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Content Page 1
Federation Information 2
Statement by Council Members 3
Independent Auditors' Report 4 to 6
Financial Statements:
Statements of Financial Position 7
Statements of Income and Expenditure
Statements of Changes in Equity 11
Statements of Receipts and Payments
Policies and Notes to the Financial Statements
CONTENTS PAGE NUMBERING
8 to 10
12 to 14
(Registered under the Societies Act, 1966)
15 to 30
AND ITS SUBSIDIARY COMPANY
MALAYSIAN EMPLOYERS FEDERATION
1
PRESIDENT : TAN SRI AZMAN SHAH BIN DATO' SERI HARON
VICE PRESIDENTS : EN. ABDUL WAHAB ABU BAKAR
EN. RAMADASS A/L ARUMUGAM
DATO' S.S. SUBRAMANIAM
EN. CHRISTOPHER S. RAJ
HONORARY TREASURER : DATO' PALANIAPPAN A/L JOSEPH
ADDRESS : 3A06-3A07, BLOCK A
PUSAT DAGANGAN PHILEO DAMANSARA II
NO. 15, JALAN 16/11
OFF JALAN DAMANSARA
46350 PETALING JAYA
SELANGOR DARUL EHSAN
AUDITORS : ATAREK KAMIL IBRAHIM & CO.
TAX AGENT : ATAREK KAMIL IBRAHIM TAX SERVICES (M) SDN. BHD.
PRINCIPAL BANKERS : AFFIN ISLAMIC BANK BERHAD
: MALAYAN BANKING BERHAD
FEDERATION INFORMATION
AND ITS SUBSIDIARY COMPANY
MALAYSIAN EMPLOYERS FEDERATION(Registered under the Societies Act, 1966)
2
2019 2018 2019 2018
Notes RM RM RM RM
NON-CURRENT ASSETS
Property, plant and equipment 4 7,328,607 7,545,977 7,324,550 7,541,737 Investment in subsidiary company 5 - - 250,000 250,000
Total Non-Current Assets 7,328,607 7,545,977 7,574,550 7,791,737
CURRENT ASSETS
Trade and other receivables 6 2,664,789 2,795,153 2,262,636 2,584,536 Tax recoverable 62,616 59,535 46,863 - Cash and cash equivalent 7 18,404,939 16,773,314 16,284,262 15,073,464
Total Current Assets 21,132,344 19,628,002 18,593,761 17,658,000
TOTAL ASSET 28,460,951 27,173,979 26,168,311 25,449,737
ACCUMULATED FUND 23,720,049 22,808,401 21,634,983 20,727,819
CURRENT LIABILITIES
Other payables and accruals 8 4,740,902 4,315,456 4,533,328 4,671,796
Taxation - 50,122 - 50,122
Total Current Liabilities 4,740,902 4,365,578 4,533,328 4,721,918
TOTAL EQUITY AND LIABILITIES 28,460,951 27,173,979 26,168,311 25,449,737
MALAYSIAN EMPLOYERS FEDERATIONAND ITS SUBSIDIARY COMPANY
STATEMENTS OF FINANCIAL POSITION
AS AT 31 DECEMBER 2019
GROUP FEDERATION
The accompanying notes form an integral part of these financial statements.
7
2019 2018 2019 2018
Notes RM RM RM RM
INCOME
Allowance for doubtful debts
no longer required 18,787 24,062 18,787 24,062
Annual subscriptions 4,523,310 4,250,222 4,523,310 4,250,222
Dinners and conferences 2,199,869 1,976,744 2,199,869 1,976,744
Entrance fees 135,500 154,592 135,500 154,592
Income from cash management fund 184,682 - 176,234 -
Interest from fixed deposits 482,850 623,221 443,168 571,498
Rental of office premises 15,000 - 15,000 -
Representation receipts 1,206,274 1,267,795 1,206,274 1,267,795
Sale of publications 812,419 660,286 812,419 660,286
Income from insurance claims 64,903 67,790 57,219 45,902
Sundry income 152,403 159,695 151,953 159,695
Training courses and seminars 3,875,094 4,109,978 2,016,990 2,175,904
TOTAL INCOME 13,671,091 13,294,385 11,756,723 11,286,700
EXPENDITURE
COURSE AND SEMINAR EXPENSES 2,094,815 2,433,725 1,201,847 1,431,730
REPRESENTATION EXPENSES 75,596 79,714 75,596 79,714
PUBLICATION, RESEARCH AND
SURVEY EXPENSES 105,842 132,502 105,842 132,502
DINNER AND
CONFERENCES EXPENSES 1,513,234 1,170,267 1,513,234 1,158,722
PREMISES EXPENSES
Building and maintenance charges 73,691 75,646 73,691 75,646
Depreciation for office premises 184,323 184,307 184,323 184,307
Electricity and water charges 148,881 135,335 148,881 135,335
Quit rent and assessment 37,786 37,286 37,786 37,286
Upkeep of office 23,554 35,864 23,554 35,864
468,235 468,438 468,235 468,438
MALAYSIAN EMPLOYERS FEDERATIONAND ITS SUBSIDIARY COMPANY
STATEMENTS OF INCOME AND EXPENDITURE FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019
GROUP FEDERATION
The accompanying notes form an integral part of these financial statements.
8
2019 2018 2019 2018
Notes RM RM RM RM
EXPENDITURE
STAFF AND PAYROLL EXPENSES
Bonus 968,161 1,003,550 857,998 891,382
EIS contribution 3,531 3,389 2,954 2,825
EPF contributions 806,174 749,963 703,918 655,208
Insurance premium 151,852 155,947 138,412 130,472
Medical expenses 277,752 312,778 261,727 260,304
Salaries and allowances 4,703,939 4,254,317 4,135,272 3,725,157
SOCSO contributions 38,467 36,786 33,418 31,858
Staff long service award 109,626 - 96,606 -
Staff training expenses 14,967 4,779 12,069 4,779
7,074,469 6,521,509 6,242,374 5,701,985
GENERAL AND OFFICE
ADMINISTRATIVE EXPENSES
Affiliation fees 74,588 73,104 74,588 73,104
Auditors' remuneration 15,500 15,500 8,500 8,500
Bank charges 2,531 3,893 2,160 3,020
Depreciation of property, plant and
equipment 194,866 196,869 192,394 195,113
General insurance 33,250 30,944 28,110 25,936
General office expenses 39,039 43,602 39,039 43,602
Gift and donations 6,167 14,500 - -
Internet access and homepage expenses 38,465 37,487 38,465 37,487
Licensing - 530 - -
Family day expenses 48,378 61,832 44,124 54,561
Newspapers, periodicals and
government publications 18,480 18,583 17,330 17,363
Postage and stamps 5,221 10,331 5,221 10,131
Printing and stationery 53,679 40,075 53,679 40,075
Balance c/f 530,164 547,250 503,610 508,892
MALAYSIAN EMPLOYERS FEDERATIONAND ITS SUBSIDIARY COMPANY
STATEMENTS OF INCOME AND EXPENDITURE FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019
GROUP FEDERATION
(Continued)
The accompanying notes form an integral part of these financial statements.
9
2019 2018 2019 2018
Notes RM RM RM RM
EXPENDITURE
GENERAL AND OFFICE
ADMINISTRATIVE EXPENSES
Balance b/f 530,164 547,250 503,610 508,892
Professional fees 22,077 15,205 13,639 3,900
Provision for doubtful debts 86,588 93,160 71,611 71,481
Secretarial fees 2,120 2,040 - -
Telephone and fax 57,429 54,014 57,429 54,014
Upkeep of office and equipment 83,503 107,371 83,503 106,901
781,881 819,040 729,792 745,188
TRAVEL, HOTEL AND
MEETING EXPENSES
Entertainment expenses 1,095 1,421 1,095 1,421
Meeting expenses 145,871 286,373 145,871 286,373
Membership drive expenses 7,260 5,092 7,260 5,092
Membership fee 1,000 1,000 - -
Overseas seminars and conferences 186,133 177,684 81,284 102,390
Public relation expenses 20,100 13,700 20,100 13,700
Travelling expenses 128,495 134,175 111,323 117,165
489,954 619,445 366,933 526,141
TOTAL EXPENDITURE 12,604,026 12,244,640 10,703,853 10,244,420
SURPLUS OF INCOME OVER
EXPENDITURE BEFORE TAXATION 1,067,065 1,049,745 1,052,870 1,042,280
TAXATION 9 (155,417) (237,332) (145,706) (234,148)
SURPLUS OF INCOME OVER
EXPENDITURE AFTER TAXATION 911,648 812,413 907,164 808,132
MALAYSIAN EMPLOYERS FEDERATIONAND ITS SUBSIDIARY COMPANY
STATEMENTS OF INCOME AND EXPENDITURE FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019
GROUP FEDERATION
(Continued)
The accompanying notes form an integral part of these financial statements.
10
Accumulated
fund
RM RM
GROUP
Balance at 1 January 2018 21,995,988 21,995,988
Surplus of income over expenditure after taxation 812,413 812,413
Balance at 31 December 2018 22,808,401 22,808,401
Surplus of income over expenditure after taxation 911,648 911,648
Balance at 31 December 2019 23,720,049 23,720,049
FEDERATION
Balance at 1 January 2018 19,919,687 19,919,687
Surplus of income over expenditure after taxation 808,132 808,132
Balance at 31 December 2018 20,727,819 20,727,819
Surplus of income over expenditure after taxation 907,164 907,164
Balance at 31 December 2019 21,634,983 21,634,983
Total
MALAYSIAN EMPLOYERS FEDERATIONAND ITS SUBSIDIARY COMPANY
STATEMENTS OF CHANGES IN EQUITY
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019
The accompanying notes form an integral part of these financial statements.
11
2019 2018 2019 2018
Note RM RM RM RM
CASH AND BANK BALANCES
AS AT 1 JANUARY
Cash in hand 10,518 10,518 9,000 9,000Cash at bank 3,623,802 722,716 3,329,752 592,595
3,634,320 733,234 3,338,752 601,595
Receipts from Operating Activities
Conference and dinner receipts 2,177,336 2,010,027 2,177,336 2,010,027
Entrance fees 114,000 151,500 114,000 151,500
Interest from term deposits 506,829 495,686 504,748 493,946
Proceeds from training courses
and seminars 3,651,325 3,364,874 1,591,177 1,603,654
Rental of office premises 15,000 - 15,000 -
Representation receipts 1,394,342 1,684,691 1,394,342 1,684,691
Sale of publications 475,860 510,347 475,860 510,347
Subscriptions 4,973,351 4,388,212 4,973,351 4,388,212
Sundry income 111,743 206,956 99,599 206,956
Sundry receipts 110,669 133,221 110,669 133,221
Tax refund 29,734 - - -
Insurance claim 37,028 45,902 37,028 45,902
13,597,217 12,991,416 11,493,110 11,228,456
Payments from Operating Activities
Amount owing to subsidiary company 508,921 343,965 508,921 343,965
Affiliation fees 74,588 69,043 74,588 69,043
Auditors' remuneration 8,500 15,800 8,500 8,500
Bank charges 2,301 3,214 2,106 2,832
Books and periodicals 8,597 11,676 7,419 10,459
Building maintenance charges 73,791 75,249 73,791 75,249
Conference and dinner expenses 1,128,955 973,181 1,128,955 973,181
Deposit for postage 2,153 5,300 2,153 5,300
Donations and gifts - 11,500 - -
Electricity and water charges 149,940 140,660 149,940 140,660
Entertainment expenses 1,095 1,467 1,095 1,467
EIS Contributions 3,531 3,631 2,954 3,067
1,962,372 1,654,686 1,960,422 1,633,723
MALAYSIAN EMPLOYERS FEDERATIONAND ITS SUBSIDIARY COMPANY
STATEMENTS OF RECEIPTS AND PAYMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019
GROUP FEDERATION
Balance c/f
The accompanying notes form an integral part of these financial statements.
12
2019 2018 2019 2018
Note RM RM RM RM
Payments from Operating Activities
Balance b/f 1,962,372 1,654,686 1,960,422 1,633,723
EPF contributions 732,776 661,482 629,558 570,626
Family day expenses 78,978 39,608 65,685 36,609
General office expenses 36,322 49,320 36,321 49,320
Human resource development fund 40,980 36,872 40,980 36,872
230,567 219,026 210,567 184,026
Internet access and
homepage expenses 38,735 38,833 38,735 38,833
Insurance premium 103,741 94,256 85,159 63,698
Licensing - - - -
Medical expenses 273,387 343,822 257,819 291,883
Meeting expenses 145,101 291,308 140,283 286,623
Membership drive expenses 26,710 19,933 26,710 19,933
Overseas seminars and
conference expenses 129,327 147,321 81,252 102,752
Postage and stamps 20,234 15,605 8,154 9,191
Prepayments of seasonal car
parking expenses and others 142,025 157,458 142,025 157,458
Printing and stationery 137,005 122,628 101,552 92,976
Printing newsletter and
Annual Report - 3,300 - 3,300
Professional and legal fees 24,468 30,725 13,639 3,900
Purchase of property,
plant and equipment 161,517 87,126 159,228 81,826
Quit rent and assessment 37,607 37,464 37,607 37,464
Representation expenses 74,329 80,451 74,329 80,451
Research and survey expenses 107,994 137,003 107,994 137,003
Salaries, bonuses and allowances 5,780,097 4,991,001 5,119,824 4,401,097
SOCSO contributions 39,296 36,786 34,247 31,858
Staff training expenses 12,938 2,332 10,500 2,332
Subscription fees - 1,000 - -
Sundry deposits - 30 - 30
Sundry payables and accrued
charges 569,442 261,236 516,875 223,336
Balance c/f 10,905,948 9,560,612 9,899,465 8,577,120
MALAYSIAN EMPLOYERS FEDERATIONAND ITS SUBSIDIARY COMPANY
STATEMENTS OF RECEIPTS AND PAYMENTS FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019
(Continued)
GROUP FEDERATION
Income tax paid
The accompanying notes form an integral part of these financial statements.
13
2019 2018 2019 2018
Notes RM RM RM RM
Payments from Operating Activities
Balance b/f 10,905,948 9,560,612 9,899,465 8,577,120
Telephone and fax 57,640 57,424 57,640 57,424
Training courses and seminars
expenses 675,899 994,108 - 1,000
Transport expenses 132,082 114,585 119,203 100,168
Upkeep of office and equipment 112,206 131,578 112,207 130,578
Vehicle loan for staff 184,270 104,000 184,270 104,000
GST return - 335,659 - 301,613
SST return 151,456 3,902 116,911 3,902
12,219,501 11,301,868 10,489,696 9,275,805
Surplus of Receipts Over Payments
from Operating Activities 1,377,716 1,689,548 1,003,414 1,952,651
Cash Flow from Investing Activities
Withdrawal of fixed deposits 15,510,201 12,861,538 14,961,495 12,434,506
Placement of fixed deposits (9,520,000) (11,650,000) (9,020,000) (11,650,000)
Placement of cash management funds (10,650,000) - (10,000,000) -
(4,659,799) 1,211,538 (4,058,505) 784,506
CASH AND BANK BALANCES
AS AT 31 DECEMBER
Cash in hand 10,518 10,518 9,000 9,000Cash at bank 341,719 3,623,802 274,661 3,329,752
7 352,237 3,634,320 283,661 3,338,752
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019
(Continued)
GROUP FEDERATION
MALAYSIAN EMPLOYERS FEDERATIONAND ITS SUBSIDIARY COMPANY
STATEMENTS OF RECEIPTS AND PAYMENTS
The accompanying notes form an integral part of these financial statements.
14
1 GENERAL INFORMATION
2 SIGNIFICANT ACCOUNTING POLICIES
2.1 Basis of preparation
2.2
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019
The subsidiary company is consolidated using the acquisition method of accounting. Under the
acquisition method of accounting, the result of the subsidiary company acquired or disposed of is
included from the date of acquisition up to the date of disposal. At the date of acquisition, the fair
value of the subsidiary company's net assets is determined and this value is reflected in the
consolidated financial statements.
Basis of consolidation
The consolidated financial statements include the audited financial statements of the Federation
and its subsidiary company made up to 31 December 2019.
MALAYSIAN EMPLOYERS FEDERATION
The financial statements of the Group and of the Federation have been prepared under the
historical cost basis, except for the revaluation of certain assets and liabilities.
POLICIES AND NOTES TO THE FINANCIAL STATEMENTS
A subsidiary company is defined as an enterprise in which the Federation has the power, directly
or indirectly to exercise control over the financial and operating policies so as to obtain benefits
from its activities.
The financial statements of the Group and of the Federation have been prepared in accordance with
Malaysian Private Entities Reporting Standard ("MPERS") and the provisions of the Societies Act, 1966.
AND ITS SUBSIDIARY COMPANY
The Federation principal place of business is located at 3A06-3A07, Block A, Pusat Dagangan Phileo
Damansara II, No. 15, Jalan 16/11, Off Jalan Damansara, 46350 Petaling Jaya, Selangor Darul Ehsan.
The principal activity of the Federation is to promote and safeguard the rights and interests of private
sector employers who are members of the Federation. The principal activities of the Federation's wholly-
owned subsidiary company are as stated in Note 5 to the financial statements. There have been no
significant changes in the nature of these principal activities during the financial year.
The principal accounting policies adopted are set out below.
15
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019
MALAYSIAN EMPLOYERS FEDERATION
POLICIES AND NOTES TO THE FINANCIAL STATEMENTS
AND ITS SUBSIDIARY COMPANY
2 SIGNIFICANT ACCOUNTING POLICIES (Continued)
2.2
2.3 Financial assets
i) Financial assets that are debt instruments measured at amortised cost
After initial recognition, financial assets are classified into one of three categories: financial assets
measured at fair value through profit or loss, financial assets that are debt instruments measured
at amortised cost, and financial assets that are equity instruments measured at cost less
impairment.
After initial recognition, debt instruments are measured at amortised cost using the effective
interest method. Debt instruments that are classified as current assets are measured at the
undiscounted amount of the cash or other consideration expected to be received.
Effective interest method is a method of calculating the amortised cost of financial assets
and of allocating the interest income over the relevant period. The effective interest rate is
the rate that exactly discounts estimate future cash receipts through the expected life of the
financial assets or, when appropriate, a shorter period, to the carrying amount of the financial
assets.
Basis of consolidation (Continued)
Financial assets are recognised in the statements of financial position when the Federation
become a party to the contractual provisions of the instrument.
On initial recognition, financial assets are measured at transaction price, include transaction costs
for financial assets not measured at fair value through profit or loss, unless the arrangement
constitutes, in effect, a financing transaction for the counterparty to the arrangement.
Intragroup transactions, balances and unrealised gains on transactions is eliminated, unrealised
loss is also eliminated unless cost cannot be recovered. Where necessary, adjustment is made to
the financial statements of the subsidiary company to ensure consistency of accounting policies
with those of the Group.
16
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019
MALAYSIAN EMPLOYERS FEDERATION
POLICIES AND NOTES TO THE FINANCIAL STATEMENTS
AND ITS SUBSIDIARY COMPANY
2 SIGNIFICANT ACCOUNTING POLICIES (Continued)
2.3 Financial assets (Continued)
ii) Financial assets that are debt instruments measured at amortised cost
iii) Financial assets that are equity instruments measured at cost less impairment
2.4 Property, plant and equipment
Years
Leasehold office premises 99
Freehold office premises 50
Furniture and fittings 5
Office equipments 5
Computer hardware and software 2 - 3
Renovation 5
Effective interest method is a method of calculating the amortised cost of financial assets
and of allocating the interest income over the relevant period. The effective interest rate is
the rate that exactly discounts estimate future cash receipts through the expected life of the
financial assets or, when appropriate, a shorter period, to the carrying amount of the financial
assets.
Equity instruments that are not publicly traded and whose fair value cannot otherwise be
measured reliably without undue cost or effort, and contracts linked to such instruments that,
if exercised, will result in delivery of such instruments, are measured at cost less impairment.
The cost of an item or property, plant and equipment is recognised as an asset when it is probable
that future economic benefits associated with the item will flow to the Group and the Federation
and the cost of the item can be measured reliably. After recognition as an asset, an item of
property, plant and equipment are measured at cost less any accumulated depreciation and any
accumulated impairment losses.
Depreciation is provided on a straight-line method so as to write off the depreciable amount of the
following assets over their estimated useful lives, as follows:
After initial recognition, debt instruments are measured at amortised cost using the effective
interest method. Debt instruments that are classified as current assets are measured at the
undiscontinued amount of the cash or other consideration expected to be received.
17
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019
MALAYSIAN EMPLOYERS FEDERATION
POLICIES AND NOTES TO THE FINANCIAL STATEMENTS
AND ITS SUBSIDIARY COMPANY
2 SIGNIFICANT ACCOUNTING POLICIES (Continued)
2.4 Property, plant and equipment (Continued)
Depreciation of an asset begins when it is ready for its intended use.
2.5 Impairment of assets, other than and financial assets
If there is an indication of a significant change in factors affecting the residual value, useful life or
asset consumption pattern since the last annual reporting date, the residual values, depreciation
method and useful lives of depreciable assets are reviewed, and adjusted prospectively.
If the recoverable amount of an asset or a cash-generating unit is less than the carrying amount,
an impairment loss is recognised to reduce the carrying amount to its recoverable amount. An
impairment loss for a cash-generating unit is firstly allocated to reduce the carrying amount of any
goodwill allocated to the cash-generating unit, and then, to the other non-current assets of the unit
pro rata on the basis of the carrying amount of each appropriate asset in the cash-generating unit.
Impairment loss is recognised immediately in profit or loss, unless the asset is carried at a
revalued amount, in which case it is treated as a revaluation decrease.
When there is an indication that an asset may be impaired but it is not possible to estimate the
recoverable amount of the individual asset, the Group and the Federation estimate the
recoverable amount of the cash-generating unit to which the asset belongs.
The recoverable amount of an asset and a cash-generating unit is the higher of the fair value less
costs to sell and value in use. In assessing value in use, the estimated future cash flows 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.
The carrying amounts of items of property, plant and equipment are derecognised on disposal or
when no future economic benefits are expected from their use or disposal. Any gain or loss arising
from the derecognition of items of property, plant and equipment, determined as the difference
between the net disposal proceeds, if any, and the carrying amounts of the item, is recognised in
profit or loss. Neither the sale proceeds nor any gain on disposal is classified as revenue.
At each reporting date, the Group and the Federation assess whether there is any indication that
an asset may be impaired. If any such indication exists, the recoverable amount of the asset is
estimated.
18
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019
MALAYSIAN EMPLOYERS FEDERATION
POLICIES AND NOTES TO THE FINANCIAL STATEMENTS
AND ITS SUBSIDIARY COMPANY
2 SIGNIFICANT ACCOUNTING POLICIES (Continued)
2.5 Impairment of assets, other than financial assets (Continued)
2.6
2.7 Cash and cash equivalents
2.8 Financial liabilities
i) Financial liabilities
The recoverable amount is the higher of an asset's or cash-generating unit's fair value less to sell,
value in use and zero.
On initial recognition, financial liabilities are measured at transaction price, include
transaction costs for financial liabilities not measured at fair value through profit or loss,
unless the arrangement constitutes, in effect, a financing transaction for the Company to the
arrangement.
Investment in subsidiary company and a jointly controlled entity are stated at cost in the balance
sheet of the Federation, and are reviewed for impairment at the end of the financial year if events
or changes in circumstances indicate that their carrying values may not be recoverable.
An impairment loss recognised in prior periods for an asset or the appropriate assets of a cash-
generating unit is reversed when there has been a change in the estimates used to determine the
asset's recoverable amount. An impairment loss is reversed to the extent that the asset's carrying
amount does not exceed the carrying amount that would have been determined, net of
depreciation, if no impairment loss had been recognised in prior periods. A reversal of an
impairment loss is recognised immediately in profit or loss, unless the asset is carried at revalued
amount, in which case it is treated as a revaluation increase.
For the purposes of the cash flow statements, cash and bank balances consist of cash in hand
and at bank which are readily convertible to known amount of cash and subjected to an
insignificant risk of change in value, and net of outstanding bank overdraft.
Financial liabilities are recognised in the statements of financial position when the Company
become a party to the contractual provisions of the instrument.
Investment in subsidiary company
19
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019
MALAYSIAN EMPLOYERS FEDERATION
POLICIES AND NOTES TO THE FINANCIAL STATEMENTS
AND ITS SUBSIDIARY COMPANY
2 SIGNIFICANT ACCOUNTING POLICIES (Continued)
2.8 Financial liabilities (Continued)
i) Financial liabilities (Continued)
ii) Financial liabilities measured at amortised cost
iii) Derecognition of financial liabilities
2.9 Provisions
A provision is recognised when the Group and the Federation has an obligation at the reporting
date as a result of a past event, it is probable that a transfer of economic benefits will be required
to settle the obligation and a reliable estimate can be made of the amount of the obligation.
The risks and uncertainties are taken into account in reaching the best estimate of a provision.
When the effect of the time value of money is material, the amount recognised in respect of the
provision is the present value of the expenditure expected to be required to settle the obligation.
After initial recognition, financial liabilities are classified into one of three categories: financial
liabilities measured at fair value through profit or loss, financial liabilities measured at
amortised cost, or loan commitments measured at cost less impairment.
Financial liabilities are derecognised when the obligation specified in the contract is
discharged, cancelled or expires.
Any difference between the carrying amounts of the financial liabilities derecognised and the
consideration paid is recognised in profit or loss.
After initial recognition, financial liabilities other than financial liabilities at fair value through
profit or loss are measured at amortised cost using the effective interest method. Gains or
losses are recognised in profit or loss when the financial liabilities are derecognised or
impaired.
Effective interest method is a method of calculating the amortised cost of financial liabilities
and of allocating the interest expense over the relevant period. The effective interest rate is
the rate that exactly discounts estimate future cash payments through the expected life of
the financial liabilities or, when appropriate, a shorter period, to the carrying amount of the
financial liabilities.
20
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019
MALAYSIAN EMPLOYERS FEDERATION
POLICIES AND NOTES TO THE FINANCIAL STATEMENTS
AND ITS SUBSIDIARY COMPANY
2 SIGNIFICANT ACCOUNTING POLICIES (Continued)
2.10 Income tax
Deferred tax liabilities and assets reflect the tax consequences that would follow from the manner
in which the Group and the Federation expect to recover or settle the carrying amounts of their
assets and liabilities and are measured at the tax rates and laws that are expected to apply to the
period when the asset is realised or the liability is settled, based on tax rates that have been
enacted or substantially enacted by the reporting date.
Deferred tax is provided in full on temporary differences which are the differences between the
carrying amounts in the financial statements and the corresponding tax base of an asset or liability
at the end of the reporting period.
Deferred tax liabilities are recognised for all taxable temporary differences that are expected to
increase taxable profit in the future. Deferred tax assets are recognised for all deductible
temporary differences that are expected to reduce taxable profit in the future and the carryforward
of unused tax losses and unused tax credits.
Deferred tax liabilities and assets are not recognised in respect of the temporary differences
associated with the initial recognition of an asset or a liability in a transaction that is not a business
combination and at the time of the transactions, affects neither accounting profit nor taxable profit.
Tax expense is recognised in profit or loss, except that a change attributable to an item of income
or expense recognised as other comprehensive income is also recognised in other comprehensive
income.
Tax payable on taxable profit for current and past periods is recognised as a current tax liability to
the extent unpaid. If the amount paid in respect of the current and past periods exceeds the
amount payable for those periods, the excess is recognised as a current tax asset.
Current tax assets and liabilities are measured at the amounts expected to be paid or recovered,
using the tax rates and laws that have been enacted or substantially enacted by the reporting
date.
Current tax liabilities and assets are offset if, and only if the Group and the Federation have a
legally enforceable right to set off the amounts and plan either to settle on a net basis, or to realise
the asset and settle the liability simultaneously.
21
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019
MALAYSIAN EMPLOYERS FEDERATION
POLICIES AND NOTES TO THE FINANCIAL STATEMENTS
AND ITS SUBSIDIARY COMPANY
2 SIGNIFICANT ACCOUNTING POLICIES (Continued)
2.11 Revenue recognition
Other revenues are recognised on the following basis :
a) Rental income :
b)
2.12 Employee benefits
i) Short-term employment benefits
ii) Defined contribution plan
The expected cost of accumulating compensated absences are recognised when the
employees render services that increase their entitlement to future compensated absences.
The expected cost of non-accumulating compensated absences, such as sick and medical
leaves, are recognised when the absences occur.
Revenue, other than revenue from members' subscriptions and entrance fees which are
recognised as revenue upon receipt by the Group and the Federation, are recognised on an
accrual basis.
Interest income :
The expected cost of profit-sharing and bonus payments are recognised when the Group
and the Federation have a present legal or constructive obligation to make such payments
as a result of past events and a reliable estimate of the obligation can be made. A present
obligation exists when the Group and the Federation have no realistic alternative but to make
the payments.
Contributions payable to the defined contribution plan are recognised as a liability and an
expense when the employees have rendered services to the Group and the Federation.
as it accrues unless probability of collection is remote.
on a time apportionment basis taking into account the principal
outstanding and the interest rate applicable.
Short-term employment benefits, such as wages, salaries and other benefits, are recognised
at the undiscounted amount as a liability and an expense when the employees have
rendered services to the Group and the Federation.
22
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019
MALAYSIAN EMPLOYERS FEDERATION
POLICIES AND NOTES TO THE FINANCIAL STATEMENTS
AND ITS SUBSIDIARY COMPANY
3 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY
3.1 Critical judgements in applying the accounting policies
i) Fair value of other financial assets and liabilities
3.2 Key sources of estimation uncertainty
i) Measurement of a provision
The fair value for certain other financial assets and financial liabilities are obtained from the
quoted price in an active market, if quoted prices are unavailable, the price of a recent
transaction for an identical financial assets or liabilities provides evidence of fair value as
long as there has not been a significant change in economic circumstances or a significant
lapse of the time since the transaction took place.
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 as follows:
The Federation use a "best estimate" as the basis for measuring a provision. Management
evaluates the estimates based on the Federation's historical experiences and other inputs or
assumptions, current developments and future events that are reasonably possible under the
particular circumstances. In the case when a provision relates to large population of
customers (such as warranty provision), a probability-weighted estimate of the outflows
required to settle the obligation is used. In the case of a single estimate (such as a provision
for environmental restoration costs), a referenced contractor's price or market price is used
as the best estimate. If an obligation is to be settled over time, the expected outflows are
discounted at a rate that takes into account the time value of money and the risk that the
actual outcome might differ from estimates made.
The judgements, that the management has made in the process of applying the accounting
policies and that have the most significant effect on the amounts recognised in the financial
statements, are as follows:
23
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019
MALAYSIAN EMPLOYERS FEDERATION
POLICIES AND NOTES TO THE FINANCIAL STATEMENTS
AND ITS SUBSIDIARY COMPANY
3
ii) Loss allowances of financial assets
iii)
The Federation recognises impairment losses for loans and receivables using the incurred
loss model. Individually significant loans and receivables are tested for impairment
separately by estimating the cash flows expected to be revorables. All others are grouped
into credit risk classes and tested for impairment collectively, using the Federation's past
experiences of loss statistics, ageing of past due amounts and current economic trends. The
actual eventual losses may be different from the allowance made and this may affect the
Federation's financial position and results.
CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY(Continued)
The cost of an item of plant and equipment is depreciated on the straight-line method or
another systematic method that reflects the consumption of the economic benefits of the
asset over its useful life. Estimates are applied in the selection of the depreciation method,
the useful lives and the residual values. The actual consumption of the economic benefits of
the plant and equipment may differ from the estimates applied at this may lead to a gain or
loss on a eventual disposal of an item of plant and equipment.
Depreciation of plant and equipment
24
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019
MALAYSIAN EMPLOYERS FEDERATION
POLICIES AND NOTES TO THE FINANCIAL STATEMENTS
AND ITS SUBSIDIARY COMPANY
4 PROPERTY, PLANT AND EQUIPMENT
GROUP 01/01/2019 Additions Disposal 31/12/2019
Cost RM RM RM RM
Office premises 9,918,039 - - 9,918,039
Furniture and fittings 672,821 10,366 - 683,187
Office equipment 1,374,930 17,914 - 1,392,844
Computer hardware and software 2,575,186 127,625 - 2,702,811
Renovation 737,503 5,914 - 743,41715,278,479 161,819 - 15,440,298
01/01/2019 Depreciation Disposal 31/12/2019
Accumulated depreciation RM RM RM RM
Office premises 2,661,541 184,323 - 2,845,864
Furniture and fittings 639,899 15,015 - 654,914
Office equipment 1,317,239 29,338 - 1,346,577
Computer hardware and software 2,498,783 65,957 - 2,564,740
Renovation 615,040 84,556 - 699,5967,732,502 379,189 - 8,111,691
01/01/2019 Last year 31/12/2019
Net book value depreciation Net book value
RM RM RM
Office premises 7,256,498 184,307 7,072,175
Furniture and fittings 32,922 17,326 28,273
Office equipment 57,691 31,681 46,267
Computer hardware and software 76,403 55,690 138,071
Renovation 122,463 92,172 43,8217,545,977 381,176 7,328,607
FEDERATION 01/01/2019 Additions Disposal 31/12/2019
Cost RM RM RM RM
Office premises 9,918,039 - - 9,918,039
Furniture and fittings 664,213 10,366 - 674,579
Office equipment 1,374,930 17,914 - 1,392,844
Computer hardware and software 2,494,565 125,336 - 2,619,901
Renovation 737,503 5,914 - 743,41715,189,250 159,530 - 15,348,780
25
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019
MALAYSIAN EMPLOYERS FEDERATION
POLICIES AND NOTES TO THE FINANCIAL STATEMENTS
AND ITS SUBSIDIARY COMPANY
4 PROPERTY, PLANT AND EQUIPMENT (Continued)
FEDERATION (Continued)
01/01/2019 Depreciation Disposal 31/12/2019
Accumulated depreciation RM RM RM RM
Office premises 2,661,541 184,323 - 2,845,864
Furniture and fittings 631,293 15,015 - 646,308
Office equipment 1,317,239 29,338 - 1,346,577
Computer hardware and software 2,422,400 63,485 - 2,485,885
Renovation 615,040 84,556 - 699,5967,647,513 376,717 - 8,024,230
01/01/2019 Last year 31/12/2019
Net book value depreciation Net book value
RM RM RM
Office premises 7,256,498 184,307 7,072,175
Furniture and fittings 32,920 17,299 28,271
Office equipment 57,691 31,681 46,267
Computer hardware and software 72,165 53,961 134,016
Renovation 122,463 92,172 43,8217,541,737 379,420 7,324,550
5 INVESTMENT IN SUBSIDIARY COMPANY
2019 2018
RM RM
250,000 250,000
2018 Principal Activities
MEF Academy 100%
Sdn. Bhd. #
#
2019
100%
Name of the Company
Provision of training and academic education for
employers in the management of human
resources, industrial relations, occupational
safety and health.
Audited by Atarek Kamil Ibrahim & Co.
FEDERATION
Unquoted shares - at cost
Details of the subsidiary company, incorporated in Malaysia, are as follows:
of Ownership
Effective percentage
26
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019
MALAYSIAN EMPLOYERS FEDERATION
POLICIES AND NOTES TO THE FINANCIAL STATEMENTS
AND ITS SUBSIDIARY COMPANY
6
2019 2018 2019 2018
RM RM RM RM
379,054 853,947 379,054 853,947
- - - -
379,054 853,947 379,054 853,947
626,753 439,998 183,385 197,756
(77,238) (72,921) (18,857) (29,517)
549,515 367,077 164,528 168,239
685,704 585,738 685,704 585,738
(58,635) (57,259) (58,635) (57,259)
627,069 528,479 627,069 528,479
387,090 394,484 387,090 394,484
(50,740) (52,255) (50,740) (52,255)
336,350 342,229 336,350 342,229
441,407 376,088 428,805 376,088
331,394 327,333 326,830 315,5542,664,789 2,795,153 2,262,636 2,584,536
Subscription fee receivable
TRADE AND OTHER RECEIVABLES
FEDERATION
prepaid expenses
Provision for doubtful debts
Sundry deposits and
Course fee receivable
GROUP
Provision for doubtful debts
The trade receivables comprise receivables from services rendered. The credit period granted is 30 days
(2018 : 30 days).
Provision for doubtful debts
Sundry receivables
Representation fee receivable
Other receivables
Provision for doubtful debts
27
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019
MALAYSIAN EMPLOYERS FEDERATION
POLICIES AND NOTES TO THE FINANCIAL STATEMENTS
AND ITS SUBSIDIARY COMPANY
7
2019 2018 2019 2018
RM RM RM RM
10,518 10,518 9,000 9,000
341,719 3,623,802 274,661 3,329,752
352,237 3,634,320 283,661 3,338,752
Fixed deposits with local licensed
banks 7,218,019 13,138,994 5,824,366 11,734,712
Cash management funds 10,834,683 - 10,176,235 -
18,404,939 16,773,314 16,284,262 15,073,464
The average effective interest rates per annum are as follows:
2019 2018
% %Local licensed banks 3.10 - 4.40 2.9 - 4.18
8 TRADE PAYABLES, OTHER PAYABLES AND ACCRUALS
2019 2018 2019 2018
RM RM RM RM
123,391 67,740 - -
Other payables 1,441,411 1,258,258 1,417,250 1,317,888
2,393,784 2,161,154 2,393,784 2,161,154
Accruals 782,316 828,304 607,822 683,233
Amount due to
subsidiary company - - 114,472 509,5214,740,902 4,315,456 4,533,328 4,671,796
GROUP AND FEDERATION
Amount due to subsidiary company which arose mainly from course fees, seminar fees, administration
fees and advances payable to the Academy, is unsecured, interest free and repayable on demand.
Fixed deposits of the Group and of the Federation have an average maturity period ranging from 90 to
365 days (2018 : 60 to 365 days).
GROUP
Cash at bank
CASH AND CASH EQUIVALENT
Cash in hand
GROUP
Trade payables
Refundable Representation
Deposit
FEDERATION
FEDERATION
28
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019
MALAYSIAN EMPLOYERS FEDERATION
POLICIES AND NOTES TO THE FINANCIAL STATEMENTS
AND ITS SUBSIDIARY COMPANY
9 TAX EXPENSES
2019 2018 2019 2018
RM RM RM RM
Current taxation 151,060 208,966 145,706 203,766
Under/(Over) provision
in previous year 4,357 28,366 - 30,382
155,417 237,332 145,706 234,148
Effective tax rate in percentage (%) 14.56 22.61 13.84 22.46
2019 2018 2019 2018
RM RM RM RM
272,759 272,337 273,746 270,993
52,179 40,956 45,132 36,547
(181,587) (112,136) (171,852) (102,756)
(2,026) (1,571) (1,320) (1,018)
9,735 9,380 - -
4,357 28,366 - 30,382
155,417 237,332 145,706 234,148
10 RELATED PARTY DISCLOSURE
a) Related parties and relationships
The related parties and their relationship with the Federation are as follows:
Related parties Relationship
MEF Academy Sdn. Bhd. Subsidiary company
in previous year
normal tax rate
Reconciliation of current taxation to the accounting profits multiplied by applicable tax rates:
GROUP FEDERATION
Non-deductible expenses
Utilisation of capital allowances
Under/(Over) provision
Other income subjected to tax
GROUP FEDERATION
Non-taxable income
Accounting profits on
29
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2019
MALAYSIAN EMPLOYERS FEDERATION
POLICIES AND NOTES TO THE FINANCIAL STATEMENTS
AND ITS SUBSIDIARY COMPANY
10 RELATED PARTY DISCLOSURE (Continued)
b) Significant related party balances and transactions
Balances 2019 2018
RM RM
Amount due to subsidiary company 114,472 509,521
Transactions
Course fees, seminar fees and administration fees
paid and payable by the Federation 659,527 679,420
11 STAFF COSTS AND NUMBER OF EMPLOYEES
2019 2018 2019 2018
RM RM RM RM
Staff costs 7,074,469 6,521,509 6,242,374 5,701,985
Number of employees 58 58 51 51
For the purpose of these financial statements, the Federation is considered to be related to the
party if the party has the ability, directly or indirectly, to control the Federation or exercise significant
influence over the Federation in making financial and operating decisions, or vice versa, or where
the Federation and the party are subject to common control or common significant influence.
Staff costs include all forms of remuneration including contributions to Employee Provident Fund of the
Group and the Federation of RM806,174 (2018: RM749,963) and RM703,918 (2018: RM655,208)
respectively.
GROUP FEDERATION
30