statements of changes in equity (cont’d) amendments to mfrs 140 : transfers of investment property...

49

ANNUAL REPORT 2017

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50

SUPERLON HOLDINGS BERHAD (740412-X) Incorporated in Malaysia

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Statements of Changes in Equity(cont’d)

51

ANNUAL REPORT 2017

STATEMENTS OF CASH FLOwSFor the financial year ended 30 April 2017

The Group The Company 2017 2016 2017 2016 RM RM RM RM

CASH FLOWS FROM/(FOR) OPERATING ACTIVITIESProfit before tax 30,223,178 21,361,838 11,751,467 7,014,862Adjustments for:Amortisation of development cost 250,548 255,135 – – Amortisation of prepaid lease payment 2,463 – – – Depreciation of property, plant and equipment 3,352,927 3,687,357 – – Dividend income – – (11,900,000) (7,200,000)Gain on disposal of property, plant and equipment (200,187) (61,820) – – Impairment loss on trade receivables – 266,134 – – Reversal of inventories previously written down (295,780) (30,816) – –Unrealised (gain)/loss on foreign exchange (256,656) 43,926 – – Reversal of impairment loss on trade receivables (188,329) (48,915) – – Reversal of impairment loss on other receivables (18,858) – – – Inventories written down – 469,400 – – Interest expense 156,204 192,570 – – Interest income (791,727) (478,377) (48,141) (73,369)

OPERATING PROFIT/(LOSS) BEFORE WORKING CAPITAL CHANGES 32,233,783 25,656,432 (196,674) (258,507)

Changes in Working CapitalInventories (10,963,467) 2,703,643 – – Trade and other receivables, deposits and prepayments (3,574,030) 492,849 (16,233) (40)Trade and other payables and accruals 3,202,944 1,199,427 4,797 4,988

CASH FROM/(FOR) OPERATIONS 20,899,230 30,052,351 (208,110) (253,559)Interest paid (156,204) (192,570) – – Interest received 791,727 478,377 48,141 73,369 Tax paid (5,309,794) (5,207,016) (99,536) (72,743)

NET CASH FROM/(FOR) OPERATING ACTIVITIES 16,224,959 25,131,142 (259,505) (252,933)

CARRIED FORWARD 16,224,959 25,131,142 (259,505) (252,933)

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

52


Statements of Cash Flows(cont’d)

The Group The Company Note 2017 2016 2017 2016 RM RM RM RM

BROUGHT FORWARD 16,224,959 25,131,142 (259,505) (252,933)

CASH FLOWS (FOR)/FROM INVESTING ACTIVITIES(Advance)/repayment to/from subsidiaries – – (4,400,711) 2,000,109 Additional investments in an existing subsidiary – – – (1,534,258)Dividend received – – 11,900,000 7,200,000 Investment in subsidiaries – – (310,416) – Net withdrawal/(placement) of fixed deposits with maturity period more than three months 7,902,428 (8,646,297) – – Proceeds from disposal of property, plant and equipment 430,020 95,876 – – Purchase of prepaid lease payment (2,347,439) – – – Purchases of property, plant and equipment 6(e) (12,346,997) (5,382,982) – –

NET CASH (FOR)/FROM INVESTING ACTIVITIES (6,361,988) (13,933,403) 7,188,873 7,665,851

NET CASH FROM/(FOR) FINANCING ACTIVITIESDividend paid (7,145,993) (3,970,116) (7,145,993) (3,970,116)Drawdown of term loans 9,903,621 – – – Net movement in trade bills – (217,000) – – Net movement in multi currency trade loans 2,363,167 (276,992) – – Purchase of treasury shares – (10,567) – (10,567)Repayment of hire purchase payables (496,409) (334,405) – – Repayment of term loans (4,572,163) (334,383) – –

NET CASH FROM/(FOR) FINANCING ACTIVITIES 52,223 (5,143,463) (7,145,993) (3,980,683)

NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 9,915,194 6,054,276 (216,625) 3,432,235

EFFECT OF FOREIGN EXCHANGE TRANSLATION (17,716) – – –

CASH AND CASH EQUIVALENTS AT BEGINNING OF THE FINANCIAL YEAR 21,752,018 15,697,742 5,896,866 2,464,631

CASH AND CASH EQUIVALENTS AT END OF THE FINANCIAL YEAR 30 31,649,496 21,752,018 5,680,241 5,896,866

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

53

ANNUAL REPORT 2017

NOTES TO THE FINANCIAL STATEMENTSFor the financial year ended 30 April 2017

1. GENERAL INFORMATION

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

The registered office and principal place of business are as follows:

Registered office : 3-2, 3rd Mile Square No. 151, Jalan Kelang Lama Batu 3 ½ 58100 Kuala Lumpur

Principal place of business : Lot 2567, Jalan Sungai Jati 41200 Klang Selangor Darul Ehsan

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors dated 28 July 2017.

2. PRINCIPAL ACTIVITIES

The Company is principally engaged in the business of investment holding and the provision of management services. The principal activities of its subsidiaries are set out in Note 5 to the financial statements. There have been no significant changes in the nature of these principal activities during the financial year.

3. BASIS OF PREPARATION The financial statements of the Group are prepared under the historical cost convention and modified to include

other bases of valuation as disclosed in other sections under significant accounting policies, and in compliance with Malaysian Financial Reporting Standards (“MFRSs”), International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia.

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

MFRSs and/or IC Interpretations (Including The Consequential Amendments)

MFRS 14 : Regulatory Deferral Accounts

Amendments to MFRS 10, : Investment Entities – Applying the Consolidation Exception MFRS 12 and MFRS 128Amendments to MFRS 11 : Accounting for Acquisitions of Interests in Joint OperationsAmendments to MFRS 101 : Disclosure InitiativeAmendments to MFRS 116 : Clarification of Acceptable Methods of Depreciation and Amortisation and MFRS 138Amendments to MFRS 116 : Agriculture – Bearer Plants and MFRS 141Amendments to MFRS 127 : Equity Method in Separate Financial Statements

Annual Improvements to MFRSs 2012 – 2014 Cycle

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


54

Notes to the Financial Statements(cont’d)

3. BASIS OF PREPARATION (CONT’D)

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

MFRSs and/or IC Interpretations Effective date (including the Consequential Amendments)

MFRS 9 : Financial Instruments 1 January 2018 (IFRS 9 issued by IASB in July 2014)MFRS 15 : Revenue from Contracts with Customers 1 January 2018MFRS 16 : Leases 1 January 2019

IC Interpretation 22 : Foreign Currency Transactions and Advance 1 January 2018 Consideration

Amendments to MFRS 2 : Classification and Measurement of Share-based 1 January 2018 Payment Transactions Amendments to MFRS 4 : Applying MFRS 9 Financial Instruments with 1 January 2018* MFRS 4 Insurance ContractsAmendments to MFRS 10 : Sale or Contribution of Assets between an Deferred until and MFRS 128 Investor and its Associate or Joint Venture further noticeAmendments to MFRS 15 : Effective Date of MFRS 15 1 January 2018Amendments to MFRS 15 : Clarifications to MFRS 15 1 January 2018 ‘Revenue from Contracts with Customers’Amendments to MFRS 107 : Disclosure Initiative 1 January 2017Amendments to MFRS 112 : Recognition of Deferred Tax Assets for Unrealised 1 January 2017 LossesAmendments to MFRS 140 : Transfers of Investment Property 1 January 2018

Annual Improvements to MFRS Standards 2014 – 2016 Cycles : • AmendmentstoMFRS12:ClarificationoftheScopeofStandard 1January2017

Annual Improvements to MFRS Standards 2014 – 2016 Cycles : • AmendmentstoMFRS1:DeletionofShort-termExemptionsforFirst-time Adopters• AmendmentstoMFRS128:MeasuringanAssociateorJointVentureat 1January2018 Fair Value

* Entities that meet the specific criteria in MFRS 4.20B may choose to defer the application of MFRS 9 until the earlier of the application of the forthcoming insurance contracts standard or annual periods beginning before 1 January 2021.

The adoption of the above accounting standards and/or interpretations (including the consequential amendments, if any) is expected to have no material impact on the financial statements of the Group upon their initial application.

55

ANNUAL REPORT 2017


4. SIGNIFICANT ACCOUNTING POLICIES

4.1 Critical accounting estimates and judgements

Estimates and judgements are continually evaluated by the directors and management and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The estimates and judgements that affect the application of the Group’s accounting policies and disclosures, and have a significant risk of causing a material adjustment to the carrying amounts of assets, liabilities, income and expenses are discussed below:

(a) Depreciation of property, plant and equipment

The estimates for the residual values, useful lives and related depreciation charges for the property, plant and equipment are based on commercial factors which could change significantly as a result of technical innovations and competitors’ actions in response to the market conditions. The Group anticipates that the residual values of its property, plant and equipment will be insignificant. As a result, residual values are not being taken into consideration for the computation of the depreciable amount. Changes in the expected level of usage and technological development could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised.

(b) Amortisation of development expenditure

The estimate for the residual value, useful lives and related amortisation charges for the development expenditures are based on commercial factors which could change significantly as a result of technical innovations and competitors’ actions in response to the market conditions. The Group anticipates that the residual values of its development expenditures will be insignificant. As a result, residual values are not being taken into consideration for the computation of the amortisation amount. Changes in the expected level of usage and technological development could impact the economic useful lives and the residual values of these assets, therefore future amortisation charges could be revised.

(c) Income taxes

There are certain transactions and computations for which the ultimate tax determination may be different from the initial estimate. The Group recognises tax liabilities based on its understanding of the prevailing tax laws and estimates of whether such taxes will be due in the ordinary course of business. Where the final outcome of these matters is different from the amounts that were initially recognised, such difference will impact the income tax expense and deferred tax balances in the year in which such determination is made.

(d) Impairment of non-financial assets

When the recoverable amount of an asset is determined based on the estimate of the value in use of the cash-generating unit to which the asset is allocated, the management is required to make an estimate of the expected future cash flows from the cash-generating unit and also to apply a suitable discount rate in order to determine the present value of those cash flows.

(e) Write-down of 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 could result in revisions to the valuation of inventories.


56


4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

4.1 Critical accounting estimates and judgements (cont’d)

(f) Impairment of trade receivables

An impairment loss is recognised when there is objective evidence that a financial asset is impaired. Management specifically reviews its loans and receivables financial assets and analyses historical bad debts, customer concentrations, customer creditworthiness, current economic trends and changes in the customer payment terms when making a judgement to evaluate the adequacy of the allowance for impairment losses. Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience for assets with similar credit risk characteristics. If the expectation is different from the estimation, such difference will impact the carrying value of receivables.

(g) Revaluation of properties

Certain properties of the Group are reported at valuation which is based on valuations performed by independent professional valuers.

The independent professional valuers have exercised judgement in determining discount rates, estimates of future cash flows, capitalisation rate, terminal year value, market freehold rental and other factors used in the valuation process. Also, judgement has been applied in estimating prices for less readily observable external parameters. Other factors such as model assumptions, market dislocations and unexpected correlations can also materially affect these estimates and the resulting valuation estimates.

(h) Impairment of trademark

Trademark is tested for impairment annually and at other times when such indicators exist. This requires management to estimate the expected future cash flows of the cash-generating unit to which trademark is allocated and to apply a suitable discount rate in order to determine the present value of those cash flows. The future cash flows are most sensitive to budgeted gross margins, growth rates estimated and discount rate used. If the expectation is different from the estimation, such difference will impact the carrying value of trademark.

(i) Impairment of available-for-sale financial assets

The Group reviews its available-for-sale financial assets at the end of each reporting period to assess whether they are impaired. The Group also records impairment loss on available-for-sale equity investments when there has been a significant or prolonged decline in the fair value below their cost. The determination of what is “significant” or “prolonged” requires judgement. In making this judgement, the Group evaluates, among other factors, historical share price movements and the duration and extent to which the fair value of an investment is less than its cost.

(j) Fair value estimates for certain financial assets and financial liabilities

The Group carries certain financial assets and financial liabilities at fair value, which requires extensive use of accounting estimates and judgement. While significant components of fair value measurement were determined using verifiable objective evidence, the amount of changes in fair value would differ if the Group uses different valuation methodologies. Any changes in fair value of these assets and liabilities would affect profit and/or equity.

57

ANNUAL REPORT 2017



4.2 Basis of consolidation

The consolidated financial statements include the financial statements of the Company and its subsidiaries made up to the end of the reporting period.

Subsidiaries are entities (including structured entities, if any) controlled by the Group. The Group controls an entity when the Group is exposed to, or has right to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Potential voting rights are considered when assessing control only when such rights are substantive. The Group also considers it has de facto power over an investee when, despite not having the majority of voting rights, it has the current ability to direct the activities of the investee that significantly affect the investee’s return.

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

Intragroup transactions, balances, income and expenses are eliminated on consolidation. Intragroup losses may indicate an impairment that requires recognition in the consolidated financial statements. Where necessary, adjustments are made to the financial statements of subsidiaries to ensure consistency of accounting policies with those of the Group.

(a) Business combinations

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

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

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

(b) Changes in ownership interests in subsidiaries without change of control

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


58



4.2 Basis of consolidation (cont’d)

(c) Loss of control

Upon the loss of control of a subsidiary, the Group recognises any gain or loss on disposal in profit or loss which is calculated as the difference between:

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

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

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

4.3 Functional and foreign currencies

(a) Functional and presentation currency

The individual financial statements of each entity in the Group are presented in the currency of the primary economic environment in which the entity operates, which is the functional currency.

The consolidated financial statements are presented in Ringgit Malaysia (“RM”), which is the Company’s functional and presentation currency.

(b) Foreign currency transactions and balances

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

(c) Foreign operations

Assets and liabilities of foreign operations (including any goodwill and fair value adjustments arising on acquisition) are translated to the Group’s presentation currency at the exchange rate at the end of the reporting period. Income, expenses and other comprehensive income of foreign operations are translated at exchange rates at the dates of the transactions. All exchange differences arising from translation are taken directly to other comprehensive income and accumulated in equity, attributed to the owners of the Company.

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

On the disposal of a foreign operation (i.e. a disposal of the Group’s entire interest in a foreign subsidiary, or a partial disposal involving loss of control over a subsidiary that includes a foreign operation which the retained interest becomes a financial asset), all of the exchange differences accumulated in equity in respect of that foreign operation attributable to the owners of the Company are reclassified to profit or loss as part of the gain or loss on disposal.

59

ANNUAL REPORT 2017



4.3 Functional and foreign currencies (cont’d)

(c) Foreign operations (cont’d)

In addition, in relation to a partial disposal of a subsidiary that does not result in the Group losing control over the subsidiary, the proportionate share of accumulated exchange differences are reattributed to non-controlling interests and are not recognised in profit or loss.

In the consolidated financial statements, when settlement of an intragroup loan is neither planned nor likely to occur in the foreseeable future, the exchange differences arising from translating such monetary item are considered to form part of a net investment in the foreign operation and are recognised in other comprehensive income.

4.4 Financial instruments

Financial assets and financial liabilities are recognised in the statements of financial position when the Group becomes a party to the contractual provisions of the instruments.

Financial instruments are classified as financial assets, financial liabilities or equity instruments in accordance with the substance of the contractual arrangement and their definitions in MFRS 132. Interest, dividends, gains and losses relating to a financial instrument classified as a liability, are reported as an expense or income. Distributions to holders of financial instruments classified as equity are charged directly to equity.

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

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

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

(a) Financial assets

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

(i) Financial assets at fair value through profit or loss

As at the end of the reporting period, there were no financial assets classified under this category.

(ii) Held-to-maturity investments

As at the end of the reporting period, there were no financial assets classified under this category.


60



4.4 Financial instruments (cont’d)

(a) Financial assets (cont’d)

(iii) Loans and receivables financial assets

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

The effective interest method is a method of calculating the amortised cost of a financial asset and of allocating interest income over the relevant period. The effective interest rate is the rate that discounts estimated future cash receipts (including all fees and points paid or receiving that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the financial asset, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

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

(iv) Available-for-sale financial assets

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

After initial recognition, available-for-sale financial assets are remeasured to their fair values at the end of each reporting period. Gains and losses arising from changes in fair value are recognised in other comprehensive income and accumulated in the fair value reserve, with the exception of impairment losses. On derecognition, the cumulative gain or loss previously accumulated in the fair value reserve is reclassified from equity into profit or loss.

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

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

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

(b) Financial liabilities

(i) Financial liabilities at fair value through profit or loss

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

61

ANNUAL REPORT 2017




(b) Financial liabilities (cont’d)

(ii) Other financial liabilities

Other financial liabilities are initially measured at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period.

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

(c) Equity instruments

Equity instruments classified as equity are measured initially at cost and are not remeasured subsequently.

(i) Ordinary shares

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

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

(ii) Treasury shares

When the Company’s own shares recognised as equity are bought back, the amount of the consideration paid, including all costs directly attributable, are recognised as a deduction from equity. Own shares purchased that are not subsequently cancelled are classified as treasury shares and are presented as a deduction from total equity. No gain or loss is recognised in profit or loss on the purchase, sale, issue or cancellation of treasury shares.

Where treasury shares are sold, the difference between the sales consideration and the carrying amount of the treasury shares are shown as a movement in equity. When the consideration received is more than the carrying amount, the credit difference arising is taken to the share premium account. Where the consideration received is less than the carrying amount, the debit difference is offset against reserves.

(d) Derecognition

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

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


62




(e) Financial guarantee contracts

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

Financial guarantee contracts are recognised initially as liabilities at fair value, net of transaction costs. Subsequent to initial recognition, financial guarantee contracts are recognised as income in profit or loss over the period of the guarantee or, when there is no specific contractual period, recognised in profit or loss upon discharged of the guarantee. If the debtor fails to make payment relating to a financial 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 end of the reporting period and the amount initially recognised less cumulative amortisation.

4.5 Investment in subsidiaries

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

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

4.6 Property, plant and equipment

All items of property, plant and equipment are initially measured at cost. Cost includes expenditure that are directly attributable to the acquisition of the asset and other costs directly attributable to bringing the asset to working condition for its intended use.

Subsequent to initial recognition, all property, plant and equipment, other than freehold land and buildings, are stated at cost less accumulated depreciation and any impairment losses.

Freehold land is stated at valuation less impairment losses recognised after the date of the revaluation. Freehold buildings are stated at revalued amount less accumulated depreciation and impairment losses recognised subsequent to the date of revaluation.

Freehold land and buildings are revalued periodically, at least once in every 5 years and at shorter intervals whenever the fair value of the revalued assets is expected to differ materially from their carrying value. Surpluses arising from the revaluation are recognised in other comprehensive income and accumulated in equity under the revaluation reserve to the extent that it reverses a revaluation deficit of the same asset previously recognised in profit or loss. Deficits arising from the revaluation, to the extent that they are not supported by any previous revaluation surpluses, are recognised in profit or loss.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when the cost is incurred and it is probable that the future economic benefits associated with the asset will flow to the Group and the cost of the asset can be measured reliably. The carrying amount of parts that are replaced is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.

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ANNUAL REPORT 2017



4.6 Property, plant and equipment (cont’d)

Freehold land is not depreciated. Depreciation on other property, plant and equipment is charged to profit or loss (unless it is included in the carrying amount of another asset) on the straight-line method to write off the depreciable amount of the assets over their estimated useful lives. Depreciation of an asset does not cease when the asset becomes idle or is retired from active use unless the asset is fully depreciated. The principal annual rates used for this purpose are:

Factory buildings and staff quarters 3%-20% Plant, machinery, tools and equipment 7%-10% Motor vehicles 10%-14% Office equipment, renovation, furniture and fittings 10%-20%

Capital work-in-progress included in property, plant and equipment are not depreciated as these assets are not yet available for use.

The depreciation method, useful lives and residual values are reviewed, and adjusted if appropriate, at the end of each reporting period to ensure that the amounts, method and periods of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of the property, plant and equipment. Any changes are accounted for as a change in estimate.

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

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising from derecognition of the asset, being the different between the net disposal proceeds and the carrying amount, is recognised in profit or loss. The revaluation reserve included in equity is transferred directly to retained profits on retirement or disposal of the asset. In addition, the Group also makes an annual transfer of the revaluation reserve to retained profits as the asset is used by the Group. In such case, the amount of the revaluation reserve 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.

4.7 Trademark

Expenditure incurred on the acquisition of trademark is capitalised as non-current asset. The useful life of trademark is estimated to be indefinite because based on the current market share of the trademark, management believes there is no foreseeable limit to the period over which the trademark is expected to generate net cash flows to the Group. Trademark is stated at cost less any impairment losses. The carrying amount of trademark is reviewed annually and adjusted for impairment where it is considered necessary.


64



4.8 Research and development expenditure

Research expenditure is recognised as an expense when it is incurred.

Development expenditure is recognised as an expense except that costs incurred on development projects are capitalised as non-current assets to the extent that such expenditure is expected to generate future economic benefits. Development expenditure is capitalised if, and only if, an entity can demonstrate all of the following:

(i) its ability to measure reliably the expenditure attributable to the asset under development;

(ii) the product or process is technically and commercially feasible;

(iii) its future economic benefits are probable;

(iv) its intention to complete and the ability to use or sell the developed asset; and

(v) the availability of adequate technical, financial and other resources to complete the asset under development.

Capitalised development expenditure is measured at cost less accumulated amortisation and impairment losses, if any. Development expenditure initially recognised as an expense is not recognised as assets in the subsequent period.

The development expenditure is amortised on a straight-line method over a period of 5 years when the products are ready for sale or use. In the event that the expected future economic benefits are no longer probable of being recovered, the development expenditure is written down to its recoverable amount.

The amortisation method, useful life and residual value are reviewed, and adjusted if appropriate, at the end of each reporting period.

4.9 Impairment

(a) Impairment of financial assets

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

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

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

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ANNUAL REPORT 2017



4.9 Impairment (cont’d)

(a) Impairment of financial assets (cont’d)

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

An impairment loss in respect of unquoted equity instrument that is carried at cost is recognised in profit or loss and is measured as the difference between the financial asset’s carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment losses are not reversed in subsequent periods.

(b) Impairment of non-financial assets

The carrying values of assets, other than those to which MFRS 136 : Impairment of Assets does not apply, are reviewed at the end of each reporting period for impairment when an annual impairment assessment is compulsory or there is an indication that the assets might be impaired. Impairment is measured by comparing the carrying values of the assets with their recoverable amounts. When the carrying amount of an asset exceeds its recoverable amount, the asset is written down to its recoverable amount and an impairment loss shall be recognised. The recoverable amount of an asset is the higher of the assets’ fair value less costs to sell and its value-in-use, which is measured by reference to discounted future cash flows using a pre-tax discount rate that reflects current market assessment of the time value of money and the risks specific to the assets. Where it is not possible to estimate the recoverable amount of an individual asset, the Group determines the recoverable amount of the cash-generating unit to which the asset belongs.

An impairment loss is recognised in profit or loss immediately unless the asset is carried at its revalued amount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of a previously recognised revaluation surplus for the same asset. Any impairment loss recognised in respect of a cash-generating unit is allocated first to reduce the carrying amount of any goodwill allocated to the cash-generating unit and then to reduce the carrying amounts of the other assets in the cash-generating unit on a pro rata basis.

In respect of assets other than goodwill, when there is a change in the estimates used to determine the recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as a reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the asset that would have been determined (net of amortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in profit or loss immediately, unless the asset is carried at its revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.


66



4.10 Leased assets

(a) Finance lease

A lease is recognised as a finance lease if it transfers substantially to the Group all the risks and rewards incidental to ownership. Upon initial recognition, the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting policy applicable to that asset. The corresponding liability is included in the statement of financial position as hire purchase payables.

Minimum lease payments made under finance leases are apportioned between the finance costs and the reduction of the outstanding liability. The finance costs, which represent the difference between the total leasing commitments and the fair value of the assets acquired, are recognised in the profit or loss and allocated over the lease term so as to produce a constant periodic rate of interest on the remaining balance of the liability for each accounting period.

Leasehold land which in substance is a finance lease is classified as property, plant and equipment.

(b) Operating lease

All leases that do not transfer substantially to the Group all the risks and rewards incidental to ownership are classified as operating leases and, the leased assets are not recognised on the statement of financial position of the Group and of the Company.

Payments made under operating leases are recognised as an expense in the profit or loss on a straight-line method over the term of the lease. Lease incentives received are recognised as a reduction of rental expense over the lease term on a straight-line method. Contingent rentals are charged to profit or loss in the reporting period in which they are incurred.

The lump sum upfront lease payments made in respect of leasehold land which is substance is an operating lease is classified as prepaid lease payments. The prepaid lease payments are stated at cost less accumulated amortisation. The amortisation is charged to profit or loss in equal instalments over the lease period.

4.11 Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined on the first-in, first-out cost method and comprises the purchase price, production costs and incidentals incurred in bringing the inventories to their present location and condition. The cost of production includes cost directly related to the units of production, and a proportion of fixed production overhead based on normal capacity of the production facilities.

Net realisable value represents the estimated selling price less the estimated costs of completion and the estimated costs necessary to make the sale.

4.12 Cash and cash equivalents

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

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ANNUAL REPORT 2017



4.13 Employee benefits

(a) Short-term benefits

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

(b) Defined contribution plans

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

4.14 Income taxes

(a) Current tax

Current tax assets and liabilities are expected amount of income tax recoverable or payable to the taxation authorities.

Current taxes are measured using tax rates and tax laws that have been enacted or substantively enacted at the end of the reporting period and are recognised in profit or loss except to the extent that the tax related to items recognised outside profit or loss (either in other comprehensive income or directly in equity).

(b) Deferred tax

Deferred tax are recognised using the liability method for all taxable temporary differences other than those that arise from goodwill or from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit.

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

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

Current and deferred tax items are recognised in correlation to the underlying transactions either in profit or loss, other comprehensive income or directly in equity. Deferred tax arising from a business combination is adjusted against goodwill or negative goodwill.

Current tax assets and liabilities or deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities when the deferred taxes relate to the same taxable entity (or on different tax entities but they intend to settle current tax assets and liabilities on a net basis) and the same taxation authority.


68



4.14 Income taxes (cont’d)

(c) Goods and services tax (“GST”)

Revenues, expenses and assets are recognised net of GST except for the GST in a purchase of assets or services which are not recoverable from the taxation authorities, the GST are included as part of the costs of the assets acquired or as part of the expense item whichever is applicable.

In addition, receivables and payables are stated with the amount of GST included (where applicable).

The net amount of the GST recoverable from or payable to the taxation authorities at the end of the reporting period is included in other receivables or other payables.

4.15 Related parties

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

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

(i) has control or joint control over the reporting entity;

(ii) has significant influence over the reporting entity; or

(iii) is a member of the key management personnel of the reporting entity or of a parent of the reporting entity.

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

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

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

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

(iii) Both entities are joint ventures of the same third party.

(iv) One entity is a joint venture of a third entity and the other entity is an associate of the third entity.

(v) The entity is a post-employment benefit plan for the benefit of employees of either the reporting entity or an entity related to the reporting entity. If the reporting entity is itself such a plan, the sponsoring employers are also related to the reporting entity.

(vi) The entity is controlled or jointly controlled by a person identified in (a) above.

(vii) A person identified in (a)(i) above has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity).

(viii) The entity, or any member of a group of which it is a part, provides key management personnel services to the reporting entity or to the parent of the reporting entity.

Related parties also include key management personnel defined as those persons having authority and responsibility for planning, directing and controlling the activities of the reporting entity either directly or indirectly, including any director (whether executive or otherwise) of that entity.

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ANNUAL REPORT 2017



4.16 Operating segments

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 financial information is available.

4.17 Earnings per ordinary share

Basic earnings per ordinary share is calculated by dividing the consolidate profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the reporting period, adjusted for own shares held.

Diluted earnings per ordinary share is determined by adjusting the consolidated profit or loss attributable to ordinary shareholders of the Company and the weighted average number of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares.

4.18 Borrowing costs

Borrowing costs that are directly attributed to the acquisition, construction or production of a qualifying assets are capitalised as part of the cost of those assets, until such time as the assets are ready for their intended use or sale. The capitalisation of borrowing costs is suspended during extended periods in which active development is interrupted.

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

Investment income earned on the temporary investment of specific borrowing pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

4.19 Fair value measurements

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

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

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

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

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

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


70



4.20 Revenue and other income

Revenue is measured at the fair value of the consideration received or receivable, net of returns, goods and services tax, cash and trade discounts.

(a) Dividend income

Dividend income from investments is recognised when the shareholders’ rights to receive dividend payment is established.

(b) Management fee income

Management fee income from subsidiaries is recognised on accrual basis upon services rendered.

(c) Sale of goods Revenue from sales of goods is recognised when significant risks and rewards of ownership of the

goods have been transferred to the buyer and where the Group does not have continuing managerial involvement and effective control over the goods sold.

(d) Interest income

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

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ANNUAL REPORT 2017


5. INVESTMENTS IN SUBSIDIARIES The Company 2017 2016 RM RM

At CostUnquoted sharesAt 1 May 39,132,939 37,598,681 Addition 310,416 1,534,258

39,443,355 39,132,939 Less : Accumulated Impairment LossAt 1 May / 30 April (2,750,000) (2,750,000)

At 30 April 36,693,355 36,382,939

The details of subsidiaries are as follows:

Principal Place of Business/ Percentage of Country of Issued Share CapitalName of Subsidiaries Principal Activities Incorporation Held by Parent 2017 2016

Subsidiaries of the CompanySuperlon Worldwide Sdn. Bhd. Design, test and manufacture of Malaysia 100% 100% (“SWSB”) thermal insulation materials mainly for the heating, ventilation, air-conditioning and refrigeration (“HVAC&R”) industry; and trading of HVAC&R parts and equipments.

Superlon Solutions Sdn. Bhd. Trading of HVAC&R parts and Malaysia 100% 100% (“SSOL”) equipments.

Superlon Hong Kong Co. Dormant. Hong Kong, 100% 100% Limited (“SHK”) * SAR

Superlon Worldwide (India) Dormant. India 100% 100% Private Limited (“SWI”) ^

Superlon Singapore Private Investment holding company. Singapore 100% – Limited (“SSGP”) @

Subsidiary of SSGPSuperlon Vietnam Company Dormant. Vietnam 100% – Limited (“SVN”) #


72


5. INVESTMENTS IN SUBSIDIARIES (CONT’D)

Note:

* Not a legal requirement to be audited and therefore consolidated based on unaudited management accounts.

^ This subsidiary was audited by other firm of chartered accountants.

@ This subsidiary was audited by member firms of Crowe Horwath International of which Crowe Horwath is member.

# As this subsidiary was dormant for the financial period from incorporation date of 24 February 2017 to 30 April 2017, no audit has been performed and therefore consolidated based on unaudited management accounts.

(a) During the current financial year, the following transaction occurred:

On 1 September 2016, the Company incorporated a wholly-owned subsidiary known as SSGP in Singapore for a total cash consideration of SGD 1 (equivalent to RM 3). The investment in SSGP was completed on 5 September 2016.

On 3 January 2017, the Company further increased the investment of SSGP from SGD 1 to SGD 100,000 with a total cash consideration of SGD 99,999 (equivalent to RM 310,413) without change in the equity interest of the subsidiary. The transaction was completed on 3 January 2017.

On 24 February 2017, a subsidiary of the Company, SSGP incorporated a wholly-owned subsidiary known as SVN in Vietnam for a total cash consideration of VND 17,066,250,000 (equivalent to USD 750,000). The investment in SVN was completed on 21 April 2017.

(b) During the previous financial year, the following transactions occurred:

On 4 March 2016, the Company increased its investment in a wholly-owned subsidiary, namely SWI for a total cash consideration of INR 522,560 (equivalent to RM 34,258). The transaction was completed on 4 March 2016.

On 31 March 2016, the Company increased its investment in a wholly-owned subsidiary, namely SSOL by capitalising the amount due by the subsidiary of RM 1,500,000. The transaction was completed on 31 March 2016.

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ANNUAL REPORT 2017


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75

ANNUAL REPORT 2017


6. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

(a) The following property, plant and equipment are charged against banking facilities (Note 18):

The Group 2017 2016 RM RM

Carrying AmountFreehold land 31,070,000 27,300,000 Factory buildings 24,831,093 12,248,053

55,901,093 39,548,053

(b) The following property, plant and equipment are subject to finance lease instalments plans (Note 18):


Carrying AmountMotor vehicles 677,962 772,782Plant and machinery 407,835 480,880

1,085,797 1,253,662

(c) During the financial year, the Group’s freehold land and factory buildings were revalued by an independent professional valuer. The surpluses arising from the revaluations, net of deferred tax, have been credited to other comprehensive income as disclosed in Note 27 and accumulated in equity under the revaluation reserve.

The details of the Group’s freehold land and factory buildings carried at fair value are analysed as follows:

Level 1 Level 2 Level 3 Total RM RM RM RMThe Group

2017Freehold land – 31,070,000 – 31,070,000 Factory buildings – 15,561,495 – 15,561,495

– 46,631,495 – 46,631,495

2016Freehold land – 27,300,000 – 27,300,000 Factory buildings – 12,248,053 – 12,248,053

– 39,548,053 – 39,548,053

The level 2 fair values have been determined based on the market comparison approach that reflects recent transaction prices for similar properties. The most significant input into this valuation approach is price per square foot of comparable properties. There has been no change to the valuation technique during the financial year.

There were no transfers between level 1, level 2 and level 3 during the financial year.

The fair value measurements of freehold land and factory buildings are based on the highest and best use which does not differ from their actual use.


76


6. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

(d) If the freehold land and factory buildings were measured using the cost model, the carrying amount would be as follows:


Carrying AmountFreehold land 12,614,180 12,614,180 Factory buildings 20,312,099 7,375,237

32,926,279 19,989,417

(e) Purchases of property, plant and equipment are as follows:


Aggregate cost of property, plant and equipment acquired 15,015,596 5,382,982 Finance via hire purchase (300,000) – Unpaid balance included in sundry payables (Note 21(b)) (2,368,599) –

Cash paid during the financial year 12,346,997 5,382,982

(f) There is no property, plant and equipment in the Company throughout the current and previous financial years.

7. PREPAID LEASE PAYMENT Land RMThe Group - At 30 April 2017

At CostAt 1 May 2016 – Addition 2,347,439

At 30 April 2017 2,347,439

Less: Accumulated amortisation At 1 May 2016 – Charge for the year 2,463

At 30 April 2017 2,463

Carrying Amount 2,344,976

The prepaid lease payment consists of land lease in Vietnam over lease period of 40 years.

77

ANNUAL REPORT 2017


8. INTANGIBLE ASSETS


Trademark (Note a) 1,000,000 1,000,000 Product development expenditure (Note b) 343,853 594,401

1,343,853 1,594,401

(a) Trademark Cost At 1 May 1,000,000 1,000,000 Additions – –

At 30 April 1,000,000 1,000,000

(b) Product development expenditure Cost At 1 May 1,846,057 1,846,057 Additions – –

At 30 April 1,846,057 1,846,057

Less: Accumulated Amortisation At 1 May 1,251,656 996,521 Amortisation 250,548 255,135

At 30 April 1,502,204 1,251,656

Carrying Amount 343,853 594,401

Trademark

The trademark “Superlon” is registered in Malaysia and acquired for a cash consideration of RM 1.0 million in August 2000 and considered by management to have indefinite useful life based on the fact that they are established international brands with global potential.

Trademark with indefinite useful life is not amortised but is reviewed for impairment on an annual basis by comparing the carrying amount with the recoverable amount of the cash-generating unit (“CGU”) based on value-in-use. Value-in-use is determined by discounting the future cash flows to be generated from the continuing use of the CGU based on the following assumptions:

• Cashflowsareprojectedbasedonthemanagement’sfive-yearbusinessplan.

• Discountratesusedforcashflowsdiscountingpurposearethemanagement’sestimateofcostofcapitalplus a reasonable risk premium at the date of assessment of the CGU. The discount rate applied for cash flow projections is 6.72% (2016 : 6.85%).

• GrowthratefortheCGUisdeterminedbasedonthemanagement’sestimateoftheindustrytrendsandpast performances of the CGU.

• Profitmarginsareprojectedbasedontheindustrytrendsandhistoricalprofitmarginachieved.

The management is not aware of any reasonably possible change in the above key assumptions that would cause the carrying amounts of the CGU to materially exceed their recoverable amounts.


78


8. INTANGIBLE ASSETS (CONT’D)

Product development expenditure

The Group has a continuous program of product development initiatives to obtain various code listing for its insulation materials, and to develop special new products for overseas market according to specific requirements of each respective country or region. The code listings, once obtained, will increase selling opportunities for its insulation materials by making it easier for designers, architects and specifies of heating, ventilation, air-conditioning and refrigeration systems to incorporate these products in their plans. Deferred product development expenditure are amortised over a five (5) years period which commensurate with the availability of the sales of the developed products.

The Group’s policy for product development costs requires the periodic review of the carrying values to determine if there has been impairment in value-based expected future cash flows. If it is determined that the carrying value exceeds the recoverable amount, the carrying value of the asset is written down to the recoverable amount.

9. OTHER INVESTMENT


At CostGolf club membership 46,667 46,667

Investment in golf club membership which is assessed to have indefinite useful life because there are no foreseeable limit to the period over which the asset are expected to generate net cash inflows for the Group and the contractual or legal right of these assets can be renewed without incurring significant costs.

Investment in golf club membership of the Group are designed as available-for-sale financial assets but are stated at cost as their fair value cannot be reliably measured using valuation techniques due to lack of marketability of such similar membership.

10. INVENTORIES


At CostRaw materials 14,408,552 5,133,461 Work-in-progress 955,323 403,696 Finished goods 2,375,409 1,481,356 Trading stock 2,049,843 1,447,667

19,789,127 8,466,180 At Net Realisable ValueTrading stock 7,280 70,980

19,796,407 8,537,160

Recognised in Profit or Loss :Inventories recognised as cost of sales 45,744,345 39,174,631 Inventories written down – 469,400 Reversal of inventories previously written down (295,780) (30,816)

79

ANNUAL REPORT 2017


11. TRADE RECEIVABLES


Trade receivables 14,697,003 12,251,444 Less: Allowance for impairment losses (1,706,196) (1,894,525)

12,990,807 10,356,919

Allowance for impairment losses:At 1 May 1,894,525 1,677,306 Addition during the financial year – 266,134 Reversal during the financial year (188,329) (48,915)

At 30 April 1,706,196 1,894,525

The Group’s normal trade terms range from cash against documents to 90 days credit (2016 : cash against documents to 90 days credit) from the date of invoices.

12. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS


Other ReceivablesScheduled receivables 18,741 18,741 – – Less: Allowance for impairment losses (18,741) (18,741) – –

– – – –

Sundry receivables 308,018 268,674 – – Less: Allowance for impairment losses (113,152) (132,010) – –

194,866 136,664 – – Advance to suppliers 126,561 350,825 – – Goods and services tax recoverable 1,842,677 435,857 5,673 –

2,164,104 923,346 5,673 – Deposits 508,430 478,800 11,600 1,000 Prepayments 482,428 369,694 – 40

3,154,962 1,771,840 17,273 1,040

Allowance for impairment losses:At 1 May 150,751 150,751 – – Reversal during the financial year (18,858) – – –

At 30 April 131,893 150,751 – –

Scheduled receivables represents the remaining amount owing by a foreign supplier arising from one-off rectification works claim pursuant to a settlement agreement dated 20 May 2009.


80


13. AMOUNT OWING BY SUBSIDIARIES

The Company 2017 2016 RM RM

Non-currentNon-trade balances 8,491,737 4,143,003 Less: Allowance for impairment losses (1,958,883) (1,958,883)

6,532,854 2,184,120

CurrentNon-trade balances 85,700 33,723

Allowance for impairment losses:At 1 May 1,958,883 1,958,883 Addition during the financial year – –

At 30 April 1,958,883 1,958,883

(a) The non-trade balances (non-current) represents unsecured interest-free advances and payments made on behalf. The amounts owing are repayable in financial years 2018 and 2019.

(b) The non-trade balances (current) represent unsecured interest-free advances and payments made on behalf. The amounts owing are repayable on demand.

(c) Amount owing by subsidiaries that are individually determined to be impaired relate to subsidiaries that have been suffering significant financial losses.

14. DEPOSITS WITH LICENSED BANK


Fixed deposits placed with a licensed bank 16,543,869 14,946,297 – – Short-term deposits placed with a licensed bank 1,550,000 2,000,000 550,000 2,000,000

18,093,869 16,946,297 550,000 2,000,000

(a) The effective interest rates for all deposits placed with a licensed bank of the Group and of the Company at the end of reporting period are 2.4% - 3.9% (2016 : 3.2% - 4.5%) per annum and 2.4% - 3.2% (2016 : 3.4%) per annum respectively.

(b) The maturity periods for fixed deposits and short-term deposits place with a licensed bank of the Group and of the Company as at the end of reporting period are ranging from 1 to 365 days (2016 : 30 to 365 days) and 1 to 32 days (2016 : 30 days) respectively.

81

ANNUAL REPORT 2017


15. SHARE CAPITAL

The Group / The Company 2017 2016

Number of Number of shares RM shares RM

Authorised:Ordinary shares of RM 0.50 each N/A N/A 200,000,000 100,000,000

N/A : Not applicable due to adoption of the Companies Act 2016 as disclosed in item (b) below.

2017 2016 Number of Number of shares RM shares RM

Issued and Fully Paid-Up:Ordinary shares with no par value (2016 : par value of RM 0.50 each)At 1 May / At 30 April 80,000,000 40,000,000 80,000,000 40,000,000

(a) The holders of ordinary shares (except treasury shares) are entitled to receive dividends as and when declared by the Company and are entitled to one (1) vote per share at meetings of the Company.

(b) On 31 January 2017, the concepts of authorised share capital and par value of share capital were abolished in accordance with the Companies Act 2016. There is no impact on the numbers of ordinary shares in issue.

16. TREASURY SHARES The Group / The Company 2017 2016

Number of Number of shares RM shares RM

Ordinary shares with no par value (2016 : par value of RM 0.50 each)At 1 May 600,079 339,332 594,079 328,765 Shares bought back during the year – – 6,000 10,567

At 30 April 600,079 339,332 600,079 339,332

None of the treasury shares were resold or cancelled during the financial year.

The details of the shares bought back during previous financial year are as follows:

Price Per Shares (RM) Number of Total Lowest Highest Average shares consideration RMMonthFinancial Year 2016October 1.73 1.77 1.76 6,000 10,567


82


17. RESERVES


Non-DistributableShare premium 1,433,182 1,433,182 1,433,182 1,433,182 Revaluation reserve 21,019,633 17,680,953 – – Foreign exchange translation reserve (17,657) – – –

22,435,158 19,114,135 1,433,182 1,433,182

DistributableRetained profits 45,892,343 30,668,740 2,946,333 34,245

68,327,501 49,782,875 4,379,515 1,467,427

(a) Share Premium

The Company has adopted the transitional provisions set out in Section 618(3) of the Companies Act 2016 (“Act”) where the sum standing to the credit of the share premium may be utilised within twenty four (24) months from the commencement date of 31 January 2017 in the manner as allowed for under the Act. Therefore, the Group and the Company has not consolidated the share premium into share capital until the expiry of the transitional period.

(b) Revaluation Reserve

The revaluation reserve represents the increase in the fair value of freehold land and factory buildings of the Group (net of deferred tax, where applicable) present under property, plant and equipment.

(c) Foreign Exchange Translation Reserve

The foreign exchange translation reserve arose from the translation of the financial statements of foreign subsidiaries.

83

ANNUAL REPORT 2017


18. LOANS AND BORROWINGS


CurrentSecured - Multi currency trade loans 3,098,239 735,072 - Term loans 445,732 358,528 - Hire purchase payables 276,497 343,565

3,820,468 1,437,165

Non-CurrentSecured - Term loans 6,319,379 1,075,125 - Hire purchase payables 227,819 357,160

6,547,198 1,432,285

10,367,666 2,869,450

Total BorrowingsSecured - Multi currency trade loans 3,098,239 735,072 - Term loans 6,765,111 1,433,653 - Hire purchase payables 504,316 700,725

10,367,666 2,869,450

The remaining maturities of the loans and borrowings at the reporting date are as follows:


CurrentNot later than one year 3,820,468 1,437,165

Non-CurrentLater than one year and not later than two years 425,185 678,320 Later than two years and not later than five years 1,267,364 753,965 Later than five years 4,854,649 –

6,547,198 1,432,285

10,367,666 2,869,450


84


18. LOANS AND BORROWINGS (CONT’D)

Hire purchase payables

(a) The hire purchase payables bear interests at 3.6% - 7.0% (2016 : 3.5% - 6.9%) per annum.

(b) The hire purchase payables of the Group amounting to RM 234,800 (2016 : RM 482,631) is guaranteed by the Company.

(c) Future minimum lease payments under finance leases together with the present value of the net minimum lease payments are as follows:


Minimum hire purchase payments:Not later than one year 294,009 370,025 Later than one year and not later than two years 92,027 299,997 Later than two years and not later than five years 152,415 67,265

538,451 737,287 Less : Future finance charges (34,135) (36,562)

Present value of hire purchase payables 504,316 700,725

CurrentNot later than one year 276,497 343,565

Non-CurrentLater than one year and not later than two years 83,398 290,613 Later than two years and not later than five years 144,421 66,547

227,819 357,160

504,316 700,725

85

ANNUAL REPORT 2017


18. LOANS AND BORROWINGS (CONT’D)

Bank borrowings

(a) The bank borrowings are secured by the following:

(i) A registered first party charge over the Group’s freehold land and factory buildings (Note 6); and

(ii) Corporate guarantee by the Company.

(b) The effective interest rates (per annum) for bank borrowings at the end of reporting period are as follows:

The Group 2017 2016

% %

Multi currency trade loans 2.5 - 3.0 1.9 - 2.2 Term loans 4.5 - 4.7 7.9

(c) The term loans are repayable by 120 to 240 monthly instalments (2016 : 120 monthly instalments). At the end of the reporting period, they are repayable as follows:


CurrentNot later than one year 445,732 358,528

Non-CurrentLater than one year and not later than two years 341,787 387,707 Later than two years and not later than five years 1,122,943 687,418 Later than five years 4,854,649 –

6,319,379 1,075,125

6,765,111 1,433,653


86


19. DEFERRED TAX (ASSETS)/LIABILITIES


At 1 May 4,017,034 4,104,724 Effect of changes in tax rate from 25% to 24% – (89,295)Recognised in profit or loss (Note 26) 334,807 (114,722)Recognised in other comprehensive income (Note 27) 188,500 –Underprovision on deferred tax expense in prior years 1,570 116,327 Foreign exchange translation difference (59) –

At 30 April 4,541,852 4,017,034

Presented after appropriate offsetting as follows:Deferred tax (assets) (491,454) (575,035)Deferred tax liabilities 5,033,306 4,592,069

4,541,852 4,017,034

The components and movement of deferred tax liabilities and assets during the financial year are as follows:

(i) Deferred tax assets

Unused tax losses Total RM RM

At 1 May 2015 637,054 637,054 Recognised in profit or loss (59,668) (59,668) (Over)provision of deferred tax income in prior years (2,351) (2,351)

At 30 April 2016 / 1 May 2016 575,035 575,035 Recognised in profit or loss (85,042) (85,042) Underprovision of deferred tax income in prior years 1,402 1,402 Foreign exchange translation differences 59 59

At 30 April 2017 491,454 491,454

87

ANNUAL REPORT 2017


19. DEFERRED TAX (ASSETS)/LIABILITIES (CONT’D)

(ii) Deferred tax liabilities

Excess of capital Other allowances over temporary depreciation differences Total RM RM RM

At 1 May 2015 4,578,831 162,947 4,741,778 Recognised in profit or loss (185,645) (78,040) (263,685) Underprovision on deferred tax expense in prior years 113,976 – 113,976

At 30 April 2016 / 1 May 2016 4,507,162 84,907 4,592,069 Recognised in profit or loss 288,954 (39,189) 249,765 Recognised in other comprehensive income 188,500 – 188,500 Underprovision on deferred tax expense in prior years 2,972 – 2,972

At 30 April 2017 4,987,588 45,718 5,033,306

20. TRADE PAYABLES

The normal trade terms granted to the Group range from cash against documents to 60 days credit (2016 : cash against documents to 60 days credit) from the date of invoices.

21. OTHER PAYABLES AND ACCRUALS


Advance from customers 582,265 736,765 – – Accruals 4,414,180 3,883,666 156,000 156,000 Sundry payables 3,305,468 580,588 38,580 33,783

8,301,913 5,201,019 194,580 189,783

(a) Sundry payables are non-interest bearing and are repayable on demand.

(b) Included in sundry payables of the Group is an amount of RM 2,368,599 (2016 : RM NIL) payable for purchases of property, plant and equipment (Note 6(e)).


88


22. DIVIDEND PAYABLE

The Group / The Company 2017 2016 RM RM

A special tax-exempt single-tier dividend of 6.00 sen (2016: 4.00 sen) per ordinary share 4,763,995 3,175,997

23. REVENUE

Revenue of the Group and of the Company comprises the following:


Dividend income – – 11,900,000 7,200,000 Management fee income – – 396,000 264,000 Invoiced value of goods sold net of discounts and returns 106,268,595 90,410,926 – –

106,268,595 90,410,926 12,296,000 7,464,000

89

ANNUAL REPORT 2017


24. PROFIT BEFORE TAX


Profit before tax is arrived at after charging:Staff costs (Note 25) 12,373,682 10,705,172 16,750 15,000 Amortisation of development cost 250,548 255,135 – – Amortisation of prepaid lease payment 2,463 – – – Auditors’ remuneration of auditors of the Company 73,000 73,500 29,000 25,500 Auditors’ remuneration of other auditors 13,479 – – – Depreciation 3,352,927 3,687,357 – – Impairment loss on trade receivables – 266,134 – – Interest expense:- bank overdrafts – 41 – – - multi currency trade loans 29,089 24,191 – – - hire purchases 32,562 44,369 – – - term loans 94,553 123,969 – – Loss on foreign exchange:- unrealised – 43,926 – –Rental of:- factory 567,000 567,000 – –- factory equipment 2,450 7,830 – – - hostel 104,295 80,600 – –- office equipment 8,870 7,662 – – - premises 113,826 102,580 – – Inventories written down – 469,400 – – And Crediting:Gain on disposal of property, plant and equipment (200,187) (61,820) – – Gain on foreign exchange:- realised (1,139,933) (311,115) (19,221) – - unrealised (256,656) – – – Insurance claim – (1,642) – – Interest income (791,727) (478,377) (48,141) (73,369)Rental income (210) – – – Reversal of inventories previously written down (295,780) (30,816) – – Reversal of impairment loss on trade receivables (188,329) (48,915) – – Reversal of impairment loss on other receivables (18,858) – – –


90


25. STAFF COSTS


Executive Directors’ Remuneration (excluding benefits-in-kind) (Note 31) 3,324,264 2,822,723 16,750 15,000

Other Staff CostsShort-term employee benefits 8,065,095 6,979,012 – – Defined contribution plan (EPF) 249,698 277,672 – – Other staff related expenses 712,625 615,989 – –

9,027,418 7,872,673 – –

Total Staff Costs 12,351,682 10,695,396 16,750 15,000

26. TAX EXPENSE


(a) Components of tax expense

Tax expense 6,208,660 4,667,227 108,665 81,313 Effect of changes in tax rate from 25% to 24% – (89,295) – – Deferred tax expense/(income) relating to origination/(reversal) of temporary differences (Note 19) 334,807 (114,722) – – (Over)/underprovision in the previous financial year: - current tax expense (36,633) 122,212 (3,277) (79) - deferred tax expense 1,570 116,327 – –

6,508,404 4,701,749 105,388 81,234

91

ANNUAL REPORT 2017


26. TAX EXPENSE (CONT’D)


(b) Reconciliation of tax expense

Profit before tax 30,223,178 21,361,838 11,751,467 7,014,862

Tax at statutory income tax rate of 24% 7,253,563 5,126,841 2,820,352 1,683,567 Effect of changes in tax rate from 25% to 24% – (89,295) – – Tax effect of non-deductible expenses 148,849 176,190 144,313 126,108 Tax effect of non-taxable income – – (2,856,000) (1,728,362) Tax effect of reducing of statutory tax rate for increase in chargeable income (309,464) – – – Tax saving arising from double deduction expenses (356,592) (265,104) – – Utilisation of reinvestment allowances (192,889) (485,422) – – Under/(Over)provision in the previous financial year: - current tax expense (36,633) 122,212 (3,277) (79) - deferred tax expense 1,570 116,327 – –

6,508,404 4,701,749 105,388 81,234

27. OTHER COMPREHENSIVE INCOME


Items that Will Not be Reclassified Subsequently to Profit or Loss

Revaluation of property, plant and equipment (Note 6) 3,770,000 – Less: Deferred tax (Note 19) (188,500) –

3,581,500 –Foreign currency translation: - changes during the financial year (17,657) –

3,563,843 –


92


28. EARNINGS PER ORDINARY SHARE

(a) Basic Earnings Per Share

Basic earnings per share is calculated by dividing the profit attributable to owners of the Company by the weighted average number of ordinary shares in issue during the financial year, excluding treasury shares held by the Company.


Profit after tax attributable to owners of the Company 23,714,774 16,660,089

Units Units

Weighted average number of ordinary shares in issue 79,399,921 79,402,446

Basic earnings per ordinary share (sen) 29.87 20.98

(b) Diluted Earnings Per Ordinary Share

The Group has not issued any diluted potential ordinary shares and hence, the diluted earnings per share is equal to the basic earnings per share.

29. DIVIDENDS

The Group / The Company 2017 2016 RM RM

An interim tax-exempt single-tier dividend of 2.50 (2016 : 2.00) sen per ordinary share on 79,399,921 (2016 : 79,405,921) ordinary shares in respect of current financial year 1,984,998 1,588,118

A second interim tax-exempt single-tier dividend of 2.50 (2016 : 3.00) sen per ordinary share on 79,399,921 ordinary shares in respect of current financial year 1,984,998 2,381,998

A special tax-exempt single-tier dividend of 6.00 sen (2016 : 4.00) sen per ordinary share on 79,399,921 ordinary shares in respect of current financial year 4,763,995 3,175,997

8,733,991 7,146,113

The directors declared an interim tax-exempt single-tier dividend of 1.50 sen per ordinary share at the Board of Directors’ Meeting on 20 June 2017 in respect of the financial year ending 30 April 2018. This dividend will subsequently payable on 28 July 2017 to shareholders whose names appeared in the Company’s Record of Depositors on 7 July 2017. This dividend shall be accounted for in equity as an appropriation of retained profits for the financial year ending 30 April 2018.

93

ANNUAL REPORT 2017


30. CASH AND CASH EQUIVALENTS

For the purpose of the statements of cash flows, cash and cash equivalents comprise the following:


Deposits with licensed bank 18,093,869 16,946,297 550,000 2,000,000 Cash and bank balances 14,299,496 13,452,018 5,130,241 3,896,866

32,393,365 30,398,315 5,680,241 5,896,866

Less : Fixed deposits with original maturity of more than 3 months (743,869) (8,646,297) – –

31,649,496 21,752,018 5,680,241 5,896,866

31. KEY MANAGEMENT PERSONNEL COMPENSATION

(a) The key management personnel of the Group and of the Company include executive directors and non-executive directors of the Company and certain senior management of the Group and of the Company.


DirectorsDirectors of the CompanyExecutive Directors:Short-term employee benefits 2,910,714 2,462,615 16,750 15,000 Defined contribution plan (EPF) 413,550 360,108 – –

3,324,264 2,822,723 16,750 15,000

Non-Executive Directors:Short-term employee benefits:- Fees 156,000 156,000 156,000 156,000 - Other benefits 22,750 19,500 22,750 19,500

178,750 175,500 178,750 175,500

Directors of the SubsidiariesNon-Executive Directors:Short-term employee benefits- Fees 10,464 9,776 – –- salaries, bonuses and other benefits 11,536 – – –

22,000 9,776 – –

Total directors’ remuneration 3,525,014 3,007,999 195,500 190,500


94


31. KEY MANAGEMENT PERSONNEL COMPENSATION (CONT’D)

(a) The key management personnel of the Group and of the Company include executive directors and non-executive directors of the Company and certain senior management of the Group and of the Company. (cont’d)


Estimated monetary value of benefits-in-kindExecutive directors of the Company 51,250 51,250 – –

Other key management personnelShort-term employee benefits 1,399,273 1,354,196 – – Defined contribution plan (EPF) 178,436 172,687 – –

Total compensation for other key management personnel 1,577,709 1,526,883 – –

(b) The number of the Company’s directors with total remuneration falling in bands of RM 50,000 are as follows:

The Group 2017 2016 Number of Directors

Executive Directors

RM 700,001 to RM 750,000 – 1 RM 750,001 to RM 800,000 – 1 RM 900,001 to RM 950,000 1 – RM 950,001 to RM 1,000,000 1 – RM 1,250,001 to RM 1,300,000 – 1 RM 1,400,001 to RM 1,450,000 1 –

Non-executive Directors

Below RM 50,000 3 3 RM 50,001 to RM 100,000 1 1

7 7

95

ANNUAL REPORT 2017


32. RELATED PARTY DISCLOSURES

(a) Identities Of Related Parties

Parties are considered to be related to the Group if the Group has the ability, directly or indirectly, to control or jointly control the party or exercise significant influence over the party in making financial and operating decisions, or vice versa, or where the Group or the Company and the party are subject to common control.

In addition to the information detailed elsewhere in the financial statements, the Group has related party relationships with its directors, key management personnel and entities within the same group of companies.

(b) Significant Related Party Transactions and Balances

Other than those disclosed elsewhere in the financial statements, the Group and the Company also carried out the following significant transactions with the related parties during the financial year:


Subsidiaries- Dividend income – – (11,900,000) (7,200,000)- Management fee income – – (396,000) (264,000)- Advance to a subsidiary – – 4,448,734 – - Payment on behalf of subsidiary – – 51,977 – - Settlement of advance by subsidiaries – – (100,000) (2,000,109)

Transactions with companies in which certain directors have direct or indirect substantial financial interests- Professional fees 218,000 134,350 218,000 134,350 - Purchase of tools 343,139 52,034 – –

The significant outstanding balances of the related parties (including the allowance for impairment loss made) together with their terms and conditions are disclosed in the respective notes to the financial statements.


96


33. OPERATING SEGMENTAL

Operating segments are prepared in a manner consistent with the internal reporting provided to the Group Executive Committee as its chief operating decision maker in order to allocate resources to segments and to access their performance. For management purposes, the Group is organised into business units based on their products and services provided.

The Group comprises the following main business segments as follows:

Business segments Business activities

Insulation materials Manufacturing of thermal insulation materials mainly for the heating, ventilation, air-conditioning and refrigeration (“HVAC&R”) industry.

HVAC&R parts and equipment Trading of HVAC&R parts and equipments.

(a) Business segments

HVAC&R Insulation parts and Investment materials equipment holdings Eliminations Consolidated RM RM RM RM RM 2017

Revenue- Investment income – – 11,900,000 (11,900,000) – - External sales 96,267,512 10,001,083 – – 106,268,595 - Management fees income – – 396,000 (396,000) –

Total revenue 96,267,512 10,001,083 12,296,000 (12,296,000) 106,268,595

Cost of sales (52,945,660) (9,299,379) – 21,409 (62,223,630)

Gross profit 43,321,852 701,704 12,296,000 (12,274,591) 44,044,965

Other income 2,995,878 Unallocated corporate expenses (16,661,461)

Profit from operation 30,379,382

Finance costs (156,204)

Profit before tax 30,223,178

Tax expense (6,508,404)

Profit after tax 23,714,774

97

ANNUAL REPORT 2017


33. OPERATING SEGMENTAL (CONT’D)

(a) Business segments (cont’d)

HVAC&R Insulation parts and Investment materials equipment holdings Eliminations Consolidated RM RM RM RM RM 2016

Revenue- Investment income – – 7,200,000 (7,200,000) – - External sales 84,765,491 5,645,435 – – 90,410,926 - Management fees income – – 264,000 (264,000) –

Total revenue 84,765,491 5,645,435 7,464,000 (7,464,000) 90,410,926

Cost of sales (49,953,711) (5,178,768) – 15,427 (55,117,052)

Gross profit 34,811,780 466,667 7,464,000 (7,448,573) 35,293,874

Other income 949,760 Unallocated corporate expenses (14,689,226)

Profit from operation 21,554,408

Finance costs (192,570)

Profit before tax 21,361,838

Tax expense (4,701,749)

Profit after tax 16,660,089

(b) Geographical segments

The Group operates principally in Malaysia, therefore geographical segment is analysed based on geographical location of its customers. The analysis of segment results is not presented because it is not practicable to allocate operating expenses as the basis for making these allocations is arbitrary. The Group’s segment revenue from external customers by geographical area based on the geographical location of its customers is shown as follows:


Africa, America and Europe 10,239,568 8,968,074 Asia (excluding Malaysia) and Oceania 69,677,905 61,202,708 Malaysia 26,351,122 20,240,144

106,268,595 90,410,926


98


33. OPERATING SEGMENTAL (CONT’D)

(b) Geographical segments (cont’d)

Major customer

Revenue from a major customer with revenue equal to or more than 10% of Group revenue, amounts to RM 11,783,528 (2016 : RM NIL) arising from sales by insulation materials.

Segment assets and segment liabilities were not disclosed as they were not regularly provided to the chief operating decision maker for their day-to-day operation decision making.

34. CAPITAL COMMITMENTS

At 30 April, the Group has the following capital commitments in respect of property, plant and equipment:


Authorised and contracted for – 8,060,000 Authorised but not contracted for 548,529 –

35. FINANCIAL INSTRUMENTS

The Group’s activities are exposed to a variety of market risk (including foreign currency risk and interest rate risk), credit risk and liquidity risk. The Group’s overall financial risk management policy focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial performance.

35.1 Financial Risk Management Policies

The policies in respect of the major areas of treasury activity are as follows:

(a) Market Risk

(i) Foreign currency risk

The Group is exposed to foreign currency risk on transactions and balances that are denominated in currencies other than the respective functional currencies of entities within the Group. The currencies giving rise to this risk are primarily United States Dollar (“USD”) and Singapore Dollar (“SGD”). Foreign currency risk is monitored closely on an ongoing basis to ensure that the net exposure is at an acceptable level. On occasion, the Group enters into forward currency contracts to hedge against its foreign currency risk. The Group also holds cash and cash equivalents denominated in foreign currencies for working capital purposes.

99

ANNUAL REPORT 2017


35.

FIN

AN

CIA

L IN

STR

UM

ENTS

(C

ON

T’D

)

35.1

Fi

nanc

ial R

isk

Man

agem

ent

Polic

ies

(Con

t’d)

(a)

Mar

ket

Ris

k (C

ont’d

)

(i)

Fo

reig

n cu

rren

cy r

isk

(con

t’d)

Th

e G

roup

’s ex

posu

re to

fore

ign

curr

ency

ris

k (a

cur

renc

y w

hich

is o

ther

than

the

func

tiona

l cur

renc

y of

the

entit

ies

with

in th

e G

roup

) tha

t ba

sed

on th

e ca

rryi

ng a

mou

nts

of th

e fin

anci

al in

stru

men

ts a

t the

end

of t

he r

epor

ting

peri

od is

sum

mar

ised

as

belo

w:

Fo

reig

n C

urre

ncy

Expo

sure

USD

SG

D

Oth

er

RM

To

tal

RM

R

M

RM

R

M

RM

Th

e G

roup

20

17

Fi

nanc

ial A

sset

s

Trad

e re

ceiv

able

s 7

,938

,259

1

11,3

62

– 4

,941

,186

1

2,99

0,80

7

Oth

er r

ecei

vabl

es

– –

69,

654

1

25,2

12

194

,866

Dep

osits

with

lice

nsed

ban

k –

– –

18,

093,

869

1

8,09

3,86

9

Cas

h an

d ba

nk b

alan

ces

6,4

49,8

51

325

,317

1

83,8

56

7,3

40,4

72

14,

299,

496

14,

388,

110

4

36,6

79

253

,510

3

0,50

0,73

9

45,

579,

038

Fi

nanc

ial L

iabi

litie

s

Trad

e pa

yabl

es

(2,6

91,9

82)

– –

(3,6

56,5

72)

(6,3

48,5

54)

O

ther

pay

able

s an

d ac

crua

ls

(414

,231

) (1

5,53

5)

(783

,601

) (6

,506

,281

) (7

,719

,648

)

Loan

s an

d bo

rrow

ings

(3

,098

,239

) –

–

(7,2

69,4

27)

(10,

367,

666)

D

ivid

end

paya

ble

– –

–

(4,7

63,9

95)

(4,7

63,9

95)

(6,2

04,4

52)

(15,

535)

(7

83,6

01)

(22,

196,

275)

(2

9,19

9,86

3)

N

et fi

nanc

ial a

sset

s/(li

abili

ties)

8

,183

,658

4

21,1

44

(530

,091

) 8

,304

,464

1

6,37

9,17

5

Le

ss :

Net

fina

ncia

l (as

sets

)/lia

bilit

ies

deno

min

ated

in th

e re

spec

tive

entit

ies

func

tiona

l cur

renc

ies

(1,3

55,8

69)

– 6

11,4

98

(8,3

04,4

64)

(9,0

48,8

35)

C

urre

ncy

expo

sure

6

,827

,789

4

21,1

44

81,

407

–

7,3

30,3

40


100


35.

FIN

AN

CIA

L IN

STR

UM

ENTS

(C

ON

T’D

)

35.1

Fi

nanc

ial R

isk

Man

agem

ent

Polic

ies

(Con

t’d)

(a)

Mar

ket

Ris

k (C

ont’d

)

(i)

Fo

reig

n cu

rren

cy r

isk

(con

t’d)

Fo

reig

n C

urre

ncy

Expo

sure

(co

nt’d

)

USD

SG

D

Oth

er

RM

To

tal

RM

R

M

RM

R

M

RM

Th

e G

roup

20

16

Fi

nanc

ial A

sset

s

Trad

e re

ceiv

able

s 7

,380

,998

3

3,58

4

– 2

,942

,337

1

0,35

6,91

9

Oth

er r

ecei

vabl

es

– –

– 1

36,6

64

136

,664

Dep

osits

with

lice

nsed

ban

k –

– –

16,

946,

297

1

6,94

6,29

7

Cas

h an

d ba

nk b

alan

ces

7,7

04,8

78

– 9

0,02

5

5,6

57,1

15

13,

452,

018

15,0

85,8

76

33,5

84

90,

025

2

5,68

2,41

3

40,

891,

898

Fi

nanc

ial L

iabi

litie

s

Trad

e pa

yabl

es

(1,0

48,2

48)

– –

(2,8

50,5

20)

(3,8

98,7

68)

O

ther

pay

able

s an

d ac

crua

ls

(376

,448

) –

– (4

,087

,806

) (4

,464

,254

)

Loan

s an

d bo

rrow

ings

(7

35,0

72)

– –

(2,1

34,3

78)

(2,8

69,4

50)

D

ivid

end

paya

ble

– –

– (3

,175

,997

) (3

,175

,997

)

(2,1

59,7

68)

– –

(1

2,24

8,70

1)

(14,

408,

469)

N

et fi

nanc

ial a

sset

s 1

2,92

6,10

8

33,

584

9

0,02

5

13,

433,

712

2

6,48

3,42

9

Le

ss :

Net

fina

ncia

l ass

ets

deno

min

ated

in th

e re

spec

tive

entit

ies

func

tiona

l cur

renc

ies

– –

–

(13,

433,

712)

(1

3,43

3,71

2)

C

urre

ncy

expo

sure

1

2,92

6,10

8

33,

584

9

0,02

5

– 1

3,04

9,71

7

101

ANNUAL REPORT 2017


35. FINANCIAL INSTRUMENTS (CONT’D)

35.1 Financial Risk Management Policies (Cont’d)

(a) Market Risk (Cont’d)

(i) Foreign currency risk (cont’d)

Foreign Currency Exposure (cont’d)

USD RM Total RM RM RM The Company 2017

Financial Assets Amount owing by subsidiaries 4,500,710 2,117,844 6,618,554 Deposits with licensed bank – 550,000 550,000 Cash and bank balances 1,428 5,128,813 5,130,241

4,502,138 7,796,657 12,298,795

Financial Liabilities Other payables and accruals – (194,580) (194,580) Dividend payable – (4,763,995) (4,763,995)

– (4,958,575) (4,958,575)

Net financial assets 4,502,138 2,838,082 7,340,220 Less : Net financial assets denominated in the Company’s functional currency – (2,838,082) (2,838,082)

Currency exposure 4,502,138 – 4,502,138

2016

Financial Assets Amount owing by subsidiaries – 2,217,843 2,217,843 Deposits with licensed bank – 2,000,000 2,000,000 Cash and bank balances – 3,896,866 3,896,866

– 8,114,709 8,114,709

Financial Liabilities Other payables and accruals – (189,783) (189,783) Dividend payable – (3,175,997) (3,175,997)

– (3,365,780) (3,365,780)

Net financial assets – 4,748,929 4,748,929 Less : Net financial assets denominated in the Company’s functional currency – (4,748,929) (4,748,929)

Currency exposure – – –


102





(i) Foreign currency risk (cont’d)

Foreign currency risk sensitivity analysis

The following table details the sensitivity analysis to a reasonably possible change in the foreign currencies at the end of the reporting period, with all other variables held constant:

The Group The Company Increase/(Decrease) Increase/(Decrease)

2017 2016 2017 2016 RM RM RM RM

The Group

Effects on profit after tax

USD - strengthened by 5% 259,456 491,192 171,081 –

SGD - strengthened by 5% 16,003 1,276 – –

Other - strengthened by 5% 3,093 3,421 – –

A weakening of the above currencies against Ringgit Malaysia at the reporting date would have had the equal but opposite effect on the above currencies to the amounts shown above, with all other variables held constant.

103

ANNUAL REPORT 2017





(ii) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group’s exposure to interest rate risk arises mainly from long-term borrowings with variable rates. The Group’s policy is to obtain the most favourable interest rates available and by maintaining a balanced portfolio of mix of fixed and floating rate borrowings.

The Group’s fixed rate borrowings with licensed banks are carried at amortised cost. Therefore, they are not subject to interest rate risk as defined MFRS 7 since neither they carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

The Group’s exposure to interest rate risk that based on the carrying amounts of the financial instruments at the end of the reporting period is disclosed below:

2017 2016 RM RM

Fixed rate instruments Financial liabilities 3,602,555 1,435,797

Floating rate instruments Financial liabilities 6,765,111 1,433,653

Interest Rate Risk Sensitivity Analysis

Any reasonably possible change in the interest rates of floating rate term loans at the end of the reporting period does not have material impact on the profit after tax and other comprehensive income of the Group and of the Company and hence, no sensitivity analysis is presented.


104




(b) Credit Risk

The Group’s exposure to credit risk, or the risk of counterparties defaulting, arises mainly from trade and other receivables. The Group manages its exposure to credit risk by the application of credit approvals, credit limits and monitoring procedures on an ongoing basis. For other financial assets (including cash and bank balances), the Group minimises credit risk by dealing exclusively with high credit rating counterparties.

The Group’s uses ageing analysis to monitor the credit quality of the trade receivables. Any receivables having significant balances past due, which are deemed to have higher credit risk, are monitored individually.

The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of the trade and other receivables as appropriate. The main components of this allowance are a specific loss component that relates to individually significant exposures, and a collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet identified (where applicable). Impairment is estimated by management based on prior experience and the current economic environment.

The Group provides financial guarantee to financial institutions for credit facilities granted to certain subsidiaries. The Company monitors the results of these subsidiaries regularly and repayments made by the subsidiaries.

(i) Credit Risk Concentration Profile

The Group’s major concentration of credit risk relates to the amounts owing by 1 customer (2016 : 1 customer) which constituted approximately 12% (2016 : 23%) of its trade receivables (including related parties) at the end of the reporting period.

In addition, the Group also determines concentration of credit risk by monitoring the geographical region of its trade receivables on an ongoing basis. The credit risk concentration profile of trade receivables at the end of the reporting period is as follows:

2017 2016 RM % of total RM % of total

By country: Africa, America and Europe 1,005,342 7.7 932,670 9.1 Asia (excluding Malaysia) and Oceania 7,022,799 54.1 6,355,664 61.4 Malaysia 4,962,666 38.2 3,068,585 29.5

12,990,807 100.0 10,356,919 100.0

105

ANNUAL REPORT 2017




(b) Credit Risk (Cont’d)

(ii) Exposure to Credit Risk

At the end of the reporting period, the maximum exposure to credit risk is represented by the carrying amount of each class of financial assets recognised in the statements of financial position of the Group and of the Company after deducting any allowance for impairment losses (where applicable).

In addition, the Company’s maximum exposure to credit risk also includes corporate guarantees provided to its subsidiaries as disclosed under the “Maturity Analysis” of item (c) below, representing the outstanding banking facilities of the subsidiaries as at the end of the financial reporting period. As at the end of the reporting period, there was no indication that any subsidiary would default on repayment.

(iii) Ageing analysis

The ageing analysis of trade receivables (including amount owing by related parties) is as follows:

Individual Collective Gross amount impairment impairment Carrying value RM RM RM RM

The Group 2017

Not past due 6,494,649 – – 6,494,649

Past due : - 0 to 30 days 5,194,430 – – 5,194,430 - 31 to 60 days 877,478 – – 877,478 - 61 to 90 days 386,927 – – 386,927 - over 91 days 1,743,519 (1,706,196) – 37,323

14,697,003 (1,706,196) – 12,990,807


106




(b) Credit Risk (Cont’d)

(iii) Ageing analysis (cont’d)

Individual Collective Gross amount impairment impairment Carrying value RM RM RM RM

The Group 2016 Not past due 5,559,679 – – 5,559,679

Past due: - 0 to 30 days 3,552,071 – – 3,552,071 - 31 to 60 days 962,672 – – 962,672 - 61 to 90 days 282,497 – – 282,497 - over 91 days 1,894,525 (1,894,525) – –

12,251,444 (1,894,525) – 10,356,919

At the end of the reporting period, trade receivables that are individually impaired were those have defaulted on payments. These receivables are not secured by any collateral or credit enhancement.

The Group believes that no additional impairment allowance is necessary in respect of trade receivables that are past due but not impaired because they are companies with good collection track record and no recent history of default.

(c) Liquidity Risk

Liquidity risk arises mainly from general funding and business activities. The Group practices prudent risk management by maintaining sufficient cash balances and the availability of funding through certain committed credit facilities.

107

ANNUAL REPORT 2017


35.

FIN

AN

CIA

L IN

STR

UM

ENTS

(C

ON

T’D

)

35.1

Fi

nanc

ial R

isk

Man

agem

ent

Polic

ies

(Con

t’d)

(c)

Liqu

idit

y ri

sk (

cont

’d)

M

atur

ity A

naly

sis

Th

e fo

llow

ing

tabl

e se

ts o

ut th

e m

atur

ity p

rofil

e of

the

finan

cial

liab

ilitie

s at

the

repo

rtin

g pe

riod

bas

ed o

n co

ntra

ctua

l und

isco

unte

d ca

sh fl

ows

(incl

udin

g in

tere

st p

aym

ents

com

pute

d us

ing

cont

ract

ual r

ates

or,

if flo

atin

g, b

ased

on

the

rate

s at

the

end

of th

e re

port

ing

peri

od):

Con

trac

tual

Con

trac

tual

C

arry

ing

undi

scou

nted

W

ithi

n

Ove

r

in

tere

st r

ate

amou

nt

cash

flow

s 1

year

1-

5 ye

ars

5 ye

ars

%

RM

R

M

RM

R

M

RM

The

Gro

up20

17

Non

-der

ivat

ive

fina

ncia

l lia

bilit

ies

Trad

e pa

yabl

es

– 6

,348

,554

6

,348

,554

6

,348

,554

–

–

Oth

er p

ayab

les

and

accr

uals

–

7,7

19,6

48

7,7

19,6

48

7,7

19,6

48

–

–

Loan

s an

d bo

rrow

ings

:-

Mul

ti cu

rren

cy tr

ade

loan

s 2

.5 -

3.0

3

,098

,239

3

,098

,239

3

,098

,239

–

– - T

erm

loan

s 4

.5 -

4.7

6

,765

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9

,224

,374

7

40,5

38

2,4

81,6

00

6,0

02,2

36

- H

ire

purc

hase

pay

able

s 3

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7.0

5

04,3

16

538

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2

94,0

09

244

,442

–

-

Div

iden

d pa

yabl

e –

4,7

63,9

95

4,7

63,9

95

4,7

63,9

95

– –

2

9,19

9,86

3

31,

693,

261

2

2,96

4,98

3

2,7

26,0

42

6,0

02,2

36


108


35.

FIN

AN

CIA

L IN

STR

UM

ENTS

(C

ON

T’D

)

35.1

Fi

nanc

ial R

isk

Man

agem

ent

Polic

ies

(Con

t’d)

(c)

Liqu

idit

y ri

sk (

cont

’d)

Mat

urity

Ana

lysi

s (c

ont’d

)

Th

e fo

llow

ing

tabl

e se

ts o

ut t

he m

atur

ity p

rofil

e of

the

fina

ncia

l lia

bilit

ies

at t

he r

epor

ting

date

bas

ed o

n co

ntra

ctua

l un

disc

ount

ed c

ash

flow

s (in

clud

ing

inte

rest

pay

men

ts c

ompu

ted

usin

g co

ntra

ctua

l rat

es o

r, if

float

ing,

bas

ed o

n th

e ra

tes

at th

e en

d of

the

repo

rtin

g pe

riod

) (co

nt’d

):

Con

trac

tual

Con

trac

tual

C

arry

ing

undi

scou

nted

W

ithi

n

Ove

r

in

tere

st r

ate

amou

nt

cash

flow

s 1

year

1-

5 ye

ars

5 ye

ars

%

RM

R

M

RM

R

M

RM

The

Gro

up20

16

Non

-der

ivat

ive

fina

ncia

l lia

bilit

ies

Trad

e pa

yabl

es

– 3

,898

,768

3

,898

,768

3

,898

,768

–

–

Oth

er p

ayab

les

and

accr

uals

–

4,4

64,2

54

4,4

64,2

54

4,4

64,2

54

– –

Lo

ans

and

borr

owin

gs:

- M

ulti

curr

ency

trad

e lo

ans

1.9

- 2

.2

735

,072

7

35,0

72

735

,072

–

–

- Ter

m lo

ans

7.9

1

,433

,653

1

,642

,428

4

58,3

52

1,1

84,0

76

– -

Hir

e pu

rcha

se p

ayab

les

3.6

- 7

.0

700

,725

7

37,2

87

370

,025

3

67,2

62

– D

ivid

end

paya

ble

– 3

,175

,997

3

,175

,997

3

,175

,997

–

–

1

4,40

8,46

9

14,

653,

806

1

3,10

2,46

8

1,5

51,3

38

–

109

ANNUAL REPORT 2017


35.

FIN

AN

CIA

L IN

STR

UM

ENTS

(C

ON

T’D

)

35.1

Fi

nanc

ial R

isk

Man

agem

ent

Polic

ies

(Con

t’d)

(c)

Liqu

idit

y ri

sk (

cont

’d)

Mat

urity

Ana

lysi

s (c

ont’d

)

Th

e fo

llow

ing

tabl

e se

ts o

ut t

he m

atur

ity p

rofil

e of

the

fina

ncia

l lia

bilit

ies

at t

he r

epor

ting

date

bas

ed o

n co

ntra

ctua

l un

disc

ount

ed c

ash

flow

s (in

clud

ing

inte

rest

pay

men

ts c

ompu

ted

usin

g co

ntra

ctua

l rat

es o

r, if

float

ing,

bas

ed o

n th

e ra

tes

at th

e en

d of

the

repo

rtin

g pe

riod

) (co

nt’d

):

Con

trac

tual

Con

trac

tual

C

arry

ing

undi

scou

nted

W

ithi

n

Ove

r

in

tere

st r

ate

amou

nt

cash

flow

s 1

year

1-

5 ye

ars

5 ye

ars

%

RM

R

M

RM

R

M

RM

The

Com

pany

2017

Oth

er p

ayab

les

and

accr

uals

–

1

94,5

80

194

,580

1

94,5

80

–

–

Div

iden

d pa

yabl

e –

4

,763

,995

4

,763

,995

4

,763

,995

–

–

Fi

nanc

ial g

uara

ntee

con

trac

t in

re

latio

n to

cor

pora

te g

uara

ntee

to

cer

tain

sub

sidi

arie

s *

–

10,

098,

150

1

2,56

3,43

7

4,0

55,3

14

2,5

05,8

87

6,0

02,2

36

1

5,05

6,72

5

17,

522,

012

9

,013

,889

2

,505

,887

6

,002

,236

2016

Oth

er p

ayab

les

and

accr

uals

–

1

89,7

83

189

,783

1

89,7

83

–

–

Div

iden

d pa

yabl

e –

3,1

75,9

97

3,1

75,9

97

3,1

75,9

97

–

–

Fina

ncia

l gua

rant

ee c

ontr

act i

n

rela

tion

to c

orpo

rate

gua

rant

ee

to c

erta

in s

ubsi

diar

ies

* –

2,6

51,3

56

2,8

85,2

93

1,4

60,3

93

1,4

24,9

00

–

6

,017

,136

6

,251

,073

4

,826

,173

1

,424

,900

–

* Th

e co

ntra

ctua

l und

isco

unte

d ca

sh fl

ows

repr

esen

t the

out

stan

ding

cre

dit f

acili

ties

of th

e su

bsid

iari

es a

t the

end

of t

he re

port

ing

peri

od. T

he

finan

cial

gua

rant

ees

have

not

bee

n re

cogn

ised

sin

ce th

e fa

ir v

alue

on

initi

al r

ecog

nitio

n w

as n

ot m

ater

ial.


110



35.2 Capital Risk Management

The Group manages its capital to ensure that entities within the Group will be able to maintain an optimal capital structure so as to support its businesses and maximise shareholders value. To achieve this objective, the Group may make adjustments to the capital structure in view of changes in economic conditions, such as adjusting the amount of dividend payment, returning of capital to shareholders or issuing new shares.

The Group manages its capital based on debt-to-equity ratio. The debt-to-equity ratio of the Group at the end of the reporting period is not presented as its cash and cash equivalents exceeded the total external borrowings.

There was no change in the Group’s approach to capital management during the financial year.

35.3 Classification of Financial Instruments


Financial Assets

Available-for-sale financial assetsOther investment (Note 9) 46,667 46,667 – –

Loans and receivablesTrade receivables (Note 11) 12,990,807 10,356,919 – – Other receivables (Note 12) 194,866 136,664 – – Amount owing by subsidiaries – – 6,618,554 2,817,843 (Note 13)Deposits with licensed bank 18,093,869 16,946,297 550,000 2,000,000 (Note 14)Cash and bank balances 14,299,496 13,452,018 5,130,241 3,896,866

45,579,038 40,891,898 12,298,795 8,714,709

Financial Liabilities

Other financial liabilitiesTrade payables (Note 20) 6,348,554 3,898,768 – – Other payables and accruals 7,719,648 4,464,254 194,580 189,783 (Note 21)Loans and borrowings (Note 18) 10,367,666 2,869,450 – – Dividend payable (Note 22) 4,763,995 3,175,997 4,763,995 3,175,997

29,199,863 14,408,469 4,958,575 3,365,780

111

ANNUAL REPORT 2017


35.

FIN

AN

CIA

L IN

STR

UM

ENTS

(C

ON

T’D

)

35.4

Fa

ir V

alue

Inf

orm

atio

n

Th

e fa

ir v

alue

s of t

he fi

nanc

ial a

sset

s and

fina

ncia

l lia

bilit

ies o

f the

Gro

up a

nd o

f the

Com

pany

whi

ch a

re m

atur

ing

with

in th

e ne

xt 1

2 m

onth

s app

roxi

mat

ed

thei

r ca

rryi

ng a

mou

nts

due

to th

e re

lativ

ely

shor

t-te

rm m

atur

ity o

f the

fina

ncia

l ins

trum

ents

or

repa

yabl

e on

dem

and

term

s.

Th

e fa

ir v

alue

of t

he G

roup

’s in

vest

men

t in

golf

club

mem

bers

hip

with

car

ryin

g am

ount

of R

M 4

6,66

7 (2

016

: RM

46,

667)

is n

ot p

rese

nted

due

to la

ck

of m

arke

tabi

lity

whe

re th

e fa

ir v

alue

can

not b

e re

liabl

y m

easu

red.

Th

e fo

llow

ing

tabl

e se

ts o

ut th

e fa

ir v

alue

pro

file

of fi

nanc

ial i

nstr

umen

ts th

at a

re c

arri

ed a

t fai

r val

ue a

nd th

ose

not c

arri

ed a

t fai

r val

ue a

t the

end

of t

he

repo

rtin

g pe

riod

:

Fair

Val

ue o

f Fin

anci

al I

nstr

umen

ts

Fair

Val

ue o

f Fin

anci

al I

nstr

umen

ts

C

arri

ed a

t Fa

ir V

alue

no

t C

arri

ed a

t Fa

ir V

alue

Tota

l C

arry

ing

Leve

l 1

Leve

l 2

Leve

l 3

Leve

l 1

Leve

l 2

Leve

l 3

Fair

Val

ue

Am

ount

RM

R

M

RM

R

M

RM

R

M

RM

R

MTh

e G

roup

2017

Fina

ncia

l Lia

bilit

ies

Hir

e pu

rcha

se p

ayab

les

– –

–

–

(504

,086

) –

(504

,086

) (5

04,3

16)

Term

loan

s –

(6,7

65,1

11)

– –

–

–

(6

,765

,111

) (6

,765

,111

)

2016

Fina

ncia

l Lia

bilit

ies

Hir

e pu

rcha

se p

ayab

les

–

–

–

–

(698

,965

) –

(6

98,9

65)

(700

,725

)Te

rm lo

ans

–

(1,4

33,6

53)

– –

– –

(1

,433

,653

) (1

,433

,653

)


112



35.4 Fair Value Information (cont’d)

The Company

At the end of the reporting period, there were no financial instruments carried at fair value.

(a) Fair value of financial instruments carried at fair value

(i) The fair values of the Group’s term loans that carry floating interest rates approximated their carrying amounts as they are repriced to market interest rates on or near the reporting date.

(ii) There were no transfer between level 1 and level 2 during the financial year.

(b) Fair value of financial instruments not carried at fair value

The fair values of hire purchase payables that carry fixed interest rates are determined by discounting the relevant future contractual cash flows using current market interest rates for similar instruments at the end of the reporting period. The interest rates used to discount the estimated cash flows are as follows:

The Group 2017 2016 % %

Hire purchase payables 4.7 - 4.9 3.6 - 7.0

36. SIGNIFICANT EVENTS DURING THE REPORTING PERIOD

(a) Companies Act 2016

The Companies Act 2016 came into effect on 31 January 2017 (except for Section 241 and Division 8 of Part III of the said Act) and replaces the existing Companies Act 1965.

Amongst the key changes introduced under the Companies Act 2016 that have affected the financial statements of the Group and of the Company upon its initial adoption are:

(i) Removal of the authorised share capital;

(ii) Ordinary shares cease to have par value; and

The adoption of the Companies Act 2016 has been applied prospectively and the impacts of adoption are disclosed in respective note to the financial statements.

113

ANNUAL REPORT 2017


36. SIGNIFICANT EVENTS DURING THE REPORTING PERIOD (CONT’D)

(b) Incorporation of foreign subsidiaries

(i) On 1 September 2016, the Company incorporated a wholly-owned subsidiary known as Superlon Singapore Private Limited (“SSGP”) in Singapore for a total cash consideration of SGD 1 (equivalent to RM 3). The investment in SSGP was completed on 5 September 2016.

(ii) On 3 January 2017, the Company further increased the investment of SSGP from SGD 1 to SGD 100,000 with a total cash consideration of SGD 99,999 (equivalent to RM 310,413) without change in the equity interest of the subsidiary. The transaction was completed on 3 January 2017.

(iii) On 24 February 2017, a subsidiary of the Company, SSGP incorporated a wholly-owned subsidiary known as Superlon Vietnam Company Limited (“SVN”) in Vietnam for a total cash consideration of VND 17,066,250,000 (equivalent to USD 750,000). The investment was completed on 21 April 2017.

(c) Acquisition of land

On 18 April 2017, the Group via its indirect wholly-owned subsidiary, SVN, entered into a sub-lease agreement with Protrade International Tech Park and Protrade International One Member Co., Ltd to sub-lease the land Lot No. 18-6, Street 3B, APSTP, An Tay Commune, Ben Cat Town, Binh Duong Province, Vietnam with land area measuring approximately 10,366.8 m² for a total cash consideration of VND 12,289,990,095 (equivalent to RM 2,347,439).

37. SIGNIFICANT EVENT OCCURRING AFTER THE REPORTING PERIOD

The proposal of the Company to sub-divide each of its existing ordinary shares into two ordinary shares was approved by Bursa Malaysia Securities Berhad on 27 April 2017 as well as the shareholders of the Company on 19 May 2017. The proposal was implemented with the listing of 160,000,000 ordinary shares on the Main Board of Bursa Malaysia Securities Berhad on 8 June 2017.


114


38. SUPPLEMENTARY INFORMATION DISCLOSURE OF REALISED AND UNREALISED PROFITS/LOSSES

The breakdown of the retained profits of the Group and of the Company at the reporting date into realised and unrealised profits are presented in accordance with the directive issued by Bursa Malaysia Securities Berhad and prepared in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants, as follows:


Total retained profits of the Company and its subsidiaries:- realised 62,514,671 47,088,242 2,946,333 34,245 - unrealised (4,463,760) (4,060,961) – –

58,050,911 43,027,281 2,946,333 34,245 Less: Consolidation adjustments (12,158,568) (12,358,541) – –

At 30 April 45,892,343 30,668,740 2,946,333 34,245

115

ANNUAL REPORT 2017

LIST OF pROpERTIESAs at 30 APRIL 2017

Approximate Land Area / Type Date of Age of Net Book Built-up (Existing Acquisition / Buildings / Value AreaProperty / Title Details Use) Revaluation Tenure (RM’000) (square feet)

Factory 1 Land and 30/03/1996 / 21 years / 19,617 126,127 Lot 2567, Jalan Sungai Jati, Building 30/04/2017 Freehold / 81,630Kampung Jawa, (Factory &41200 Klang, Selangor / Office)GM3947, Lot 2567,Tempat Sungei Jaty,Mukim Klang,Daerah Klang, Selangor

Lot 2568, Jalan Sungai Jati, Land and 08/01/2009 / Newly 19,370 126,076Taman Klang Jaya, Building 30/04/2017 constructed / / 63,35741200 Klang, Selangor / (Warehouse) FreeholdGM20928, Lot 174634(Formerly GM 1393, Lot 2568),Mukim Klang, Daerah Klang, Selangor

Factory 2Lot 2736, Jalan Raja Nong, Land and 13/10/2004 / 13 years / 16,914 120,620Kampung Jawa, Building 30/04/2017 Freehold / 69,17441200 Klang, Selangor / (Factory &GM19478, Lot 128651, Office)Tempat Sungei Jaty,Mukim Klang,Daerah Klang, Selangor

116


ANALYSIS OF SHAREHOLDINGSAs at 7 August 2017

Issued Share Capital : RM40,000,000.00Total Number of Issued Shares : 160,000,000Class of Shares : Ordinary shares No. of No. ofSize of shareholdings shareholders % shares %

Less than 100 35 0.96 1,324 0.00100 – 1,000 950 26.11 444,665 0.281,001 – 10,000 1,838 50.51 8,629,085 5.4310,001 – 100,000 695 19.10 20,769,764 13.08100,001 – less than 5% 118 3.24 70,244,156 44.245% and above 3 0.08 58,710,848 36.97

TOTAL 3,639 100.00 158,799,842* 100.00

* Excluding the 1,200,158 shares held in treasury

SUBSTANTIAL SHAREHOLDERS’ SHAREHOLDINGS

Direct Interest Indirect InterestName No. of shares % No. of shares % Liu Lee, Hsiu Lin @ Jessica H. Liu 35,860,548 22.58 14,280,000* 8.99Kumpulan Wang Persaraan (Diperbadankan) 13,850,300 8.72 1,270,300 0.80Chan Keng Chung 9,000,000 5.67 – –Liu Han-Chao 7,140,000 4.50 35,860,548α 22.58

* Deemed interested via her children, Mr Liu Han-Chao and Jeremy Liu’s shareholdingsα Deemed interested via his mother, Madam Liu Lee, Hsiu-Lin’s shareholdings

DIRECTORS’ SHAREHOLDINGS

Direct Interest Indirect InterestName No. of shares % No. of shares % Lim E @ Lim Hoon Nam – – – –Liu Lee, Hsiu Lin @ Jessica H. Liu 35,860,548 22.58 14,280,000* 8.99Liu Han-Chao 7,140,000 4.50 35,860,548α 22.58Ongi Cheng San 60,204 0.04 – –Chun Kwong Pong – – – –Yee Wei Meng – – – –Lim Wee Keong – – – – * Deemed interested via her children, Mr Liu Han-Chao and Jeremy Liu’s shareholdingsα Deemed interested via his mother, Madam Liu Lee, Hsiu-Lin’s shareholdings

117

ANNUAL REPORT 2017

Analysis of Shareholdings(cont’d)

LIST OF THIRTY (30) LARGEST SHAREHOLDERS

Name No. of shares %

1 LIU LEE, HSIU-LIN 35,308,320 22.232 KUMPULAN WANG PERSARAAN (DIPERBADANKAN) 13,850,300 8.723 CHAN KENG CHUNG 9,000,000 5.674 YAYASAN GURU TUN HUSSEIN ONN 7,799,800 4.915 JEREMY LIU 7,140,000 4.506 LIU HAN-CHAO 7,140,000 4.507 MAYBANK SECURITIES NOMINEES (ASING) SDN BHD 5,569,200 3.51

EXEMPT AN FOR MAYBANK KIM ENG SECURITIES PTE LTD8 HLIB NOMINEES (ASING) SDN BHD 3,623,316 2.28

PLEDGED SECURITIES ACCOUNT FOR LIU, MAN-TIEN 9 RHB CAPITAL NOMINEES (TEMPATAN) SDN BHD 3,200,000 2.02

PLEDGED SECURITIES ACCOUNT FOR FONG SILING 10 MALACCA EQUITY NOMINEES (TEMPATAN) SDN BHD 1,503,300 0.95

EXEMPT AN FOR PHILLIP CAPITAL MANAGEMENT SDN BHD 11 CARTABAN NOMINEES (TEMPATAN) SDN BHD 1,426,000 0.90

RHB TRUSTEES BERHAD FOR KAF VISION FUND 12 PUBLIC NOMINEES (TEMPATAN) SDN BHD 1,373,200 0.86

PLEDGED SECURITIES ACCOUNT FOR CHEE SAI MUN 13 HSBC NOMINEES (TEMPATAN) SDN BHD 1,340,000 0.84

HSBC (M) TRUSTEE BHD FOR RHB SMALL CAP OPPORTUNITY UNIT TRUST 14 CITIGROUP NOMINEES (TEMPATAN) SDN BHD 1,270,300 0.80

KUMPULAN WANG PERSARAAN (DIPERBADANKAN) 15 HSBC NOMINEES (TEMPATAN) SDN BHD 1,218,400 0.77

HSBC (M) TRUSTEE BHD FOR PERTUBUHAN KESELAMATAN SOSIAL 16 HSBC NOMINEES (TEMPATAN) SDN BHD 1,055,700 0.66

HSBC (M) TRUSTEE BHD FOR RHB DANA HAZEEM 17 LIM KHUAN ENG 1,000,000 0.6318 RHB NOMINEES (TEMPATAN) SDN BHD 1,000,000 0.63

PLEDGED SECURITIES ACCOUNT FOR HILARY FERNANDEZ 19 HLB NOMINEES (TEMPATAN) SDN BHD 832,000 0.52

PLEDGED SECURITIES ACCOUNT FOR CHEE SAI MUN 20 HSBC NOMINEES (TEMPATAN) SDN BHD 764,000 0.48

HSBC (M) TRUSTEE BHD FOR RHB SMART BALANCED FUND 21 LIEW CHEE MING 712,000 0.4522 UOB KAY HIAN NOMINEES (TEMPATAN) SDN BHD 710,000 0.45

EXEMPT AN FOR UOB KAY HIAN PTE LTD 23 AFFIN HWANG NOMINEES (TEMPATAN) SDN. BHD. 663,800 0.42

PLEDGED SECURITIES ACCOUNT FOR TANG CHONG HEE 24 MAYBANK NOMINEES (TEMPATAN) SDN BHD 611,100 0.38

MAYBANK TRUSTEES BERHAD FOR CIMB-PRINCIPAL SMALL CAP FUND 25 HSBC NOMINEES (ASING) SDN BHD 573,800 0.36

SG NANTES FOR PIONEER FUNDS - ASIA (EX. JAPAN) EQUITY 26 LIU LEE, HSIU LIN 552,228 0.3527 CITIGROUP NOMINEES (ASING) SDN BHD 549,800 0.35

EXEMPT AN FOR CITIBANK NEW YORK (NORGES BANK 14) 28 AMANAHRAYA TRUSTEES BERHAD 500,000 0.31

PUBLIC ISLAMIC EMERGING OPPORTUNITIES FUND 29 MAYBANK NOMINEES (TEMPATAN) SDN BHD 482,000 0.30

PAULINE SEAH SEOW GEIK 30 HSBC NOMINEES (TEMPATAN) SDN BHD 469,600 0.30

HSBC (M) TRUSTEE BHD FOR RHB MALAYSIA DIVIDEND FUND

118


NOTICE IS HEREBY GIVEN that the Eleventh Annual General Meeting of SUPERLON HOLDINGS BERHAD (“Superlon” or “the Company”) will be held at Botanic Room, Botanic Resort Club, No.1, Jalan Ambang Botanic, Bandar Botanic, 41200 Klang, Selangor Darul Ehsan on Tuesday, 26 September 2017 at 10.00 a.m. for the following purposes:

AS ORDINARY BUSINESS

1. To receive the Audited Financial Statements for the financial year ended 30 April 2017 together with the Reports of Directors and Auditors thereon (Please refer to Note A).

2. To approve the payment of Directors’ fees for the financial year ended 30 April 2017.

(Ordinary Resolution 1)

3. To approve the following payments to Directors:

(1) Directors’ fees of up to RM180,000 for the financial year ending 30 April 2018 payable monthly in arrears after each month of completed service of the Directors during the subject financial year.

(2) Directors’ allowances of up to RM76,000 for the period from 01 May 2017 to 31 October 2018.



4. To re-elect the following Directors who retire in accordance with Article 96 of the Articles of Association of the Company:-

(1) Mr Lim Wee Keong(2) Mr Chun Kwong Pong

(Ordinary Resolution 4)(Ordinary Resolution 5)

5. To approve the re-appointment of retiring Auditors, Messrs Crowe Horwath as Auditors of the Company and to authorise the Directors to fix their remuneration.


AS SPECIAL BUSINESS

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

6. Authority for Directors to allot and issue shares pursuant to Section 75 of the Companies Act 2016 (“the Act”)

“THAT, subject always to the Act, the Articles of Association of the Company and approval and requirements of the relevant governmental and/or regulatory authorities (where applicable), the Directors be and are hereby empowered pursuant to Section 75 of the Act to allot and issue new ordinary shares in the Company, from time to time and upon such terms and conditions and for such purposes and to such persons whomsoever the Directors may, in their absolute discretion deem fit and expedient in the interest of the Company, provided that the aggregate number of shares to be issued pursuant to this resolution does not exceed ten percent (10%) of the total number of issued shares for the time being of the Company AND THAT such authority shall continue to be in force until the conclusion of the next annual general meeting of the Company.”


NOTICE OF ANNUAL GENERAL MEETING

119

ANNUAL REPORT 2017

7. Proposed renewal of authority for the Company to purchase its own shares

“THAT, subject to the Companies Act 2016 (“the Act”), rules, regulations and orders made pursuant to the Act, provisions of the Company’s Memorandum and Articles of Association and the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) and any other relevant authority, the Company be and is hereby given full authority, to seek shareholders’ approval for the renewal of authority for the Company to purchase and/or such amount of ordinary shares in the Company (“Shares”) through Bursa Securities upon such terms and conditions as the Directors may deem fit in the interest of the Company provided that:

(i) the aggregate number of Shares so purchased and/or held pursuant to this ordinary resolution (“Purchased Shares”) does not exceed ten percent (10%) of the total number of issued Shares; and

(ii) the maximum amount of funds to be allocated for the Purchased Shares shall not exceed the retained profits of the Company;

THAT the Directors be and are hereby authorised to decide at their discretion either to retain the Purchased Shares as treasury shares (as defined in Section 127 of the Act) and/ or to cancel the Purchased Shares and/or to retain the Purchased Shares as treasury shares for distribution as share dividends to the shareholders of the Company and/or be resold through Bursa Securities in accordance with the relevant rules of Bursa Securities and/or cancelled subsequently and/or to retain part of the Purchased Shares as treasury shares and/or cancel the remainder and to deal with the Purchased Shares in such other manner as may be permitted by the Act, rules, regulations, guidelines, requirements and/or orders of Bursa Securities and any other relevant authorities for the time being in force;

AND THAT such approval and authorisation shall only continue to be in force until:

(i) the conclusion of the next Annual General Meeting (“AGM”) of the Company following the general meeting at which such resolution was passed at which time it shall lapse unless by ordinary resolution passed at that meeting, the authority is renewed, either unconditionally or subject to conditions; or

(ii) the expiration of the period within which the next AGM after that date is required by law to be held; or

(iii) revoked or varied by an ordinary resolution passed by the shareholders of the Company in a general meeting,

whichever occurs first;

AND FURTHER THAT the Directors of the Company be authorised to do all such acts and things (including, without limitation executing all such documents as may be required) as they may consider expedient or necessary to give full effect to this mandate.”


8. Proposed retention of Independent Director

“THAT approval be and is hereby given to Mr Lim E @ Lim Hoon Nam, who has served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine (9) years, to continue to act as an Independent Non-Executive Director of the Company in accordance with the Malaysian Code on Corporate Governance 2012.”


Notice of Annual General Meeting(cont’d)

120



9. Proposed retention of Independent Director

“THAT subject to the passing of Ordinary Resolution 4, approval be and is hereby given to Mr Lim Wee Keong, who has served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine (9) years, to continue to act as an Independent Non-Executive Director of the Company in accordance with the Malaysian Code on Corporate Governance 2012.”


10. To transact any other ordinary business of which due notice shall have been given.

By order of the BoardPANG KAH MAN (MIA 18831)Company Secretary

Kuala Lumpur23 August 2017

NOTES:

1. Only depositors whose names appear in the Record of Depositors as at 18 September 2017 shall be regarded as members and be entitled to attend, participate, speak and vote at the Eleventh Annual General Meeting.

2. A member shall be entitled to appoint another person as his/her proxy to exercise all or any of his/her rights to attend, participate, speak and vote in his/her stead pursuant to Section 334 of the Companies Act 2016. There shall be no restriction as to the qualification of the proxy.

3. Where a member of the Company is an Exempt Authorised Nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“Omnibus Account”), there is no limit to the number of proxies which the Exempt Authorised Nominee may appoint in respect of each Omnibus Account it holds.

4. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he/she specifies the proportion of his/her shareholdings to be represented by each proxy.

5. The instrument appointing a proxy shall be in writing under the hand of the appointer or his/her attorney duly authorised in writing. If the appointer is a corporation, the instrument must be executed under its Common Seal or under the hand of an attorney so authorised.

6. The instrument appointing a proxy and the power of attorney or other authority, if any, under which it is signed or a notarially certified copy of that power of attorney, must be deposited at the Registered Office of the Company at 3-2, 3rd Mile Square, No. 151 Jalan Kelang Lama, Batu 3½, 58100 Kuala Lumpur not less than twenty-four (24) hours before the time appointed for holding this meeting or any adjournment thereof as Paragraph 8.29A(1) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad requires all resolutions set out in the Notice of Eleventh AGM to vote by poll.

EXPLANATORY NOTES TO THE AGENDA

7. Item 1 of the Agenda

This Agenda item is meant for discussion only as the provision of Section 340(1)(a) of the Act does not require a formal approval of the shareholders and hence, is not put forward for voting.

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ANNUAL REPORT 2017

8. Item 3 of the Agenda - Ordinary Resolutions no. 2 & 3 Approval of Directors’ fees for the financial year ending 30 April 2018 and allowances from 01 May 2017 to

31 October 2018 Directors’ fees approved for the financial year ended 30 April 2017 was RM156,000. The Directors’ fees and

allowances proposed for the financial year ending 30 April 2018 are calculated based on the number of scheduled Board and Committee Meetings for 2018 and assuming that all Non-Executive Directors will hold office until the conclusion of the next annual general meeting.

The resolutions are to facilitate payment of Directors’ fees and allowances on current financial year basis. In the event the Directors’ fees and allowances proposed are insufficient (e.g. due to more meetings), approval will be sought at the next annual general meeting for additional fees to meet the shortfall.

9. Item 6 of the Agenda - Ordinary Resolution no. 7 Authority to Allot and Issue Shares pursuant to Section 75 of the Act

(a) The proposed resolution, if passed, will grant a mandate (“General Mandate”) empowering the Directors of the Company, from the date of the Eleventh Annual General Meeting to allot and issue shares in the Company up to an amount not exceeding in total of ten percent (10%) of the total number of issued shares of the Company (excluding treasury shares, if any) for the time being for such purposes as they may think fit and in the interest of the Company. This authority, unless revoked or varied at a general meeting, shall continue to be in full force until the conclusion of the next annual general meeting of the Company.

(b) The General Mandate is a renewal from the previous mandate obtained at the last annual general meeting held on 27 September 2016 which will expire at the conclusion of the Eleventh Annual General Meeting of the Company.

(c) As at the date of this Notice, the Company did not issue any new shares based on the previous mandate obtained at the last annual general meeting.

(d) The General Mandate, if granted will provide flexibility to the Company for any possible fund raising activities, including but not limited to further placement of shares, for purpose of funding current and/or future investment project(s), working capital and/or payment of bank borrowings and acquisition.

10. Item 7 of the Agenda - Ordinary Resolution no. 8 Proposed renewal of authority for the Company to purchase its own shares The proposed resolution, if passed, will allow the Directors of the Company to exercise the power of the Company

to purchase not more than ten percent (10%) of the total number of issued shares of the Company at any time within the time period stipulated in the Main Market Listing Requirements of Bursa Malaysia Securities Berhad. This authority, unless revoked or varied by the Company at a general meeting, shall continue to be in full force until the conclusion of the next annual general meeting of the Company.

Further details are set out in the Statement to Shareholders dated 23 August 2017.

11. Items 8 and 9 of the Agenda - Ordinary Resolutions no. 9 and 10 Proposed retention of Independent Directors

The Nomination Committee has assessed the independence of the Directors, Mr Lim E @ Lim Hoon Nam and Mr Lim Wee Keong who have served as Independent Non-Executive Directors of the Company for a cumulative term of more than nine (9) years from the date of their appointment on 31 January 2007 and 27 March 2008 respectively. Notwithstanding their long tenure in office, the Board (based on the recommendations made by the Nomination Committee (save and except for the interested Directors)) is of the unanimous opinion that Mr Lim E @ Lim Hoon Nam and Mr Lim Wee Keong shall continue to act as Independent Non-Executive Directors of the Company based on the following justifications:-


122


(i) They have fulfilled the criteria under the definition of an Independent Director as stated in the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Listing Requirements”), and thus, they will be able to function as check and balance, provide a broader view and bring an element of objectivity to the Board;

(ii) During their tenure in office, they have not developed, established or maintained any significant relationship which would impair their independence as Independent Directors with the Executive Directors and major shareholders other than normal engagements and interactions on a professional level consistent and expected of them to carry out their duties as Independent Non-Executive Directors and Chairman or member of the Board Committees;

(iii) During their tenure in office, they have never transacted or entered into any transactions with, nor provided any services to the Company and its subsidiaries (“the Group”), within the scope and meaning as set forth under Paragraph 5 of Practice Note 13 of Listing Requirements;

(iv) They are currently not sitting on the board of any other public and/or private companies having the same nature of business as that of the Group; and

(v) Other than Directors’ fees and allowances paid in accordance with the industry norm and within the acceptable market rates which have been duly disclosed in the Annual Report, there are no other incentives or benefits of whatsoever nature that have been paid to them by the Company during their tenure in office.

12. Personal data privacy

By submitting an instrument appointing a proxy(ies) and/or representative(s) to attend, speak and vote at the Eleventh Annual General Meeting (“AGM”) and/or any adjournment thereof, a member of the Company:

(i) consents to the collection, use and disclosure of the member’s personal data by the Company (or its agents) for the purpose of the processing and administration by the Company (or its agents) of proxies and representatives appointed for the AGM (including any adjournment thereof) and the preparation and compilation of the attendance lists, minutes and other documents relating to the AGM (including any adjournment thereof), and in order for the Company (or its agents) to comply with any applicable laws, listing rules, regulations and/or guidelines (collectively, the “Purposes”),

(ii) warrants that where the member discloses the personal data of the member’s proxy(ies) and/or representative(s) to the Company (or its agents), the member has obtained the prior consent of such proxy(ies) and/or representative(s) for the collection, use and disclosure by the Company (or its agents) of the personal data of such proxy(ies) and/or representative(s) for the Purposes, and

(iii) agrees that the member will indemnify the Company in respect of any penalties, liabilities, claims, demands, losses and damages as a result of the member’s breach of warranty.

STATEMENT ACCOMPANYINGNOTICE OF ANNUAL GENERAL MEETING(Pursuant to Paragraph 8.27(2) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad)

DETAILS OF INDIVIDUAL WHO IS STANDING FOR ELECTION AS DIRECTOR

No individual is seeking for election as a Director at the Eleventh Annual General Meeting of the Company.


✄PROXY FORM

I/We, ...........................................................................................................................................................................

of ................................................................................................................................................................................(FULL ADDRESS)

being (a) member(s) of Superlon Holdings Berhad hereby appoint(s) ...........................................................................

....................................................................................................................................................................................

of ................................................................................................................................................................................

or failing him / her, ......................................................................................................................................................

of ................................................................................................................................................................................as my/our proxy to vote for me/us and on my/our behalf at the Eleventh Annual General Meeting of the Company to be held at Botanic Room, Botanic Resort Club, No.1, Jalan Ambang Botanic, Bandar Botanic, 41200 Klang, Selangor Darul Ehsan on Tuesday, 26 September 2017 at 10.00 a.m. and at any adjournment thereof.

No. Ordinary Resolutions For Against

1 Approval of Directors’ fees for the financial year ended 30 April 2017

2 Payment of Directors’ fees for the financial year ending 30 April 2018

3 Payment of Directors’ allowances for the period from 01 May 2017 to 31 October 2018

4 Re-election of Mr Lim Wee Keong as Director

5 Re-election of Mr Chun Kwong Pong as Director

6 Re-appointment of Messrs Crowe Horwath as Auditors and to authorise the Directors to determine their remuneration

7 Renewal of authority for Directors to issue shares pursuant to Section 75 of the Companies Act 2016

8 Proposed renewal of authority for the Company to purchase its own shares up to ten percent (10%) of its total number of issued shares

9 Proposed retention of Mr Lim E @ Lim Hoon Nam as Independent Director

10 Proposed retention of Mr Lim Wee Keong as Independent Director

Please indicate with an “X” in the appropriate box against each resolution how you wish your proxy to vote. If no instruction is given, this form will be taken to authorise the proxy to vote at his/ her discretion.

For appointment of two proxies, the percentage of shareholdings to be represented by each proxy is as follows:

Dated this ................... day of ..............................2017

.........................................................................Signature of Shareholder(s) or Common Seal

NOTES:

1. Only depositors whose names appear in the Record of Depositors as at 18 September 2017 shall be regarded as members and be entitled to attend, participate, speak and vote at the Eleventh Annual General Meeting.

2. A member shall be entitled to appoint another person as his/her proxy to exercise all or any of his/her rights to attend, participate, speak and vote in his/her stead pursuant to Section 334 of the Companies Act 2016. There shall be no restriction as to the qualification of the proxy.

3. Where a member of the Company is an Exempt Authorised Nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“Omnibus Account”), there is no limit to the number of proxies which the Exempt Authorised Nominee may appoint in respect of each Omnibus Account it holds.

4. Where a member appoints more than one (1) proxy, the appointment shall be invalid unless he/she specifies the proportion of his/her shareholding to be represented by each proxy.

5. The instrument appointing a proxy shall be in writing under the hand of the appointer or his/her attorney duly authorised in writing. If the appointer is a corporation, the instrument must be executed under its Common Seal or under the hand of an attorney so authorised.

6. The instrument appointing a proxy and the power of attorney or other authority, if any, under which it is signed or a notarially certified copy of that power of attorney, must be deposited at the Registered Office of the Company at 3-2, 3rd Mile Square, No. 151 Jalan Kelang Lama, Batu 3½, 58100 Kuala Lumpur not less than twenty-four (24) hours before the time appointed for holding this meeting or any adjournment thereof as Paragraph 8.29A(1) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad requires all resolutions set out in the Notice of Eleventh AGM to vote by poll.

No. of Shares Percentage

Proxy 1

Proxy 2

Total 100%

Number of Shares Held

SUPERLON HOLDINGS BERHAD(Company No.740412-X)(Incorporated in Malaysia)

To: Company Secretary

SUPERLON HOLDINGS BERHAD (740412-X)

3-2, 3rd Mile Square No. 151 Jalan Kelang Lama Batu 31/2

58100 Kuala Lumpur

AFFIXSTAMPHERE

Please fold here

Please fold here

SUPERLON is Malaysia’s leading manufacturer of high quality thermal insulation materials used mainly in the Heating, Ventilation, Air Conditioning and Refrigeration (HVAC&R) system of residential, commercial and industrial buildings. The company’s thermal insulation products are used as vapor barrier for the prevention of condensation or frost formation on cooling systems, chilled water and refrigeration lines and heat loss reduction for hot water plumbing, heating and dual temperature piping.

Mission Statement• To be recognized globally as a reliable manufacturer of quality

thermal insulators.

• To build a global brand name within the thermal insulation industry.

• To continuously be innovative in the application of elastomeric acrylonitrile butadiene rubber across other industries.

Vision Statement• To be a company that contributes to the overall reduction of

global energy consumption through the manufacturing of quality products, particularly in the area of thermal insulators.

In addition to the manufacturing of thermal insulation materials, SUPERLON is also involved in trading of HVAC&R parts and equipment. The existing product ranges for our trading business include the following:-

1) Copper Tubes, Fittings and Driers

2) Refrigerant Gas

3) Refrigerator Compressor, Vacuum Pump and Motor Fan

4) Temperature Controller, Digital Thermometer and Refrigerator Gauge.

HVAC&R PARTS

INSULATION SHEETS & ROLLS

SUPERLON sheets are available in pre-cut sizes or in rolls.

INSULATION TUBES

Superlon Holdings B

erhad (740412-X) A

NN

UA

L REPO

RT 2017

Superlon Holdings Berhad(740412-X)

Superlon Holdings Berhad (740412-X)

Lot 2567, Jalan Sungai Jati, 41200 Klang, Selangor Darul Ehsan.Tel: 603-3372 3888 Fax: 603-3382 1688 Email: [email protected]

www.superlon.com.my

ANNUAL REPORT

2017

statements of changes in equity (cont’d) amendments to mfrs 140 : transfers of investment property...

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