nurturing 2015 business innovation - … packaging industry according to the ... packaging is paper...

NURTURING BUSINESS INNOVATION2015

ANNUAL REPORT

Company No. 603770 – DC N 603770 D

TO A PROMISING FUTUREEvery valuable minute spent on penning down a restructuring plan for strategic growth is comparable to the time spent on nurturing a seedling to become a tree. We illustrated this concept by depicting a nger touching the sprout, against a sun glare.

Content

CORPORATE INFORMATION 04-07 CORPORATE PROFILE 08-11

CHAIRMAN STATEMENT 12-17

PROFILE OF THE BOARD OF DIRECTORS 18-25

STATEMENT OF CORPORATE GOVERNANCE 26-41

STATEMENT OF RISK MANAGEMENT AND INTERNAL CONTROL 42-45

AUDIT COMMITTEE REPORT 46-51

OTHER COMPLIANCE INFORMATION 52-55

FIVE YEARS FINANCIAL HIGHLIGHTS AND FINANCIAL INDICATORS 56-59

FINANCIAL STATEMENTS 60-151

LIST OF PROPERTIES 152-155

ANALYSIS OF SHAREHOLDINGS 156-161

NOTICE OF ANNUAL GENERAL MEETING 162-168

PROXY FORM 169-170

3

CORPORATE INFORMATION

5

Board of Directors

Dato’ Lee Kwee Hiang Executive Chairman(Appointed on 13 November 2014)

Dato’ Eow Kwan Hoong Non-Independent Executive Director

Wan Tak Chuen Non-Independent Non-Executive Director(Appointed on 13 November 2014)

Dato’ Chew Weng Kit Non-Independent Non-Executive Director(Appointed on 13 November 2014)

Syed Abdullah Bin Syed Abd Kadir Independent Non-Executive Director

Dato’ Mohamad Suparadi Bin Md Noor Independent Non-Executive Director

Chan Feoi Chun Independent Non-Executive Director

Shahabuddin Bin Abdullah @ Lee Seng Pun Non-Independent Executive Director(Resigned on 17 December 2014)

Lee Seng Hoong Non-Independent Executive Director(Resigned on 17 December 2014)

Chow Pak Lim Non-Independent Non-Executive Director(Retired on 17 September 2014)

Leom Chit Dein @ Lim Jit Teng Non-Independent Executive Director(Retired on 17 September 2014)

Company Secretaries

Joanne Toh Joo Ann (LS 0008574)Chin Chooi Wei (MAICSA 7062555)

CORPORATE INFORMATION

6

Audit Committee

Syed Abdullah Bin Syed Abd Kadir – ChairmanDato’ Mohamad Suparadi Bin Md Noor – MemberChan Feoi Chun – Member

Nomination Committee

Syed Abdullah Bin Syed Abd Kadir – ChairmanDato’ Mohamad Suparadi Bin Md Noor – MemberChan Feoi Chun – Member

Remuneration Committee

Syed Abdullah Bin Syed Abd Kadir – ChairmanDato’ Eow Kwan Hoong – MemberChan Feoi Chun – Member

Auditors

Baker Tilly Monteiro HengChartered Accountants (AF 0117)Baker Tilly MH TowerLevel 10, Tower 1, Avenue 5Bangsar South City59200 Kuala Lumpur, Malaysia.Tel No: 603 - 2297 1000Fax No: 603 - 2282 9980

Stock Exchange Listing

The Main Board of the Bursa MalaysiaSecurities Berhad

Registrar

Tricor Investor Services Sdn BhdLevel 17, The Gardens North Tower,Mid Valley City, Lingkaran Syed Putra,59200 Kuala LumpurTel No: 603 - 2264 3883Fax No: 603 - 2282 1886

Registered Of ce

Level 18, The Gardens North Tower,Mid Valley City,Lingkaran Syed Putra,59200 Kuala Lumpur, MalaysiaTel No: 603 - 2264 8888Fax No: 603 - 2282 2733

Corporate Business Of ce

Lot 30745, Jalan Pandan Indah,Pandan Indah, 55100 Kuala LumpurTel No: 603 - 4292 1288Fax No: 603 - 4291 0085

ANNUAL REPORT 2015VERSATILE CREATIVE BERHAD Company No. 603770 – D

7

CORPORATEPROFILE

9

About Us

Versatile Creative Berhad is a public listed company on the Main Board of the Malaysian Stock Exchange, comprising:

• Imagescan Creative Sdn BhdWe are one of the industry’s most trusted names in colour separation, and an award winner of the Epson Award for Best in Digital Colour Proo ng at the Asian Print Award 2004. Serving clients such as Iris, Samsung, Sime Darby, P&G, Maybank and more, we offer services that range from printing, high resolution scanning, and inkjet proo ng to desktop publishing, synology backup, and media digital transmission.

• Fairpoint Plastic Industries Sdn BhdWe are the country’s leading manufacturer of food-grade plastic packaging products, certi ed with ISO22000:2005, ISO9001:2008, HACCP, and SEDEX. Our specialisation is in injection molding and thermoforming. By investing in and utilising the state-of-the-art machines and precision molds, we produce our worldwide-patented combo lids, dairy scoops, chilled food tubs and lids, and noodle cups. We also provide our clients with product design and packaging consultations.

• Versatile Paper BoxesWe are one of the country’s leading manufacturers of paper and cardboard packaging products, and the rst company to acquire the German-made Heidelberg Speedmaster CD 5-colour offset printing machine, complete with computerised quality and register control system. Specialised in the production of offset printed cartons; laminated, corrugated, and die-cut boxes and nestings; and our patented eco pallet, 90% of the clients we work with are export-oriented multinational companies.

CORPORATE PROFILE

10

Being in the industry for more than 25 years, Versatile Creative Berhad continues to take pride in serving a majority of major companies from various industries, in and around the region.

Our commitment in being the one-stop printing and packaging solutions provider is proven by our multitude of services, which ranges from product conceptualisation and design, to the nished product, warehousing and logistics.

Currently, our client base reads like a “Who’s Who” in the industry, including major FMCG players Nestle, Dutch Lady, and Danone; E&E giant Panasonic; well-known pharmaceutical Meditop, Ansell, and WRP; automotive SKF; and Quality Coils from the general consumer sector.

Regionally, we work with Chomthana (a major ice cream manufacturer in Thailand); SKF (China, India, and Indonesia); and Signature Orthopedics (Australia).

Through the years, we have established ourselves as a major player in the region. Whilst ful lling their many needs, our track record in customer service has encouraged clients to stay on and keep working with us. From Fairpoint being the main yogurt tub supplier and Versatile as the pioneer of the foil laminated box, our clients continue to seek our expert service. They are con dent in our reliability, and we have earned their trust with our outstanding products and services.

CORPORATE PROFILE

Our Vision

We strive to be an outstanding and preferred global supplier of innovative, versatile, cost-effective, and the best delivery and products to all our customers.

Our Mission

• To be acknowledged as an outstanding and preferred supplier of packaging materials, and recognised as such by customers, suppliers and employees.

• To research and develop products that will bear the “Versatile” name, instead of only providing services.

• To achieve pro tability, cost-control and ef ciency so to meet the aspiration of shareholders, employees, and customers.

• To have a team of professional, loyal, and dedicated managers to lead the company for further growth, expansion and continuous improvement.

• To have a team of motivated and well-trained workforce with a fair rewarding system, and a safe, clean, harmonious, and conducive working environment.

• To be a responsible corporate citizen towards the community and the environment.


11

CHAIRMAN STATEMENT

13

Dato’ Lee Kwee HiangChairman

Business Environment

The overall Group and industry faced great challenges in the year 2015, following the global economy uncertainties, rising cost of doing business, and higher cost of living due to the curbing subsidies of essential items. These factors have had an impact on Malaysia’s consumer sentiment. Furthermore, the recent weakening of the Malaysian Ringgit, and the advent of Goods and Services Tax (GST), have been deteriorating the domestic consumer market. However, the Group remains optimistic that there are plenty business opportunities ahead and economic recovery will continue, allowing it to deliver another year of favourable pro t and growth.

On behalf of the Board of Directors, I am pleased to present the Annual Report and Audited Financial Statements of the Company and the Group for the nancial year ended 31 March 2015.

14

Packaging Industry

According to The Future of Global Packaging to 2018 report by Smithers Pira, the global packaging revenue will be able to reach USD$975 billion in year 2018, and the report also highlighted that sales of packaging are concentrated in Asia, predicted to represent over 40% of the global demand.

Currently, the world’s largest consumer packaging is paper and board, followed by rigid plastics (tubs, pots and jars, etc.) which consist of 61% of the packaging revenue share. Paper, board and plastics are among the fastest growing sectors of the market, propelled by replacement of metal and glass packaging materials in the near future.

Sustainable packaging will become popular and important in the coming year, because it is driven by consumer demand and government legislations around the world. Many companies view sustainability programs as a source of innovation and social responsibility that helps in differentiation, by appealing to the consciences of consumers.

Financial Performance

Revenue for the Group for the nancial year ended 31 March 2015 was RM49.84 million, as compared to the previous nancial period ended fteen months ago, on 31 March 2014, at RM71.15 million. We recorded an increase in gross pro t margin of 13.73% from 10.70%, mainly due to cost-control activities carried out by the management to reduce wastages, investment in plant and machinery to improve the production productivity, and reduction of the electricity and labour cost. However, the Group incurred a wider loss before taxation of RM15.88 million for the nancial year ended 31 March 2015, as compared to RM2.70 million in the previous nancial period ended fteen months ago, on 31 March 2014. This was mainly due to an one-off impairment loss on goodwill and net fair value loss on other investment, amounting to RM11.49 million and RM3.48 million, respectively.

Paper Products Segment

Turnover for the paper products segment has declined to RM27.23 million, as compared to RM34.15 million in the previous nancial period ended fteen months ago, on 31 March 2014. This segment recorded a loss before taxation of RM0.52 million, as compared to the pro t before taxation of RM5.53 million in the previous nancial period ended fteen months ago, on 31

March 2014. This was mainly attributed to the net fair value loss on other investment amounting to RM3.48 million, as compared to the net fair value gain on other investment of RM4.49 million in the previous nancial period ended fteen months ago, on 31 March 2014.

By excluding the net fair value on other investment, the segment recorded an improvement in the operating level, mainly due to new investment in machinery, as well as improvement in production productivity, and cost-control activity by eliminating the wastages.

The Company expects marginal growth in the segment for the year 2016 in view of competitive product offerings and customers’ high price sensitivity, but remains cautious toward the bottom line, that is the weakening of the Malaysian Ringgit.

Plastic Products Segment

The plastic products segment has registered a decline in revenue of RM18.75 million in 31 March 2015 from RM27.29 million for the nancial period ended fteen months ago, on

31 March 2014. The segment recorded a loss before taxation of RM2.62 million as compared to RM6.40 million in the previous nancial period ended fteen months ago, on 31 March 2014. This was mainly due to the improvisation of the production ef ciency, with the new purchase of plastic injection machines and lower cost incurred, such as repair and maintenance of machinery and labour costs.

The Company will continue to explore new business opportunities beyond the traditional markets, both within Malaysia and overseas. Barring any unforeseen circumstances, the Company is optimistic that performance for the coming year will improve despite a challenging business environment, and remains focused on cost-containment.

CHAIRMAN STATEMENT


15

Colour Separation and Printing Segment

Revenue for the colour separation and printing segment registered a drastic drop in revenue of RM4.10 million, as compared to RM9.72 million for the nancial period ended fteen months ago, on 31 March 2014. Besides, the segment registered a loss before taxation of RM0.47 million, as compared to the pro t before taxation of RM1.40 million in the previous nancial period. The loss before taxation was mainly due to a signi cant fall in revenue from colour separation division, which gave a higher margin to the segment.

The changes in technology have encouraged the customers to focus on innovation technology and cost-containment.

The Company will continue to intensify efforts to explore new innovation products, i.e. “e-publishing product”, to local and overseas market. Barring any unforeseen circumstances, the Company is optimistic that the e-publishing product will gain wider acceptances from customers and it will continue to grow.

Corporate Development

• Capital reduction exercise The Company had, on 29 August 2014, completed

the capital reduction exercise, by reducing the par value of each existing ordinary share of the Company from RM1.00 to RM0.50 each.

The reduction of the issued and paid-up share capital of the Company amounting to RM55.32 million arising from the par value reduction, was credited to the accumulated losses.

• Changes in immediate and ultimate holding company On 18 September 2014, Iris Healthcare Sdn

Bhd (“IHSB”) disposed of Versatile Creative Bhd’s (“VCB”) shares of 27,660,770 units, representing 25% interest of the Company. Accordingly, IHSB and Iris Corporation Berhad (“ICB”) (immediate holding of IHSB) ceased to be immediate and ultimate holding company of the Group and of the Company.

• Disposal of investment in ICB shares During the nancial year, the Group had

disposed of 24 million units of ICB shares, which amounted to carrying amount of RM6 million to the open market of Bursa Malaysia Securities for a total cash consideration of RM7.45 million . The disposal has contributed a gain on disposal of shares, of RM1.45 million to the Group. The utilisation from the proceeds is for the Group’s working capital, which comprises the payment to creditors, and operating expenditure such as purchase of raw materials, distribution and administrative expenses, as well as nance costs.

• Private Placement The directors of the Company had, on 24

February 2015, proposed to undertake the proposed private placement of up to 10%, 11,064,308 new ordinary shares of RM0.50 each in the Company, at RM0.72, and subsequently, had, on 20 April 2015, approved the listing and quotation by Bursa Malaysia Securities Bhd. The Company had, on 30 April 2015, the Price Fixing Date xed

the issue for 5,035,900 Placement Shares at RM0.72 per Placement share, representing approximately 4.55% of the issued and paid-up capital of VCB as at 30 April 2015 of 110,643,081 VCB shares, being the rst tranche of the Private Placement,

subsequently of the above, the Placement shares was quoted listing on 13 May 2015.

On 15 May 2015, the Price Fixing Date xed the issue for 1,659,700 Placement

Shares at RM0.72 per Placement share, representing approximately 1.43% of the issued and paid-up capital of VCB as at 15 May 2015 of 115,678,981 VCB shares, being the second tranche of the Private Placement, subsequently of the above, the Placement shares was quoted listing on 22 May 2015.

The utilisation from the proceeds is for the Group’s working capital, which comprises the payment to creditors, and operating expenditure such as purchase of raw materials, distribution and administrative expenses, as well as nance costs.

CHAIRMAN STATEMENT

16

• Disposal of a freehold land-cum-two single-storey detached factory buildings Fairpoint Plastic Industries Sdn Bhd (“FPI”),

a wholly owned subsidiary of VCB, had, on 10 July 2015, entered into a Sale and Purchase Agreement (“SPA”) with Era Prestij Development Sdn Bhd for the disposal of a freehold two single-storey detached factory, each with an annexed double-storey of ce buildings and ancillary buildings, erected on a piece of land held under individual title HSD 140012, at Lot No. PT 71174, Pekan Kajang, District of Ulu Langat, and State of Selangor Darul Ehsan, measuring approximately 5,646 square metres (collectively referred to as “the Property”), free from all encumbrances on an “as is where is” basis for a total consideration of RM12 million only subject to 6% Goods and Services Tax, to be paid in the manner stated in the SPA, and subject to all other terms and conditions as stipulated in the SPA and/or such terms and conditions as shall be mutually agreed upon (“Proposed Disposal”). Upon the completion of the Proposed Disposal, a Tenancy Agreement shall be entered into between

FPI and the Purchaser, wherein the FPI shall rent the Property from the Purchaser at a monthly rental rate of RM0.05 million and through its Solicitors shall, prior to the release of the Balance Purchase Price to FPI, attend to the following:-

i) Retain from the Balance Disposal Price (as stated under Section 1.5(II) of this announcement) the deposits as referred to under the Tenancy Agreement, with respect to the Property, amounting to RM0.115 million only, and forward the same to the Purchaser being the two (2) months security deposit and RM0.015 million utility deposit;

ii) Retain from the Balance Purchase Price

the Rental apportionment for the month;

iii) Furnish all bills and receipts evidencing payment of all outstanding outgoings (up-to-date) in the Property.

On receipt of the Balance Purchase Price by the FPI’s Solicitors, FPI shall pay rental to the Purchaser for that month, duly apportioned on daily basis, according to the date of the FPI’s Solicitors’ receipt of the Balance Purchase Price.

Appreciation

On behalf of the Board, I would like to express my sincere appreciation and thanks for the invaluable contributions of Encik Shahabuddin Bin Abdullah @ Lee Seng Pun, Mr. Lee Seng Hoong, who have resigned during the year 2014, and Mr. Chow Pak Lim and Mr. Leom Chit Dein @ Lim Jit Teng, who have retired during the year 2014.

I would like to of cially welcome our new directors, namely Dato’ Chew Weng Kit, and Mr. Wan Tak Chuen. These new directors have a wealth of experience and track record, and I am con dent that their capabilities will play an important role to support the growth of the Group.

I would like to thank our shareholders, customers, business partners, and suppliers for their continued support. In particular, I would like to thank our management and staff for their contribution and performance under challenging conditions during the year.

Dato’ Lee Kwee HiangExecutive Chairman18 August 2015

CHAIRMAN STATEMENT


17

PROFILE OFTHE BOARD OF

DIRECTORS

19

Appointed to the Board of Versatile Creative Berhad [“VCB”] and elected the Executive Chairman on 13 November 2014. He is one of the co-founders of IRIS Corporation Berhad, primarily responsible for research and development and manufacturing. In 1969, he began his career in computer and electronics division with the Royal Malaysian Air Force before joining DE Electronic & Computer Sdn Bhd as the Managing Director till 1984. He later started Microcomputer Systems (M) Sdn Bhd (“MSSB”) in 1985, and obtained the rst computer-manufacturing license with pioneer status that subsequently permitted the launch of the rst Malaysian-designed PC in 1987, followed by the awarding of “PIKOM Product of the Year” for its 386sx computer in 1989.

He, too, was a member of the R&D committee that designed and produced the ATOM 1 for the Malaysian Ministry of Education, of which the rst batch was installed in 60 pilot schools nationwide under the Computer in Education programme. MSSB later merged with LIKOM Corporation of Lion Group, where he became the Executive Director till 1994. Subsequently, he set up his consultancy business, Power Metric Consultant Sdn Bhd, where he remains a director until present. He was awarded the “PIKOM Computime IT Personality of the Year” and “PIKOM Key Industry Leader Award” in 1991 and October 2006, respectively. He has no family relationship with any other Directors and/or substantial shareholders of VCB. He has no con ict of interest with VCB and has no convictions for any offences within the past 10 years other than traf c offences.

Dato’ Lee Kwee HiangExecutive ChairmanMalaysian, age 66

20

Wan Tak ChuenNon-Independent Non-Executive DirectorHongKonger, age 60

Appointed to the Board on 28 October 2003. He was appointed as an Executive Director of Versatile Paper Boxes Sdn Bhd and its subsidiaries in 1997. He is a member of the Malaysian Institute of Accountants, as well as a fellow member of the Chartered Institute of Management Accountants (CIMA), in United Kingdom. In 2013, he was elected by CIMA members in South East Asia to serve as a Council member of CIMA UK for a three-year term.

He is also a member of the South East Asia Regional Board of CIMA. He joined the Lion Group as an Accounts Manager in 1982. After serving the Group for 17 years and holding the post of Group Chief Accountant, he resigned in December 1997 and joined IRIS Corporation Berhad. Curently, he holds Directorships in IRIS Corporation Berhad, Lion Forest Industries Berhad, and Lion AMB Resources Berhad. In addition, he also sits on the Boards of several Malaysian private limited companies. He has no family relationship with any other Directors and/or substantial shareholders of VCB. He has no con ict of interest with VCB and has no convictions for any offences within the past 10 years other than traf c offences.

Dato’ Eow Kwan HoongNon-Independent Executive DirectorMalaysian, age 62

Appointed to the Board on 13 November 2014 as a Non-Independent Non-Executive Director. A highly successful self-made entrepreneur from Hong Kong with businesses in China, Macau and Taiwan, he is currently a director and major shareholder of Rica Holdings Sdn Bhd. He plays a signi cant role in nurturing these companies, setting the direction for growth and expansion, as well as assisting in the marketing of their products and services.

Moreover, he controls more than 10 companies in Hong Kong, of which the major company, Wanco Industries Ltd., is one of the largest manufacturers of motors (condenser-run, shaded pole, and geared motors) used as components for the manufacturing of household appliances, of ce and medical equipment, as well as gaming machines. His other major business involves the sourcing of high-tech component parts from China, Hong Kong and Taiwan for various types of high-tech product manufacturers in the region and in Malaysia. He has no family relationship with any other Directors and/or substantial shareholders of VCB. He has no con ict of interest with VCB and has no convictions for any offences within the past 10 years other than traf c offences.


21

Appointed to the Board on 28 October 2003 and is also the Senior Independent Non-Executive Director. He was appointed as a Director of Versatile Paper Boxes Sdn Bhd in 1997. He graduated with a double degree in Bachelor of Science (Engineering Production) and Bachelor of Commerce (Economics) from the University of Birmingham, United Kingdom in 1977. He has extensive experience in banking and nancial services sector, having worked in a commercial bank (Hong Kong and Shanghai Banking Corporation Ltd), a merchant bank (Bumiputera Merchant Bankers Berhad), and a public listed company (Amanah Capital Partners) with subsidiaries involved in, among others, discount house, money broking, unit trusts, nance companies and fund management operations.

Presently, he is also a Director of IRIS Corporation Berhad, YTL Corporation Berhad, YTL Power International Berhad, YTL E-Solutions Berhad, Extiva Communications Sdn Bhd, and Stenta Films (M) Sdn Bhd. He has no family relationship with any other Directors and/or substantial shareholders of VCB. He has no con ict of interest with VCB and has no convictions for any offences within the past 10 years other than traf c offences.

Syed Abdullah Bin Syed Abd KadirIndependent Non-Executive DirectorMalaysian, age 61

Dato’ Chew Weng KitNon-Independent Non-Executive DirectorMalaysian, age 60

Appointed to the Board on 13 November 2014 as a Non-Independent Non-Executive Director. The current Director of Fiscal Corporate Services Sdn Bhd also has had experience as a Tax Inspector in the Inland Revenue Department in Wellington, New Zealand, from 1978 to 1980 before joining Price Waterhouse, Kuala Lumpur, as the Senior Tax Supervisor from 1980 to 1983.

He was also a member of the Chartered Accountant since 1982, Malaysian Institute of Accountants since 1989, and Malaysian Institute of Taxation since 1992. He was the Board of Trustees with Yayasan Hoki Malaysia. In June 2011, he joined the AHF-MHC Hockey Academy as an Honorary Treasurer and was a part of the Management Committee. He has no family relationship with any other Directors and/or substantial shareholders of VCB. He has no con ict of interest with VCB and has no convictions for any offences within the past 10 years other than traf c offences.

22

Appointed to the Board on 28 October 2003. He started his career as Assistant Accountant with Bank Bumiputera (M) Berhad in 1983. In 1988, he became a Dealer Representative in BBMB Securities Sdn Bhd. He subsequently became a remisier in SJ Securities Sdn Bhd in 1990. In 2002, he was appointed as the Chairman of National Sports Complex, Bukit Jalil.

Currently, he is the Chairman of DSN Capital Sdn Bhd. He has no family relationship with any other Directors and/or substantial shareholders of VCB. He has no con ict of interest with VCB and has no convictions for any offences within the past 10 years other than traf c offences.

Dato’ Mohamad Suparadi Bin Md NorIndependent Non-Executive DirectorMalaysian, age 56

Appointed to the Board on 23 January 2009. He is a Fellow of the Chartered Institute of Management Accountants, UK (CIMA), a Member of Malaysian Institute of Accountants, and a Graduate of the Institute of Chartered Secretaries and Administrators UK (ICSA). He also holds a Master of Business Studies (Banking & Finance) from University College Dublin, Ireland. He is an Independent Non-Executive Director of IRIS Corporation Bhd, and a Non-Independent Non-Executive Director of Perisai Petroleum Teknologi Berhad.

He is currently an Executive Director of Swiss-Garden International Vacation Club Bhd., a subsidiary of PJD Development Holdings Bhd. Prior to that, he has held various senior management positions in the nancial services, Group of MBF Holdings. He is the immediate past Chairman of South East Asia Regional Board for CIMA. He has no family relationship with any other Directors and/or substantial shareholders of VCB. He has no con ict of interest with VCB and has no convictions for any offences within the past 10 years other than traf c offences.

Chan Feoi ChunIndependent Non-Executive DirectorMalaysian, age 62


23

Dato’ Chew Weng Kit Dato’ Eow Kwan HoongDato’ Lee Kwee Hiang

THE BOARD OF DIRECTORS

24

Syed Abdullah BinSyed Abd Kadir

Dato’ Mohamad Suparadi Bin Md Noor

Chan Feoi Chun Wan Tak Chuen


25

STATEMENT OF CORPORATE

GOVERNANCE

27

The Board of Directors (“the Board”) of Versatile Creative Berhad (“VCB” or “the Company”) remains committed towards governing, guiding, and monitoring the direction of the Company with the objective of enhancing long-term sustainable value creation aligning to the interests of shareholders and stakeholders. The Board strives for and advocates good corporate governance, and views this as a fundamental part of discharging its roles and responsibilities. Hence, the Board continues to implement the eight (8) principles set out in the Malaysian Code on Corporate Governance 2012 (“the Code”) to its particular circumstances, having regard to the recommendations stated under each principle.

This statement sets out the extent of how the Company and its group of companies (“the Group”) have applied and complied with the principles and recommendations of the Code and Paragraph 15.25 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Malaysia”) (“MMLR ”).

Principle 1 – Establish Clear Roles and Responsibilities of the Board and Management

The Board’s role is to govern and set the strategic direction of the Company, whilst the Management manages the Company and the Group in accordance with the strategic direction and delegations of the Board. The responsibility of the Board is to oversee the activities of the Management in carrying out these delegated duties.

The Group is led and controlled by an effective Board where it assumes, amongst others, the following principal responsibilities in discharging its stewardship role, and duciary and leadership functions:

• Reviewing and adopting a strategic plan, including setting performance, objectives and budget for the Group, and subsequently monitoring the implementation of the strategic plan by the Management to ensure sustainable growth of the Group;

• Overseeing the conduct of the Company and the Group’s performance, and build sustainable value for shareholders;

STATEMENT OF CORPORATE GOVERNANCE

28

• Evaluating principal risks of the Group and ensuring the implementation of appropriate risk management and internal control systems to manage these risks;

• Reviewing the adequacy and the effectiveness of the Group’s risk management and internal control systems;

• Establishing proper succession planning, including assessing, training, xing the compensation of, and where appropriate, replacing, the Board and Senior Management;

• Reviewing the adequacy and the integrity of the management information systems of the Company and the Group;

• Ensuring that the Company adheres to high standards of ethics and corporate behaviour.

The Board has established and delegated speci c responsibilities to three (3) committees of the Board, which operate within clearly de ned written terms of references. The Board reviews the Board Committees’ authority and terms of reference from time to time to ensure their relevance. The Board Committees deliberate the issues on a broad and an in-depth basis before putting up any recommendation to the Board for approval. The ultimate responsibility for decision-making lies with the Board. The Board Committees consist of:

a) Audit CommitteeThe Audit Committee plays an active role in assisting the Board in discharging its governance responsibilities, which include maintaining a sound risk management, internal control and governance system.

b) Remuneration CommitteeThe Remuneration Committee is primarily responsible for determining and recommending to the Board the remuneration packages of the Executive Director of the Company.

c) Nomination CommitteeThe Nomination Committee is primarily responsible for recommending suitable appointments to the Board, taking into consideration the Board structure, size, composition and the required mix of expertise and experience that the Director should bring to the Board.

It assesses the effectiveness of the Board as a whole, the committees of the Board and the contribution of each Director, including Non-Executive Directors, as well as the Managing Director.

Board Charter

The Board has established a Board Charter to provide guidance in the roles and responsibilities to the Board members and management. The Board Charter addresses the following matters:-

• Objectives• Roles and Responsibilities of the Board• Roles of the Chairman and Managing Director• Board Committees• General Meeting• Investor Relations and Shareholder Communication• Company Secretary

The Board Charter, which serves as a referencing point for Board’s activities to enable Directors to carry out their stewardship role and discharge their duciary duties towards the Company, also seeks to include a formal schedule of matters reserved to the Board for deliberation and decision, so that the control and direction of the Company are in its hands. The Charter is made publicly available on Company’s website at www.vc-b.com.my, in line with Recommendation 1.7 of the MCCG2012.

Code of Ethics

The Board has adopted the Code of Ethics of the Company for Directors to enhance the standard of corporate governance and behaviour, and to focus on the Board and each Director on areas of ethical risk, provide guidance to Directors to help them recognise and deal with ethical issues, provide mechanisms to report unethical conduct, and help to foster a culture of honesty and accountability.

The Board is committed to adhering the best practices in corporate governance, and observing the highest standards of integrity and behaviour in all activities conducted by the Company and the Group, including the interaction with its shareholders, employees, creditors, customers, and within the community and environment in which the Company and the Group operate.



29

Whistle Blower Policy

To address this concern, the Group has formalised and established a Whistle Blower Policy. This is to outline when, how, and to whom a concern may properly be raised about any actual or potential corporate fraud or improper conduct, or an unlawful conduct involving an employee, of cer or Management of the Company.

Sustainability of Business

The Board is cognisant of the importance of business sustainability, which encompasses all aspects of ethical business practices, addressing relevant Environment, Social, and Governance. The Board is committed to making a positive impact in the communities, where we have a presence while further strengthening our corporate reputation via upholding a culture of integrity and transparency.

Over the years, our approach towards corporate social responsibility (“CSR”) has continued to support the international Forest Stewardship Council (“FSC”) in promoting the responsible management of forest worldwide, by ensuring that the sustainable environment for the future generations is intact. By promoting these, the Company has obtained the Forest Stewardship Council (“FSC”) Certi cate in 2014.

Supply and Access to Information

Every Director has full and unrestricted access to information within the Group. Where required, the Board and its Committees are provided with independent professional advice, the cost of which is borne by the Company. The Board may also seek advice from the Management or request further explanation, information, or update on any aspect of the Group’s operations or business concerns. The Board is supplied with quality and timely information, which allows it to discharge its responsibilities effectively and ef ciently. The agenda for each meeting, together with a set of comprehensive Board Papers for each agenda item, are delivered to each Director in advance of meetings, to provide the Board with suf cient time to review the matters to be deliberated for an effective discussion and decision-making during the meeting, and where necessary, to obtain supplementary information before the meeting.

Company Secretary

The Board regularly consults the Company Secretary on procedural and regulatory requirements. The Company Secretary, who is quali ed and competent, plays an important role in advising and supporting the Board by ensuring adherence to board policies and procedures.

Principle 2 – Strengthen Composition

Board Composition and Balance

During the nancial year under review, the Board consists of seven (7) members – comprising three (3) Independent Non-Executive Directors, two (2) Non-Independent Non-Executive Directors, one (1) Executive Director, and one (1) Executive Chairman. The composition is in compliance with the Bursa Securities main Market Listing Requirements, which requires at least two (2) Directors or one-third (1/3) of the Board, whichever is the higher, to be Independent Directors. The Board is made up of members with wide range of business, technical, and nancial backgrounds. The pro le of each Director is presented on pages 18 to 25 of the Annual Report.

All of the Board members serve as directors in not more than ve (5) boards of listed companies, so as to ensure that they devote suf cient time to carry out their responsibilities.

The roles of the Chairman and the Executive Director are separated even though the Chairman is not an independent Director, at the moment Directors were of the opinion that the Board need not be made up of a majority of independent Directors as recommended by the Code.

The Board believes that a Chairman is one who will act in the best interest of shareholders as a whole. As the Chairman has a signi cant relevant interest in the Company, he is well placed to act on behalf of shareholders and in their best interest. The Chairman is responsible for the Board’s effectiveness and conduct, whilst the Executive Director has overall responsibilities over the business and operation of the Group. The clear division of functions and responsibilities between these two roles, which have been clearly de ned in the Board Charter, will ensure the balance of power and authority.


30

The Independent Non-Executive Directors help to align objectives and provide independent judgment in the decision-making of the Board, as well as to provide check and balance for the Managing Director. The Non-Executive Director contributes signi cantly in areas such as policy and strategy, performance monitoring, allocation of resources, as well as the improvement of governance and controls. The Board is constituted of individuals who are committed to business integrity and professionalism in all the activities of the Company.

Board Diversity

The Company strives for gender diversity and inclusiveness in our Board. The goal is to have a Board that is gender-balanced, and to ensure that women are treated on the same basis as men in terms of the Board positions. This goal means having a Board of both genders in the Company, and most importantly, to have women, as well as men in board positions.

The Company will conduct an annual review of its gender diversity and will take action to rectify gender imbalances in a reasonable and timely manner.

Nomination Committee – Selection and Assessment of Director

With speci c terms of reference by the Board, a Nomination Committee has been established, comprising Independent Non-Executive Directors.

There were two (2) Nomination meetings held during the nancial year ended 31 March 2015, with the details of Directors’ attendance set out below:

The Nomination Committee is primarily responsible for recommending suitable appointments to the Board, taking into consideration the Board structure, size, composition and the required mix of expertise and experience, which the Director should bring to the Board. It assesses the effectiveness of the Board as a whole, the Board Committees and the contribution of each Director, including Non-Executive Directors.

The nal decision on the appointment of a candidate recommended by Nomination Committee rests with the whole Board. The Board is entitled to the services of the Company Secretary, who would ensure that all appointments are made upon obtaining all necessary information from the Directors.

During the nancial year ended 31 March 2015, the Nomination Committee has assessed the balance composition of the Board members based on merits, Directors’ contribution and Board effectiveness.

The Nomination Committee concluded that each Board member had been competent and committed in discharging his duties and responsibilities. All assessments and evaluations carried out by the Nomination Committee were properly documented.


Number of Nomination Committee Meetings

2/2

1/2

2/2

Chairman

Member

Member

Syed Abdullah Bin Syed Abd Kadir


Chan Feoi Chun

AttendedDirectors


31


The Board, through the Nomination Committee’s annual appraisal, believes that the current composition of the Board brings the required mix of skills and core competencies required for the Board to discharge its duties effectively.

During the year, there were four (4) Board members who resigned; two (2) Board members have opted for retirement, and did not wish to seek for re-election as Directors of the Company, and were approved by shareholders at the Eleventh Annual General Meeting, another two (2) Board members tendered their resignation as Directors of the Company due to personal reason, and there were three (3) new board members whom were appointed as Directors of the Company.

Remuneration Committee

The Board has established a Remuneration Committee consisting of two (2) Independent Non-Executive Directors and the Non-independent Executive Director.

There was one (1) Remuneration meeting held during the nancial year ended 31 March 2015, with the details of the Directors’ attendance set out below:

The Remuneration Committee has been entrusted by the Board to determine that the levels of remuneration are suf cient to attract and retain Directors needed in managing the business of the Group. The Remuneration Committee is entrusted under its terms of reference to assist the Board, amongst others, to recommend to the Board the remuneration of the Executive Chairman and Executive Director. In the case of Non-Executive Directors, the level of remuneration shall re ect the experience and level of responsibilities undertaken by the Non-Executive Directors concerned. In all instances, the deliberations are conducted with the Directors concerned, abstaining from discussions on the individual remuneration.

The remuneration of the Directors of the Company for the nancial year ended 31 March 2015 is setout below:-

Number of Remuneration Committee Meetings

1/1

1/1

1/1

31, 800

266,472

298, 272

76, 600

42, 600

119, 200

108, 400

309,072

417,472

Chairman

Member

Member


Dato’ Eow Kwan Hoong

Chan Feoi Chun

Non-Executive

Executive

Total

Attended

Basic Salary (RM) Fees (RM) Total (RM)

Directors

32


Number of Directors whose remuneration falls into the following bands:

The Board has chosen to disclose the remuneration bands pursuant to Bursa Malaysia Listing Requirements, and is to the opinion that detailed disclosure of individual director’s remuneration will not add signi cantly to the understanding and evaluation of the Company’s governance.

Principle 3 – Reinforce Independence of the Board

The roles of the Chairman of the Board (“the Chairman”) and the Executive Director are separated, with each having a clear scope of duties and responsibilities. The distinct and separate roles of the Chairman and the Executive Director, with a clear division of functions and responsibilities, ensure a balance of power and authority, such that no one individual has unfettered powers of decision-making. This crucial partnership dictates the long-term success of the Group and of the Company.

The Chairman plays a crucial and pivotal leadership role in ensuring that the Board works effectively, whilst the Executive Director has the overall responsibility for the operational and business units, organisational effectiveness and implementation of Board policies, directives, strategies, and decisions.

The Independence Directors make up more than one-third (1/3) of the Board composition. The appointment of the Independent Directors is to ensure that the Board includes Directors who can effectively exercise their independence and objective judgment to the Board deliberations, and to mitigate risks arising from con ict of interest or undue in uence from interested parties.

The Non-Executive Directors contribute in areas such as policy and strategy, performance monitoring, allocation of resources, as well as the improvement of governance and controls. The Board is constituted of individuals who are committed to business integrity and professionalism in all the activities of the Company.

The Nomination Committee has reviewed and assessed the independence of all Independent Directors, and recommended them to continue as Independent Non-Executive Directors of the Company based on the following justi cations:-

• They uphold integrity and are able to function as check and balance, provide a broader view and bring an element of objectivity to the Board;

• They have vast experience in a diverse range of business, which could provide constructive and independent judgments for the best interest of the Company;

RM 50,000 and below

RM 50,001 - RM 100,000

RM 100,001 - RM 150,000

RM 200,001 - RM 250,000

RM 250,001 - RM 350,000

6

-

-

-

-

2

1

2

-

-

Remuneration (per annum) Non-Executive Executive


33

• They exercise due care as Independent Directors of the Company, and carry out their duties in the interest of the Company and shareholders;

• They uphold independent decision and challenge the management’s objectivity.

Following an assessment conducted by the Board through the Nomination Committee, the Board opined that the independence of directors cannot be assessed only based on the quantitative aspect as stated in the MMLR, but the true independence emanates from intellectual honesty, manifested through a commitment to serve the best interest of the Company. The Independent Directors can still continue to remain objective and independent in expressing their respective views, and in participating in deliberations and decision-making of the Board and the Board Committees. The Board is further of the view that the length of service of the Independent Directors on the Board does not, in any way, interfere with their independent judgment and ability to act in the best interest of the Group. Hence, based on the recommendation by the Nomination Committee, the Board recommends that the Independent Directors continue to be designated as independent directors of the Company.

Principle 4 – Foster Commitment

The Board schedules to meet at least four (4) times a year, with all meetings scheduled well in advance to facilitate the Directors in planning their meeting schedule. Additional meetings are convened when necessary, and important decision needs to be made between scheduled meetings. Board and Board Committee papers, which are prepared by the Management, provide the relevant facts and analyses for the convenience of the Directors. The meeting agenda, the relevant reports, and Board papers are furnished to Directors and Board Committee members well before the meeting, to allow the Directors suf cient time to peruse for effective discussion and decision-making during the meeting. At the quarterly Board meetings, the Board reviews the business performance of the Group and discusses major operational and nancial issues.

The Chairman of each Board Committee informs the Directors at each Board meeting of any salient matters noted by the the respective Committees, and which require the Board’s attention or direction. All pertinent issues discussed at Board meetings, in arriving at the decisions and conclusions, are properly recorded by the Company Secretary, by way of Minutes of meetings.

Board Meetings

There were four (4) Board meetings held during the nancial year ended 31 March 2015, with details of Directors’ attendance set out below:


Shahabuddin Bin Abdullah @ Lee Seng Pun *^

Dato’ Lee Kwee Hiang #

Dato’ Eow Kwan Hoong

Lee Seng Hoong ^

Directors

Number of Board Meetings

Attended

Chairman

Executive Chairman

Executive Director

Executive Director

3/4

2/4

4/4

3/4

34

Note:* re-designated from Chairman to Executive Director on 13 November 2014;# appointed to the Board of Director on 13 November 2014;^ resigned from the Board of Director on 17 December 2014;@ retired from the Board of Director on 17 September 2014.

The Board complied with Paragraph 15.06 of the MMLR on the restriction on the number of directorships in listed companies held by the Directors. The Board is satis ed that the external directorships of the Board members have not impaired their ability to devote suf cient time in discharging their roles and responsibilities effectively, as well as regularly updating and enhancing their skills and knowledge.

The Board is also satis ed with the level of time commitment given by the Directors towards ful lling their roles and responsibilities as Directors of the Company.

Directors’ Training – Continuing Education Programmes

All Directors have attended the Mandatory Accreditation Programme as required under the MMLR. To remain relevant in the rapidly changing and complex modern business environment, the Directors are committed to continuing education and lifelong learning to ful ll their responsibilities to the Company, and enhance their contributions to Board deliberations.

The Directors are encouraged to attend brie ngs, conferences, forums, trade fairs (locally and internationally), seminars and training to keep abreast with the latest developments in the industry, and to enhance their skills and knowledge.

Amongst the training and seminar courses attended by some of the directors were as follows:


Leom Chit Dein @ Lim Jit Teng @

Dato’ Chew Weng Kit #

Wan Tak Chuen #

Chow Pak Lim @



Chan Feoi Chun

2/4

2/4

2/4

2/4

4/4

3/4

4/4

Directors Attended

Executive Director

Non-IndependentNon-Executive Director



Independent Non-Executive Director




35


No Name of Director

1 Dato’ Lee Kwee Hiang

2 Dato’ Eow Kwan Hoong

3 Wan Tak Chuen

4 Dato’ Chew Weng Kit

5 Chan Feoi Chun

Programme

Training Attended by Directors

Date Attended

Mandatory Accreditation Programme for Directors of Public Listed Companies

Focus Group Session for Board of Directors on Strengthening Corporate Governance Disclosure Amongst the Listed Issuers

Lion Group In-house Directors’ Training on:1. The Key Factors of Goods and Services Tax (GST)

and its Implementation 2. Transfer Pricing

Lion Group In-house Directors’ Training on:1. General pillars of ASEAN Economic Community (“AEC”) - Single market and production base concept

under the AEC - General features of the ASEAN Trades

in Goods Agreement (ATIGA), ASEAN Comprehensive Investment Agreement (ACIA) and Mutual Recognition

Arrangements (MRA)2. Protection of intellectual property in view of the

AEC single market



The Scenario Planning

Risk Management & Internal Control : Workshop for Audit Committee Members

17 & 18 December 2014

6 May 2015

13 January 2015

17 June 2015

17 & 18 December 2014

17 & 18 December 2014

29 May 2014

5 June 2014

36


No Name of Director

6 Syed Abdullah Bin Syed Abd Kadir

Programme Date Attended

Common Breaches of the Listing Requirements with Case Studies

Advocacy Sessions on Corporate Disclosure for Directors

PDPA 2010 & The Competition Act 2010 - implications on Capital Market

GST & Tax Training – BDO

Crisis Management and Leadership during a disaster by Institute of Enterprise Risk Practitioners

Focus Group Session for Board of Directors on Strengthening Corporate Governance Disclosure Amongst the Listed Issuers

Enterprise Risk Management : Driving Organizational Sustainability, Agility & Resilience

26 April 2014

6 May 2014

18 June 2014

10December 2014

10 March 2015

06 May 2015

10 June 2015

Dato’ Mohamad Suparadi Bin Md Noor did not attend any structured training and seminar/courses during the year due to his hectic travelling schedule.

Encik Shahabuddin Bin Abdullah @ Lee Seng Pun and Mr. Lee Seng Hoong did not attend any structured training and seminar/courses before their resignation from the Board of Director.

The Directors will continue to undertake and attend relevant training and seminar courses to enhance their skills and knowledge for the purpose of discharging their duties and responsibilities.

Principle 5 – Uphold Integrity in Financial Reporting

It is the Board’s commitment to present a balanced and meaningful assessment of the Group’s nancial performance and prospects at the end of each reporting period and nancial year, primarily

through the quarterly announcement of Group’s results to Bursa Malaysia, the annual nancial statement, and review of the Group’s operations in the Annual Report, where relevant. A statement by the Directors of their responsibilities, in the preparation of nancial statements, is set out in the ensuing paragraph.


37


Number of Audit Committee Meetings

4/4

3/4

4/4

Chairman

Member

Member



Chan Feoi Chun

AttendedDirectors

Statement of Directors’ Responsibility for Preparing Financial Statements

The Board is responsible to ensure that the nancial statements are properly drawn up in accordance with the provision of the Company Act 1965 and approved accounting standards in Malaysia, so as to give a true and fair view of the state of affairs of the Group as at the nancial year, and of the results and cash ows of the Group for the nancial year ended then.

The Directors are satis ed that, in preparing the nancial statements of the Group for the year ended 31 March 2015, the Group has adopted suitable accounting policies and applied them consistently, prudently and reasonably. The Directors also consider that all applicable approved accounting standards have been followed in the preparation of the nancial statements. The nancial statements have been prepared on the going concern basis.

The Directors are responsible for ensuring that the Group keeps suf cient accounting records to disclose with reasonable accuracy the nancial position of the Group, which also enable them to ensure that the nancial statements comply with the Companies Act 1965.

In discharging its duciary responsibility, the Board is assisted by the Audit Committee to oversee the nancial reporting processes and the quality of the Group’s nancial statements.

Audit Committee

The primary objective of the Audit Committee is to assist the Board in reviewing the adequacy and integrity of the Group’s nancial administration and reporting, internal control and risk management systems, including the management information system, and system for compliance with applicable laws, regulations, rules, directives and guidelines.

The Audit Committee consists of three (3) Independent Non-Executive Directors, with details of Directors’ attendance set out below:

38

The Board, through the Audit Committee, maintains an appropriate, formal and transparent relationship with the Group’s internal and external auditors. The Audit Committee has explicit authority to communicate directly with the Group’s internal and external auditors, and vise-versa. The Group’s internal and external auditors also have direct access to the Audit Committee to highlight any concerning issue at any time. Furthermore, the Audit Committee meets the external auditors without the presence of Executive Directors or the Management, whenever necessary. Meetings are held to further discuss the Group’s audit plans, audit ndings, nancial statements, as well as to seek their professional advice on other related matters.

The Audit Committee is also tasked by the Board, amongst others, to consider the appointment of the external auditors, the audit fee and any question of resignation, or dismissal, as well as non-audit services to be provided by the external auditors to the Company with a view to auditing independence, and to provide its recommendations thereon to the Board. The Audit Committee has received con rmation from the external auditors that, for the audit of the nancial statements of the Group and Company for the nancial year ended 31 March 2015, they have maintained their independence in accordance with their rm’s requirements, and with the provisions of the By-Law on Professional Independence of the Malaysia Institute of Accountants, they have reviewed the non-audit services provided to the Group during the nancial year in accordance with the independence as external auditors of the Group. The external auditors also reaf rmed their independence of the completion of the audit.



39

Principle 6 – Recognise and Manage Risks

The Board rmly believes in maintaining a sound risk management framework and an internal control system, with a view to safeguard shareholders’ investment and the assets of the Group. The size and geographical spread of the Group involves exposure to a wide variety of risks, where the nature of these risks means that events may occur, which could give rise to unanticipated or unavoidable losses.

In establishing and reviewing the risk management and internal control systems, the Board recognises that such systems can provide only reasonable, but not absolute, assurance against the occurrence of any material misstatement or loss. The Audit Committee meets on a quarterly basis to ensure that there is clear accountability for managing signi cant identi ed risks, and that these identi ed risks are satisfactorily addressed on an ongoing basis. In addition, the Audit Committee reviews the adequacy and effectiveness of risk management and internal control systems.

Regular assessments on the adequacy and integrity of the internal controls, and monitoring of compliance with policies and procedures, are also carried out through internal audits. The Group has outsourced the activities and function of the internal audit to a professional service provider who reports directly to the Audit Committee. The internal audit plan that covers internal audit coverage and scope of work is presented to the Audit Committee and the Board for their respective consideration and approval annually. Internal audit reports encompassing the audit nding, together with recommendations, thereon, are presented to the Audit Committee during its quarterly meetings. Senior and functional line management are tasked to ensure that management action plans are carried out effectively, and regular follow-up audits are performed to monitor the continued compliance.

Principle 7 – Ensure Timely and High Quality Disclosure

The Board is aware of the need to establish corporate disclosure policies and procedures, which enables comprehensive, accurate and timely disclosures relating to the Company and its subsidiaries, to be made to the regulators, shareholders and stakeholders. On this basis, the Board will not only comply with the disclosure requirements as stipulated in the MMLR, but is also responsible to disclose material information to regulators, shareholders and stakeholders.

The Group also maintains a corporate website, www.vc-b.com.my, to disseminate information and enhance its investor relations. All timely disclosures, material information and announcements made to Bursa Malaysia are published on the website shortly after the same is released by the Company.

Principle 8 – Strengthen Relationship between Company and Shareholders

Shareholder Participation at General Meetings

Shareholders are encouraged to attend the Annual General Meeting (“AGM”) and any other general meetings of the shareholders, by which provide the shareholders with the opportunity to raise questions or concerns with regards to the Group. Such meetings also serve as a platform for shareholders to have direct access to the Board.

The Company, at all times, dispatches its notice of the AGM and any other general meeting of the shareholders, Annual Report, and related circulars to shareholders at least twenty one (21) days before the AGM and any other general meetings of the shareholders – unless otherwise required by law – in order to provide suf cient time to shareholders to understand and evaluate the matters involved, as well as to make necessary arrangements to attend, participate and vote, either in person, by corporate representative,


40

proxy or attorney, to exercise their ownership rights on an informed basis during the AGM and any other general meetings of the shareholders. Where special business items are to be transacted, a full explanation is provided in the notice of the AGM and any general meetings of the shareholders or the related circulars to shareholders, in order to assist the shareholders’ understanding of the matters and the implication of their decision in voting for, or against, a resolution.

All resolutions set out in the notice of the AGM and any other general meetings of the shareholders are put to vote by show of hands, unless otherwise required by shareholders or by law. The Board encourages and facilitates poll voting, where the chairman of the AGM and any other general meetings will inform shareholders of their right to demand a poll vote at the commencement of the meeting. The outcome of the AGM and any other general meetings of the shareholders are announced to Bursa Malaysia on the same day the meeting is held.

The chairman of the AGM and any other general meetings of the shareholders will invite the shareholders to raise questions pertaining to the Company’s nancial performance, and other items for adoption at the meeting, before putting a resolution to vote.

Communication and Engagement with Shareholders

The Board recognises the importance of being transparent and accountable to the Company’s investors and, as such, has various channels to maintain communication with them. The various channels of communications are through the quarterly announcement of quarterly and year-to-date nancial results to Bursa Malaysia, relevant announcement and circulars, when necessary, the Annual and Extraordinary General Meetings, and through the Group’s website where shareholders can access pertinent information concerning the Group.

COMPLIANCE STATEMENT

The Board is satis ed that the Company had applied most of the principles and best practices of the Code during the nancial year. Henceforth, the Board is committed and will continue to enhance compliance of the Code within the Company and the Group.



41

STATEMENTOF RISK MANAGEMENT AND INTERNAL CONTROL

42

As part of the Risk Management process, a Registry of Risk and the Risk Management Handbook were adopted. The Registry of Risk is maintained to identify principal business risk and updated for ongoing changes in the risk pro le. The Risk Management Handbook summarises risk management methodology, approach and processes, roles and responsibilities, and various risk management concepts.

The Key Elements Of The Group’s Internal Control System Include:

• Organisation structure with de ned lines of responsibility, authority, and accountability;

• Policies and procedures for key business processes are formalised and documented for implementation and continuous improvements;

• Quarterly Board meetings and monthly management meetings are held, where information is provided to the Board and management covering nancial performances and operations;

• Training and development is provided as and when required by employees with the objective of enhancing their knowledge and competency; and

• Management accounts and reports are prepared regularly for monitoring of actual performance.

Internal Audit Functions

In accordance with the Malaysian Code on Corporate Governance, the Group, in its efforts to provide adequate and effective internal control system, had appointed an independent consulting rm to review the adequacy and integrity of its system of internal control. The independent consulting rm acts as the internal auditor and reports directly to the Audit Committee.

The internal audit reviewed and addressed critical business processes, identi ed risks and internal control gaps, assessesed the effectiveness and adequacy of the existing state of internal control of the Group, and recommended possible improvements to the internal control process.

The Board of Directors is pleased to present the Statement on Risk Management and Internal Control, which outlines the nature and scope of internal control of the Group during the nancial year pursuant to the Listing Requirements of Bursa Malaysia Securities Berhad, and to the “Statement on Risk Management and Internal Control – Guidance for Directors of Public Listed Companies” issued by the Institute of Internal Auditors Malaysia, and endorsed and supported by Bursa Malaysia Securities Berhad.

The Board of Directors recognises the importance of good practice of corporate governance, and is committed to maintain a sound system of internal control to safeguard shareholders’ investments and Group’s assets. Also, the Board is pleased to provide the following statement, which outlines the nature and scope of internal control of the Group for the nancial year ended 31 March 2015.

Board Responsibility

The Board af rms its overall responsibility for maintaining the Group’s systems of internal control and risk management to safeguard investment, the interest of customers, regulators, employees, and the Group’s assets. The Board further recognises its responsibility in reviewing the adequacy and integrity of these systems. The Audit Committee is entrusted by the Board to ensure effectiveness of the Group’s internal control and risk management systems.

Due to the limitations that are inherent in any system of internal control, the systems of internal control can only provide reasonable and not absolute assurance against material misstatement or loss, as it is designated to manage, rather than to eliminate, the risk of failing to achieve the Group’s business objectives

Risk Management

The Board con rms that there is an ongoing process of identifying, assessing, and responding to risks to achieve the objectives of the Group for the nancial year under review. The process is in place for the year under review, and up to the date of issuance of the Statement on Risk Management and Internal Control.

STATEMENT OF RISK MANAGEMENT AND INTERNAL CONTROL

44

This is to provide reasonable assurance that such systems continue to operate satisfactorily and effectively within the Group. Quarterly periodic audit reports and status reports on follow-up actions were tabled to the Audit Committee and Board during its quarterly meetings. For the nancial year ended 31 March 2015, the total

costs incurred for the outsourced internal audit function is RM36,000.

Conclusion

The Board has received assurance from the Executive Director and Group Finance Manager that the Group’s risk management and internal control systems are operating effectively, in all material aspects, based on the risk management and internal control system of the Group.

The Board continues to take appropriate action plans to strengthen the risk management and

internal control systems to meet the Group’s objectives in light of the continuous changes in

the business environment.

Review Of The Statement By External Auditors

The external auditors have reviewed this Statement on Risk Management and Internal Control for inclusion in this Annual Report and had reported to the Board that nothing has come to their attention that causes them to believe that the statement is inconsistent with their understanding of the process adopted by the Board in reviewing the adequacy and integrity of the system of internal control.

This statement is made in accordance with the resolution of the Board of Directors dated 27 July 2015.

STATEMENT OF RISK MANAGEMENT AND INTERNAL CONTROL


45

AUDIT COMMITTEE

REPORT47

The primary objective of the Audit Committee is to assist the Board in the effective discharge of its duciary responsibilities for corporate governance, nancial reporting to shareholders and the public,

and internal control.

The Audit Committee will adopt practices aimed at maintaining appropriate standards of responsibility, integrity and accountability for all the Company’s shareholders.

Membership

The present members of the Audit Committee (the “Committee”) comprise of:-

ChairmanSyed Abdullah bin Syed Abd Kadir : Independent Non-Executive Director

MembersDato’ Mohamad Suparadi bin Md Noor : Independent Non-Executive DirectorChan Feoi Chun : Independent Non-Executive Director

Terms of Reference

The primary function of the Audit Committee is to assist the Board of Directors in ful lling the following oversight objectives of the Group’s activities:-

A. Risk Management• To review the adequacy and effectiveness of risk management, internal control and governance

systems instituted in the Group.

B. Internal Audit Function• To review the adequacy of the scope of the audits conducted by the Internal Auditors.

C. External Audit• To evaluate the external auditors’ audit plans, scope of their audits and their audit reports.• To evaluate the performance of the external auditors and make recommendations to the Board of

Directors on their appointment and remuneration.

D. Audit Reports• To review internal and external audit reports to ensure that remedial actions are taken by the

Management on signi cant lapses that are identi ed in controls and procedures.• To review signi cant internal and external audit ndings and management’s responses.

E. Financial Reporting• To review the quarterly and annual nancial statements of the Group for recommendation to the Board of Directors for approval, focusing particularly on:- - Changes in, or implementation of, new accounting policies and practices; - Signi cant and unusual events; and - Compliance with the applicable approved accounting standards and other legal and regulatory

requirements.

F. Related Party Transactions• Any related party transactions that may arise within the Group.

G. Other Matters• Such other matters as the Committee considers appropriate or as authorised by the Board of Directors.

AUDIT COMMITTEE REPORT

48

Composition

The Board shall elect and appoint Committee members from amongst their number, comprising no fewer than three (3) Directors, the majority of which shall be Independent Non-Executive Directors of the Company. The Board shall, at all times, ensure that at least one (1) member of the Committee shall be a member of the Malaysian Institute of Accountants.

If a member of the Committee resigns, dies or for any reason ceases to be a member, with the result that the number of members is reduced to below three (3), the Board shall, within three (3) months of the event, appoint such number of new members as may be required to ll the vacancy.

The Chairman of the Committee shall be an Independent Non-Executive Director. No alternate Director may be appointed as a member of the Committee.

Authority

The Committee is authorised by the Board to seek any information it requires from the employees, who are required to cooperate with any request made by the Committee. The Committee shall have full and unrestricted access to any information pertaining to the Group.

The Committee shall have direct communication channels with the external auditors, and with senior management of the Group, and shall be able to convene meetings with the external auditors whenever it considers necessary.

Meeting

The Chairman may call a meeting of the Audit Committee if any committee member, any Executive Director, or the external auditors make a request.

A minimum of two members present shall form a quorum, provided both of whom present are Independent Directors. The Committee shall meet with the external auditors, and the internal auditors without executive Board members, whenever deemed necessary. The Company Secretary shall act as Secretary of the AuditCommittee or in his/her absence, another person authorised by the Chairman of the Audit Committee.



49

The Committee convened four (4) meetings, and the attendance of each committee member is as follows:-

The meetings were appropriately structured through the use of agendas, which were distributed to members with suf cient noti cation.

Responsibilities and Duties

In ful lling its primary objectives, the Committee has undertaken their responsibilities and duties of reviewing with the external auditor the audit scope and plan, including any changes to the planned scope of the audit plan, and reviewing the adequacy of the internal audit scope and plan, functions and that it has necessary authority to carry out its work.

The Directors are required by law to prepare nancial statements for each nancial year, which give a true and fair view of the state of affairs of the Group and the Company at the end of the nancial year, and of the results and cash ows of the Group and the Company for the nancial year ended then.

The Directors consider that, in preparing the nancial statements for the nancial year ended 31 March 2015, the Group has used appropriate accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent. The Directors also consider that all applicable approved accounting standards have been followed.

The Directors are responsible for ensuring that the Group and the Company keep accounting records, which disclose with reasonable accuracy at any time the nancial position of the Group and of the Company, and which also enable them to ensure that the nancial statements comply with the provisions of the Companies Act 1965 and the applicable approved accounting standard in Malaysia.

The Directors are also responsible for taking reasonable steps to safeguard the assets of the Group and the Company to prevent and detect fraud and other irregularities.

4/4

3/4

4/4

Chairman

Member

Member

Syed Abdullah Bin Syed Abdul Kadir


Chan Feoi Chun

AttendedDirectors


50

Summary of Activities during the Financial Period

During the nancial year ended 31 March 2015, the Committee has carried out its duties in accordance with its terms of reference. The main activities undertaken by the Committee were as follows:

• Reviewed the external auditors’ scope of work and audit plans for the nancial period. Prior to the audit, representatives from the external auditors presented their audit strategy and plan.

• Reviewed with the external auditors the results of the audit, the audit report and the management letter, including management’s response.

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

• Reviewed independence, objectivity, and effectiveness of services provided by the external auditors.

• Reviewed the internal audit reports, which highlighted the auditing issues, recommendations and management’s response, to discuss with the management the actions taken to improve the system of internal control, based on improvement opportunities identi ed.

• Reviewed the application of corporate governance principles and the extent of the Group’s compliance with the best practices set out under the Malaysian Code on Corporate Governance, for the purpose of preparing the Corporate Governance Statement and Statement on Internal Control pursuant to the Listing Requirements.

• Reviewed the annual report and the audited nancial statements of the Company, prior to submission to the Board for their consideration and approval. The review was to ensure that the audited nancial statements were drawn up in accordance with the provisions of the Companies Act 1965, and the applicable approved accounting standards for entities other than private entities issued by the Malaysian Financial Reporting Standards (“MFRS”). Any signi cant issues resulting from the audit of the nancial statements by the external auditors were deliberated.

• Reviewed the quarterly unaudited nancial result announcements before recommending them for the Board’s approval.

• Reviewed the Company’s compliance of the MMLR of the Bursa Malaysia, Financial Reporting Standards, and other relevant legal and regulatory requirements with respect to the quarterly and year-end nancial statements.

• Reviewed the related party transactions entered by the Group.

Internal Audit Function

The internal audit function is independent of the activities or operations of other operating units. The principal role of this function is to undertake independent, regular, and systematic reviews of the risk management, internal control, and governance systems so as to provide reasonable assurance that such systems continue to operate satisfactorily and effectively. It is the responsibility of the internal audit function to provide the Audit Committee with independent and objective reports on the state of internal controls and governance of the various operating units within the Group, and the extent of compliance of the units with the Group’s established policies and procedures, as well as relevant statutory requirements.



51

OTHERCOMPLIANCE

INFORMATION

52

Material ContractsThere were no material contracts of the Company and its subsidiaries involving Directors and/or major shareholders entered since the end of the previous nancial period.

Share Buybacks

There were no share buy-back transactions entered by the Company during the nancial year under review.

Details and Status of the Utilisation of Proceeds from the Private Placement

* Expenses relating to the Private Placement amounting to RM157,948 were lower than estimated. The remaining portion was reclassi ed for working capital purposes.

Options, Warrants or Convertible Securities

There were no options, warrants or convertible securities issued or exercised during the nancial year.

Imposition of Sanctions/PenaltiesThere were no public sanctions and/or penalties imposed on the Company and its subsidiary companies, Directors or Management during the nancial year.

Non-Audit Fees Paid to External AuditorsOther than the following, there were no non-audit fees paid to the external auditors for the nancial

year 31 March 2015: -

Variation in Results

The Company did not undertake any pro t estimates, forecasts or projections for the nancial year. There was no material variance between the audited results for the nancial year and unaudited results previously announced.

OTHER COMPLIANCEINFORMATION

Working capital requirements

Purchase of raw materials

Distribution & administrative expenses

Finance costs

Estimated expenses in relation to Private Placements*

Total

Messrs Baker TillyMonteiro Heng

Messrs Baker TillyMonteiro Heng

Review of the Statement of Risk Management and Internal Control

Review of the Supplementary Information on the Disclosure of Realised and Unrealised Pro ts or Losses

DeviationRM’000

Auditors Service AmountRM

5,300

4,000

9,300

(42)

-

-

(42)

Actual UtilisationRM’000

3,773

860

30

158

4,821

Proposed UtilisationRM’000

3,731

860

30

200

4,821

Purpose


53

Pro t Guarantees

There were no pro t guarantees received or given by the Company during the nancial year.

Revaluation of Landed Properties

The Group has elected to measure all of its lands and buildings using the revaluation model under MFRS116 Property, Plant and Equipment. This adoption has resulted in a revaluation surplus of RM9.078 million as at 31 December 2012.

Contracts Relating to Loans

There were no contracts relating to loans made by the Company with respect to the above mentioned contracts.

Corporate Social Responsibilities (“CSR”)

The Group recognises its social obligation to society and strives for a balanced approach between ful lling its key business objectives, and contributing to the society and the environment.

Over the years, our approach towards corporate social responsibility (“CSR”) has continued to support the international Forest Stewardship Council (“FSC”) in promoting the responsible management of forest worldwide, by ensuring that the sustainable environment for the future generations is intact. By promoting this, the Company has obtained the Forest Stewardship Council (“FSC”) Certi cate in 2014.

Versatile continues to live up to its tagline “Creativity, Advancement, Reliability, Excellence and Sincerity” (“CARES”), by which the Company continuously strives to identify ways to make its manufacturing processes more environmental-friendly. This demonstrates the Company’s commitment and seriousness in taking on its CSR through its daily business operations.

Also, the Company has donated RM10, 000 to Lions Club of Kuala Lumpur Humanitarian Fund for the Sabah Quake Victims, extending a helping hand to the community and valuing life in a socially and environmentally responsible way.

The Group emphasises CSR on three focal areas, as follows:

ENVIRONMENT

The Group complies strictly to all environmental laws and regulations by ensuring regular monitoring and upgrading in these laws and regulations where applicable. During the year, the Group was not penalised for any instance of non-compliance with environmental laws and regulations.

In 2015, the Group undertook several initiatives aimed at preserving the environment, such as: • Recycling waste solvents and reusing materials within the Group’s production processes; • Selling recycled and readily usable wastes or materials to licensed scrap collectors; and • Using electronic le sharing and storage systems to reduce paper usage.

COMMUNITY

As a socially responsible corporate citizen in the community, the Group has contributed monetary assistance to various non-pro t organisations during the nancial year.


54

WORKPLACE

Employees are the most valuable assets of the Group. Employee welfare is well taken care of, and we employ our employees under fair and equitable terms with equal career advancement opportunity based on performance and academic quali cations.

Training programmes are constantly provided by the Group to upgrade employees’ skills, knowledge and experience, ultimately helping them reach their full potential.

Complying with the statutory requirement in Malaysia, the Group also contributes to the Employees’ Provident Fund and the Social Security Organisation, while providing personal accident insurance for executive employees.

The safety, health and welfare of employees are not compromised, and are actively ensured by the Group’s Safety and Health Committee.

To ensure high level of awareness on safety requirements is disseminated to employees at all levels, the Group continues to implement various safety and health programmes regularly, such as rst aid training, re drill, and emergency response training.

The Group promotes continuous improvement on safety and health standards and is in compliant with the statutory requirements, codes, guidelines, and standards for occupational safety and health.

In line with the recognition of constant training and upgrading of employee knowledge and skills in effectively and ef ciently discharging their responsibilities, the Group has also conducted various training programmes, such as the Malaysian Food Act Training, FSSC 22000 Awareness Training, HACCP & GMP Awareness Programme, and GST Essentials and Kick-off for Implementation.


ii) Gender in Percentage

Gender Female:Male:TOTAL

Age Group in PercentageAge19-30:31- 40:41- 50:51- 60:61- 72:

Ethnicity in PercentageCOUNTRYMalaysia:Myanmar:Nepal:Bangladesh:Indonesia:TOTAL

EMPLOYEETOTAL 124 32.6%256 67.4%380 100.0%

147 38.7%111 29.2% 80 21.1% 37 9.7% 5 1.3%380 100.0%

233 61.3%101 26.6% 40 10.5% 5 1.3% 1 0.3%380 100.0%

MANAGEMENTTOTAL 9 29.0%22 71.0%31 100.0%

7 22.6%14 45.2% 6 19.4% 4 12.9%31 100.0%

31 100.0%

31 100.0%

BOARDTOTAL

7 100.0%7 100.0%

3 42.9%4 57.1%7 100.0%

7 100.0%

7 100.0%


55

FIVE YEAR’S FINANCIAL HIGHLIGHTSAND FINANCIALINDICATORS

56

Revenue

(Loss)/Pro t before tax

Shareholders’ funds/Net assets

FYE

31.12.2010RM ‘000

57,518

(1,150)

54,335

FYE

31.12.2011RM ‘000

54,785

(5,854)

48,630

FYE

31.12.2012RM ‘000

60,756

1,395

61,552

PYE(15 months)31.03.2014 RM ‘000

71,152

(2,701)

99,372

FYE

31.03.2015RM ‘000

49,840

(15,882)

57,129

REVENUE

RM’000

80,000

60,000

40,000

20,000

2010

57,518 54,78560,756

71,152

49,840

2011 2012 2014 2015

(Loss)/Pro t before tax

RM’000

5,000

5,000

10,000

15,000

20,0002010

(1,150)

(5,854)

1,395

(2,701)

(15,882)

2011 2012 2014 2015

Shareholders’ funds/Net assets

RM’000

80,000

60,000

40,000

20,000

2010

54,33548,630

61,552

99,372

57,129

2011 2012 2014 2015

FINANCIAL HIGHLIGHTS

58


59

FINANCIALSTATEMENT

60

VERSATILE CREATIVE BERHAD(Incorporated in Malaysia)

REPORTS AND FINANCIAL STATEMENTSFOR THE FINANCIAL YEAR ENDED

31 MARCH 2015

Content

DIRECTORS’ REPORT 62-67 FINANCIAL STATEMENTS

STATEMENTS OF FINANCIAL POSITION 68-69

STATEMENTS OF PROFIT OR LOSS AND 70-71OTHER COMPREHENSIVE INCOME

STATEMENTS OF CHANGES IN EQUITY 72-73

STATEMENTS OF CASH FLOWS 74-76

NOTES TO THE FINANCIAL STATEMENTS 77-145

SUPPLEMENTARY INFORMATION ON THE BREAKDOWN 146OF REALISED AND UNREALISED LOSSES

STATEMENT BY DIRECTORS 147

STATUTORY DECLARATION 148

INDEPENDENT AUDITORS’ REPORT 149-151

61

DIRECTORS’ REPORT

The directors hereby submit their report together with the audited nancial statements of Versatile Creative Berhad (“the Company”) and its subsidiaries (“the Group”) for the nancial year ended 31 March 2015.

PRINCIPAL ACTIVITIES

The principal activity of the Company is investment holding. The principal activities of the subsidiaries are disclosed in Note 6 to the nancial statements.

There have been no signi cant changes in the nature of these principal activities during the nancial year.

RESULTS

Group CompanyRM RM

Loss for the nancial year (16,006,954) (780,804)

Attributable to:

Owners of the Company (16,006,954) (780,804)

Non-controlling interests – –

(16,006,954) (780,804)

DIVIDEND

No dividend was paid or declared by the Company since the end of the previous nancial period.

The directors do not recommend the payment of any dividends in respect of the nancial year ended 31 March 2015.

RESERVES AND PROVISIONS

There were no material transfers to or from reserves and provisions during the nancial year other than as disclosed in the nancial statements.

BAD AND DOUBTFUL DEBTS

Before the statements of pro t or loss and statements of nancial position of the Group and of the Company were made out, the directors took reasonable steps to ascertain that action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts, and had satis ed themselves that all known bad debts had been written off and that adequate allowance had been made for doubtful debts.


AND ITS SUBSIDIARIES

62

BAD AND DOUBTFUL DEBTS (Continued)

At the date of this report, the directors are not aware of any circumstances that would render the amount written off for bad debts, or the amount of the allowance for doubtful debts, in the nancial statements of the Group and of the Company inadequate to any substantial extent.

CURRENT ASSETS

Before the statements of pro t or loss and statements of nancial position of the Group and of the Company were made out, the directors took reasonable steps to ensure that any current assets, other than debts, which were unlikely to be realised in the ordinary course of business, their values as shown in the accounting records of the Group and of the Company had been written down to an amount that they might be expected to be realised.

At the date of this report, the directors are not aware of any circumstances that would render the values attributed to the current assets in the nancial statements of the Group and of the Company misleading.

VALUATION METHODS

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

CONTINGENT AND OTHER LIABILITIES

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

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

(ii) any contingent liabilities in respect of the Group and of the Company that has arisen since the end of the nancial year.

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

CHANGE OF CIRCUMSTANCES

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


63

ITEMS OF AN UNUSUAL NATURE

The results of the operations of the Group and of the Company for the nancial year were not, in the opinion of the directors, substantially affected by any item, transaction or event of a material and unusual nature.

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

ISSUE OF SHARES AND DEBENTURES

On 29 August 2014, the Company completed the par value reduction from RM1.00 to RM0.50 per share Pursuant to the par value reduction, the issued share capital of the Company had been reduced from RM110,643,081/- comprising 110,643,081 ordinary shares of RM1.00 each to RM55,321,541/- comprising 110,643,081 ordinary shares of RM0.50 each. The authorised share capital of the Company is now RM500,000,000/- divided into 1,000,000,000 ordinary shares of RM0.50 each.

The Company did not issue any shares and debentures during the nancial year.

DIRECTORS

The names of the directors of the Company in of ce since the date of the last report and at the date of this report are:-

Shahabuddin bin Abdullah @ Lee Seng Pun (Resigned on 17.12.2014)Dato’ Eow Kwan Hoong Lee Seng Hoong (Resigned on 17.12.2014)Chow Pak Lim (Retired on 17.09.2014)Leom Chit Dein @ Lim Jit Teng (Retired on 17.09.2014)Syed Abdullah bin Syed Abd KadirDato’ Mohamad Suparadi bin Md Noor Chan Feoi ChunDato’ Lee Kwee Hiang (Appointed on 13.11.2014)Dato’ Chew Weng Kit (Appointed on 13.11.2014)Wan Tak Chuen (Appointed on 13.11.2014)



64

DIRECTORS’ INTERESTS

According to the Register of Directors’ Shareholdings kept by the Company under Section 134 of the Companies Act, 1965, in Malaysia, the interests of those directors who held of ce at the end of the nancial year in shares in the Company and its related corporations during the nancial year are as

follows:-

Number of ordinary sharesAt At

1.4.2014 Bought Sold 31.3.2015

Direct interests:

Dato' Lee Kwee Hiang – 28,141,321 (1,050,000) 27,091,321

Deemed interests:

Dato' Chew Weng Kit # – 27,660,770 – 27,660,770

Wan Tak Chuen # – 27,660,770 – 27,660,770

#Deemed interest by virtue of his interest in Rica Holdings (M) Sdn. Bhd.

The par value reduction of every share of RM1.00/- each to RM0.50/- each which was completedon 29 August 2014.

Other than as stated above, none of the other directors in of ce at the end of the nancial yearhad any interest in the shares of the Company and its related corporations during the nancial year.

DIRECTORS’ BENEFITS

Since the end of the previous nancial period, no director of the Company has received or become entitled to receive a bene t (other than bene ts included in the aggregate amount of emoluments received or due and receivable by the directors or the xed salary of a full employee of the Company as shown in Note 28 to the nancial statements) by reason of a contract made by the Company or a related corporation with the director or with a rm of which the director is a member, or with a company in which the director has a substantial nancial interest.

Neither during nor at the end of the nancial year was the Company or any of its related corporations a party to any arrangement, whose object was to enable the directors to acquire bene ts by means of the acquisition of shares in, or debentures of, the Company or any other body corporate.


65

SIGNIFICANT EVENT

Signi cant events during and after the nancial year of the Group and of the Company are disclosed in Note 33 and 34 to the nancial statements.

HOLDING COMPANIES

In the last nancial period, the directors regard Iris Healthcare Sdn. Bhd. and Iris Corporation Berhad, companies incorporated and domiciled in Malaysia as the immediate and ultimate holding companies respectively.

Iris Corporation Berhad is a company listed on the Ace Market of the Bursa Malaysia Securities Berhad.

As disclosed in Note 33 to the nancial statements, Iris Healthcare Sdn. Bhd. has partially disposed its shares in Versatile Creative Berhad during the nancial year. Accordingly, Iris Healthcare Sdn. Bhd. and Iris Corporation Berhad have ceased to be immediate and ultimate holding companies of the Group and of the Company.



66

AUDITORS

The auditors, Messrs. Baker Tilly Monteiro Heng, have expressed their willingness to continue in of ce.

On behalf of the Board,

DATO’ LEE KWEE HIANGDirector

DATO’ EOW KWAN HOONGDirector

Kuala LumpurDate: 27 July 2015


67

STATEMENTS OF FINANCIAL POSITION AS AT 31 MARCH 2015

Group Company2015 2014 2015 2014

Note RM RM RM RM

ASSETS

Non-current assets

Property, plant and equipment 4 42,765,118 41,920,531 3,252 2,844

Goodwill on consolidation 5 – 11,489,275 – –

Investment in subsidiaries 6 – – 21,777,173 21,777,173

Other investments 7 24,445,181 – – –

Total non-current assets 67,210,299 53,409,806 21,780,425 21,780,017

Current assets

Inventories 8 5,111,341 6,901,469 – –

Trade and other receivables 9 13,239,031 16,753,783 3,062,093 3,757,646

Prepayments 1,004,476 995,833 12,756 15,002

Tax recoverable 373,693 25,798 – 1,008

Other investment 7 7,306,238 66,372,617 – –

Fixed deposits placed with a licensed bank 10 750,751 712,458 – –

Cash and bank balances 11 914,850 2,182,269 47,301 315,750

Total current assets 28,700,380 93,944,227 3,122,150 4,089,406

TOTAL ASSETS 95,910,679 147,354,033 24,902,575 25,869,423



68

STATEMENTS OF FINANCIAL POSITION AS AT 31 MARCH 2015 (Continued)

Group Company2015 2014 2015 2014

Note RM RM RM RM

EQUITY AND LIABILITIESEquity attributable to owners of the Company

Share capital 12 55,321,540 110,643,081 55,321,540 110,643,081

Capital redemption reserve 13 3,000,000 3,000,000 – –

Fair value reserve 14 15,987,288 42,223,262 – –

Revaluation reserve 15 8,608,823 8,843,863 – –

Accumulated losses (25,788,265) (65,337,892) (30,792,933) (85,333,670)

Shareholders’ funds 57,129,386 99,372,314 24,528,607 25,309,411

Non-current liabilities

Loans and borrowings 16 5,388,299 5,921,441 – –

Deferred tax liabilities 17 3,356,780 2,974,737 – –

Total non-current liabilities 8,745,079 8,896,178 – –

Current liabilities

Trade and other payables 18 9,996,910 15,279,344 373,968 560,012

Loans and borrowings 16 20,039,304 23,301,005 – –

Tax payables – 505,192 – –

Total current liabilities 30,036,214 39,085,541 373,968 560,012

Total liabilities 38,781,293 47,981,719 373,968 560,012

TOTAL EQUITY AND LIABILITIES 95,910,679 147,354,033 24,902,575 25,869,423

The accompanying notes form an integral part of these nancial statements.


69

STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 31 MARCH 2015

Group Company1.4.2014

to31.3.2015

1.1.2013to

31.3.2014

1.4.2014to

31.3.2015

1.1.2013to

31.3.2014Note RM RM RM RM

Revenue 19 49,840,055 71,151,547 1,102,860 774,087

Cost of sales 20 (42,995,225) (63,538,457) – –

Gross pro t 6,844,830 7,613,090 1,102,860 774,087

Other income 3,799,375 6,207,719 – 545

Distribution expenses (2,570,010) (3,856,140) – –

Administrative expenses (10,669,868) (8,345,063) (1,883,664) (1,847,422)

Other expenses (11,489,274) (2,147,030) – –

Finance costs (net) 21 (1,796,743) (2,173,877) – –

Loss before taxation 22 (15,881,690) (2,701,301) (780,804) (1,072,790)

Taxation 24 (125,264) 128,720 – 3,522

Loss for the nancial year/period (16,006,954) (2,572,581) (780,804) (1,069,268)

Other comprehensive income, net of tax 23

Items that are or maybe reclassi ed subsequently to pro t or loss

- (Loss)/gain on fair value changes (25,144,609) 40,392,472 – –

- Available-for-sale nancialassets reclassi ed to pro t or loss (1,091,365) – –

–

Other comprehensive (loss)/income for the year, net of tax (26,235,974) 40,392,472 – –

Total comprehensive (loss)/income for the nancial year/period (42,242,928) 37,819,891 (780,804) (1,069,268)



70

STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE FINANCIAL YEAR ENDED 31 MARCH 2015 (Continued)


to31.3.2015

1.1.2013to

31.3.2014

1.4.2014to

31.3.2015

1.1.2013to


Loss attributable to:

Owners of the company (16,006,954) (2,572,581) (780,804) (1,069,268)

Non-controlling interests – – – –

Loss for the year/period (16,006,954) (2,572,581) (780,804) (1,069,268)

Total comprehensive (loss)/income attributable to:

Owners of the company (42,242,928) 37,819,891 (780,804) (1,069,268)

Non-controlling interests – – – –

Total comprehensive (loss)/income for the year/period (42,242,928) 37,819,891 (780,804) (1,069,268)

Loss per ordinary share (sen)

-basic 25 (14.47) (2.33)

-diluted 25 (14.47) (2.33)



71

STAT

EMEN

TS O

F C

HA

NG

ES IN

EQ

UIT

YFO

R T

HE

FIN

AN

CIA

L YE

AR

EN

DED

31

MA

RC

H 2

015

Att

ribu

tabl

e to

ow

ners

of t

he C

ompa

ny

Shar

e C

apit

alR

M

Cap

ital

Red

empt

ion

Res

erve

RM

Fair

Val

ue

Res

erve

RM

Rev

alua

tion

R

eser

veR

M

Acc

umul

ated

Loss

esR

MTo

tal

RM

Gro

up

At 1

Jan

uary

201

3 11

0,64

3,08

13,

000,

000

1,83

0,79

09,

078,

903

(63,

000,

351)

61,5

52,4

23

Fair

val

ue o

f ava

ilabl

e-fo

r-sa

le

nanc

ial a

sset

s–

–40

,392

,472

––

40,3

92,4

72

Cry

stal

isat

ion

of r

eval

uatio

n re

serv

e–

––

(235

,040

)23

5,04

0–

Pro

t fo

r th

e n

anci

al p

erio

d–

––

–(2

,572

,581

)(2

,572

,581

)

Tota

l com

preh

ensi

ve in

com

e fo

r th

e n

anci

al p

erio

d–

–40

,392

,472

(235

,040

)(2

,337

,541

)37

,819

,891

At 3

1 M

arch

201

411

0,64

3,08

13,

000,

000

42,2

23,2

628,

843,

863

(65,

337,

892)

99,3

72,3

14

Fair

val

ue o

f ava

ilabl

e-fo

r-sa

le

nanc

ial a

sset

s–

–(2

5,14

4,60

9)–

–(2

5,14

4,60

9)

Der

ecog

nitio

n of

ava

ilabl

e-fo

r-sa

le

nanc

ial a

sset

s–

–(1

,091

,365

)–

–(1

,091

,365

)

Tota

l oth

er c

ompr

ehen

sive

loss

for

the

nan

cial

yea

r–

–(2

6,23

5,97

4)–

–(2

6,23

5,97

4)

Cap

ital r

educ

tion

exer

cise

(55,

321,

541)

––

–55

,321

,541

–

Cry

stal

isat

ion

of r

eval

uatio

n re

serv

e–

––

(235

,040

)23

5,04

0–

Loss

for

the

nan

cial

yea

r–

––

–(1

6,00

6,95

4)(1

6,00

6,95

4)

Tota

l com

preh

ensi

ve lo

ss fo

r th

e n

anci

al y

ear

(55,

321,

541)

–(2

6,23

5,97

4)(2

35,0

40)

39,5

49,6

27(4

2,24

2,92

8)

At 3

1 M

arch

201

555

,321

,540

3,00

0,00

015

,987

,288

8,60

8,82

3(2

5,78

8,26

5)57

,129

,386

VER

SATI

LE C

REA

TIVE

BER

HA

D(In

corp

orat

ed in

Mal

aysi

a)

AN

D IT

S SU

BSI

DIA

RIE

S

72

STATEMENTS OF CHANGES IN EQUITYFOR THE FINANCIAL YEAR ENDED 31 MARCH 2015 (Continued)

Attributable to owners of the CompanyShare

CapitalRM

Accumulated Losses

RMTotalRM

CompanyAt 1 January 2013 110,643,081 (84,264,402) 26,378,679

Total comprehensive loss for the nancial period – (1,069,268) (1,069,268)

At 31 March 2014 110,643,081 (85,333,670) 25,309,411

Capital reduction exercise (55,321,541) 55,321,541 –

Total comprehensive loss for the nancial year – (780,804) (780,804)

At 31 March 2015 55,321,540 (30,792,933) 24,528,607



73

STATEMENTS OF CASH FLOWSFOR THE FINANCIAL YEAR ENDED 31 MARCH 2015


to31.3.2015

1.1.2013to

31.3.2014

1.4.2014to

31.3.2015

1.1.2013to


OPERATING ACTIVITIES:

Loss before taxation (15,881,690) (2,701,301) (780,804) (1,072,790)

Adjustments for:

Depreciation ofproperty, plant and equipment 3,743,279 5,076,347 2,075 3,583

Gain on disposal ofproperty, plant and equipment (217,417) (552,691) – –

Gain on disposal of other investment (2,543,295) – – –

Property, plant and equipmentwritten off – 16,297 – –

Impairment loss on trade and other receivables 350,527 220,621 29,768 –

Impairment loss on trade and other receivables no longer required (177,009) (58,165) – –

Impairment loss on goodwill 11,489,274 2,147,030 – –

Net fair value loss/(gain) on other investments 3,476,589 (4,488,050) – –

Interest income (44,797) (17,784) – –

Interest expense 1,841,540 2,191,661 – –

Dividends received – (568,908) – –

Operating cash ows before changes in working capital 2,037,001 1,265,057 (748,961) (1,069,207)

Changes in working capital:

Inventories 1,790,127 1,755,449 – –

Receivables 3,332,591 1,290,499 32,014 (6,045)

Payables (5,282,434) 2,567,004 (215,812) 282,238

Net cash ows from operations 1,877,285 6,878,009 (932,759) (793,014)

Interest received 44,797 17,784 – –

Interest paid (483,058) (686,985) – –

Income tax paid (597,315) (104,018) – (1,008)

Income tax refund 1,008 16,222 1,008 7,722

Net cash flows generated from/(used in) operating activities 842,717 6,121,012 (931,751) (786,300)



74

STATEMENTS OF CASH FLOWSFOR THE FINANCIAL YEAR ENDED 31 MARCH 2015 (Continued)


to31.3.2015

1.1.2013to

31.3.2014

1.4.2014to

31.3.2015

1.1.2013to


INVESTING ACTIVITIES:

Acquisition of property, plantand equipment 4(d) (3,072,265) (2,499,934) (2,483) –

Fixed deposit held as security value (38,293) (17,377) – –

Dividends received – 568,908 – –

Repayment from subsidiaries – – 665,785 969,956

Proceeds from disposal of property, plant and equipment 329,061 615,160 – –

Proceeds from disposal of other investment 7,451,930 – – –

Net cash ows generated from/(used in) investing activities 4,670,433 (1,333,243) 663,302 969,956

FINANCING ACTIVITIES:

Interest paid (1,358,481) (1,504,676) – –

Repayment of borrowings (4,580,078) (23,079) – –

Repayment of nance lease liabilities (1,279,870) (1,315,724) – –

Net cash ows used in nancing activities (7,218,429) (2,843,479) – –

NET CHANGE IN CASH AND CASH EQUIVALENTS (1,705,279) 1,944,290 (268,449) 183,656

CASH AND CASH EQUIVALENTS AT BEGINNING OF THE FINANCIAL YEAR/PERIOD (1,488,352) (3,432,642) 315,750 132,094

CASH AND CASH EQUIVALENTS AT END OF THE FINANCIAL YEAR/PERIOD (i) (3,193,631) (1,488,352) 47,301 315,750


75

STATEMENTS OF CASH FLOWSFOR THE FINANCIAL YEAR ENDED 31 MARCH 2015 (Continued)

i) Cash and cash equivalents included in the statements of cash ows comprise the following statements of nancial position amounts:-

Group Company2015RM

2014RM

2015RM

2014RM

Cash and bank balances 914,850 2,182,269 47,301 315,750

Fixed deposits 750,751 712,458 – –

Less: Bank overdrafts (4,108,481) (3,670,621) – –

Fixed deposits held as security value (750,751) (712,458) – –

(3,193,631) (1,488,352) 47,301 315,750




76

NOTES TO THE FINANCIAL STATEMENTS

1. GENERAL INFORMATION

The principal activity of the Company is investment holding. The principal activities of the subsidiaries are disclosed in Note 6 to the nancial statements. There have been no signi cant changes in the nature of these principal activities during the nancial year.

The Company is a public limited liability company, incorporated and domiciled in Malaysia, and listed on Main Market of Bursa Malaysia Securities Berhad.

The principal place of the Company is located at Lot 30745, Jalan Pandan Indah, Pandan Indah, 55100 Kuala Lumpur.

The registered of ce of the Company is located at Level 18, The Gardens, North Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur.

The nancial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors on 27 July 2015.

2. SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of Preparation

The nancial statements of the Group and of the Company have been prepared in accordance with the Malaysian Financial Reporting Standards (“MFRSs”), International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.

The nancial statements of the Group and of the Company have been prepared under the historical cost basis, except as disclosed in the signi cant policies in Note 2.3 to the nancial statements.

The preparation of nancial statements in conformity with MFRSs requires the use of certain critical accounting estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the nancial statements, and the reported amounts of the revenue and expenses during the reported period. It also requires Directors to exercise their judgement in the process of applying the Group’s and the Company’s accounting policies. Although these estimates and judgement are based on the Directors’ best knowledge of current events and actions, actual results may differ.

The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are signi cant to the nancial statements are disclosed in Note 3 to the nancial statements.


77

2. SIGNIFICANT ACCOUNTING POLICIES

2.2 New MFRSs, Amendments/Improvements to MFRSs and New IC Interpretations (“IC Int”)

(a) Adoption of Amendments/Improvements to MFRSs and New IC Int

The Group and the Company had adopted the following amendments/improvements to MFRSs and new IC Int that are mandatory for the current nancial year:-

Amendments/Improvements to MFRSs

MFRS 10 Consolidated Financial Statements

MFRS 12 Disclosure of Interests in Other Entities

MFRS 127 Separate Financial Statements

MFRS 132 Financial Instruments: Presentation

MFRS 136 Impairment of Assets

MFRS 139 Financial Instruments: Recognition and Measurement

New IC Int

IC Int 21 Levies

The adoption of the above new and revised MFRSs, amendments/improvements to MFRSs, new IC Int and amendments to IC Int did not have any effect on the nancial statements of the Group and of the Company except for those as discussed below:-

Amendments to MFRS 10 Consolidated Financial Statements, MFRS 12 Disclosure of Interests in Other Entities and MFRS 127 Separate Financial Statements

Amendments to MFRS 10 introduce an exception to the principle that all subsidiaries shall be consolidated. The amendments de ne an investment entity and require a parent that is an investment entity to measure its investment in particular subsidiaries at fair value through pro t or loss in accordance with MFRS 139 Financial Instruments: Recognition and Measurement instead of consolidating those subsidiaries in its consolidated nancial statements. Consequently, new disclosure requirements related to investment entities are introduced in amendments to MFRS 12 and MFRS 127.

78

2. SIGNIFICANT ACCOUNTING POLICIES (Continued)

2.2 New MFRSs, Amendments/Improvements to MFRSs and New IC Interpretations (“IC Int”) (Continued)

(a) Adoption of Amendments/Improvements to MFRSs and New IC Int (Continued)

Amendments to MFRS 10 Consolidated Financial Statements, MFRS 12 Disclosure of Interests in Other Entities and MFRS 127 Separate Financial Statements (Continued)

In addition, amendments to MFRS 127 also clarify that if a parent is required, in accordance with paragraph 31 of MFRS 10, to measure its investment in a subsidiary at fair value through pro t or loss in accordance with MFRS 139, it shall also account for its investment in that subsidiary in the same way in its separate nancial statements.

Amendments to MFRS 132 Financial Instruments: Presentation

Amendments to MFRS 132 do not change the current off-setting model in MFRS 132. The amendments clarify the meaning of ‘currently has a legally enforceable right of set-off’, that the right of set-off must be available today (not contingent on a future event) and legally enforceable for all counter parties in the normal course of business. The amendments clarify that some gross settlement mechanisms with features that are effectively equivalent to net settlement will satisfy the MFRS 132 off-setting criteria. This Amendments only impact the presentation in the nancial statements but have no impact on the nancial results and positions of the Group and of the Company.

Amendments to MFRS 136 Impairment of Assets

Amendments to MFRS 136 clarify that disclosure of the recoverable amount (based on fair value less costs of disposal) of an asset or cash generating unit is required to be disclosed only when an impairment loss is recognised or reversed. In addition, there are new disclosure requirements about fair value measurement when impairment or reversal of impairment is recognised.

Amendments to MFRS 139 Financial Instruments: Recognition and Measurement

Amendments to MFRS 139 provide relief from discontinuing hedge accounting in a situation where a derivative, which has been designated as a hedging instrument, is novated to effect clearing with a central counterparty as a result of laws or regulations, if speci c conditions are met. As a result of the amendments, continuation of hedge accounting is permitted if, as a consequence of laws or regulations, the parties to hedging instrument agree to have one or more clearing counterparties replace their original counterparty and the changes to the terms arising from the novation are consistent with the terms that would have existed if the novated derivative were originally cleared with the central counterparty.


79



(b) New MFRSs and Amendments/Improvements to MFRSs that are issued, but not yet effective and have not been early adopted

The Group and the Company have not adopted the following new MFRSs and amendments/improvements to MFRSs that have been issued by the Malaysian Accounting Standards Board (“MASB”) as at the date of authorisation of these nancial statements but are not yet effective for the Group and the Company:-

Effective for nancial periods

beginning onor after

New MFRSsMFRS 9 Financial Instruments 1 January 2018MFRS 15 Revenue from Contracts with Customers 1 January 2017Amendments/Improvements to MFRSsMFRS 1

MFRS 2

First-time Adoption of Malaysian Financial Reporting StandardsShare-based Payment

1 July 2014

1 July 2014MFRS 3 Business Combinations 1 July 2014MFRS 5 Non-current Asset Held for Sale and

Discontinued Operations1 January 2016

MFRS 7 Financial Instruments: Disclosures Effective uponapplication of MFRS 9

MFRS 8 Operating Segments 1 July 2014

MFRS 10 Consolidated Financial Statements 1 January 2016MFRS 11 Joint Arrangements 1 January 2016MFRS 12 Disclosures of Interests in Other Entities 1 January 2016MFRS 13 Fair Value Measurement 1 July 2014MFRS 101 Presentation of Financial Statements 1 January 2016MFRS 116 Property, Plant and Equipment 1 July 2014/

1 January 2016MFRS 119 Employee Bene ts 1 July 2014/

1 January 2016MFRS 124 Related Party Disclosures 1 July 2014MFRS 127 Separate Financial Statements 1 January 2016MFRS 128 Investments in Associates and Joint Ventures 1 January 2016MFRS 138 Intangible Assets 1 July 2014/

1 January 2016MFRS 140 Investment Property 1 July 2014MFRS 141 Agriculture 1 January 2016

A brief discussion on the above signi cant new and revised MFRSs, amendments/improvements to MFRSs, new IC Int and amendments to IC Int are summarised below. Due to the complexity of these new standards, the nancial effects of their adoption are currently still being assessed by the Group and the Company.

80



(b) New MFRSs and Amendments/Improvements to MFRSs that are issued, but not yet effective and have not been early adopted (Continued)

MFRS 9 Financial Instruments

MFRS 9 introduces a package of improvements which includes a classi cation and measurement model, a single forward-looking ‘expected loss’ impairment model and a substantially-reformed approach to hedge accounting.

Classi cation and measurement MFRS 9 introduces an approach for classi cation of nancial assets which is driven by cash

ow characteristics and the business model in which an asset is held. The new model also results in a single impairment model being applied to all nancial instruments.

In essence, if a nancial asset is a simple debt instrument and the objective of the entity’s business model within which it is held is to collect its contractual cash ows, the nancial asset is measured at amortised cost. In contrast, if that asset is held in a business model the objective of which is achieved by both collecting contractual cash ows and selling nancial assets, then the nancial asset is measured at fair value in the statement of nancial position, and amortised cost information is provided through pro t or loss. If the business model is neither of these, then fair value information is increasingly important, so it is provided both in the pro t or loss and in the statement of nancial position.

Impairment MFRS 9 introduces a new, expected-loss impairment model that will require more timely

recognition of expected credit losses. Speci cally, this Standard requires entities to account for expected credit losses from when nancial instruments are rst recognised and to recognise full lifetime expected losses on a more timely basis. The model requires an entity to recognise expected credit losses at all times and to update the amount of expected credit losses recognised at each reporting date to re ect changes in the credit risk of nancial instruments. This model eliminates the threshold for the recognition of expected credit losses, so that it is no longer necessary for a trigger event to have occurred before credit losses are recognised.

Hedge accounting MFRS 9 introduces a substantially-reformed model for hedge accounting, with enhanced

disclosures about risk management activity. The new model represents a signi cant overhaul of hedge accounting that aligns the accounting treatment with risk management activities, enabling entities to better re ect these activities in their nancial statements.In addition, as a result of these changes, users of the nancial statements will be provided with better information about risk management and the effect of hedge accounting on the nancial statements.


81


2.2 New MFRSs, Amendments/Improvements to MFRSs and New IC Interpretations (“IC Int”)(Continued)


Amendments to MFRS 1 First-time Adoption of Malaysian Financial Reporting Standards

Amendments to MFRS 1 relates to the IASB’s Basis for Conclusions which is not an integral part of the Standard. The Basis for Conclusions clari es that a rst-time adopter is permitted but not required to apply a new or revised Standard that is not yet mandatory but is available for early application.

Amendments to MFRS 2 Share-based Payment

Amendments to MFRS 2 clari es the de nition of ‘vesting conditions’ by separately de ning ‘performance condition’ and ‘service condition’ to ensure consistent classi cation of conditions attached to a share-based payment.

Amendments to MFRS 3 Business Combinations

Amendments to MFRS 3 clari es that when contingent consideration meets the de nition of nancial instrument, its classi cation as a liability or equity is determined by reference to

MFRS 132 Financial Instruments: Presentation. It also clari es that contingent consideration that is classi ed as an asset or a liability shall be subsequently measured at fair value at each reporting date and changes in fair value shall be recognised in pro t or loss.

In addition, amendments to MFRS 3 clari es that MFRS 3 excludes from its scope the accounting for the formation of all types of joint arrangements (as de ned in MFRS 11 Joint Arrangements) in the nancial statements of the joint arrangement itself.

Amendments to MFRS 7 Financial Instruments: Disclosures

Amendments to MFRS 7 provides additional guidance to clarify whether servicing contracts constitute continuing involvement for the purposes of applying the disclosure requirements of MFRS 7.

The Amendments also clarify the applicability of Disclosure–Offsetting Financial Assets and Financial Liabilities (Amendments to MFRS 7) to condensed interim nancial statements.

82




Amendments to MFRS 8 Operating Segments

Amendments to MFRS 8 requires an entity to disclose the judgements made by management in applying the aggregation criteria to operating segments. This includes a brief description of the operating segments that have been aggregated and the economic indicators that have been assessed in determining that the aggregated operating segments share similar economic characteristics.

The Amendments also clari es that an entity shall provide reconciliations of the total of the reportable segments’ assets to the entity’s assets if the segment assets are reported regularly to the chief operating decision maker.

Amendments to MFRS 13 Fair Value Measurement

Amendments to MFRS 13 relates to the IASB’s Basis for Conclusions which is not an integral part of the Standard. The Basis for Conclusions clari es that when IASB issued IFRS 13, it did not remove the practical ability to measure short-term receivables and payables with no stated interest rate at invoice amounts without discounting, if the effect of discounting is immaterial.

The Amendments also clari es that the scope of the portfolio exception of MFRS 13 includes all contracts accounted for within the scope of MFRS 139 Financial Instruments: Recognition and Measurement or MFRS 9 Financial Instruments, regardless of whether they meet the de nition of nancial assets or nancial liabilities as de ned in MFRS 132 Financial Instruments: Presentation.

Amendments to MFRS 101 Presentation of Financial Statements

Amendments to MFRS 101 improves the effectiveness of disclosures. The Amendments clari es guidance on materiality and aggregation, the presentation of subtotals, the structure of nancial statements and the disclosure of accounting policies.


83




Amendments to MFRS 116 Property, Plant and Equipment

Amendments to MFRS 116 clari es the accounting for the accumulated depreciation/amortisation when an asset is revalued. It clari es that:

• the gross carrying amount is adjusted in a manner that is consistent with the revaluation of the carrying amount of the asset; and

• the accumulated depreciation/amortisation is calculated as the difference between the gross carrying amount and the carrying amount of the asset after taking into account accumulated impairment losses.

Amendments to MFRS 116 prohibits revenue-based depreciation because revenue does not re ect the way in which an item of property, plant and equipment is used or consumed.

Amendments to MFRS 119 Employee Bene ts

Amendments to MFRS 119 provides a practical expedient in accounting for contributions from employees or third parties to de ned bene t plans.

If the amount of the contributions is independent of the number of years of service, an entity is permitted to recognise such contributions as a reduction in the service cost in the period in which the related service is rendered, instead of attributing the contributions to the periods of service.

However, if the amount of the contributions is dependent on the number of years of service, an entity is required to attribute those contributions to periods of service using the same attribution method required by MFRS 119 for the gross bene t (i.e. either based on the plan’s contribution formula or on a straight-line basis).

In addition, the Amendments clari es that the high quality corporate bonds used to estimate the discount rate for post-employment bene t obligations should be denominated in the same currency as the liability and the depth of the market for high quality corporate bonds should be assessed at a currency level.

Amendments to MFRS 124 Related Party Disclosures

Amendments to MFRS 124 clari es that an entity providing key management personnel services to the reporting entity or to the parent of the reporting entity is a related party of the reporting entity.

84




Amendments to MFRS 127 Separate Financial Statements

Amendments to MFRS 127 allows a parent and investors to use the equity method in its separate nancial statements to account for investments in subsidiaries, joint ventures and associates, in addition to the existing options.

Amendments to MFRS 140 Investment Property

Amendments to MFRS 140 clari es that the determination of whether an acquisition of investment property meets the de nition of both a business combination as de ned in MFRS 3 and investment property as de ned in MFRS 140 requires the separate application of both Standards independently of each other.

Amendments to MFRS 10 Consolidated Financial Statements and MFRS 128 Investments in Associates and Joint Ventures

These Amendments address an acknowledged inconsistency between the requirements in MFRS 10 and those in MFRS 128, in dealing with the sale or contribution of assets between an investor and its associate or joint venture.

The main consequence of the Amendments is that a full gain or loss is recognised when a transaction involves a business (whether it is housed in a subsidiary or not), as de ned in MFRS 3 Business Combinations. A partial gain or loss is recognised when a transaction involves assets that do not constitute a business, even if these assets are housed in a subsidiary.

Amendments to MFRS 10 Consolidated Financial Statements, MFRS 12 Disclosures of Interests in Other Entities and MFRS 128 Investments in Associates and Joint Ventures

These Amendments addresses the following issues that have arisen in the application of the consolidation exception for investment entities:-

• Exemption from presenting consolidated nancial statements:- the Amendments clari es that the exemption from presenting consolidated nancial statements applies to a parent entity that is a subsidiary of an investment entity, when the investment entity measures all of its subsidiaries at fair value.


85




Amendments to MFRS 10 Consolidated Financial Statements, MFRS 12 Disclosures of Interests in Other Entities and MFRS 128 Investments in Associates and Joint Ventures (Continued)

• Consolidation of intermediate investment entities:- the Amendments clari es that only a subsidiary is not an investment entity itself and provides support services to the investment entity is consolidated. All other subsidiaries of an investment entity are measured at fair value.

• Policy choice for equity accounting for investments in associates and joint ventures:- the Amendments allows a non-investment entity that has an interest in an associate or joint venture that is an investment entity, when applying the equity method, to retain the fair value measurement applied by the investment entity associate or joint venture to its interest in subsidiaries, or to unwind the fair value measurement and instead perform a consolidation at the level of the investment entity associate or joint venture.

2.3 Summary of Signi cant Accounting Policies

(a) Basis of Consolidation

(i) Subsidiaries

Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Speci cally, the Group controls an investee if and only if the Group has:-

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

• Exposure, or rights, to variable returns from its involvement with the investee; and• The ability to use its power over the investee to affect its returns.

When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

• The contractual arrangement with the other vote holders of the investee; • Rights arising from other contractual arrangements; and• The Group’s voting rights and potential voting rights.

86


2.3 Summary of Signi cant Accounting Policies (Continued)

(a) Basis of Consolidation (Continued)

(i) Subsidiaries (Continued)

The Group adopted MFRS 10, Consolidated Financial Statements in the previous nancial period. The adoption of MFRS 10 has no signi cant impact to the nancial statements of the Group.

Investments in subsidiaries are measured in the Company’s statement of nancial position at cost less any impairment losses, unless the investment is held for sale or distribution. The cost of investments includes transaction costs.

The accounting policies of subsidiaries are changed when necessary to align them with the policies adopted by the Group.

(ii) Accounting for business combinations

Business combinations are accounted for using the acquisition method from the acquisition date, which is the date on which control is transferred to the Group.

The Group measures goodwill at the acquisition date as:• the fair value of the consideration transferred; plus• the recognised amount of any non-controlling interests in the acquiree; plus• if the business combination is achieved in stages, the fair value of the existing

equity interest in the acquiree; less• the net recognised amount (generally fair value) of the identi able assets acquired

and liabilities assumed.

When the excess is negative, a bargain purchase gain is recognised immediately in pro t or loss.

The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in pro t or loss.

Costs related to the acquisition, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred.

Any contingent consideration payable is recognised at fair value at the acquisition date. If the contingent consideration is classi ed as equity, it is not remeasured and settlement is accounted for within equity. Otherwise, subsequent changes to the fair value of the contingent consideration are recognised in pro t or loss.


87



(a) Basis of Consolidation (Continued)

(iii) Accounting for acquisitions of non-controlling interests

The Group treats all changes in its ownership interest in a subsidiary that do not result in a loss of control as equity transactions between the Group and its non-controlling interests holders. Any difference between the Group’s share of net assets before and after the change and any consideration received or paid, is adjusted to or against Group reserves.

(iv) Loss of control

Upon the loss of control of a subsidiary, the Group derecognised the assets and liabilities of the subsidiary, any non-controlling interests and the other components of equity related to the subsidiary. Any surplus or de cit arising on the loss of control is recognised in pro t or loss. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently it is accounted for as an equity accounted investee or as an available-for-sale nancial asset depending on the level of in uence retained.

(v) Non-controlling interests

Non-controlling interests at the reporting date, being the equity in a subsidiary not attributable directly or indirectly to the owners of the Company, are presented in the consolidated statement of nancial position and consolidated statement of changes in equity within equity, separately from equity attributable to the owners of the Company. Non-controlling interests in the results of the Group is presented in the consolidated statement of comprehensive income as an allocation of the pro t or loss and the comprehensive income for the year between non-controlling interests and the owners of the Company.

Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a de cit balance.

(vi) Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated nancial statements. Unrealised gains arising from transactions with equity accounted associates are eliminated against the investment to the extent of the Group’s interest in the associates. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

88



(b) Property, Plant and Equipment and Depreciation

Property, plant and equipment are stated at cost or valuation less accumulated depreciation and impairment losses, if any. The policy for the recognition and measurement of impairment losses is in accordance with Note 2.3(k) to the nancial statements.

Cost includes expenditure that are directly attributable to the acquisition of the asset and any other costs directly attributable to bringing the asset to working condition for its intended use, and the cost of dismantling and removing the items and restoring the site on which they are located. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment. When signi cant parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment.

The cost of replacing part of an item of property, plant and equipment is included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that the future economic bene ts associated with the part will ow to the Group and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the pro t or loss as incurred.

The cost of property, plant and equipment recognised as a result of business combination is based on fair value at acquisition date. The fair value of property is the estimated amount for which a property could be exchanged between a willing buyer and a willing seller in an arm’s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion. The fair value of other items of plant and equipment is based on the quoted market prices for similar terms.

Depreciation is calculated on a straight line method so as to write off the costs of the property, plant and equipment over their expected useful lives. The principal annual rates used for this purpose are as follows:-

Leasehold land and building 51 years

Motor vehicles 10–20%

Plant and machinery 10–20%

Of ce equipment, furniture and ttings, and renovation 10–20%

Buildings 2%

No depreciation is provided on the freehold land as it has an in nite useful life.


89



(b) Property, Plant and Equipment and Depreciation (Continued)

The residual values, useful lives and depreciation method are reviewed, and adjusted if appropriate, at each reporting date. The effects of any revisions of the residual values, useful lives and depreciation method are included in the pro t and loss for the nancial year in which the changes arise.

Fully depreciated assets are retained in the accounts until the assets are no longer in use.

An item of property, plant and equipment is derecognised upon disposal or when no future economic bene ts are expected from its use or disposal. Gain and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of property, plant and equipment and are recognised net within in the pro t or loss. When revalue assets are sold, the amounts included in the revaluation surplus reserve are transferred to retained earnings.

The Group has elected to measure all of its lands and buildings using the revaluation model under MFRS 116 Property, Plant and Equipment.

Lands and building at valuation are revalued by an independent professional valuer at a regular interval of at least once in every ve years with additional valuations in the intervening years where market conditions indicate that the carrying values of the revalued lands and buildings materially differ from the market values.

Any revaluation surplus is recognised in other comprehensive income and accumulated in equity under the asset revaluation reserve, except to the extent that it reverses a revaluation decrease of the same asset previously recognised in pro t or loss, in which case the increase is recognised in pro t or loss. A revaluation de cit is recognised in pro t or loss, except to the extent that it offsets an existing surplus on the same asset carried in the asset revaluation reserve.

Upon disposal or retirement of an asset, any revaluation surplus relating to the particular asset is transferred directly to retained earnings. The surplus may be transferred as the asset is used by the Group. The amount of the surplus transferred would be the difference between depreciation based on the revalued carrying amount of the asset and depreciation based on the asset’s original cost. Transfers from revaluation surplus to retained earnings are not made through pro t or loss.

90



(c) Goodwill on Consolidation

Goodwill is initially measured at cost. Following initial recognition, goodwill is measured at cost less accumulated impairment losses.

For the purpose of impairment testing, goodwill acquired is allocated, from the acquisition date, to each of the Group’s cash-generating units that are expected to bene t 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 pro t 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 off, the goodwill associated with the operation disposed off is included in the carrying amount of the operation when determining the gain or loss on disposal off the operation. Goodwill disposed off 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.

(d) Inventories

Inventories comprise raw materials, consumables, work-in-progress and nished goods that are stated at the lower of cost and net realisable value.

The cost of inventories is based on the weighted average cost principle, and includes expenditure incurred in acquiring the inventories and bringing them to their existing location and condition. In the case of work-in-progress and nished goods, costs include cost of raw materials, direct labour and an appropriate proportion of xed and variable production overheads.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs necessary to make the sale.


91



(e) Equity Instruments

(i) Ordinary shares

Ordinary shares are classi ed as equity. Dividends on ordinary shares are recognised as liabilities when declared before the reporting date. A dividend proposed or declared after the reporting date, but before the nancial statements are authorised for issue, is not recognised as a liability at the reporting date.

The transaction costs of an equity transaction are accounted for as deductions from equity, net of tax. Equity transaction costs comprise only those incremental external costs directly attributable to the equity transaction which would otherwise have been avoided.

(ii) Preference shares

Preference shares are classi ed as equity if they are non-redeemable, or are redeemable but only at the Company’s option and dividends are discretionary at the option of the issuers. Dividends thereon are recognised as distributions within equity. Preference shares are classi ed as liability if they are redeemable on a speci c date or at the option of the shareholders and dividends thereon are recognised in the pro t or loss as interest expense. Preference shares that are compound instruments are split into liability and equity components. Each component is accounted for separately. Dividends on preference shares are recognised on an accrual basis.

(f) Employee Bene ts

(i) Short term employee bene ts

Wages, salaries, social security contribution, bonuses and non-monetary bene ts are accrued in the period in which the associated services are rendered by the employees. Short-term accumulating compensated absences such as paid annual leave are their entitlement to future compensated absences. Short-term non-accumulating compensated absences sick leave, maternity and paternity leave are recognised when absences occur.

(ii) Post-employment bene ts

The Group contributes to the Employee’s Provident Fund, the national de ned contribution plan. The contributions are charged to the pro t or loss in the period to which they are related. Once the contributions have been paid, the Group has no further payment obligations.

92



(g) Leases

(i) Finance leases

Leases of property, plant and equipment where the Group assumes substantially all the bene ts and risks of ownership are classi ed as nance leases.

Assets acquired by way of hire purchase or nance leases are stated at an amount equal to the lower of their fair values and the present value of the minimum lease payments at the inception of the leases, less accumulated depreciation and impairment losses, if any. The corresponding liability is included in the statement of nancial position as borrowings. In calculating the present value of the minimum lease payments, the discount factor used in the interest rate implicit in the lease, when it is practicable to determine; otherwise, the Group’s incremental borrowings rate is used. Any initial direct costs are also added to the carrying amount of such assets.

Lease payments are apportioned between the nance costs and the reduction of the outstanding liability. Finance costs, which represent the difference between the total leasing commitments and the fair value of the assets acquired, are recognised in the pro t or loss over the term of the relevant lease so as to produce a constant periodic rate of charge on the remaining balance of the obligations for each accounting period.

The depreciation policy for leased assets is in accordance with that for depreciable property, plant and equipment as described in Note 2.3(b) to the nancial statements.

(ii) Operating leases

Leases of assets where a signi cant portion of the risks and rewards of ownership are retained by the lessor are classi ed as operating leases.

Operating lease payments are recognised as an expense on a straight-line basis over the term of the relevant lease. The aggregate bene t of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis.

(h) Taxation

The tax expense in the pro t or loss represents the aggregate amount of current and deferred tax. Current tax is the expected amount of income taxes payable in respect of the taxable pro t for the year and is measured using the tax rates that have been enacted at the reporting date.


93



(h) Taxation (Continued)

Deferred tax is provided for, using the liability method, on temporary differences at the reporting date arising between the tax bases of assets and liabilities and their carrying amounts in the nancial statements. In principle, deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that taxable pro t will be available against which the deductible temporary differences, unused tax losses and unused tax credit can be utilised. Deferred tax is not recognised if the temporary difference arises from goodwill or negative goodwill or from the initial recognition of an asset or liability in a transaction which is not a business combination and at time of the transaction, affects neither accounting pro t nor taxable pro t.

Deferred tax is measured at the tax rates that are expected to apply in the period when the asset is realised or the liability is settled, based on tax rates that have been enacted or substantively enacted at the reporting date. Deferred tax is recognised in the pro t or loss, except when it arises from transaction which is recognised in other comprehensive income or directly in equity, in which case the deferred tax is also charged or credited in other comprehensive income or directly in equity or when it arises from a business combination that is an acquisition, in which case the deferred tax is included in the resulting goodwill or bargain purchased.

(i) Foreign Currency Translation

(i) Functional and presentation currency

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

(ii) Foreign currency transactions

Transactions in foreign currencies are translated to Ringgit Malaysia at exchange rates ruling at the transaction date.

Monetary assets and liabilities in foreign currencies at the statement of nancial position are translated into Ringgit Malaysia at the rates ruling at the reporting date. All exchange differences are included in the pro t or loss.

Non-monetary items are measured in term of historical cost in a foreign currency or translated using the exchange rates as at the date of the initial transaction. Non-monetary items measured at fair value in foreign currency are translated using the exchange rates at the date when the fair value was determined.

94



(i) Foreign Currency Translation (Continued)

(ii) Foreign currency transactions (Continued)

Exchange differences arising on the settlement of monetary items or on translating monetary items at the reporting date are recognised in pro t or loss, except for exchange differences arising on monetary items that form part of the Group’s net investment in foreign operation.

Exchange differences arising on monetary items that form part of the Group’s net investment in foreign operation, where that monetary item is denominated in either the functional currency of the reporting entity or the foreign operation, are initially taken directly to the foreign currency translation reserve within equity until the disposal of the foreign operations, at which time they are recognised in the pro t or loss.

(j) Financial Instruments

Financial instruments are recognised in the statements of nancial position when, and only when, the Group and the Company become a party to the contract provisions of the nancial instruments.

A nancial instrument is recognised initially, at its fair value, plus, in the case of a nancial instrument not at fair value through pro t or loss, transaction costs that are directly attributable to the acquisition or issue of the nancial instrument.

The Group and the Company categorise the nancial instruments as follows:-

(i) Financial Assets:-

Financial assets at fair value through pro t or loss

Financial assets are classi ed as fair value through pro t or loss if they are held for trading, including derivatives, or are designated as such upon initial recognition.

A nancial asset is classi ed as held for trading if it is acquired principally for the purpose of selling in the near future or part of a portfolio of identi ed nancial instruments that are managed together and for which there is evidence of a recent actual pattern of short term pro t taking.

Subsequent to initial recognition, nancial assets at fair value through pro t or loss are measured at fair value with the gain or loss recognised in statement of comprehensive income. Exchange differences, interest and dividend income on nancial assets at fair value through pro t or loss are recognised as other gains or losses in pro t or loss.


95



(j) Financial Instruments (Continued)

(i) Financial Assets:- (Continued)

Loans and receivables

Financial assets with xed or determinable payments that are not quoted in an active market, trade and other receivables and cash and cash equivalents are classi ed 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 pro t or loss when the loans and receivables are derecognised or impaired, and through the amortisation process.

Held-to-maturity investments

Financial assets with xed or determinable payments and xed maturity and the Group have the positive intention and ability to hold the investment to maturity is classi ed as held-to-maturity investments.

Subsequent to initial recognition, held-to-maturity investments are measured at amortised cost using the effective interest method. Gains and losses are recognised in pro t or loss when the held-to-maturity investments are derecognised or impaired, and through the amortisation process.

Available-for-sale nancial assets

Available-for-sale are nancial assets that are designated as available for sale or are not classi ed in any of the three preceding categories. They are included in non-current assets unless the investment matures or management intends to dispose of it within 12 months of the end of the reporting year.

After initial recognition, available-for-sale nancial assets are measured at fair value with the gain or loss recognised in other comprehensive income, except for impairment losses, foreign exchange gains and losses on monetary instruments and interest calculated using the effective interest method are recognised in pro t or loss. The cumulative gain or loss previously recognised in other comprehensive income is reclassi ed from equity to pro t or loss as a reclassi cation adjustment when the nancial asset is derecognised.

Investments in equity instruments whose fair value cannot be reliably measured are measured at cost less impairment loss.

96




(ii) Financial Liabilities

Financial liabilities are classi ed according to the substance of the contractual arrangements entered into and the de nitions of a nancial liability.

Financial liabilities, within the scope of MFRS 139, are recognised in the statement of nancial position when, and only when, the Group and the Company become a party to

the contractual provisions of the nancial instrument. Financial liabilities are classi ed as either nancial liabilities at fair value through pro t or loss or other nancial liabilities.

All nancial liabilities are subsequently measured at amortised cost other than those categorised as fair value through pro t or loss.

(a) Financial liabilities at fair value through pro t or loss

Financial liabilities at fair value through pro t or loss include nancial liabilities held for trading and nancial liabilities designated upon initial recognition as at fair value through pro t or loss.

Financial liabilities held for trading include derivatives entered into by 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 pro t or loss. Net gains or losses on derivatives include exchange differences.

The Group and the Company have not designated any nancial liabilities as at fair value through pro t or loss.

(b) Other nancial liabilities

The Group’s and the Company’s other nancial 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 classi ed as current liabilities unless the Company has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

For other nancial liabilities, gains and losses are recognised in pro t or loss when the liabilities are derecognised, and through the amortisation process.


97




(ii) Financial Liabilities (Continued)

A nancial liability is derecognised when the obligation under the liability is extinguished. When an existing nancial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modi ed, such an exchange or modi cation 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 pro t or loss.

(iii) Financial Guarantee Contracts

A nancial guarantee contract is a contract that requires the issuer to make speci ed payments to reimburse the holder for a loss it incurs because a speci ed debtor fails to make payment when due in accordance with the original or modi ed terms of a debt instrument.

Subsequent to initial recognition, nancial guarantee contracts are recognised as income in pro t or loss over the period of the guarantee. If the debtor fails to make payment relating to nancial guarantee contract when it is due and the Group, as the issuer, is required to reimburse the holder for the associated loss, the liability is measured at the higher of the best estimate of the expenditure required to settle the present obligation at the reporting date and the amount initially recognised less cumulative amortisation.

(k) Impairment of Assets

(i) Impairment of Financial Assets

All nancial assets (except for nancial assets categorised as fair value through pro t or loss and investment in subsidiaries) are assessed at each reporting date whether there is any objective evidence of impairment as a result of one or more events having an impact on the estimated future cash ows of the asset. Losses expected as a result of future events, no matter how likely, are not recognised. For an equity instrument, a signi cant or prolonged decline in the fair value below its cost is an objective evidence of impairment.

An impairment loss in respect of loans and receivables and held-to-maturity investments is recognised in pro t or loss and is measured as the difference between the asset’s carrying amount and the present value of estimated future cash ows discounted at the asset’s original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account.

98



(k) Impairment of Assets (Continued)

(i) Impairment of Financial Assets (Continued)

An impairment loss in respect of available-for-sale nancial assets is recognised in the pro t or loss and is measured as the difference between the asset’s acquisition cost (net of any principal repayment and amortisation) and the asset’s current fair value, less any impairment loss previously recognised. Where a decline in the fair value of an available-for-sale nancial asset has been recognised in the other comprehensive income, the cumulative loss in other comprehensive income is reclassi ed from equity and recognised to pro t or loss.

An impairment loss in respect of unquoted equity instrument that is carried at cost is recognised in pro t or loss and is measured as the difference between the asset’s carrying amount and the present value of estimated future cash ows discounted at the current market rate of return for a similar nancial asset.

(ii) Impairment of Non- nancial Assets

The Group and the Company assess 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 and the Company make an estimate of the asset’s recoverable amount.

For goodwill that has an inde nite useful life and is not available for use, the recoverable amount is estimated at each reporting date or more frequently when indicators of impairment are identi ed.

An asset’s recoverable amount is the higher of an asset’s or cash generating units’ (“CGU”) fair value less cost to sell and its value in use. In assessing value in use, the estimated future cash ows are discounted to their present value using a pre-tax discount rate that re ects current market assessments of the time value of money and the risk speci c to the asset. Where the carrying amounts of an asset exceed its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. Impairment losses recognised in respect of a CGU or groups of CGUs are allocated rst 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 apro-rata basis.

An impairment loss is recognised in the pro t or loss in the period in which it arises.


99



(k) Impairment of Assets (Continued)

(ii) Impairment of Non- nancial Assets (Continued)

Impairment loss on goodwill is not reversed in a subsequent period. An impairment loss for an asset other than goodwill is reversed if, and only if, there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment was recognised. The carrying amount of an asset other than goodwill is increased to its revised recoverable amount, provided that this amount does not exceed its carrying amount that would have been determined (net of amortisation or depreciation) had no impairment loss been recognised for the asset in prior years. A reversal of impairment loss for an asset other than goodwill is recognised in the pro t or loss.

(l) Revenue Recognition

Revenue is recognised to the extent that it is probable that the economic bene ts will ow to the Group and the revenue can be reliably measured. The following speci c recognition criteria must also be met before revenue is recognised.

(i) Sales of Goods

Revenue from sale of goods is measured at the fair value of the consideration received or receivable for the sale of goods, net of return and allowance, trade discounts and volume rebates. Revenue is recognised when the signi cant risks and rewards of ownership of the goods have been transferred to the buyer.

(ii) Rental income

Rental income is recognised in the pro t or loss on accrual basis.

(iii) Management fee

Management fee is recognised for services rendered, including professional and management advice, marketing, management information system and accounting services and administrative matters to the subsidiaries.

(iv) Interest income

Interest income is recognised on accrual basis.

(v) Dividend income

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

100



(m) Cash and Cash Equivalents

For the purpose of cash ow statements, cash and cash equivalents comprise cash in hand, bank balances, xed deposits, demand deposits and other short term and highly liquid investments, that are readily convertible to known amounts of cash and which are subject to an insigni cant risk of changes in value, net of bank overdrafts and deposits pledged to nancial institutions.

(n) Segmental Reporting

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

(o) Fair Value Measurements

Fair value of an asset or a liability, except for share-based payment and lease transactions, is determined as 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 measurement assumes that the transaction to sell the asset or transfer the liability takes place either in the principal market or in the absence of a principal market, in the most advantageous market.

For non- nancial assets, the fair value measurement takes into account a market participant’s ability to generate economic bene ts 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.


101

102

3. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS

3.1 Critical judgements in applying the Company’s accounting policies

In the process of applying the Group’s and Company’s accounting policies, which are described in Note 2.3 above, the management has made the following judgement, apart from those involving estimations, which have a signi cant effect on the amounts recognised in the nancial statements:-

(i) Classi cation between operating lease and nance lease for leasehold land

The Group has developed certain criteria based on MFRS 117 Lease in making judgement whether a leasehold land should be classi ed either as operating lease or nance lease.

Finance lease is a lease that transfers substantially all the risks and rewards incidental to ownership of an assets and operating lease is a lease that does not transfer substantially all the risks and rewards incidental to ownership. If the leasehold land meets the criteria of the nance lease, the lease will be classi ed as property, plant and equipment if it is for own use

or will be classi ed as investment property if it is to earn rentals or for capital appreciation or both. Judgements are made on the individual leasehold land to determine whether the leasehold land quali es as operating lease or nance lease.

The Group has classi ed the leasehold land as nance leases.

(ii) Classi cation of other investments

In the last nancial period, Iris Corporation Berhad became the ultimate holding company of the Group and of the Company. Pursuant to Section 17 of the Companies Act, 1965 in Malaysia, a corporation cannot be a member of a company which is its holding company. The Group would be required to dispose of its investment in the ultimate holding company within 12 months. Accordingly, the Group has reclassi ed the other investments designated as available-for-sale nancial assets from non-current assets to current assets in last nancial period.

As disclosed in Note 33 to the nancial statements, Iris Healthcare Sdn. Bhd. and Iris Corporation Berhad had ceased to be immediate and ultimate holding companies of the Group and of the Company during the nancial year. Accordingly, the Group has reclassi ed the other investments designated as available-for-sale nancial assets with the total carrying value of RM24,445,181/- as non-current available-for-sale nancial assets as there were no intention to dispose off the shares in the short term. The remaining balances of the other investments designated as available-for-sale nancial assets are classi ed as current assets as the management intends to dispose it off within the next 12 months.


103

3. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS (Continued)

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 signi cant risk of causing a material judgement to the carrying amounts of assets and liabilities within the next nancial year are as stated below:-

(i) Useful lives of property, plant and equipment

The Group and the Company estimate the useful lives of property, plant and equipment based on period over which the assets are expected to be available for use. The estimated useful lives of property, plant and equipment are reviewed periodically and are updated if expectation differs from previous estimates due to physical wear and tear, technical or commercial obsolescence and legal or other limits on the use of the relevant assets. In addition, the estimation of useful lives of property, plant and equipment are based on internal technical evaluation and experience with similar assets. It is possible, however, that future results of operations could be materially affected by changes in the estimates brought about by changes in factors mentioned above. The amounts and timing of recorded expenses for any period would be affected by changes in these factors and circumstances. A reduction in estimated useful lives of the property, plant and equipment would increase the recorded expenses and decrease the non-current assets.

(ii) Impairment of investment in subsidiaries and recoverability of amount owing by subsidiaries

The Company assess the investment in subsidiaries for impairment annually in accordance with its accounting policy. More regular reviews are performed if events indicate that this is necessary. The assessment of the net tangible assets of the subsidiaries affects the result of the impairment test. Costs of investments in subsidiaries which have ceased operations were impaired up to net assets of the subsidiaries. The impairment made on investment in subsidiaries entails an impairment to be made to the amount owing by these subsidiaries.

Signi cant judgement is required in the estimation of the present value of future cash ows generated by the subsidiaries, which involve uncertainties and are signi cantly affected by assumptions used and judgement made regarding estimates of future cash ows and discount rates. Changes in assumptions could signi cantly affect the results of the Company’s tests for impairment of investment in subsidiaries.

(iii) Impairment of property, plant and equipment

The Group and the Company review the carrying amount of its property, plant and equipment, to determine whether there is an indication that those assets have suffered an impairment loss in accordance with relevant accounting policies on the property, plant and equipment. Independent professional valuations to determine the carrying amount of these assets will be procured when the need arise.

104


3.2 Key sources of estimation uncertainty (Continued)

(iii) Impairment of property, plant and equipment (Continued)

As at the end of the nancial year under review, the directors are of the view that there is no indication of impairment to these assets and therefore no independent professional valuation was procured by the Group during the nancial year to determine the carrying amount of these assets. The carrying amounts of property, plant and equipment are disclosed in Note 4 to the nancial statements.

(iv) Impairment of goodwill

Goodwill is tested for impairment annually and at other times when such indicators exist. This requires an estimation of the value in use of the cash-generating units to which goodwill is allocated.

When value in use calculations are undertaken, management must estimate the expected future cash ows from the asset or cash-generating unit and choose a suitable discount rate in order to calculate the present value of those cash ows. Further details of the carrying value, the key assumptions applied in the impairment assessment of goodwill and sensitivity analysis to changes in the assumptions are given in Note 5 to the nancial statements.

(v) Allowance for write down in inventories

Reviews are made periodically by management on damaged, obsolete and slow-moving inventories. These reviews require judgement and estimates. Possible changes in these estimates can result in revisions to the valuation of inventories.

(vi) Impairment of receivables

The Group and the Company assess at each reporting date whether there is any objective evidence that a nancial asset is impaired. To determine whether there is objective evidence of impairment, the Group and the Company considers factors such as the probability of insolvency or signi cant nancial dif culties of the debtor and default or signi cant delay in payments.

Where there is objective evidence of impairment, the amount and timing of future cash ows are estimated based on historical loss experience for assets with similar credit risk

characteristics. The carrying amount of the Group’s and of the Company’s receivables at the reporting date is disclosed in Note 9 to the nancial statements.

(vii) Taxation

Signi cant judgement is required in determining the capital allowances and deductibility of certain expenses during the estimation of the provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain during the course of business. Where the nal tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred income tax provisions in the period in which such determination is made.


105


3.2 Key sources of estimation uncertainty (Continued)

(viii) Deferred tax assets

Deferred tax assets are recognised for all deductible temporary differences and unused tax credits to the extent that it is probable that taxable pro t will be available against which the deductible temporary differences and unused tax credits can be utilised. Signi cant 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 pro ts together with future tax planning strategies.

(ix) Contingent liabilities

Determination of the treatment of contingent liabilities in the nancial statements is based on the management’s view of the expected outcome of the applicable contingency.

106

4.

PR

OP

ERTY

, PLA

NT

AN

D E

QU

IPM

ENT

Leas

ehol

d la

nd a

nd

build

ing

RM

Free

hold

la

nd a

nd b

uild

ing

RM

Mot

or v

ehic

les,

pl

ant a

nd m

achi

nery

RM

Of

ce

equi

pmen

t,

furn

itur

e an

d

tti

ngs,

and

reno

vati

onR

MTo

tal

RM

Gro

up20

15C

ost/

Valu

atio

n

At 1

Apr

il 20

14Ad

ditio

nsD

ispo

sals

/Wri

tten

off

s

24,0

17,5

15 – –

10,6

18,6

26 – –

61,5

00,3

004,

524,

097

(2,8

26,6

65)

5,02

0,13

417

5,41

2(5

2,50

3)

101,

156,

575

4,69

9,50

9(2

,879

,168

)

At 3

1 M

arch

201

524

,017

,515

10,6

18,6

2663

,197

,732

5,14

3,04

310

2,97

6,91

6

Rep

rese

nted

by:

-C

ost

Valu

atio

n–

24,0

17,5

15–

10,6

18,6

2663

,197

,732 –

5,14

3,04

3–

68,3

40,7

7534

,636

,141

24,0

17,5

1510

,618

,626

63,1

97,7

325,

143,

043

102,

976,

916

Acc

umul

ated

Dep

reci

atio

n

At 1

Apr

il 20

14C

harg

e fo

r th

e n

anci

al y

ear

Dis

posa

ls/W

ritt

en o

ffs

5,47

4,24

636

5,38

5–

2,40

8,28

015

1,72

4–

46,8

08,8

203,

050,

806

(2,7

15,0

27)

4,54

4,69

817

5,36

4(5

2,49

8)

59,2

36,0

443,

743,

279

(2,7

67,5

25)

At 3

1 M

arch

201

55,

839,

631

2,56

0,00

447

,144

,599

4,66

7,56

460

,211

,798

Net

Boo

k Va

lue

at 3

1 M

arch

201

518

,177

,884

8,05

8,62

216

,053

,133

475,

479

42,7

65,1

18

Rep

rese

nted

by:

-C

ost

Valu

atio

n–

18,1

77,8

84–

8,05

8,62

216

,053

,133 –

475,

479

–16

,528

,612

26,2

36,5

06

18,1

77,8

848,

058,

622

16,0

53,1

3347

5,47

942

,765

,118


107

4.

PR

OP

ERTY

, PLA

NT

AN

D E

QU

IPM

ENT

(Con

tinu

ed)

Leas

ehol

d la

nd a

nd

build

ing

RM

Free

hold

land

and

bu

ildin

gR

M

Mot

or v

ehic

les,

pla

nt

and

mac

hine

ryR

M

Of

ce

equi

pmen

t,

furn

itur

e an

d t

ting

s, a

nd

reno

vati

onR

MTo

tal

RM

Gro

up20

14C

ost/

Valu

atio

n

At 1

Jan

uary

201

3Ad

ditio

nsD

ispo

sals

/Wri

tten

off

s

24,0

17,5

15 – –

10,6

18,6

26 – –

60,3

79,1

707,

910,

351

(6,7

89,2

21)

4,98

1,13

242

,202

(3,2

00)

99,9

96,4

437,

952,

553

(6,7

92,4

21)

At 3

1 M

arch

201

424

,017

,515

10,6

18,6

2661

,500

,300

5,02

0,13

410

1,15

6,57

5

Rep

rese

nted

by:

-

Cos

t

Valu

atio

n

–

24,0

17,5

15

24,0

17,5

15

–

10,6

18,6

26

10,6

18,6

26

61,5

00,3

00 –

61,5

00,3

00

5,02

0,13

4

–

5,02

0,13

4

66,5

20,4

34

34,6

36,1

41

101,

156,

575

Acc

umul

ated

Dep

reci

atio

nAt

1 J

anua

ry 2

013

Cha

rge

for

the

nan

cial

per

iod

Dis

posa

ls/W

ritt

en o

ffs

5,01

7,51

545

6,73

1–

2,21

8,62

618

9,65

4–

49,3

74,6

644,

145,

738

(6,7

11,5

82)

4,26

2,54

728

4,22

4(2

,073

)

60,8

73,3

525,

076,

347

(6,7

13,6

55)

At 3

1 M

arch

201

45,

474,

246

2,40

8,28

046

,808

,820

4,54

4,69

859

,236

,044

Net

Boo

k Va

lue

at 3

1 M

arch

201

418

,543

,269

8,21

0,34

614

,691

,480

475,

436

41,9

20,5

31

Rep

rese

nted

by:

-C

ost

Valu

atio

n–

18,5

43,2

69–

8,21

0,34

614

,691

,480 –

475,

436

–15

,166

,916

26,7

53,6

15

18,5

43,2

698,

210,

346

14,6

91,4

8047

5,43

641

,920

,531

108

4. PROPERTY, PLANT AND EQUIPMENT (Continued)

Of ceEquipment

RM

Company

2015

Cost

At 1 April 2014 41,265

Additions 2,483

At 31 March 2015 43,748

Accumulated Depreciation

At 1 April 2014 38,421

Charge for the nancial year 2,075

At 31 March 2015 40,496

Net Book Value at 31 March 2015 3,252

2014

Cost

At 1 January 2013/31 March 2014 41,265

Accumulated Depreciation

At 1 January 2013 34,838

Charge for the nancial period 3,583

At 31 March 2014 38,421

Net Book Value at 31 March 2014 2,844

a) The Group revalued its land and buildings based on professional valuations made byTD Aziz Sdn. Bhd., an independent professional valuer in September 2012 by using the comparison method. Had the land and buildings been carried under the cost model, the carrying amount of the land and buildings would have been RM10,180,035/- (2014: RM10,659,565/-).

b) Property, plant and equipment of the Group with the net book value of RM28,730,868/-(2014: RM27,870,400/-) have been pledged to licensed banks to secure credit facilities granted to the Company and its subsidiaries.

c) Property, plant and equipment of the Group with the net book value of RM9,315,319/-(2014: RM7,994,762/-) are acquired under hire purchase instalment plans.


109

4. PROPERTY, PLANT AND EQUIPMENT (Continued)

d) During the nancial year, the Group and the Company made the following cash payments to purchase of property, plant and equipment:-

Group Company2015RM

2014RM

2015RM

2014RM

Purchase of property, plant and equipment 4,699,509 7,952,553 2,483 –

Financed by hire purchasearrangements (1,627,244) (5,452,619) – –

Cash payments on purchase ofproperty, plant and equipment 3,072,265 2,499,934 2,483 –

e) Fair value information

An independent valuation of the Group’s land and buildings was performed by an independent professional valuer to determine the fair value of the land and buildings as at 31 December 2012. The revaluation surplus net of applicable deferred tax was shown in revaluation reserve as disclosed in Note 15 to the nancial statements.

The following analyses the non- nancial assets carried at fair value, by valuation method. The

different levels have been de ned as follows: • 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 (that is, as prices) or indirectly (that is, derived from prices).

• Level 3 – inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs).

The fair value of the land and buildings of the Group are categorised as Level 2. The fair values

of land and buildings have been derived using the sales comparison approach. Sale prices of comparable land and building in close proximity are adjusted for differences in key attributes such as property size. The most signi cant input into this valuation approach is price per square foot.

110

5. GOODWILL ON CONSOLIDATION

Group2015RM

2014RM

At cost 29,996,968 29,996,968

Accumulated impairment loss

At 1 April 2014/1 January 2013 (18,507,693) (16,360,663)

Impairment during the nancial year/period (11,489,275) (2,147,030)

At 31 March (29,996,968) (18,507,693)

– 11,489,275

In previous nancial period, key assumptions used for the value-in-use calculations are:-

• Cash ows were projected by the management based on past experience, actual operating results and a 5 years business plan;

• Total revenue of Versatile Paper Boxes Sdn. Bhd. were projected at about RM31,293,000/- in the next nancial year. The expected revenue growth in the cash ows projection was 5%-12% per annum for years 2015 - 2019; and

• A pre-tax discount rate of 7.5% was used in determining the value-in-use of the subsidiaries. The discount rate was estimated based on the Group’s incremental borrowing rate.

The recoverable amount of Versatile Paper Boxes Sdn. Bhd. was RM47,436,026/- as at31 March 2015.

The impairment loss was recognised in other operating expenses in the statements of pro t or loss and other comprehensive income.

6. INVESTMENT IN SUBSIDIARIES

Company2015RM

2014RM

Unquoted shares-at cost 79,067,902 79,067,902

Less: Allowances for impairment (57,290,729) (57,290,729)

21,777,173 21,777,173


111

6. INVESTMENT IN SUBSIDIARIES (Continued)

The following information relates to the subsidiaries which are all incorporated and domiciled in Malaysia.

Name of CompaniesEffective

Equity Interests Principal Activities2015

%2014

%

Direct subsidiaries

Versatile Paper Boxes Sdn. Bhd. 100 100 Manufacturing and trading of paper, board packaging products, specialising in offset-printed boxes and offset-laminated

cartons

FP Pack Sdn. Bhd.(formerly known asFairpoint PackagingSdn. Bhd.)

100 100 Dormant

Indirect subsidiaries held through Versatile Paper Boxes Sdn. Bhd.

Fairpoint PlasticIndustries Sdn. Bhd.

100 100 Manufacturing and sale of plastic packaging products

Imagescan Creative Sdn. Bhd.

100 100 Provision of colour sepa-ration and lithography services and printed materials

Versatile Smart Properties Sdn. Bhd. 100 100 Dormant

112

7. OTHER INVESTMENTSGroup

2015RM

2014RM

Non-current


-Equity instruments (quoted in Malaysia)

At 1 April 2014 / 1 January 2013 – 19,342,891

Net gain on fair value changes recognisedin other comprehensive income – 40,392,472

Transfer from/(to) current asset 24,445,181 (59,735,363)

Total non-current investment securities 24,445,181 –

Current

Financial assets at fair value through pro t or loss

-Equity instrument (quoted in Malaysia)

At 1 April 2014 / 1 January 2013 6,637,254 2,149,204

Net fair value (loss) / gain recognised in pro t or loss (3,476,590) 4,488,050

Disposal (3,160,664) –

At 31 March – 6,637,254


-Equity instrument (quoted in Malaysia)

At 1 April 2014 / 1 January 2013 59,735,363 –

Net loss on fair value changes recognisedin other comprehensive income (25,144,608) –

Disposal (2,839,336) –

Transfer (to) / from non-current asset (24,445,181) 59,735,363

At 31 March 7,306,238 59,735,363

Total current investment securities 7,306,238 66,372,617

Total investment securities 31,751,419 66,372,617

Market Value:

Quoted shares in Malaysia 31,751,419 66,372,617

Other investment represents approximately 5.02% (2014: 6.20%) equity interest of the issued andpaid-up share capital of Iris Corporation Berhad held by the Group.


113

8. INVENTORIESGroup

2015RM

2014RM

At cost

Raw materials and consumablesWork-in-progressFinished goods

2,096,655867,837

1,729,615

2,751,2161,196,8102,550,855

4,694,107 6,498,881

At net realisable value

Raw materials and consumablesFinished goods

288,366128,868

211,954190,634

417,234 402,588

Total inventories 5,111,341 6,901,469

Inventories recognised as cost of sales 24,811,521 35,476,504

Carrying amount of inventories pledgedas security for bank borrowings 3,722,356 4,180,009

9. TRADE AND OTHER RECEIVABLES

Group Company2015RM

2014RM

2015RM

2014RM

CurrentTrade receivablesThird parties Amount owing by ultimate

holding company

15,379,346

–

18,748,516

554,377

–

–

–

–

15,379,346 19,302,893 – –

Less: Allowances for impairment- Third parties - Amount owing by ultimate

holding company

(3,231,562)

–

(3,068,777)

(19,035)

–

–

–

–

Trade receivables, net 12,147,784 16,215,081

114

9. TRADE AND OTHER RECEIVABLES (Continued)

Group Company2015RM

2014RM

2015RM

2014RM

Other receivables

Other receivablesAmount owing by subsidiariesRefundable deposits

894,930–

226,085

337,841–

200,861

29,7683,062,093

–

29,7683,727,878

–

1,121,015 538,702 3,091,861 3,757,646

Less: Allowances for impairment- other receivables (29,768) – (29,768) –

Other receivables, net 1,091,247 538,702 3,062,093 3,757,646

Total trade and other receivables 13,239,031 16,753,783 3,062,093 3,757,646

Add: cash and bank balances (Note 11) 914,850 2,182,269 47,301 315,750

Total loans and receivables 14,153.881 18,936,052 3,109,394 4,073,396

Trade receivables are non-interest bearing and are generally on 30 to 120 (2014: 30 to 120) days terms. They are recognised on their original invoice amount which represents their fair values on initial recognition.

The currency exposure pro les of trade and other receivables are as follows:-

Group Company2015RM

2014RM

2015RM

2014RM

Ringgit MalaysiaUnited States DollarGreat Britain PoundAustralian DollarIndonesian Rupiah

11,585,184637,753258,275726,446

31,373

14,458,6861,369,144

635,711255,670

34,572

3,062,093––––

3,757,646––––

13,239,031 16,753,783 3,062,093 3,757,646


115


Analysis on trade receivables

The ageing analysis of the Group’s trade receivables are as follows:-

Group2015RM

2014RM

Neither past due nor impaired 4,712,333 4,283,569

Past due 1 - 30 days 1,768,013 3,318,166

Past due 31 - 120 days 2,915,826 3,746,368

Past due more than 120 days butless than 1 year 1,812,863 2,992,998

Past due more than 1 year 938,749 1,873,980

Total Past Due 7,435,451 11,931,512

Impaired 3,231,562 3,087,812

15,379,346 19,302,893

Receivables that are neither past due nor impaired

Trade and other receivables that are neither past due nor impaired are creditworthy debtors with good payment records with the Group. More than 90% (2014: 90%) of the Group’s trade receivables arise from customers with more than four years of experience with the Group and losses have incurred infrequently.

Receivables that are past due but not impaired

At the reporting date, trade receivables that are past due but not impaired are unsecured in nature. The business transactions with these receivables are still on-going and thus no further impairment provided by the Company.

Receivables that are impaired

The Group’s trade receivables that are impaired at the reporting date and the movement of the impairment are as follows:-

Individuallyimpaired

2015RM

2014RM

GroupTrade receivables - nominal amountsLess: Allowances for impairment

8,098,856(3,231,562)

9,153,577(3,087,812)

4,867,294 6,065,765

116


Movements in allowances for impairment:-

Group Company2015RM

2014RM

2015RM

2014RM

At 1 April 2014 /1 January 2013

Trade receivables

Third parties 3,068,777 2,925,356 – –

Amount owing by ultimate holding company 19,035 – – –

3,087,812 2,925,356

Other receivables

Add: Movement during the nancial year/periodTrade receivablesThird parties

– – – –

- Impairment loss on trade receivables 320,759 220,621 – –

- Impairment loss no longer required (177,009) (58,165) – –

- Transfer from/(to) amount owing by ultimate holding 19,035 (19,035) – –

162,785 143,421 – –

Amount owing by ultimate holding company

- Transfer (to)/from amount owing by ultimate holding (19,035) 19,035 – –

(19,035) 19,035

Movement for trade receivables 143,750 162,456 – –

Other receivables

- Impairment loss on other receivable 29,768 – 29,768 –

Movement for other receivables 29,768 – 29,768 –

At 31 March

Trade receivables

Third parties 3,231,562 3,068,777 – –

Amount owing by ultimate holding company – 19,035 – –

3,231,562 3,087,812 – –

Other receivables 29,768 – 29,768 –

3,261,330 3,087,812 29,768 –

Trade receivables that are individually determined to be impaired at the reporting date relate to debtors that are in signi cant nancial dif culties and have defaulted on payments. These receivables are not secured by any collateral or credit enhancements.


117

10. FIXED DEPOSITS PLACED WITH A LICENSED BANK

The weighted average effective interest rate (“WAEIR”) as at the reporting date and the remaining maturities of the Group deposits with licensed banks are as follows:-

Group2015 2014

WAEIR (%) 3.30 3.10

Average maturities (days) 365 365

The xed deposits placed with licensed banks are pledged to a licensed bank to secure credit facilities granted to the Company and its subsidiaries as disclosed in Note 16 to the nancial statements.

11. CASH AND BANK BALANCES

The currency exposure pro les of cash and bank balances are as follows:-

Group Company2015RM

2014RM

2015RM

2014RM

Ringgit Malaysia 792,607 1,305,883 47,301 315,750

Australian Dollar 100,340 734,021 – –

United States Dollar 21,903 142,365 – –

914,850 2,182,269 47,301 315,750

118

12. SHARE CAPITAL

Group and Company2015 2014

Numberof Share

Unit RM

Numberof Share

Unit RM

Authorised:

Ordinary shares of RM1/- each 500,000,000 500,000,000 500,000,000 500,000,000

Par value reduction – (250,000,000) – –

Ordinary shares of RM0.50/- each 500,000,000 250,000,000 500,000,000 500,000,000

Created during the year 500,000,000 250,000,000 – –

1,000,000,000 500,000,000 500,000,000 500,000,000

Non-cumulative preference sharesof RM1/- each 3,000,000 3,000,000 3,000,000 3,000,000

At 31 March 1,003,000,000 503,000,000 503,000,000 503,000,000

Issued and fully paid:Ordinary shares of RM1/- each 110,643,081 110,643,081 110,643,081 110,643,081

Par value reduction – (55,321,541) – –

Ordinary shares of RM0.50/- each */ ordinary shares of RM1.00/- each 110,643,081 55,321,540 110,643,081 110,643,081

*The Company had on 29 August 2014 completed a par value reduction via cancellation of RM0.50/- of par value of every existing share of RM1.00/- each in the issued and paid up capital of the Company.


119

13. CAPITAL REDEMPTION RESERVE

The capital redemption reserve relates to the redemption of preference shares of a subsidiary.

14. FAIR VALUE RESERVE

Fair value reserve represents the cumulative fair value changes, net of tax, of available-for-sale nancial assets until they are disposed of or impaired.

15. REVALUATION RESERVE

The revaluation reserve represents the surplus arising from revaluation of land and building.

16. LOANS AND BORROWINGSGroup

2015RM

2014RM

Current (secured)Finance lease liabilitiesFloating rate bank loanRevolving creditsBankers' acceptancesBank overdrafts

2,061,303335,520

1,500,00012,034,000

4,108,481

1,520,874310,510

1,500,00016,299,000

3,670,621

20,039,304 23,301,005

Non-current (secured)Finance lease liabilitiesFloating rate bank loan

4,241,3271,146,972

4,434,3811,487,060

5,388,299 5,921,441

Total loans and borrowings 25,427,603 29,222,446

120

16. LOANS AND BORROWINGS (Continued)

(i) Finance lease liabilitiesGroup

2015RM

2014RM

Minimum lease payments- On demand and within one year- Later than one year but not later than two years- Later than two years but not later than ve years- Later than ve years

2,236,0482,091,0082,573,440

69,441

1,875,5011,472,1083,305,458

147,392

Future interest charges6,969,937(667,307)

6,800,459(845,204)

Present value of mininum lease payments 6,302,630 5,955,255

Represented by:-Current- On demand and within one year 2,061,303 1,520,874

Non-current

- Later than one year but not later than two years- Later than two years but not later than ve years- Later than ve years

1,939,6102,233,572

68,145

1,236,7403,056,125

141,516

4,241,327 4,434,381

6,302,630 5,955,255

The effective interest rate ranges from 2.36% to 8.35% (2014: 2.36% to 7.02%) perannum. Interest rates are xed at the inception of the hire purchase arrangements.

The nance lease liabilities are effectively secured on the rights of the assets underhire purchase.

(ii) Loans and borrowingsGroup

2015RM

2014RM

On demand and within one yearLater than one year but not later than two yearsLater than two years but not later than ve yearsLater than ve years

20,039,3042,291,2343,028,920

68,145

23,301,0051,563,8624,146,293

211,286

25,427,603 29,222,446


121


(ii) Loans and borrowings (Continued)

Floating rate bank loanThe effective interest rate as at the reporting date is 5.35% (2014: 5.35% to 7.60%) per annum.

Revolving creditsThe effective interest rates as the reporting date range from 5.94% to 8.85% (2014: 5.94% to 8.10%) per annum.

Bankers’ acceptancesThe bankers’ acceptances of the Group are granted on the undertaking that the Group will not pledge or execute any charges on its assets, other than those assets under nance lease obligations.

Effective interest rates as at reporting date range from 3.63% to 5.25% (2014: 3.63% to 4.98%) per annum.

Bank overdraftsThe bank overdrafts of the Group are granted on the undertaking that the Group will not pledge or execute any charges on its assets, other than those assets under hire purchase.

The effective interest rates as at the reporting date range from 6.60% to 8.35% (2014: 6.60% to 8.10%) per annum.

Security

The borrowings are secured as follows:-

(i) Joint and several guarantees by certain directors and shareholders;

(ii) Fixed and oating charge over the entire assets of the subsidiaries including present and future assets of the subsidiaries;

(iii) Lien over xed deposits together with letter of set-off;

(iv) Pledge of 78.85 million units of Iris Corporation Berhad’s shares, or other quoted shares acceptable to the Bank, by way of the Memorandum of Deposit; and

(v) Legal charge over property and machineries of the respective subsidiaries.

122


(ii) Loans and borrowings (Continued)

Covenants

The main covenants of the borrowings and term loans are as follows:-

Positive Covenants

Undertaking not to create or exit any mortgage, charge, pledge, lien, encumbrances or other security interest of any kind on its present and future assets without the prior written consent of the bank.

Negative Covenants

(i) Grant loans to directors, shareholders or related companies;

(ii) Enter into pro t sharing arrangement with other party unless such arrangement is entered into the ordinary course of business;

(iii) Change the nature of the existing business;

(iv) Incur additional indebtedness including lease obligation;

(v) Cease to exercise control over the nanced machinery and shall not lease, rent, transfer or dispose of it;

(vi) Change its ownership or permit any form of merger, reconstruction, consolidation, amalgamation or reduction in share capital;

(vii) Dispose or lease its property, plant and equipment except in the ordinary course of its business; and

(viii) Declare or pay any dividend or make any distribution of share capital.


123

17. DEFERRED TAX LIABILITIES

Group2015RM

2014RM

At 1 April 2014/1 January 2013

- Property, plant and equipment 970,575 1,652,930

- Revaluation of land and buildings 2,004,162 2,048,801

2,974,737 3,701,731

Recognised in pro t or loss (Note 24) 382,043 (726,994)

At 31 March 3,356,780 2,974,737

Representing the tax effects of:

- Property, plant and equipment 1,397,257 970,575

- Revaluation of land and buildings 1,959,523 2,004,162

3,356,780 2,974,737

18. TRADE AND OTHER PAYABLES

Group Company2015RM

2014RM

2015RM

2014RM

Current Trade payables

Third parties 5,878,675 4,686,236 – –

Other payables

Accrued operating expensesOther payablesAmount owing to ultimate holding company

1,863,4792,254,756

–

3,415,7526,177,356

1,000,000

297,098 76,870

–

301,221258,791

–

4,118,235 10,593,108 373,968 560,012

Total trade and other payables 9,996,910 15,279,344 373,968 560,012

Add: Loans and borrowings(Note 16) 25,427,603 29,222,446 – –

Total nancial liabilitiescarried at amortised cost 35,424,513 44,501,790 373,968 560,012

124

18. TRADE AND OTHER PAYABLES (Continued)

The trade and other payables normal credit term ranges from 30 to 120 (2014: 30 to 120) days.

In last nancial period, included in other payables of the Group is an amount of RM3,506,064/- owing to a payable which is unsecured, bears interest at 8% per annum and repayable upon demand.

The currency exposure pro les of trade and other payables are as follows:-

Group Company2015RM

2014RM

2015RM

2014RM

Ringgit MalaysiaEuroSingapore Dollar

9,843,755141,448

11,707

15,246,80122,38810,155

373,968––

560,012––

9,996,910 15,279,344 373,968 560,012

19. REVENUE

Group

Revenue represents the gross income from the manufacturing and trading of paper, board packaging products, specialising in offset-printed boxes and offset-laminated cartons, manufacture and sale of plastic packaging products, provision of colour separation, printed material and provision of specialised outdoor advertising media services.

Group1.4.2014

to31.3.2015

RM

1.1.2013 to

31.3.2014RM

Sales of goods 45,735,590 61,440,648

Sales of services 4,104,465 9,710,899

49,840,055 71,151,547

Company

Revenue represents management fee from services rendered, including professional and management advice, marketing, management information system and accounting services and administrative matters to the subsidiaries.

20. COST OF SALES

Cost of sales represents cost of inventories sold.


125

21. FINANCE COSTS (NET)Group

1.4.2014to

31.3.2015RM

1.1.2013 to

31.3.2014RM

Interest income 44,797 17,784

Interest expenses:

- bank overdraft- loans- other borrowings

(241,383) (94,943)

(1,505,214)

(342,145)(149,321)

(1,700,195)

(1,841,540) (2,191,661)

(1,796,743) (2,173,877)

22. LOSS BEFORE TAXATION

Loss before taxation has been arrived at:-Group Company

1.4.2014to

31.3.2015RM

1.1.2013to

31.3.2014RM

1.4.2014to

31.3.2015RM

1.1.2013to

31.3.2014RM

After charging:-Impairment loss on receivables:-- third parties 350,527 220,621 29,768 –Impairment loss on goodwill 11,489,274 2,147,030 – –

Audit fee- current year/period- (over)/under accrual

in prior year/period- non-statutory

92,000

(5,163) 36,000

96,765

26,410 40,330

33,000

(600) 36,000

33,000

12,68240,330

Depreciation of property, plant and equipment

Director remuneration- fees- other emoluments

3,743,279

119,200 454,512

5,076,347

129,058 604,337

2,075

119,200 298,272

3,583

129,058333,087

Leases rental Net fair value loss on

other investmentProperty, plant and equipment

written offRental expenses

40,604

3,476,589

–647,144

49,544

–

16,297542,274

–

–

––

–

–

––

126

22. LOSS BEFORE TAXATION (Continued)

Loss before taxation has been arrived at:- (Continued)Group Company

1.4.2014to

31.3.2015RM

1.1.2013to

31.3.2014RM

1.4.2014to

31.3.2015RM

1.1.2013to

31.3.2014RM

After charging:- (Continued)Staff costs:- EPF- SOSCO- Salaries, wages, bonuses and

allowances- Welfare and training

986,277112,871

11,399,024364,192

1,255,323146,632

15,474,303430,638

46,6951,938

269,92719,264

56,5742,464

280,95915,446

And crediting:-Dividends receivedImpairment loss on receivables

no longer requiredGain on disposal of

other investmentGain on disposal of

property, plant and equipmentRental incomeManagement fees receivedNet fair value gain on

other investmentRealised gain on foreign exchange

–

177,009

2,543,295

217,417154,216

–

–56,027

568,908

58,165

–

552,691178,716

–

4,488,05069,831

–

–

–

––

1,102,860

––

–

–

–

––

774,087

––

23. OTHER COMPREHENSIVE INCOME, NET OF TAXGroup

1.4.2014to

31.3.2015RM

1.1.2013 to

31.3.2014RM

Items that are or may be reclassi edsubsequently to pro t or loss

Fair value of available-for-sale nancial assets- (Loss)/gain arising during the year/period- Available-for-sale nancial assets

reclassi ed to pro t or loss

(25,144,609)

(1,091,365)

40,392,472

–

(26,235,974) 40,392,472


127

24. TAXATION


to31.3.2015

RM

1.1.2013to

31.3.2014RM

1.4.2014to

31.3.2015RM

1.1.2013to

31.3.2014RM

Taxation- current year/period- over accrual in prior period/year

(47,473)304,252

(610,000)11,726

––

–3,522

256,779 (598,274) – 3,522

Deferred taxation (Note 17)- current year/period- over accrual in prior period/year

(176,288)(205,755)

(234,401)961,395

––

––

(382,043) 726,994 – –

(125,264) 128,720 – 3,522

The income tax is calculated at the statutory rate of 25% of the estimated taxable pro t for the scal

year. The statutory tax rate will be reduced to 24% from the current year rate of 25% effective year of assessment 2016.

A reconciliation of income tax expense applicable to loss before taxation at the statutory income tax rate to income tax expense at the effective income tax rate of the Group and of the Company are as follows:-


to31.3.2015

RM

1.1.2013to

31.3.2014RM

1.4.2014to

31.3.2015RM

1.1.2013to

31.3.2014RM

Loss before taxation (15,881,690) (2,701,301) (780,804) (1,072,790)

Tax at applicable tax rate of 25%Tax effects arising from:- non-deductible expenses- non-taxable income- origination of deferred

tax assets not recognised- different in tax rate- crystalisation of deferred taxation- over accrual in prior year

3,970,423

(3,607,170)62,563

(675,286)(18,931)44,64098,497

675,325

(1,527,024)1,268,438

(1,267,434)(38,346)44,640

973,121

195,201

(74,115)–

(116,243)(4,843)

––

268,198

(94,970)–

(166,298)(6,930)

–3,522

Tax expense for the nancial year/period (125,264) 128,720 – 3,522

128

24. TAXATION (Continued)

The amount of temporary differences for which no deferred tax assets have been recognised are as follows:-

Group Company2015RM

2014RM

2015RM

2014RM

Deductible/(taxable)temporary difference

Unabsorbed tax lossesUnabsorbed reinvestment

allowances

1,896,2731,939,156

11,652,453

(13,689)1,035,430

11,652,453

27,0801,487,321

–

25,0051,005,051

–

15,487,882 12,674,194 1,514,401 1,030,056

Potential deferred tax assets not recognised at 24% 3,717,092 3,041,806 363,456 247,213

25. LOSS PER ORDINARY SHARE

(a) Basic loss per ordinary share

Basic loss per ordinary share is calculated by dividing the loss for the nancial year attributable to the owners of the Company by the weighted average number of ordinary shares in issued during the nancial year.

Group2015RM

2014RM

Loss attributable to owners of the Company (16,006,954) (2,572,581)

Weighted average number of ordinary shares 110,643,081 110,643,081

Basic loss per ordinary share (sen) (14.47) (2.33)

(b) Diluted loss per ordinary share

For diluted loss per ordinary share calculation, the weighted average number of ordinary shares in issued is adjusted to assume conversion of all potential ordinary shares.

The Group has no potential dilutive ordinary shares. As such, there is no dilutive effect on the loss per share of the Group.


129

26. CAPITAL COMMITMENT

Group2015RM

2014RM

Capital expenditure commitmentApproved but not contracted for- plant and equipment 1,918,088 1,718,598

27. FINANCIAL GUARANTEE

2015RM

2014RM

GroupFinancial guarantee to creditors of a

subsidiary 181,400 138,150

CompanyFinancial guarantee to licenced banks for

credit facilities granted to its subsidiaries 20,833,267 22,277,581

28. SIGNIFICANT RELATED PARTY TRANSACTIONS

(i) Related parties

Related parties are parties considered to be related to the Group if the Group or the Company has the ability to control the other party or exercise signi cant in uence over the other party in making nancial and operating decisions, or vice versa, or where the Group or the Company and the party are subject to common control or common signi cant in uence. Related parties may be individuals or other entities.

Related parties also include key management personnel de ned as those persons having authority and responsibility for planning, directing and controlling the activities of the Group either directly or indirectly. The key management personnel include all the directors of the Group, and certain members of senior management of the Group.

130

28. SIGNIFICANT RELATED PARTY TRANSACTIONS (Continued)

(ii) Signi cant related party transactions

The Group and the Company had the following transactions with related parties during the nancial year:-


to31.3.2015

RM

1.1.2013to

31.3.2014RM

1.4.2014to

31.3.2015RM

1.1.2013to

31.3.2014RM

Transactions with subsidiariesManagement fees received/receivable

from subsidiaries- Fairpoint Plastic Industries Sdn. Bhd.- Imagescan Creative Sdn. Bhd.- Versatile Paper Boxes Sdn. Bhd.

–––

–––

411,48792,275

599,098

300,22696,411

377,450

Purchases from subsidiaries- Imagescan Creative Sdn. Bhd. – – 5,384 1,700

Transactions with companies which certain directors have interests

Sales-Iris Corporation Berhad 3,712 397,915 – –

Transactions with directorsRental of premises paid to a former

director- Chow Pak LimDisposal of motor vehicle to a

former director- Leom Chit Dein @ Lim Jit Teng

14,450

1

16,150

–

–

–

–

–

(iii) The remuneration of directors and other members of Key Management of the Group and the Company during the nancial year were as follows:-


to31.3.2015

RM

1.1.2013to

31.3.2014RM

1.4.2014to

31.3.2015RM

1.1.2013to

31.3.2014RM

Directors' feeOther emoluments

119,200454,512

129,058604,337

119,200298,272

129,058333,087

573,712 733,395 417,472 462,145


131

28. SIGNIFICANT RELATED PARTY TRANSACTIONS (Continued)

(iv) The numbers of directors of the Group whose total remuneration during the nancial year/period fall within the following bands are as follows:-

Group Company2015 2014 2015 2014

Executive directorsRM50,000 and belowRM50,001 to RM100,000RM100,001 to RM150,000RM150,001 to RM200,000RM250,001 to RM350,000

1121–

–12–1

212––

–12––

Non-executive directorsRM50,000 and below 6 4 6 –

29. SEGMENTAL REPORTING

Business segments

The Group’s operating businesses are classi ed according to the nature of activities as follows:

Paper products : Manufacturing and trading of paper board packaging products, specialising in offset-printed boxes and offset-laminated cartons.

Plastic products : Manufacturing and sale of plastic packaging products.

Colour separation : Provision of colour separation and lithography services and printed and printing materials.

Others : Investment holding and provision of specialised outdoor advertising media services.

Segment revenue, expenses and results include transfer between segments. These transfers are eliminated on consolidation.

132

29.

SEG

MEN

TAL

REP

OR

TIN

G (C

onti

nued

)

Pap

erpr

oduc

tsR

M

Pla

stic

prod

ucts

RM

Col

our

sepa

rati

onpr

oduc

ts a

ndpr

inti

ngR

MO

ther

sR

MEl

imin

atio

nR

MTo

tal

RM

Gro

up1.

4.20

14 to

31.

3.20

15R

EVEN

UE

Exte

rnal

cus

tom

ers

Inte

r-se

gmen

t26

,992

,529

239,

213

18,7

48,4

452,

025

4,09

9,08

15,

384

–1,

102,

860

–(1

,349

,482

) A

49,8

40,0

55–

Con

solid

ated

Tot

al R

even

ue27

,231

,742

18,7

50,4

704,

104,

465

1,10

2,86

0(1

,349

,482

)49

,840

,055

RES

ULT

SR

epor

tabl

e se

gmen

t pro

t/(lo

ss)

Inte

rest

inco

me

Inte

rest

exp

ense

sIm

pair

men

t los

s on

goo

dwill

Dep

reci

atio

n

14,1

74,5

9938

,954

(1,5

24,1

19)

(11,

489,

274)

(1,7

17,5

53)

(409

,283

)1,

812

(302

,009

)–

(1,9

06,6

57)

(347

,443

)4,

031

(14,

209)

–(1

16,9

94)

(785

,225

)– – –

(2,0

75)

(11,

486,

245)

– – – –

B1,

146,

403

44,7

97(1

,840

,337

)(1

1,48

9,27

4)(3

,743

,279

)

Loss

bef

ore

taxa

tion

Taxa

tion

(517

,393

)(1

89,3

40)

(2,6

16,1

37)

11,8

46(4

74,6

15)

52,2

30(7

87,3

00)

–(1

1,48

6,24

5)–

(15,

881,

690)

(125

,264

)

Loss

for

the

nan

cial

yea

r(7

06,7

33)

(2,6

04,2

91)

(422

,385

)(7

87,3

00)

(11,

486,

245)

(16,

006,

954)

OTH

ER I

NFO

RM

ATIO

N

Segm

ent a

sset

s70

,869

,438

21,1

56,4

883,

441,

726

69,3

34–

95,5

36,9

86

Tota

l ass

ets

71,1

79,6

7521

,181

,278

3,48

0,39

269

,334

–95

,910

,679

Segm

ent l

iabi

litie

s22

,584

,846

12,1

64,2

8029

6,47

237

8,91

5–

35,4

24,5

13

Tota

l lia

bilit

ies

25,6

21,7

7512

,484

,131

296,

472

378,

915

–38

,781

,293

Cap

ital e

xpen

ditu

re2,

308,

811

2,37

2,15

716

,058

2,48

3–

4,69

9,50

9

Non

cas

h ex

pens

es o

ther

than

de

prec

iatio

n an

d am

ortis

atio

n11

,726

,627

76,5

149,

921

29,7

68–

11,8

42,8

30 C


133

29.

SEG

MEN

TAL

REP

OR

TIN

G (C

onti

nued

)

Pap

erpr

oduc

tsR

M

Pla

stic

prod

ucts

RM

Col

our

sepa

rati

onpr

oduc

ts a

ndpr

inti

ngR

MO

ther

sR

MEl

imin

atio

nR

MTo

tal

RM

Gro

up1.

1.20

13 to

31.

3.20

14R

EVEN

UE

Exte

rnal

cus

tom

ers

Inte

r-se

gmen

t34

,152

,546 53

927

,288

,102

5,10

49,

710,

899

12,6

94–

774,

087

–(7

92,4

24)

A71

,151

,547 –

Con

solid

ated

Tot

al R

even

ue34

,153

,085

27,2

93,2

069,

723,

593

774,

087

(792

,424

)71

,151

,547

RES

ULT

SR

epor

tabl

e se

gmen

t pro

t/(lo

ss)

Inte

rest

inco

me

Inte

rest

exp

ense

sIm

pair

men

t los

s on

goo

dwill

Dep

reci

atio

n an

d am

ortis

atio

n

9,62

3,54

611

,798

(1,6

96,2

74)

–(2

,410

,731

)

(1,3

78,9

28)

3,17

1(4

32,8

71)

(2,1

47,0

30)

(2,4

47,6

15)

1,67

0,13

84,

548

(64,

249) –

(214

,418

)

(1,0

79,0

80)

– – –(3

,583

)

(2,1

39,7

23)

(1,7

34)

1,73

4

– –

B6,

695,

953

17,7

83(2

,191

,660

)(2

,147

,030

)(5

,076

,347

)

(Los

s)/p

ro t

befo

re ta

xatio

nTa

xatio

n5,

528,

339

(417

,199

)(6

,403

,273

)88

0,52

91,

396,

019

(338

,132

)(1

,082

,663

)3,

522

(2,1

39,7

23)

–(2

,701

,301

)12

8,72

0

(Los

s)/p

ro t

for

the

nan

cial

per

iod

5,11

1,14

0(5

,522

,744

)1,

057,

887

(1,0

79,1

41)

(2,1

39,7

23)

(2,5

72,5

81)

OTH

ER I

NFO

RM

ATIO

N

Segm

ent a

sset

s11

7,30

1,78

622

,691

,679

6,96

4,17

437

0,59

6–

147,

328,

235

Tota

l ass

ets

117,

301,

786

22,7

16,4

696,

964,

174

371,

604

–14

7,35

4,03

3

Segm

ent l

iabi

litie

s30

,418

,974

11,5

92,4

371,

925,

484

564,

895

–44

,501

,790

Tota

l lia

bilit

ies

33,2

67,6

6811

,924

,134

2,22

5,02

256

4,89

5–

47,9

81,7

19

Cap

ital e

xpen

ditu

re6,

181,

352

1,74

1,84

929

,352

––

7,95

2,55

3

Non

cas

h ex

pens

es o

ther

than

de

prec

iatio

n an

d am

ortis

atio

n10

9,35

92,

229,

360

51,6

69–

–2,

390,

388

C

134

29. SEGMENTAL REPORTING (Continued)

A Inter-segment revenues are eliminated on consolidation.

B The following items are added in/(deduct from) segment results to arrive at reportable seg-ment pro t/(loss):-

1.4.2014to

31.3.2015RM

1.1.2013to

31.3.2014RM

Impairment on amount owing by inter-segments 3,029 7,307

Impairment on goodwill (11,489,274) (2,147,030)

(11,486,245) (2,139,723)

C Other non-cash expenditure consist of:-

1.4.2014to

31.3.2015RM

1.1.2013to

31.3.2014RM

Impairment loss on receivables

-trade and other receivables 350,527 220,622

-inter-company balance 3,029 7,305

Property, plant and equipment written off – 15,431

Impairment of goodwill 11,489,274 2,147,030

11,842,830 2,390,388


135

30. FAIR VALUE OF FINANCIAL INSTRUMENTS

(a) Fair value of Financial Instruments

The following are classes of nancial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value:-

Note

Trade and other receivables 9

Trade and other payables 18

Cash and bank balances 11

Loans and borrowings 16

The carrying amounts of these nancial assets and liabilities are reasonable approximation of fair values, either due to their short term nature or that they are oating rate instruments that arere-priced to market interest rates on or near the reporting date.

The carrying amounts of the current portion of loans and borrowings are reasonable approximations of fair values due to the insigni cant impact of discounting.

The fair values of current loans and borrowings are estimated by discounting expected future cash ows at market incremental lending rate for similar types of lending, borrowing or leasing arrangements at the reporting date.

The following summarises the methods used in determining the fair values of the nancial instruments:-

(i) The nancial assets and nancial liabilities maturing within the next 12 months approximated their fair values due to the relatively short-term maturity of the nancial instruments.

(ii) The fair values of the hire purchase payables and term loans are determined by discounting the relevant cash ows using current interest rates for similar instruments as at the end of the reporting year.

136

30. FAIR VALUE OF FINANCIAL INSTRUMENTS (Continued)

(b) Categories of Financial Instruments

The table below provides an analysis of nancial instruments categorised as follows:-

(i) Financial assets at fair value through pro t or loss (“FATPL”) (ii) Loans and receivables (“L&R”); (iii) Available-for-sale nancial asset (“AFS”); (iv) Financial liabilities measured at amortised cost (“FL”).

Carrying L&R/Amount FL FATPL AFS

RM RM RM RM

Group 2015Financial assets

Other investments 31,751,419 – – 31,751,419

Trade and other receivables 13,239,031 13,239,031 – –

Cash and bank balances 914,850 914,850 – –

45,905,300 14,153,881 – 31,751,419

Financial liabilities

Loans and borrowings 25,427,603 25,427,603 – –

Trade and other payables 9,996,910 9,996,910 – –

35,424,513 35,424,513 – –

2014Financial assets

Other investments 66,372,617 – 6,637,254 59,735,363


Cash and bank balances 2,182,269 2,182,269 – –

85,308,669 18,936,052 6,637,254 59,735,363


Loans and borrowings 29,222,446 29,222,446 – –

Trade and other payables 15,279,344 15,279,344 – –

44,501,790 44,501,790 – –


137


(b) Categories of Financial Instruments (Continued)

Carrying L&R/Amount FL FATPL AFS

RM RM RM RM

Company2015Financial assets



3,109,394 3,109,394 – –


Trade and other payables 373,968 373,968 – –

2014Financial assets



4,073,396 4,073,396 – –

Financial liabilitiesTrade and other payables 560,012 560,012 – –

(c) Fair Value Hierarchy

The Group and the Company classify fair value measurements using a fair value hierarchy that re ects the signi cance of the inputs used in making the measurements. 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 asset or liability that are not based on observable market data

(unobservable inputs).

138


(c) Fair Value Hierarchy (Continued)

The table below analyses the Group’s nancial instruments carried at fair value shown in the statements of nancial position:-

Level 1 Level 2 Level 3 TotalRM RM RM RM

Assets measured at fair value

Other investments

- Available-for-sale

nancial assets 31,751,419 – – 31,751,419

The fair value of the Group’s nancial instruments is classi ed as Level 1.

The fair value of nancial instruments traded in active market is based on quoted market prices at the reporting date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis. The quoted market price used for nancial assets held by the group is the current bid price.

31. FINANCIAL INSTRUMENTS

(a) Financial Risk Management and Objectives

The Group is exposed to credit, liquidity, foreign currency and interest rate risks that arise in the normal course of business. The Group’s overall nancial risk management objectives are to ensure that the Group creates and optimises value for its shareholders and to minimise any potential adverse effects on the nancial performance and position based on its prevailing capability and capacity. The general risk management philosophy, policies, and the overall business strategies are reviewed annually by the Board of Directors and quarterly review are undertaken to ensure that the Group’s policy guidelines adhered to.

(i) Credit risk

Credit risk is the risk of loss that may arise on outstanding nancial instruments should a counterparty default on its obligations. The Group’s and the Company’s exposure to credit risk arises primarily from trade and other receivables. For other nancial 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.


139

31. FINANCIAL INSTRUMENTS (Continued)

(a) Financial Risk Management and Objectives (Continued)

(i) Credit risk (Continued)

The Group and the Company does not hold any collateral as security and other credit enhancements for the above nancial assets.

The management has a credit policy in place to monitor and minimise the exposure of default. The Group trades only with recognised and credit worthy third parties. Trade receivables are monitored on an ongoing basis.

As at reporting date, there were no signi cant concentrations of credit risk in the Group The maximum exposure to credit risk for the Group is represented by the carrying amount of each nancial instrument.

Financial assets that are neither past due nor impaired Information regarding trade and other receivables that are neither past due nor impaired

is disclosed in Note 9 to the nancial statements. Deposits with banks that are neither past due nor impaired are placed with reputable nancial institutions with no history of default.

Financial assets that are either past due or impaired Information regarding nancial assets that are past due or impaired is disclosed in Note

9 to the nancial statements.

(ii) Liquidity Risk

Liquidity risk is the risk that the Group or the Company will not be able to meet its nancial obligations as they fall due. The Group’s exposure to liquidity risk arises

principally from its various payables, loans and borrowings.

The Group maintains a level of cash and cash equivalents and bank facilities deemed adequate by the management to ensure, as far as possible, that it will have suf cient liquidity to meet its liabilities when they fall due.

Maturity analysis The table below summarises the maturity pro le of the Group’s and the Company’s

liabilities at the reporting date based on contractual undiscounted repayment obligations.

140



(ii) Liquidity Risk (Continued)

On demandor withinone year

RM

One to ve years

RM

Over ve yearsRM

TotalRM

Group2015Financial liabilities

Trade and other payables 9,996,910 – – 9,996,910

Loans and borrowings 20,039,304 5,320,154 68,145 25,427,603

30,036,214 5,320,154 68,145 35,424,513

2014Financial liabilities

Trade and other payables 15,279,344 – – 15,279,344

Loans and borrowings 23,301,005 5,710,155 211,286 29,222,446

38,580,349 5,710,155 211,286 44,501,790

Company2015Financial liabilities

Trade and other payables 373,968 – – 373,968

373,968 – – 373,968

2014Financial liabilities

Trade and other payables 560,012 – – 560,012

560,012 – – 560,012

(iii) Foreign Currency Risk

Foreign currency risk is the risk that the fair value or future cash ows of a nancial instrument will uctuate because of changes in foreign exchange rates.

The Group has transactional currency exposures arising from sales, purchases, and cash and bank balances that are denominated in a currency other than the respective functional currency of the Group, primarily Ringgit Malaysia (“RM”). The foreign currency in which these transactions are denominated is mainly United States Dollar (“USD”), Singapore Dollar (“SGD”), Great Britain Pound (“GBP”), Australian Dollar (“AUD”), Euro (“EURO”), Indonesian Rupiah (“IDR”) and Hong Kong Dollar (“HKD”).


141



(iii) Foreign Currency Risk (Continued)

The Group ensures that the net exposure to this risk is kept to an acceptable level by buying or selling foreign currencies at spot rates where necessary to address short-term imbalances. Management does not enter into currency hedging transactions since it considers that the cost of such instruments outweigh the potential risk of exchange rate uctuations.

Sensitivity analysis for foreign currency risk

A 10% strengthening/weakening of the RM against the respective foreign currencies as at the end of the reporting year would have increased/(decreased) the pro t after taxation by the amounts shown below. This assumes that all other variances remain constant.

Group2015

Pro t/(loss)and equity

RM

USD

SGD

AUD

GBP

EURO

IDR

strengthen - 10%

strengthen - 10%

strengthen - 10%

strengthen - 10%

strengthen - 10%

strengthen - 10%

65,966

5,999

82,679

25,828

(11,931)

4,201

2014

USD

SGD

AUD

GBP

EURO

HKD

strengthen - 10%

strengthen - 10%

strengthen - 10%

strengthen - 10%

strengthen - 10%

strengthen - 10%

151,151

(1,511)

98,969

63,561

(2,239)

3,457

(iv) Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash ows of the Group’s and the Company’s nancial instruments will uctuate because of changes in market interest rates.

The Group’s exposure to interest rate risk arises primarily from their loans and borrowings.

142



(iv) Interest Rate Risk (Continued)

The Group manage the net exposure to interest rate risks by maintaining suf cient lines of credit to obtain acceptable lending costs and by monitoring the exposure to such risks on an ongoing basis. Management does not enter into interest rate hedging transactions since it considers that the cost of such instruments outweigh the potential risk of interest rate uctuation.

The information on maturity dates and effective interest rate of nancial assets and liabilities are disclosed in their respective notes.

Sensitivity analysis for interest rate risk

Fair value sensitivity analysis for xed rate instruments

The Group do not account for any xed rate nancial assets at fair value through pro t or loss and equity. Therefore, a change in interest rates at the reporting date would not affect pro t or loss and equity.

Cash ows sensitivity analysis for variable rate instruments

A change of 100 basis points in interest rates at the reporting date would have increased/(decreased) pro t or loss and equity by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant.

Pro t or loss and Equity2015 2014

100bp 100bp 100bp 100bp Increase Decrease Increase Decrease

RM RM RM RM

Group

Variable rate instruments (14,825) 14,825 (17,976) 17,976


143

32. CAPITAL MANAGEMENT

The primary objective of the Group’s capital management is to ensure that it maintains a strong capital base and safeguard the Group’s ability to continue as a going concern, so as to maintain investor, creditor and market con dence and to sustain future development of the business. The directors monitor and determine to maintain an optimal debt-to-equity ratio that complies with debt covenants and regulatory requirements.

During the nancial year, the Group’s strategy, which was unchanged from year 2014, was to maintain the reasonable debt-to-equity ratio as follows:-

Group2015 2014RM RM

Total liabilities excluded deferred tax liabilities 35,424,513 45,006,982

Equity attributable to owners of the Group 57,129,386 99,372,314

Debt-to-equity ratio 0.62 0.45

There were no changes in the Group’s approach to capital management during the nancial year. The Company and the subsidiaries are not subject to any externally imposed capital requirements.

33. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

a) Changes in immediate and ultimate holding company

On 18 September 2014, Iris Healthcare Sdn. Bhd. disposed Versatile Creative Berhad’s (“VCB”) shares of 27,660,770 units, representing 25% interest of the Group and of the Company. Accordingly, Iris Healthcare Sdn. Bhd. (“IHSB”) and Iris Corporation Berhad (“ICB”) (immediate holding of IHSB) ceased to be immediate and ultimate holding company of the Group and of the Company.

b) Disposal of investment in Iris Corporation Berhad’s shares (“ICB shares”)

During the nancial year, the Group had disposed off 24 million units of ICB shares which amounted to carrying amount of RM6,000,000/-, to the open market of Bursa Malaysia Securities for a total cash consideration of RM7,451,930/-.

144

33. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR (Continued)

c) Capital reduction exercise

On 30 April 2014, the directors of the Company had proposed the following:-

(i) Reduction of the issued and paid-up share capital of the Company pursuant to Section 64 of the Companies Act, 1965 in Malaysia, involving the cancellation of RM0.50 of the par value of each ordinary share of RM1.00 each in the Company; and

(ii) Amendments to the Memorandum and Articles of Association of the Company to facilitate the Proposed Par Value Reduction.

On 29 August 2014, the Company had lodged the sealed order of the cancellation granted by the High Court of Malaya in Kuala Lumpur with Companies Commission of Malaysia. With the completion of par value reduction on the event date, the par value of each existing ordinary share of the Company was reduced from RM1/- to RM0.50/- each as at that date.

The reduction of the issued and paid up share capital of the Company amounting to RM55 million arising from the par value reduction was credited to the accumulated losses.

34. SIGNIFICANT EVENTS AFTER THE FINANCIAL YEAR

a) Proposed corporate exercise

On 24 February 2015, the directors of the Company had proposed to undertake the proposed private placement of up to 11,064,308 new ordinary shares of RM0.50 each in the Company (“placement shares”), representing up to ten percent (10%) of the issued and paid-up share capital of the Company at RM0.72/-.

On 20 April 2015, Bursa Malaysia Securities Berhad approved the listing and quotation for up to 11,064,308 new shares to be issued pursuant to the proposed private placement on the Main Market of Bursa Securities.

On 30th April 2015, the Price Fixing Date xed the issue price for 5,035,900 Placement Shares, representing approximately 4.55% of the issued and paid-up share capital of VCB as at 30th April 2015 of 110,643,081 VCB Shares, being the rst (1st) tranche of the Private Placement at RM0.72 per Placement Share (“Issue Price”), subsequently to the above, the Placement shares was quoted listing on 13 May 2015.

On 15 May 2015, the Price Fixing Date xed the issue price for 1,659,700 Placement Shares, representing approximately 1.43% of the issued and paid-up share capital of VCB as at 15 May 2015 of 115,678,981 VCB Shares, being the second (2nd) tranche of the Private Placement at RM0.72 per Placement Share (“Issue Price”), subsequently to the above, the Placement shares was quoted listing on 22 May 2015.


145

34 SIGNIFICANT EVENTS AFTER THE FINANCIAL YEAR (Continued)

b) Proposed disposal of factory by Fairpoint Plastic Industries Sdn. Bhd. (“FPI”)

On 10 July 2015, the Company wishes to announce that FPI, a wholly-owned subsidiary of the Company has entered into a Sale and Purchase Agreement (“SPA”) with Era Prestij Development Sdn. Bhd. (“Purchaser”) for the disposal of a two single storey detached factory each with an annexed double storey of ce buildings and ancillary buildings erected on a piece of freehold land held under individual title HS(D) 140012 at Lot No. PT 71174, Pekan Kajang, District of Ulu Langat and State of Selangor Darul Ehsan (“Property”) measuring approximately 5,646 square metres for a total consideration of RM12 million only subject to 6% GST (“Disposal Consideration”), to be paid in the manner stated in the SPA and subject to all other terms and conditions as stipulated in the SPA and/or such terms and conditions as shall be mutually agreed upon.

146

SUPPLEMENTARY INFORMATION ON THE BREAKDOWN OF REALISED AND UNREALISED LOSSES

On 25 March 2010, Bursa Malaysia Securities Berhad (“Bursa Malaysia”) issued a directive to all listed issuers pursuant to Paragraphs 2.06 and 2.23 of Bursa Malaysia Main Market Listing Requirements. The directive requires all listed issuers to disclose the breakdown of the retained pro ts or accumulated losses as at the end of the reporting year, into realised and unrealised pro ts or losses.

On 20 December 2010, Bursa Malaysia further issued guidance on the disclosure and the format required.

Pursuant to the directive, the amounts of realised and unrealised pro ts or losses included in the accumulated losses of the Group and the Company as at 31 March 2015 and 31 March 2014 are as follows:-

Group Company2015 2014 2015 2014RM RM RM RM

Accumulated losses of the Companyand its subsidiaries:-

- realised (22,431,485) (62,363,155) (30,792,933) (85,333,670)

- unrealised (3,356,780) (2,974,737) – –

Total group accumulated losses asper statements of nancial position (25,788,265) (65,337,892) (30,792,933) (85,333,670)

The determination of realised and unrealised pro ts is based on Guidance of Special Matter No. 1, Determination of Realised and Unrealised Pro ts and Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants on 20 December 2010.

The disclosure of realised and unrealised pro ts or losses above is solely for complying with the disclosure requirements stipulated in the directive of Bursa Malaysia and should not be applied for any other purposes.


147

STATEMENT BY DIRECTORS

We, DATO’ LEE KWEE HIANG and DATO’ EOW KWAN HOONG, being two of the directors of Versatile Creative Berhad, do hereby state that in the opinion of the directors, the accompanying nancial statements set out on pages 68 to 145, are drawn up so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 March 2015 and of the results and cash ows of the Group and of the Company for the nancial year ended on that date in accordance with the Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.

The supplementary information set out on page 146 has been prepared in accordance with the Guidance of Special Matter No. 1, Determination of Realised and Unrealised Pro ts or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants.

On behalf of the Board,

DATO’ LEE KWEE HIANGDirector

DATO’ EOW KWAN HOONGDirector




148

STATUTORY DECLARATION

I, DATO’ EOW KWAN HOONG, being the director primarily responsible for the nancial management of Versatile Creative Berhad, do solemnly and sincerely declare that to the best of my knowledge and belief, the nancial statements set out on pages 68 to 145, and the supplementary information set out on page 146 are 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, l960.

DATO’ EOW KWAN HOONG

Subscribed and solemnly declared by the above named at Kuala Lumpur in the Federal Territory on 27 July 2015.

Before me,

LEONG SEE KEONGW494

Commissioner for Oaths




149

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OFVERSATILE CREATIVE BERHAD

(Incorporated in Malaysia)

Report on the Financial Statements

We have audited the nancial statements of Versatile Creative Berhad, which comprise the statements of nancial position as at 31 March 2015 of the Group and of the Company, and the statements of pro t or

loss and other comprehensive income, statements of changes in equity and statements of cash ows of the Group and of the Company for the nancial year then ended, and a summary of signi cant accounting policies and other explanatory information, as set out on pages 68 to 145.

Directors’ Responsibility for the Financial Statements

The directors of the Company are responsible for the preparation of nancial statements so as to give a true and fair view in accordance with the 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 controls as the directors determine are necessary to enable the preparation of nancial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these nancial 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 nancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the nancial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the nancial statements, whether due to fraud or error. In making those risk assessments, we consider internal controls relevant to the Company’s preparation of nancial 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 Company’s internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the nancial statements.

We believe that the audit evidence we have obtained is suf cient and appropriate to provide a basis for our audit opinion.



150

Opinion

In our opinion, the nancial statements give a true and fair view of the nancial position of the Group and of the Company as at 31 March 2015 and of their nancial performance and cash ows for the nancial year then ended in accordance with the 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 Companies Act, 1965 in Malaysia 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 Companies Act, 1965 in Malaysia.

(b) We are satis ed that the nancial statements of the subsidiaries that have been consolidated with the Company’s nancial statements are in form and content appropriate and proper for the purposes of the preparation of the nancial statements of the Group and we have received satisfactory information and explanations required by us for those purposes.

(c) Our audit reports on the nancial statements of the subsidiaries did not contain any quali cation or any adverse comment made under Section 174(3) of the Companies Act, 1965 in Malaysia.

Other Reporting Responsibilities

The supplementary information set out in page 146 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the nancial statements. The directors are responsible for the preparation of the supplementary information in accordance with the Guidance on Special Matter No.1, Determination of Realised and Unrealised Pro ts 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.




151

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 contents of this report.

Baker Tilly Monteiro Heng Ong Teng YanNo. AF 0117 No.3076/07/17(J)Chartered Accountants Chartered Accountant


LIST OFPROPERTIES

153

Location

Lot 30745,Jalan PandanIndah, PandanIndah 55100Kuala Lumpur

No. 5 & 12, Jalan Teras 4, Kawasan Industrial Teras, Tmn Industrial Selesa Jaya, 43300 Balakong Selangor

Descriptionof Land

Land with a single storey

detached factory with an annexed

double storey of ce building

Land with 2 single storey

detached factories each with

an annexed double storey of ce building

Land Area(sq.ft.)

130,680

60,946

Built-upArea

(sq.ft.)

94,961

25,265&

28,750

ExistingUse

Factory, warehouse and of ce

Factory, warehouse and of ce

Tenure/LeasePeriod

Term of 60 years

expiring on 26 June

2063

Freehold

Net Carrying

Value(RM’000)

18,178

8,059

Age of Building (years)

21

18-19

Date ofAcquisition

09 Dec 1993

31 Dec 1995&

19 Aug 2003


AND ITS SUBSIDIARIESLIST OF PROPERTIES

154


155

ANALYSIS OFSHAREHOLDINGS

157

ANALYSIS OF SHAREHOLDINGS

As at 29 July 2015

Ordinary Shares

Authorised share capital - 1,000,000,000 ordinary shares of RM0.50 eachPaid up capital - 117,338,681 ordinary shares of RM0.50 eachClass of shares - Ordinary share of RM0.50 eachVoting rights - One vote per ordinary share

Distribution of Shareholdings

Substantial Shareholders as per Register of Substantial Shareholders

8,464

631

78

22

3

9,198

43,810,045

27,660,770

21,991,321

-

-

92.019

6.860

0.848

0.239

0.032

100.000

37.336

23.573

18.742

-

-

1,497,236

1,894,317

1,710,650

19,259,142

92,977,336

117,338,681

-

-

1,100,000(a)

43,810,045(b)

43,810,045(c)

1.275

1.614

1.457

16.413

79.238

100.000

-

-

0.938

37.336

37.336

Size of shareholding:

Less than 1,000

1,001 to 10,000

10,001 to 100,000

100,001 to less than 5% of issued shares

5% and above of issued shares

Total

1. Iris Healthcare Sdn Bhd (“IHSB”)

2. Rica Holdings (M) Sdn Bhd

3. Dato’ Lee Kwee Hiang

4. IRIS Corporation Berhad (“ICB”)

5. Felda Investment Corporation Berhad

Name

No. ofShareholders

No. ofShares Held

% ofShareholders

%

Total Holdings

No. ofShares Held

% ofHoldings

%

IndirectDirect

158


Substantial shareholders as per Register of substantial shareholders (Continued)

Notes:(a) Deemed interested by virtue of his spouse Law Siew Lan’s interest in the Company pursuant to Section 134(12)(c) of the Companies Act, 1965 (Act)(b) Deemed interested by virtue of its interest in ICB pursuant to Section 6A of the Act

(c) Deemed interested by virtue of its interest in Felda Investment Corporation Berhad pursuant to Section 6A of the Act (d) Deemed interested by virtue of its interest in Federal Land Development Authority pursuant to Section 6A of the Act (e) Deemed interested by virtue of its interest in Rica Holdings (M) Sdn Bhd pursuant to Section 6A of the Act

Directors’ Shareholdings

21,991,321

-

-

-

-

-

-

21,991,321

18.742

-

-

-

-

-

-

18.742

1,100,000

27,660,770

27,660,770

-

-

-

-

56,421,540

0.938

23.573

23.573

-

-

-

-

48.084

1. Dato’ Lee Kwee Hiang

2. Wan Tak Chuen

3. Dato’ Chew Weng Kit

4. Syed Abdullah Bin Syed Abd Kadir

5. Dato’ Eow Kwan Hoong

6. Dato’ Mohamad Suparadi bin Md Noor

7. Chan Feoi Chun

Total

NameNo. of

Shares Held% No. of

Shares Held%

Deemed InterestDirect Interest

-

-

-

93,462,136

-

-

-

79.651

43,810,045(d)

27,660,770(e)

27,660,770(e)

187,851,675

37.336

23.573

23.573

160.092

6. Federal Land Development Authority

7. Wan Tak Chuen

8. Dato’ Chew Weng Kit

Total

NameNo. of

Shares Held% No. of

Shares Held%


159


30 Largest Shareholders as at 29 July 2015

43,810,045

27,660,770

21,506,521

4,140,100

3,309,200

1,659,700

1,210,000

1,106,500

1,106,500

1,106,500

1,100,000

749,500

610,000

553,200

553,200

407,200

333,537

263,000

236,400

37.336

23.573

18.328

3.528

2.820

1.414

1.031

0.942

0.942

0.942

0.937

0.638

0.519

0.471

0.471

0.347

0.284

0.224

0.201

1. MIDF AMANAH INVESTMENT NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR IRIS HEALTHCARE SDN BHD

2. MIDF AMANAH INVESTMENT NOMINEES (TEMPATAN) SDN BHD AMANAH INTERNATIONAL FINANCE SDN BHD FOR RICA HOLDINGS (M) SDN BHD

3. MIDF AMANAH INVESTMENT NOMINEES (TEMPATAN) SDN BHD AMANAH INTERNATIONAL FINANCE SDN BHD FOR DATO’ LEE KWEE HIANG

4. RHB NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR SHANMUGAVEL A/L S.LINGAM

5. TENGKU AB MALEK BIN TENGKU MOHAMED

6. CHONG SAM MOOI

7. CHANG WEI LING

8. LAI KWONG CHOY

9. PAYSYS (M) SDN BHD

10. SOH CHAI HWA

11. LAW SIEW LAN

12. RHB NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR LEE SOY HIANG

13. CHONG PAIK NGAN

14. MAYBANK NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR INDRAN A/L R. CANDIAH

15. OOI AH NGOH

16. FUNG TOH GUNN

17. CIMB GROUP NOMINEES (TEMPATAN) SDN BHD CIMB BANK BERHAD

18. DATO’ LEE KWEE HIANG

19. AMSEC NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR ULTRA PROGRESSIVE SDN BHD

Total Holdings

% ofHoldings

160

20. AMSEC NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT - AMBANK (M) BERHAD FOR DATO’ LEE KWEE HIANG (SMART)

21. DATUK TAN SAY JIM

22. WONG WAI KUAN

23. PANG CHEE KEONG

24. SYUHAIDA BINTI ISMAIL

25. CHRISTINE CHAN KOK YOONG

26. MARTINE TIEU

27. CHE S’E HONG

28. LEW SOON KIAK

29. WONG SIN KIEW

30. NG TENG PUAY

Total


221,800

146,000

116,005

115,600

115,000

100,200

64,000

50,000

50,000

46,400

45,000

112,491,878

0.189

0.124

0.098

0.098

0.098

0.085

0.054

0.042

0.042

0.039

0.038

95.869

Total Holdings

% ofHoldings


161

NOTICE OF ANNUAL

GENERALMEETING

162

Ordinary Business

1. To receive the Audited Financial Statements for the nancial year ended 31 March 2015 together with the Reports of the Directors and Auditors thereon.

2. To re-elect Dato’ Mohamad Suparadi Bin Md Noor who retires pursuant to Article 73 of the Company’s Articles of Association.

3. To re-elect Syed Abdullah Bin Syed Abd Kadir who retires pursuant to Article 73 of the Company’s Articles of Association.

4. To re-elect Chan Feoi Chun who retires pursuant to Article 73 of the Company’s Articles of Association.

5. To re-elect Dato’ Lee Kwee Hiang who retires pursuant to Article 78 of the Company’s Articles of Association.

6. To re-elect Dato’ Chew Weng Kit who retires pursuant to Article 78 of the Company’s Articles of Association.

7. To re-elect Wan Tak Chuen who retires pursuant to Article 78 of the Company’s Articles of Association.

8. To approve the payment of Directors’ fees of RM119,200 for the nancial year ended 31 March 2015.

9. To re-appoint Messrs Baker Tilly Monteiro Heng as Auditors of the Company and to authorise the Directors to x their remuneration.

(Please refer to Explanatory

Note 1)

[Resolution 1](Please refer to

Explanatory Note 2)


Explanatory Note 2)


Explanatory Note 2)


Explanatory Note 3)


Explanatory Note 3)


Explanatory Note 3)

[Resolution 7]

[Resolution 8]

NOTICE IS HEREBY GIVEN that the 12th Annual General Meeting of the Company will be held at Tioman Room, Bukit Jalil Golf & Country Resort, Jalan Jalil Perkasa, 57000 Kuala Lumpur on Thursday, 17 September 2015 at 10.30 a.m. to transact the following businesses:-

NOTICE OF TWELFTH (12TH) ANNUAL GENERAL MEETING

AGENDA

VERSATILE CREATIVE BERHAD(603770 D)

(Incorporated in Malaysia)

164

10. ORDINARY RESOLUTION I AUTHORITY TO ISSUE SHARES

“THAT subject always to the Companies Act 1965, the Articles of Association of the Company, the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) and the approvals of the relevant governmental/regulatory authorities, the Directors be and are hereby empowered, pursuant to Section 132D of the Companies Act 1965, to issue shares in the Company from time to time at such price, upon such terms and conditions, and for such purposes as the Directors may in their absolute discretion deem t provided that the aggregate number of shares issued pursuant to this Resolution does not exceed 10% of the nominal value of the issued and paid-up share capital (excluding treasury shares) of the Company for the time being AND THAT the Directors be and are also empowered to obtain the approval from Bursa Securities for the listing of and quotation for the additional shares so issued on the Bursa Securities AND FURTHER THAT such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company.”

11. ORDINARY RESOLUTION II PROPOSED RENEWAL OF THE EXISTING AND NEW SHAREHOLDERS’

MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE

“THAT pursuant to Paragraph 10.09 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Listing Requirements”), the Company and its subsidiaries (“the Group”) be and are hereby authorised to enter into and give effect to the recurrent related party transactions of a revenue or trading nature with the related parties as set out in Section 1.4 of the Circular to Shareholders dated 26 August 2015 (“Related Parties”) provided that such transactions and/or arrangements are:-

(a) necessary for the day-to-day operations;(b) are undertaken in the ordinary course of business at arm’s length basis and are on normal commercial terms and transaction prices which are

not more favourable to the Related Parties than those generally available to the public; and

(c) are not detrimental to the minority shareholders of the Company, (collectively known as “Shareholders’ Mandate”);

AND THAT such approval, shall continue to be in force until:-


Explanatory Note 4)


Explanatory Note 5)

Special Business

To consider and if thought t, to pass the following resolutions, with or without modi cations, as Ordinary Resolutions of the Company:-


165

(a) the conclusion of the next Annual General Meeting (“AGM”) of the Company, at which time it will lapse, unless by a resolution passed at such AGM, the authority is renewed; or

(b) the expiration of the period within the next AGM of the Company after that date 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

(c) revoked or varied by ordinary resolution passed by the shareholders of the Company in general meeting, whichever is earlier;

AND THAT the Directors of the Company be and are hereby authorised to complete and do all such acts and things (including executing all such documents as may be required) as they may consider expedient or necessary to give effect to the Shareholders’ Mandate.”

12. ORDINARY RESOLUTION III CONTINUING IN OFFICE AS INDEPENDENT NON-EXECUTIVE DIRECTORS

12.1 “THAT, subject to the passing of Resolution 2, approval be and is hereby given to Syed Abdullah Bin Syed Abd Kadir who has served as an Independent Non-Executive Director of the Company for an accumulative term of more than nine years, to continue to act as an Independent Non-Executive Director of the Company.”

12.2 “THAT, subject to the passing of Resolution 1, approval be and is hereby given to Dato’ Mohamad Suparadi Bin Md Noor who has served as an Independent Non-Executive Director of the Company for accumulative term of more than nine years, to continue to act as an Independent Non-Executive Director of the Company.”

By Order of the BoardJOANNE TOH JOO ANN (LS 0008574)CHIN CHOOI WEI (MAICSA 7062555)Company SecretariesKuala Lumpur26 August 2015


Explanatory Note 6)


Explanatory Note 6)

166

NOTES:-

Notes on Appointment of Proxy

(a) A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 (“the Act”) shall not apply to the Company.

(b) The instrument appointing a proxy shall be in writing (in the common seal or usual form) under the hand of the appointer or his attorney duly authorised in writing or, if the appointer is a corporation, either under Seal or under the hand of an of cer or attorney duly authorised. The duly completed form must be deposited at the Registered Of ce of the Company at Level 18, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur not less than 48 hours before the time for holding the meeting provided that in the event member(s) duly executes the form of proxy but does not name any proxy, such member(s) shall be deemed to have appointed the Chairman of the meeting as his/their proxy, provided always that the rest of the proxy form, other than the particulars of the proxy have been duly completed by the member(s).

(c) A member shall be entitled to appoint not more than two (2) proxies to attend, vote and speak at the same meeting.

(d) Where a member is an authorised nominee as de ned under the Securities Industry (Central Depositories) Act, 1991 (“Depositories Act”), it may appoint at least one proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.

(e) Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple bene cial owners in one securities account (“omnibus account”) there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds. An exempted authorised nominee refers to an authorised nominee de ned under the Depositories Act which is exempted from compliance with the provisions of subsection 25A(1) of Depositories Act.

(f) Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he speci es the proportions of his shareholdings to be represented by each proxy.

(g) Only members whose names appear in the Record of Depositors as at 9 September 2015 will be entitled to attend, vote and speak at the meeting or appoint proxy(ies) to attend, vote and speak on their behalf.

Explanatory Notes

(1) Item 1 of Agenda This item is meant for discussion only as the provision of Section 169(1) of the Companies Act, 1965

does not require a formal approval of the shareholders for the Audited Financial Statements. Hence, this Agenda is not put forward for voting.

(2) Item 2, 3 and 4 of Agenda The Nomination Committee and the Board of Directors had undertaken an annual assessment on

the independence of Dato’ Mohamad Suparadi Bin Md Noor, Syed Abdullah Bin Syed Abd Kadir and Chan Feoi Chun, who are seeking for re-election at the forthcoming Annual General Meeting. The assessment had been disclosed in the Corporate Governance Statement of the Company’s 2015 Annual Report.


167

(3) Item 5, 6 and 7 of Agenda Following the appointment during the current nancial year, Dato’ Lee Kwee Hiang, Dato’ Chew Weng

Kit and Wan Tak Chuen would be standing for re-election as Directors of the Company pursuant to Article 78 of the Company’s Articles of Association. The Board of Directors had assessed their suitability as Directors of the Company prior to their appointment.

Special Business

(4) Item 10 of Agenda - Authority to Issue Shares The Proposed Resolution 9 is for the purpose of granting a renewal of a general mandate (“General

Mandate”) and empowering the Directors to issue shares in the Company up to an amount not exceeding in total ten per centum (10%) of the Issued Share Capital of the Company for such purposes as the Directors consider would be in the interest of the Company.

This authority, unless revoked or varied by the Company at a general meeting, will expire at the next Annual General Meeting.

The General Mandate will provide exibility to the Company for allotment of shares for any possible fund raising activities, including but not limited for further placing of shares, for the purpose of funding future investment(s), acquisition(s) and/or working capital.

As at the date of this Notice, the Company had placed out 6,695,600 new Ordinary Shares (“placement shares”) at an issue price of RM 0.72 each and had raised a proceed of RM4,820,832. The placement shares issued by the Company had all been listed on the Main Market of Bursa Malaysia Securities Berhad [“Private Placement”]. Details and status of the utilisation of proceeds from the Private Placement are set out in the “Other Compliance Information” on page 52 to 55 of the 2015 Annual Report.

(5) Item 11 of Agenda - Proposed Renewal of the Existing and New Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading Nature

The Ordinary Resolution proposed under Resolution 10, if passed, will allow the Group to enter into recurrent related party transactions made on an arm’s length basis and on normal commercial terms and which are not detrimental to the interests of the minority shareholders.

(6) Item 12 of Agenda - Continuing In Of ce As Independent Non-Executive Directors Pursuant to the Malaysian Code on Corporate Governance 2012, the Board of Directors had assessed

the independence of Syed Abdullah Bin Syed Abd Kadir and Dato’ Mohamad Suparadi Bin Md Noor who each has served as an Independent Non-Executive Director of the Company for an accumulative term of more than nine years, and recommended them to continue to act as Independent Non-Executive Directors of the Company based on the following justi cations:-

- They uphold integrity and are able to function as check and balance, provide a broader view and bring an element of objectivity to the Board; - They have vast experience in a diverse range of business, which could provide constructive and independent judgments for the best interest of the Company;- They exercise due care as Independent Directors of the Company, and carry out their duties in the interest of the Company and shareholders;- They uphold independent decision and challenge the management’s objectivity.

The proposed Resolutions 11 and 12, if passed, will enable Syed Abdullah Bin Syed Abd Kadir and Dato’ Mohamad Suparadi Bin Md Noor to continue in of ce as Independent Non-Executive Directors.

168

Resolution For Against

1

2

3

4

5

6

7

8

9

10

11

12

VERSATILE CREATIVE BERHAD (603770 D)(Incorporated in Malaysia)

No. of shares held

PROXY FORM

I/ We NRIC/ Company No.Tel No. of

being a member/members Versatile Creative Berhad hereby appointNRIC No. Tel No. of

or failing him,NRIC No. Tel No. of

or failing him, the Chairman of the Meeting as *my/our proxy to vote for *me/us and on *my/our behalf at the 12th Annual General Meeting of the Company to be held at Tioman Room, Bukit Jalil Golf & Country Resort, Jalan Jalil Perkasa 3, Bukit Jalil, 57000 Kuala Lumpur on Thursday, 17 September 2015 at 10.30 a.m. and at any adjournment thereof.

Please indicate with an “X” in the space provided whether you wish your votes to be cast for or against the resolutions. In the absence of speci c directions, your proxy will vote or abstain as he/she thinks ts.

As witness my/our hand(s) this _________day of ____________________2015.

Signature or Common Seal of Member(s)*Strike out whichever is not desired. (Unless otherwise instructed the proxy may vote as he thinks t)

Item Agenda

1. Ordinary Business Receive the Audited Financial Statements for the nancial year ended

31 March 2015 together with the Reports of the Directors and Auditors thereon.

2. Re-election of Dato’ Mohamad Suparadi Bin Md Noor as Director of the Company pursuant to Article 73 of the Company’s Articles of Association.

3. Re-election of Syed Abdullah Bin Syed Abd Kadir as Director of the Company pursuant to Article 73 of the Company’s Articles of Association.

4. Re-election of Chan Feoi Chun as Director of the Company pursuant to Article 73 of the Company’s Articles of Association.

5. Re-election of Dato’ Lee Kwee Hiang as Director of the Company pursuant to Article 78 of the Company’s Articles of Association.

6. Re-election of Dato’ Chew Weng Kit as Director of the Company pursuant to Article 78 of the Company’s Articles of Association.

7. Re-election of Wan Tak Chuen as Director of the Company pursuant to Article 78 of the Company’s Articles of Association.

8. Approval of Directors’ fees amounting to RM119,200.00 for the nancial year ended 31 March 2015.

9. Re-appointment of Messrs Baker Tilly Monteiro Heng as Auditors of the Company and to authorise the Directors to x their remuneration.

10. Special Business Authority to the Directors to issue shares pursuant to Section 132D of the

Companies Act, 1965.11. Proposed Renewal of the Existing and New Shareholders’ Mandate for

Recurrent Related Party Transactions of a Revenue or Trading Nature12.1 To approve Syed Abdullah Bin Syed Abd Kadir to continue to act as an

Independent Non-Executive Director.12.2 To approve Dato’ Mohamad Suparadi Bin Md Noor to continue to act as an

Independent Non-Executive Director.


169

Notes:

i. A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 (“the Act”) shall not apply to the Company.

ii. The instrument appointing a proxy shall be in writing (in the common seal or usual form) under the hand of the appointer or his attorney duly authorised in writing or, if the appointer is a corporation, either under Seal or under the hand of an of cer or attorney duly authorised. The duly completed form must be deposited at the Registered Of ce of the Company at Level 18, The Gardens North Tower, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur not less than 48 hours before the time for holding the meeting provided that in the event member(s) duly executes the form of proxy but does not name any proxy, such member(s) shall be deemed to have appointed the Chairman of the meeting as his/their proxy, provided always that the rest of the proxy form, other than the particulars of the proxy have been duly completed by the member(s).

iii. A member shall be entitled to appoint not more than two (2) proxies to attend, vote and speak at the same meeting.

iv. Where a member is an authorised nominee as de ned under the Securities Industry (Central Depositories) Act, 1991 (“Depositories Act”), it may appoint at least one proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.

v. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple bene cial owners in one securities account (“omnibus account”) there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds. An exempted authorised nominee refers to an authorised nominee de ned under the Depositories Act which is exempted from compliance with the provisions of subsection 25A(1) of Depositories Act.

vi. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he speci es the proportions of his shareholdings to be represented by each proxy.

vii. Only members whose names appear in the Record of Depositors as at 9 September 2015 will be entitled to attend, vote and speak at the meeting or appoint proxy(ies) to attend, vote and speak on their behalf.

Fold here

Fold here

AFFIXPOSTAGE

STAMP

VERSATILE CREATIVE BERHAD (CO. NO:603770-D)

Level 18,The Gardens North Tower,Mid Valley City, Lingkaran Syed Putra,59200 Kuala Lumpur.

170

REAPINGSUCCESS

TOMORROWREGISTERED OFFICELevel 18, The Gardens North Tower,Mid Valley City, Lingkaran Syed Putra,59200 Kuala Lumpur.Tel No : 603 - 2264 8888Fax : 603 - 2282 2733

CORPORATE BUSINESS OFFICELot 30745, Jalan Pandan Indah,Pandan Indah, 55100 Kuala Lumpur.Tel No : 603 - 4292 1288Fax : 603 - 4291 0085

(Company No.603770-D)(Company No 603770 D)

nurturing 2015 business innovation - … packaging industry according to the ... packaging is paper...

Documents