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A N N U A L

R E P O R T

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01

ANNUAL REPORT 2014

CONTENTS

Notice of Annual General Meeting

2-8

Statement accompanying the Notice of Annual General Meeting

Corporate Information

10

Financial Highlights

11

Directors' Profile

12 - 14

Managing Director's Statement

15 - 16

Statement on Corporate Social Responsibility

17 - 18

Statement on Corporate Governance

19 - 27

Statement of Risk Management and Internal Control

28

Audit Committee Report

29 - 32

Statement of Directors' Responsibility

33

Other Information required by the Main Market Listing Requirements


of Bursa Malaysia Securities Berhad

34 - 35

Directors' Report

36 - 39

Statement by Directors

40

Statutory Declaration

40

Independent Auditors' Report

41 - 42

Statements of Comprehensive Income

43

Statements of Financial Position

44

Statements of Changes in Equity

45 - 46

Statements of Cash Flows

47 - 48

Notes to the Financial Statements

49 - 107

Supplementary Information

108

List of Properties owned by the Group

109

Analysis of Shareholdings

110 - 111

Proxy Form

Enclosed

02

ANNUAL REPORT 2014

NOTICE OF ANNUAL GENERAL MEETING


NOTICE IS HEREBY GIVEN THAT the Twenty-first (21st) Annual General Meeting of Suiwah Corporation Bhd (or the
Company) will be held at Sunshine Banquet Hall, Level 4, Sunshine Square Complex, 1, Jalan Mayang Pasir, 11950 Bayan
Baru, Penang on Monday, 17 November 2014 at 11.00 a.m. for the following purposes:
AS ORDINARY BUSINESS:1.

To receive the Audited Financial Statements for the year ended 31 May 2014 together with the Reports
of the Directors and Auditors thereon.

Resolution 1

2.

To approve the declaration of a first and final single tier dividend of 6% for the financial year ended
31 May 2014.

Resolution 2

3.

To re-elect the following Directors who are retiring in accordance with Article 87 of the Companys
Articles of Association and are offering themselves for re-election:
(a)
Wong Thai Sun; and
(b)
Hwang Siew Peng

4.

Resolution 3
Resolution 4

To pass the following resolution pursuant to Section 129 of the Companies Act, 1965 as ordinary
resolution:
THAT Dato Ahmad Hassan bin Osman who is over the age of seventy years and retiring in accordance
with Section 129 of the Companies Act, 1965, be hereby re-appointed as Director of the Company and
to hold office until the conclusion of the next Annual General Meeting.

Resolution 5

5.

To approve the payment of directors fees of Ringgit Malaysia Two Hundred Thirty Nine Thousand and
Six Hundred (RM239,600) only for the year ended 31 May 2014.

Resolution 6

6.

To re-appoint Messrs. Ernst & Young as Auditors of the Company for the ensuing year and to authorise
the Directors to fix their remuneration.

Resolution 7

AS SPECIAL BUSINESS:7.

To consider and if thought fit, to pass the following resolutions with or without modification: 7.1

ORDINARY RESOLUTION:
AUTHORITY TO ISSUE AND ALLOT SHARES PURSUANT TO SECTION 132D OF THE
COMPANIES ACT, 1965
THAT, subject to Section 132D of the Companies Act, 1965 (Act), the Articles of Association
of the Company, other applicable laws, guidelines, rules and regulations and approvals of
the relevant governmental and/or regulatory authorities, the Directors be and are hereby
empowered to issue and allot shares in the Company, at any time to any person(s) other than a
Director or major shareholder of the Company or person connected with any Director or major
shareholder of the Company and upon such terms and conditions and for such purposes as
the Directors may, in their absolute discretion deem fit, provided that the aggregate number of
shares issued pursuant to this resolution does not exceed ten per centum (10%) of the issued
and paid-up share capital of the Company (excluding treasury shares) for the time being AND
THAT the Directors be and are also empowered to obtain the approval for the listing of and
quotation for the additional shares so issued on Bursa Malaysia Securities Berhad;
AND FURTHER THAT such authority shall commence immediately upon the passing of this
resolution and continue to be in force until the conclusion of the next Annual General Meeting
of the Company.

7.2

ORDINARY RESOLUTION:
PROPOSED RENEWAL AND NEW SHAREHOLDERS MANDATE FOR RECURRENT
RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE INVOLVING
DATO HWANG THEAN LONG, DATIN CHEAH GAIK HUANG, HWANG SIEW PENG,
SUIWAH HOLDINGS SDN BHD AND SUIWAH SUPERMARKET SENDIRIAN BERHAD

Resolution 8

03

ANNUAL REPORT 2014

NOTICE OF ANNUAL GENERAL MEETING (CONTD.)


THAT approval be and is hereby given to the Companys subsidiaries to enter into and give
effect to the recurrent related party transactions of a revenue or trading nature involving Dato'
Hwang Thean Long, Datin Cheah Gaik Huang, Hwang Siew Peng, Suiwah Holdings Sdn Bhd
and Suiwah Supermarket Sendirian Berhad (hereinafter referred to as "Related Parties") as
specified in Section 2.3 under Part A of the Circular dated 24 October 2014, and falling within
the ambit of Part E, Paragraph 10.09 of Chapter 10 of the Main Market Listing Requirements
of Bursa Malaysia Securities Berhad, which are necessary for the day-to-day operations and
undertaken in the ordinary course of business of the Company, on terms not more favourable
to Related Parties than those generally available to the public and not detrimental to minority
shareholders of the Company;

Resolution 9

THAT such approval unless revoked or varied by the Company in general meeting shall continue
to be in full force and effect until:
(i)

the conclusion of the next Annual General Meeting ("AGM") of the Company following
the general meeting at which this mandate was passed, at which time it will lapse,
unless by a resolution passed at the general meeting whereby the authority is renewed;
or

(ii)

the expiration of the period within which the next AGM of the Company 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 extension as may be allowed pursuant to Section
143(2) of the Act); or

(iii)

revoked or varied by resolution passed by the shareholders of the Company in a


general meeting;

whichever is the earlier;


THAT the above mandate is subject to annual renewal and disclosure will be made in the
annual report of the aggregate value of transactions conducted by the Group.
AND THAT the Directors of the Company be 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 the above mandate.
7.3

ORDINARY RESOLUTION:
PROPOSED RENEWAL OF SHAREHOLDERS MANDATE FOR RECURRENT RELATED
PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE INVOLVING DATUK
HAJI RADZALI BIN HASSAN AND HOZONE SDN BHD
THAT approval be and is hereby given to the Companys subsidiaries to enter into and give
effect to the recurrent related party transactions of a revenue or trading nature involving Datuk
Haji Radzali bin Hassan and person connected to him, namely Hozone Sdn Bhd (hereinafter
referred to as "Interested Persons") as specified in Section 2.3 under Part A of the Circular
dated 24 October 2014, and falling within the ambit of Part E, Paragraph 10.09 of Chapter
10 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad which are
necessary for the day-to-day operations and undertaken in the ordinary course of business
of the Company, on terms not more favourable to Interested Persons than those generally
available to the public and not detrimental to minority shareholders of the Company;
THAT such approval unless revoked or varied by the Company in general meeting shall continue
to be in full force and effect until:
(i)

the conclusion of the next Annual General Meeting ("AGM") of the Company following
the general meeting at which this mandate was passed, at which time it will lapse,
unless by a resolution passed at the general meeting whereby the authority is renewed;
or

(ii)

the expiration of the period within which the next AGM of the Company after the date
it is required to be held pursuant to Section 143(1) of the Companies Act, 1965 ("the
Act") (but must 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 of the Company in a


general meeting;

whichever is the earlier;


THAT the above mandate is subject to annual renewal and disclosure will be made in the
annual report of the aggregate value of transactions conducted by the Group.
AND THAT the Directors of the Company be 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 the above mandate.

Resolution 10

04

ANNUAL REPORT 2014

NOTICE OF ANNUAL GENERAL MEETING (CONTD.)


7.4

ORDINARY RESOLUTION:
PROPOSED RENEWAL OF SHAREHOLDERS MANDATE FOR RECURRENT RELATED
PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE INVOLVING A DIRECTOR
OF THE COMPANYS SUBSIDIARY, NAMELY LOOI TIK MIOW
THAT approval be and is hereby given to the Companys subsidiaries to enter into and give
effect to the recurrent related party transactions of a revenue or trading nature involving a
Director of the Companys subsidiary, namely Looi Tik Miow (hereinafter referred to as
"Interested Director") as specified in Section 2.3 under Part A of the Circular dated 24 October
2014, and falling within the ambit of Part E, Paragraph 10.09 of Chapter 10 of the Main Market
Listing Requirements of Bursa Malaysia Securities Berhad, which are necessary for the dayto-day operations and undertaken in the ordinary course of business of the Company, on terms
not more favourable to Interested Director than those generally available to the public and not
detrimental to minority shareholders of the Company;

Resolution 11

THAT such approval unless revoked or varied by the Company in general meeting shall continue
to be in full force and effect until:
(i)

the conclusion of the next Annual General Meeting ("AGM") of the Company following
the general meeting at which this mandate was passed, at which time it will lapse,
unless by a resolution passed at the general meeting whereby the authority is renewed;
or

(ii)

the expiration of the period within which the next AGM of the Company after the date
it is required to be held pursuant to Section 143(1) of the Companies Act, 1965 ("the
Act") (but must 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 of the Company in a


general meeting;

whichever is the earlier;


THAT the above mandate is subject to annual renewal and disclosure will be made in the
annual report of the aggregate value of transactions conducted by the Group.
AND THAT the Directors of the Company be 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 the above mandate.
7.5

ORDINARY RESOLUTION:
PROPOSED RENEWAL OF SHAREHOLDERS MANDATE FOR RECURRENT RELATED
PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE INVOLVING A DIRECTOR
OF THE COMPANYS SUBSIDIARY, NAMELY LEONG KONG MENG
THAT approval be and is hereby given to the Companys subsidiaries to enter into and give
effect to the recurrent related party transactions of a revenue or trading nature involving a
Director of the Companys subsidiary, namely Leong Kong Meng (hereinafter referred to as
"Interested Director") as specified in Section 2.3 under Part A of the Circular dated 24 October
2014, and falling within the ambit of Part E, Paragraph 10.09 of Chapter 10 of the Main Market
Listing Requirements of Bursa Malaysia Securities Berhad, which are necessary for the dayto-day operations and undertaken in the ordinary course of business of the Company, on terms
not more favourable to Interested Director than those generally available to the public and not
detrimental to minority shareholders of the Company;
THAT such approval unless revoked or varied by the Company in general meeting shall continue
to be in full force and effect until:
(i)

the conclusion of the next Annual General Meeting ("AGM") of the Company following
the general meeting at which this mandate was passed, at which time it will lapse,
unless by a resolution passed at the general meeting whereby the authority is renewed;
or

(ii)

the expiration of the period within which the next AGM of the Company after the date
it is required to be held pursuant to Section 143(1) of the Companies Act, 1965 ("the
Act") (but must 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 of the Company in a


general meeting;

whichever is the earlier;


THAT the above mandate is subject to annual renewal and disclosure will be made in the
annual report of the aggregate value of transactions conducted by the Group.
AND THAT the Directors of the Company be 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 the above mandate.

Resolution 12

05

ANNUAL REPORT 2014

NOTICE OF ANNUAL GENERAL MEETING (CONTD.)


7.6

ORDINARY RESOLUTION:
PROPOSED RENEWAL OF AUTHORITY FOR THE COMPANY TO PURCHASE ITS OWN
SHARES OF UP TO 10% OF ITS ISSUED AND PAID-UP ORDINARY SHARE CAPITAL
("PROPOSED RENEWAL OF SHARE BUY-BACK MANDATE")
THAT subject to the Companies Act, 1965 ("the Act"), the provisions of the Companys
Memorandum and Articles of Association, Main Market Listing Requirements of Bursa Malaysia
Securities Berhad ("Bursa Securities") and all other applicable laws, guidelines, rules and
regulations, the Directors of the Company be and is hereby authorised, to the fullest extent
permitted by law, to purchase such amount of ordinary shares of RM1.00 each in the Company
("SCB Shares") 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:(i)

the aggregate number of SCB Shares which may be purchased or held by the Company
shall not exceed ten per centum (10%) of the total issued and paid-up ordinary share
capital for the time being of the Company, subject to a restriction that the Company
continues to maintain a shareholding spread that is in compliance with the Main Market
Listing Requirements of Bursa Securities after the share purchase;

(ii)

the maximum fund to be allocated by the Company for the purpose of purchasing the
SCB Shares under the Proposed Renewal of Share Buy-Back Mandate shall not exceed
the retained profits and/or the share premium account of the Company for the time being;

Resolution 13

(iii) the authority hereby given shall commence immediately upon passing of this ordinary
resolution and shall continue to be in force until:(a) the conclusion of the next Annual General Meeting ("AGM") of the Company
following the forthcoming AGM, at which time the authority will lapse unless renewed
by ordinary resolution passed at the general meeting, the authority is renewed, either
unconditionally or subject to conditions; or
(b) the expiration of the period within which the next AGM of the Company after the date
it is required by law to be held; or
(c) revoked or varied by ordinary resolution passed by the shareholders of the Company
in a general meeting,
whichever occurs first; but not so as to prejudice the completion of purchase(s) by the
Company of the SCB Shares before the aforesaid expiry date and, made in any event,
in accordance with the provisions of the guidelines issued by Bursa Securities and any
prevailing laws, rules, regulations, orders, guidelines and requirements issued by any
relevant authorities; and
(iv) upon completion of the purchase(s) of the SCB Shares by the Company, authority
be and is hereby given to the Directors of the Company to decide at their absolute
discretion to either to cancel the SCB Shares so purchased and/or to retain the SCB
Shares so purchased as treasury shares which may be distributed as shares dividends
to shareholders and if retained as treasury shares, may resell the treasury shares on
Bursa Securities and/or subsequently cancelled, or to retain part of the SCB Shares so
purchased as treasury shares and cancel the remainder in the manner as prescribed by
the Act, rules, regulations and orders made pursuant to the Act and the requirements of
the Bursa Securities and any other relevant authority for the time being in force;
AND THAT authority be and is hereby unconditionally and generally given to the Directors of the
Company to take all such steps as are necessary or expedient to implement, finalise, complete
or to effect the Proposed Renewal of Share Buy-Back Mandate with full powers to assent to
any conditions, modifications, resolutions, variations and/or amendments (if any) as may be
imposed by the relevant authorities and to do all such acts and things as the said Directors may
deem fit and expedient in the best interest of the Company to give effect to and to complete the
purchase of the SCB Shares.
7.7

ORDINARY RESOLUTION:
MANDATE FOR Y.B. SENATOR DATO HAJI SUHAIMI BIN ABDULLAH WHO HAS
SERVED AS AN INDEPENDENT NON-EXECUTIVE DIRECTOR OF THE COMPANY FOR
A CUMULATIVE TERM OF MORE THAN NINE (9) YEARS, TO CONTINUE TO ACT AS AN
INDEPENDENT NON-EXECUTIVE DIRECTOR OF THE COMPANY
THAT approval be and is hereby given to Y.B. Senator Dato Haji Suhaimi bin Abdullah, who
has served as an Independent Non-Executive Director of the Company for a cumulative term
of more than nine (9) years, to continue to act as an Independent Non-Executive Director
of the Company in compliance with the recommendation of Malaysian Code on Corporate
Governance 2012.

Resolution 14

06

ANNUAL REPORT 2014

NOTICE OF ANNUAL GENERAL MEETING (CONTD.)


7.8

ORDINARY RESOLUTION:
MANDATE FOR DATO AHMAD HASSAN BIN OSMAN WHO HAS SERVED AS AN
INDEPENDENT NON-EXECUTIVE DIRECTOR OF THE COMPANY FOR A CUMULATIVE
TERM OF MORE THAN NINE (9) YEARS, TO CONTINUE TO ACT AS AN INDEPENDENT
NON-EXECUTIVE DIRECTOR OF THE COMPANY
THAT approval be and is hereby given to Dato Ahmad Hassan bin Osman, who has served
as an Independent Non-Executive Director of the Company for a cumulative term of more than
nine (9) years, to continue to act as an Independent Non-Executive Director of the Company
in compliance with the recommendation of Malaysian Code on Corporate Governance 2012.

7.9

Resolution 15

ORDINARY RESOLUTION:
MANDATE FOR MR. JEN SHEK VOON WHO HAS SERVED AS AN INDEPENDENT NONEXECUTIVE DIRECTOR OF THE COMPANY FOR A CUMULATIVE TERM OF MORE
THAN NINE (9) YEARS, TO CONTINUE TO ACT AS AN INDEPENDENT NON-EXECUTIVE
DIRECTOR OF THE COMPANY
THAT approval be and is hereby given to Mr. Jen Shek Voon, who has served as an Independent
Non-Executive Director of the Company for a cumulative term of more than nine (9) years, to
continue to act as an Independent Non-Executive Director of the Company in compliance with
the recommendation of Malaysian Code on Corporate Governance 2012.

Resolution 16

7.10 ORDINARY RESOLUTION:


MANDATE FOR MR. WONG THAI SUN WHO HAS SERVED AS AN INDEPENDENT NONEXECUTIVE DIRECTOR OF THE COMPANY FOR A CUMULATIVE TERM OF MORE
THAN NINE (9) YEARS, TO CONTINUE TO ACT AS AN INDEPENDENT NON-EXECUTIVE
DIRECTOR OF THE COMPANY
THAT approval be and is hereby given to Mr. Wong Thai Sun, who has served as an Independent
Non-Executive Director of the Company for a cumulative term of more than nine (9) years, to
continue to act as an Independent Non-Executive Director of the Company in compliance with
the recommendation of Malaysian Code on Corporate Governance 2012.

Resolution 17

NOTICE OF DIVIDEND ENTITLEMENT


NOTICE IS ALSO HEREBY GIVEN THAT a first and final single tier dividend of 6% in respect of the financial year ended 31
May 2014, if approved by members of the Company, will be paid on 18 December 2014. The entitlement date for the dividend
payment is 4 December 2014.
A Depositor shall qualify for entitlement only in respect of:(a)

Shares transferred to the Depositors Securities Account before 4.00 p.m. on 4 December 2014 in respect of ordinary
transfers; and

(b)

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

By Order of the Board,


THUM SOOK FUN
(MIA 24701)
Company Secretary
Dated: 24 October 2014
Penang

07

ANNUAL REPORT 2014

NOTICE OF ANNUAL GENERAL MEETING (CONTD.)


Explanatory Note to Special Business: (i)

Resolution No. 8 - Authority to issue and allot shares pursuant to Section 132D of the Companies Act, 1965
The proposed Resolution No. 8 is to seek a renewal of general mandate obtained from its shareholders of the Company
at the last Annual General Meeting (AGM) held on 28 November 2013 (hereinafter referred to as the Previous
Mandate) and which will lapse at the conclusion of the 21st AGM to be held on 17 November 2014.
As at the date this Notice, the Previous Mandate granted by the shareholders had not been utilised and hence, no
proceed was raised therefrom.
The general mandate if passed, will provide flexibility for the Company and empower the Directors of the Company to
issue and allot ordinary shares in the capital of the Company for any fund raising activities, including but not limited to
placing of shares, working capital and/or funding of strategic development of the Group. The renewal of the General
Mandate is sought to provide flexibility and to avoid any delay arising from and cost in convening a general meeting
to obtain approval from its shareholders for such issuance of shares up to an amount not exceeding in total 10% of
the issued and paid-up share capital of the Company, as the Directors consider appropriate in the best interest of the
Company. This General Mandate, unless revoked or varied by the Company in a general meeting, will expire at the
conclusion of next AGM of the Company.

(ii)

Resolution Nos. 9 to 12 - Proposed Renewal and New Shareholders Mandate for the recurrent related party transactions
of a revenue or trading nature (Proposed RRPT Mandate)
The proposed adoption of Resolution Nos. 9 to 12, if passed, will enable the Company and/or its subsidiaries to enter
into the recurrent transactions involving the interest of the Related Parties which are of a revenue or trading nature and
necessary for the Groups day to day operations subject to the transactions being carried out in the ordinary cause of
business on terms not more favorable than those generally available to the public and are not detriment to the minority
shareholders of the Company.
For further information, please refer to the Part A of the Circular/Statement to Shareholders dated 24 October 2014,
which is dispatched together with the Companys Annual Report 2014.

(iii)

Resolution No. 13 - Proposed Renewal of Share Buy-Back Mandate


The proposed adoption of Resolution No. 13 is to renew the authority granted by the shareholders of the Company at the
20th AGM of the Company held on 28 November 2013. The Proposed Renewal of Share Buy-Back Mandate, if passed,
will empower the Directors to buy-back and/or hold up to a maximum of 10% of the Companys issued and paid-up
ordinary share capital at any point of time, by utilising the funds allocated which shall not exceed the total retained profits
and/or share premium account of the Company. This authority, unless revoked or varied by the Company in a general
meeting, will expire at the conclusion of the next Annual General Meeting of the Company, or the expiration of period
within which the next Annual General Meeting is required by law to be held, whichever is earlier.
For further information, please refer to the Part B of the Circular/Statement to Shareholders dated 24 October 2014,
which is dispatched together with the Companys Annual Report 2014.

(iv)

Resolution No. 14 - Mandate for Y.B. Senator Dato Haji Suhaimi bin Abdullah who has served as an Independent
Non-Executive Director of the Company for a cumulative term of more than nine (9) years, to continue to act as an
Independent Non-Executive Director of the Company
Both the Nomination Committee and the Board have assessed the independence of Y.B. Senator Dato Haji Suhaimi
bin Abdullah, who has served as an Independent Non-Executive Director of the Company for a cumulative term of
more than nine (9) years, and recommended him to continue to serve as an Independent Non-Executive Director of the
Company based on the following justifications:(a) He continues to fulfill the definition of independence as set out in Malaysian Code on Corporate Governance 2012
and Main Market Listing Requirements of Bursa Securities;
(b) His existing tenure in office (despite of more than 9 years) does not impair his independence;
(c) He remains objective and independent in expressing his view and in participating in deliberation and decision
making of the Board and Board Committee(s); and
(d) He continues to demonstrate conduct and behaviour that are essential indicators of independence.

08

ANNUAL REPORT 2014

NOTICE OF ANNUAL GENERAL MEETING (CONTD.)


(v)

Resolution No. 15 - Mandate for Dato Ahmad Hassan bin Osman who has served as an Independent Non-Executive
Director of the Company for a cumulative term of more than nine (9) years, to continue to act as an Independent NonExecutive Director of the Company
Both the Nomination Committee and the Board have assessed the independence of Dato Ahmad Hassan bin Osman,
who has served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine (9)
years, and recommended him to continue to serve as an Independent Non-Executive Director of the Company based
on the following justifications:(a) He continues to fulfill the definition of independence as set out in Malaysian Code on Corporate Governance 2012
and Main Market Listing Requirements of Bursa Securities;
(b) His existing tenure in office (despite of more than 9 years) does not impair his independence;
(c) He remains objective and independent in expressing his view and in participating in deliberation and decision
making of the Board and Board Committee(s); and
(d) He continues to demonstrate conduct and behaviour that are essential indicators of independence.

(vi)

Resolution No. 16 - Mandate for Mr. Jen Shek Voon who has served as an Independent Non-Executive Director of
the Company for a cumulative term of more than nine (9) years, to continue to act as an Independent Non-Executive
Director of the Company
Both the Nomination Committee and the Board have assessed the independence of Mr. Jen Shek Voon, who has
served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine (9) years,
and recommended him to continue to serve as an Independent Non-Executive Director of the Company based on the
following justifications:(a) He continues to fulfill the definition of independence as set out in Malaysian Code on Corporate Governance 2012
and Main Market Listing Requirements of Bursa Securities;
(b) His existing tenure in office (despite of more than 9 years) does not impair his independence;
(c) He remains objective and independent in expressing his view and in participating in deliberation and decision
making of the Board and Board Committee(s); and
(d) He continues to demonstrate conduct and behaviour that are essential indicators of independence.

(vii)

Resolution No. 17 - Mandate for Mr. Wong Thai Sun who has served as an Independent Non-Executive Director of
the Company for a cumulative term of more than nine (9) years, to continue to act as an Independent Non-Executive
Director of the Company
Both the Nomination Committee and the Board have assessed the independence of Mr. Wong Thai Sun, who has
served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine (9) years,
and recommended him to continue to serve as an Independent Non-Executive Director of the Company based on the
following justifications:(a) He continues to fulfill the definition of independence as set out in Malaysian Code on Corporate Governance 2012
and Main Market Listing Requirements of Bursa Securities;
(b) His existing tenure in office (despite of more than 9 years) does not impair his independence;
(c) He remains objective and independent in expressing his view and in participating in deliberation and decision
making of the Board and Board Committee(s); and
(d) He continues to demonstrate conduct and behaviour that are essential indicators of independence.

Notes:
1.
In respect of deposited securities, only members whose names appear in the Record of Depositors on 10 November
2014 (General Meeting Record of Depositors) shall be eligible to attend, speak and vote at the Meeting.
2.
A member entitled to attend and vote at the Meeting is entitled to appoint two (2) or more proxies to attend and vote in
his or her stead. Where a member appoints two (2) proxies, the appointments shall be invalid unless he or she specifies
the proportions of his or her shareholdings to be represented by each proxy.
3.
A proxy may but does not need to be a member. There shall be no restriction as to the qualification of the proxy and
the provision of Section 149 (1)(a), (b) and (c) of the Companies Act, 1965 shall not apply to the Company. A proxy
appointed to attend and vote at the Meeting shall have the same rights as the member to speak at the Meeting.
4.
The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorised in
writing or, if the appointor is a corporation, either under its seal or under the hand of an officer or attorney duly authorised.
5.
Where a member of the Company is an exempt authorised nominee as defined under Securities Industry (Central
Depositories) Act 1991 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.
6.
The instrument appointing a proxy and the power of attorney or other authority if any, under which it is signed or a
notarially certified copy of the power or authority shall be deposited at the registered office of the Company at No. 1-201 SUNTECH @ Penang Cybercity, Lintang Mayang Pasir 3, 11950 Bayan Baru, Penang not less than forty-eight (48)
hours before the time for holding the meeting or any adjournment thereof.

ANNUAL REPORT 2014

09
STATEMENT ACCOMPANYING THE NOTICE OF ANNUAL GENERAL MEETING
(Pursuant to Paragraph 8.27(2) of the Main Market Listing Requirements of Bursa Securities)

As at date of this notice, there are no individuals who are standing for election as Directors (excluding the above Directors who
are standing for re-election or re-appointment) at this forthcoming 21st Annual General Meeting.

10

ANNUAL REPORT 2014

CORPORATE INFORMATION
BOARD OF DIRECTORS
DATO HWANG THEAN LONG - Managing Director
DATIN CHEAH GAIK HUANG - Executive Director
MS. HWANG SIEW PENG - Executive Director
DATUK HAJI RADZALI BIN HASSAN - Non-Independent Non-Executive Director
Y.B. SENATOR DATO HAJI MOHD SUHAIMI BIN ABDULLAH - Independent Non-Executive Director
DATO AHMAD HASSAN BIN OSMAN - Independent Non-Executive Director
MR. WONG THAI SUN - Independent Non-Executive Director
MR. JEN SHEK VOON - Independent Non-Executive Director
AUDIT COMMITTEE
Y.B. SENATOR DATO HAJI MOHD SUHAIMI BIN ABDULLAH - Chairman
DATO AHMAD HASSAN BIN OSMAN - Member
MR. WONG THAI SUN - Member
MR. JEN SHEK VOON - Member
NOMINATION COMMITTEE
DATO AHMAD HASSAN BIN OSMAN - Chairman
Y.B. SENATOR DATO HAJI MOHD SUHAIMI BIN ABDULLAH - Member
MR. WONG THAI SUN - Member
REMUNERATION COMMITTEE
DATO AHMAD HASSAN BIN OSMAN - Chairman
Y.B. SENATOR DATO HAJI MOHD SUHAIMI BIN ABDULLAH - Member
MR. WONG THAI SUN - Member
COMPANY SECRETARY
THUM SOOK FUN (MIA 24701)
REGISTERED OFFICE
No. 1-20-1 SUNTECH @ Penang Cybercity, Lintang Mayang Pasir 3, 11950 Bayan Baru, Penang, Malaysia.
Tel. No. : +604-6437387
Fax No. : +604-6437389
Web Page : http://www.suiwah.com.my
SHARE REGISTRAR
SECURITIES SERVICES (HOLDINGS) SDN BHD
Suite 18.05, MWE Plaza, No. 8, Lebuh Farquhar, 10200 Penang, Malaysia.
Tel. No. : +604-2631966
Fax No. : +604-2628544
AUDITORS
ERNST & YOUNG (AF0039)
Chartered Accountants
21st Floor, MWE Plaza, No. 8, Lebuh Farquhar, 10200 Penang, Malaysia.
ADVOCATES & SOLICITORS
GHAZI & LIM
NG SEE KEE & LEONG
WONG-CHOOI & MOHD. NOR
ROWENA YAM, KHOO & ASSOCIATES
PRINCIPAL BANKERS
OCBC BANK (MALAYSIA) BERHAD
MALAYAN BANKING BERHAD
STOCK EXCHANGE LISTING
Main Market of Bursa Malaysia Securities Berhad
Stock Code
: 9865
Stock Name
: SUIWAH

11

ANNUAL REPORT 2014

FINANCIAL HIGHLIGHTS
2011
RM000

2012
RM000

2013
RM000

2014
RM000

422,263

381,010

372,335

378,165

Profit Before Tax

18,973

12,622

19,187

14,845

Paid up Capital

61,000

61,000

61,000

61,000

118,234

119,917

129,922

144,210

Revenue

Reserves

Revenue

Profit Before Tax

RM'000
430,000

RM'000
25,000

420,000
20,000

410,000
400,000

350,000
340,000

14,845

19,187

18,973

5,000

12,622

360,000

378,165

10,000
372,335

370,000

381,010

380,000

15,000
422,263

390,000

0
2011

2012

2013

2014

2011

Year

2012

2013

2014

Year

Reserves

Paid-up Capital
RM'000
70,000

RM'000
160,000

60,000

140,000
120,000

50,000

40,000

10,000

2011

2012

129,922

60,000

119,917

20,000

80,000

118,234

61,000

61,000

61,000

61,000

30,000

144,210

100,000
40,000

20,000
0

0
2011

2012
Year

2013

2014

Year

2013

2014

12

ANNUAL REPORT 2014

DIRECTORS PROFILE
DATO HWANG THEAN LONG - Managing Director
Aged 65, Malaysian
Dato' Hwang Thean Long was appointed to the Board on 10 December 1992. He is presently the Managing Director of the
Company and also acting as director of the subsidiary companies namely Crimson Omega Sdn Bhd, PT Sunshine Amanjaya
Indonesia, Qdos Holdings Bhd, Qdos Marketing Sdn Bhd, Sunshine (Labuan) Private Limited, Sunshine Supermarket &
Departmental Store Sdn Bhd and Sunshine Wholesale Mart Sdn Bhd.
He has more than 43 years of experience in business industry especially supermarket retailing. He started his career with
a mini market when he joined his father, the late Mr. Hwang Siong Wah, the founder of the well-known Swee Wah general
merchant at Ayer Itam, Penang in 1970. After taking over the Swee Wah general merchant, he has expanded the business
by opening additional outlets, which comprise of Sunshine Square, Sunshine Farlim Shopping Mall, Suiwah Ayer Itam and
Sunshine Lip Sin. His current directorship in other public company includes Penang Commercial and Industrial Development
Berhad.
He is also a major shareholder of the Company by virtue of his interests held through Suiwah Holdings Sdn Bhd and Suiwah
Supermarket Sendirian Berhad in the Company. He is the spouse of Datin Cheah Gaik Huang, an Executive Director of the
Company and the father of Ms. Hwang Siew Peng who is also an Executive Director of the Company.
Dato' Hwang Thean Long attended all the five (5) Board Meetings held during the financial year ended 31 May 2014.

Y.B. SENATOR DATO HAJI MOHD SUHAIMI BIN ABDULLAH - Independent Non-Executive Director
Aged 56, Malaysian
Y.B. Senator Dato' Haji Mohd Suhaimi Bin Abdullah was appointed to the Board on 10 December 1992. He is presently the
Chairman of the Audit Committee and a member of the Nomination and Remuneration Committee of the Company. He is also
a director of the subsidiary companies namely Crimson Omega Sdn Bhd and Qdos Holdings Bhd.
He graduated from Havering Technical College, London in 1981 with Diploma in Business Studies. Subsequently, he obtained
a professional qualification in the Chartered Institute of Transport from School of Transport, University of London in 1985 and
is a member of the Chartered Institute of Transport since 1989. From 1982 to 1984, while he was completing his studies, he
was engaged as a secretary with the Majlis Pelajar-Pelajar Malaysia in London, UK. There, he managed the administrative
and communicative matters between Ministries of Malaysia, which have contact with the Malaysian Students Societies Council
in the UK and Ireland.
From 1984 to 1985, he was employed as a Marketing Executive in Mafeta Travel Agency Limited, London, UK where he
managed the sales and marketing of air tickets for Malaysia and Far East countries. From 1985 to 1987, the Foundation of
Mara Education engaged him as an Assistant Secretary II, where he handled the administrative matters of the foundation.
Also in 1986, he joined Angkatan Seniman Abad XX Sdn Bhd as an Executive Director. He was in charged of all administrative
and financial matters for the company, which produced feature films and sitcoms for local media. Then in 1987, he joined
YPM Realities Sdn Bhd as a General Manager and subsequently joined Yayasan Bumiputera Pulau Pinang Berhad also as
a General Manager in 1991. He was in charge of the overall management and day-to-day operations of the companies. He
currently is the Managing Director and Chief Executive Officer of Silver Ridge Holdings Bhd.
Y.B. Senator Dato' Haji Mohd Suhaimi Bin Abdullah attended four (4) of the five (5) Board Meetings held during the financial
year ended 31 May 2014.

DATIN CHEAH GAIK HUANG - Executive Director


Aged 61, Malaysian
Datin Cheah Gaik Huang was appointed to the Board on 14 March 1997. She has more than 33 years of working experience
in the supermarket retailing business and also acting as director of the subsidiary companies namely Aljano Sdn Bhd, Magirex
Sdn Bhd, Sunshine Electrical Superstore Sdn. Bhd, Sunshine Supermarket & Departmental Store Sdn Bhd and Sunshine
Wholesale Mart Sdn Bhd. She does not hold any directorship in other public companies.
She is the spouse of Dato' Hwang Thean Long, the Managing Director and a major shareholder of the Company. Therefore,
she is deemed to have an interest in shares of the Company through Suiwah Holdings Sdn Bhd ("SHSB") and Suiwah
Supermarket Sendirian Berhad ("SSSB") by virtue of her husband's shareholdings held through SHSB and SSSB. She is also
the mother of Ms. Hwang Siew Peng, who is an Executive Director of the Company.
Datin Cheah Gaik Huang attended all the five (5) Board Meetings held during the financial year ended 31 May 2014.

13

ANNUAL REPORT 2014

DIRECTORS PROFILE (CONTD.)


MS. HWANG SIEW PENG - Executive Director
Aged 40, Malaysian
Ms. Hwang Siew Peng was appointed to the Board on 26 December 2001. She also sits on the Board of Directors of several
subsidiary companies of the Company and other private companies.
She holds a Bachelor of Commerce Degree (Marketing and Management) from Curtin University of Technology, Western
Australia. She worked as store operational assistant before joining Suiwah group of companies as Business Development
Executive in the year 2000. She does not hold any directorship in other public companies.
She is the daughter to Dato' Hwang Thean Long and Datin Cheah Gaik Huang, who are the Executive Directors and
major shareholders of the Company. Therefore, she is deemed to have interest in shares of the Company by virtue of the
shareholdings of her parents.
Ms. Hwang Siew Peng attended all the five (5) Board Meetings held during the financial year ended 31 May 2014.

DATO AHMAD HASSAN BIN OSMAN - Independent Non-Executive Director


Aged 76, Malaysian
Dato' Ahmad Hassan Bin Osman was appointed to the Board on 18 December 1995 and on 16 September 2004, his position
has been redesignated from Non-Independent Non-Executive Director to Independent Non-Executive Director. He is presently
the Chairman of the Nomination Committee and Remuneration Committee and also a member of Audit Committee in the
Company. He is also a director of the subsidiary company, namely Crimson Omega Sdn Bhd.
He graduated from the University of Malaya, Kuala Lumpur in 1962 and subsequently obtained a Masters Degree in Economics
from the University of Wisconsin, Madison in 1978.
He has vast experience in the public service, spanning a period of over 30 years. His last post with the Government was as
the Secretary-General of the Ministry of Housing and Local Government, Malaysia. Upon retirement, he was appointed as an
Executive Director of the Islamic Development Bank based in Jeddah, Saudi Arabia from 1994 to 1997. His current directorship
in other public company includes Kimble Corporation Bhd.
Dato' Ahmad Hassan Bin Osman attended all the five (5) Board Meetings held during the financial year ended 31 May 2014.

MR. WONG THAI SUN - Independent Non-Executive Director


Aged 59, Malaysian
Mr. Wong Thai Sun was appointed to the Board on 26 December 2001. He is a member of the Audit Committee, Nomination
Committee and Remuneration Committee of the Company. He also sits as a member in the Employees Share Option Scheme
Committee of the Company.
He holds a Bachelor of Economics and Accountancy from Australian National University. He is a member of the Malaysian
Institute of Accountants and the Certified Public Accountants, Australia.
He has public practice experience in accountancy for over 20 years in Malaysia and in overseas and currently has his own public
practice firm, which is Wong Thai Sun & Associates. He is the Independent Non-Executive Director of Dnonce Technology Bhd
and Emico Holdings Bhd.
Mr. Wong Thai Sun attended all the five (5) Board Meetings held during the financial year ended 31 May 2014.

14

ANNUAL REPORT 2014

DIRECTORS PROFILE (CONTD.)


MR. JEN SHEK VOON - Independent Non-Executive Director
Aged 67, Singaporean
Mr. Jen Shek Voon was appointed to the Board on 1 July 2004. He is also a member of the Audit Committee of the Company.
He sits on the Board of Directors of a number of publicly listed companies on the stock exchanges of Singapore, Malaysia
and Hong Kong SAR. He does not hold any directorship in other public companies in Malaysia. He is a fellow member of the
Singapore Institute of Directors.
He holds Master of Bachelor of Accounting (Hons) from University of Singapore and obtained a post-graduate Commerce
Hons degree from the University of New South Wales. He is a fellow of the Institute of Chartered Accountants in Australia,
Association of Chartered Certified Accountants in United Kingdom and the Taxation Institute of Australia. He also is a Chartered
Accountant of the Institute of Singapore Chartered Accountants (ISCA) and a member of Information System Audit and
Control Association, British Computer Society, Institute of Internal Auditors and the Malaysian Institute of Accountants.
He currently manages his own public accounting practice, Jen Shek Voon PAS, as a sole proprietor. Mr. Jen is a Public
Accountant Singapore, licensed by the Singapore Accounting and Corporate Regulatory Authority (ACRA).
Mr. Jen Shek Voon attended all the five (5) Board Meetings held during the financial year ended 31 May 2014.

DATUK HAJI RADZALI BIN HASSAN - Non-Independent Non-Executive Director


Aged 57, Malaysian
Datuk Haji Radzali Bin Hassan is a Pioneering Environmental Entrepreneur, was appointed to the Board on 16 September
2004.
Born in 1957 in Perak, Datuk Radzali completed his Masters in Business Administration and holds an Advance Diploma in
International Business Studies.
Datuk Radzali was conferred the Kestaria Setia DiRaja Award by DYMM Paduka Baginda Yang DiPertuan Agong in 1997 and
Darjah Mulia Seri Melaka by TYT Yang Di Pertua Negeri Melaka.
Datuk Radzali is currently the Chairman/Group Managing Director of Harta Maintenance Sdn Bhd and Harta Group of
Companies since April 1980, is also an acting director of the subsidiary companies namely Qdos Holdings Bhd and Qdos
Flexcircuits Sdn Bhd. Datuk Radzali does not hold any directorship in other public companies.
Datuk Radzali is a major shareholder of the Company by virtue of his interests held through Hozone Sdn Bhd. Datuk is also a
Director and shareholder of Hozone Sdn Bhd.
Datuk Haji Radzali Bin Hassan attended three (3) of the five (5) Board Meetings held during the financial year ended 31 May
2014.

Save for the family relationship as disclosed above, none of the above Directors have any family relationship with
other Directors and/or major shareholders of the Company. None of the above Directors have any conflict of interest
with the Company or any conviction for any offences other than traffic offences within the past ten (10) years.

ANNUAL REPORT 2014

15
MANAGING DIRECTORS STATEMENT

On behalf of the Board of Directors, I have the pleasure to present to you the Annual Report of Suiwah Corporation Bhd. (the
Company) and its group of companies (the Group) for the financial year ended 31 May 2014.
FINANCIAL OVERVIEW
During the financial year ended 31 May 2014 (FY2014), the Groups revenue stood at RM378.17 million which constitutes a
1.57% increase over last years revenue of RM372.33 million, mainly contributed by its retail segment which recorded higher
revenue for FY2014 in conjunction with the opening of new retail outlet during the year.
However, the Groups profit before tax decreased by 22.67% from RM19.19 million recorded in previous financial year to
RM14.84 million for FY2014. The decrease was mainly due to higher operating expenses incurred for the retail segment in
conjunction with the opening of the new retail outlet during the year and for the manufacturing segment, it was due amortization
of intangible assets, patent license fair value adjustment and unrealized forex loss incurred during the year.
After providing for taxation, the Groups earnings per share improved from 24.23 sen in previous financial year to 30.99 sen
for FY2014.
The Companys shareholders funds have improved from RM99.49 million as at 31 May 2013 to RM108.12 million as at 31
May 2014. The total Groups bank short term borrowings stood at RM6.67 million as at 31 May 2014 compared with RM13.41
million as at 31 May 2013.
DIVIDEND
The Company had declared and paid a first and final dividend of 8% less 25% taxation amounting to RM3.44 million for the
FY2013.
After reviewing the Group performance for FY2014, the Board of Directors is pleased to recommend a first and final single tier
dividend of 6% for the FY2014. The proposed final dividend will be tabled for the shareholders approval at the forthcoming
Twenty-first Annual General Meeting to be held on 17 November 2014.
OPERATIONS REVIEW
Retail Segment
Managing a group of retail stores is much more sophisticated endeavor than it sometimes appeared. The business is very
much people driven which is the basis for the Group to move the business forward. A smiling face communicates a very
positive and strong support to the retail segment and the Group will embark on providing top notch training in sales, customer
service, product/service knowledge and operating procedures to further enhance its retail business performance.
In addition, the retail segment will also be concentrating on multi-channel retailing for seamless approach to enhancing
consumer experience through specialized strategy software and technological devices. Consumers nowadays are very much
in control of the supply chain; hence multi-channel retailing is a revolution for the retail segment to be more consumers centric.
Manufacturing Segment
The Groups manufacturing segment recorded higher profit for FY2014, mainly due to improved operational efficiency and
higher technology content in the products and services to its increasing number of customers.
Lean management and driving towards enhanced technological capabilities continues to be the main drivers to value-add the
manufacturing segment. We foresee strong growth prospect in flexible printed circuits and IC substrate industry, with the rising
popularity of phablets and the emergence of Internet of Things (IoT).
Property Investment and Development Segment
The Groups property investment and development segment recorded a satisfactory performance for FY2014 as compared to
the previous financial year.
The Group is in the process of developing the Sunshine Tower project on a 9-acres land in Farlim, Penang. Sunshine Tower
is set to be the next happening leisure and entertainment venue in the northern region.

16

ANNUAL REPORT 2014

MANAGING DIRECTORS STATEMENT (CONTD.)


FUTURE PROSPECTS
The goods and services tax (GST) is expected to have some short to medium term impact on the Groups financial performance
when it is introduced in April 2015.
The implementation of GST will further pressure the cost structure; not just in terms of rising price of inventory, but also
GST compliance cost within the Group. Retail spending will drop during the first few months post GST implementation, as
consumers observe the changes in prices of goods and services. Purchase power for the middle to lower income group will
be immensely affected.
Notwithstanding the above, the Group will continue to take on a series of business adjustments to its business strategies with
an aim to deliver satisfactory performance for financial year 2015.
CORPORATE RESPONSIBILITY
Within our business strategies, corporate responsibility remains an integral part of our efforts, despite the economic challenges
we have faced. As we work to strengthen our business, we are committed to doing it right for our employees, shareholders,
consumers, customers and the environment. We support programs that improve our local communities. We believe that our
customers, consumers and suppliers value our efforts to operate in an ethical, environmentally sustainable, and socially
responsible manner. The Groups commitment to these aspects can be located in Statement on Corporate Social Responsibility
in this Annual Report.
CORPORATE GOVERNANCE
The Groups commitment to corporate governance is outlined in the Statement of Corporate Governance and other related
reports found in the relevant sections of this Annual Report. The Board of Directors of the Company has also ensured that the
decision making process is impartial. Independence is assured in key appointments as well as maintaining proper standards
of conduct at all times.
APPRECIATION
On behalf of the Group and the Board of Directors, I would like to thank all our shareholders, customers, bankers, suppliers,
business associates and regulatory authorities for their invaluable and continuing support to the Group. We would also like to
extend our gratitude and appreciation to the management team and all the employees of the Group for their diligent services,
commitment and loyalty to the Group and innovations which have enabled the Group to achieve another successful year.
I would also like to extend my personal thanks to my fellow Directors for their constant dedication as the Group attributed its
success to the leadership of its Board of Directors and it also owes much to the dedication of its employees and the support of
its loyal customers and trust given by all our shareholders.
The Group will continue to embark on a series of adjustments its business strategies with an aim to diversify satisfactory
performance for the upcoming financial year.
Thank you.
DATO HWANG THEAN LONG
Managing Director
Date : 17 October 2014

ANNUAL REPORT 2014

17
STATEMENT ON CORPORATE SOCIAL RESPONSIBILITY (CSR)

As much as we are fair and just in all our business practices, we also maintained an unwavering commitment towards the
community and environment. In year 2014, the Group carried out many corporate social responsibility activities and few are
worth to be highlighted as follows:

Sunshine Gives Back In The Ramadan Month


We bring blessings and joy by giving out Sunshine Gift Vouchers and Raya Hampers to 83 orphanages from Rumah
Kebajikan Anak Perempuan Pulau Pinang and Rumah Kebajikan Anak Lelaki Pulau Pinang at the launching of our Raya
Celebration at Sunshine Square Bayan Baru on 20 July 2013.

Hari Raya Puasa Visit to Orphanage Homes


A yearly deed and visit carried out by our Subsidiarys Director, Dato Hj. Abdul Rafique and Sunshines Management team
on 22 July 2013, where duit Raya and hampers were given out to the unfortunate children at the Pusat Pemulihan Dalam
Komuniti, Permatang Damar Laut.

Coaching The Young Scholars


Sunshine accepted 10 internship students from Oriental Institute of Technology, Taiwan. Throughout their internship period
from 23 July 2013 to 7 September 2013, our senior managers provided guidance and coaching in the field of industrial
design, advertisement design and product design.

PC Recycling Program
On 8 September 2013, Sunshine launched a PC Recycling Program, a joint effort with Dell Asia Pacific Sdn Bhd, Penang
Municipal Council and IRM Industries Sdn Bhd in reducing e-wastes which are hazardous to the environment. A total of
2,379 kg of used computers and accessories were collected from 80 participants in this 4 hours event held at Sunshine
Square Bayan Baru.

Blood Donation Campaign


Qdos has carried out a blood donation campaign responding to Penang General Hospitals call in its awareness for
blood donation. On 12 September 2013, both the management and staffs of Qdos donated a total of 30 packs of blood to
Penang General Hospital. Ms. Gloria Tan, one of Qdos staff received Gold Award for her continuous generosity in blood
donation.
Another round of success for Qdos for its benevolence was a total 56 packs of blood were collected on 9 April 2014 for
Penang General Hospital.
Meanwhile, Sunshine Retail Group also held the Blood Donation & Health Check campaign at its major retail outlets for
sharing act of kindness with the public. A total 298 packs of blood were collected when the campaign was held at Banquet
Hall of Sunshine Square Bayan Baru on 12 January 2014. A total 100 packs were collected at Sunshine Bertam Kepala
Batas on 29 March 2014 and a total of 120 packs were collected at Sunshine Farlim Shopping Mall on 1 May 2014.

27th Malaysia Primary School Mathematics Competition 2014


Sunshine sponsored RM3,500.00 worth of prizes to winners of the 27th Malaysia Primary School Mathematics Competition
2014 organized by Kar Yin Fee Kon Youth Section. The sponsorship is aimed to encourage interests among young
students in mathematics and to increase the standard of mathematics.

Penang Youth Table Tennis Competition


Another prize sponsored by Sunshine worth RM10,000.00 was to the winners of Penang Junior League held on 11
October 2013 organized by Penang Youth Table Tennis Association to boost healthy lifestyle in youth with sports activities
such as table tennis.

Qdos Charity Visits to Orphanage and Old Folks Home


Qdos has complemented the Groups CSR in line with the visits to Rumah Anak Yatim Al-Hidayah in Baling, Kedah on 7
December 2013 and to Relau Rumah Charis in Relau, Penang on 15 February 2014. Many daily necessity items such as
sundries, toiletries and foods were donated.

Back To School Donation


Each of the 30 needy children from Kepala Batas, Bertam received voucher worth RM100.00 from Sunshine on 15
December 2013. With this voucher sponsorship, they are entitled to purchase back to school items such as school
uniforms, stationeries and shoes.

Chinese New Year Celebration With The Elderly


On 5 January 2014, Sunshine carried out some spreading joy around senior citizens with low income from Ayer Itam,
Penang by giving out hampers and angpows to them in conjunction with the Chinese New Year Celebration at Sunshine
Farlim Shopping Mall.

18
STATEMENT ON CORPORATE SOCIAL RESPONSIBILITY (CSR)

ANNUAL REPORT 2014

(CONTD.)

Haiyan Typhoon Disaster Relief Fund


A joint effort drive with Malaysia Rose Charities Association, Sunshine provided aids to the victims of Haiyan Typhoon
Disaster in Philippines by way of donation boxes placement at prime locations in its major retail outlets from 20 November
2013 to 20 January 2014. A total donation of RM3,500.00 were collected to help the victims.

Green School Award 2014


The Retail Group continues to support Penang State Government in its Green School Award which aimed to create
awareness and educate the Gen-Y on the importance of utilizing resources in a sustainable way and friendly to the
environment. Prize sponsorships worth RM6,500.00 were awarded the top 3 primary schools in Penang.

Colgate OHM Free Dental Check-up


For 7 consecutive years, Sunshine and Colgate Palmolive has been organizing Oral Health campaign which was held
at Sunshine Square, Bayan Baru from 3 to 6 April 2014. Unlike in previous years, additional campaign was carried and
held at Sunshine Bertam, Kepala Batas from 1 to 4 May 2014. Through these activities, public have benefited from the
information sharing on oral health they have also enjoyed free dental check-up.

19

ANNUAL REPORT 2014

STATEMENT ON CORPORATE GOVERNANCE


Introduction
The Board of Directors (Board) of Suiwah Corporation Bhd (SCB or Company) recognizes the importance of adopting
good corporate governance throughout the Group as a fundamental part of the Boards responsibility to protect and enhance
long-term shareholders value and the financial performance of the Company, whilst taking into account of the interests of other
stakeholders.
The Statement below sets out how the Group has applied the principles and recommendations of Malaysian Code on Corporate
Governance 2012 (MCCG 2012 or Code) together with the provisions contained in the Main Market Listing Requirements
of Bursa Malaysia Securities Berhad (Listing Requirements).
This statement outlines the Groups main corporate governance practices and policies in alignment with the recommended
principles of MCCG 2012 as below:







Establish clear roles and responsibilities


Strengthen composition
Reinforce independence
Foster commitment
Uphold integrity in financial reporting
Recognise and manage risks
Ensure timely and high quality disclosure
Strengthen relationship between company and shareholders

The following paragraphs describe how the Group has applied the Principles of the Code and how the Board has complied with
the recommendations set out in the Code for the financial year ended 31 May 2014.
Principle 1 - Establish Clear Roles and Responsibilities
1.1

Board should establish clear functions reserved for Board and those to delegated to Management
The Board has been entrusted with the overall responsibility for the overall governance, strategic direction and
overseeing the investments of the Group.
The Board retains full and effective control of the Group and assumes responsibility for determining the Groups
strategies and direction, shareholders and investors relationship, approval of annual and quarterly financial results,
acquisition and disposal, major capital expenditure as well as reviewing the adequacy and integrity of the Groups
system of internal controls.

1.2

Board should establish clear roles and responsibilities in discharging its fiduciary and leadership functions
Currently, the position of the Chairman of the Company is vacant subsequent to the demise of the late Tun Dato Seri
Utama Dr. Lim Chong Eu. In this respect, the Board will elect among themselves to chair its meeting. The Chairman
of the Board Meeting is primarily responsible for orderly conduct of a Board Meeting whilst the Managing Director
is responsible for the day-to-day business operations and implementation of Board policies and decisions. Hence,
there is a clear division of responsibility between the Chairman and Managing Director to ensure there is a balance
of power and authority. None of the members of the Board has unfettered powers of decision.
The Board comprises of the Managing Director, two (2) Executive Directors, one (1) Non-Independent Non-Executive
Director and four (4) Independent and Non-Executive Directors, all of whom bring to the Group a broad and valuable
range of experience. There was a strong independent element on the Board as 50% of its Board members comprises
of Independent and Non-Executive Directors.
The presence of Independent and Non-Executive Directors in the Board provides objectivity and they are of the
caliber necessary to carry sufficient weight in Board decisions. The role of the Independent and Non-Executive
Directors is particularly important in ensuring that the strategies proposed by the management are fully discussed
and examined, and takes into account the long-term interests, not only of the shareholders, but also of employees,
customers, suppliers, and the many communities in which the Group conducts business.
The Group Managing Director is responsible for the day to day management of the business and operations of the
Company and Group. He is supported by a management team to ensure the operations are carried out smoothly.
The Board meets regularly at least four (4) times a year. At the end of every quarter, the Groups financial statements
and results are tabled and deliberated by the Board. During the Board Meeting, the Board reviews the operation and
performance of the Group and any other strategic issues that may affect the Groups business.

20

ANNUAL REPORT 2014

STATEMENT ON CORPORATE GOVERNANCE (CONTD.)


1.3

Formalise ethical standards through a code of conduct and ensure its compliance
The Board has in place a code of ethics for the Directors. The code includes amongst of others the respect for the
individual, create a culture of open and honest communication, set tone at the top, uphold the law, avoid conflict of
interest, set metrics and report results accurately.
The Board conducted themselves in an ethical manner while executing their duties and functions, and complied with
the Companys Code of Ethics recommended by the Companies Commission of Malaysia.
In addition to the Company Directors Code of Ethics established by Companies Commission of Malaysia, both
Directors and employees are required to uphold the highest integrity in discharging their duties and in dealings with
various stakeholders such as shareholders, customers, fellow employees and regulators.

1.4

Ensure the Companys strategy promote sustainability


The Company focuses on key areas of environment conservation and social contribution with the aim to promote
sustainable development. A report on sustainability activities, demonstrating the Companys commitment to the global
environmental, social, governance and sustainability agenda, appears in the Corporate Responsibility Statement of
this Annual Report.

1.5

Procedures to allow the Directors access to information and advice


All Directors have full and timely access to information through the Board papers distributed in a timely manner prior
to the Board meetings. The Board papers provide, among others, periodic financial information, annual budget,
operational and corporate issues, investment proposals and management proposals that require Boards approval.
Senior management staff may be invited to attend Board meetings to provide the Board detailed explanations and
clarifications on certain matters that are tabled by them to the Board. The Directors may also interact directly with
the Management, or request further explanation, information or updates on any aspect of the Companys operations
or business concerns from them. In this way the Board has full access to all information on the Companys affairs to
enable the proper discharge of duties.
The Board may seek independent professional advice at the Companys expense on specific issues to enable it
to discharge its duties in relation to the matters being deliberated. Individual Director may also obtain independent
professional or other advice in furtherance of their duties, subject to the approval of the Board, depending on the
quantum of the fees involved.

1.6

Ensure Board is supported by suitably qualified and competent Company Secretary


The Board is satisfied with the performance and support rendered by the Company Secretary to the Board in the
discharge of its functions. The Company Secretary plays an advisory role to the Board in relation to the Companys
constitution, Boards policies and procedures and compliance with the relevant regulatory requirements, codes or
guidance and legislations. The Board is supported by suitably qualified and competent company secretary who is
member of a professional body.
The Board has ready and unrestricted access to the advice and services of the Company Secretary, who are
considered capable of carrying out the duties to which the post entails.

1.7

Formalise, periodically review and make public the Board Charter


The Board Charter (Charter) serves as a reference point for the Boards activities where the Board has established
clear functions reserved for the Board and those delegated to Management. The Charter provides guidance for
Directors and Management on the responsibilities of the Board, its Committees and requirements of Directors and it
is subject to periodical review to ensure consistency with the Boards strategic intent as well as relevant standards
of corporate governance. Salient terms of the Charter are made available at the Companys website at www.suiwah.
com.my

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STATEMENT ON CORPORATE GOVERNANCE (CONTD.)


Principle 2 Strengthen Composition
2.1

Establish a Nominating Committee (NC) which should comprise exclusively Non-Executive Directors, a
majority of whom must be independent
The NC of the Company was established on 29 April 2002. The NC comprises three (3) Non-Executive Directors,
majority of who are Independent Non-Executive Directors as follows:
Chairman
Dato Ahmad Hassan Bin Osman (Independent Non-Executive Director)
Members
Y.B. Senator Dato Haji Mohd Suhaimi Bin Abdullah (Independent Non-Executive Director)
Mr. Wong Thai Sun (Independent Non-Executive Director)
The NC had convened one meeting during the financial year 2014.

2.2

NC should develop, maintain and review criteria for recruitment process and annual assessment of Directors
The NC is empowered to bring to the Board, recommendations as to the appointment of any new Director or to fill
board vacancies as and when they arise in making its recommendation, the NC will consider the required mix of skills,
knowledge, expertise, experience and other qualities, including core competencies which should bring to the Board.
The duties and functions of the NC are as follows: (i)
(ii)
(iii)
(iv)

(v)
(vi)
(vii)
(viii)
(ix)
(x)
(xi)
(xii)

To review the structure, size and composition (including skills, knowledge and experience) required of the
Board compared to its current position and make recommendations to the Board with regard to any changes.
To give full consideration to succession planning for directors in the course of its works, taking into account
the challenges and opportunities facing the company, and what skills and expertise are therefore needed on
the Board in the future.
To review and recommend to the Board, candidates to fill board vacancies as and when they arise.
To prepare a description of the role and capabilities required for a particular appointment with thorough
evaluation and considerations of the following criteria: skills, knowledge, expertise and experience;
competencies, commitment, contribution and performance;
professionalism;
integrity; and
the case of candidates for the position of Independent Non-Executive Directors, the Committee shall
also evaluate the candidates ability to discharge such responsibilities/function as are expected from
Independent Non-Executive Directors.
To review and recommend the re-appointment of any Non-Executive Director at the conclusion of their term
office having given due regard to their performance and ability to continue to contribute to the Board in the
light of the knowledge, skills and experience required.
To ensure the Board composition meets the needs of the Company.
To develop, maintain and review the criteria to be used in the recruitment process and annual assessment
of Directors.
To review and recommend to the Board, candidates to fill the seats on Board committees.
To assist the Board to annually review its required mix of skills and experience and other qualities including
core competencies, which Non-Executive Directors should bring to the Board.
To assess the effectiveness of the Board as a whole and Committees of the Board and assess the
contribution of each individual Director, including the Independent Non-Executive Directors, as well as the
Chief Executive Officer.
To review and recommend the re-appointment and re-election of Directors of the Company for shareholders
approval.
To facilitate Board induction and training programmes.

The Board was of the view that the performance appraisal and assessment on the Board is not applicable to the
Group as all the Board are already subject to the retirement by rotation at least once in every three (3) years but
eligible for re-election by the shareholders at the Annual General Meeting (AGM) of the Company. The assessment
of Boards performance shall be dependent on the shareholders review before they decide to vote for or against the
re-election of the retiring Directors at the AGM.
While the Board recognizes the initiatives by the government to enlarge the womens representation at boardroom,
the Board composition comprise of two (2) female Directors out of the eight (8) Directors.
During the financial year 2014, the NC conducted an assessment of the Directors who are subject to retirement at the
forthcoming AGM in accordance with the provisions of the Articles of Association of the Company and the relevant
provisions of the Companies Act, 1965.

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STATEMENT ON CORPORATE GOVERNANCE (CONTD.)


2.3

Board should establish formal and transparent remuneration policies and procedures to attract and retain
Directors
The Remuneration Committee of the Company comprises a majority of non-executive directors and its composition
is as follows:Chairman
Dato Ahmad Hassan Bin Osman (Independent Non-Executive Director)
Members
Y.B. Senator Dato Haji Mohd Suhaimi Bin Abdullah (Independent Non-Executive Director)
Mr. Wong Thai Sun (Independent Non-Executive Director)
The Remuneration Committee is primarily responsible for recommending the policy and framework of directors
remuneration, including the terms and remuneration of the executive directors, to the Board in order to align with the
business strategy and long term objectives of the Company. The remuneration of directors is determined at levels
which enable the Company to attract and retain Directors with the relevant experience and expertise to govern the
Group effectively.
During the financial year 2014, the Remuneration Committee had performed its duty to assess annually the
remuneration package of its Executive Directors and proposed the remuneration of Executive Directors to the Board
for consideration.
In the case of Executive Directors, the remuneration comprises salary, allowances and bonus. The fees payable to
Non-Executive Directors are approved by shareholders at each AGM. All Directors are also paid allowance for each
meeting they attend.
The details of the Directors remuneration for the financial year ended 31 May 2014 are as follows:
Company
Category of Remuneration

Directors Fees
Salaries, Bonus and Other Emoluments
Meeting Allowance
Total

Group

Executive
Directors

NonExecutive
Directors

Executive
Directors

NonExecutive
Directors

(RM)

(RM)

(RM)

(RM)

174,600

65,000

177,600

74,000

462,276

18,000

50,000

18,000

50,000

192,600

115,000

657,876

124,000

The number of Directors whose remuneration falls into each successive band of RM50,000 is as follows:

Range of Remuneration

Number of Directors
Executive Directors

Non-Executive Directors

Below RM50,000

RM50,001- RM100,000

RM100,001- RM150,000

RM300,001- RM350,000

Above RM350,000

Total

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STATEMENT ON CORPORATE GOVERNANCE (CONTD.)


Principle 3 Reinforce Independence
3.1

Board should undertake an assessment of its Independent Directors annually


The Board through the NC assessed the independence of Independent Directors on an annual basis, with a view to
ensure the Independent Directors bring independent and objective judgement to the Board and this mitigates arising
from conflict of interest or undue influence from interested parties. Where there is a likely conflict of interest position,
the Board would take appropriate action to rectify the situation. Should any Director has an interest in any matter
under deliberation, he is required to disclose his interest and abstain from participating in the discussions and voting
on the matter.
The Board also received confirmation in writing from the Independent Directors of their independence. The Board is
satisfied with the assessment of the Independent Directors.

3.2

Tenure of Independent Director should not exceed cumulative term of nien (9) years. Upon completion of
tenure, Independent Director can continue serving but as Non-Executive Director
One of the recommendation of the Code states that the tenure of an Independent Director should be capped at nine
(9) years, either be a consecutive service of nine (9) years or a cumulative service of nine (9) years with intervals.
Upon completion of the nine (9) years tenure in office, an Independent Director may continue to serve on the company
subject to the re-designation as a Non-Independent Director.
Currently, the following Independent Directors, who have served the Company as Independent Non-Executive
Directors for a cumulative term more than nine (9) years are: (i)
Y.B. Senator Dato Haji Mohd Suhaimi Bin Abdullah
(ii)
Dato Ahmad Hassan Bin Osman
(iii)
Mr. Wong Thai Sun
(iv)
Mr. Jen Shek Voon
However, the NC and the Board have assessed the independence of Y.B. Senator Dato Haji Mohd Suhaimi Bin
Abdullah, Dato Ahmad Hassan Bin Osman, Mr. Wong Thai Sun and Mr. Jen Shek Voon are satisfied with the skills,
contribution and independent judgment that the said independent Directors bring to the Board and was of the view
that the said Independent Directors remain objective and independent in expressing their views and in participating
in deliberations and decision making of the Board and Board Committees. The length of their service on the Board
does not in any way interfere with their exercise of independent judgment and ability to act in the best interests of the
Company.
As all the members of NC have acted as Independent Directors for the tenure in office for more than a cumulative
term of nine (9) years and in line with Recommendation 3.2 of MCCG 2012, the Board (save for Y.B. Senator Dato
Haji Mohd Suhaimi Bin Abdullah, Dato Ahmad Hassan Bin Osman, Mr. Wong Thai Sun and Mr. Jen Shek Voon
who have abstained themselves from deliberation and forming the opinion on the subject matter) recommends and
supports them to continue to act as an Independent Non-Executive Directors of the Company. The relevant motion
on the subject matter will be presented to the shareholders for consideration at the forthcoming AGM.

3.3

Must justify and seek shareholders approval in retaining Independent Directors (serving more than 9 years)
This was explained in the foregoing section.

3.4

Positions of Chairman and Managing Director to be held by different individuals


This was explained in the Paragraph 1.2 above.

3.5

The Board must comprise majority Independent Directors if the Chairman is not an Independent Director
It is recommended that the Board must comprise a majority of Independent Directors where the position of the
Chairman is not an Independent Director. The Board currently comprises all Non-Executive Directors, of whom
four (4) out of eight (8) directors are Independent Non-Executive Directors. The Board therefore has a strong
independence element in its composition as there is a balance of membership in the Board thus ensuring that no
individual dominates the decision making process and the results thereof.

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STATEMENT ON CORPORATE GOVERNANCE (CONTD.)


Principle 4: Foster Commitment
4.1

Board should set expectations on time commitment for its members and protocols for accepting new
directorships
The Board is satisfied with the level of time commitment given by the Directors towards fulfilling their roles and
responsibilities as Directors of the Company.
The Board would have at least four (4) regular scheduled meetings annually, with additional meetings convened as
and when necessary.
A total of five (5) Board meetings were held in financial year ended 31 May 2014. The following is the record of
attendance by the Board members during the financial year:Name of Directors

Total Meetings Attended

% of Attendance

Dato Hwang Thean Long

100

Datin Cheah Gaik Huang

100

Ms. Hwang Siew Peng

100

Y.B. Senator Dato Haji Mohd Suhaimi Bin Abdullah

80

Dato Ahmad Hassan Bin Osman

100

Mr. Wong Thai Sun

100

Mr. Jen Shek Voon

100

60

Executive Directors

Independent and Non-Executive Directors

Non-Independent and Non-Executive Director


Datuk Haji Radzali Bin Hassan

In the intervals between Board meetings, for exceptional matters requiring urgent Board decisions, the Board
decisions are obtained via circular resolutions to which sufficient information required is attached to facilitate the
Board in making informed decisions.
4.2

Board should ensure members have access to appropriate continuing education programme
All Directors have attended the Mandatory Accreditation Programme (MAP) as required by Bursa Malaysia Securities
Berhad (Bursa Securities) on all directors of listed companies.
The Directors are also encouraged to attend the relevant training courses deemed necessary so as to keep abreast
with the changes on guidelines issued by the relevant authorities as well as the latest developments in the market
place, which can complement their services to the Group. The Directors are also updated by the Company Secretary
on any changes to legal and governance requirements of the Group.
The Directors will continue to undergo other relevant training programmes from time to time to enhance their skills
and knowledge where relevant. The training programmes attended by the individual Directors during the financial
year ended 31 May 2014 are as follows:
Title of the seminars, workshops or courses attended
Y.B. Senator Dato Haji Mohd Suhaimi Bin Abdullah
Enhanced Understanding of Risk Management and Internal Control
Workshop
Emotional Intelligence in Action
Dato Ahmad Hassan Bin Osman
Enhanced Understanding of Risk Management and Internal Control
Workshop
International Seminar on Development and Finance in Jeddah,
Saudi Arabia
Transformational Leadership in Malaysia

Mode of Training

No. of hours /
days spent

Workshop

8 hours

Seminar

16 hours

Workshop

8 hours

Seminar

7 days

Seminar

16 hours

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ANNUAL REPORT 2014

STATEMENT ON CORPORATE GOVERNANCE (CONTD.)


Title of the seminars, workshops or courses attended
Datuk Haji Radzali Bin Hassan
Enhanced Understanding of Risk Management and Internal Control
Workshop
Training Needs Analysis & Design (UKM)
Training Needs Analysis Management
GST Awareness (Accounting for Tax)
Awareness Programme for Industry Excellence
Mr. Wong Thai Sun
Getting Accounting Right for GST in Malaysia
New Public Rulings for 2013 & 2014
Corporate Tax Issues for 2014
Monthly Tax Deduction as Final Tax - Employers & Employees
Responsibilities
Taxation of Real Properties, Income from Letting of Real Properties
and Investment Holding Companies
Ms. Hwang Siew Peng
Enhanced Understanding of Risk Management and Internal Control
Workshop
Malaysia Retailers Association Study Tour
Retail Asia Singapore
Retail Innovation Forum

Mode of Training

No. of hours /
days spent

Workshop

8 hours

Classroom
Classroom
KPDNKK Seminar
MITI Seminar

3 days
3 days
8 hours
8 hours

Seminar
Seminar
Seminar
LHDNMMEF Seminar
Seminar

16 hours
8 hours
8 hours
8 hours

Workshop

8 hours

Study Tour
Seminar &
Conference
Forum

16 hours
3 days

16 hours

8 hours

Messrs. Jen Shek Voon and Wong Thai Sun have completed the Continuing Professional Education requirements for
their respective accounting professional bodies for which they are members of. In addition to the above and during the
financial year 2014, the Directors were updated on the amendments to the Listing Requirements of Bursa Securities.
Save as disclosed above, the other Directors have not attended any trainings during the financial year under review,
due to their respective tight traveling schedules and busy/heavy work commitments. Nevertheless, they are kept
abreast with new statutory or regulatory development and various operational issues facing the changing business
environment within the Group.
Principle 5: Uphold integrity in financial reporting
5.1

Audit Committee should ensure financial statements comply with applicable financial reporting standards
The Board acknowledges their responsibility to ensure that the financial statements of the Company and the Group
are prepared in accordance with the provisions of the Companies Act, 1965 and approved accounting standards in
Malaysia so as to give a true and fair view of the state of affairs and the result of the Company and of the Group.

5.2

Audit Committee should have policies and procedures to assess suitability and independence of External
Auditors
A transparent and appropriate relationship with the External Auditors to enable them to independently report to
shareholders in accordance with statutory and professional requirement is established through the Audit Committee.
The role of the Audit Committee members and their relationship with the External Auditors may be found in the Audit
Committee Report in the Annual Report.
The Audit Committee has obtained a written assurance from the external auditors confirming that they were, and
has been, independent throughout the conduct of the audit engagement in accordance with the terms of all relevant
professional and regulatory requirements.
The Audit Committee is satisfied with the competence and independence of the external auditors and had
recommended the re-appointment of the external auditors to the Directors at the Annual General Meeting.
The Audit Committee also met with the External Auditors twice during the financial year ended 2014 without the
presence of Management and Executive Directors in compliance with the best practices of the Code.

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STATEMENT ON CORPORATE GOVERNANCE (CONTD.)


Principle 6: Recognise and Manage Risks
6.1

Board should establish a sound framework to manage risks


The Audit Committee oversees the risk oversight and risk management of the Company through the adoption of risk
management policy.
The Group is in the process to develop and formalize an appropriate risk management framework and structure and
details of the risk management are set out in the Risk Management and Internal Controls Statement in this Annual
Report.

6.2

Board should establish an internal audit function which reports directly to Audit Committee
It is the responsibility of the Board to maintain sound system of internal controls to safeguard shareholders investment.
The Internal Audit function of the Group has been outsourced to a professional firm who is assisting the Audit
Committee in discharging its duties and responsibilities. The role of the Internal Audit is to provide the Audit Committee
with independent assessment for adequate, efficient and effective internal control system to ensure compliance
with policies and procedures. The Internal Audit function is also involved in risk management, risk evaluation and
recommendation of control activities to manage such identified risk. The attainment of such objectives involves the
following activities being carried out by the Internal Auditors:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)

Reviewing and appraising the soundness, adequacy and application of accounting, financial and other
controls and promoting effective control in the Company and the Group at reasonable cost.
Ascertaining the extent to whom the Groups and the Companys assets are accounted for and safeguarded
from losses of all kinds.
Attending stock counts of merchandise.
Appraising the reliability and usefulness of information developed within the Group and the Company for
management reporting purposes.
Carrying out audit work and to liaise with the external auditors to maximise the use of resources and for
effective coverage of audit risks.
Recommending improvement to the existing systems of controls.
Carrying out investigations and special reviews requested by management and/or the Audit Committee of
the Company.
Continuously identifying opportunity for improvement in the operations of business processes of the
Company and the Group.
Discuss with management action taken to improve the system of internal control.

The Internal Auditors attended the meetings and reported directly to the Audit Committee on the internal audit reports
during the financial year. The Internal Auditors tabled their audit findings on inventory management and procurement
and risk assessment 2014 to the Audit Committee.
The total costs of the internal audit function in respect of the financial year ended 31 May 2014 was RM23,800 only.
Principle 7: Ensure timely and high quality disclosure
7.1

Ensure company has appropriate corporate disclosure policies and procedures


The Board recognises the importance of disclosing of all material information in an accurate, clear and complete
manner in accordance to the disclosure requirements as set out in the Listing.
The Board has delegated the authority to the Executive Directors to approve all announcements for release to
Bursa Securities. The Group Managing Director and/or Executive Directors work closely with the Board, the Senior
Management and the Company Secretary who are privy to the information to maintain strict confidentiality of the
information.

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STATEMENT ON CORPORATE GOVERNANCE (CONTD.)


Principle 7: Ensure timely and high quality disclosure (contd.)
7.2

Encourage company to leverage on information technology for effective dissemination of information


The Company continues to recognise the importance of transparency and accountability to its shareholders and
investors. The Board always ensures that the shareholders are informed of the financial performance and major
corporate activities of the Company. Such information is communicated to shareholders and investors through
various disclosures and announcements to Bursa Securities, including the quarterly financial results, annual reports
and where appropriate, circulars and press releases.
Apart from the mandatory announcements through the Bursa Securities, the Company also maintains a website
www.suiwah.com.my to which shareholders and investors can have access to information on the operations and
business activities of the Group.
Investor relations activities such as meetings with fund managers and analysts and interviews by the press are held
at appropriate time to explain the Groups strategy, performance and major developments.

Principle 8: Strengthen relationship between Company and shareholders


8.1

Take reasonable steps to encourage shareholder participation at general meetings


The AGM is the principal form for communicating with shareholders. Shareholders who are unable to attend are
allowed to appoint proxy, who need not be the shareholders, to attend and vote on their behalf. Board members are
present to answer questions raised by shareholders. Shareholders are given the opportunity to ask questions during
the questions and answers session prior to each resolution being proposed to consideration by shareholders.
The Company provides information to the shareholders with regard to, amongst others, details of the Annual General
Meeting, their entitlement to attend the Annual General Meeting, the right to appoint a proxy and also the qualifications
of a proxy.

8.2

Board should encourage poll voting


The Chairman of the meeting would remind the shareholders, proxies and corporate representatives on their rights to
demand for a poll in accordance with the provisions of the Articles of Association of the Company for any resolutions.
The voting process at the annual general meeting shall be by way of show of hands unless a poll is demanded. The
Chairman may demand for a poll for any substantive resolutions put forward for voting at the shareholders meetings,
if so required. The Companys share registrars system is well equipped for any poll voting should the circumstances
arise.

8.3

Board should promote effective communication and proactive engagements with shareholders
In maintaining the commitment to effective communication with shareholders, the Group adopts the practice
of comprehensive, timely and continuing disclosures of information to its shareholders as well as to the general
investing public. The practice of disclosure of information is not just established to comply with the requirements of
the Listing Requirements. It also adopts the recommendations of the Code with regard to strengthening engagement
and communication with shareholders. Where possible and applicable, the Group also provides additional disclosure
of information on a voluntary basis. The Group believes that consistently maintaining a high level of disclosure and
extensive communication with its shareholders is vital to shareholders and investors to make informed investment
decisions.
The Annual Report is the main channel of communication between the Company and its stakeholders. The Annual
Report communicates comprehensive information of the financial results and activities undertaken by the Group.
As a listed issuer, the contents and disclosure requirements of the annual report are also governed by the Listing
Requirements.
Another key avenue of communication with its shareholders is the Companys AGM, which provides a useful forum
for shareholders to engage directly with the Companys Directors. At each AGM, the Directors of the Company would
be present at the meetings to answer any questions that the shareholders may ask. The Chairman of the meeting
provided time for the shareholders to ask questions for each agenda in the notice of the AGM. The External Auditors
were also present at the AGM to answer any questions that the shareholders may ask. The shareholders were also
able to meet with the Directors after the meeting while they mingled with the shareholders, proxies and corporate
representatives.

Compliance Statement
The Board is satisfied that in financial year 2014, save for the above relevant explanations, the Company is in compliance with
principles and recommendations of the Code.
This statement is made in accordance with the resolution of the Board dated 22 September 2014.

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ANNUAL REPORT 2014

STATEMENT OF RISK MANAGEMENT AND INTERNAL CONTROL


The Board remains committed to maintaining a sound system
of risk management and internal controls to safeguard
shareholders investments and the Groups assets. This
Statement on Risk Management and Internal Control (the
Statement) is made pursuant to Paragraph 15.26(b) of
the Bursa Securities Listing Requirements, with reference
to the Statement of Guidance for Directors of Public Listed
Companies issued by the Institute of Internal Auditors
Malaysia and adopted by Bursa Malaysia.
BOARD RESPONSIBILITY
The Board of Directors recognises the importance of
sound internal controls and risk management practices to
good corporate governance. The Board affirms its overall
responsibility for the Groups systems of internal controls
and risk management, and for reviewing the adequacy and
integrity of those systems. It should be noted, however,
that such systems are designed to manage rather than
eliminate the risk of failure to achieve business objectives.
In addition, it should be noted that any system could provide
only reasonable and not absolute assurance, against material
misstatement or loss.
The Boards objective is to ensure that the Group has
an appropriate system in place for the identification and
management of risks, including the deployment of internal
controls to address the risks so identified and concluded
that the risk management and internal control system of the
Group is adequate and effective.
RISK MANAGEMENT
Risk assessment is the identification and analysis of relevant
risks to achievement of the Groups objectives, forming
a basis for determining how the risks should be managed.
Mechanisms are needed to identify and deal with risks
associated with changes of economic, industry, regulatory
and operating conditions.
Management carries out risk identification exercise
periodically for its major subsidiaries. The risk assessment is
reviewed by the Executive Directors.
INTERNAL AUDIT FUNCTION
The Board recognises that effective monitoring on a
continuous basis is a vital component of a sound internal
control system.
The Groups Internal Audit Function, outsourced to an
Independent professional accounting and consulting firm
until May 2014, reports directly to the Audit Committee. The
Internal Audit Function carries out the reviews with impartiality,
proficiency and due professional care.
The Internal Audit adopts a risk-based approach in developing
its audit plan which addresses the core auditable areas of
the Group based in their risk profile. The highlighted areas
will be followed up closely to determine the extent of their
recommendations that have been implemented by the
Management.
INTERNAL CONTROL
The other key elements of the Groups internal control
systems are described below:

Clearly defined delegation of responsibilities to


committees of the Board and to management of Head
Office and operating units, are set out in the Company
organization structure

Authority and responsibility of each operating unit or


department are clearly defined under respective job
description. Each department is functioned and report
independently to Chief Executive Officer

Grievance Procedures is incorporated in The Employees


Handbook to raise employees concerns regarding
malpractices and irregularities affecting the Group

Code of ethics are established and adhered to by all


employees to ensure high standards of conduct and
ethical values in all business practices

The Board reviews all areas of significant financial


risk and approves all significant capital projects and
investments after careful corporate review

Annual budgets are reviewed and approved by the Chief


Executive Officer. The Group senior management meets
on a monthly basis with operating company management
to review their business and financial performance
against the business plans and approved budgets.
Significant business risks and variances relevant to each
operating company are reviewed in these meetings

Regular visits to operating units by senior management

In house training and development programmes


conducted by outsourced training house, corresponding
to the needs of all level of employees

Relevant executive directors and senior management


have been delegated with specific accountability for
monitoring the performance of designated business
operating units

The system of internal control was satisfactory and has


not resulted in any material losses, contingencies or
uncertainties that would require disclosure in the Groups
Annual Report

REVIEW OF ADEQUACY AND EFFECTIVENESS


The Board has reviewed the adequacy and effectiveness of
the Groups risk management activities and internal control
framework and ensured that necessary actions have been or
are being taken to rectify weaknesses identified during the
year.
The Group Managing Director confirmed to the Board that the
Groups System is operating adequately and effectively in all
material aspects during the financial year and up to the date
of this Statement.
In this connection, the Board concludes that an effective
system of risk management and internal control is in place
to safeguard the shareholders investment and the Groups
assets.
REVIEW OF THE STATEMENT BY EXTERNAL AUDITOR
Pursuant to Paragraph 15.23 of the Bursa Malaysia Securities
Berhad Main Market Listing Requirements, the external
auditors have reviewed this Statement for inclusion in the
Groups Annual Report for the financial year ended 31 May
2014 and reported to the Board that nothing has come to
their attention that caused them to believe that the Statement
is inconsistent with their understanding of the processes
adopted by the Board in reviewing the adequacy and integrity
of the risk management and internal control system.
The statement is issued in accordance with a resolution of the
Directors dated 17 October 2014.

29

ANNUAL REPORT 2014

AUDIT COMMITTEE REPORT


Members
Y.B. Senator Dato Haji Mohd Suhaimi Bin Abdullah
Dato Ahmad Hassan Bin Osman
Mr. Wong Thai Sun
Mr. Jen Shek Voon

- Chairman (Independent Non-Executive Director)


- Member (Independent Non-Executive Director)
- Member (Independent Non-Executive Director)
- Member (Independent Non-Executive Director)

Summary of Terms of Reference


Constitution
(i)

The Audit Committee was established by the Board of Directors (the Board) of the Company on 21 June 1995.

(ii)

The Board shall ensure that the composition and functions of the Audit Committee comply as far as possible with the
Bursa Malaysia Securities Berhads (Bursa Securities) Main Market Listing Requirements (Listing Requirements)
as well as other regulatory requirements.

Objectives
The principal objectives of the Audit Committee are to assist the Board in discharging its statutory duties and responsibilities
relating to accounting and financial reporting practices of the Company and its subsidiaries. In addition, the Audit Committee
shall:
(i)

evaluate the quality of the audits performed by the Internal and External Auditors;

(ii)

provide assurance that the financial information presented by Management is relevant, reliable and timely;

(iii)

oversee compliance with laws and regulations and observance of a proper code of conduct; and

(iv)

determine the quality, adequacy and effectiveness of the Groups control environments and quality of the audits.

Membership
The Audit Committee shall be appointed by the Board from amongst its Directors which fulfill the following requirements:
(i)

The Audit Committee must be composed of no fewer than three (3) members;

(ii)

All the Audit Committee members must be Non-Executive Directors, with a majority of members must be independent.
No alternate Director is to be appointed as a member of the Audit Committee.

(iii)

At least one (1) member of the Audit Committee:


(a)
must be a member of the Malaysian Institute of Accountants (MIA); or
(b)
if he is not a member of the MIA, he must have at least three (3) years working experience; and
i. he must have passed the examinations specified in Part I of the 1st Schedule of the Accountants Act,
1967; or
ii. he must be a member of one of the associations of accountants specified in Part II of the 1st Schedule
of the Accountants Act, 1967; or
(c)
fulfills such other requirements as prescribed or approved by Bursa Securities.
The definition of Independent Directors shall have the meaning given in Chapter 1.01 of the Listing Requirements.

The Chairman of the Audit Committee shall be appointed among the members of the Audit Committee who shall be an
Independent Director. In the absence of the Audit Committee Chairman and/or an appointed deputy, the remaining Audit
Committee members present shall elect one of themselves to chair the Audit Committee meeting.
Mr. Wong Thai Sun is a member of the MIA and the Certified Public Accountants, Australia. Mr. Jen Shek Voon is a practicing
member of the Institute of Certified Public Accountants, Singapore and a member of Information System Audit and Control
Association, British Computer Society, a member of Institute of Internal Auditors and MIA.

30

ANNUAL REPORT 2014

AUDIT COMMITTEE REPORT (CONTD.)


Meetings
(i)

The Audit Committee shall meet at least four (4) times a year, with due notice of issues to be discussed, and shall
record its conclusions in discharging its duties and responsibilities and at such times as and when necessary.

(ii)

A quorum for the Audit Committee meeting shall consist of a majority of Independent Non-Executive Directors and
shall not be less than two (2). For the purpose of this provision, any Audit Committee members who is able (directly
or by telephone communication) to speak and shall be entitled to vote or be counted in quorum accordingly.

(iii)

Upon the request of the External Auditors, the Chairman of the Audit Committee shall convene a meeting of the Audit
Committee to consider any matter the External Auditors believe should be brought to the attention of the Directors or
Shareholders.

(iv)

Notice of Audit Committee meetings shall be given to all the Audit Committee members unless the Audit Committee
waives such requirement.

(v)

The Finance Manager, the Head of Internal Audit and representatives of the External Auditors shall normally attend
meetings. Other Board members and employees may attend meetings upon the invitation of the Audit Committee.
However, the Audit Committee shall meet with the External Auditors, the Internal Auditors or both, without other Board
members and Management present whenever deemed necessary.

(vi)

Questions arising at any meeting of the Audit Committee shall be decided by a majority of votes of the members
present, and in the case of equality of votes, the Chairman of the Audit Committee shall have a second or casting
vote.

(vii)

The Company Secretary shall be the Secretary of the Audit Committee.

During the financial year ended 31 May 2014, five (5) Audit Committee meetings were held. Details of attendance of each Audit
Committee member were as follows:No. of the Audit Committee
Meetings Attended

% of Attendance

Y.B. Senator Dato Haji Mohd Suhaimi Bin Abdullah

100

Dato Ahmad Hassan Bin Osman

100

Mr. Wong Thai Sun

100

Mr. Jen Shek Voon

100

Name of Directors

Authority
The Audit Committee shall, in accordance with a procedure to be determined by the Board and at the expense of the Company,
(i)

have explicit authority to investigate any matter within its terms of reference, the resources to do so, and full access
to information. All employees shall be directed to co-operate as requested by members of the Audit Committee.

(ii)

have full and unlimited/unrestricted access to all information and documents/resources which are required to perform
its duties as well as to the Internal and External Auditors and Senior Management of the Company and Group.

(iii)

obtain independent professional or other advice and to invite outsiders with relevant experience to attend, if necessary.

(iv)

have direct communication channels with the External Auditors and person(s) carrying out the internal audit function
or activity.

Where the Audit Committee is of the view that the matter reported by it to the Board has not been satisfactorily resolved
resulting in a breach of the Listing Requirements, the Audit Committee shall promptly report such matter to Bursa Securities.

31

ANNUAL REPORT 2014

AUDIT COMMITTEE REPORT (CONTD.)


Duties and Responsibilities
The duties and responsibilities of the Audit Committee are as follows:(i)

to nominate a person or persons as Auditor;

(ii)

to discuss with the External Auditors before the audit commences the nature and scope of the audit, ensure coordination where more than one (1) audit firm is involved;

(iii)

to review with the External Auditors their evaluation of the system of internal controls and their audit report;

(iv)

to review the Companys quarterly/financial report and annual financial statements before submission to the Board,
focusing particularly on:
(a)
the consistency of and any changes to the accounting policies and practices;
(b)
major judgemental areas;
(c)
significant adjustments resulting from the audit;
(d)
the going concern assumption; and
(e)
compliance with accounting standards and other legal and regulatory bodies requirements.

(v)

to review any related party transactions and conflict of interest situation that may arise within the Company or the
Group, including any transaction, procedure or course of conduct that raises questions of management integrity;

(vi)

to discuss problems and reservations arising from the interim and final Audits, and any matter the auditor may wish
to discuss (in the absence of Management, where necessary);

(vii)

to review the External Auditors management letter and Managements response;

(viii)

to do the following, in relation to the internal audit function:


(a)
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;
(b)
review the internal audit programme and results of the internal audit process and, where necessary, ensure
that appropriate actions are taken on the recommendations of the internal audit function;
(c)
review any appraisal or assessment of the performance of members of the internal audit function;
(d)
approve any appointment or termination of senior staff members of the internal audit function; and
(e)
take cognizance of resignations of internal audit staff members and provide the resigning staff member an
opportunity to submit his reasons for resigning.

(ix)

to verify the allocation of options pursuant to the Employees Share Option Scheme (ESOS) in compliance with the
criteria as stipulated in the by-law of ESOS of the Company, if any;

(x)

to review the cost effectiveness, independence and objectivity of the External Auditors and recommend for the
appointment/re-appointment of the External Auditors, the audit fee and any questions of resignation or dismissal
of the External Auditors to the Board, to be put to Shareholders for approval at the general meeting in relation to
appointment, re-appointment and dismissal of the Companys External Auditors;

(xi)

to establish policies governing the circumstances under which the contract in relation to the provision of non-audit
services can be entered into by the Group with its External Auditors and procedures that need to be adhered;

(xii)

to review the adequacy and effectiveness of risk management and internal control systems instituted within the
Group;

(xiii)

to report its findings on the financial and management performance, and other material matters to the Board;

(xiv)

to consider the major findings of internal investigations and Managements response; and

(xv)

to consider other functions as may be agreed to by the Audit Committee and the Board of Directors.

32

ANNUAL REPORT 2014

AUDIT COMMITTEE REPORT (CONTD.)


Reporting Procedures
Minutes of each meeting shall be distributed to each member of the Audit Committee. The Audit Committee Chairman shall
report on each meeting to the Board.
The minutes of the Audit Committee meeting shall be signed by the Chairman of the meeting at which the proceedings were
held or by the Chairman of the next succeeding meeting.
Summary of Activities
During the financial year ended 31 May 2014, the Audit Committee carried out its duties and responsibilities in accordance
with its terms of reference.
The main activities undertaken by the Audit Committee were as follows:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)

Review of the quarterly unaudited consolidated financial statements before recommending them for the Boards
approval;
Review of the annual consolidated financial statements of the Group and to discuss issues with the External Auditors
before submission to the Board for approval;
Review the accounting issues arising from the updates of the new developments on accounting standards issued by
Malaysian Accounting Standard Board;
Review of the related party transactions of the Company and its subsidiaries;
Review the internal audit reports, which highlighted the audit issues, recommendation and managements response;
Review of the External Auditors management letter and Managements response; and
Review the External Auditors scope of work and plans for the year.

Internal Audit Function


The Internal Audit function of the Group is assumed by the Internal Auditor appointed externally to assist the Audit Committee in
discharging its duties and responsibilities. The role of the Internal Auditors is to provide the Audit Committee with independent
assessment for adequate, efficient and effective Internal Control System to ensure compliance with policies and procedures.
The Internal Audit function is also involved in risk management, risk evaluation and recommendation of control activities to
manage such identified risk. The attainment of such objectives involves the following activities being carried out by Internal
Audit function:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)

Reviewing and appraising the soundness, adequacy and application of accounting, financial and other controls and
promoting effective control in the Company and the Group at reasonable cost.
Ascertaining the extent to whom the Groups and the Companys assets are accounted for and safeguarded from
losses of all kinds.
Attending stock counts of merchandise.
Appraising the reliability and usefulness of information developed within the Group and the Company for management
reporting purposes.
Carrying out audit work and to liaise with the External Auditors to maximise the use of resources and for effective
coverage of audit risks.
Recommending improvement to the existing systems of controls.
Carrying out investigations and special reviews requested by the Management and/or the Audit Committee of the
Company.
Continuously identifying opportunity for improvement in the operations of business processes of the Company and
the Group.
Discuss with management action taken to improve the system of internal control.

This statement is made in accordance with the resolution of the Board dated 22 September 2014.

33

ANNUAL REPORT 2014

STATEMENT OF DIRECTORS RESPONSIBILITY

IN RELATION TO THE FINANCIAL STATEMENTS

The Board is required to prepare audited financial statements which give a true and fair view of the state of affairs of the Group
and the Company at the end of each financial year and of their results and their cash flows for that year then ended.
In preparing the financial statements for the year ended 31 May 2014, the Board considers that:
(i)

all applicable approved accounting standards in Malaysia have been followed;

(ii)

the Group and the Company have used appropriate accounting policies and have consistently applied them;

(iii)

reasonable and prudent judgments and estimates were made; and

(iv)

the financial statements were prepared on the going concern basis as the Board has a reasonable expectation, having
made enquiries, that the Group and the Company have adequate resources to continue in operational existence for
the foreseeable future.

The Board is responsible for ensuring that the Group and the Company maintain accounting records 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 Board has general responsibilities for taking such steps that are reasonably available 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 the resolution of the Board dated 22 September 2014.

34

ANNUAL REPORT 2014

OTHER INFORMATION

REQUIRED BY THE MAIN MARKET LISTING REQUIREMENTS OF BURSA MALAYSIA SECURITIES BERHAD

Utilisation of Proceeds
No proceeds were raised by the Company from any corporate exercise during the financial year and no new shares being
issued by the Company during the financial year based on the general mandate granted by the shareholders pursuant to
Section 132D of the Companies Act, 1965 at the last Annual General Meeting of the Company.
Share Buy-back
During the financial year ended 31 May 2014, the details of its ordinary shares of RM1.00 each (SCB Shares) bought back
by the Company are as follows:
Buy Back Price Per
SCB Share
(RM)

No. of SCB Shares


Bought Back
& retained as
Treasury Shares

Lowest

Highest

Average Cost Per


SCB Share*
(RM)

August 2013

1.81

1.81

1.81

12,000

21,720.00

January 2014

1.93

1.93

1.93

3,000

5,790.00

15,000

27,510.00

Monthly Breakdown

Total:

Total Cost*
(RM)

Note: * exclude transaction charges.


A total of 15,000 SCB shares purchased by the Company were retained as treasury shares and no shares were resold or
cancelled during the financial year. As at 31 May 2014, a total of 3,681,100 SCB Shares were held as treasury shares in
accordance with Section 67A of the Companies Act, 1965.
Options, Warrants or Convertible Securities
There was no issue or exercise of options, warrants or convertible securities during the financial year.
Depository Receipt Programme
The Company did not sponsor any Depository Receipt programme during the financial year.
Sanctions and Penalties
There were no sanctions or penalties imposed on the Company and its subsidiaries, Directors or Management by the relevant
regulatory bodies during the financial year.
Non-Audit Fees
The amount of non-audit fees paid to the External Auditors by the Group and by the Company for the financial year 2014
amounted to RM27,000.00 and RM25,000.00 respectively.
Variation in Results
There were no material variations between the audited results and the unaudited results for the year ended 31 May 2014 of
the Group as previously announced.
Profit Guarantee
The Company did not provide any profit guarantee to any parties during the financial year.
Material Contracts
Other than those related party transactions disclosed in Note 39 to the audited financial statements, there were no material
contracts outside the ordinary course of business, including contract relating to loan entered into by the Company and its
subsidiaries involving Directors and major shareholders interests that are still subsisting at the end of financial year or which
were entered into since the end of the previous financial year.

35

ANNUAL REPORT 2014

OTHER INFORMATION

REQUIRED BY THE MAIN MARKET LISTING REQUIREMENTS OF BURSA MALAYSIA SECURITIES BERHAD (CONTD.)

Recurrent Related Party Transactions of a Revenue or a Trading Nature


The summary of the Recurrent Related Party Transactions which have been entered by the Group based on the mandate as
obtained at the Twentieth Annual General Meeting held on 28 November 2013 are as follows:No.

Nature of Transaction

Interested Related Parties

Transaction Value (RM)

Rental of premises which is located at Sunshine


Square (Level 2, 3 & 4), 1, Jalan Mahsuri measuring
approximately 9,635 square metres by Suiwah
Holdings Sdn Bhd (SHSB) to Sunshine Wholesale
Mart Sdn Bhd (SWMSB) for a monthly rental and
service charges of RM161,943

SHSB
Suiwah Supermarket
Sendirian Berhad (SSSB)
Dato Hwang Thean Long
Datin Cheah Gaik Huang
Ms. Hwang Siew Peng

Purchase of direct materials such as polyester and


pressure sensitive adhesive by Qdos Flexcircuits
Sdn Bhd (QFSB) from Zephyr (Penang) Sdn Bhd
(ZSB)

Mr. Looi Tik Miow

RM269,810

Purchase of label sticker by SWMSB from ZSB

Mr. Looi Tik Miow

Rental of premises which is located at 608


M&N, Jalan Paya Terubong, Ayer Itam, Penang
measuring approximately 4,500 square feet by Dato
Hwang Thean Long to Sunshine Supermarket &
Departmental Store Sdn Bhd (SSDS) for a monthly
rental of RM4,000

SHSB
SSSB
Dato Hwang Thean Long
Datin Cheah Gaik Huang
Ms. Hwang Siew Peng

RM48,000

Rental of premises which is located at 88 Lintang


Mayang Pasir 1, Mk 12, 11950 Bayan Baru, Penang
measuring approximately 139.79 square metres by
Meridian Chance Sdn Bhd (MCSB) to SWMSB for a
monthly rental of RM2,000

SHSB
SSSB
Dato Hwang Thean Long
Datin Cheah Gaik Huang
Ms. Hwang Siew Peng

RM24,000

Provide laundry services for cleaning clean room


clothing to QFSB by Mylaco Sdn Bhd (MSB)

Mr. Leong Kong Meng


Ms. Hwang Siew Peng

RM336

Sales of merchandise from SWMSB to MSB

Mr. Leong Kong Meng


Ms. Hwang Siew Peng

Sales of merchandise from Crimson Omega Sdn


Bhd to MSB

Mr. Leong Kong Meng


Ms. Hwang Siew Peng

Purchase of Dycem Cleanzone for floor coverings


and mat solutions by QFSB from Sinar Bekal (M)
Sdn Bhd (SBSB)

Hozone Sdn Bhd (HSB)


Datuk Haji Radzali Bin
Hassan

10

Provide Surface Mounted Technology and other


subcontract services related to flexible printed
circuits boards to QFSB by Nanometric Electronics
Sdn Bhd (NESB)

SHSB
SSSB
Dato Hwang Thean Long
Datin Cheah Gaik Huang
Ms. Hwang Siew Peng
Mr. Leong Kong Meng

RM949,576

11

Sales of merchandise from SWMSB to NESB

SHSB
SSSB
Dato Hwang Thean Long
Datin Cheah Gaik Huang
Ms. Hwang Siew Peng
Mr. Leong Kong Meng

RM2,032

12

Rental of 80 car park bays located at Level 3


Sunshine Square Complex, Lintang Mayang Pasir
1, Mk 12, 11950 Bayan Baru, Penang by SHSB to
SWMSB for a monthly rental of RM4,000.

SHSB
SSSB
Dato Hwang Thean Long
Datin Cheah Gaik Huang
Ms. Hwang Siew Peng

RM26,765

13

Rental of hostel which is located at No 136-K, MK


13, Lorong Rambutan, 11500 Air Itam, Penang
measuring approximately 1,949 square feet paid
by QFSB to Dato Hwang Thean Long for a monthly
rental of RM1,800

SHSB
SSSB
Dato Hwang Thean Long
Datin Cheah Gaik Huang
Ms. Hwang Siew Peng

RM10,800

RM1,943,316

36

ANNUAL REPORT 2014

DIRECTORS REPORT
The directors have pleasure in presenting their report together with the audited financial statements of the Group and of the
Company for the financial year ended 31 May 2014.
Principal activities
The principal activities of the Company are investment holding, provision of management services and letting of property.
The principal activities of the subsidiaries, joint venture and associate are described in Notes 17, 18 and 19 to the financial
statements.
There have been no significant changes in the nature of the principal activities during the financial year.
Results

Profit for the year


Attributable to:
Equity holders of the Company
Non-controlling interests

Group
RM

Company
RM

17,900,713

12,101,610

17,763,907
136,806
17,900,713

12,101,610
12,101,610

There were no material transfers to or from reserves or provisions during the financial year other than as disclosed in the
financial statements.
In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year were
not substantially affected by any item, transaction or event of a material and unusual nature other than as disclosed in the
financial statements.
Dividend
The amount of dividend paid by the Company since 31 May 2013 was as follows:
RM

In respect of the financial year ended 31 May 2013 as reported in the


directors' report of that year:
First and final dividend of 8% less 25% taxation, approved on
28 November 2013 and paid on 18 December 2013

3,439,329

At the forthcoming Annual General Meeting, a first and final single tier dividend of 6% in respect of the current financial year
ended 31 May 2014, on 57,314,448 ordinary shares (the number of outstanding ordinary shares in issue of the Company as
at 31 May 2014 after the set off with 3,685,800 ordinary shares bought back by the Company and held as treasury shares
subsequent to year end) amounting to RM3,438,867 (6 sen net per share) will be proposed for shareholders' approval. The
financial statements for the current financial year do not reflect this proposed dividend. Such dividends when approved by the
shareholders will be accounted for in equity as an appropriation of retained earnings in the financial year ending 31 May 2015.
Directors
The names of the directors of the Company in office since the date of the last report and at the date of this report are:
Dato' Hwang Thean Long
Y.B. Senator Dato' Haji Mohd Suhaimi bin Abdullah *
Dato' Ahmad Hassan bin Osman *
Datin Cheah Gaik Huang
Hwang Siew Peng
Wong Thai Sun *
Jen Shek Voon ^
Datuk Haji Radzali bin Hassan
*
^

Being members of Audit, Remuneration and Nomination Committees


Being member of Audit Committee

37

ANNUAL REPORT 2014

DIRECTORS REPORT (CONTD.)


Directors' benefits
Neither at the end of the financial year, nor at any time during that year, did there subsist any arrangement to which the
Company was a party, whereby the directors might acquire benefits by means of acquisition of shares in or debentures of the
Company or any other body corporate.
Since the end of the previous financial year, no director has received or become entitled to receive a benefit (other than
benefits included in the aggregate amount of emoluments received or due and receivable by the directors or the fixed salaries
of directors who are full-time employees of the Company or its subsidiaries as shown in Note 7 to the financial statements)
by reason of a contract made by the Company or a related corporation with any director or with a firm of which the director is
a member, or with a company in which the director has a substantial financial interest, except as disclosed in Note 39 to the
financial statements.
Directors' interests
According to the register of directors' shareholdings, the interests of directors in office at the end of the financial year in shares
and options over shares in the Company during the financial year were as follows:

The Company
Direct interest
Dato' Hwang Thean Long
Dato' Haji Mohd Suhaimi bin Abdullah
Datin Cheah Gaik Huang
Indirect interest
Dato' Hwang Thean Long *
Hwang Siew Peng **
Datuk Haji Radzali bin Hassan ***

Number of ordinary shares of RM1 each


1 June
2013
Acquired
Sold

31 May
2014

4,445,381
417,125
26,400

4,445,381
417,125
26,400

10,959,105
15,430,886
12,117,948

10,959,105
15,430,886
12,117,948

26,400
15,404,486

26,400
15,404,486

Indirect interest
Interest of Spouse/Children of the Directors ^
Dato Hwang Thean Long
Datin Cheah Gaik Huang
*

By virtue of his interests in shares of Suiwah Holdings Sdn. Bhd. and Suiwah Supermarket Sendirian Berhad, both
companies incorporated in Malaysia, Dato' Hwang Thean Long is deemed to have an interest in the shares of the
Company and all its subsidiaries to the extent both these companies have interests.

**

By virtue of the interests of her parents, Dato' Hwang Thean Long and Datin Cheah Gaik Huang, Hwang Siew Peng
is deemed to have an interest in the shares of the Company and all its subsidiaries to the extent her parents have
interests.

***

By virtue of his interest in shares of Hozone Sdn. Bhd. ("Hozone"), a company incorporated in Malaysia, Datuk Haji
Radzali bin Hassan is deemed to have an interest in the shares of the Company, and all its subsidiaries to the extent
Hozone has an interest.

Disclosure pursuant to Section 134 (12) (c) of the Companies Act 1965

None of the other directors in office at the end of the financial year had any interest in shares in the Company or its related
corporations and share options of the Company during the financial year.

38

ANNUAL REPORT 2014

DIRECTORS REPORT (CONTD.)


Treasury shares
During the financial year, the Company bought back 15,000 of its issued ordinary shares from the open market at an average
price of RM1.84 per share. The total consideration paid for the share buy back including transaction costs was RM27,663. The
shares bought back are being held as treasury shares in accordance with Section 67A of the Companies Act 1965.
As at 31 May 2014, the Company held as treasury shares a total of 3,681,100 of its 61,000,248 issued ordinary shares. Such
treasury shares are held at a carrying amount of RM5,374,381 including transaction costs and further relevant details are
disclosed in Note 29(a) to the financial statements.
Subsequent to year end, the Company bought back 4,700 of its issued ordinary shares from the open market at an average
price of RM2.90 per share. The total consideration paid for the share buy back was RM13,705, consisting of consideration
paid amounting to RM13,630 and transaction costs of RM75. The share buy back transactions were financed by internally
generated funds.
Other statutory information
(a)

(b)

Before the statements of comprehensive income and statements of financial position of the Group and of the Company
were made out, the directors took reasonable steps:
(i)

to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of
provision for doubtful debts and satisfied themselves that all known bad debts had been written off and that
no provision for doubtful debts was necessary in the financial statements of the Group. The directors were
also satisfied that there were no known bad debts and that adequate provision for doubtful debts has been
made in the financial statements of the Company; and

(ii)

to ensure that any current assets which were unlikely to realise their values as shown in the accounting
records in the ordinary course of business had been written down to an amount which they might be expected
so to realise.

At the date of this report, the directors are not aware of any circumstances which would render:
(i)

the amount written off for bad debts inadequate to any substantial extent or it necessary to make any provision
for doubtful debts in the financial statements of the Group nor they are aware of any circumstances which
would render it necessary to write off any bad debts or the amount of the provision for doubtful debts in the
financial statements of the Company inadequate to any substantial extent; and

(ii)

the values attributed to the current assets in the financial statements of the Group and of the Company
misleading.

(c)

At the date of this report, the directors are not aware of any circumstances which have arisen which would render
adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or
inappropriate.

(d)

At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report
or financial statements of the Group and of the Company which would render any amount stated in the financial
statements misleading.

(e)

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

(f)

(i)

any charge on the assets of the Group and of the Company which have arisen since the end of the financial
year which secures the liabilities of any other person; or

(ii)

any contingent liability of the Group and of the Company which have arisen since the end of the financial year.

In the opinion of the directors:


(i)

no contingent or other liability has become enforceable or is likely to become enforceable within the period
of twelve months after the end of the financial year which will or may affect the ability of the Group or of the
Company to meet their obligations when they fall due; and

(ii)

no item, transaction or event of a material and unusual nature has arisen in the interval between the end of
the financial year and the date of this report which is likely to affect substantially the results of the operations
of the Group or of the Company for the financial year in which this report is made.

39

ANNUAL REPORT 2014

DIRECTORS REPORT (CONTD.)


Subsequent events
Details of the subsequent events are disclosed in Note 44 to the financial statements.
Auditors
The auditors, Ernst & Young, have expressed their willingness to continue in office.
Signed on behalf of the Board in accordance with a resolution of the directors dated 26 September 2014.

Dato' Hwang Thean Long

Wong Thai Sun

40

ANNUAL REPORT 2014

STATEMENT BY DIRECTORS

PURSUANT TO SECTION 169(15) OF THE COMPANIES ACT, 1965

We, Dato' Hwang Thean Long and Wong Thai Sun, being two of the directors of Suiwah Corporation Bhd., do hereby
state that, in the opinion of the directors, the accompanying financial statements set out on pages 43 to 107 are drawn
up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the
requirements of the Companies Act 1965 in Malaysia so as to give a true and fair view of the financial position of the
Group and of the Company as at 31 May 2014 and of their financial performance and cash flows for the year then ended.
The information set out in Note 46 to the financial statements on page 108 have been prepared in accordance with the
Guidance on Special Matter No.1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure
Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants.
Signed on behalf of the Board in accordance with a resolution of the directors dated 26 September 2014.

Dato' Hwang Thean Long

Wong Thai Sun

STATUTORY DECLARATION

PURSUANT TO SECTION 169(16) OF THE COMPANIES ACT, 1965

I, Dato' Hwang Thean Long, being the director primarily responsible for the financial management of Suiwah Corporation Bhd.,
do solemnly and sincerely declare that the accompanying financial statements set out on pages 43 to 108 are in my opinion
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
abovenamed Dato' Hwang Thean Long
at Georgetown in the state of Penang
on 26 September 2014

Before me,
MOK CHENG YOON
PJK
NO. P140
Commissioner for Oaths

Dato' Hwang Thean Long

41

ANNUAL REPORT 2014

INDEPENDENT AUDITORS REPORT

TO THE MEMBERS OF SUIWAH CORPORATION BHD. (Incorporated in Malaysia)

Report on the financial statements


We have audited the financial statements of Suiwah Corporation Bhd., which comprise the statements of financial position as
at 31 May 2014 of the Group and of the Company, and the statements of comprehensive income, statements of changes in
equity and statements of cash flows of the Group and of the Company for the year then ended, and a summary of significant
accounting policies and other explanatory information, as set out on pages 43 to 107.
Directors responsibility for the financial statements
The directors of the Company are responsible for the preparation of financial statements so as to give a true and fair view in
accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements
of the Companies Act 1965 in Malaysia. The directors are also responsible for such internal control as the directors determine
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 judgment, including the assessment of risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the
entitys 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 entitys internal control.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting
estimates made by the directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company
as at 31 May 2014 and of their financial performance and cash flows for the year then ended in accordance with Malaysian
Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 1965
in Malaysia.
Report on Other Legal And Regulatory Requirements
In accordance with the requirements of the Companies Act 1965 in Malaysia, we also report the following:
(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its
subsidiaries 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 all the subsidiaries of which we have not acted
as auditors, which are indicated in Note17 to the financial statements, being financial statements that have been included
in the consolidated financial statements.
(c)

We are satisfied that the financial statements of the subsidiaries that have been consolidated with the financial statements
of the Company are in form and content appropriate and proper for the purposes of the preparation of the consolidated
financial statements and we have received satisfactory information and explanations required by us for those purposes.

(d) The auditors reports on the financial statements of the subsidiaries were not subject to any qualification and did not
include any comment required to be made under Section 174(3) of the Act.
Other Reporting Responsibilities
The supplementary information set out in Note 46 on page 108 is disclosed to meet the requirement of Bursa Malaysia
Securities Berhad. 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.

42

ANNUAL REPORT 2014

INDEPENDENT AUDITORS REPORT

TO THE MEMBERS OF SUIWAH CORPORATION BHD. (Incorporated in Malaysia) (CONTD.)

Other Matters
This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act
1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

Ernst & Young


Adeline Chan Su Lynn
AF: 0039
No. 3082/07/15(J)
Chartered Accountants Chartered Accountant

Penang, Malaysia
Date: 26 September 2014

43

ANNUAL REPORT 2014

STATEMENTS OF COMPREHENSIVE INCOME


FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

Note
Revenue
Other operating income
Changes in inventories of merchandise, finished
goods and work-in-progress
Raw materials and consumable goods used
Inventories purchased
Cost of inventory property
Employee benefits expense
Inventories written down/off
Reversal of inventories written down
Amortisation of intangible asset
Amortisation of land use rights
Commission
Depreciation of:
- property, plant and equipment
- investment property
Net loss on financial assets at
fair value through profit or loss
Reversal/(Impairment loss) on
investment in a subsidiary
Promotional expenses
Property, plant and equipment written off
Operating leases - minimum lease payment for:
- land and buildings
- equipment and machinery
Subcontract charges
Upkeep and maintenance
Utilities
Other operating expenses
Operating profit
Finance costs
Share of profit/(loss) in a joint venture
Profit before tax
Income tax benefit/(expense)
Profit net of tax

4
5

22
6
16
15
13
14

17

8
9
10

Other comprehensive income


Other comprehensive income to be reclassified
to profit or loss in subsequent periods
Foreign currency translation
Total comprehensive income for the year
Profit for the year attributable to:
Equity holders of the Company
Non-controlling interests
Total comprehensive income attributable to:
Equity holders of the Company
Non-controlling interests
Earnings per share attributable to equity
holders of the Company (sen)
Basic/Diluted, for profit for the year

11

Group
2014
RM

2013
RM

Company
2014
RM
6,547,320
7,917,588

2013
RM

378,165,018
2,744,203

372,334,550
1,891,639

878,834
(28,963,877)
(261,512,839)
(2,834,809)
(25,402,214)
157,494
(374,070)
(215,266)
(1,403,018)

6,151,223
(30,099,756)
(263,009,754)
(22,968,308)
(553,092)
(215,266)
(1,380,393)

(193,110)
-

(192,600)
-

(10,496,176)
-

(9,851,927)
-

(972)
(473,171)

(1,106)
(473,171)

(170,859)

(25,338)

(5,216,191)
(46,967)

(4,489,626)
(185,753)

342,276
-

(3,472,493)
(42,000)
(4,905,718)
(4,590,964)
(9,873,083)
(6,465,488)
15,959,517
(1,172,674)
57,768
14,844,611
3,056,102
17,900,713

(2,326,378)
(102,000)
(5,882,726)
(4,451,348)
(8,474,771)
(6,997,400)
19,363,576
(172,005)
(4,627)
19,186,944
(5,490,184)
13,696,760

(37,344)

(443,660)

(1,602)
(521,492)
13,616,837
13,616,837
(1,515,227)
12,101,610

13,735,220
331,351

(28,334)
(1,547)
(5,673,635)
7,696,178
7,696,178
(1,660,071)
6,036,107

17,863,369

13,253,100

12,101,610

6,036,107

17,763,907
136,806
17,900,713

13,890,365
(193,605)
13,696,760

12,101,610
12,101,610

6,036,107
6,036,107

17,726,563
136,806
17,863,369

13,446,705
(193,605)
13,253,100

12,101,610
12,101,610

6,036,107
6,036,107

30.99

24.23

The accompanying accounting policies and explanatory information form an integral part of the financial statements.

44

ANNUAL REPORT 2014

STATEMENTS OF FINANCIAL POSITION


AS AT 31 MAY 2014

Assets
Non-current assets
Property, plant and equipment
Investment property
Land use rights
Intangible asset
Investments in subsidiaries
Investment in a joint venture
Investment in an associate
Investment securities
Goodwill on consolidation

Current assets
Inventory property
Inventories
Trade and other receivables
Other current assets
Tax recoverable
Loan receivables
Short term investments
Cash and bank balances

Note

Group
2014
RM

2013
RM

Company
2014
RM

2013
RM

13
14
15
16
17
18
19
20
21

131,662,728
41,143
6,531,830
12,068,371
3,114
4,665,045
154,972,231

115,731,758
256,409
6,905,900
12,068,577
3,114
4,665,045
139,630,803

3,135
23,500,291
68,298,619
91,802,045

4,107
23,973,462
59,256,344
83,233,913

22
23
24
25

23,525,714
33,736,041
21,591,575
505,849
4,275,057
84,236
24,309,096
27,844,565
135,872,133
290,844,364

26,166,480
33,511,211
24,205,914
398,315
675,660
28,730
13,698,835
32,199,611
130,884,756
270,515,559

34,991,436
14,932
3,213,822
38,220,190
130,022,235

36,273,636
14,932
4,008,160
40,296,728
123,530,641

29
29
29
30
31

61,000,248
(5,374,381)
13,934,711
(2,912,370)
133,187,216
199,835,424
875,834
200,711,258

61,000,248
(5,346,718)
13,934,711
(2,875,026)
118,862,638
185,575,853
807,232
186,383,085

61,000,248
(5,374,381)
13,934,711
38,564,257
108,124,835
108,124,835

32
33
36
34

114,583
11,370,090
6,299,262
1,703,446
19,487,381

164,583
1,480,354
6,064,296
2,621,026
10,330,259

35
32
33
36
37

256,517
50,000
6,659,164
61,196,999
1,712,534
770,511
70,645,725
90,133,106
290,844,364

256,517
50,000
13,411,210
56,468,627
1,316,804
2,299,057
73,802,215
84,132,474
270,515,559

21,838,164
59,236
21,897,400
21,897,400
130,022,235

23,837,928
202,496
24,040,424
24,040,424
123,530,641

26
27
28

Total assets
Equity and liabilities
Equity attributable to equity holders of the Company
Share capital
Treasury shares
Share premium
Other reserves
Retained earnings
Non-controlling interests
Total equity
Non-current liabilities
Government grant
Borrowings
Trade and other payables
Deferred tax

Current liabilities
Provision for liabilities
Government grant
Borrowings
Trade and other payables
Deferred revenue
Tax payable
Total liabilities
Total equity and liabilities

61,000,248
(5,346,718)
13,934,711
29,901,976
99,490,217
99,490,217

The accompanying accounting policies and explanatory information form an integral part of the financial statements.

61,000,248

Purchase of treasury shares

At 31 May 2014

Dividend (Note 12)

for the year

Total comprehensive income

61,000,248

At 1 June 2013

61,000,248

Purchase of treasury shares

At 31 May 2013

(5,374,381)

(27,663)

(5,346,718)

(5,346,718)

(29,820)

(5,316,898)

RM

RM

61,000,248

shares

capital

Dividend (Note 12)

for the year

Total comprehensive income

At 1 June 2012

Group

Treasury

Share

13,934,711

13,934,711

13,934,711

13,934,711

RM

premium

Share

Non-distributable

(2,912,370)

(37,344)

(2,875,026)

(2,875,026)

(443,660)

(2,431,366)

RM

reserves

Other

133,187,216

(3,439,329)

17,763,907

118,862,638

118,862,638

(3,441,189)

13,890,365

108,413,462

RM

earnings

Retained

Distributable

Attributable to equity holders of the Company

199,835,424

(27,663)

(3,439,329)

17,726,563

185,575,853

185,575,853

(29,820)

(3,441,189)

13,446,705

175,600,157

RM

Total

Non-

875,834

(68,204)

136,806

807,232

807,232

(193,605)

1,000,837

RM

interests

controlling

200,711,258

(27,663)

(3,507,533)

17,863,369

186,383,085

186,383,085

(29,820)

(3,441,189)

13,253,100

176,600,994

RM

equity

Total

ANNUAL REPORT 2014

45

STATEMENTS OF CHANGES IN EQUITY


FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

46

ANNUAL REPORT 2014

STATEMENTS OF CHANGES IN EQUITY (CONTD.)


FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

Non-distributable

Distributable

Share

Treasury

Share

Other

Retained

Total

capital

shares

premium

reserves

earnings

equity

RM

RM

RM

RM

RM

RM

13,934,711

27,307,058

96,925,119

Company
At 1 June 2012

61,000,248

(5,316,898)

Total comprehensive income


for the year

6,036,107

6,036,107

Dividend (Note 12)

(3,441,189)

(3,441,189)

Purchase of treasury shares

(29,820)

At 31 May 2013

61,000,248

(5,346,718)

13,934,711

29,901,976

99,490,217

At 1 June 2013

61,000,248

(5,346,718)

13,934,711

29,901,976

99,490,217

12,101,610

12,101,610

(3,439,329)

(3,439,329)

Total comprehensive income


for the year

Dividend (Note 12)

Purchase of treasury shares

(27,663)

61,000,248

(5,374,381)

13,934,711

38,564,257

At 31 May 2014

(29,820)

(27,663)
108,124,835

The accompanying accounting policies and explanatory information form an integral part of the financial statements.

47

ANNUAL REPORT 2014

STATEMENTS OF CASH FLOWS

FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

Group
Note

Company

2014

2013

2014

2013

RM

RM

RM

RM

14,844,611

19,186,944

13,616,837

7,696,178

Operating activities
Profit before tax
Adjustments for:
- Amortisation of:
- government grant

(50,000)

(50,000)

- land use rights

15

215,266

215,266

- intangible assets

16

374,070

Bad debts written off

34,317

466,265

Depreciation of:
- property, plant and equipment

13

10,496,176

9,851,927

972

1,106

- investment property

14

473,171

473,171

Gross dividends from subsidiaries

Finance costs

1,172,674

Interest income

Inventories written down/off

(835,610)

172,005
(595,610)

(4,830,636)
(84,409)

(11,838,536)
(71,191)

553,092

170,859

25,338

Net loss on financial assets at


fair value through profit or loss
Reversal of inventories written down

(157,494)

(Reversal)/Impairment loss on investment


in a subsidiary

17

(342,276)

28,334

Gain on disposal of property plant and


equipment

Property, plant and equipment written off

(42,114)
46,967

185,753

5,183,179

Allowance for impairment of doubtful debts

Reversal of impairment loss

Unrealised foreign exchange (gains)/losses

Share of (profit)/loss in a joint venture

(7,833,179)

(260,160)

(172,744)

213,646

(57,768)

4,627

30,229,253

1,000,480

1,212,081

3,305,298

4,372,738

Operating cash flows before changes in


working capital

26,039,210

Decrease/(Increase) in inventory property

2,640,766

Decrease in receivables

2,697,260

(Increase)/Decrease in other current assets


Increase in inventories
Increase/(Decrease) in payables
Increase in deferred revenue

(107,534)
(67,336)
4,963,338

(198,123)

(2,006)
6,620,053

16,005

(29,611)

395,730

38,952

Cash generated from operations

36,561,434

44,366,165

1,016,485

1,182,470

Interest paid

(1,172,674)

Interest received

835,610

(172,005)
595,610

84,409

71,191

Tax paid

(2,989,422)

(4,795,548)

(458,488)

(282,441)

Net cash from operating activities

33,234,948

39,994,222

642,406

971,220

48

ANNUAL REPORT 2014

STATEMENTS OF CASH FLOWS (CONTD.)


FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

Group
Note

Company

2014

2013

2014

2013

RM

RM

RM

RM

(39,230)

243,227

19,000

Investing activities
Increase in deposits pledged to banks

(10,738)

(Increase)/Decrease in deposits placed with


licensed banks (more than 3 months)

(933)

Increase in short term investments

(10,781,120)

(9,882,227)

Proceeds from disposal of property,


plant and equipment

316,727

Net dividends received

Acquisition of patent licence

16

Purchase of property, plant and equipment

13

Net cash (used in)/from investing activities

3,630,636

10,571,402

(6,905,900)

(26,748,726)

(28,862,248)

(37,224,790)

(45,427,378)

3,630,636

10,571,402

(915,546)

Financing activities
Proceeds from/(Repayment of) term loan, net

10,696,012

Dividend paid to:


- non controlling interest of subsidiaries

(68,204)

- shareholders of holding company

12

(3,439,329)

(3,441,189)

(3,439,329)

(3,441,189)

Purchase of treasury shares

29

(27,663)

(29,820)

(27,663)

(29,820)

Decrease/(Increase) in amounts due


from subsidiaries

9,115,380

(29,665,541)

Net changes in bankers' acceptances

1,583,767

1,742,398

Net cash from/(used in) financing activities

8,744,583

(2,644,157)

(5,067,380)

(12,406,978)

4,754,741

(8,077,313)

(794,338)

(864,356)

(Decrease)/Increase in amounts due


to subsidiaries

(10,715,768)

20,729,572

Net increase/(decrease) in cash and


cash equivalents
Effects of exchange rate changes

20,631

195,072

22,225,522

30,107,763

4,008,160

4,872,516

27,000,894

22,225,522

3,213,822

4,008,160

Cash and cash equivalents as at 1 June


2013 / 2012
Cash and cash equivalents as at 31 May
2014 / 2013

28

The accompanying accounting policies and explanatory information form an integral part of the financial statements.

49

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS


FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

1.

Corporate information
The Company is a public limited liability company, incorporated and domiciled in Malaysia and listed on the Main
Market of Bursa Malaysia Securities Berhad ("Bursa Malaysia"). The registered office of the Company is located at
No. 1-20-1 SUNTECH @ Penang Cybercity, Lintang Mayang Pasir 3, 11950 Bayan Baru, Penang.
The principal activities of the Company are investment holding, provision of management services and letting of
property. The principal activities of the subsidiaries, joint venture and associate are described in Notes 17, 18 and 19.
There have been no significant changes in the nature of the principal activities during the financial year.

2.

Summary of significant accounting policies

2.1

Basis of preparation
The financial statements of the Group and of the Company have been prepared in accordance with Malaysian
Financial Reporting Standards ("MFRS"), International Financial Reporting Standards ("IFRS") and the requirements
of the Companies Act 1965 in Malaysia.
The financial statements have been prepared on a historical cost basis except those disclosed below in the accounting
policies.
The financial statements are presented in Ringgit Malaysia ("RM").

2.2

Changes in accounting policies


The accounting policies adopted are consistent with those of the previous financial year except as follows:
On 1 June 2013, the Group and the Company adopted the following new and amended MFRS and IC Interpretations
mandatory for annual financial periods beginning on or after 1 June 2013.

Description
Amendments to MFRS 101: Presentation of Items of Other
Comprehensive Income
MFRS 3: Business Combinations (IFRS 3: Business Combinations
issued by IASB in March 2004)
MFRS 10: Consolidated Financial Statements
MFRS 11: Joint Arrangements
MFRS 12: Disclosure of interests in Other Entities
MFRS 13: Fair Value Measurement
MFRS 119: Employee Benefits (IAS 19 as amended by IASB in June 2011)
MFRS 127: Separate Financial Statements (IAS 27 as amended
by IASB in May 2011)
MFRS 127: Consolidated and Separate Financial Statements
(IAS 27 as revised by IASB in December 2003)
MFRS 128: Investment in Associate and Joint Ventures (IAS 28 as
amended by IASB in May 2011)
IC Interpretation 20: Stripping Costs in the Production Phase of
a Surface Mine
Amendments to MFRS 1: Government Loans
Annual Improvements 2009-2011 Cycle
Amendments to MFRS 7: Disclosures Offsetting Financial Assets
and Financial Liabilities
Amendments to MFRS 10, MFRS 11 and MFRS 12: Consolidated
Financial Statements, Joint Arrangements and Disclosure of Interests
in Other Entities: Transition Guidance

Effective for
financial periods
beginning on or after

1 July 2012
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013
1 January 2013

1 January 2013

50

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)


FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

2.

Summary of significant accounting policies (contd.)

2.2

Changes in accounting policies (contd.)


Adoption of the above standards and interpretations did not have any effect on the financial performance or position
of the Group and of the Company except for those discussed below:
MFRS 10 Consolidated Financial Statements
MFRS 10 replaces part of MFRS 127 Consolidated and Separate Financial Statements that deals with consolidated
financial statements and IC Interpretation 112 Consolidation Special Purpose Entities.
Under MFRS 10, an investor controls an investee when:
(i)

the investor has power over an investee,

(ii)

the investor has exposure, or rights, to variable returns from its involvement with the investee, and

(iii)

the investor has ability to use its power over the investee to affect the amount of the investor's returns.

Under MFRS 127 Consolidated and Separate Financial Statements, control was defined as the power to govern the
financial and operating policies of an entity so as to obtain benefits from its activities.
MFRS 10 includes detailed guidance to explain when an investor that owns less than 50 per cent of the voting shares
in an investee has control over the investee. MFRS 10 requires the investor to take into account all relevant facts
and circumstances, particularly the size of the investors holding of voting rights relative to the size and dispersion of
holdings of the other vote holders.
The application of MFRS 10 has no impact on the Groups and the Companys financial position or financial
performance.
MFRS 11 Joint Arrangements
MFRS 11 replaces MFRS 131 Interests in Joint Ventures and IC Interpretation 113 Jointly-Controlled Entities Nonmonetary Contributions by Venturers.
The classification of joint arrangements under MFRS 11 is determined based on the rights and obligations of the
parties to the joint arrangements by considering the structure, the legal form, the contractual terms agreed by the
parties to the arrangement and when relevant, other facts and circumstances. Under MFRS 11, joint arrangements
are classified as either joint operations or joint ventures.
A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement have rights
to the assets, and obligations for the liabilities, relating to the arrangement. A joint venture is a joint arrangement
whereby the parties that have joint control of the arrangement have rights to the net assets of the arrangement.
MFRS 11 removes the option to account for jointly controlled entities (JCE) using proportionate consolidation.
Instead, JCE that meet the definition of a joint venture must be accounted for using the equity method. This standard
has no material impact on the Group's financial position or performance.
MFRS 12 Disclosures of Interests in Other Entities
MFRS 12 includes all disclosure requirements for interests in subsidiaries, joint arrangements, associates and
structured entities. A number of new disclosures are required. This standard affects disclosures only and has no
impact on the Groups financial position or performance.

51

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)

FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

2.

Summary of significant accounting policies (contd.)

2.2

Changes in accounting policies (contd.)


MFRS 13: Fair Value Measurement
MFRS 13 establishes a single source of guidance under MFRS for all fair value measurements. MFRS 13
does not change when an entity is required to use fair value, but rather provides guidance on how to measure
fair value under MFRS. MFRS 13 defines fair value as an exit price. As a result of the guidance in MFRS 13,
the Group re-assessed its policies for measuring fair values, in particular, its valuation inputs such as nonperformance risk for fair value measurement of liabilities. MFRS 13 also requires additional disclosures.
Application of MFRS 13 has not materiality impacted the fair value measurement of the Group. Additional disclosures
where required, are provided in the individual notes relating to the assets and liabilities whose fair values were
determined.
Amendments to MFRS 101: Presentation of Items of Other Comprehensive Income
The amendments to MFRS 101 introduce a grouping of items presented in other comprehensive income. Items
that will be reclassified (recycled) to profit or loss at a future point in time (eg. net loss or gain on available-for-sale
financial assets) have to be presented separately from items that will not be reclassified (eg. revaluation of land
and buildings). The amendments affect presentation only and have no impact on the Groups financial position or
performance.
MFRS 127 Separate Financial Statements
As a consequence of the new MFRS 10 and MFRS 12, MFRS 127 is limited to accounting for subsidiaries, jointly
controlled entities and associates in separate financial statements.
MFRS 128 Investments in Associates and Joint Ventures
As a consequence of the new MFRS 11 and MFRS 12, MFRS 128 is renamed as MFRS 128 Investments in Associates
and Joint Ventures. This new standard describes the application of the equity method to investments in joint ventures
in addition to associates.

2.3

Standards issued but not yet effective


The standards and interpretations that are issued but not yet effective up to the date of issuance of the Group's
and the Companys financial statements are disclosed below. The Group and the Company intend to adopt these
standards, if applicable, when they become effective.
Effective for
financial periods
Description
beginning on or after
Amendments to MFRS 10, MFRS 12 and MFRS 127: Investment Entities
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
Amendments to MFRS 119: Defined Benefit Plans: Employee Contributions
Annual improvements to MFRSs 2010 - 2012 cycle

1 January 2014
1 January 2014
1 January 2014
1 January 2014
1 January 2014
1 July 2014
1 July 2014

52

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)


FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

2.

Summary of significant accounting policies (contd.)

2.3

Standards issued but not yet effective (contd.)

Description
Annual improvements to MFRSs 2011 - 2013 cycle
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 141: Agriculture:Bearer Plants
MFRS 14 Regulatory Deferral Accounts
MFRS 15 Revenue from Contracts with Customers
MFRS 9 Financial Instruments (IFRS 9 issued by IASB in November 2009)
MFRS 9 Financial Instruments (IFRS 9 issued by IASB in October 2010)
MFRS 9 Financial Instruments: Hedge Accounting and
amendments to MFRS 9, MFRS 7 and MFRS 139

Effective for
financial periods
beginning on or after
1 July 2014
1 January 2016
1 January 2016
1 January 2016
1 January 2016
1 January 2017
To be announced
To be announced
To be announced

The directors expect that the adoption of the standards and interpretations will have no material impact on the financial
statements in the period of initial application except as discussed below:
MFRS 9 Financial Instruments
MFRS 9 reflects the first phase of work on the replacement of MFRS 139 and applies to classification and measurement
of financial assets and financial liabilities as defined in MFRS 139. The standard was initially effective for annual
periods beginning on or after 1 January 2013, but Amendments to MFRS 9: Mandatory Effective Date of MFRS 9 and
Transition Disclosures, issued in March 2012, moved the mandatory effective date to 1 January 2015. Subsequently,
on 14 February 2014, it was announced that the new effective date will be decided when the project is closer to
completion. The adoption of the first phase of MFRS 9 will have an effect on the classification and measurement of
the Groups financial assets, but will not have an impact on classification and measurements of the Groups financial
liabilities. The Group will quantify the effect in conjunction with the other phases, when the final standard including all
phases is issued.
2.4

Basis of consolidation
The consolidated financial statements comprise the financial statements of the Company and its subsidiaries as at
the reporting date. The financial statements of the subsidiaries used in the preparation of the consolidated financial
statements are prepared for the same reporting date as the Company. Consistent accounting policies are applied to
like transactions and events in similar circumstances.
The Company controls an investee if and only if the Company has all the following:
(i)

Power over the investee (i.e existing rights that give it the current ability to direct the relevant activities of the
investee);

(ii)

Exposure, or rights, to variable returns from its investment with the investee; and

(iii)

The ability to use its power over the investee to affect its returns.

When the Company has less than a majority of the voting rights of an investee, the Company considers the following
in assessing whether or not the Companys voting rights in an investee are sufficient to give it power over the investee:
(i)

The size of the Companys holding of voting rights relative to the size and dispersion of holdings of the other
vote holders;

(ii)

Potential voting rights held by the Company, other vote holders or other parties;

53

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)

FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

2.

Summary of significant accounting policies (contd.)

2.4

Basis of consolidation (contd.)


(iii)

Rights arising from other contractual arrangements; and

(iv)

Any additional facts and circumstances that indicate that the Company has, or does not have, the current
ability to direct the relevant activities at the time that decisions need to be made, including voting patterns at
previous shareholders meetings.

Subsidiaries are consolidated when the Company obtains control over the subsidiary and ceases when the Company
loses control of the subsidiary. All intra-group balances, income and expenses and unrealised gains and losses
resulting from intra-group transactions are eliminated in full.
Losses within a subsidiary are attributed to the non-controlling interests even if that results in a deficit balance.
Changes in the Groups ownership interests in subsidiaries that do not result in the Group losing control over the
subsidiaries are accounted for as equity transactions. The carrying amounts of the Groups interests and the noncontrolling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. The resulting
difference is recognised directly in equity and attributed to owners of the Company.
When the Group loses control of a subsidiary, a gain or loss calculated as the difference between (i) the aggregate
of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying
amount of the assets and liabilities of the subsidiary and any non-controlling interest, is recognised in profit or loss.
The subsidiarys cumulative gain or loss which has been recognised in other comprehensive income and accumulated
in equity are reclassified to profit or loss or where applicable, transferred directly to retained earnings. The fair value of
any investment retained in the former subsidiary at the date control is lost is regarded as the cost on initial recognition
of the investment.
2.5

Transactions with non-controlling interests


Non-controlling interest represents the equity in subsidiaries not attributable, directly or indirectly, to owners of the
Company, and is presented separately in the consolidated statement of comprehensive income and within equity in
the consolidated statement of financial position, separately from equity attributable to owners of the Company.
Changes in the Company owners ownership interest in a subsidiary that do not result in a loss of control are accounted
for as equity transactions. In such circumstances, the carrying amounts of the controlling and non-controlling interests
are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by
which the non-controlling interest is adjusted and the fair value of the consideration paid or received is recognised
directly in equity and attributed to owners of the parent.
Total comprehensive income within a subsidiary is attributed to the non-controlling interest even if it results in a deficit
balance.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.
If the Group loses control over a subsidiary, it:
- derecognises the assets (including goodwill) and liabilities of the subsidiary;
- derecognises the carrying amount of any non-controlling interest;
- derecognises the cumulative translation differences recorded in equity;
- recognises the fair value of the consideration received;
- recognises the fair value of any investment retained;
- recognises any surplus or deficit in profit or loss; and
- reclassifies the parents share of components previously recognised in other comprehensive income to profit
or loss or retained earnings, as appropriate.

54

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)


FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

2.

Summary of significant accounting policies (contd.)

2.6

Subsidiaries
A subsidiary is an entity over which the Company has all the following:
(i)

Power over the investee (i.e existing rights that give it the current ability to direct the relevant activities of the
investee);

(ii)

Exposure, or rights, to variable returns from its investment with the investee; and

(iii)

The ability to use its power over the investee to affect its returns.

In the Companys separate financial statements, investments in subsidiaries are accounted for at cost less any
accumulated impairment losses. On disposal of such investments, the difference between net disposal proceeds and
their carrying amounts is included in profit or loss.
2.7

Investments in an associates and joint ventures


An associate is an entity in which the Group has significant influence. Significant influence is the power to participate
in the financial and operating policy decisions of the investee but is not control or joint control over those policies.
A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights to
the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement,
which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing
control.
On acquisition of an investment in associate or joint venture, any excess of the cost of investment over the Groups
share of the net fair value of the identifiable assets and liabilities of the investee is recognised as goodwill and included
in the carrying amount of the investment. Any excess of the Groups share of the net fair value of the identifiable assets
and liabilities of the investee over the cost of investment is excluded from the carrying amount of the investment and
is instead included as income in the determination of the Groups share of the associates or joint ventures profit or
loss for the period in which the investment is acquired.
An associate or a joint venture is equity accounted for from the date on which the investee becomes an associate or
a joint venture.
Under the equity method, on initial recognition the investment in an associate or a joint venture is recognised at
cost, and the carrying amount is increased or decreased to recognise the Group's share of the profit or loss and
other comprehensive income of the associate or joint venture after the date of acquisition. When the Groups share
of losses in an associate or a joint venture equals or exceeds its interest in the associate or joint venture, the Group
does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf
of the associate or joint venture.
Profits and losses resulting from upstream and downstream transactions between the Group and its associate or
joint venture are recognised in the Groups financial statements only to the extent of unrelated investors interests
in the associate or joint venture. Unrealised losses are eliminated unless the transaction provides evidence of an
impairment of the asset transferred.
The financial statements of the associates and joint ventures are prepared as of the same reporting date as the
Company. Where necessary, adjustments are made to bring the accounting policies in line with those of the Group.
After application of the equity method, the Group applies MFRS 139 Financial Instruments: Recognition and
Measurement to determine whether it is necessary to recognise any additional impairment loss with respect to its net
investment in the associate or joint venture. When necessary, the entire carrying amount of the investment is tested
for impairment in accordance with MFRS 136 Impairment of Assets as a single asset, by comparing its recoverable
amount (higher of value in use and fair value less costs to sell) with its carrying amount. Any impairment loss is
recognised in profit or loss. Reversal of an impairment loss is recognised to the extent that the recoverable amount of
the investment subsequently increases.
In the Companys separate financial statements, investments in associates and joint ventures are accounted for at
cost less any accumulated impairment losses. On disposal of such investments, the difference between net disposal
proceeds and their carrying amounts is included in profit or loss.

55

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)

FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

2.

Summary of significant accounting policies (contd.)

2.8

Intangible assets
(a)

Goodwill
Goodwill is initially measured at cost. Following initial recognition, goodwill is measured at cost less any
accumulated impairment losses.
For the purpose of impairment testing, goodwill acquired is allocated, from the acquisition date, to each of the
Groups cash-generating units that are expected to benefit from the synergies of the combination.
The cash-generating unit to which goodwill has been allocated is tested for impairment annually and
whenever there is an indication that the cash-generating unit may be impaired, by comparing the carrying
amount of the cash-generating unit, including the allocated goodwill, with the recoverable amount of the
cash-generating unit. Where the recoverable amount of the cash-generating unit is less than the carrying
amount, an impairment loss is recognised in the profit or loss. Impairment losses recognised for goodwill are
not reversed in subsequent periods.
Where goodwill forms part of a cash-generating unit and part of the operation within that cash-generating
unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount
of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this
circumstance is measured based on the relative fair values of the operations disposed of and the portion of
the cash-generating unit retained.
Goodwill and fair value adjustments arising on the acquisition of foreign operation on or after 1 January 2006
are treated as assets and liabilities of the foreign operations and are recorded in the functional currency
of the foreign operations and translated in accordance with the accounting policy set out in Note 2.26.
Goodwill and fair value adjustments which arose on acquisitions of foreign operation before 1 January 2006
are deemed to be assets and liabilities of the Company and are recorded in RM at the rates prevailing at the
date of acquisition.

(b)

Other intangible assets


Intangible assets acquired separately are measured initially at cost. Following initial acquisition, intangible
assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.
Intangible assets with finite useful lives are amortised over the estimated useful lives and assessed for
impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period
and the amortisation method are reviewed at least at each financial year-end. Changes in the expected useful
life or the expected pattern of consumption of future economic benefits embodied in the asset is accounted
for by changing the amortisation period or method, as appropriate, and are treated as changes in accounting
estimates. The amortisation expense on intangible assets with finite lives is recognised in profit or loss.
Gains or losses arising from derecognition of an intangible asset are measured as the difference between
the net disposal proceeds and the carrying amount of the asset and are recognised in profit or loss when the
asset is derecognised.

56

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)


FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

2.

Summary of significant accounting policies (contd.)

2.9

Property, plant and equipment and depreciation


All items of property, plant and equipment are initially recorded at cost. The cost of an item of property, plant and
equipment is recognised as an asset if, and only if, it is probable that future economic benefits associated with the
item will flow to the Group and the cost of the item can be measured reliably.
Subsequent to recognition, property, plant and equipment are measured at cost less accumulated depreciation and
any accumulated impairment losses. When significant parts of property, plant and equipment are required to be
replaced in intervals, the Group recognises such parts as individual assets with specific useful lives and depreciation,
respectively. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the plant
and equipment as a replacement if the recognition criteria are satisfied. All other repair and maintenance costs are
recognised in profit or loss as incurred.
Short-term leasehold land
Long-term leasehold apartment
Buildings
Plant and machinery
Office equipment, renovation, furniture and fittings
Computers
Motor vehicles

5% - 6%
1.27%
2% - 18%
10% - 20%
10% - 20%
20% - 33.3%
10% - 20%

Capital work-in-progress are not depreciated as these assets are not yet available for use.
The carrying values of property, plant and equipment are reviewed for impairment when events or changes in
circumstances indicate that the carrying value may not be recoverable.
The residual value, useful life and depreciation method are reviewed at each financial year-end, and adjusted
prospectively, if appropriate.
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are
expected from its use or disposal. Any gain or loss on derecognition of the asset is included in profit or loss in the year
the asset is derecognised.
2.10

Investment properties
Investment properties are measured at cost model which is to measure investment properties at cost less accumulated
depreciation and any accumulated impairment losses.
Depreciation is computed on a straight-line basis over the estimated useful lives of the assets as follows:
Buildings

1% - 2%

A property interest under an operating lease is classified and accounted for as an investment property on a propertyby-property basis when the Group holds it to earn rentals or for capital appreciation or both. Any such property interest
under an operating lease classified as an investment property is carried at fair value.
Investment properties are derecognised when either they have been disposed of or when the investment property is
permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gain or loss on the
retirement or disposal of an investment property is recognised in profit or loss in the year of retirement or disposal.
Transfers are made to or from investment property only when there is a change in use.
2.11

Inventory property
Property acquired or being constructed for sale in the ordinary course of business, rather than to be held for rental
or capital appreciation, is held as inventory property and is measured at the lower of cost and net realisable value.
Net realisable value is the estimated selling price in the ordinary course of the business, based on market prices at
the reporting date and discounted for the time value of money if material, less costs to completion and the estimated
costs of sale.
The cost of inventory property recognised in profit or loss on disposal is determined with reference to the specific costs
incurred on the property sold and an allocation of any non-specific costs based on the relative size of the property
sold.

57

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)

FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

2.

Summary of significant accounting policies (contd.)

2.12

Impairment of non-financial assets


The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such
indication exists, or when an annual impairment assessment for an asset is required, the Group makes an estimate
of the assets recoverable amount.
An assets recoverable amount is the higher of an assets fair value less costs to sell and its value in use. For the
purpose of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable
cash flows (cash-generating units (CGU)).
In assessing value in use, the estimated future cash flows expected to be generated by the asset are discounted to
their present value using a pre-tax discount rate that reflects current market assessments of the time value of money
and the risks specific to the asset. Where the carrying amount of an asset exceeds its recoverable amount, the asset
is written down to its recoverable amount. Impairment losses recognised in respect of a CGU or groups of CGUs are
allocated first to reduce the carrying amount of any goodwill allocated to those units or groups of units and then, to
reduce the carrying amount of the other assets in the unit or groups of units on a pro-rata basis.
Impairment losses are recognised in profit or loss except for assets that are previously revalued where the revaluation
was taken to other comprehensive income. In this case the impairment is also recognised in other comprehensive
income up to the amount of any previous revaluation.
An assessment is made at each reporting date as to whether there is any indication that previously recognised
impairment losses may no longer exist or may have decreased. A previously recognised impairment loss is reversed
only if there has been a change in the estimates used to determine the assets recoverable amount since the last
impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable
amount. That increase cannot exceed the carrying amount that would have been determined, net of depreciation,
had no impairment loss been recognised previously. Such reversal is recognised in profit or loss unless the asset is
measured at revalued amount, in which case the reversal is treated as a revaluation increase. Impairment loss on
goodwill is not reversed in a subsequent period.

2.13

Financial assets
Financial assets are recognised in the statements of financial position when, and only when, the Group and the
Company become a party to the contractual provisions of the financial instrument.
When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets not
at fair value through profit or loss, directly attributable transaction costs.
The Group and the Company determine the classification of their financial assets at initial recognition, and the categories
include financial assets at fair value through profit or loss, loans and receivables, held-to-maturity investments and
available-for-sale financial assets.
(a)

Financial assets at fair value through profit or loss


Financial assets are classified as financial assets at fair value through profit or loss if they are held for trading
or are designated as such upon initial recognition. Financial assets held for trading are derivatives (including
separated embedded derivatives) or financial assets acquired principally for the purpose of selling in the near
term.
Subsequent to initial recognition, financial assets at fair value through profit or loss are measured at fair
value. Any gains or losses arising from changes in fair value are recognised in profit or loss. Net gains or net
losses on financial assets at fair value through profit or loss do not include exchange differences, interest and
dividend income. Exchange differences, interest and dividend income on financial assets at fair value through
profit or loss are recognised separately in profit or loss as part of other losses or other income.
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.

58

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)


FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

2.

Summary of significant accounting policies (contd.)

2.13

Financial assets (contd.)


(b)

Loans and receivables


Financial assets with fixed or determinable payments that are not quoted in an active market are classified
as loans and receivables.
Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective
interest method. Gains and losses are recognised in profit or loss when the loans and receivables are
derecognised or impaired, and through the amortisation process.
Loans and receivables are classified as current assets, except for those having maturity dates later than 12
months after the reporting date which are classified as non-current.

(c)

Held-to-maturity investments
Financial assets with fixed or determinable payments and fixed maturity are classified as held-to-maturity
when the Group has the positive intention and ability to hold the investment to maturity.
Subsequent to initial recognition, held-to-maturity investments are measured at amortised cost using the
effective interest method. Gains and losses are recognised in profit or loss when the held-to-maturity
investments are derecognised or impaired, and through the amortisation process.
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.

(d)

Available-for-sale financial assets


Available-for-sale financial assets are financial assets that are designated as available for sale or are not
classified in any of the three preceding categories.
After initial recognition, available-for-sale financial assets are measured at fair value. Any gains or losses
from changes in fair value of the financial assets are recognised in other comprehensive income, except
that impairment losses, foreign exchange gains and losses on monetary instruments and interest calculated
using the effective interest method are recognised in profit or loss. The cumulative gain or loss previously
recognised in other comprehensive income is reclassified from equity to profit or loss as a reclassification
adjustment when the financial asset is derecognised. Interest income calculated using the effective interest
method is recognised in profit or loss.
Dividends on an available-for-sale equity instrument are recognised in profit or loss when the Groups and the
Company's right to receive payment is established.
Investments in equity instruments whose fair value cannot be reliably measured are measured at cost less
any accumulated impairment losses.
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.

A financial asset is derecognised when the contractual right to receive cash flows from the asset has expired. On
derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the
consideration received and any cumulative gain or loss that had been recognised in other comprehensive income is
recognised in profit or loss.
Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the
period generally established by regulation or convention in the marketplace concerned. All regular way purchases
and sales of financial assets are recognised or derecognised on the trade date i.e., the date that the Group and the
Company commit to purchase or sell the asset.

59

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)

FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

2.

Summary of significant accounting policies (contd.)

2.14

Impairment of financial assets


The Group and the Company assess at each reporting date whether there is any objective evidence that a financial
asset is impaired.
(a)

Trade and other receivables and other financial assets carried at amortised cost
To determine whether there is objective evidence that an impairment loss on financial assets has been
incurred, the Group and the Company consider factors such as the probability of insolvency or significant
financial difficulties of the debtor and default or significant delay in payments. For certain categories of
financial assets, such as trade receivables, assets that are assessed not to be impaired individually are
subsequently assessed for impairment on a collective basis based on similar risk characteristics. Objective
evidence of impairment for a portfolio of receivables could include the Groups and the Company's past
experience of collecting payments, an increase in the number of delayed payments in the portfolio past the
average credit period and observable changes in national or local economic conditions that correlate with
default on receivables.
If any such evidence exists, the amount of impairment loss is measured as the difference between the assets
carrying amount and the present value of estimated future cash flows discounted at the financial assets
original effective interest rate. The impairment loss is recognised in profit or loss.
The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets
with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance
account. When a trade receivable becomes uncollectible, it is written off against the allowance account.
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 to the extent that the carrying amount of the asset does not exceed its amortised cost at the
reversal date. The amount of reversal is recognised in profit or loss.

(b)

Available-for-sale financial assets


Significant or prolonged decline in fair value below cost, significant financial difficulties of the issuer or obligor,
and the disappearance of an active trading market are considerations to determine whether there is objective
evidence that investment securities classified as available-for-sale financial assets are impaired.
If an available-for-sale financial asset is impaired, an amount comprising the difference between its cost (net
of any principal payment and amortisation) and its current fair value, less any impairment loss previously
recognised in profit or loss, is transferred from equity to profit or loss.
Impairment losses on available-for-sale equity investments are not reversed in profit or loss in the subsequent
periods. Increase in fair value, if any, subsequent to impairment loss is recognised in other comprehensive
income. For available-for-sale debt investments, impairment losses are subsequently reversed in profit or
loss if an increase in the fair value of the investment can be objectively related to an event occurring after the
recognition of the impairment loss in profit or loss.

2.15

Financial liabilities
Financial liabilities are classified according to the substance of the contractual arrangements entered into and the
definitions of a financial liability.
Financial liabilities, within the scope of MFRS 139, are recognised in the statements of financial position when, and only
when, the Group and the Company become a party to the contractual provisions of the financial instrument. Financial
liabilities are classified as either financial liabilities at fair value through profit or loss or other financial liabilities.
(a)

Financial liabilities at fair value through profit or loss


Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial
liabilities designated upon initial recognition as at fair value through profit or loss.
Financial liabilities held for trading include derivatives entered into by the Group and the Company that do not
meet the hedge accounting criteria. Derivative liabilities are initially measured at fair value and subsequently
stated at fair value, with any resultant gains or losses recognised in profit or loss. Net gains or losses on
derivatives include exchange differences.
The Group and the Company have not designated any financial liabilities as at fair value through profit or
loss.

60

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)


FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

2.

Summary of significant accounting policies (contd.)

2.15

Financial liabilities (contd.)


(b)

Other financial liabilities


The Groups and the Company's other financial liabilities include trade payables, other payables and loans
and borrowings.
Trade and other payables are recognised initially at fair value plus directly attributable transaction costs and
subsequently measured at amortised cost using the effective interest method.
Loans and borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently
measured at amortised cost using the effective interest method. Borrowings are classified 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.
For other financial liabilities, gains and losses are recognised in profit or loss when the liabilities are
derecognised, and through the amortisation process.

A financial liability is derecognised when the obligation under the liability is extinguished. When an existing financial
liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability
are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and
the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.
2.16

Fair value measurements


The Group and the Company measure financial instruments, such as, embedded derivatives, at fair value at each
reporting date. Also, fair values of financial instruments measured at amortised cost are disclosed in Note 40.
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. The fair value measurement is based on the presumption that
the transaction to sell the asset or transfer the liability takes place either:
- in the principal market for the asset or liability; or
- in the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible to by the Group and by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participants would use when
pricing the asset or liability, assuming that market participants act in their economic best interest.
A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic
benefits by using the asset in its highest and best use or by selling it to another market participant that would use the
asset in its highest and best use.
The Group and the Company use valuation techniques that are appropriate in the circumstances and for which
sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising
the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised
within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value
measurement as a whole:
Level 1 :

Quoted (unadjusted) market prices in active markets for identical assets or liabilities;

Level 2 :

Valuation techniques for which the lowest level input that is significant to the fair value measurement
is directly or indirectly observable;

Level 3 :

Valuation techniques for which the lowest level input that is significant to the fair value measurement
is unobservable.

61

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)

FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

2.

Summary of significant accounting policies (contd.)

2.16

Fair value measurements (contd.)


For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group and the
Company determine whether transfers have occurred between Levels in the hierarchy by re-assessing categorisation
(based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each
reporting period.
The Group and the Company determine the policies and procedures for recurring fair value measurement, such as
properties and unquoted available-for-sale (AFS) financial assets.
External valuers may be involved for valuation of significant assets, such as properties and AFS financial assets.
Involvement of external valuers is decided upon annually by the Group and by the Company. Selection criteria include
market knowledge, reputation, independence and whether professional standards are maintained.
At each reporting date, the Group and the Company analyse the movements in the values of assets and liabilities
which are required to be re-measured or re-assessed as per the Groups and the Companys accounting policies.
For this analysis, the Group and the Company verify the major inputs applied in the latest valuation by agreeing the
information in the valuation computation to contracts and other relevant documents.
The Group and the Company, in conjunction with the Groups and the Companys external valuers, also compare
the changes in the fair value of each asset and liability with relevant external sources, where practical, to determine
whether the change is reasonable.
For the purpose of fair value disclosures, the Group and the Company have determined classes of assets and
liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value
hierarchy as explained above.

2.17

Income taxes
i.

Current tax
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the
taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or
substantively enacted by the reporting date.
Current taxes are recognised in profit or loss except to the extent that the tax relates to items recognised
outside profit or loss, either in other comprehensive income or directly in equity.

ii.

Deferred tax
Deferred tax is provided using the liability method on temporary differences at the reporting date between the
tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred tax liabilities are recognised for all temporary differences, except:
-

where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability
in a transaction that is not a business combination and, at the time of the transaction, affects neither
the accounting profit nor taxable profit or loss; and

in respect of taxable temporary differences associated with investments in subsidiaries, associates


and interests in joint ventures, where the timing of the reversal of the temporary differences can be
controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

62

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)


FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

2.

Summary of significant accounting policies (contd.)

2.17

Income taxes (contd.)


ii.

Deferred tax (contd.)


Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax
credits and unused tax losses, to the extent that it is probable that taxable profit will be available against
which the deductible temporary differences, and the carry forward of unused tax credits and unused tax
losses can be utilised except:
-

where the deferred tax asset relating to the deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the time
of the transaction, affects neither the accounting profit nor taxable profit or loss; and

in respect of deductible temporary differences associated with investments in subsidiaries,


associates and interests in joint ventures, deferred tax assets are recognised only to the extent that
it is probable that the temporary differences will reverse in the foreseeable future and taxable profit
will be available against which the temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent
that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred
tax asset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are
recognised to the extent that it has become probable that future taxable profit will allow the deferred tax
assets to be utilised.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when
the asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or
substantively enacted at the reporting date.
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 transaction either in other comprehensive income or directly
in equity and deferred tax arising from a business combination is adjusted against goodwill on acquisition.
Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current
tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same
taxation authority.
2.18

Share capital and share issuance expenses


An equity instrument is any contract that evidences a residual interest in the assets of the Group and the Company
after deducting all of its liabilities. Ordinary shares are equity instruments.
Ordinary shares are recorded at the proceeds received, net of directly attributable incremental transaction costs.
Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which
they are declared.

2.19

Treasury shares
When shares of the Company, that have not been cancelled, recognised as equity are reacquired, the amount of
consideration paid is recognised directly in equity. Reacquired shares are classified as treasury shares and presented
as a deduction from total equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or
cancellation of treasury shares. When treasury shares are reissued by resale, the difference between the sales
consideration and the carrying amount is recognised in equity.

2.20

Cash and cash equivalents


Cash and cash equivalents comprise cash at bank and on hand, demand deposits, and short-term, highly liquid
investments with maturity of 3 months or less that are readily convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value. These also include bank overdrafts that form an integral part of the
Groups and the Company's cash management.

63

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)

FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

2.

Summary of significant accounting policies (contd.)

2.21

Inventories
Inventories are stated at the lower of cost and net realisable value.
Cost of inventories of merchandise held for resale is determined using the weighted average method.
Cost of manufactured goods is determined using the first in, first out method. The cost of raw materials comprises
costs of purchase. The cost of finished goods and work-in-progress comprise costs of raw materials, direct labour,
other direct costs and appropriate proportions of manufacturing overheads based on normal operating capacity.
The cost of properties held for sale comprises cost associated with the acquisition of land, direct costs and appropriate
proportions of common costs. Cost is determined on a specific identification basis.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs necessary
to make the sale.

2.22

Leases
i.

As lessee
Finance leases, which transfer to the Group substantially all the risks and rewards incidental to ownership of
the leased item, are capitalised at the inception of the lease at the fair value of the leased asset or, if lower,
at the present value of the minimum lease payments. Any initial direct costs are also added to the amount
capitalised. Lease payments are apportioned between the finance charges and reduction of the lease liability
so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are
charged to profit or loss. Contingent rents, if any, are charged as expenses in the periods in which they are
incurred.
Leased assets are depreciated over the estimated useful life of the asset. However, if there is no reasonable
certainty that the Group will obtain ownership by the end of the lease term, the asset is depreciated over the
shorter of the estimated useful life and the lease term.
Operating lease payments are recognised as an expense in profit or loss on a straight-line basis over the
lease term. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental
expense over the lease term on a straight-line basis.

ii.

As lessor
Leases where the Group and the Company retain substantially all the risks and rewards of ownership of the
asset are classified as operating leases. Initial direct costs incurred in negotiating an operating lease are
added to the carrying amount of the leased asset and recognised over the lease term on the same bases as
rental income. The accounting policy for rental income is set out in Note 2.27 (v).

2.23

Borrowings costs
Borrowing costs are capitalised as part of the cost of a qualifying asset if they are directly attributable to the acquisition,
construction or production of that asset. Capitalisation of borrowing costs commences when the activities to prepare
the asset for its intended use or sale are in progress and the expenditures and borrowing costs are incurred. Borrowing
costs are capitalised until the assets are substantially completed for their intended use or sale.
All other borrowing costs are recognised in profit or loss in the period they are incurred. Borrowing costs consist of
interest and other costs that the Group and the Company incurred in connection with the borrowing of funds.

2.24

Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event,
it is probable that an outflow of economic resources will be required to settle the obligation and the amount of the
obligation can be estimated reliably.
Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is no longer
probable that an outflow of economic resources will be required to settle the obligation, the provision is reversed. If
the effect of the time value of money is material, provisions are discounted using a current pre tax rate that reflects,
where appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the
passage of time is recognised as a finance cost.

64

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)


FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

2.

Summary of significant accounting policies (contd.)

2.25

Employee benefits
i.

Short term benefits


Wages, salaries, bonuses and social security contributions are recognised as an expense in the year in
which the associated services are rendered by employees. Short term accumulating compensated absences
such as paid annual leave are recognised when services are rendered by employees that increase their
entitlement to future compensated absences. Short term non-accumulating compensated absences such as
sick leave are recognised when the absences occur.

ii.

Defined contribution plans


Defined contribution plans are post-employment benefit plans under which the Group pays fixed contributions
into separate entities or funds and will have no legal or constructive obligation to pay further contributions if
any of the funds do not hold sufficient assets to pay all employee benefits relating to employee services in
the current and preceding financial years. Such contributions are recognised as an expense in profit or loss
as incurred. As required by law, companies in Malaysia make such contributions to the Employees Provident
Fund ("EPF"). The Group's foreign subsidiary also make contributions to its respective country's statutory
pension scheme.

2.26

Foreign currencies
i.

Functional and presentation currency


The individual financial statements of each entity in the Group are measured using the currency of the primary
economic environment in which the entity operates ("the functional currency"). The financial statements of the
Group and of the Company are presented in Ringgit Malaysia ("RM"), which is also the Company's functional
currency.

ii.

Foreign currency transactions


Transactions in foreign currencies are measured in the respective functional currencies of the Company
and its subsidiaries and are recorded on initial recognition in the functional currencies at exchange rates
approximating those ruling at the transaction dates. Monetary assets and liabilities denominated in foreign
currencies are translated at the rate of exchange ruling at the reporting date. Non-monetary items denominated
in foreign currencies that are measured at historical cost are translated using the exchange rates as at the
dates of the initial transactions. Non-monetary items denominated in foreign currencies measured at fair
value are translated using the exchange rates at the date when the fair value was determined.
Exchange differences arising on the settlement of monetary items or on translating monetary items at the
reporting date are recognised in profit or loss except for exchange differences arising on monetary items
that form part of the Groups net investment in foreign operations, which are recognised initially in other
comprehensive income and accumulated under foreign currency translation reserve in equity. The foreign
currency translation reserve is reclassified from equity to profit or loss of the Group on disposal of the foreign
operation.
Exchange differences arising on the translation of non-monetary items carried at fair value are included in
profit or loss for the period except for the differences arising on the translation of non-monetary items in
respect of which gains and losses are recognised directly in equity. Exchange differences arising from such
non-monetary items are also recognised directly in equity.

iii.

Foreign operations
The results and financial position of foreign operations that have a functional currency different from the
presentation currency of the consolidated financial statements are translated into RM as follows:
-

Assets and liabilities for each statement of financial position presented are translated at the closing
rate prevailing at the reporting date;

Income and expenses for each statement of comprehensive income are translated at average
exchange rates for the year, which approximate the exchange rates at the dates of the transactions;
and

All resulting exchange differences are taken to the foreign currency translation reserve within equity.

65

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)

FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

2.

Summary of significant accounting policies (contd.)

2.26

Foreign currencies (contd.)


iii.

Foreign operations (contd.)


Goodwill and fair value adjustments arising on the acquisition of foreign operations on or after 1 January 2006
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 reporting date. Goodwill and fair value adjustments
which arose on the acquisition of foreign subsidiaries before 1 January 2006 are deemed to be assets and
liabilities of the parent company and are recorded in RM at the rates prevailing at the date of acquisition.

2.27

Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the
revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is
recognised:
i.

Sale of goods
Revenue is recognised net of sales taxes and upon transfer of significant risks and rewards of ownership
to the buyer. Revenue is not recognised to the extent where there are significant uncertainties regarding
recovery of the consideration due, associated costs or the possible return of goods.

ii.

Sale of completed property


A property is regarded as sold when the significant risks and returns have been transferred to the buyer,
which is normally on unconditional exchange of contracts. For conditional exchanges, sales are recognised
only when all the significant conditions are satisfied.

iii.

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

iv.

Management fees
Management fees are recognised when services are rendered.

v.

Rental income
Rental income is recognised on a straight-line basis over the term of the lease. The aggregate cost of
incentives provided to lessees is recognised as a reduction of rental income over the lease term on a straightline basis.

vi.

Interest income
Interest income is recognised on an accrual basis using the effective interest method.

vii.

Revenue on award credits


Revenue on award credits is recognised based on the number of award credits that have been redeemed in
exchange for free or discounted goods, relative to the total number of award credits expected to be redeemed.

2.28

Government grant
Government grant is recognised at its fair value where there is reasonable assurance that the grant will be received
and all conditions attached will be met. Where the grant relates to an asset, the fair value is recognised as deferred
capital grant in the statements of financial position and is amortised to the statements of comprehensive income over
the expected useful life of the relevant asset by equal annual instalments.
Grant contributed towards the acquisition of plant and equipment is deducted from the cost of those assets.

66

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)


FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

2.

Summary of significant accounting policies (contd.)

2.29

Land use rights


Land use rights are initially measured at cost. Following initial recognition, land use rights are measured at cost less
accumulated amortisation and accumulated impairment losses. The land use rights are amortised over the lease term
of 6 years.

2.30

Segment reporting
For management purposes, the Group is organised into operating segments based on their products and services
which are independently managed by the respective segment managers responsible for the performance of the
respective segments under their charge. The segment managers report directly to the management of the Company
who regularly review the segment results in order to allocate resources to the segments and to assess the segment
performance. Additional disclosures on each of these segments are shown in Note 43, including the factors used to
identify the reportable segments and the measurement basis of segment information.

2.31

Contingencies
A contingent liability or asset is a possible obligation or asset that arises from past events and whose existence will
be confirmed only by the occurrence or non-occurrence of uncertain future event(s) not wholly within the control of
the Group and of the Company.
Contingent liabilities and assets are not recognised in the statements of financial position of the Group and of the
Company.

2.32

Current and non-current classification


The Group and the Company present assets and liabilities in statements of financial position based on current and
non-current classification.
An asset is classified as current when it is:
- expected to be realised or intended to be sold or consumed in normal operating cycle;
- held primarily for the purpose of trading;
- expected to be realised within 12 months after the reporting period; or
- cash and cash equivalents unless restricted from being exchanged or used to settle a liability for at least 12
months after the reporting period.
All other assets are classified as non-current.
A liability is classified as current when:
- it is expected to be settled in normal operating cycle;
- it is held primarily for the purpose of trading;
- it is due to be settled within 12 months after the reporting period; or
- there is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting
period.
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities, respectively.

67

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)

FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

3.

Significant accounting judgements and estimates


The preparation of the financial statements of the Group and of the Company requires management to make
judgements, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities,
and the disclosure of contingent liabilities at the reporting date. However, uncertainty about these assumptions and
estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or
liability affected in the future.

3.1

Judgements made in applying accounting policies


In the process of applying the Groups accounting policies, management has made the following judgements, apart
from those involving estimations, which have the most significant effect on the amounts recognised in the financial
statements:
i.

Classification of property
The Group has developed certain criteria based on MFRS 140: Investment Property in making judgement
whether a property qualifies as an investment property. Investment property is a property held to earn rentals
or for capital appreciation or both.
The Company has leased out its building to a subsidiary as a supermarket and departmental store and
accordingly the building is classified as investment property in the Company's financial statements. The
building is classified as property, plant and equipment in the Group's financial statements as it is held for use
in the supply of goods and services.
Property that is held for sale in the ordinary course of business is classified as inventory property.

ii.

Operating lease commitments the Company as a lessor


The Company has entered into property leases with a subsidiary on its investment properties. The Company
has determined that it retains all the significant risks and rewards of ownership of these properties which are
leased out as operating leases.

3.2

Key sources of estimation uncertainty


The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that
have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
financial year are discussed below.
i.

Impairment of goodwill
The Group determines whether goodwill are impaired at least on an annual basis. This requires an estimation
of the value-in-use of the cash-generating units ("CGU") to which goodwill are allocated. Estimating a valuein-use amount requires management to make an estimate of the expected future cash flows from the CGU
and also to choose a suitable discount rate in order to calculate the present value of those cash flows. The
carrying amount of the goodwill as at 31 May 2014 of the Group was RM4,665,045 (2013: RM4,665,045) is
disclosed in Note 21.

ii.

Deferred tax assets


Deferred tax assets are recognised for all unused tax losses and unabsorbed capital allowances to the extent
that it is probable that taxable profit will be available against which the losses and capital allowances can be
utilised. Significant management judgement is required to determine the amount of deferred tax assets that
can be recognised, based upon the likely timing and level of future taxable profits together with future tax
planning strategies. The total carrying value of unrecognised tax losses and capital allowances of the Group
is disclosed in Note 34.

iii.

Depreciation of plant and machinery


The cost of plant and machinery for the manufacturing of flexible printed circuit boards of the Group are
depreciated on a straight-line basis over the assets' useful lives. Management estimates the useful lives
of these plant and machinery to be within 5 to 8 years. These are common life expectancies applied in the
precisions industry. Changes in the expected level of usage and technological developments could impact
the economic useful lives and the residual values of these assets, therefore future depreciation charges could
be revised.

68

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)


FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

3.

Significant accounting judgements and estimates (contd.)

3.2

Key sources of estimation uncertainty (contd.)


iv.

Impairment of financial assets


The Group and the Company assess at each reporting date whether there is any objective evidence that a
financial asset is impaired. To determine whether there is objective evidence of impairment, the Group and
the Company consider factors such as the probability of insolvency or significant financial difficulties of the
debtor and default or significant delay in payments.
Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated
based on historical loss experience for assets with similar credit risk characteristics. The carrying amount of
the Groups and the Company's loans and receivables at the reporting date is disclosed in Note 24.

v.

Deferred revenue
The Group allocates the consideration received from the sale of goods to the goods sold and the points
issued under its loyalty programme. The consideration allocated to the points issued is measured at their fair
value.
The carrying amount of deferred revenue allocated to the award credits at the reporting date was RM1,712,534
(2013: RM1,316,804) is disclosed in Note 37.

vi.

Impairment loss on investments in subsidiaries and associate


The Company has recognised impairment loss in respect of investments in subsidiaries and associate. The
Company carried out the impairment test based on the estimation of the higher of the value-in-use or the
fair value less cost to sell of the cash-generating units ("CGU") to which the investments in subsidiaries and
associate belong to. Estimating the recoverable amount requires the Company to make an estimate of the
expected future cash flows from the CGU and also to determine a suitable discount rate in order to calculate
the present value of those cash flows.
The carrying amount at the reporting date for investments in subsidiaries and associate is disclosed in Notes
17 and 19.

4.

Revenue

Sales of goods
Proceeds from the sale of inventory property
Sales of completed properties
Loan interest income
Rental income from:
- investment property
- operating leases, other than those relating to
investment property
Management fees from subsidiaries
Gross dividends from subsidiaries

Group
2014
RM

2013
RM

Company
2014
RM

2013
RM

368,698,511
3,590,160
354,100
5,600

367,859,428
249,000
5,360

1,656,684

1,656,684

5,516,647
378,165,018

4,220,762
372,334,550

60,000
4,830,636
6,547,320

240,000
11,838,536
13,735,220

69

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)

FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

5.

Other operating income


2014
RM
Advertising and promotional income
Amortisation of government grant (Note 32)
Bad debts recovered
Gain on disposal of property, plant and
equipment
Commission income
Insurance claim
Interest income
Miscellaneous
Reversal of impairment loss (Note 24(b))

6.

Employee benefits expense

Wages and salaries


Executive directors' remuneration (Note 7)
Social security contributions
Contributions to defined contribution plan
Other benefits

7.

Directors' remuneration

Directors of the Company


Executive:
Salaries and other emoluments
Fees
Bonus
Contributions to defined contribution plan

Non-executive:
Other emoluments
Fees

Group

2013
RM

2014
RM

Company

2013
RM

407,785
50,000
-

310,684
50,000
50,000

42,114
6,808
835,610
1,401,886
2,744,203

7,466
20,839
595,610
857,040
1,891,639

84,409
7,833,179
7,917,588

71,191
260,160
331,351

Group
2014
RM
20,919,332
1,309,982
200,721
1,476,442
1,495,737
25,402,214

Group
2014
RM

2013
RM
18,609,646
1,341,395
197,498
1,435,162
1,384,607
22,968,308

2013
RM

Company
2014
RM
192,600
510
193,110

Company
2014
RM

2013
RM
192,600
192,600

2013
RM

395,706
177,600
52,500
32,070
657,876

379,564
177,600
45,000
30,180
632,344

18,000
174,600
192,600

18,000
174,600
192,600

50,000
74,000
124,000

50,000
74,000
124,000

50,000
65,000
115,000

50,000
65,000
115,000

70

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)


FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

7.

Directors' remuneration (contd.)

Group
2014
RM

2013
RM

Company
2014
RM

2013
RM

Directors of subsidiaries
Executive:
Salaries and other emoluments
Fees
Bonus
Contributions to defined contribution plan

482,206
9,000
93,684
67,216
652,106

580,022
9,000
47,952
72,077
709,051

150,000

150,000

Total directors remuneration (Note 39(b))


Estimated money value of benefits-in-kind

1,583,982
22,952

1,615,395
28,294

307,600
-

307,600
-

Total directors remuneration including


benefits-in-kind

1,606,934

1,643,689

307,600

307,600

1,309,982

1,341,395

192,600

192,600

274,000
1,583,982
22,952

274,000
1,615,395
28,294

115,000
307,600
-

115,000
307,600
-

1,606,934

1,643,689

307,600

307,600

Non-executive:
Fees

Analysis:
Total executive directors' remuneration (Note 6)
Total non-executive directors' remuneration
(Note 8)
Total directors' remuneration
Estimated money value of benefits-in-kind
Total directors remuneration including
benefits-in-kind

The executive directors remuneration of the Group amounting to RM1,309,982 (2013: RM1,341,395) are paid to the
present directors of the Group.
The number of directors of the Company whose total remuneration during the year fell within the following bands is
analysed below:

Executive directors:
RM50,001 - RM100,000
RM100,001 - RM150,000
RM300,001 - RM350,000
Non-executive directors:
Below RM50,000

Number of directors
2014
2013
2
1

2
1

71

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)

FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

8.

Other operating expenses


Included in other operating expenses are:

Auditors' remuneration:
- statutory audit
- current year
- underprovision in
prior years
- other services
Allowance for impairment of doubtful debts
(Note 24(b))
Bad debts written off
Foreign exchange (gains)/losses:
- realised
- unrealised
Non-executive directors' remuneration (Note 7)
- present directors

9.

Group
2014
RM

2013
RM

153,170

25,000

25,000

5,000

17,000
5,000

34,317

466,265

5,183,179
-

(975,401)
(172,744)

(172,422)
213,646

274,000

274,000

115,000

115,000

Finance costs

Income tax expense

Current year income tax:


Malaysian income tax
Overprovision in prior year
Deferred tax (Note 34):
Relating to origination and reversal of temporary
differences
Overprovision in prior year
Income tax recognised in profit or loss

2013
RM

153,832

Group
2014
RM

Interest expense:
Bankers' acceptances
Bank overdrafts
Term loans
Unwinding of discount on non-current payable

10.

Company
2014
RM

2013
RM

100,007
285,203
476,163
311,301
1,172,674

Group
2014
RM

2013
RM

131,057
27,071
13,877
172,005

Company
2014
RM

2013
RM

4,651,694
(6,790,216)
(2,138,522)

6,666,641
(4,401)
6,662,240

1,517,567
(2,340)
1,515,227

1,669,630
(9,559)
1,660,071

(682,825)
(234,755)
(917,580)
(3,056,102)

(971,560)
(200,496)
(1,172,056)
5,490,184

1,515,227

1,660,071

Domestic income tax is calculated at the Malaysian statutory tax rate of 25% (2013: 25%) of the estimated assessable
profit for the year.
Taxation of other jurisdictions is calculated at the rates prevailing in the respective jurisdiction.

72

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)


FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

10.

Income tax expense (contd.)


A reconciliation of income tax expense applicable to profit before tax at the statutory income tax rate to income tax
expense at the effective income tax rate of the Group and of the Company is as follows:
2014
RM

2013
RM

Profit before tax

14,844,611

19,186,944

Taxation at Malaysian statutory tax rate of 25%


Different tax rates in other countries
Expenses not deductible for tax purposes
Income not subject to tax
Effect of utilisation of previously unrecognised deferred tax assets
Deferred tax assets not recognised during the year
Overprovision of income tax expense in prior year
Overprovision of deferred tax in prior year
Income tax (benefit)/expense for the year

3,711,153
1,773,006
(1,764,281)
(8,374)
257,365
(6,790,216)
(234,755)
(3,056,102)

4,796,736
(1,996)
1,351,529
(333,476)
(406,117)
288,405
(4,401)
(200,496)
5,490,184

Profit before tax

13,616,837

7,696,178

Taxation at Malaysian statutory tax rate of 25%


Expenses not deductible for tax purposes
Income not subject to tax
Overprovision of income tax expense in prior year
Income tax expense for the year

3,404,209
164,881
(2,051,523)
(2,340)
1,515,227

1,924,045
1,503,126
(1,757,541)
(9,559)
1,660,071

Group

Company

Group
(i)

A subsidiary has on 18 January 2010 obtained approval from Malaysian Industrial Development Authority
("MIDA"), subject to certain conditions being complied with, 100% tax exemption on its statutory income on
"Fine Resolution Interconnect Flexible Printed Circuit Boards" (Pitch < 3mm) for a period of 5 years from
the "Production Date". The subsidiary has subsequently applied to MIDA to vary one of its conditions and
its application has been approved by MIDA. The subsidiary has in turn submitted an application to fix its
"Production Date" to the Ministry of International Trade and Industry ("MITI").
On 23 July 2013, MITI has approved the subsidiary's application and fixed 1 June 2009 as the "Production
Date" of the subsidiary where 100% of its statutory income on "Fine Resolution Interconnect Flexible Printed
Circuit Boards" (Pitch < 3mm) is tax exempted for a period of 5 years from 1 June 2009 to 31 May 2014.
During the current year, the subsidiary has re-submitted the revised corporate tax return to the tax authority
for year of assessments 2010, 2011, 2012 and 2013. Accordingly, the tax paid in prior years in respect of
these years of assessment amounting to approximately RM6,800,000 have been reversed as overprovision
in prior year and recorded as tax recoverable as at 31 May 2014.

73

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)

FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

11.

Basic earnings per share


Basic earnings per share amounts are calculated by dividing profit for the year attributable to ordinary equity holders
of the Company by the weighted average number of ordinary shares in issue during the financial year, excluding
treasury shares held by the Company.
Diluted earnings per share amounts are calculated by dividing profit for the year from continuing operations, net of
tax, attributable to owners of the parent by the weighted average number of ordinary shares outstanding during the
financial year plus the weighted average number of ordinary shares that would be issued on the conversion of all the
dilutive potential ordinary shares into ordinary shares.
Group
2014
RM
Profit for the year attributable to ordinary equity holders of the Company (RM)
Weighted average number of ordinary shares in issue
Basic earnings per share (sen)
Diluted earnings per share (sen)

12.

17,763,907
57,319,148
30.99
30.99

2013
RM
13,890,365
57,334,148
24.23
24.23

Dividend

Group and Company

Amount
2014
RM

2013
RM

Net dividend per share


2014
2013
Sen
Sen

In respect of financial year ended 31 May 2012:


First and final dividend of 8% less 25% taxation,
declared on 22 November 2012 and paid on
14 December 2012

3,441,189

6.00

3,439,329

3.44

3,439,329

3,441,189

3.44

6.00

In respect of financial year ended 31 May 2013:


First and final dividend of 8% less 25% taxation,
declared on 28 November 2013 and paid on
18 December 2013

At the forthcoming Annual General Meeting, a first and final single tier dividend of 6% in respect of the current financial
year ended 31 May 2014, on 57,314,448 ordinary shares (the number of outstanding ordinary shares in issue of the
Company as at 31 May 2014 after the set off with 3,685,800 ordinary shares bought back by the Company and held
as treasury shares subsequent to year end) amounting to RM3,438,867 (6 sen net per share) will be proposed for
shareholders' approval. The financial statements for the current financial year do not reflect this proposed dividend.
Such dividends when approved by the shareholders will be accounted for in equity as an appropriation of retained
earnings in the financial year ending 31 May 2015.

13.

Net carrying amount


At 31 May 2014

Accumulated depreciation
At 1 June 2013
Depreciation charge for
the year
Reclassifications
Disposals
Write off
At 31 May 2014

Cost
At 1 June 2013
Additions
Reclassifications
Disposals
Write off
At 31 May 2014

2014

Group

Property, plant and equipment

5,523,768

13,212
28,492

63,848
999,835

2,313,308

15,280

1,030,570
4,521,690
5,552,260

Long-term
leasehold
apartment
RM

935,987

3,313,143
3,313,143

Short-term
leasehold
land
RM

69,515,100

3,469,393
76,954
23,699,595

20,153,248

59,368,975
155,038
33,690,682
93,214,695

Buildings
RM

17,380,074

5,008,001
(17,172)
(1,326,794)
(5,360,023)
47,917,637

49,613,625

63,104,649
1,215,268
7,986,191
(1,601,407)
(5,406,990)
65,297,711

Plant and
machinery
RM

3,421,862

1,519,639
(59,782)
(3,135,833)
14,594,224

16,270,200

19,477,253
1,552,037
122,628
(3,135,832)
18,016,086

Office
equipment,
renovation,
furniture
and fittings
RM

469,141

212,545
(6,369)
5,150,717

4,944,541

5,237,725
198,413
190,090
(6,370)
5,619,858

Computers
RM

751,434

209,538
2,380,023

2,170,485

3,131,457
3,131,457

Motor
vehicles
RM

32,288,041

1,096,591

1,096,591

56,267,943
23,627,970
(46,511,281)
33,384,632

Capital
work-inprogress
RM

131,662,728

10,496,176
(1,326,794)
(8,502,225)
95,867,114

95,199,957

210,931,715
26,748,726
(1,601,407)
(8,549,192)
227,529,842

Total
RM

74
ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)

FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

13.

Net carrying amount


At 31 May 2013

Accumulated depreciation
At 1 June 2012
Depreciation charge for
the year
Write off
Exchange differences
At 31 May 2013

Cost
At 1 June 2012
Additions
Reclassifications
Disposals
Write off
Exchange differences
At 31 May 2013

2013

Group

1,015,290

13,099
15,280

63,856
935,987

2,377,156

2,181

1,030,570
1,030,570

Long-term
leasehold
apartment
RM

872,131

3,313,143
3,313,143

Short-term
leasehold
land
RM

Property, plant and equipment (contd.)

39,215,727

3,099,272
20,153,248

17,053,976

59,316,986
51,989
59,368,975

Buildings
RM

13,491,024

4,018,346
(14,479,498)
49,613,625

60,074,777

76,591,190
495,258
633,096
(14,614,895)
63,104,649

Plant and
machinery
RM

3,207,053

2,182,324
(1,303,127)
643
16,270,200

15,390,360

20,445,993
283,954
65,000
(1,318,435)
741
19,477,253

Office
equipment,
renovation,
furniture
and fittings
RM

293,184

271,413
(40,303)
4,944,541

4,713,431

5,283,425
29,650
(75,350)
5,237,725

Computers
RM

960,972

203,617
(130,555)
2,170,485

2,097,423

2,948,318
313,695
(130,556)
3,131,457

Motor
vehicles
RM

55,171,352

1,096,591

1,096,591

29,297,337
27,687,702
(698,096)
(19,000)
56,267,943

Capital
work-inprogress
RM

115,731,758

9,851,927
(15,953,483)
643
95,199,957

101,300,870

198,226,962
28,862,248
(19,000)
(16,139,236)
741
210,931,715

Total
RM

ANNUAL REPORT 2014

75

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)


FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

76

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)


FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

13.

Property, plant and equipment (contd.)

Plant and
machinery
RM

Office
equipment,
renovation,
furniture
and fittings
RM

Computers
RM

Motor
vehicles
RM

Total
RM

Cost
At 1 June 2013/At 31 May 2014

1,443,263

18,292

26,003

535,017

2,022,575

Accumulated depreciation
At 1 June 2013
Depreciation charge for the year
At 31 May 2014

1,441,171
342
1,441,513

18,291
18,291

23,990
630
24,620

535,016
535,016

2,018,468
972
2,019,440

1,750

1,383

3,135

Cost
At 1 June 2012/At 31 May 2013

1,443,263

18,292

26,003

535,017

2,022,575

Accumulated depreciation
At 1 June 2012
Depreciation charge for the year
At 31 May 2013

1,440,695
476
1,441,171

18,291
18,291

23,360
630
23,990

535,016
535,016

2,017,362
1,106
2,018,468

2,092

2,013

4,107

Company
2014

Net carrying amount


At 31 May 2014
2013

Net carrying amount


At 31 May 2013
(a)

Included in property, plant and equipment are:


(i)

a motor vehicle of the Company with net carrying amount of RM1 (2013: RM1) which is registered
under the name of an employee of the subsidiary in trust for the Company;

(ii)

motor vehicles of a subsidiary with net carrying amount of RM47,173 (2013: RM65,309) which are
registered under the name of a director of the Company, i.e. Dato' Hwang Thean Long in trust for
the said subsidiary;

(iii)

leasehold land of a subsidiary included under capital work-in-progress with a net carrying amount
of RM16,273,409 (2013: RM16,273,409) pledged to a bank to secure bank borrowings as disclosed
in Note 33; and

(iv)

land and building of a subsidiary with a net carrying amount of RM4,521,690 and RM33,123,704
respectively, pledged to a bank to secure bank borrowings as disclosed in Note 33; and

(v)

fully depreciated property, plant and equipment which are still in use with the following costs:
Group
2014
RM
Buildings
Plant and machinery
Office equipment, renovation,
furniture and fittings
Computers
Motor vehicles

2013
RM

Company
2014
RM

2013
RM

938,648
24,241,679

938,648
23,828,544

1,440,273

1,438,512

5,922,352
4,566,212
1,470,050
37,138,941

8,942,112
4,037,880
1,426,417
39,173,601

18,290
21,803
535,017
2,015,383

18,290
21,803
535,017
2,013,622

77

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)

FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

13.

14.

Property, plant and equipment (contd.)


(b)

The short term leasehold land has an unexpired lease of 35 years (2013: 36 years).

(c)

The long term leasehold land included under capital work-in-progress has an unexpired lease of 90 years
(2013: 91 years).

(d)

The long term leasehold apartment has an unexpired lease of 76 years (2013: 77 years).

(e)

Included in the buildings of the Group are buildings erected on land leased from statutory bodies with a net
carrying amount of RM2,160,285 (2013: RM4,208,483).

Investment property

Leasehold land and building


Cost
At 1 June 2013 / 31 May 2014
Accumulated depreciation
At 1 June 2013 / 2012
Depreciation charge for the year
At 31 May 2014 / 2013
Net carrying amount
At 31 May 2014 / 2013

Company
2014
RM

2013
RM

29,078,033

29,078,033

5,104,571
473,171
5,577,742

4,631,400
473,171
5,104,571

23,500,291

23,973,462

Company
The investment property of the Company has an open market value of approximately RM25,800,000 (2013:
RM25,800,000) and is leased to a subsidiary as a supermarket and departmental store.
The title deed of the investment property is registered under the name of a corporate shareholder of the Company,
i.e. Suiwah Holdings Sdn. Bhd., a company in which a director of the Company, i.e. Dato' Hwang Thean Long has a
substantial interest. The strata title of the building is in the process of being transferred to the Company.
Direct operating expenses incurred by the Company on the investment property during the financial year amounted
to RM652,357 (2013: RM652,355).

15.

Land use rights

At 1 June 2013 / 2012


Amortisation during the year
At 31 May 2014 / 2013

Group
2014
RM
256,409
(215,266)
41,143

2013
RM
471,675
(215,266)
256,409

78

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)


FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

16.

Intangible asset

Group
2014
RM

Patent license
Cost:
At 1 June 2013 / 2012
Additions
At 31 May 2014 / 2013
Accumulated amortisation:
At 1 June 2013 / 2012
Amortisation during the year
At 31 May 2014 / 2013
Net carrying amount:
At 31 May 2014 / 2013

17.

2013
RM

6,905,900
6,905,900

6,905,900
6,905,900

374,070
374,070

6,531,830

6,905,900

Investments in subsidiaries

Company
2014
RM

Unquoted shares in Malaysia, at cost:


Impairment losses

69,260,773
(962,154)
68,298,619

2013
RM

60,560,774
(1,304,430)
59,256,344

Impairment assessment
As at 31 May 2014, the Company carried out a review of the recoverable amount of its investments in subsidiaries. A
reversal of impairment loss of RM342,276 has been recognised in profit or loss, increasing the net carrying amount of
the investment in Great Support Sdn. Bhd. to its recoverable amount as at 31 May 2014.
(a)

Details of the Group's subsidiaries are as follows:

Name of subsidiaries

% of ownership interest
held by the Group
2014
2013
Principal activities

Incorporated in Malaysia
Sunshine Wholesale Mart Sdn. Bhd.

100

100

Operator of a supermarket and departmental


store and money lending

Sunshine Supermarket & Departmental


Store Sdn. Bhd.

100

100

Operator of supermarkets and


departmental stores and
trading of cable wires

Sunshine Link Sdn. Bhd.

100

100

Investment holding

Aljano Sdn. Bhd.

100

100

Trading in general merchandise, garments


and construction materials

Magirex Sdn. Bhd.

100

100

Property investment

Sunshine Electrical Superstore Sdn. Bhd.

100

100

Supply of electricity

79

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)

FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

17.

Investments in subsidiaries (contd.)


(a)

Details of the Group's subsidiaries are as follows: (contd.)

Name of subsidiaries

% of ownership interest
held by the Group
2014
2013
Principal activities

Great Support Sdn. Bhd.

75

75

Property development

Crimson Omega Sdn. Bhd.

100

100

Property development

Silver Resort Sdn. Bhd.

100

100

Property development

Sunshine Amanjaya Sdn. Bhd. (i)

100

100

Sub-letting of properties and trading of


merchandise goods

Sunshine (Labuan) Private Limited (i)

100

100

Dormant

Qdos Holdings Bhd.

100

100

Investment holding

Sunshine Amanjaya Pte Ltd (i), (iii)

51

51

International trading business

100

100

Intended principal activities are to act as a


main distributor, importer and exporter of
merchandise goods

Qdos Flexcircuits Sdn. Bhd.

100

100

Manufacturing of flexible printed circuit


boards

Qdos Technology Sdn. Bhd.

100

100

Research and development, design and


prototyping of flexible printed circuit boards

Qdos Marketing Sdn. Bhd.

100

100

Design services of flexible printed circuit


boards and trading in general merchandise

Qdos Interconnect Sdn. Bhd.

100

100

Manufacturing and trading in semiconductor

100

100

Design of flexible printed circuit boards. The


Company remained dormant during the
year.

Incorporated in Indonesia
PT. Sunshine Amanjaya Indonesia (ii)

Held under Qdos Holdings Bhd.


Incorporated in Malaysia

Incorporated in India
Qdos Flexcircuits (India)
Private Limited (i)
(i)

Audited by firms of auditors other than Ernst & Young

(ii)

The Company has a 99% equity interest in the subsidiary and the remaining 1% equity interest is held by a
wholly owned subsidiary, Sunshine Amanjaya Sdn. Bhd.

(iii)

The Company has a 50% equity interest in the subsidiary and the remaining 1% equity interest is held by a
wholly owned subsidiary, Sunshine Wholesale Mart Sdn. Bhd.

80

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)


FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

17.

Investments in subsidiaries (contd.)


(b)

Summarised financial information of Great Support Sdn. Bhd. which has non-controlling interests that is
material to the Group is set out below. The summarised financial information presented below is the amount
before inter-company elimination. The non-controlling interests in respect of Sunshine Amanjaya Pte Ltd is
not material to the Group.
(i)

(ii)

Summarised statement of financial position


2014
RM

2013
RM

Non-current assets
Current assets
Total assets

3,180,511
3,180,511

2,834,809
2,834,809

Current liabilities, representing total liabilities


Net assets

68,907
3,111,604

21,790
2,813,019

Equity attributable to:


- owners of the Company
- non controlling interests

2,333,703
777,901

2,109,764
703,255

2014
RM

2013
RM

3,590,160

568,585

130,895

426,439
142,146

98,171
32,724

68,204

2014
RM

2013
RM

Summarised statement of comprehensive income

Revenue
Profit for the year, representing total
comprehensive income for the year
Profit for the year, representing total
comprehensive income for the year
attributable to:
- owners of the Company
- non controlling interests
Dividend paid to non controlling interests
(iii)

Summarised cash flows

Net cash from/(used) in operating activities


Net cash from investing activities
Net cash (used in)/from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents as at 1 June
Cash and cash equivalents as at 31 May

3,422,452
35,732
(277,673)
3,180,511
3,180,511

(3,893)
3,893
-

81

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)

FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

18.

Investment in a joint venture


Group
2014
RM
Unquoted shares outside Malaysia, at cost
Share of post acquisition reserve
Exchange differences

15,063,373
12,344
(3,007,346)
12,068,371

2013
RM
15,063,373
(45,424)
(2,949,372)
12,068,577

During the year ended 31 May 2011, the Groups subsidiaries, Qdos Flexicircuits Sdn. Bhd. and Qdos Flexicircuit
(India) Private Limited have entered into a Shareholders' Agreement with M.J Shantharam, Valdel Real Estate Pvt. Ltd
and Exora Technologies Private Limited (Exora) to subscribe up to 22,500,000 new shares of Rupees 10 each in
Exora, representing 49% of the equity interest in Exora, for a total cash consideration of approximately RM15 million.
As at 31 May 2014, the Groups subsidiaries have in total subscribed for 22,151,893 shares of Rupees 10 each in
Exora, representing 49% of the equity interest in Exora for a total cash consideration of RM15,063,373.
The Group has 49% of the voting rights of its joint arrangement. Under the contractual arrangement, unanimous
consent is required from all parties to the agreement for all relevant activities.
The joint arrangement is structured via separate entity and provides the Group with the rights to the net assets of the
entity under the arrangement. Therefore, this entity is classified as a joint venture of the Group.
(a)

Details of the joint venture are as follows:

Name of joint venture

% of ownership
interest held
by the Group
2014
2013

Nature of relationship

Accounting
model
applied

Held under Qdos


Flexcircuits Sdn. Bhd.
and its subsidiary
Incorporated in India
Exora Technologies
Private Limited

49

49

Venture into the development


of commercial/ residential
properties in India through a
special purpose vehicle.
It is a strategic for the
Group's business
development in India.

Equity
method

82

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)


FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

18.

Investment in a joint venture (contd.)


(b)

Summarised financial information of Exora is set out as below. The summarised information represents the
amounts in the MFRS financial statements of the joint venture and not the Group's share of those amounts.

(i)

Summarised statement of financial position


2014
RM

2013
RM

2,720

2,733

Total assets

1,633,608
2,606,241
24,450,644
7,336,664
36,027,157
36,029,877

227,361
18,282,273
7,360,785
25,870,419
25,873,152

Current liabilities
Short term borrowings
Trade payables
Other current liabilities
Total liabilities
Net assets

11,479,870
245
32,933
11,513,048
24,516,829

1,357,051
246
55
1,357,352
24,515,800

2014
RM

2013
RM

Assets
Non-current assets
Current
Trade receivables
Cash and cash equivalents
Short term loans and advances
Other current assets

(ii)

Summarised statement of comprehensive income

Other income
Administration expenses
Finance cost
Other expenses
Profit before tax
Tax expense
Profit after tax, representing total comprehensive income
(c)

179,908
(11,062)
(24)
(205)
168,617
(50,723)
117,894

(8,952)
(6)
(484)
(9,442)
(9,442)

Reconciliation of the summarised financial information presented above to the carrying amount of the Groups
interest in joint venture:
2014
RM
Net assets at 1 June 2013 / 2012
Profit/(Loss) for the year
Exchange difference
Net assets at 31 May 2014 / 2013
Interest in joint venture
Goodwill
Carrying value of Groups interest in joint ventures

24,515,800
117,894
(116,865)
24,516,829
49%
55,125
12,068,371

2013
RM
25,304,670
(9,442)
(779,428)
24,515,800
49%
55,835
12,068,577

83

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)

FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

19.

Investment in an associate

Group
2014
RM

Unquoted shares outside Malaysia, at cost


Accumulated impairment losses
Share of post acquisition reserve
Exchange difference

1,631,726
1,631,726
(1,513,625)
(118,101)
-

Company
2014
RM

2013
RM
1,631,726
1,631,726
(1,513,625)
(118,101)
-

1,631,726
(1,631,726)
-

2013
RM

1,631,726
(1,631,726)
-

Impairment assessment
The Company has carried out a review of the recoverable amount of its investment in associate due to its net liability
position. The review has led to the retention of the impairment loss of RM1,631,726 recognised in profit or loss in the
prior year, reducing the net carrying amount of the investment to nil.
(a)

Details of the associate are as follows:

Name of associate

% of ownership
interest held
by the Group
2014
2013

Accounting
model
applied

Nature of relationship

Incorporated in India
Valdel Oil and Gas Private
Limited ("VOG")

(b)

25

25

Carrying on business
connected with oil and
natural gas. The Company
has remained dormant
during the year.

Equity
method

Summarised financial information of VOG is set out below. The summarised financial information represents
the amounts in the MFRS financial statements of the associate and not the Groups share of those amounts.
(i)

Summarised statement of financial position

Non-current assets
Current assets
Total assets
Non-current liabilities
Current liabilities
Total liabilities
Net liabilities
(ii)

2014
RM

2013
RM

5,211,741
306,391
5,518,132

5,382,920
403,300
5,786,220

9,874
6,698,193
6,708,067
(1,189,935)

9,874
6,615,544
6,625,418
(839,198)

Summarised statement of comprehensive income


2014
RM
Revenue
Loss before tax
(Loss)/Profit after tax, representing total
comprehensive income

2013
RM

550,009
(304,216)

428,611
(338,353)

(304,216)

547,716

84

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)


FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

20.

Investment securities

Non-current
Available-for-sale financial assets
- Equity instruments (quoted in Malaysia)
-Equity instruments (quoted outside Malaysia)

Market value

21.

Goodwill on consolidation

At 31 May

Group
2014
RM

2013
RM

2,841
273
3,114

2,841
273
3,114

6,216

3,888

Group
2014
RM

2013
RM

4,665,045

4,665,045

Impairment test on goodwill


(a)

Allocation of goodwill
Goodwill has been allocated to the Group's cash-generating units ("CGU") identified according to the business
segment and relates to the manufacturing and designing of flexible printed circuits boards as follows:

Manufacturing
(b)

2014
RM

2013
RM

4,665,045

4,665,045

Key assumptions used in value-in-use ("VIU") calculations


The recoverable amount of the CGU is determined based on VIU calculations using cash flow projections
based on financial forecasts approved by management covering a 5-years period.
The following describes each key assumption on which management has based its cash flow projection for
VIU calculations of CGU to undertake impairment testing of goodwill:
(i)

Budgeted gross margin


The basis used to determine the value assigned to the budgeted gross margin is the average gross
margin achieved in the year immediately before the budgeted year adjusted for expected efficiency
improvement, market and economic conditions and internal resource efficiency, where applicable.

(ii)

Growth rate
The weighted average growth rate used is consistent with the long term average growth rate for the
relevant industry. The forecasted growth rate used to extrapolate cash flows beyond the five-year
period is 3.6% (2013: 3.9%).

(iii)

Discount rate
The discount rate used is on a basis that reflects specific risks relating to the relevant business
segment. The pre-tax discount rate applied to the cash flow projections is 9.6% (2013: 10%)

85

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)

FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

21.

Goodwill on consolidation (contd.)


Sensitivity to changes in assumptions
With regard to the assessment of value-in-use of the CGU, management believes that no reasonable change in any of
the above key assumptions would cause the carrying value of the CGU to materially exceed its recoverable amount.

22.

Inventory property
Group

2014
At 1 June 2013
Costs incurred during the year
Disposals
At 31 May 2014

Freehold
land
RM

Leasehold
land
RM

Development
costs
RM

7,305,719
(2,834,809)
4,470,910

12,417,091
12,417,091

6,443,670
194,043
6,637,713

26,166,480
194,043
(2,834,809)
23,525,714

7,305,719
7,305,719

12,417,091
12,417,091

6,245,547
198,123
6,443,670

25,968,357
198,123
26,166,480

Total
RM

2013
At 1 June 2012
Costs incurred during the year
At 31 May 2013

Included in freehold land is a Malay reserve freehold land with a carrying value of RM Nil (2013: RM2,834,809).
The long term leasehold land is pledged to a bank to secure bank borrowings as disclosed in Note 33 and has an
unexpired lease of 90 years (2013: 91 years).
23.

Inventories

At cost:
Merchandise held for resale
Raw materials
Work-in-progress
Finished goods
Properties held for sale
Spare parts

Group
2014
RM

2013
RM

21,047,243
4,630,669
2,664,016
617,256
4,328,413
448,444
33,736,041

20,619,755
4,518,819
2,206,200
436,670
4,569,693
368,802
32,719,939

33,736,041

791,272
33,511,211

At net realisable value:


Raw materials

The cost of inventories recognised as an expense during the year amounted to RM289,597,882 (2013: RM286,958,287).
The reversal of write-down of inventories amounting to RM157,494 (2013: RM Nil) was made during the year when
the related inventories were sold above their carrying amounts.

86

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)


FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

24.

Trade and other receivables

Trade receivables
Third parties
Allowance for impairment
Trade receivables, net

Group
2014
RM

2013
RM

Company
2014
RM

2013
RM

17,756,403
17,756,403

22,306,783
22,306,783

1,378,260
179,176
-

1,838,260
8,733,639
586

5,730,989
27,693,517
3,773
4,721

5,436,370
24,382,812
1,314
32,834

759,273
1,933,869
56,664
1,085,366
3,835,172
3,835,172
21,591,575
84,236
27,844,565
49,520,376

864,803
594,019
24,750
415,559
1,899,131
1,899,131
24,205,914
28,730
32,199,611
56,434,255

1,000
34,991,436
34,991,436
34,991,436
3,213,822
38,205,258

1,000
3,680,000
44,106,815
(7,833,179)
36,273,636
36,273,636
4,008,160
40,281,796

Other receivables
Due from subsidiaries:
- Magirex Sdn. Bhd.
- Sunshine Amanjaya Sdn. Bhd.
- PT. Sunshine Amanjaya Indonesia
- Sunshine Supermarket & Departmental Store
Sdn. Bhd.
- Sunshine Wholesale Mart Sdn. Bhd.
- Sunshine (Labuan) Private Limited
- Sunshine Amanjaya Pte. Ltd.
Deposits for:
- Rental
- Others
Rental income receivable
Sundry receivables
Dividend receivable from Qdos Holdings Bhd.
Allowance for impairment
Other receivables, net
Total trade and other receivables
Add: Loan receivables (Note 26)
Add: Cash and bank balances (Note 28)
Total loans and receivables
(a)

Trade receivables
The Group's primary exposure to credit risk arises through the trade receivables of its manufacturing
subsidiaries. The Group's trading terms with its customers are mainly on credit, except for new customers,
where payment in advance is normally required. The normal credit periods range from 30 to 75 days (2013:
30 to 75 days). Other credit terms are assessed and approved on a case-by-case basis. The Group seeks to
maintain strict control over its outstanding receivables and has a credit control department to minimise credit
risk. Overdue balances are reviewed regularly by senior management.
At 31 May 2014, the Group has significant exposure to a group of customers, which constitutes approximately
45% (2013: 74%) of the trade receivables as at year end.

87

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)

FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

24.

Trade and other receivables (contd.)


(a)

Trade receivables (contd.)


Ageing analysis of trade receivables
The ageing analysis of the Groups trade receivables is as follows :

Neither past due nor impaired


1 to 30 days past due not impaired
31 to 60 days past due not impaired
61 to 90 days past due not impaired
91 to 120 days past due not impaired
More than 121 days past due not impaired
Impaired

2014
RM

2013
RM

9,664,823

9,708,475

3,790,705
2,025,912
711,837
428,679
1,134,447
8,091,580
17,756,403

5,066,389
3,416,217
2,889,262
39,030
1,187,410
12,598,308
22,306,783

Receivables that are neither past due nor impaired


Trade receivables that are neither past due nor impaired are creditworthy debtors with good payment records
with the subsidiaries.
None of the Groups trade receivables that are neither past due nor impaired have been renegotiated during
the financial year.
Receivables that are past due but not impaired
The Group has trade receivables amounting to RM8,091,580 (2013: RM12,598,308) that are past due at the
reporting date but not impaired. These relate to customers which have no recent history of default and are
monitored on an on-going basis. The receivables that are past due but not impaired are unsecured in nature.
Receivables that are impaired
The Group's trade receivables that are impaired at the reporting date and the movement of the allowance
accounts used to record the impairment are as follows:

Trade receivables:
- nominal amounts
Allowance for impairment

Group
2014
RM
-

2013
RM
-

Movement in allowance accounts:


Group
2014
RM
At 1 June 2013 / 2012
Written off
At 31 May 2014 / 2013

2013
RM
157,729
(157,729)
-

88

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)


FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

24.

Trade and other receivables (contd.)


(b)

Amounts due from subsidiaries


Amounts due from subsidiaries are non-interest bearing and are repayable on demand. These amounts are
unsecured and are to be settled in cash.
Other receivables that are impaired
At 31 May 2013, the Company has provided an allowance of RM7,833,179 for impairment of the unsecured
advances to subsidiaries with nominal amounts of RM8,733,639. At 31 May 2014, the Company has made a
reversal of these impairment.
Company
2014
RM
Other receivables:
- nominal amounts
Allowance for impairment

34,991,436
34,991,436

2013
RM

44,106,815
(7,833,179)
36,273,636

Movement in allowance accounts:


Company
2014
RM
At 1 June 2013 / 2012
Charge for the year (Note 8)
Reversal of impairment loss (Note 5)
At 31 May 2014 / 2013

7,833,179
(7,833,179)
-

2013
RM

2,910,160
5,183,179
(260,160)
7,833,179

Further details on related party transactions are disclosed in Note 39.


Other information on financial risks of receivables are disclosed in Note 41.

25.

Other current assets

Prepayments

26.

Loan receivables

Unsecured advances repayable within twelve months


Loan interest receivable

Group
2014
RM
505,849

2013
RM
398,315

Company
2014
RM
14,932

Group
2014
RM
78,466
5,770
84,236

2013
RM
14,932

2013
RM
26,000
2,730
28,730

The advances are made by a subsidiary, Sunshine Wholesale Mart Sdn. Bhd. whose principal activities include that
of money lending under the Moneylenders Act 1951. The advances bear interest rates of 12% to 18% (2013: 12% to
18%) per annum.

89

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)

FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

27.

Short term investments

Group
2014
RM

Financial assets at fair value through profit or loss


- Unit trust funds (quoted in Malaysia)
- Unquoted investments

Market value of quoted unit trust funds

2013
RM

17,036,600
7,272,496
24,309,096

9,509,662
4,189,173
13,698,835

17,036,600

9,509,662

Other information on financial risks of short term investments is disclosed in Note 41.

28.

Cash and bank balances

Cash on hand and at banks


Deposits with licensed banks:
- short term placements
- fixed deposits

Group
2014
RM

Company
2014
RM

2013
RM

2013
RM

23,892,895

31,367,611

3,213,822

4,008,160

2,400,000
1,551,670
27,844,565

832,000
32,199,611

3,213,822

4,008,160

Included in cash at banks of the Group are amounts of RM2,331,480 (2013: RM2,285,371) held pursuant to Section
7A of the Housing Development (Control and Licensing) Act 1966 and are restricted from use in other operations.
Deposits with licensed banks of the Group amounting to RM430,808 (2013: RM420,070) have been pledged to banks
as collaterals for bank facilities and bankers' guarantees obtained.
Deposits with licensed banks of the Group amounting to RM207,962 (2013: RM136,755) are held in trust by a director.
The range of interest rates earned per annum and the maturities period during the financial year for short term
placements and fixed deposits were as follows:
2014
Interest rates
Maturity period

2013

2.75% - 9.00% 2.95% - 9.00%


14 - 365 days
365 days

Other information on financial risks of cash and cash equivalents is disclosed in Note 41.
For the purposes of the statements of cash flows, cash and cash equivalents comprise the following as at the reporting
date:

Group
2014
RM
Deposits with licensed banks
Less: Fixed deposits pledged to banks

Fixed deposits (more than 90 days)
Add: Cash on hand and at banks
Less: Bank overdraft (Note 33)
Cash and cash equivalents

3,951,670
(430,808)
(412,863)
3,107,999
23,892,895
27,000,894

2013
RM
832,000
(420,070)
(411,930)
31,367,611
(9,142,089)
22,225,522

Company
2014
RM
3,213,822
3,213,822

2013
RM

4,008,160
4,008,160

90

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)


FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

29.

Share capital, share premium and treasury shares


Number of ordinary
shares of RM1 each
Share
capital
(issued and
Treasury
fully paid)
shares

Share
capital
(issued and
fully paid)
RM

Amount

Treasury
shares
RM

Share
premium
RM

At 1 June 2012
Purchase of treasury shares
At 31 May 2013

61,000,248
61,000,248

(3,646,100)
(20,000)
(3,666,100)

61,000,248
61,000,248

(5,316,898)
(29,820)
(5,346,718)

13,934,711
13,934,711

At 1 June 2013
Purchase of treasury shares
At 31 May 2014

61,000,248
61,000,248

(3,666,100)
(15,000)
(3,681,100)

61,000,248
61,000,248

(5,346,718)
(27,663)
(5,374,381)

13,934,711
13,934,711

Authorised:
At 1 June and 31 May

Number of ordinary
shares of RM1 each
2014
2013

100,000,000

100,000,000

Amount
2014
RM

100,000,000

2013
RM

100,000,000

There is no movement in issued and fully paid/ authorised share capital during the year.
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. All ordinary shares rank equally with regard to the Company's residual
assets.
(a)

Treasury shares
The shareholders of the Company, by an ordinary resolution passed in a general meeting held on 28 November
2013, renewed their approval for the Company's plan to buy back its own ordinary shares. The directors of
the Company are committed to enhancing the value of the Company for its shareholders and believe that the
share buy back plan can be applied in the best interests of the Company and its shareholders.
During the financial year, the Company bought back 15,000 (2013: 20,000) of its issued and fully paid
ordinary shares from the open market at an average price of RM1.84 (2013: RM1.49) per share. The total
consideration paid for the share buy back was RM27,663 (2013: RM29,820), consisting of consideration
paid amounting to RM27,510 (2013: RM29,650) and transaction costs of RM153 (2013: RM170). The shares
bought back are being held as treasury shares in accordance with Section 67A of the Companies Act 1965.
Of the total 61,000,248 (2013: 61,000,248) issued and fully paid ordinary shares as at 31 May 2013,
3,681,100 (2013: 3,666,100) are held as treasury shares by the Company. As at 31 May 2014, the number
of outstanding ordinary shares in issue after the set off is therefore 57,319,148 (2013: 57,334,148) ordinary
shares of RM1 each.
Subsequent to year end, the Company bought back 4,700 of its issued ordinary shares from the open market
at an average price of RM2.90 per share. The total consideration paid for the share buy back was RM13,705,
consisting of consideration paid amounting to RM13,630 and transaction costs of RM75. The share buy back
transactions were financed by internally generated funds.

91

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)

FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

30.

Other reserves (non-distributable)

Group
At 1 June 2013 / 2012
Foreign currency translation
At 31 May 2014 / 2013

Foreign currency
translation reserve
2014
2013
RM
RM
(2,875,026)
(37,344)
(2,912,370)

(2,431,366)
(443,660)
(2,875,026)

Group
Other reserve of the Group represents foreign currency translation reserve. The foreign currency translation reserve
is used to record exchange differences arising from the translation of the financial statements of foreign operations
whose functional currencies are different from that of the Group's presentation currency. It is also used to record the
exchange differences arising from monetary items which form part of the Group's net investment in foreign operations,
where the monetary item is denominated in either the functional currency of the reporting entity or the foreign operation.
31.

Retained earnings
Prior to the year of assessment 2008, Malaysian companies adopted the full imputation system. In accordance with
the Finance Act 2007 which was gazetted on 28 December 2007, companies shall not be entitled to deduct tax on
dividend paid, credited or distributed to its shareholders, and such dividends will be exempted from tax in the hands of
the shareholders ("single tier system"). However, there is a transitional period of six years, expiring on 31 December
2013, to allow companies to pay franked dividends to their shareholders under limited circumstances. Companies
also have an irrevocable option to disregard the revised 108 balance and pay dividends under the single tier system.
The change in the tax legislation also provides for the 108 balance to be locked-in as at 31 December 2007 in
accordance with Section 39 of the Finance Act 2007.
The Company did not elect for the irrevocable option to disregard the 108 balance. Accordingly, during the transitional
period, the Company may utilise the credit in the 108 balance to distribute cash dividend payments to ordinary
shareholders as defined under the Finance Act 2007. As at 31 May 2013, the Company has sufficient tax credit in
the revised 108 balance to pay franked dividends amounting to RM20,043,024 out of its retained earnings. Any 108
balance which has not been utilised as at 31 December 2013 is disregarded. Thereafter, the Company may distribute
dividends out of its entire retained earnings under the single tier system.
As at 31 May 2014, the Company has tax exempt profits available for distribution of approximately RM226,897 (2013:
RM226,897), subject to the agreement of the Inland Revenue Board.

32.

Government grant

Group
2014
RM

2013
RM

Cost:
At 1 June 2013 / 31 May 2014

400,000

400,000

Accumulated amortisation:
At 1 June 2013 / 2012
Amortisation during the year (Note 5)
At 31 May 2014/ 2013

185,417
50,000
235,417

135,417
50,000
185,417

50,000
114,583
164,583

50,000
164,583
214,583

Net carrying amount:


Current
Non-current

Government grant relates to grant received for the acquisition of plant and equipment for development activities
undertaken by a subsidiary of the Group to promote technology advancement. There are no unfulfilled conditions or
contingencies attached to the grant.

92

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)


FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

33.

Borrowings

Short term borrowings:


Secured:
Bank overdrafts
Bankers' acceptances
Term loans
Long term borrowings:
Secured:
Term loans
Total borrowings:
Bank overdrafts
Bankers' acceptances
Term loans
Maturity of borrowings:
On demand or within one year
More than 1 year and less than 2 years
More than 2 years and less than 5 years
More than 5 years

Group
2014
RM

2013
RM

4,921,016
1,738,148
6,659,164

9,142,089
3,337,249
931,872
13,411,210

11,370,090

1,480,354

4,921,016
13,108,238
18,029,254

9,142,089
3,337,249
2,412,226
14,891,564

6,659,164
2,154,922
2,809,779
6,405,389
18,029,254

13,411,210
1,480,354
14,891,564

The bank borrowings of the Group are secured by way of:


(i)

a corporate guarantee by the Company;

(ii)

a first legal charge over the leasehold land of a subsidiary included under capital work-in-progress and
inventory property with a carrying amount of RM16,273,409 (2013: RM16,273,409) and RM12,417,091
(2013: RM12,417,091) respectively as disclosed in Note 13 and Note 22.

(iii)

a first party first fixed charge over a piece of land and building of a subsidiary with a carrying amount of
RM4,521,690 and RM33,123,704 respectively as disclosed in Note 13.

Bank overdrafts are denominated in RM and bear interest rate at Nil (2013: 7.5%) per annum.
The bankers' acceptances bore interest rates at the reporting date ranging from 3.73% to 3.92% (2013: 3.70% to
3.75%) per annum.
The term loans of the Group are repayable over:
(i)

seventy eight (78) equal monthly instalments of RM87,217 commencing 1 September 2009. The term
loan bore interest rates at the reporting date ranging from 4.5% to 6.6% (2013: 4.5% to 6.3%) per annum.
Subsequent to year end, the Group has fully settled the term loan. Further details are disclosed in Note 44.

(ii)

hundred and fourty three (143) equal monthly instalments of RM111,590 commencing 4 January 2014. The
last instalment may vary to ensure full settlement of the term loan.The term loan bore a profit rate of 5.1%
(2013: Nil) per annum at the reporting date.

Other information on financial risks of borrowings is disclosed in Note 41.

93

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)

FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

34.

Deferred tax

Group
2014
RM

2013
RM

At 1 June 2013 / 2012


Recognised in profit or loss (Note 10)
At 31 May 2014 / 2013

2,621,026
(917,580)
1,703,446

3,793,082
(1,172,056)
2,621,026

Presented after appropriate offsetting as follows:


Deferred tax liabilities
Deferred tax assets
At 31 May

1,703,446
1,703,446

2,621,026
2,621,026

The components and movements of deferred tax liabilities and assets during the financial year prior to offsetting are
as follows:
Deferred tax liabilities of the Group
Property,
plant and
equipment
RM

Revaluation
surplus *
RM

Others
RM

Total
RM

At 1 June 2013
Recognised in profit or loss
At 31 May 2014

2,181,650
(758,270)
1,423,380

1,090,752
(29,604)
1,061,148

102,873
3,954
106,827

3,375,275
(783,920)
2,591,355

At 1 June 2012
Recognised in profit or loss
At 31 May 2013

2,925,345
(743,695)
2,181,650

1,133,021
(42,269)
1,090,752

295,852
(192,979)
102,873

4,354,218
(978,943)
3,375,275

Deferred tax assets of the Group


Provisions
RM

Others
RM

Total
RM

At 1 June 2013
Recognised in profit or loss
At 31 May 2014

(489,374)
(54,155)
(543,529)

(264,875)
(79,505)
(344,380)

(754,249)
(133,660)
(887,909)

At 1 June 2012
Recognised in profit or loss
At 31 May 2013

(450,679)
(38,695)
(489,374)

(110,457)
(154,418)
(264,875)

(561,136)
(193,113)
(754,249)

Revaluation surplus relates to revaluation of property, plant and equipment in prior years. Upon transition to
MFRS, the Group elected to measure all its property, plant and equipment using cost model. Accordingly, the
revaluation surplus was transferred to retained earnings on date of transition to MFRS.

Deferred tax assets have not been recognised in respect of the following items:
Group
2014
RM
Unused tax losses
Unabsorbed capital allowances
Other deductible temporary differences

5,743,510
2,095,138
23,838
7,862,486

2013
RM
5,757,824
1,240,073
23,954
7,021,851

94

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)


FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

34.

Deferred tax (contd.)


The availability of the unused tax losses and unabsorbed capital allowances for offsetting against future taxable profits
of the respective subsidiaries are subject to no substantial change in shareholdings under the Income Tax Act 1967
and guidelines issued by the tax authority.
No deferred tax assets are recognised in respect of the above as it is not probable that future taxable profit will be
available against which these items can be utilised.

35.

Provision for liabilities

Group
2014
RM

At 1 June 2013 / 2012


Utilisation of provision
At 31 May 2014 / 2013

2013
RM

256,517
256,517

270,285
(13,768)
256,517

This represents provision for liquidated damages in respect of the development projects undertaken by a subsidiary.
The provision is recognised for expected liquidated damages claims based on the terms of the applicable sale and
purchase agreements.
36.

Trade and other payables

Current
Trade payables
Third parties
Related party *
Other payables
Due to subsidiaries:
- Crimson Omega Sdn. Bhd.
- Aljano Sdn. Bhd.
- Silver Resort Sdn. Bhd.
- PT Sunshine Amanjaya Indonesia
Due to tooling suppliers
Deposits received
Rental deposits
Accruals
Other payables

Non-current
Other payable
Total trade and other payables
Add: Borrowings (Note 33)
Total financial liabilities
carried at amortised cost
*

Group
2014
RM

2013
RM

Company
2014
RM

2013
RM

49,015,481
30,443
49,045,924

46,465,134
37,399
46,502,533

112,109
4,500
1,540,379
4,141,005
6,353,082
12,151,075
61,196,999

110,912
5,500
998,944
4,523,333
4,327,405
9,966,094
56,468,627

20,099,627
1,189,349
58,427
144,006
285,105
61,650
21,838,164
21,838,164

22,840,749
627,407
39,021
269,101
61,650
23,837,928
23,837,928

6,299,262

6,064,296

67,496,261
18,029,254

62,532,923
14,891,564

21,838,164
-

23,837,928
-

85,525,515

77,424,487

21,838,164

23,837,928

The related party is Zephyr (Penang) Sdn. Bhd., a company in which a director of a subsidiary, Qdos Holdings
Bhd., i.e. Looi Tik Miow, has an interest.

95

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)

FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

36.

Trade and other payables (contd.)


(a)

Trade payables
Trade payables are non-interest bearing and the normal trade credit terms granted to the Group range from
30 to 90 days (2013: 30 to 90 days).

(b)

Other payables
Included in current and non-current payables of the Group is RM503,941 (2013: RM224,604) and RM6,299,262
(2013: RM6,064,296) respectively for the acquisition of intangible assets. The amount is payable by way
of instalments in the aggregate sum of USD3,000,000 either upon the achievement of certain cumulative
targeted sales quantity or by instalments ranging between USD200,000 to USD400,000 over a period of 10
years by 31 December 2022, whichever is earlier. The gross payable is recognised based on the net present
value discounted at a rate of 4.95% per annum.

(c)

Amounts due to subsidiaries


Amounts due to subsidiaries are non-interest bearing and are repayable on demand. These amounts are
unsecured and are to be settled in cash.

Further details on related party transactions are disclosed in Note 39.


Other information on financial risks of payables are disclosed in Note 41.

37.

Deferred revenue
The Group operates a loyalty programme which allows customers to accumulate points when they purchase products
in the Groups stores. The points can be redeemed for free or for discounted goods from the Groups stores.
Deferred revenue represents consideration received from the sale of goods that is allocated to the points issued under
the loyalty programme that are expected to be redeemed but are still outstanding as at the reporting date.
At 31 May 2014, the estimated liability for unredeemed points amounted to RM1,712,534 (2013: RM1,316,804):
Group
2014
RM
At 1 June 2013 / 2012
Recognised in profit or loss (net)
At 31 May 2014 / 2013

1,316,804
395,730
1,712,534

2013
RM
1,277,852
38,952
1,316,804

96

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)


FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

38.

Commitments
(a)

Capital commitments

Group
2014
RM

Capital expenditure:
Approved and contracted for:
- Land and building
- Machineries
(b)

10,997,000
528,000

2013
RM

11,656,000
-

Operating lease commitments as lessee


The Group has entered into non-cancellable operating lease agreements for the use of the leasehold land
and buildings. These leases have an average life of between 3 and 15 years with no renewal or purchase
option included in the contracts. There were no restrictions placed upon the Group by entering into these
leases.
The future aggregate minimum lease payments under non-cancellable operating leases contracted for as at
the reporting date but not recognised as liabilities, are as follows:
Group
2014
RM
Not later than 1 year
Later than 1 year and not later than 5 years
Later than 5 years

(c)

3,622,977
4,110,413
288,408
8,021,798

2013
RM
3,434,700
1,126,178
802,011
5,362,890

Operating lease commitments as lessor


The Group and the Company have entered into commercial property leases on its investment property and
property, plant and equipment. These non-cancellable leases have remaining lease terms of between two
and four years. All leases include a clause to enable upward revision of the rental charge on an annual basis
based on prevailing market conditions.
Future minimum rentals receivable under non-cancellable operating leases at the reporting date are as
follows:
Group
Company
2014
2013
2014
2013
RM
RM
RM
RM
Not later than 1 year
Later than 1 year and
not later than 5 years

2,182,235

1,930,227

1,656,684

1,656,684

468,365
2,650,600

129,500
2,059,727

1,656,684

1,656,684

97

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)

FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

39.

Related party disclosures


(a)

Related party transactions


In addition to the related party information disclosed elsewhere in the financial statements, the following
significant transactions between the Group and the Company and related parties took place at terms agreed
between the parties during the financial year:

Group
Rental paid/payable to:
- Suiwah Holdings Sdn. Bhd., a corporate shareholder
- Suiwah Supermarket Sdn. Bhd., a company in which
a director of the Company, i.e. Dato Hwang Thean
Long has an interest
- a director of the Company, i.e. Dato Hwang Thean
Long
- Meridian Chance Sdn. Bhd., a company connected
with a director of the Company, i.e. Dato Hwang
Thean Long by virtue of his family relationship
Purchases of merchandise from Zephyr (Penang)
Sdn. Bhd., a company in which Looi Tik Miow, a director
of a subsidiary, Qdos Holdings Bhd., has an interest

2014
RM

2013
RM

2,284,806

2,284,806

21,164

11,800

48,000

48,000

24,000

24,000

269,810

155,947

4,830,636
60,000
1,656,684
8,700,000

11,838,536
240,000
1,656,684
-

500,000
(2,500,000)
2,706,657
460,000
(350,000)
2,459
28,113
(144,592)

6,331,960
(21,133,742)
21,219,470
(440,000)
(515,061)
(258,846)
19,610
8,937
23,638
-

Company
Gross dividends from subsidiaries
Management fees from subsidiaries
Rental income from a subsidiary
Additional investment in subsidiary
Advances (from)/to or repayment (to)/from subsidiaries, net:
- Sunshine Supermarket & Departmental Store Sdn. Bhd.
- Crimson Omega Sdn. Bhd.
- Sunshine Wholesale Mart Sdn. Bhd.
- Magirex Sdn. Bhd.
- Aljano Sdn. Bhd.
- Sunshine (Labuan) Private Limited
- Sunshine Amanjaya Sdn. Bhd.
- Sunshine Amanjaya Pte Ltd
- Silver Resort Sdn. Bhd.
- PT Sunshine Amanjaya Indonesia

Datin Cheah Gaik Huang and Hwang Siew Peng are also deemed interested in the transactions in which
Dato Hwang Thean Long has an interest by virtue of their family relationships.
Information regarding outstanding balances arising from related party transactions as at 31 May 2014 are
disclosed in Notes 24 and 36.

98

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)


FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

39.

Related party disclosures (contd.)


(b)

Compensation of key management personnel


The remuneration of directors and other members of key management personnel during the year was as
follows:
Group
Company
2014
2013
2014
2013
RM
RM
RM
RM
Short term employee benefits
Defined contribution plan

1,564,874
108,754
1,673,628

1,590,758
111,497
1,702,255

307,600
307,600

307,600
307,600

Included in the remuneration of total key management personnel are:


Group
2014
RM
Directors remuneration (Note 7)
40.

1,583,982

2013
RM
1,615,395

Company
2014
RM
307,600

2013
RM
307,600

Fair value of financial instruments


(a)

Fair value of financial instruments by classes that are carried at fair value
The following table shows an analysis of financial instruments carried at fair value by level of fair value
hierarchy :

2014
Financial assets
Investment securities
Quoted equity instruments (Note 20)
Short term investments
- Quoted unit trust funds (Note 27)
- Unquoted investments (Note 27)

Level 1
RM

Level 2
RM

Level 3
RM

Total
RM

3,114

3,114

17,036,600
-

7,272,496

17,036,600
7,272,496

3,114

3,114

9,509,662
-

4,189,173

9,509,662
4,189,173

2013
Financial assets
Investment securities
Quoted equity instruments (Note 20)
Short term investments
- Quoted unit trust funds (Note 27)
- Unquoted investments (Note 27)
Fair value hierarchy
The Group and the Company classify fair value measurement using a fair value hierarchy that reflects the
significance of the inputs used in making the measurement. The fair value hierarchy has the following levels:
Level 1 : Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 : Inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (i.e., as prices) or indirectly (i.e., derived from prices).
Level 3 : Inputs for the assets and liability that are not based on observable market data (unobservable
inputs).

99

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)

FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

40.

Fair value of financial instruments (contd.)


(b)

Fair value of financial instruments by classes that are not carried at fair value and whose carrying
amounts are reasonable approximation of fair value
The following are classes of financial instruments that are not carried at fair value and whose carrying
amounts are reasonable approximation of fair value:
Note
Trade and other receivables
Loan receivables
Bank borrowings (current)
Bank borrowings (non-current)
Trade and other payables (current)
Trade and other payable (non-current)

24
26
33
33
36
36

The carrying amounts of these financial assets and liabilities are reasonable approximation of fair values,
either due to their short-term nature or that they are floating rate instruments that are re-priced to market
interest rates on or near the reporting date.
The carrying amounts of the bank borrowings are reasonable approximations of fair values due to the
insignificant impact of discounting.
The fair values of bank borrowings are estimated by discounting expected future cash flows at market
incremental lending rate for similar types of lending, borrowing or leasing arrangements at the reporting date.

41.

Financial risk management objectives and policies


The Group and the Company are exposed to financial risks arising from their operations and the use of financial
instruments. The key financial risks include interest rate risk, foreign currency risk, liquidity risk, credit risk and market
price risk.
The Board of Directors reviews and agrees policies and procedures for the management of these risks. The Audit
Committee provides independent oversight to the effectiveness of the risk management process.
It is, and has been throughout the current and previous financial year, the Groups policy that no derivatives shall
be undertaken except for the use as hedging instruments where appropriate and cost-efficient. The Group and the
Company do not apply hedge accounting.
The following sections provide details regarding the Groups and the Companys exposure to the above-mentioned
financial risks and the objectives, policies and processes for the management of these risks.
(a)

Interest rate risk


Interest rate risk is the risk that the fair value or future cash flows of the Groups and the Companys financial
instruments will fluctuate because of changes in market interest rates.
As the Group has no significant interest-bearing financial assets, the Groups income and operating cash
flows are substantially independent of changes in market interest rates. The Groups interest-bearing
financial assets are mainly short term in nature and have been mostly placed as deposits in licensed banks.
The Groups interest rate risk arises primarily from interest-bearing borrowings. Borrowings at floating rates
expose the Group to cash flow interest rate risk. Borrowings obtained at fixed rates expose the Group to
fair value interest rate risk. The Group manages its interest rate exposure by maintaining a mix of fixed and
floating rate borrowings.
Sensitivity analysis for interest rate risk
At the reporting date, if interest rates had been 10 basis points lower/higher, with all other variables held
constant, the Groups profit net of tax would have been RM18,209 (2013: RM14,892) higher/lower, arising
mainly as a result of lower/higher interest expense on floating rate loans and borrowings. The assumed
movement in basis points for interest rate sensitivity analysis is based on the currently observable market
environment.

100

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)


FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

41.

Financial risk management objectives and policies (contd.)


(b)

Foreign currency risk


Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in foreign exchange rates.
Some of the Groups subsidiaries have transactional currency exposures arising from sales or purchases that
are denominated in a currency other than the respective functional currencies of the Groups subsidiaries,
primarily RM. The foreign currencies in which these transactions are denominated are mainly US Dollars
(USD).
Approximately 14% (2013: 15%) of the Groups subsidiaries sales are denominated in foreign currencies.
The Groups subsidiaries trade receivable and trade payable balances at the reporting date have similar
exposures.
The Group also holds cash and cash equivalents denominated in foreign currencies for working capital
purposes. At the reporting date, such foreign currency balances (mainly in USD) amounted to RM12,085,331
(2013: RM20,532,718) for the Group.
Sensitivity analysis for foreign currency risk
The following table demonstrates the sensitivity of the Groups profit net of tax to a reasonably possible
change in the USD exchange rates against the respective functional currencies of the Group entities, with all
other variables held constant.
Increase/(decrease) in
profit net of tax
2014
2013
RM
RM
USD/RM - strengthened 5%
- weakened 5%

(c)

(198,834)
198,834

858,071
(858,071)

Liquidity risk
Liquidity risk is the risk that the Group or the Company will encounter difficulty in meeting financial obligations
due to shortage of funds. The Groups and the Companys exposure to liquidity risk arises primarily from
mismatches of the maturities of financial assets and liabilities. The Groups and the Companys objective is
to maintain a balance between continuity of funding and flexibility through the use of stand-by credit facilities.
The Group and the Company manage their debt maturity profile, operating cash flows and the availability
of funding so as to ensure that all refinancing, repayment and funding needs are met. As part of its overall
liquidity management, the Group and the Company maintain sufficient levels of cash or cash convertible
investments to meet their working capital requirements. In addition, the Group and the Company strive to
maintain available banking facilities of a reasonable level to its overall debt position. Furthermore, the Group
and the Company are able to raise funds from both capital markets and financial institutions and balance
its portfolio with combination of a mixture of short and long term fundings so as to achieve overall cost
effectiveness.

101

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)

FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

41.

Financial risk management objectives and policies (contd.)


(c)

Liquidity risk (contd.)


Analysis of financial instruments by remaining contractual maturities
The table below summarises the maturity profile of the Groups and the Companys liabilities at the reporting
date based on contractual undiscounted repayment obligations.

Group
Financial liabilities:
Trade payables
Other payables
Borrowings
Total undiscounted financial
liabilities

2014
One to
five years
RM

Over
five years
RM

Total
RM

49,045,924
12,290,134
7,237,892

4,501,000
7,202,630

3,536,500
7,359,041

49,045,924
20,327,634
21,799,563

68,573,950

11,703,630

10,895,541

91,173,121

346,755
21,491,409

346,755
21,491,409

21,838,164

21,838,164

2013
One to
five years
RM

Over
five years
RM

Total
RM

46,502,533
10,123,186
13,525,942

3,637,800
1,545,312

4,547,250
-

46,502,533
18,308,236
15,071,254

70,151,661

5,183,112

4,547,250

79,882,023

330,751
23,507,177

330,751
23,507,177

23,837,928

23,837,928

On demand or
within one year
RM

Company
Financial liabilities:
Other payables
Amounts due to subsidiaries
Total undiscounted financial
liabilities

Group
Financial liabilities:
Trade payables
Other payables
Borrowings
Total undiscounted financial
liabilities

On demand or
within one year
RM

Company
Financial liabilities:
Other payables
Amounts due to subsidiaries
Total undiscounted financial
liabilities

102

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)


FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

41.

Financial risk management objectives and policies (contd.)


(d)

Credit risk
Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default
on its obligations. The Groups and the Companys exposure to credit risk arises primarily from trade and other
receivables. For other financial assets (including investment securities, cash and bank balances and derivatives),
the Group and the Company minimise credit risk by dealing exclusively with high credit rating counterparties.
The Groups objective is to seek continual revenue growth while minimising losses incurred due to increased
credit risk exposure. The Group trades only with recognised and creditworthy third parties. It is the Groups
policy that all customers who wish to trade on credit terms are subject to credit verification procedures. In
addition, receivable balances are monitored on an ongoing basis with the result that the Groups exposure to
bad debts is not significant.
For transactions that do not occur in the country of the relevant operating unit, the Group does not offer credit
terms without the approval.
i.

Exposure to credit risk


At the reporting date, the Groups and the Companys maximum exposure to credit risk are
represented by:
(a)

The carrying amount of each class of financial assets recognised in the statements of
financial position.

(b)

A nominal amount of RM19,648,086 (2013: RM16,426,914) relating to corporate guarantees


provided by the Company to financial institutions as securities for credit facilities granted to
subsidiaries.

Information regarding credit enhancements for trade and other receivables are disclosed in Note 24.
ii.

Credit risk concentration profile


The Group determines concentrations of credit risk by monitoring the country sector profile of its
trade receivables on an ongoing basis. The credit risk concentration profile of the Groups trade
receivables at the reporting date are as follows:

By country:
Within Malaysia
Germany
Switzerland
Singapore
Other countries
Total
iii.

2014
RM
12,428,456
890,306
34,664
1,987,164
2,415,813
17,756,403

%
70
5
11
14
100

2013
RM
17,052,605
1,277,345
316,150
2,505,158
1,155,525
22,306,783

%
77
6
1
11
5
100

Financial assets that are neither past due nor impaired


Information regarding trade receivables that are neither past due nor impaired is disclosed in Note
24.

iv.

Financial assets that are either past due or impaired


Information regarding trade receivables that are either past due or impaired is disclosed in Note 24.

103

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)

FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

41.

Financial risk management objectives and policies (contd.)


(e)

Market price risk


Market price risk is the risk that the fair value or future cash flows of the Groups financial instruments will
fluctuate because of changes in market prices (other than interest or exchange rates).
The Group is exposed to equity price risk arising from its investment in quoted equity instruments. The
quoted equity instruments in Malaysia are listed on Bursa Malaysia. The Group does not have exposure to
commodity price risk.

42.

Capital management
The primary objective of the Groups capital management is to ensure that it maintains a strong credit rating and
healthy capital ratios in order to support its business and maximise shareholder value.
The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To
maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to
shareholders or issue new shares. No changes were made in the objectives, policies or processes during the years
ended 31 May 2014 and 31 May 2013.
The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Group
includes within net debt, borrowings, trade and other payables, less short term investments and cash and bank
balances. Capital includes equity attributable to the owners of the parent.
Group
2014
RM

Note
Borrowings
Trade and other payables
Less: - short term investments
- cash and bank balances
Net debt

33
36
27
28

18,029,254
67,496,261
(24,309,096)
(27,844,565)
33,371,854

14,891,564
62,532,923
(13,698,835)
(32,199,611)
31,526,041

Equity attributable to the owners of the


parent, representing total capital

199,835,424

185,575,853

Capital and net debt

233,207,278

217,101,894

14%

15%

Gearing ratio

43.

2013
RM

Segment information
For management purposes, the Group is organized into business units based on their products and services, and
there are four reportable operating segments as follows:
(i)

Retail - operation of supermarkets and departmental stores and a hypermarket;

(ii)

Manufacturing - manufacturing and designing of flexible printed circuits boards;

(iii)

Property investment and development of residential and commercial properties; and

(iv)

Trading

The directors are of the opinion that all inter-segment transactions have been entered into in the normal course of
business and have been established on terms and conditions that are not materially different from those obtained in
transaction with unrelated parties.
There are minimal inter-segment sales within the Group.

104

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)


FOR THE FINANCIAL YEAR ENDED 31 MAY 2014
43. Segment information (contd.)
(a) Business segment
Property
investment
and
Retail Manufacturing development
2014

Trading

Eliminations Consolidated

RM

RM

RM

RM

RM

RM

306,075,503

65,214,393

6,655,437

219,685

378,165,018

Revenue and expenses


Revenue
Segment revenue
Sales to external customers
Inter-segment sales
Total revenue

227,208

3,377,088

(3,604,296)

306,302,711

65,214,393

10,032,525

219,685

(3,604,296)

378,165,018

10,203,031

6,244,924

(1,467,227)

143,179

15,123,907

137,437

608,905

835,610

Results
Segment results
Interest income

89,268

Finance costs

(1,172,674)

Share of profit in a joint venture

57,768

Profit before tax

14,844,611

Income tax benefit

3,056,102

Profit for the year

17,900,713

Assets
Segment assets
Investment in a joint venture

85,310,160

100,239,250

86,021,792

2,929,733

274,500,935

12,068,371

12,068,371

Unallocated assets

4,275,058

Total assets

290,844,364

Liabilities
Segment liabilities

52,342,254

13,872,891

1,306,813

2,107,939

69,629,897

Unallocated liabilities

20,503,209

Total liabilities

90,133,106

Other segment information


Additions to non-current assets
Amortisation expense
Depreciation
Non-cash expenses/(benefit) other
than depreciation, amortisation
and impairment losses

16,728,343

9,633,402

254,301

132,680

26,748,726

374,070

215,266

589,336

3,019,664

3,915,329

3,511,115

50,068

10,496,176

46,057

(173,906)

(347)

(128,196)

105

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)

FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

43. Segment information (contd.)


(a) Business segment (contd.)
Property
investment
and
Retail Manufacturing development
2013

Trading

Eliminations Consolidated

RM

RM

RM

RM

RM

RM

297,210,139

72,125,986

2,998,425

372,334,550

Revenue and expenses


Revenue
Segment revenue
Sales to external customers
Inter-segment sales
Total revenue

193,742

3,394,588

(3,588,330)

297,403,881

72,125,986

6,393,013

(3,588,330)

372,334,550

11,679,649

10,353,656

(2,297,047)

182,207

363,713

Results
Segment results
Interest income

51,031

(968,292)
-

(1,341)

Finance costs

18,767,966
595,610
(172,005)

Share of loss in a joint venture

(4,627)

Profit before tax

19,186,944

Income tax expense

(5,490,184)

Profit for the year

13,696,760

Assets
Segment assets
Investment in a joint venture

107,160,411

96,491,890

51,456,397

2,662,624

257,771,322

12,068,577

12,068,577

Unallocated assets

675,660

Total assets

270,515,559

Liabilities
Segment liabilities

47,801,777

13,335,302

1,163,054

2,020,694

64,320,827

Unallocated liabilities

19,811,647

Total liabilities

84,132,474

Other segment information


Additions to non-current assets
Amortisation expense
Depreciation
Non-cash expenses other than
depreciation, amortisation and
impairment losses

27,572,833

1,237,426

51,989

28,862,248

215,266

215,266

2,364,382

3,960,419

3,484,706

42,420

9,851,927

241,412

712,977

58,501

381,204

1,394,094

106

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)


FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

43.

Segment Information (contd.)


(b)

Geographical segments
The Group operates locally except for the manufacturing segment which has a wholly owned subsidiary in
India. All of the Group's manufacturing activities are conducted in Malaysia while the overseas subsidiary is
principally engaged in the design of flexible printed circuit boards.
The following table provides an analysis of the Group's revenue, segment assets and capital expenditure by
geographical segment:

2014
Total revenue from external
customers
Segment assets
Capital expenditure

Malaysia
RM

Singapore,
India,
Philippines,
Sri Lanka,
Vietnam and
Thailand
RM

Korea,
Hong Kong,
Taiwan and
Japan
RM

United
States of
America,
Europe
and
New Zealand
RM

357,204,166
268,051,815
26,748,726

3,035,237
6,449,120
-

1,725,780
-

16,199,835
-

378,165,018
274,500,935
26,748,726

355,255,055
251,177,566
28,862,248

2,615,286
6,593,756
-

1,687,555
-

12,776,654
-

372,334,550
257,771,322
28,862,248

Consolidated
RM

2013
Total revenue from external
customers
Segment assets
Capital expenditure
44.

Subsequent events
There were no material events subsequent to the end of the year except as follows:
(i)

On 1 July 2014, a subsidiary, Qdos Interconnect Sdn. Bhd. has obtained approval from Malaysian Industrial
Development Authority (MIDA) for the following incentives subject to certain conditions being complied with:
(a)

100% tax exemption on its statutory income on Molded Interconnect Substrate (MIS). The
subsidiary has yet to submit an application to the Ministry of International Trade and Industry to fix
its Production Date;

(b)

matching research and development grant of 50% up to a maximum of RM3,146,200 for 3 years
from year 2014;

(c)

matching training grant of 50% up to a maximum of RM142,000 for 3 years from year 2014;

(d)

matching modenisation grant of 50% to purchase Auto Vertical 3 in 1 copper platting machine up to
a maximum of RM1,211,000 for 3 years from year 2014.

(ii)

On 8 August 2014, a subsidiary, Crimson Omega Sdn. Bhd. has fully settled its term loan amounting to
RM1,485,042.

(iii)

On 15 August 2014, a subsidiary, Qdos Flexcircuits (India) Private Limited (Qdos India) has increased its
authorized share capital from Rs. 100,000,000 to Rs. 150,000,000 divided into 15,000,000 equity shares of
Rs. 10 each ranking pari passu with the existing equity shares of Qdos India.

107

ANNUAL REPORT 2014

NOTES TO THE FINANCIAL STATEMENTS (CONTD.)

FOR THE FINANCIAL YEAR ENDED 31 MAY 2014

44.

45.

Subsequent events (contd.)


(iv)

On 15 August 2014, a subsidiary, Qdos Flexcircuits Sdn. Bhd. has increased its investment in its subsidiary,
Qdos Flexcircuit (India) Private Limited ("Qdos India") for an amount of USD2,000,000 in order for Qdos India
to subscribe 12,000,000 equity shares of the face value of Rs.10 each in Exora Technologies Private Limited
("Exora") by way of issuance of rights issue. Exora will utilise part of the investment monies to acquire 5,000
equity shares in the capital of Unival Willows Estate Pvt. Ltd. ("Unival Willows") from Unitech Holdings Private
Limited.

(v)

On 18 August 2014, the board of directors of a subsidiary, Qdos Flexcircuits Sdn. Bhd., has approved the
purchase of a property known as Unit 225A, Bridgewater Lane, Milpitas, California 95035, United States of
America for a cash consideration of USD623,415.

(vi)

On 27 August 2014, a subsidiary, Sunshine Supermarket & Departmental Store Sdn Bhd, has drawn down
a cash line facility-i Bai-Bithaman Ajil which has a limit of RM8,000,000 and bears profit rate of 6.00% per
annum and is repayable over 60 months. It is secured by:
(a)

a fixed charged over a freehold land and building known as 1, Persiaran Dagangan, Pusat Bandar
Bertam Perdana, 13200 Kepala Batas; and

(b)

a corporate guarantee from the Company for all monies due and owing under the facilities.

Authorisation of financial statements for issue


The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the
directors on 26 September 2014.

108

ANNUAL REPORT 2014

SUPPLEMENTARY INFORMATION
46.

Supplementary Information Breakdown of Retained Profits Into Realised and Unrealised


The breakdown of the retained profits of the Group and of the Company as at 31 May 2014 into realised and unrealised
profits is presented in accordance with the directive issued by Bursa Malaysia Securities Berhad dated 25 March 2010
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.
The retained earnings as at reporting date may be analysed as follows:
Group
2014
RM
Total retained earnings of the Company and its
subsidiaries
- Realised
- Unrealised

Total share of accumulated losses from


joint venture
- Realised
Total share of accumulated losses from
associate
- Realised
- Unrealised
Consolidation adjustments
Retained earnings as per financial statements

2013
RM

Company
2014
RM

2013
RM

157,491,254
100,468
157,591,722

134,701,741
(1,239,217)
133,462,524

38,564,257
38,564,257

29,901,976
29,901,976

12,344

(45,424)

(1,513,625)
(118,101)
131,785,374
(12,922,736)
118,862,638

38,564,257
38,564,257

29,901,976
29,901,976

(1,513,625)
(118,101)
155,972,340
(22,785,124)
133,187,216

109

ANNUAL REPORT 2014

LIST OF PROPERTIES OWNED BY THE GROUP


AS AT 31 MAY 2014

Land Area /
Built Up Area

Tenure

Age Of
Building

Net Book
Value
(RM)

Location

Description

No. 1, Jalan Mayang Pasir,


11950 Bayan Baru,
Penang

Basement level &


Level 1,
Sunshine Square
Complex

33,000 sq ft &
34,584 sq ft

99 years
leasehold
expiring
2090

21 years

23,500,291

No. 2A, Lebuhraya


Kampung Jawa,
11900 Bayan Lepas,
Penang

Leasehold land
with a warehouse
and 3 storey office
block

61,237 sq ft &
37,600 sq ft

60 years
leasehold
expiring
2050

22 years

4,213,283

Lots Nos. 2704, 2705,


2706 and 453, Mukim 7,
Province Wellesley South,
Penang

Freehold land

501,376 sq ft

Freehold
land

Not
Applicable

4,470,910

Lot 7703, Mukim 13, N.E.D,


Bandar Baru Air Itam,
Penang

Leasehold land

392,434 sq ft /
126,325 sq ft

99 years
leashold
expiring
2104

Not
Applicable

21,833,932

No. 99, Lebuhraya


Kampung Jawa,
Taman Perindustrian,
Bayan Lepas,
11900 Penang

Leasehold land
with double
storey factory
building

87,806 sq ft &
87,000 sq ft

60 years
leasehold
expiring
2049

14 years

8,830,674

3-9-3A, Jalan Bukit Jambul,


11900 Bayan Lepas,
Penang

Condominium

2,281 sq ft

99 years
leashold
expiring
2090

13 years

1,002,078

No 294, Jalan Thean Teik,


Bandar Baru Air Itam,
11500 Penang

Ground floor & Level


1, Sunshine Farlim Mall

67,972 sq ft &
91,035 sq ft

9 years
leasehold
expiring
2017

6 years

194,791

No 5047, Diatas Sebahagian


Lot HS (D) 9813, Plot ('A'),
Jalan Bagan Dalam,
Dermaga Butterworth Seksyen 4,
12100 Seberang Perai Utara,
Penang

Leasehold land
with a warehouse

64,400 sq ft

16 years
leasehold
expiring
2023

4 year

1,965,494

1, Persiaran Dagangan,
Pusat Bandar Bertam Perdana,
13200 Kepala Batas,
Penang

Freehold land with


1 sub-basement and
2 storey
shopping mall,
Sunshine Bertam

727,229 sq ft

Freehold
land

Not
Applicable

37,589,630

110

ANNUAL REPORT 2014

ANALYSIS OF SHAREHOLDINGS
AS AT 8 OCTOBER 2014

Class of Shares
Voting Rights

: Ordinary Share of RM1.00 each (Shares)


: One Vote Per Share

Distribution Schedule of Shareholders


No of Holders
Holdings
59
Less than 100
279
100 - 1,000
1,021
1,001 - 10,000
219
10,001 to 100,000 shares
30
100,001 to less than 5% of issued shares
4
5% and above of issued shares
1,612

No. of Shares
2,272
200,096
3,988,712
6,334,843
17,187,506
29,601,019
57,314,448

%
0.00
0.35
6.96
11.05
29.99
51.65
100.00

# This represents the total issued and paid up capital of RM61,000,248, comprising of 61,000,248 Shares after deducting
3,685,800 Shares retained by the Company (or SCB) as treasury shares.
30 Largest Securities Account Holders
(without aggregating the securities from different securities accounts belonging to the same person)
No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16

17
18
19
20
21
22
23
24
25
26
27
28
29
30

Name
HOZONE SDN.BHD.
SUIWAH HOLDINGS SDN. BHD.
DAUNPURI SDN. BHD.
SUIWAH HOLDINGS SDN. BHD.
DATO HWANG THEAN LONG
WONG THAN KIM
DATO HWANG THEAN LONG
HLB NOMINEES (TEMPATAN) SDN BHD
(PLEDGED SECURITIES ACCOUNT FOR LIM CHAI BENG)
LENA LEONG OY LIN
LOOI TIK MIOW
HO SAM FONG
LIM KENG HONG
UNG PENG JOO
LEONG KOK TAI
TEO KWEE HOCK
KENANGA NOMINEES (TEMPATAN) SDN BHD
(PLEDGED SECURITIES ACCOUNT FOR Y.B. SENATOR DATO HAJI MOHD SUHAIMI
BIN ABDULLAH)
BARBARA ELIZABETH NG
JF APEX NOMINEES (TEMPATAN) SDN BHD
(PLEDGED SECURITIES ACCOUNT FOR TEO SIEW LAI)
LENA LEONG OY LIN
CHAN SENG CHEONG
TAWAKAR ENTERPRISE SDN. BHD.
CIMSEC NOMINEES (TEMPATAN) SDN BHD
(PLEDGED SECURITIES ACCOUNT FOR IRENE YEOH POH IM)
CH'NG BOON CHONG
LEE ENG HOCK & CO. SENDIRIAN BERHAD
KANG KHOON SENG
YEAP SHIEW LAN
ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHD
(PLEDGED SECURITIES ACCOUNT FOR OOI CHIN HOCK)
DATO POH BIN SENG
YEO KHEE HUAT
INTER-PACIFIC EQUITY NOMINEES (TEMPATAN) SDN BHD
(HO SOO TAK)

No. of
Shares held
12,117,948
7,591,200
6,595,171
3,296,700
2,296,881
2,207,380
2,148,500
2,000,000

% #
21.14
13.24
11.51
5.75
4.01
3.85
3.75
3.49

1,428,600
668,300
597,000
546,600
464,400
459,600
430,800
417,125

2.49
1.17
1.04
0.95
0.81
0.80
0.75
0.73

364,800
300,000

0.64
0.52

288,700
230,820
200,000
193,000

0.50
0.40
0.35
0.34

192,700
190,000
180,000
180,000
172400

0.34
0.33
0.31
0.31
0.30

172,000
168,380
163,800

0.30
0.29
0.29

111

ANNUAL REPORT 2014

ANALYSIS OF SHAREHOLDINGS
AS AT 8 OCTOBER 2014 (CONTD.)

Substantial Shareholders (Direct & Indirect)


(excluding those who are bare trustees pursuant to Section 69 of the Companies Act, 1965)
No. of Shares beneficially held by the Substantial Shareholders
No. Name of Shareholders
Direct Interest
% #
Indirect Interest
% #
Note
1 Hozone Sdn Bhd
12,117,948
21.14
2 Suiwah Holdings Sdn Bhd
10,887,900
19.00
3 Daunpuri Sdn Bhd
6,595,171
11.51
4 Dato' Hwang Thean Long
4,445,381
7.76
10,985,505
19.16
(i)
5 Datin Cheah Gaik Huang
26,400
0.05
15,404,486
26.88
(ii)
6 Suiwah Supermarket Sendirian Bhd
71,205
0.12
10,887,900
19.00
(iii)
7 Hwang Siew Peng
15,430,886
26.92
(iv)
8 Datuk Haji Radzali bin Hassan
12,117,948
21.14
(v)
9 Che Wan Bin Mat
6,595,171
11.51
(vi)
10 Yeoh Eng Wan
6,595,171
11.51
(vi)
Notes :
(i)
Deemed interested through his shareholdings in Suiwah Holdings Sdn Bhd (SHSB) and Suiwah Supermarket Sdn Bhd
(SSSB) by virtue of Section 6A of the Companies Act, 1965 (the Act) and the shareholdings of his wife, Datin Cheah
Gaik Huang in SCB.
(ii)
Deemed interested through the shareholdings of her husband, Dato' Hwang Thean Long in SCB.
(iii)
Deemed interested through SHSB in SCB by virtue of Section 6A of the Act.
(iv)
Deemed interested through the shareholdings of her parents, Dato' Hwang Thean Long and Datin Cheah Gaik Huang
in SCB
(v)
Deemed interested through his shareholdings in Hozone Sdn Bhd pursuant to Section 6A of the Act.
(vi)
Deemed interested through their shareholdings in Daunpuri Sdn Bhd pursuant to Section 6A of the Act.
Directors Shareholdings (Direct & Indirect)
Name of Directors
Dato' Hwang Thean Long
Datin Cheah Gaik Huang
Y.B. Senator Dato' Haji Mohd Suhaimi bin Abdullah
Dato' Ahmad Hassan bin Osman
Datuk Haji Radzali bin Hassan
Wong Thai Sun
Hwang Siew Peng
Jen Shek Voon

No. of Shares beneficially held by the Directors


Direct Interest
% #
Indirect Interest
%#
4,445,381
7.76
10,985,505
19.17
26,400
0.05
15,404,486
26.88
417,125
0.73
12,117,948
21.14
15,430,886
26.92
-

Note
(i)
(ii)

(iii)
(iv)

Notes :
(i)
Deemed interested through his shareholdings in SHSB and SSSB by virtue of Section 6A of the Act and the shareholdings
of his wife, Datin Cheah Gaik Huang in SCB.
(ii)
Deemed interested through the shareholdings of her husband, Dato' Hwang Thean Long in SCB.
(iii)
Deemed interested through his shareholdings in Hozone Sdn Bhd pursuant to Section 6A of the Act.
(iv)

Deemed interested through the shareholdings of her parents, Dato' Hwang Thean Long and Datin Cheah Gaik Huang
in SCB.

Interest In The Related Corporation


Dato Hwang Thean Long, Datin Cheah Gaik Huang, Hwang Siew Peng and Datuk Haji Radzali Bin Hassan by virtue of
their interest in Shares in the Company, are deemed interested in Shares of all the Companys subsidiaries to the extent the
Company has an interest.
Save as disclosed above, none of the other Directors in office have any interest in Shares in the Company or its related
corporations.

112

ANNUAL REPORT 2014

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113

ANNUAL REPORT 2014

PROXY FORM
No. of Shares held
I/We ___________________________________________________________________________________________________________
(FULL NAME IN CAPITAL LETTERS)

of _____________________________________________________________________________________________________________
(FULL ADDRESS)

member/members of the abovenamed Company, hereby appoint ____________________________________________________________


of ________________________________________________________ or failing him,__________________________________________
of ________________________________________________or the Chairman of the Meeting, as *my/our proxy to vote for *me/us on *my/
our behalf at the Twenty-first (21st) Annual General Meeting of the Company to be held at Sunshine Banquet Hall, Level 4, Sunshine Square
Complex, 1, Jalan Mayang Pasir, 11950 Bayan Baru, Penang on Monday, 17 November 2014 at 11.00 a.m. and at any adjournment thereof.
*My/Our Proxy is to vote as indicated below:
AS ORDINARY BUSINESS:
Resolution 1 To receive the Audited Financial Statements for the year ended 31 May 2014 together with the Reports of the
Directors and Auditors thereon.
Resolution 2 To approve the declaration of a first and final single tier dividend of 6% for the financial year ended 31 May 2014.
Resolution 3 To re-elect Wong Thai Sun as Director of the Company.
Resolution 4 To re-elect Hwang Siew Peng as Director of the Company.
Resolution 5 To re-appoint Dato Ahmad Hassan bin Osman as Director of the Company.
Resolution 6 To approve the payment of Directors fees.
Resolution 7 To re-appoint Messrs. Ernst & Young as Auditors of the Company and to authorise the Directors to fix their
remuneration.
AS SPECIAL BUSINESS:
Resolution 8 Ordinary Resolution Authority to issue and allot shares pursuant to Section 132D of the Companies Act, 1965.
Resolution 9 Ordinary Resolution - Proposed renewal and new shareholders mandate for recurrent related party transactions
of a revenue or trading nature ("RRPTs") involving Dato Hwang Thean Long, Datin Cheah Gaik Huang, Hwang
Siew Peng, Suiwah Holdings Sdn Bhd and Suiwah Supermarket Sendirian Berhad.
Resolution 10 Ordinary Resolution - Proposed renewal of shareholders mandate for RRPTs involving Datuk Haji Radzali bin
Hassan and Hozone Sdn Bhd.
Resolution 11 Ordinary Resolution - Proposed renewal of shareholders mandate for RRPTs involving Looi Tik Miow.
Resolution 12 Ordinary Resolution - Proposed renewal of shareholders mandate for RRPTs involving Leong Kong Meng.
Resolution 13 Ordinary Resolution - Proposed renewal of Shares Buy-Back Mandate.
Resolution 14 Ordinary Resolution - Mandate for Y.B. Senator Dato Haji Suhaimi bin Abdullah to continue to act as an
Independent Non-Executive Director of the Company.
Resolution 15 Ordinary Resolution - Mandate for Dato Ahmad Hassan bin Osman to continue to act as an Independent NonExecutive Director of the Company.
Resolution 16 Ordinary Resolution - Mandate for Mr. Jen Shek Voon to continue to act as an Independent Non-Executive
Director of the Company.
Resolution 17 Ordinary Resolution - Mandate for Mr. Wong Thai Sun to continue to act as an Independent Non-Executive
Director of the Company.

For

Against

(Please indicate with an X in the appropriate box against each Resolution how you wish your proxy to vote. If no instruction is given, the
proxy will vote or abstain at his/her discretion).
* Strike out whichever not applicable.
Signed this day of 2014.


Signature of Shareholder/Common Seal
Notes:
1. In respect of deposited securities, only members whose names appear in the Record of Depositors on 10 November 2014 (General Meeting Record of
Depositors) shall be eligible to attend, speak and vote at the Meeting.
2. A member entitled to attend and vote at the Meeting is entitled to appoint two (2) or more proxies to attend and vote in his or her stead. Where a member
appoints two (2) proxies, the appointments shall be invalid unless he or she specifies the proportions of his or her shareholdings to be represented by each
proxy.
3. A proxy may but does not need to be a member. There shall be no restriction as to the qualification of the proxy and the provision of Section 149 (1)(a), (b)
and (c) of the Companies Act, 1965 shall not apply to the Company. A proxy appointed to attend and vote at the Meeting shall have the same rights as the
member to speak at the Meeting.
4. The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorised in writing or, if the appointor is a
corporation, either under its seal or under the hand of an officer or attorney duly authorised.
5. Where a member of the Company is an exempt authorised nominee as defined under Securities Industry (Central Depositories) Act 1991 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.
6. The instrument appointing a proxy and the power of attorney or other authority if any, under which it is signed or a notarially certified copy of the power or
authority shall be deposited at the registered office of the Company at No. 1-20-1 SUNTECH @ Penang Cybercity, Lintang Mayang Pasir 3, 11950 Bayan
Baru, Penang not less than forty-eight (48) hours before the time for holding the meeting or any adjournment thereof.
7. Any alteration in this form must be initialed.

Please fold across the line and close

stamp

To : The Company Secretary

SUIWAH CORPORATION BHD (253837-H)


No. 1-20-1 SUNTECH @ Penang Cybercity, Lintang Mayang Pasir 3,
11950 Bayan Baru, Penang, Malaysia.

Please fold across the line and close

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No. 1-20-1, SUNTECH @ Penang Cybercity, Lintang Mayang Pasir 3, 11950 Bayan Baru, Penang, Malaysia .
Tel: 604-643 7387 Fax: 604-643 7389 www.suiwah.com.my | www.sunshineonline.com.my