM156, Lot No. 133, Mukim of Sebatu,Melaka

Freehold Agriculture Land - 8,434 - 97

H.S.D. 6202 & 6205 P.T. 320 & 321Mukim Semujuk, Daerah Jasin,Melaka

99 years leasehold

(Expiring on 23.02.2100)

Vacant Industrial Land

- 14,525 - 746

Lot 11288Mukim of Grisek,District of Ledang, Johor

Freehold Agriculture Land - 20,209 - 1,034

PT Tiga Mutiara Nusantara

Lintas Tebing Tinggi-P.Siantar Km 21.5Kalembak – Dolok MerawanSerdang Bedagai – 20693Sumatera Utara - Indonesia

Freehold Industrial Land *** - 100,000 - 882

Factory Building 9 - 11,940 3,697

LIST OF LANDED PROPERTIES


Registered/ Beneficial Owner

Property Tenure Description/Existing Use

Age of Building (years)

Land area (sq. meter)

Built-up area(sq.

meter)

Net book value as at

31 July 2014

RM’000

Digital FurnitureSdn Bhd

PTD 10251, HS (M) 5231, Freehold Factory Building 10 19,349 10,330 5,728

Lot 170, G.M. No.1247, Freehold Factory Building 8 7,082 2,972 640

Lot 14670, G.M.No.4074, Freehold Factory Building 4 4,195 2,133 1,427

Lot 3120, G.M. No.3055,

Mukim Jalan Bakri, Daerah Muar,

Johor

Freehold Factory Building 4 9,004 4,831 2,282

Yeo Aik

Hevea (M)

Sdn Bhd

Lot PTD No.15024, HSM 25806 Freehold Factory Building 2 4,4636,142 3,327

Lot PTD No.15025, HSM 25807

Mukim of Grisek,

District of Ledang, Johor

Freehold Factory Building 2 5,056

Winshine

Holdings Sdn

Bhd

Plot 331, Lot No. PTD 5104

Title No HSD 38295

Mukim of Simpang Kanan

District of Batu Pahat,

Johor Darul Takzim

60 years

leasehold

(expiring on

05.10.2057)

Factory Building 18 8,094 5,279 2,709

Winshine

Industries Sdn

Bhd

Plot 337, Lot No. PTD 37809

Title No HSD 39280

60 years

leasehold

(expiring on

06.07.2059)


Plot 360, Lot No. PTD 47268,

Title No. HSD 55701

Mukim of Simpang Kanan, District

of Batu Pahat, Johor Darul Takzim

60 years

leasehold

(expiring on

08.10.2066)

Factory and

Office Building

16 20,235 9,526 1,826

Lot No. PTD 31719

Title No Geran 61861

Mukim of Simpang Kanan

District of Batu Pahat,

Johor Darul Takzim

Freehold Single-Storey

Terrace House

18 313 101 85

Jaycorp Green

Energy

Sdn Bhd

PLO 481, PTD 192374

Title No HSD 442263

Mukim of Plentong

District of Johor Bahru

Johor Darul Takzim

60 years

leasehold

(expiring on

20.03.2067)


Bongawan Solo

Sdn Bhd

Country lease 025341226,

025341235 & 025341271 located

at Kampung Bongawan, District

of Papar, Sabah

99 years

leasehold

(expiring on

31.12.2080)

Agriculture land - 1,600,200 - 21,073

* WarehouseownedbyYeoAikWoodSdnBhdisconstructedonthepieceofindustriallandownedbyJaycorpTradingSdnBhd** FactorybuildingownedbyYeoAikHevea(M)SdnBhdisconstructedonthepieceofindustriallandownedbyYeoAikWoodSdnBhd*** IndustriallandownedbyPT.TigaMutiaraNusantaraisunderownershiprightstousetheland(HakGunaBangunanNo.1)andlocated inSerdangBadagai,SumateraUtara.Theselandrightswillexpireat27April2026

LIST OF LANDED PROPERTIES (cont’d)


STATISTICS OF SHAREHOLDINGS AS AT24 OCTOBER 2014Authorised Share Capital : RM100,000,000.00Issued and fully Paid-Up Share Capital : RM68,625,000.00Class of Shares : Ordinary shares of RM0.50 eachVoting Rights : One vote per ordinary share

ANALYSIS BY SIZE OF SHAREHOLDINGS

DIRECTORS’ SHAREHOLDINGS

SIZE OFSHAREHOLDINGS

NO OFSHAREHOLDERS

% OFSHAREHOLDERS

NO OFSHARES HELD

% OFSHAREHOLDINGS

less than 100 508 15.75 23,445 0.02

100 to 1,000 448 13.89 151,705 0.11

1,001 to 10,000 1,679 52.05 6,620,687 4.84

10,001 to 100 000 497 15.41 14,460,430 10.57

10,001 to less than 5% 92 2.85 54,250,833 39.66

5% and above 2 0.06 61,275,000 44.80

TOTAL 3,226 100.00 136,782,100* 100.00

Note:

* Excluding a total of 467,900 ordinary shares of RM0.50 each bought-back and retained as treasury shares as at 24 October 2014

DIRECTORSAs at 24 October 2014

Direct Indirect

No. of Shares %* No. of Shares %*

TAN SRI ABDUL MAJID KHAN^ - - 31,787,500 ^1 23.24

YEO ECK LIONG^ - own - others

3,389,547-

2.48-

30,275,000 ^2

52,500 ^322.13

0.04

YEO AYK KE^ - own - others

719,175

-0.53

-30,275,000 ^2

72,750 ^422.13

0.05

CHIA LAI JOO 2,578,032 1.88 - -

LIM POH TEOT 3,284,225 2.40 - -

OMAR BIN MUSA - - - -

ASGARI BIN MOHD FUAD STEPHENS - - - -

KONG CHEE WENG, HAROLD - - - -

YEO AIK TAN(ALTERNATE DIRECTOR TO YEO AYK KE)

764,593 0.56 30,275,000 ^2 22.13

Notes:* Excludingatotalof467,900unitordinarysharesofRM0.50eachbought-backbytheCompanyandretainedastreasurysharesasat24October2014.

^1 DeemedinterestthroughhissubstantialshareholdinginJawalaCorporationSdnBhd.

^2 DeemedinterestthroughhissubstantialshareholdinginCentralGlamourSdnBhd.

^3 Deemedinterestinshareheldbyhiswife,SimPeckLingandsister,YeoSiwNee,byvirtueofSection134(12)(c)oftheCompaniesAct,1965.

^4 Deemedinterestinshareheldbyhiswife,OnYinChooandsister,YeoSiwNee,byvirtueofSection134(12)(c)oftheCompaniesAct,1965.


SUBSTANTIAL SHAREHOLDERS’ SHAREHOLDINGS

SUBSTANTIAL SHAREHOLDERS

As at 24 October 2014

Direct Indirect

No. of Shares %^ No. of Shares %^

CENTRAL GLAMOUR SDN BHD 30,275,000 22.13 - -

JAWALA CORPORATION SDN BHD 31,787,500 23.24 - -

YEO ECK LIONG

- others

3,389,547

-

2.48

-

30,275,000*

52,500 ^1

22.13

0.04

YEO AYK KE

- others

719,175

-

0.53

-

30,275,000*

72,750 ^2

22.13

0.05

YEO YEK MENG 440,842 0.32 30,275,000* 22.13

YEO AIK TAN 764,593 0.56 30,275,000* 22.13

TAN SRI ABDUL MAJID KHAN - - 31,787,500** 23.24

DATUK JEMA ANTON KHAN - - 31,787,500** 23.24

HAZMAT AQBAL BIN MOHD AYUB KHAN - - 31,787,500** 23.24

CHEE AH WHAT - - 31,787,500** 23.24

STATISTICS OF SHAREHOLDINGS AS AT 24 OCTOBER 2014 (cont’d)

Notes:* Excludingatotalof467,900unitordinarysharesofRM0.50eachbought-backbytheCompanyandretainedastreasurysharesasat24October2014.

^1 Deemedinterestinshareheldbyhiswife,SimPeckLingandsister,YeoSiwNee,byvirtueofSection134(12)(c)oftheCompaniesAct,1965.

^2 Deemedinterestinshareheldbyhiswife,OnYinChooandsister,YeoSiwNee,byvirtueofSection134(12)(c)oftheCompaniesAct,1965.

** DeemedinterestthroughhissubstantialshareholdinginCentralGlamourSdnBhd.


TOP THIRTY SECURITIES ACCOUNT HOLDERS AS AT 24 OCTOBER 2014

NO. NAME No. of

Shares Held% of ^

Issued Shares

1. CIMSEC NOMINEES (TEMPATAN) SDN BHD< CIMB BANK FOR JAWALA CORPORATION SDN BHD(RETAIL BANKING) >

31,000,000 22.66

2. CENTRAL GLAMOUR SDN BHD 30,275,000 22.13

3. HSBC NOMINEES (ASING) SDN BHD< EXEMPT AN FOR CREDIT SUISSE (SG BR-TST-ASING) >

6,000,000 4.39

4. PUBLIC NOMINEES (TEMPATAN) SDN BHD< PLEDGED SECURITIES ACCOUNT FOR CHUAH SWEE HUAT (E-KLC) >

3,535,000 2.58

5. YEO ECK LIONG 3,389,547 2.48

6. CHAN CHOO SING 3,058,000 2.24

7. LIM POH TEOT 2,606,250 1.91

8. DE KIAT HAI 2,184,400 1.60

9. AIBB NOMINEES (TEMPATAN) SDN BHD< PLEDGED SECURITIES ACCOUNT FOR TAN SIEW BOOY (D18) >

2,000,000 1.46

10. CHIA LAI JOO 1,876,782 1.37

11. MAYBANK NOMINEES (TEMPATAN) SDN BHD<EXEMPT AN FOR DBS BANK LIMITED (CLIENT A/C) >

1,554,700 1.14

12. TAN SIEW BOOY 1,553,200 1.14

13. TEK KON HENG 1,453,800 1.06

14. NG BEE HAR 878,625 0.64

15. CITIGROUP NOMINEES (ASING) SDN BHD<PERSHING LLC FOR S.K. INTERNATIONAL HOLDINGS LIMITED >

800,000 0.58

16. LEONG YOK MOOI 793,600 0.58

17. JAWALA CORPORATION SDN BHD 787,500 0.58

18. SIAH LEE CHU 768,450 0.56

19. MOHD RADZUAN BIN AB HALIM 766,550 0.56

20. YEO AIK TAN 739,593 0.54

21. TAN WENG BOON 733,600 0.54

22. YEO AYK KE 719,175 0.53


NO. NAME No. of

Shares Held% of ^

Issued Shares

23. HAW SEONG DEOW 702,250 0.51

24. CHIA LAI JOO 701,250 0.51

25. LIM POH TEOT 677,975 0.50

26. YEH INTERNATIONAL SERVICES CORPORATION SDN BHD 625,000 0.46

27. SAM FOK FUE 600,000 0.44

28. CIMSEC NOMINEES (TEMPATAN) SDN BHD< CIMB BANK FOR LEOW PENG LIM (MQ0326) >

561,000 0.41

29. TEE KIM YAM 531,710 0.39

30. ROBERT TAN 512,500 0.37

Note:

^ Excluding a total of 467,900 ordinary shares of RM0.50 each bought-back by the Company and retained as treasury shares

TOP THIRTY SECURITIES ACCOUNT HOLDERS AS AT 24 OCTOBER 2014 (cont’d)


JAYCORP BERHAD (Company No. 459789-X)

(Incorporated in Malaysia)

PROXY FORM No. of shares held

I/We*............................................................................................................................................................................................................... (name of shareholder as per NRIC, in capital letters)

IC No./ Passport No./ Company No.* ..……………………………………………………..................................................................................

of..................................................................................................................................................................................................................... (full address)

being a member/members* of JAYCORP BERHAD, hereby appoint …........................................................................................................

IC No/ Passport No.*....................................................... of..........................................................................................................................(name of proxy as per NRIC, in capital letters) (full address)

or failing him/her*, ....................................................................................... IC No/ Passport No.* ............................................................... (name of proxy as per NRIC, in capital letters)

of .................................................................................................................................................................................................................... (full address)

or failing him/her*, the Chairman of the Meeting as my/our* proxy to vote for me/us* on my/our* behalf at the Sixteenth Annual General Meeting of the Company to be held at Room Bunga Melati, 7th Floor, Ramada Plaza Melaka, Jalan Bendahara, 75100 Melaka, Malaysia, on Thursday, 18 December 2014 at 10.30 a.m. and at any adjournment thereof.

No. Resolution For Against

OrdinaryResolution 1

Declaration of first and final single tier dividend of 3.5 sen per ordinary share for the financial year ended 31 July 2014

Ordinary Resolution 2

Approval of payment of Directors’ Fees for the financial year ended 31 July 2014


Re-election of Mr Yeo Eck Liong as a Director retiring under Article 113 of the Articles of Association of the Company


Re-election of Mr Chia Lai Joo as a Director retiring under Article 113 of the Articles of Association of the Company


Re-appointment of Tan Sri Abdul Majid Khan as a Director pursuant to Section 129 of the Companies Act, 1965


Re-appointment of Messrs Crowe Horwath as Auditors of the Company and to authorise the Directors to fix their remuneration.


Authority under Section 132D of the Companies Act, 1965 for the Directors to allot and issue shares


Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature


Renewal of Authority for Share Buy-Back


Retention of Encik Omar bin Musa as an Independent Non-Executive Director, in accordance with the Malaysian Code on Corporate Governance 2012


Retention of Encik Asgari bin Mohd Fuad Stephens as an Independent Non-Executive Director, in accordance with the Malaysian Code on Corporate Governance 2012

* Strike out whichever is not desired.

[Please indicate with a cross (x) in the spaces provided whether you wish your votes to be cast for or against the resolutions. In the absence of specific directions, your proxy may vote or abstain as he thinks fit.]

............................................................Signature or Common Sealof Member(s)Dated this ..........day of .......................... 2014

NOTES:

1. A member of the Company entitled to attend and vote at the meeting is entitled to appoint not more than two (2) proxies to attend and vote in his/her stead at the same meeting. Where a member of the Company is an authorised nominee as defined in accordance with the provisions of the Securities Industry (Central Depositories) Act, 1991, it may appoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account. A proxy may but need not be a member of the Company and the provisions of Section 149 (1) (b) of the Companies Act, 1965 shall not apply to the Company.

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

An exempt authorised nominee refers to an authorised nominee defined under the Securities Industry (Central Depositories) Act 1991 (“SICDA”) which is exempted from compliance with the provisions of subsection 25A(1) of SICDA.

3. The instrument appointing a proxy or proxies must be deposited at the Registered Office of the Company at JA 1880, Batu 22 1/2, Parit Perawas, Sungai Rambai, 77400 Melaka, Malaysia, not less than 48 hours before the time set for holding the meeting or any adjournment thereof.

4. A power of attorney or certified copy thereof or the instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly appointed under a power of attorney or, if the appointer is a corporation, either under its common seal or under the hand of an officer or attorney duly appointed under a power of attorney.

5. For the purpose of determining who shall be entitled to attend this meeting, the Company shall be requesting Bursa Malaysia Depository Sdn Bhd to make available to the Company, a Record of Depositors as at 11 December 2014 and only a Depositor whose name appears on such Record of Depositors shall be entitled to attend, speak and vote at the meeting and entitled to appoint proxy or proxies.

STAMP

JAYCORP Berhad (459789 X)

JA 1880, Batu 22 1/2, Parit PerawasSungai Rambai, 77400 Melaka

Malaysia

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