sustainable growth - MalaysiaStock.Biz...2014/09/05 · Place : Concorde Hotel Shah Alam, Gallery...

AnnualReport

2014

sustainable

growth

Place : Concorde Hotel Shah Alam, Gallery 1, Level 3, No. 3 Jalan Tengku Ampuan Zabedah, 40100 Shah Alam, Selangor Darul Ehsan.Time : Monday, 29 September 2014 at 9.00 a.m.

Notice of AnnuAlGenerAlMeetinG

19th

2 Corporate Information 3 Corporate Structure 4 Notice of Annual General Meeting 7 Directors’ Profile 10 Chairman’s Statement 12 Audit Committee Report 15 Statement on Corporate Governance 26 Additional Compliance Information 27 Statement on Risk Management and Internal Control 29 Directors’ Responsibilities Statement 30 Corporate Social Responsibility Statement 31 Financial Statements 105 List of Properties 109 Analysis of Ordinary Shareholdings 112 Analysis of Warrant Holdings Structure • Form of Proxy

coNteNts

Resintech Berhad (341662-X) Annual Report 20142

BOARD OF DIRECTORS

Dato’ Abu Sujak bin Mahmud(Senior Independent Non-Executive Chairman)

Dato’ Dr. Teh Kim Poo, DSSA, PJK, JP(Managing Director)

Datin Gan Jew, PJK (Executive Director)

Teh Leng Kang, PJK(Executive Director)

Khairul Anuar bin Shaharudin(Independent Non-Executive Director)

Wei Hwei Hong(Executive Director)

Kok Wee Wah(Independent Non-Executive Director)

AUDIT COMMITTEE ChairmanDato’ Abu Sujak bin Mahmud(Senior Independent Non-Executive Chairman)

MembersKhairul Anuar bin Shaharudin (Independent Non-Executive Director)


NOMINATION COMMITTEE

Chairman Dato’ Abu Sujak bin Mahmud(Senior Independent Non-Executive Chairman)

MemberKhairul Anuar bin Shaharudin(Independent Non-Executive Director)

REMUNERATION COMMITTEE

Chairman Dato’ Dr. Teh Kim Poo, DSSA, PJK, JP(Managing Director)

MembersDato’ Abu Sujak bin Mahmud(Senior Independent Non-Executive Chairman)

Khairul Anuar bin Shaharudin(Independent Non-Executive Director)

COMPANY SECRETARIES Teo Mee Hui (MAICSA 7050642) Lim Lee Kuan (MAICSA 7017753)

REGISTERED OFFICE Lot 3 & 5, Jalan Waja 14Kawasan Perindustrian Telok Panglima Garang, 42500 Telok Panglima GarangSelangor Darul EhsanTel : 03-3122.2422Fax : 03-3122.2411

WEBSITE & EMAIL

www.resintechmalaysia.my [email protected]

CORPORATE OFFICE

Lot 3 & 5, Jalan Waja 14Kawasan Perindustrian Telok Panglima Garang, 42500 Telok Panglima GarangSelangor Darul EhsanTel : 03-3122.2422Fax : 03-3122.2411

AUDITORS Crowe Horwath Chartered AccountantsLevel 16, Tower CMegan Avenue IINo. 12, Jalan Yap Kwan Seng50450 Kuala Lumpur

SHARE REGISTRAR

Symphony Share Registrars Sdn. Bhd. Level 6, Symphony HouseBlock D13, Pusat Dagangan Dana 1Jalan PJU 1A/4647301 Petaling JayaSelangor Darul EhsanTel : 03-7841.8000 Fax : 03-7841.8008

PRINCIPAL BANKERS

Hong Leong Bank BerhadNo 90 Jalan Persiaran Raja Muda Musa42000 Port KlangSelangor Darul Ehsan

United Overseas Bank (Malaysia) Berhad80-84 Jalan 3/6DMedan Putra Business CentreSri Manjalara Off Jalan Damansara52200 Kuala Lumpur

CIMB Bank Malaysia BerhadNo 22A Lorong Batu Nilam 4BBandar Bukit Tinggi41200 KlangSelangor Darul Ehsan

STOCK EXCHANGE LISTING Main Market of Bursa Malaysia Securities Berhad

Shares:Stock Name : RESINTC Stock Code : 7232

Warrants:Stock Name : RESINTC-WAStock Code : 7232WA

coRPoRAteiNfoRMAtioN

Resintech Berhad (341662-X) Annual Report 2014 3

coRPoRAtestRuctuRe

Resintech Biowood(Malaysia) Sdn Bhd

Resintech Plastics (M) Sdn Bhd

Resintech-KaparSdn Bhd

Resintech (Sabah)Sdn Bhd

Vision MouldSpecialist (M)

Sdn Bhd

ResintechProducts

MarketingSdn Bhd

Exact LinkSdn Bhd

ResintechEngineering

Sdn Bhd

RT WaterTechnology

Sdn Bhd

PT ResintechIndomas

Sarpino’s (M)Sdn Bhd

Sarpino’s Pizzeria(Cambodia) Co. Ltd

100%100% 100%

100%

100%

100%

100%100% 100% 100%

100%

100%


Notice ofANNuAl geNeRAl MeetiNg

NOTICE IS HEREBY GIVEN that the Nineteenth Annual General Meeting of RESINTECH BERHAD will be held at Concorde Hotel Shah Alam, Gallery 1, Level 3, No. 3, Jalan Tengku Ampuan Zabedah, 40100 Shah Alam, Selangor Darul Ehsan on Monday, 29 September 2014 at 9.00 a.m. for the following purposes:

AGENDA

As Ordinary Business

1. To table the Audited Financial Statements for the financial year ended 31 March 2014 together with the Reports of Directors and Auditors thereon.

Please refer to Explanatory Note 1

2. To re-elect the following Directors, who retire pursuant to Article 126 of the Articles of Association of the Company:

2.1 Teh Leng Kang, PJK Ordinary Resolution 1

2.2 Khairul Anuar Bin Shaharudin Ordinary Resolution 2

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

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

Ordinary Resolution 4

As Special Business

To consider and, if thought fit, to pass the following Ordinary Resolutions with or without any modification:

5. AUTHORITY TO ISSUE SHARES

“THAT subject always to the Companies Act, 1965, Articles of Association of the Company and approvals from Bursa Malaysia Securities Berhad and any other governmental/regulatory bodies, where such approval is necessary, authority be and is hereby given to the Directors pursuant to Section 132D of the Companies Act, 1965 to issue and allot not more than ten percent (10%) of the issued capital of the Company at any time upon any such terms and conditions and for such purposes as the Directors may in their absolute discretion deem fit or in pursuance of offers, agreements or options to be made or granted by the Directors while this approval is in force until the conclusion of the next Annual General Meeting of the Company and that the Directors be and are hereby further authorised to make or grant offers, agreements or options which would or might require shares to be issued after the expiration of the approval hereof.”



6. RE-APPOINTMENT OF DIRECTOR PURSUANT TO SECTION 129(6) OF THE COMPANIES ACT, 1965

“THAT pursuant to Section 129(6) of the Companies Act, 1965, Dato’ Abu Sujak Bin Mahmud be and is hereby re-appointed as Director of the Company and to hold office until the conclusion of the next Annual General Meeting.”


By Order of the Board

TEO MEE HUI (MAICSA 7050642)LIM LEE KUAN (MAICSA 7017753)Company Secretaries

Selangor Darul Ehsan5 September 2014

Notes:

1. Member entitled to attend and vote at the meeting may appoint another person as his proxy to attend and vote in his stead. A proxy may but need not be a member of the Company. If the proxy is not a member, the proxy need not be an advocate, an approved company auditor or a person approved by the Registrar of Companies.

2. A Member may appoint only one (1) proxy or attorney or authorised representative. Where a member is an authorised nominee as defined under the Securities Industry (Central Depositories) Act, 1991, it may appoint only one (1) proxy in respect of each securities account it holds with ordinary shares of the company standing to the credit of the said securities account.

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. The instrument appointing a proxy shall be in writing (in the common or usual form) under the hand of the appointor or of his attorney duly authorised in writing or, if the appointor is a corporation, either under seal or under the hand of an officer or attorney duly authorised.

5. The instrument appointing a proxy and the power of attorney or other attorney, if any, under which it is signed or a notarially certified copy of that power or authority shall be deposited at Symphony Share Registrars Sdn Bhd, Level 6, Symphony House, Block D13, Pusat Dagangan Dana 1, Jalan PJU 1A/46, 47301 Petaling Jaya, Selangor Darul Ehsan not less than forty-eight (48) hours before the time for holding of the meeting or adjourned meeting.

6. The Date of Record of Depositors for the purpose of determining members’ entitlement to attend, vote and speak at the meeting is 22 September 2014.

Notice ofANNuAl geNeRAl MeetiNg(coNt’d)


Explanatory Notes to Special Business:

1. Item 1 of the Agenda - Audited Financial Statements and the Auditors’ Report for the financial year ended 31 March 2014 together with the Reports of Directors’ and Auditors

The Audited Financial Statements under this agenda item is meant for discussion only as the provision of Section 169(1) of the Companies Act, 1965 does not require a formal approval of the shareholders and hence this item is not put forward for voting.

2. Item 5 of the Agenda – Ordinary Resolution 5

The proposed resolution, if passed, will give flexibility to the Directors to issue shares to such persons at any time in their absolute discretion without convening a general meeting. This authorisation will expire at the conclusion of next Annual General Meeting of the Company.

This is the renewal of the mandate obtained from the members at the last Annual General Meeting (“the previous mandate”). The previous mandate was not utilised and accordingly no proceeds were raised.

The purpose of this general mandate is for possible fund raising exercises including but not limited to further placement of shares for purpose of funding current and/or future investment projects, working capital, repayment of borrowings and/or acquisitions.

3. Item 6 of the Agenda – Ordinary Resolution 6

The proposed resolution, if passed, will allow the director who is of or over the age of 70 years to be re-appointed as director of public company pursuant to Section 129 (6) of the Companies Act, 1965.

A vote by the majority of not less than three-fourths of members who are entitled to vote and voting in person or by proxy is required to pass this resolution.

Notice ofANNuAl geNeRAl MeetiNg(coNt’d)


Y. Bhg. Dato’ Abu Sujak bin Mahmud DSSA, KMN, PPT, PJK, a Malaysian aged 75, is the Independent Non-Executive Chairman of the Company and was appointed to the Board on 25 July 2006. He is also the Chairman of the Audit Committee and Nomination Committee and a member of the Remuneration Committee. Dato’ Abu Sujak began his career as an audit clerk in Jabatan Pembangunan Koperasi Malaysia in 1958. He then joined the Maktab Perguruan Bahasa in 1960 and taught for a period of five (5) years before pursuing his degree in the University of Malaya. He obtained a Bachelor of Arts in Malay Studies in 1970. Dato’ Abu Sujak joined Dewan Bandaraya Kuala Lumpur in 1971 and subsequently appointed as Secretary of Majlis Perbandaran Klang and Majlis Perbandaran Shah Alam. In 1986, he was chosen to stand for election, which marked his career as a politician. He served as a member of the Selangor State Legislative Council for three (3) terms and was also a member of the Selangor State Executive Council from 1986 to 1995. He was also appointed as Timbalan Menteri Besar Selangor in 1990 until 1995 and as the Datuk Bandar Majlis Bandaraya Shah Alam in 2000 until 2002. Dato’ Abu Sujak also sits on the Board of Brem Holding Berhad.

Y. Bhg. Dato’ Dr. Teh Kim Poo, DSSA, PJK, JP, a Malaysian aged 63, the founder and Managing Director of the Company, was appointed to the Board on 24 April 1995. He is also the Chairman of the Remuneration Committee. Dato’ Dr. Teh obtained a PhD in Total Quality Management (TQM) from Newport University USA in 2002. He also possesses a Diploma in Accounting (LCCI), Post Graduate Diploma in Marketing (CIM, UK) and Master in Business Administration in Marketing from University of Hull, UK. He is also a chartered marketer of the Chartered Institute of Marketing (CIM, UK). Dato’ Dr. Teh possesses in-depth knowledge and vast experience in the plastics industry and has successfully built up the Group into one of the more prominent plastic pipe manufacturers in Malaysia. As the Managing Director, he is responsible for the overall management and strategic direction of the Group.

Dato’ Dr. Teh was the State Assemblyman of Kawasan Pandamaran Selangor from 2004 to 2008. He is currently the Chairman of Barisan Nasional Bahagian Klang and Chairman of Malaysia Chinese Association (MCA) Klang Division. Dato’ Dr. Teh is appointed as the Port Klang Authority Chairman since April 2011. He does not hold any directorship in other public companies.

Y. Bhg. Datin Gan Jew, PJK, a Malaysian aged 60, the co-founder and Executive Director of the Company was appointed to the Board on 24 April 1995. She has vast experience in the handling of manufacturing operations of the Group. She is well versed with all the operations on the production floor and her management style encompasses a very hands-on approach. She is also experienced in human resource matters and has been very much involved in the selection and co-ordination of the Group’s employees. She is currently oversees the cost savings operations of the Group, a role where she is able to leverage upon her experience of over twenty (20) years in the industry.

Datin Gan is currently the Vice Chairman of Wanita MCA Selangor, Chairman of Wanita MCA Klang Division, Chairman of Wanita Gan Association Selangor, Chairman of Rukun Tetangga Southern Park Selangor, Treasurer of Rukun Tetangga Klang Division and Adviser to Wanita Hin Ann Association Selangor. She does not hold any directorship in other public companies.

diRectoRs’PRofile


Teh Leng Kang, PJK, a Malaysian aged 38, was appointed to the Board on 25 July 2006 as an Executive Director. He graduated from Western Michigan University with a degree in Mechanical Engineering. He joined Resintech Plastics (M) Sdn. Bhd. in 1998. He was in the Production Department during the first two (2) years of his service, where he gained invaluable knowledge and experience in the machineries and production processes. Subsequently, he joined the Group’s Sales and Marketing Department, wherein he expanded his knowledge in our sales and marketing activities. Mr Teh was one of the key persons involved in the launching and marketing of the HDPE corrugated sewer pipe in 2000. Over the years, he has continued to play a significant role in managing the production operations and has set his sights now on expanding the Group’s business. He is currently oversees the Group’s entire operation and also a member of Research & Development team, where he plays an important role in defining the scope of research and its objectives. He was appointed as the Management Representative position of Resintech Plastics (M) Sdn. Bhd.’s ISO team in 2003 and led the Company through the ISO renewal audits. He does not hold any directorship in other public companies.

Khairul Anuar bin Shaharudin, a Malaysian aged 40, was appointed to the Board on 25 July 2006 as an Independent Non-Executive Director of the Company. He is also a member of the Audit Committee and Nomination Committee. Encik Khairul Anuar obtained a LL.B (Hons) from the Universiti Kebangsaan Malaysia in 1998 and was duly admitted as an Advocate and Solicitor to the High Court of Malaya in 1999. He began his career by chambering in Messrs. Azmah & Maishiah from 1998 to 1999. Subsequently, he was made a partner in the legal firms of Messrs. Hanif Hassan & Co and Messrs. Khairul Anuar, Suhaila & Co. in 1999 and 2000 respectively. In 2001, Encik Khairul Anuar was appointed as the Managing Partner in the legal firm of Messrs. Jefrizal & Co. and this was followed by being a Managing Partner in Messrs. Khairul, Suhaila & Hazlina in 2002, a post which he holds until now.

He does not hold any directorship in other public companies.

Wei Hwei Hong, a Malaysian aged 38, is an Executive Director and also Financial Controller. She was appointed to the Board on 25 July 2006. She graduated from the University of Sheffield with a Bachelor of Arts (Hons). She is a fellow member of Association of Certified Chartered Accountants (ACCA) and also a member of Malaysia Institute of Accountants (MIA). Ms Wei possesses hands-on audit experience in one of the big four (4) accounting firms for a period of three (3) years, working on a vast array of projects. She joined Resintech Plastics (M) Sdn. Bhd. in May 2003 and currently, is responsible for overseeing the Accounts and Finance Department of the Group.

She does not hold any directorship in other public companies.

Kok Wee Wah, a Malaysian aged 48, is an Independent Non-Executive Director of the Company. He was appointed to the Board on 22 February 2008. He is also a member of the Audit Committee. Mr Kok is a fellow member of Association of Certified Chartered Accountants (ACCA) and also a member of Malaysia Institute of Accountants (MIA). He has many years experience in one of the big four (4) accounting firms and has worked in many other industries before he joined Resintech-Kapar Sdn. Bhd. in 2006. Mr Kok resigned as the General Manager of Resintech-Kapar Sdn. Bhd. in February 2008 and took on the position in the Board of Directors as Non-Independent Non-Executive Director. He was then re-designated to Independent Non-Executive Director on 15 June 2010. He does not hold any directorship in other public companies.

diRectoRs’ PRofile(coNt’d)


Notes to Directors’ Profile

1. Family Relationship

Save for the following, none of the Directors have any family relationships with any other Directors and/or Major Shareholders:-

• Dato’Dr.TehKimPooisthespouseofDatinGanJew,aDirectorandMajorShareholderoftheCompany.Heisalsothefather to Mr Teh Leng Kang, a Director of the Company.

• MrTehLengKangisthespouseofMsWeiHweiHong,aDirectoroftheCompanyandthesonofDato’Dr.TehKimPooand Datin Gan Jew.

2. Conflict of Interest

None of the Directors have any conflict of interest with the Company.

3. Conviction of Offences

None of the Directors have been convicted any offences (other than traffic offences) within the past 10 years.

4. Attendances at Board Meetings

The details of the Directors’ attendance at the Board Meetings are set out on page 22 of this Annual Report.

5. Directors’ Shareholdings

The details of the Directors’ Shareholdings are set out on pages 111 to 112 of this Annual Report.

diRectoRs’ PRofile(coNt’d)


chAiRMAN’s stAteMeNts

FINANCIAL AND OPERATIONAL HIGHLIGHTS

The Group recorded total revenue of RM86.2 million for the financial year ended 31 March 2014 as compared to RM84.7 million in the year before. Its profit before taxation of RM5.8 million and profit after taxation of RM5.0 million improved from RM3.0 million and RM2.8 million respectively as recorded in previous financial year.

The Group’s manufacturing and trading segments profitability has been badly hit by the escalating operational and finance costs but the performance has been partly offset by fair value gain on certain investment properties. The food and beverage segment has yet to turnaround during the year but losses has been minimized.

DIVIDENDS

The Group did not recommend any payment of dividend during the financial year.

Dear Valued Shareholders,

On behalf of the Board of Directors of Resintech Berhad, I am pleased to present to you the Annual Report and Financial Statements of Resintech Berhad for the financial year ended 31 March 2014.


OUTLOOK

The prospect of the new financial year is expected to be very challenging especially locally. Input costs has not gone down and this may persist, if not worsen. Many of us are feeling the pinch of rising utilities and other living costs. At the same time, shortages of certain local materials are stripping away the margin too. The outlook in the West Malaysia hasn’t been very positive as well. Despite the media reporting that the recent series of invasions and abductions in Sabah have not affected the tourism segment, the market is slowing down. The Group is therefore on the lookout for new market and product developments.

The Management is undertaking more restructuring in its main segment, which is the manufacturing and trading segment, to enhance the competitiveness of its finished products. We are also working on improving the food and beverage segment further by consolidating some of the outlets. Nonetheless, the Group continues to take mitigating steps to ensure impact of negative factors are minimised whilst still focusing on improving operational efficiency and cost effectiveness.

chAiRMAN’s stAteMeNts(coNt’d)

ACKNOWLEDGEMENT

On behalf of the Board, I wish to express our sincerest appreciation to the Group’s management and staff and other stakeholders for their untiring efforts, support and loyalty.

Y. Bhg. Dato Abu Sujak Bin MahmudChairman


1. COMPOSITION AND ATTENDANCE

During the financial year ended 31 March 2014, a total of five (5) Audit Committee meetings were conducted and the members of the Audit Committee and details of their attendance of the meetings during the financial period are as follows:

Attendance of meetings

Chairman: Dato’ Abu Sujak bin Mahmud(Senior Independent Non-Executive Chairman)

5/5

Members: Khairul Anuar bin Shaharudin(Independent Non-Executive Director)

5/5


5/5

2. SUMMARY OF TERMS OF REFERENCE

1. Composition

The Audit Committee shall be appointed from amongst the Board and shall comprise no fewer than three (3) members, a majority of whom shall be independent directors and all members should be Non-Executive Directors.

No alternate director shall be appointed as a member of the Audit Committee.

In the event of any vacancy with the result that the number of members is reduced to below three, the vacancy shall be filled within three (3) months.

The terms of office and performance of an Audit Committee and each of its members must be reviewed by the Board annually to determine whether such Audit Committee and members have carried out their duties in accordance with its terms of reference.

2. Chairman

The Chairman, who shall be elected by the Audit Committee, shall be an Independent Director.

3. Secretary

The Company Secretary or any authorised person shall be the secretary of the Audit Committee.

4. Meetings

The Audit Committee shall meet at least four (4) times in each financial year and may regulate its own procedure in lieu of convening a formal meeting by means of video or teleconference.

The quorum for a meeting shall be the majority of members present, who shall be Independent Directors.

The Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”) may attend the quarterly meetings upon the invitation of the Audit Committee although they do not have any voting rights.

All decisions at such meeting shall be decided on a show of hands on a majority of votes and that the Chairman shall have the casting vote should a tie arise.

The internal and external auditors have the right to appear at any meeting of the Audit Committee and shall appear before the Audit Committee when required to do so by the Audit Committee. The internal and external auditors may also request a meeting if they consider necessary.

Audit coMMittee RePoRt


5. Rights

The Audit Committee shall:

(a) have authority to investigate any matter within its terms of reference;(b) have the resources which are required to perform its duties;(b) have full and unrestricted access to any information pertaining to the Group;(c) have direct communication channels with the external auditors and person(s) carrying out the internal audit

function or activity;(d) have the right to obtain independent professional or other advice at the Company’s expense;(e) promptly report to Bursa Securities or such other name(s) as may be adopted by Bursa Securities, matters which

have not been satisfactorily resolved by the Board of Directors resulting in a breach of the listing requirements;(f) have the right to pass circular resolutions in writing by a majority vote from the Audit Committee (g) meet as and when required on a reasonable notice;(h) the Chairman shall call for a meeting upon the request of the External Auditors.

6. Duties

The Audit Committee shall carry out the following key matters in accordance with its terms of reference:-

a. Risk Management & Internal Control

To review the adequacy and effectiveness of the Company’s risk management and risk assurance process and recommend such measures to the Board and evaluate the quality and effectiveness of the Company’s Internal Control system and management information systems including compliance with applicable laws, rules, corporate governance requirements and guidelines.

b. Financial Reporting

To review the quarterly results and annual financial statements before recommending to the Board for approval for release to Bursa Securities.

c. External Audit

To recommend the appointment or re-appointment of the external auditors and audit fee to the Board; review and discuss the nature and scope of the external audit strategy and plan for the year and issues arising from the external auditors’ interim and final letters of recommendation to management, including management responses and the external auditors’ evaluation of the system of internal control.

d. Internal Audit

To review the adequacy of the scope, functions, competency, resources and authority of the internal audit function in carrying out its work, review the risk-based internal audit plans and programmes; and review the major findings reported by internal audit and follow up on management’s implementation of the recommended actions.

e. Related Party Transactions

To monitor related party transactions entered into by the Company or the Group and to determine if such transactions are undertaken on an arm’s length basis and normal commercial terms and on terms not more favourable to the related parties than those generally available to the public and to review conflicts of interest that may arise within the Company or the Group.

Audit coMMittee RePoRt(coNt’d)


3. SUMMARY OF ACTIVITIES

In line with the Terms of Reference of the Audit Committee, the following activities were undertaken by the Audit Committee during the financial year ended 31 March 2014:

(a) Reviewed the unaudited quarterly reports on the consolidated results of the Group;

(b) Reviewed the audited financial statements and ensured that the financial reporting and disclosure requirements of relevant authorities had been complied with before recommending to the Board for approval;

(c) Reviewed the Statement on Risk Management and Internal Control and Audit Committee Report for inclusion in the Annual Report;

(d) Reviewed related party transactions and conflict of interest situation that may arise within the Group;

(e) Reviewed the performance of the external auditors and made recommendation to the Board on re-appointment and remuneration of the external auditors;;

(f) Reviewed the external auditors’ report in relation to audit and accounting issues arising from the audit, new development and updates on the Financial Reporting Standards issued by the Malaysian Accounting Standards Board and their impact on the Group;

(g) Met with the external auditors without the presence of the executive Board members and Management;

(h) Reviewed the internal audit plan and reports presented by the internal auditors to ensure adequate scope and coverage of the activities of the Group; and

(i) Considered the appointment of the existing internal auditors and recommended to the Board for approval.

4. INTERNAL AUDIT FUNCTION

The Company’s internal audit function is outsourced to an external professional services firm. The principal objective of the internal audit function is to assist the Board to monitor the risks and to periodically review the system of internal control to ensure that the system of internal control established by Management is functioning effectively and satisfactorily in the Group.

As an independent function, the professional services firm reported directly to the Audit Committee. An internal audit plan for the year was prepared by the professional services firm and was approved by the Audit Committee.

In carrying out the internal audit plan for the year under review, the independent professional services firm carried out internal audit reviews on Procure to Pay Cycle of PT Resintech Indomas and Fixed Assets Management of Resintech Plastics Ca Sdn Bhd. These reviews were coordinated by the Group’s Management and staff. Reports from the professional services firm were studied and integrated for improvements where necessary. Audit Committee was updated on the progresses and agreed implementation plans.

The cost incurred for the internal audit function in respect of the financial year ended 31 March 2014 was RM46,000.

Audit coMMittee RePoRt(coNt’d)


The Board of Directors of Resintech Berhad (“the Company”) is committed in cultivating a responsible

organisation by instilling corporate conscience through excellence in corporate governance (“CG”)

standards at all times, including accountability and transparency are observed throughout the Group

as a fundamental part of building a sustainable business and discharging its responsibilities to protect

and enhance shareholder value and financial performance of the Group. This statement provides an

insight into the CG practices of the Company pursuant to the Principles and Recommendations as set

out in the Malaysian Code on Corporate Governance 2012 (“MCCG 2012”).

1. ESTABLISH CLEAR ROLES AND RESPONSIBILITIES

1.1 Clear functions of the Board and those delegated to Management

The Board is responsible for formulating and reviewing the strategic plans and key policies of the Company, and charting the course of the Group’s business operations whilst providing effective oversight of Management’s performance, risk assessment and controls over business operations.

The Board delegates and confers some of its authorities and discretion on the Chairman, Executive Directors, and Management as well as on properly constituted Board Committees comprising mainly/exclusively Non-Executive Directors.

There is a clear division of responsibilities between the Chairman of the Board and the Managing Director (“MD”). The Chairman leads strategic planning at the Board level, while the Executive Directors are responsible for the implementation of the policies laid down and executive decision-making.

The role of Management is to support the Executive Directors and implement the running of the general operations and financial business of the Company, in accordance with the delegated authority of the Board.

The Board Committees made up of Audit Committee (“AC”), Nomination Committee (“NC”) and Remuneration Committee (“RC”); and are entrusted with specific responsibilities to oversee the Group’s affairs, with authority to act on behalf of the Board in accordance with their respective Terms of Reference. At each Board meeting, the Chairmen of the relevant Board Committees report to the Board on key issues deliberated by the Board Committees at their respective meetings.

In general, the Non-Executive Directors are independent of Management. Their roles are to constructively challenge Management and monitor the success of Management in delivering the approved targets and business plans within the risk appetite set by the Board. They have free and open contact with Management at all levels, and they engage with the external and internal auditors to address matters concerning Management and oversight of the Company’s business and operations.

Key matters reserved for the Board’s approval include the annual business plan and budget, capital management and investment policies, authority limits/levels, risk management policies, declaration of dividends, business continuity plan, issuance of new securities, business restructuring, expenditure above a certain limit, material acquisitions and disposition of assets.

stAteMeNt oNcoRPoRAte goVeRNANce


1.2 Clear roles and responsibilities in discharging fiduciary and leadership functions

The Board has discharged its responsibilities in the best interests of the Company. The following are among the key responsibilities of the Board:

(a) Reviewing and adopting the Company’s strategic plans

The Board has in place a strategy planning process, whereby MD presents to the Board its recommended strategy annually, together with the proposed business plans for the ensuing year for the Board’s review and approval. The Board will deliberate both Management’s and its own perspectives, and challenge the Management’s views and assumptions to ensure the best outcome.

(b) Overseeing the conduct of the Company’s business

The MD is responsible for the day-to-day management of the business and operations of the Group in respect of both its regulatory and commercial unctions. He is supported by Management and the Finance Director.

Management’s performance, under the leadership of MD, is assessed by the Board through monitoring the success in delivering the approved targets and business plans against the performance of the Group.

(c) Succession Planning

The Board has entrusted the NC and RC with the responsibility to review candidates for the Board and key management positions and to determine remuneration packages for these appointments, and to formulate nomination, selection, remuneration and succession policies for the Group.

(d) Overseeing the development and implementation of a shareholder communications policy for the Company

The Company strongly believes that effective and timely communication is essential in maintaining good relations with the shareholders, investors and investment community. The Company carried out its Investor Relations (“IR”) activities with reference to its stated Corporate Disclosure Policy, which is available on its website.

The Company has identified Dato’ Abu Sujak bin Mahmud, as the Senior Independent Non-Executive Director to whom concerns of shareholders and other stakeholders may be conveyed.

In addition to the above, shareholders and investors can make inquiries about IR matters with designated management personnel directly responsible for investor relations, via dedicated e-mail addresses available on the corporate website.

(e) Reviewing the adequacy and integrity of management information and internal control system of the Company

The Board is ultimately responsible for the adequacy and integrity of the Company’s internal control system. Details pertaining to the Company’s internal control system and the reviews of its effectiveness are set out in the Statement on Risk Management and Internal Control of this Annual Report.

stAteMeNt oN coRPoRAte goVeRNANce(coNt’d)


1.3 Formalised ethical standards through Code of Conduct

The Board is guided by the Code of Conduct for Directors and Employees in discharging its oversight role effectively. The Code of Conduct require all Directors to observe high ethical business standards, and to apply these values to all aspects of the Group’s business and professional practice and act in good faith in the best interests of the Group and its shareholders. A summary of the Code of Conduct was published on the corporate website.

In addition, the Company’s Whistleblowing Policy as published in the Company’s website seek to foster an environment where integrity and ethical behaviour are maintained and any illegal or improper action and/or wrong doing in the Company may be exposed.

1.4 Strategies promoting sustainability

The Board formalises the Company’s strategies on promoting sustainability. Discussion was held amongst the Directors to explore future investment and expansion of business in other countries.

1.5 Access to information and advice

The Directors have individual and independent access to the advice and dedicated support services of the Company Secretaries in ensuring the effective functioning of the Board. The Directors may seek advice from Management on issues under their respective purview. The Directors may also interact directly with Management, or request further explanation, information or updates on any aspect of the Company’s operations or business concerns from them.

In addition, the Board may seek independent professional advice at the Company’s expense on specific issues to enable it to discharge its duties in relation to matters being deliberated.

1.6 Qualified and competent company secretaries

The Board is regularly updated and apprised by the Company Secretary on new regulation issued by the regulatory authorities. The Company Secretary also serves notice to the Directors and Principal Officers to notify them of closed periods for trading in the Company’s securities.

The Company Secretary attends and ensures that all Board meetings are properly convened, and that accurate and proper records of the proceedings and resolutions passed are taken and maintained in the statutory register of the Company.

The Company Secretary works closely with Management to ensure that there are timely and appropriate information flows within and to the Board and Board Committees.

1.7 Board Charter

In discharging its duties, the Board is constantly mindful of the need to safeguard the interests of the Group’s stakeholders. In order to facilitate the effective discharge of its duties, the Board is guided by the Board Charter which was adopted by the Board on 15 March 2013 and the same was published on the corporate website.

The Board Charter serves to ensure that all Board members acting on the Group’s behalf are aware of their expanding roles and responsibilities. It sets out the strategic intent and specific responsibilities to be discharged by the Board members collectively and individually. It also regulates on how the Board conducts business in accordance with CG principles.



2.0 STRENGTHEN COMPOSITION

2.1 Nomination Committee (“NC”)

The NC comprises exclusively Independent Non-Executive Directors.

The NC is guided by specific terms of reference and the NC’s duties are as follows:

• TorecommendcandidatesforalldirectorshipstobefilledbyshareholdersortheBoard;• TorecommendcandidatestofilltheseatsonBoardCommittees;• ToassessthecontributionofeachindividualDirector;• ToreviewannuallytheBoardstructure,size,compositionandthebalancebetweenExecutiveDirectors,Non-

Executive Directors and Independent Directors to ensure that the Board has the appropriate mix of skills and experience including core competencies which Directors should bring to the Board and other qualities to function effectively and efficiently;

• TotakethenecessarystepstoensurethatwomencandidatesaresoughtaspartoftheCompany'srecruitmentexercise to meet its gender diversity policy;

• ToreviewannuallytheindependenceofIndependentDirectors;• Toensureexistenceofanappropriate frameworkandsuccessionplan for theExecutiveDirectorandsenior

management of the Company; • To identify suitable orientation, educational and training programmes for continuous development of

Directors;• ToestablishandimplementprocessesforassessingtheeffectivenessoftheBoardasawhole,theCommittees

of the Board and assessing the contribution of each Director; and• ToconsiderothermattersasreferredtotheCommitteebytheBoard.

2.2 Senior Independent Non-Executive Director

The Board has identified the Independent Non-Executive Director, Dato’ Abu Sujak Bin Mahmud, as the Senior Independent Non-Executive Director to whom concerns of shareholders and other stakeholders may be conveyed. The NC was chaired by Dato’ Abu Sujak Bin Mahmud.

Dato’ Abu Sujak Bin Mahmud can be contacted by e-mail at [email protected]

2.3 Develop, maintain and review criteria for recruitment and annual assessment of Directors

Board appointment process The NC is responsible for identifying and recommending suitable candidates for Board membership and also for

assessing the performance of the Directors on an on-going basis. The Board will have the ultimate responsibility and final decision on the appointment. This process shall ensure that the Board membership was accurately reflects the long-term strategic direction and needs of the Company and determines skills matrix to support strategic direction and needs of the Company.

Management shall then engage broadly to develop a pool of interested potential candidates meeting the skills, expertise, personal qualities and diversity requirements for both the Board and the Committee appointments.

The NC evaluates and matches the criteria of the candidate, and will consider diversity, including gender, where appropriate, and recommends to the Board for appointment.

Consideration will be given to those individuals possessing the identified skill, talent and experience.

The NC will contact those persons identified to determine interest in serving the Company. This communication will ensure that prospective Board members have clarity regarding the nominating process as well as Director/Board profiles, roles and responsibilities, expectations of time commitments and other information as required.



2.3 Develop, maintain and review criteria for recruitment and annual assessment of Directors (cont’d)

Board appointment process (cont’d) According to the Articles of Association of the Company, all Directors are required to submit themselves for re-election

at intervals of not more than three (3) years. The Articles of Association also state that one-third (1/3) of the Board members shall retire from office at the Annual General Meeting (“AGM”) and shall be eligible for re-election at the same AGM.

The new Director(s) duly appointed by the Board are then recommended for re-election at the AGM.

The Company shall then provide orientation and on-going education to the Board.

In making the selection, the Board is assisted by the NC to consider the following aspects:

• Probity,personalintegrityandreputation–thepersonmusthavethepersonalqualitiessuchashonesty,integrity,diligence and independence of mind and fairness.

• Competenceandcapability–thepersonmusthavethenecessaryskills,abilityandcommitmenttocarryouttherole.

Annual Assessment The Board reviews and evaluates its own performance and the performance of its Committees on an annual basis.

The Board evaluation comprises a Board Assessment, an Individual Director Assessment and an Assessment of Independence of Independent Directors.

The assessment of the Board is based on specific criteria, covering areas such as the Board structure, Board operations, roles and responsibilities of the Board, the Board Committee and the Chairman’s role and responsibilities.

For Individual Director Assessment, the assessment criteria include contribution to interaction, quality of inputs, and understanding of role.

The results of the assessment would form the basis of the NC’s recommendation to the Board for the re-election of Directors at the next AGM.

The NC also undertakes yearly evaluation of the performance of the CFO whose remuneration is directly linked to performance, based on her score sheet. For this purpose, the performance evaluation for the year 2014 of the CFO was reviewed by the NC on 25 July 2014.

Gender diversity policy The Company has two (2) female directors for the time being, and shall maintain this gender diversity policy until

31 December 2015. Nonetheless, the Company will endeavour to achieve a higher target through the progressive refreshing of the Board as it implements the nine-year policy for Independent Non-Executive Directors.

2.4 Remuneration Policies and Procedures

The RC and the Board ensure that the Company’s remuneration policy remains supportive of the Company’s corporate objectives and is aligned with the interest of shareholders, and further that the remuneration packages of Directors and key Senior Management Officers are sufficiently attractive to attract and to retain persons of high calibre.

The RC reviews annually the performance of the Executive Directors and submits recommendations to the Board on specific adjustments in remuneration and/or reward payments that reflect their respective contributions for the year, and which are depend on the performance of the Group, achievement of the goals and/or quantified organisational targets as well as strategic initiatives set at the beginning of each year.

The Board as a whole determines the remuneration of Non-Executive Directors and recommends the same for shareholders’ approval.



2.4 Remuneration Policies and Procedures (cont’d)

The Executive Directors are not entitled to the above Director’s fee and any meeting allowance for Board or Board Committee Meetings they attend. The remuneration package of the Executive Directors consists of monthly salary, bonus and benefits-in-kind such as company car and the benefit of Directors and Officers Liability Insurance in respect of any liabilities arising from acts committed in their capacity as Directors and Officers of the Company. The Directors and principal officers are required to contribute jointly towards the premium of the said policy.

Details of the Directors’ remuneration (including benefits-in-kind) of each Director during the financial year ended 31 March 2014 are as follows:

(a) Total Remuneration

Executive Directors

RM

Non-Executive Directors

RMTotal

RM

Basic Salary 960,000.00 - 960,000.00

Bonuses & incentives 81,000 - 81,000.00

Fees 120,000.00 109,800.00 229,800.00

Benefits-in-kind 117,680.00 15,000.00 132,680.00

Total 1,278,680.00 124,800.00 1,403,480.00

(b) Directors’ remuneration by bands

Executive Non-Executive Total

Below RM50,000 - 3 3

RM150,001 to RM200,000 1 - 1

RM250,001 to RM300,000 2 - 2

RM500,001 to RM550,000 1 1 1

Total number of Directors 4 3 7

The details of individual Director’s remuneration are not disclosed as the Board considers the above disclosures on the Directors’ remuneration are sufficient to cater to the transparency and accountability aspects of the Code.

3.0 REINFORCE INDEPENDENCE

3.1 Annual Assessment of Independence

The Board, through the NC, assesses the independence of Independent Directors annually. The criteria for assessing the independence of an Independent Director include the relationship between the Independent Director and the Company and his involvement in any significant transaction with the Company.

Based on the above assessment in 2013/2014, the Board is generally satisfied with the level of independence demonstrated by all the Independent Directors, and their ability to bring independent and objective judgement to board deliberations.

Dato’ Abu Sujak bin Mahmud, one (1) of the Independent Non-Executive Directors, is seeking for re-appointment at the forthcoming AGM. The NC is satisfied that Dato’ Abu Sujak bin Mahmud has demonstrated that he is independent of management and free from any business or other relationship which could interfere with the exercise of independent judgement. The Board therefore recommends and supports his proposed re-appointment.



3.2 Tenure of Independent Directors

The Board has adopted a nine-year policy for Independent Non-Executive Directors. An Independent Director may continue to serve on the Board subject to the director’s re-designation as a Non-Independent Director. Otherwise, the Board will justify and seek shareholders’ approval at the AGM in the event it retains the Director as an Independent Director.

None of the Independent Non-Executive Directors served more than nine years in the Company.

3.3 Shareholders’ approval for the Continuance in Office as Independent Directors

The Board would seek shareholders’ approval at the AGM if an Independent Director who has served in that capacity for more than nine years shall remain as an Independent Director.

The NC will assess the independence of the Independent Director based on the assessment criteria developed by the NC, and recommended to the Board for recommendation to shareholders for approval. Justification for the Board’s recommendation would be provided to shareholders.

3.4 Separation of the Positions of the Chairman and the MD

The positions of the Chairman and the MD are held by two different individuals. Dato’ Abu Sujak bin Mahmud, a Senior Independent Non-Executive Director, is the Chairman whereas Dato’ Dr. Teh Kim Poo is the Company’s MD.

The distinct and separate roles of the Chairman and MD, with a clear division of responsibilities, ensure a balance of power and authority, such that no one individual has unfettered powers of decision-making.

3.5 Composition of the Board

The Board of Directors currently comprises seven (7) members, of whom three (3) are Independent Non-Executive Directors (including the Chairman), and four (4) Executive Directors. The three (3) Independent Non-executive Directors fulfilled the criteria of independence as defined in the Market Market Listing Requirements (“MMLR”). The Independent Non-Executive Directors do not participate in the day-to-day management of the Company and do not involve themselves in business transactions or relationships with the Company, in order not to compromise their objectivity. In staying clear of any potential conflict of interest, the Independent Non-Executive Directors remain in a position to fulfill their responsibility to provide check and balance to the Board.

The Board composition has met the MMLR and the MCCG for a balance board with Independent Directors constituting more than one-third of the Board.

The Independent Non-Executive Directors are of the caliber necessary to provide an independent judgment on the issues of strategy, performance and resource allocation. They carry sufficient weight in Board decisions to ensure long-term interest of the shareholders, employees, customers and other stakeholders.

The seven (7) members of the Board are persons of high calibre and integrity, and they possess the appropriate skills and provide a wealth of knowledge, experience and skills in the key areas of accountancy, business operations and development, finance and risk management, amongst others.

Jointly with the CFO, the MD is accountable to the Board over the daily management and development of the Company.

The profile of each of the Member of the Board is presented on the pages 7 to 8 of this Annual Report.



4.0 FOSTER COMMITMENT

4.1 Time Commitment

The Board is satisfied with the level of time commitment given by the Directors towards fulfilling their roles and responsibilities as Directors of the Company. This is evidenced by the attendance record of the Directors at Board Meetings, as set out in the table.

Name of Director DesignationNo. of meetings

attended

Dato’ Abu Sujak bin Mahmud Independent Non-Executive Chairman 5/5

Dato’ Dr. Teh Kim Poo, DSSA, PJK, JP Managing Director 3/5

Datin Gan Jew, PJK Executive Director 5/5

Teh Leng Kang, PJK Executive Director 5/5

Khairul Anuar bin Shaharudin Independent Non-Executive Director 5/5

Wei Hwei Hong Executive Director 5/5

Kok Wee Wah Independent Non-Executive Director 5/5

To ensure that the Directors have the time to focus and fulfil their roles and responsibilities effectively, the Directors must not hold directorships at more than five (5) public listed companies and shall notify the Chairman before accepting any new directorship.

To facilitate the Directors’ time planning, an annual meeting schedule is prepared and circulated at the beginning of every year, as well as the tentative closed periods for dealings in securities by Directors based on the targeted date of announcements of the Group’s quarterly results.

4.2 Training

All Directors have completed the Mandatory Accreditation Programme (”MAP”) as prescribed by Bursa Securities. The Company will continue to identify suitable training for the Directors to equip and update themselves with the necessary knowledge in discharging their duty and responsibilities as Directors.

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

During the financial year under review, Datin Gan Jew has not attended any training due to her business commitments.



4.0 FOSTER COMMITMENT (CONT’D)

4.2 Training (Cont’d)

During the financial year ended 31 March 2014, the Directors have attended the following training, seminars, conferences and exhibitions which they considered vital in keeping abreast with changes in laws and regulation, business environment, and corporate government development:-

Directors Date of Course Seminar / Course

Dato’ Abu Sujak bin Mahmud 25 November 2013Risk Management & Internal Control Workshops for Audit Committee Members

Dato’ Dr. Teh Kim Poo, DSSA, PJK, JP 20-30 June 2013Working Visit to Beijing, Yiwu, Xiamen, China.

Khairul Anuar bin Shaharudin

11&12 October 2013The 4th Global Entrepreneurship Summit 2014

11 November 2013Islamic Financial Intelligence Summit 2013

20 November2013Leverage in Practice : Briefing on Government Facilities for Firms

22 & 23 January 2014Malaysia 3rd Conference Annual Property

Teh Leng Kang 12-14 September 2013CIMB Business Delegation to Myanmar 2013

Wei Hwei Hong 12 November 2013 Deloitte TaxMax 39th Series

Kok Wee Wah 29 November 2013Risk Management & Internal Control Workshops for Audit Committee Members

5.0 UPHOLD INTEGRITY IN FINANCIAL REPORTING

5.1 Compliance with applicable financial reporting standards

The Board is committed to provide a balanced, clear and meaningful assessment of the financial performance and prospects of the Company via all disclosures and announcements made.

The Board is assisted by the AC to oversee and scrutinise the process and quality of the financial reporting, includes reviewing and monitoring the integrity of the financial statements and the appropriateness of the Company’s accounting policies to ensure accuracy, adequacy and completeness of the report, as well as in compliance with the relevant accounting standards.

5.2 Assessment of suitability and independence of external auditors

The AC is responsible for reviewing audit, recurring audit-related and non-audit services provided by the external auditors. These recurring audit-related and non-audit services comprise regulatory reviews and reporting, interim reviews, tax advisory and compliance services.

The terms of engagement for services provided by the external auditors are reviewed by the AC prior to submission to the Board for approval.



5.0 UPHOLD INTEGRITY IN FINANCIAL REPORTING (CONT’D)

5.2 Assessment of suitability and independence of external auditors (cont’d)

The AC has reviewed the provision of non-audit services by the external auditors during the year and concluded that the provision of these services did not compromise the external auditors’ independence and objectivity as the amount of the fees paid for these services was not significant when compared to the total fees paid to the external auditors.

Having satisfied itself with the performance of Messrs Crowe Horwath, the AC will recommend their re-appointment to the Board, upon which the shareholders’ approval will be sought at the AGM.

6.0 Recognise and manage risks

6.1 Sound framework to manage risks

The Board oversees, reviews and monitors the operation, adequacy and effectiveness of the Group’s system of internal controls.

The Board has yet to adopt any Risk Management Framework and will take the necessary steps in addressing the same by the next financial year ending 31 March 2015.

The Company continues to maintain and review its internal control procedures to ensure the protection of its assets and its shareholders’ investment.

6.2 Internal Audit Function

The Company has outsourced its Internal audit function to a professional services firm namely BDO Advisory Sdn. Bhd. to assist the AC in discharging its duties and responsibilities in respect of reviewing the adequacy and effectiveness of the Group’s risk management and internal control systems.

The Statement on Risk Management and Internal Control as included on pages 27 to 28 of this Annual Report provides the overview of the internal control framework adopted by the Company during the financial year ended 31 March 2014.

7.0 ENSURE TIMELY AND HIGH qUALITY DISCLOSURE

7.1 Corporate Disclosure Policy and Procedures

The Company has put in place a Corporate Disclosure Policy with the objective to ensure communications to the public are timely, factual, accurate, complete, broadly disseminated and where necessary, filed with regulators in accordance with applicable laws.

The MD and CFO are responsible for determining materiality of information and ensuring timely, complete and accurate disclosure of material information to the investing public in accordance with securities laws and stock exchange rules and regulations, monitoring compliance with this policy and overseeing the disclosure controls and procedures.

Sufficient information would be provided to the Company Secretary for drafting of necessary announcement.

The Board is mindful that information which is expected to be material must be announced immediately, and that the confidential information should be handled properly to avoid leakage and improper use of such information.



7.0 ENSURE TIMELY AND HIGH qUALITY DISCLOSURE (CONT’D)

7.2 Leverage on information technology for effective dissemination of information

The Company’s website provides all relevant corporate information and it is accessible by the public. The Company’s website includes share price information, all announcements made by the Company, Annual Reports, financial results, corporate calendar as well as the corporate governance statement of the Company.

Through the Company’s website, the stakeholders are able to direct queries to the Company.

8.0 STRENGTHEN RELATIONSHIP BETWEEN COMPANY AND SHAREHOLDERS

8.1 Encourage shareholder participation at general meetings

In an effort to encourage greater shareholders’ participation at AGMs, the Board takes cognisance in serving longer than the required minimum notice period for AGMs, when possible. The Chairman cum the Senior Independent Director ensure that the Board is accessible to shareholders and an open channel of communication is cultivated.

The Company encloses the Annual Report together with the notice of AGM with regard to, amongst others, details of the AGM, their entitlement to attend the AGM, the right to appoint proxy and also qualification of proxy.

The Company allows a shareholder to appoint a proxy who may not be a member of the Company. If the proxy is not a member of the Company, he/she need not be an advocate, an approved company auditors or a person approved by the Registrar of Companies.

To further promote participation of members through proxies, which in line with the MMLR, the Company had amended its Articles of Association to include explicitly the right of proxies to speak at general meetings.

8.2 Encourage poll voting

At the 18th AGM of the Company held on 27 September 2013, all resolutions put forth for shareholders’ approval at the meeting were voted on by show of hands.

The Chairman would ensure that shareholders were informed of their rights to demand a poll vote at the commencement of the AGM.

8.3 Effective communication and proactive engagement

At the previous 18th AGM, Directors were present in person to engage directly with, and be accountable to the shareholders for their stewardship of the Company. The Directors, Management and external auditors were in attendance to respond to the shareholders’ queries.

From the Company’s perspective, the AGM also serves as a forum for Directors and Management to engage with the shareholders personally to understand their needs and seek their feedback. The Board welcomes questions and feedback from shareholders during and at the end of shareholders’ meeting and ensures their queries are responded in a proper and systematic manner.

COMPLIANCE STATEMENT

The Board is satisfied that the Company has in 2013/2014 complied with the principles and recommendations of the MCCG 2012 save for otherwise indicated in this Statement.

This statement is made in accordance with the resolution of the Board dated 25 July 2014.



AdditioNAl coMPliANce iNfoRMAtioN

1. SHARE BUY-BACKS

During the financial year, the Company did not purchase its own shares from the open market.

2. OPTIONS OR CONVERTIBLE SECURITIES

The Company did not issue any options or convertible securities during the financial year.

3. DEPOSITORY RECEIPT PROGRAMME

The Company did not sponsor any Depository Receipt Programme during the financial year.

4. SANCTIONS AND/OR PENALTIES

There were no material sanctions and/or penalties imposed on the Company and its subsidiaries, Directors or Management by any regulatory bodies during the financial year.

5. NON-AUDIT FEES

During the financial year, the non-audit fees incurred for services rendered to the Company and its subsidiaries by the auditors, or a firm or corporation affiliated to the auditors’ firm amounted to RM46,400.00.

6. VARIATION IN RESULTS

There was no material variance of 10% or more between the audited results for the financial year ended 31 March 2014 and the unaudited results previously announced.

7. PROFIT GUARANTEE

There were no profit guarantees received by the Company during the financial year.

8. MATERIAL CONTRACTS INVOLVING DIRECTORS’ AND MAJOR SHAREHOLDERS’ INTEREST

There were no material contracts entered into by the Company and its subsidiaries involving Directors’ and Major Shareholders’ interests, either still subsisting at the end of the financial year, or which were entered into since the end of the previous financial year.

9. UTILISATION OF PROCEEDS

There were no proceeds raised from any corporate proposals during the financial year.

10. RECURRENT RELATED PARTY TRANSACTIONS OF REVENUE NATURE (“RRPT”)

There was no shareholders’ mandate obtained in respect of RRPT of revenue or trading nature during the financial year end.


The Board is committed to maintaining a sound system of internal control and risk management

practices. In accordance with the Paragraph 15.26(b) of the MMLR of Bursa Securities, the Board

append herewith its Statement on Risk Management and Internal Control within the Group during

the financial year ended 31 March 2014.

BOARD RESPONSIBILITY

The Board recognises the importance of sound system of internal control to safeguard shareholders’ investment and the Group’s assets against potential shortcomings.

The Board is also aware of the limitations inherent in any internal control systems. As such, a sound internal control system manages the potential risk of failure to achieve corporate objectives rather than totally eliminating it. Therefore, the system of internal control can only provide reasonable assurance, not absolute assurance, against any material misstatements or losses. With such benefits and limitations, due consideration was given to weigh the cost as compared to the expected benefits from the devising and implementing the control procedures. Additionally, the MD and CFO have given assurance to the Board that the system is operating adequately and effectively to meet the Group’s objectives.

RISK MANAGEMENT

The Board acknowledges that there is an underlying and ongoing process in the Group for the identification, evaluation and mitigation of its significant risks. Management from each department identifies their risks within the defined parameters and standards. Such process was exercised through periodic management meetings held to communicate and deliberate key issues and risks amongst Management team members. Where appropriate, controls are devised, revised, improved and implemented.

INTERNAL AUDIT FUNCTION

The Board has continued to be assisted by the outsourced external consultants in carrying out the internal audit function. The Board review and evaluate the reports presented by the consultants on the implementation of the system and on the recommendations of best practices. During the financial year under review, two (2) internal audit reviews were carried out. For the financial year under review, the cost incurred for the internal audit function amounted to RM46,000.

OTHER KEY ELEMENTS OF INTERNAL CONTROLS

The other key elements of the Group’s internal control system are as follows:-

a) Well Defined Organisational Structure

Key responsibilities are clearly defined and authorisation policy sets out appropriate authorization limit.

b) Operating Manual

Internal policies and procedures are properly documented in the Standard Operating Procedures manuals.

stAteMeNt oN RisK MANAgeMeNt ANd iNteRNAl coNtRol


OTHER KEY ELEMENTS OF INTERNAL CONTROLS (CONT’D)

c) Management Meetings

Regular management meetings are conducted to review and discuss on relevant progresses and reports.

d) Internal Audit Activities

Internal audit activities are conducted to assess adequacy of controls and monitor of compliance with the Group’s Policies and Procedures.

e) Management Visits

Members of the senior management team carried out inspections regularly as a check to ensure that operations are running smoothly and problems arisen are solved without delay.

f) Financial Results

Financial results are reviewed and approved quarterly by the Audit Committee and the Board.

CONCLUSION

The Board is of the view that the risk management and internal control system in place for the financial year under review, and up to the date of approval of this Statement, is satisfactory. During the financial year under review, a number of internal control weaknesses were identified and presented for improvement discussion. These are not expected to result in any material loss.

The Group will continue improving and enhancing the existing system of internal control pertaining to the identified risks with the anticipation of changing business environment.

This statement has been reviewed by the Group’s external auditors in accordance with Recommended Practice Guide (“RPG”) 5 (Revised) : Guidance for the Auditors on Engagement to Report on the Statement on Risk Management and Internal Control.

This statement is made in accordance with the resolution of the Board dated 28 August 2014.

stAteMeNt oN RisK MANAgeMeNt ANd iNteRNAl coNtRol(coNt’d)


The Board of Directors of the Company is responsible in preparing financial statements which are in accordance with the applicable Approved Accounting Standards in Malaysia and the MMLR of Bursa Securities.

The Directors are responsible for ensuring that the Company and the Group keep proper accounting records to enable the Company and the Group to disclose, with reasonable accuracy and without any material misstatement, so as to give a true and fair view on the financial position of the Company and the Group as at 31 March 2014 and the results and cash flows of the Company and the Group for the financial year ended on that date.

In preparing the financial statements for the financial year ended 31 March 2014, the Directors have:

a) adopted the relevant and appropriate accounting policies consistently;b) made judgements and estimates that are reasonable and prudent;c) adopted applicable accounting standards, subjects to any material departures, if any, which will be disclosed and explained

in the financial statements; andd) prepared the financial statements on the assumption that the Company and the Group will operate as going concern.

diRectoR’s ResPoNsibilitiesstAteMeNt


coRPoRAte sociAl ResPoNsibility stAteMeNt

Resintech Group is fully aware of its corporate responsibilities for the community, employees, the environment and other stakeholders. Resintech incorporates corporate social responsibility (“CSR”) concepts into its operations and decision making through a transparent approach by communicating to its stakeholders and encouraging their feedback through prompt and detailed disclosure. The Group constantly reviews its employee well-being by ensuring continuous learning through on-the-job training, external training and seminars. The Group also provides practical training for university students.

Resintech made effort to provide health and safe working environment which includes periodic inspections on firefighting equipment, conducting fire drill training, providing safety wear, to name a few. As we do so, our actions improve the quality of life for the people of Resintech Group as well as the community at large.

In short, Resintech strongly supports CSR practices as a contribution to society, environment and human resource which would enable the organisation to generate value and hope to continue contributing actively in future.

fiNANciAlstAteMeNts32 DIRECTORS’ REPORT

36 STATEMENT BY DIRECTORS

36 STATUTORY DECLARATION

37 INDEPENDENT AUDITORS’ REPORT

39 STATEMENTS OF FINANCIAL POSITION

41 STATEMENTS OF PROFIT OR LOSS AND

OTHER COMPREHENSIVE INCOME

43 STATEMENTS OF CHANGES IN EQUITY

44 STATEMENTS OF CASH FLOWS

46 NOTES TO THE FINANCIAL STATEMENTS

Resintech berhad (341662-X) Annual Report 201432

The directors of Resintech Berhad have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the financial year ended 31 March 2014.

PRINCIPAL ACTIVITIES

The Company is principally engaged in the business of investment holding. The principal activities of the subsidiaries are disclosed in Note 5 to the financial statements. There have been no significant changes in the nature of these activities during the financial year.

RESULTS

The Group The Company

RM’000 RM’000

Profit/(Loss) after taxation for the financial year 4,955 (118)

Attributable to:-

Owners of the Company 4,962 (118)

Non-controlling interests (7) -

4,955 (118)

DIVIDENDS

No dividend was paid since the end of the previous financial year and the directors do not recommend the payment of any dividend for the current financial year.

RESERVES AND PROVISIONS

All material transfers to or from reserves or provisions during the financial year are disclosed in the financial statements.

ISSUES OF SHARES AND DEBENTURES

During the financial year,

(a) there were no changes in the authorised and issued and paid-up share capital of the Company; and

(b) there were no issues of debentures by the Company.

WARRANTS

The Company has 68,600,000 2011/2016 Warrants in issue as at 31 March 2014.

The main features of the Warrants are detailed in Note 18 to the financial statements.

directors’ report

Resintech berhad (341662-X) Annual Report 2014 33

OPTIONS GRANTED OVER UNISSUED SHARES

During the financial year, no options were granted by the Company to any person to take up any unissued shares in the Company.

BAD AND DOUBTFUL DEBTS

Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps to ascertain that action had been taken in relation to the writing off of bad debts and the making of allowance for impairment losses on receivables, and satisfied themselves that all known bad debts had been written off and that adequate allowance had been made for impairment losses on receivables.

At the date of this report, the directors are not aware of any circumstances that would require the further writing off of bad debts, or the additional allowance for impairment losses on receivables in the financial statements of the Group and of the Company.

CURRENT ASSETS

Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps to ascertain that any current assets other than debts, which were unlikely to be realised in the ordinary course of business, including their values as shown in the accounting records of the Group and of the Company, have been written down to an amount which they might be expected to realise.

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

VALUATION METHODS

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

CONTINGENT AND OTHER LIABILITIES

The contingent liability is disclosed in Note 41 to the financial statements. At the date of this report, there does not exist:-

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

(b) any contingent liability of the Group and of the Company which has arisen since the end of the financial year.

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

CHANGE OF CIRCUMSTANCES

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

directors’ report(cont’d)


ITEMS OF AN UNUSUAL NATURE

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

There has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors, to affect substantially the results of the operations of the Group and of the Company for the financial year.

DIRECTORS

The directors who served since the date of the last report are as follows:-

Dato’ Dr. Teh Kim Poo, DSSA, PJK, JPDatin Gan Jew, PJKDato’ Abu Sujak Bin Mahmud Khairul Anuar Bin ShaharudinTeh Leng Kang, PJKWei Hwei Hong Kok Wee Wah

DIRECTORS’ INTERESTS

According to the register of directors’ shareholdings, the interests of directors holding office at the end of the financial year in shares in the Company and its related corporations during the financial year are as follows:-

Number Of Ordinary Shares Of RM0.50 Each

At At

1.4.2013 Bought Sold 31.3.2014

The Company

Direct Interests

Dato’ Dr. Teh Kim Poo, DSSA, PJK, JP 56,405,999 - - 56,405,999

Datin Gan Jew, PJK 9,647,400 - - 9,647,400

Dato’ Abu Sujak Bin Mahmud 4,569,600 - - 4,569,600

Teh Leng Kang, PJK 4,200,002 - - 4,200,002

Deemed Interests


Datin Gan Jew, PJK 60,711,001 - - 60,711,001

Wei Hwei Hong 4,200,002 - - 4,200,002



DIRECTORS’ INTERESTS (CONT’D)

Number of Warrants 2011/2016

At At

1.4.2013 Bought Sold 31.3.2014

The Company

Direct Interests


Datin Gan Jew, PJK 4,823,700 - - 4,823,700

Dato’ Abu Sujak Bin Mahmud 2,284,800 - - 2,284,800

Teh Leng Kang, PJK 2,100,001 - - 2,100,001

Deemed Interests


Datin Gan Jew, PJK 30,355,500 - - 30,355,500

Wei Hwei Hong 2,100,001 - - 2,100,001

By virtue of their shareholdings in the Company, Dato’ Dr. Teh Kim Poo, DSSA, PJK, JP and Datin Gan Jew, PJK are deemed to have interests in shares in its related corporations during the financial year to the extent of the Company’s interest, in accordance with Section 6A of the Companies Act 1965.

The other directors holding office at the end of the financial year had no interest in shares and options over shares of the Company or its related corporations during the financial year.

DIRECTORS’ BENEFITS

Since the end of the previous financial year, no director has received or become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by directors as shown in the financial statements, or the fixed salary of a full-time employee of the Company) by reason of a contract made by the Company or a related corporation with the director or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest except for any benefits which may be deemed to arise from transactions entered into in the ordinary course of business with a company in which certain directors have substantial financial interests as disclosed in Note 39 to the financial statements.

Neither during nor at the end of the financial year was the Group or the Company a party to any arrangements whose object is to enable the directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

AUDITORS

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

Signed in accordance with a resolution of the directors dated

Dato’ Dr. Teh Kim Poo, DSSA, PJK, JP Teh Leng Kang, PJK



stAteMeNt BY directors

stAtUtorY decLArAtioN

We, Dato’ Dr. Teh Kim Poo, DSSA, PJK, JP and Teh Leng Kang, PJK, being two of the directors of Resintech Berhad, state that, in the opinion of the directors, the financial statements set out on pages 39 to 104 are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company at 31 March 2014 and of their financial performance and cash flows for the financial year ended on that date.

The supplementary information set out in Note 44, which is not part of the financial statements, is prepared in all material respects, in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants and the directive of Bursa Malaysia Securities Berhad.

Signed in accordance with a resolution of the directors dated

Dato’ Dr. Teh Kim Poo, DSSA, PJK, JP Teh Leng Kang, PJK

I, Wei Hwei Hong, I/C No. 760909-10-5544, being the director primarily responsible for the financial management of Resintech Berhad, do solemnly and sincerely declare that the financial statements set out on pages 39 to 104 are, to the best of my knowledge and belief, correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act 1960.

Subscribed and solemnly declared byWei Hwei Hong, I/C No. 760909-10-5544,at Kuala Lumpur in the FederalTerritory on this

Before me Wei Hwei Hong

Lai Din (W668)Commissioner for Oaths


Report on the Financial Statements

We have audited the financial statements of Resintech Berhad, which comprise statements of financial position as at 31 March 2014 of the Group and of the Company, and statements of profit or loss and other comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 39 to 104.

Directors’ Responsibility for the Financial Statements

The directors of the Company are responsible for the preparation of financial statements so as to give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 1965 in Malaysia. The directors are also responsible for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company as of 31 March 2014 and of their financial performance and cash flows for the financial year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 1965 in Malaysia.

Report on Other Legal and Regulatory Requirements

In accordance with the requirements of the Companies Act 1965 in Malaysia, we also report the following:-

(a) In our opinion, the accounting and other records and the registers required by the Act to be kept by the Company and its subsidiaries of which we have acted as auditors have been properly kept in accordance with the provisions of the Act.

(b) We have considered the financial statements and the auditors’ report of the subsidiary of which we have not acted as auditors, which is indicated in Note 5 to the financial statements.

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

(d) The audit reports on the financial statements of the subsidiaries did not contain a

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