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ANNUAL 2013 REPORT RAYA INTERNATIONAL BERHAD (FORMERLY KNOWN AS ENVAIR HOLDING BERHAD) (Company No. 412406-T)

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A N N U A L 2 0 1 3 R E P O R T

RAYA INTERNATIONAL BERHAD (FORMERLY KNOWN AS ENVAIR HOLDING BERHAD)

(Company No. 412406-T)

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RAYA INTERNATIONAL BERHAD (Company No. 412406-T)

D2-1-11, No.1, Solaris Dutamas, Jalan Dutamas, Taman Sri Hartamas, 50480 Kuala Lumpur. Tel : +603 6205 3586 Fax : +603 6205 3586

www.raya.com.my

RayaIntARcov_FINAL.indd 1 6/4/14 4:21 PM

RAYA INTERNATIONAL BERHAD Annual Report 2013

1CONTENTS

CORPORATE INFORMATION 2 DIRECTORS’ PROFILE 3 CHAIRMAN’S STATEMENT 8 STATEMENT OF CORPORATE GOVERNANCE 9 AUDIT COMMITTEE REPORT 16 STATEMENT ON RISK MANAGEMENT & INTERNAL CONTROL 21 STATEMENT OF VERIFICATION ON ALLOCATION OF OPTION PURSUANT TO 22 EMPLOYEE SHARE OPTION SCHEME OTHER COMPLIANCE INFORMATION 23 FINANCIAL STATEMENTS

Directors’ Report 24 Statement by Directors and Statutory Declaration 28 Independent Auditors’ Report 29 Statements of Profit & Loss and Other Comprehensive Income 32 Statements of Financial Position 33 Consolidated Statement of Changes in Equity 34 Statement of Changes in Equity 35 Statements of Cash Flows 36 Notes to Financial Statements 38

LIST OF PROPERTIES 66 ANALYSIS OF SHAREHOLDINGS 67 NOTICE OF SEVENTEENTH ANNUAL GENERAL MEETING 69 PROXY FORM Enclosed

RAYA INTERNATIONAL BERHAD Annual Report 2013

2

CORPORATE INFORMATION

BOARD OF DIRECTORS Jeneral Tan Sri Abdul Aziz Bin Zainal (Rtd) Chairman, Independent Non-Executive Director

Dato’ Izham Bin Yusoff Independent Non-Executive Director Ezrul Ehsan Bin Ismail Executive Director

Mejar Ismail Bin Ahmad (Rtd) Non-Independent Non-Executive Director

Dato’ Malek Radzuan Bin Saharin Non-Independent Non-Executive Director Abdul Latif Bin Abdul Rahim Non-Independent Non-Executive Director Mohd Shukri Bin Abdullah Independent Non-Executive Director

AUDIT COMMITTEE SHARE REGISTRAR

Mohd Shukri Bin Abdullah Independent Non-Executive Director Dato’ Malek Radzuan Bin Saharin Non-Independent Non-Executive Director

Tricor Investor Services Sdn Bhd Level 17, The Gardens North Tower Mid Valley City, Lingkaran Syed Putra 59200 Kuala Lumpur. Tel : 603-2264 3883 Fax : 603-2282 1886 Email: [email protected]

COMPANY SECRETARIES REGISTERED OFFICE

Wan Haslinda Wan Yusoff MAICSA 7055478

Sangar Nallappan MACS 01413 AUDITORS

STYL Associates AF 1929 Chartered Accountants No: 107B, Jalan Aminuddin Baki Taman Tun Dr Ismail 60000 Kuala Lumpur. Tel : 603-7727 5573 Fax : 603-7727 0771 PRINCIPAL BANKERS

Public Bank Berhad CIMB Bank Berhad

D2-1-11, No: 1, Solaris Dutamas Jalan Dutamas, Taman Sri Hartamas 50480 Kuala Lumpur. Tel : 603-6205 3586 Fax : 603-6205 3586

BUSINESS ADDRESS

2nd Floor, Lot 107, Jalan 6 Off Jalan Chan Sow Lin Sungai Besi 55200 Kuala Lumpur. Tel : 603-9235 9899 Fax : 603-9235 9989 Website : www.raya.com.my STOCK EXCHANGE LISTING

ACE Market of Bursa Malaysia Securities Berhad

STOCK NAME - RAYA

STOCK CODE - 0080

Corporate InformationCORPORATE INFORMATION

BOARD OF DIRECTORS Jeneral Tan Sri Abdul Aziz Bin Zainal (Rtd) Chairman, Independent Non-Executive Director

Dato’ Izham Bin Yusoff Independent Non-Executive Director Ezrul Ehsan Bin Ismail Executive Director

Mejar Ismail Bin Ahmad (Rtd) Non-Independent Non-Executive Director

Dato’ Malek Radzuan Bin Saharin Non-Independent Non-Executive Director Abdul Latif Bin Abdul Rahim Non-Independent Non-Executive Director Mohd Shukri Bin Abdullah Independent Non-Executive Director

AUDIT COMMITTEE SHARE REGISTRAR

Mohd Shukri Bin Abdullah Independent Non-Executive Director Dato’ Malek Radzuan Bin Saharin Non-Independent Non-Executive Director

Tricor Investor Services Sdn Bhd Level 17, The Gardens North Tower Mid Valley City, Lingkaran Syed Putra 59200 Kuala Lumpur. Tel : 603-2264 3883 Fax : 603-2282 1886 Email: [email protected]

COMPANY SECRETARIES REGISTERED OFFICE

Wan Haslinda Wan Yusoff MAICSA 7055478

Sangar Nallappan MACS 01413 AUDITORS

STYL Associates AF 1929 Chartered Accountants No: 107B, Jalan Aminuddin Baki Taman Tun Dr Ismail 60000 Kuala Lumpur. Tel : 603-7727 5573 Fax : 603-7727 0771 PRINCIPAL BANKERS

Public Bank Berhad CIMB Bank Berhad

D2-1-11, No: 1, Solaris Dutamas Jalan Dutamas, Taman Sri Hartamas 50480 Kuala Lumpur. Tel : 603-6205 3586 Fax : 603-6205 3586

BUSINESS ADDRESS

2nd Floor, Lot 107, Jalan 6 Off Jalan Chan Sow Lin Sungai Besi 55200 Kuala Lumpur. Tel : 603-9235 9899 Fax : 603-9235 9989 Website : www.raya.com.my STOCK EXCHANGE LISTING

ACE Market of Bursa Malaysia Securities Berhad

STOCK NAME - RAYA

STOCK CODE - 0080

RAYA INTERNATIONAL BERHAD Annual Report 2013

3

Directors’ ProfileDIRECTORS’ PROFILE

JENERAL TAN SRI ABDUL AZIZ BIN ZAINAL (RTD) Chairman / Independent Non Executive Director

Jeneral Tan Sri Abdul Aziz Hj Zainal, a Malaysian, aged 63, is the Chairman of the Company. He was appointed to the Board on 10 October 2013.

He received his secondary education at Boys Wing, Royal Military College (RMC) in Sungai Besi. He then underwent Officer Cadet training and was commissioned into the Royal Malay Regiment (RMR) in 1971. His maiden posting was to the 3rd RMR as Platoon Commander on 16 April 1971.

As an infantry officer, Jeneral Tan Sri Abdul Aziz served in several capacities in RMR battalions, reaching the level of Commanding Officer. He also held several key command and staff appointments in various headquarters, departments and training establishments. These included as Staff Officer 2 Human Resource in the Infantry Directorate, Army Headquarters; and Chief Instructor at the Army Management School in Port Dickson. He was assigned as Military Assistant to the Chief of Defence Force in 1985. As a Colonel, he was appointed as Commandant of the Army Combat Training Centre, as well as Chief of Staff in the Department of Planning and Development. Jeneral Tan Sri Abdul Aziz was a graduate of the Malaysian Armed Forces (MAF) Staff College and MAF Defence College. Upon his promotion to Brigadier-General in 1997, he was made Assistant Chief of Staff Operations and Training in the Army Headquarters. Subsequently, he was Commander 4 Mechanised Brigade from 1998 to 2000, and Chief of Staff of Army Headquarters. His next promotion to Major-General saw him appointed as General Officer Commanding 3 Division. He assumed command of the Army Field Command in August 2003 upon being elevated to the rank of Lieutenant-General. On 9 September 2004, he was promoted to General, and given the ultimate responsibility of leading the Malaysian Army. Jeneral Tan Sri Abdul Aziz was appointed the 16th Chief of Defence Force on 1 February 2007.

Jeneral Tan Sri Abdul Aziz has a wide repertoire of experiences at the international level. He was Assistant Defence Attache in the Philippines from 1981 to 1983, and served NATO as Malaysian Contingent Commander in Bosnia & Herzegovina from 1996 to 1997. In addition to that, he also attended several courses and seminars overseas, such as the Battle Shooting Management Course in the United Kingdom, the Peace Support Operations Seminar in Victoria, British Columbia, and the Pacific Armies Management Seminars in Sydney, Tokyo and Calgary. In 1996, he graduated with a Masters Degree in Management from the Asian Institute of Management, Manila.

Jeneral Tan Sri Abdul Aziz is a towering figure in the military realm, as evident in his able leadership and management. He made notable contributions when he was at the helm of the Malaysian Army, such as revitalising the Army’s mission and vision, known as “2 10 + 10”, and introducing the “Balanced Scorecard” as an assessment instrument for the Service. He also wrote a book entitled, “The Marksman”, which highlights the management philosophy of the Army towards excellence, and addressed appropriate key performance indexes (KPI). Having assumed the MAF highest office, he made similar contributions that led to the inception of the “Balanced Scorecard” and KPI in the MAF Headquarters as well as producing a sequel to his previous work, “The Marksman in the 21st Century”. His most significant legacy is the Armed Forces capability development plan, called the “Fourth Dimension MAF” (4D MAF); a transformation era towards becoming a highly credible, fully integrated and balanced force-after-next in all dimensions, and placing emphasis on jointness and inter-operability among the three Services. In recognition of those accomplishments, he was conferred various distinguished awards, namely the “Triple A Award” from the Asian Institute of Management, Manila on 3 April 2007; and the “Old Putera Association of the Year Award” on 16 June 2007. On 16 December 2007, he was conferred an Honorary Doctorate in Leadership and Management by the University of Tun Abdul Razak, Kuala Lumpur. This honour acknowledged Jeneral Tan Sri Abdul Aziz’s leadership and management at MAF’s highest level, after having served the organisation for more than 40 years. His managerial acumen was duly recognised with his appointment as Adjunct Professor to the Management Centre of the International Islamic University, Malaysia in 2008. In addition, he also received an Honorary Doctorate in Management from the Malaysian University of Sabah on 25 August 2008.

RAYA INTERNATIONAL BERHAD Annual Report 2013

4

Owing to his meritorious service to the nation, he has been bestowed with numerous awards from His Majesty the King and His Majesty the State Rulers respectively. Renowned for promoting security and stability in the region, he was conferred awards by His Majesty the King of Thailand, His Majesty the Ruler of Brunei, His Excellency the President of the Republic of the Philippines, His Excellency the President of the Republic of Singapore and His Excellency the President of Indonesia.

Having led an illustrious career and rendered remarkable service to the nation and the MAF for four decades, Jeneral Tan Sri Abdul Aziz handed over his portfolio as Chief of Defence Force to his successor on 1 September 2009.

Having retired from the Military career, he is again reenlisted into the Government services in May 2010 and posted as the Ambassador of Malaysia to France, accredited as well to Portugal and Monaco. He is currently the Chairman of Heitech Defence System Sdn. Bhd. and the Chairman of Perbadanan Perwira Niaga (Malaysia) (Pernama)

He has no family relationship with other Directors or major shareholders of the Company. There is no conflict of interest with the Company. Within the last 10 years, he has not been convicted for any offences. He is not a member of any Board Committee of the Company and he does not hold any directorships in other public companies. He does not hold any shares in the Company.

During the financial year, he has attended all the meetings of the Board.

DATO’ IZHAM BIN YUSOFF Independent Non-Executive Director

Dato’ Izham Bin Yusoff, a Malaysian, aged 47, is an Independent Non-Executive Director of the Company. He was appointed to the Board on 1 October 2013

He graduated with Bachelor of Accounting, University of Miami and Master of Business Administration (Accounting and International Business), University of Miami. He also and Associate Member of Institute of Internal Auditors Malaysia

Dato’ Izham bin Yusoff began his career with Citibank NA in Miami as Assistant Business Planning & Analysis Manager in 1992 before joining Procter & Gamble in Singapore as Financial Analysis Manager, Corporate from 1992 to 1995. He joined Citibank Berhad in Malaysia as Financial Controller in 1995, and was the Corporate Strategy Manager with Maxis Berhad from 1996 to 1997. He was Special Assistant to the Managing Director of EON Berhad from 1998 to 2002, Managing Director of Amanah Raya Berhad from 2002 to 2004, and the CEO of KUB Malaysia Berhad from 2004 to 2007. He was also the COO of Ninebio Sdn Bhd and its Executive Director from August 2007 to January 2010 and remained a Non-Executive Director until October 2010

He had served numerous companies as director including :

Director, Bursa Malaysia (2004-2013) Director, AKN Technology Bhd (2009-2012) Director, Satang Holdings Berhad (2008-2010)

He has no family relationship with other Directors or major shareholders of the Company. There is no conflict of interest with the Company. Within the last 10 years, he has not been convicted for any offences. He is not a member of any Board Committee of the Company and currently he is the Managing Director of Bina Darulaman Berhad. He does not hold any shares in the Company

During the financial year, he has attended all the meetings of the Board.

Directors’ Profile (Cont’d)

Owing to his meritorious service to the nation, he has been bestowed with numerous awards from His Majesty the King and His Majesty the State Rulers respectively. Renowned for promoting security and stability in the region, he was conferred awards by His Majesty the King of Thailand, His Majesty the Ruler of Brunei, His Excellency the President of the Republic of the Philippines, His Excellency the President of the Republic of Singapore and His Excellency the President of Indonesia.

Having led an illustrious career and rendered remarkable service to the nation and the MAF for four decades, Jeneral Tan Sri Abdul Aziz handed over his portfolio as Chief of Defence Force to his successor on 1 September 2009.

Having retired from the Military career, he is again reenlisted into the Government services in May 2010 and posted as the Ambassador of Malaysia to France, accredited as well to Portugal and Monaco. He is currently the Chairman of Heitech Defence System Sdn. Bhd. and the Chairman of Perbadanan Perwira Niaga (Malaysia) (Pernama)

He has no family relationship with other Directors or major shareholders of the Company. There is no conflict of interest with the Company. Within the last 10 years, he has not been convicted for any offences. He is not a member of any Board Committee of the Company and he does not hold any directorships in other public companies. He does not hold any shares in the Company.

During the financial year, he has attended all the meetings of the Board.

DATO’ IZHAM BIN YUSOFF Independent Non-Executive Director

Dato’ Izham Bin Yusoff, a Malaysian, aged 47, is an Independent Non-Executive Director of the Company. He was appointed to the Board on 1 October 2013

He graduated with Bachelor of Accounting, University of Miami and Master of Business Administration (Accounting and International Business), University of Miami. He also and Associate Member of Institute of Internal Auditors Malaysia

Dato’ Izham bin Yusoff began his career with Citibank NA in Miami as Assistant Business Planning & Analysis Manager in 1992 before joining Procter & Gamble in Singapore as Financial Analysis Manager, Corporate from 1992 to 1995. He joined Citibank Berhad in Malaysia as Financial Controller in 1995, and was the Corporate Strategy Manager with Maxis Berhad from 1996 to 1997. He was Special Assistant to the Managing Director of EON Berhad from 1998 to 2002, Managing Director of Amanah Raya Berhad from 2002 to 2004, and the CEO of KUB Malaysia Berhad from 2004 to 2007. He was also the COO of Ninebio Sdn Bhd and its Executive Director from August 2007 to January 2010 and remained a Non-Executive Director until October 2010

He had served numerous companies as director including :

Director, Bursa Malaysia (2004-2013) Director, AKN Technology Bhd (2009-2012) Director, Satang Holdings Berhad (2008-2010)

He has no family relationship with other Directors or major shareholders of the Company. There is no conflict of interest with the Company. Within the last 10 years, he has not been convicted for any offences. He is not a member of any Board Committee of the Company and currently he is the Managing Director of Bina Darulaman Berhad. He does not hold any shares in the Company

During the financial year, he has attended all the meetings of the Board.

Owing to his meritorious service to the nation, he has been bestowed with numerous awards from His Majesty the King and His Majesty the State Rulers respectively. Renowned for promoting security and stability in the region, he was conferred awards by His Majesty the King of Thailand, His Majesty the Ruler of Brunei, His Excellency the President of the Republic of the Philippines, His Excellency the President of the Republic of Singapore and His Excellency the President of Indonesia.

Having led an illustrious career and rendered remarkable service to the nation and the MAF for four decades, Jeneral Tan Sri Abdul Aziz handed over his portfolio as Chief of Defence Force to his successor on 1 September 2009.

Having retired from the Military career, he is again reenlisted into the Government services in May 2010 and posted as the Ambassador of Malaysia to France, accredited as well to Portugal and Monaco. He is currently the Chairman of Heitech Defence System Sdn. Bhd. and the Chairman of Perbadanan Perwira Niaga (Malaysia) (Pernama)

He has no family relationship with other Directors or major shareholders of the Company. There is no conflict of interest with the Company. Within the last 10 years, he has not been convicted for any offences. He is not a member of any Board Committee of the Company and he does not hold any directorships in other public companies. He does not hold any shares in the Company.

During the financial year, he has attended all the meetings of the Board.

DATO’ IZHAM BIN YUSOFF Independent Non-Executive Director

Dato’ Izham Bin Yusoff, a Malaysian, aged 47, is an Independent Non-Executive Director of the Company. He was appointed to the Board on 1 October 2013

He graduated with Bachelor of Accounting, University of Miami and Master of Business Administration (Accounting and International Business), University of Miami. He also and Associate Member of Institute of Internal Auditors Malaysia

Dato’ Izham bin Yusoff began his career with Citibank NA in Miami as Assistant Business Planning & Analysis Manager in 1992 before joining Procter & Gamble in Singapore as Financial Analysis Manager, Corporate from 1992 to 1995. He joined Citibank Berhad in Malaysia as Financial Controller in 1995, and was the Corporate Strategy Manager with Maxis Berhad from 1996 to 1997. He was Special Assistant to the Managing Director of EON Berhad from 1998 to 2002, Managing Director of Amanah Raya Berhad from 2002 to 2004, and the CEO of KUB Malaysia Berhad from 2004 to 2007. He was also the COO of Ninebio Sdn Bhd and its Executive Director from August 2007 to January 2010 and remained a Non-Executive Director until October 2010

He had served numerous companies as director including :

Director, Bursa Malaysia (2004-2013) Director, AKN Technology Bhd (2009-2012) Director, Satang Holdings Berhad (2008-2010)

He has no family relationship with other Directors or major shareholders of the Company. There is no conflict of interest with the Company. Within the last 10 years, he has not been convicted for any offences. He is not a member of any Board Committee of the Company and currently he is the Managing Director of Bina Darulaman Berhad. He does not hold any shares in the Company

During the financial year, he has attended all the meetings of the Board.

Owing to his meritorious service to the nation, he has been bestowed with numerous awards from His Majesty the King and His Majesty the State Rulers respectively. Renowned for promoting security and stability in the region, he was conferred awards by His Majesty the King of Thailand, His Majesty the Ruler of Brunei, His Excellency the President of the Republic of the Philippines, His Excellency the President of the Republic of Singapore and His Excellency the President of Indonesia.

Having led an illustrious career and rendered remarkable service to the nation and the MAF for four decades, Jeneral Tan Sri Abdul Aziz handed over his portfolio as Chief of Defence Force to his successor on 1 September 2009.

Having retired from the Military career, he is again reenlisted into the Government services in May 2010 and posted as the Ambassador of Malaysia to France, accredited as well to Portugal and Monaco. He is currently the Chairman of Heitech Defence System Sdn. Bhd. and the Chairman of Perbadanan Perwira Niaga (Malaysia) (Pernama)

He has no family relationship with other Directors or major shareholders of the Company. There is no conflict of interest with the Company. Within the last 10 years, he has not been convicted for any offences. He is not a member of any Board Committee of the Company and he does not hold any directorships in other public companies. He does not hold any shares in the Company.

During the financial year, he has attended all the meetings of the Board.

DATO’ IZHAM BIN YUSOFF Independent Non-Executive Director

Dato’ Izham Bin Yusoff, a Malaysian, aged 47, is an Independent Non-Executive Director of the Company. He was appointed to the Board on 1 October 2013

He graduated with Bachelor of Accounting, University of Miami and Master of Business Administration (Accounting and International Business), University of Miami. He also and Associate Member of Institute of Internal Auditors Malaysia

Dato’ Izham bin Yusoff began his career with Citibank NA in Miami as Assistant Business Planning & Analysis Manager in 1992 before joining Procter & Gamble in Singapore as Financial Analysis Manager, Corporate from 1992 to 1995. He joined Citibank Berhad in Malaysia as Financial Controller in 1995, and was the Corporate Strategy Manager with Maxis Berhad from 1996 to 1997. He was Special Assistant to the Managing Director of EON Berhad from 1998 to 2002, Managing Director of Amanah Raya Berhad from 2002 to 2004, and the CEO of KUB Malaysia Berhad from 2004 to 2007. He was also the COO of Ninebio Sdn Bhd and its Executive Director from August 2007 to January 2010 and remained a Non-Executive Director until October 2010

He had served numerous companies as director including :

Director, Bursa Malaysia (2004-2013) Director, AKN Technology Bhd (2009-2012) Director, Satang Holdings Berhad (2008-2010)

He has no family relationship with other Directors or major shareholders of the Company. There is no conflict of interest with the Company. Within the last 10 years, he has not been convicted for any offences. He is not a member of any Board Committee of the Company and currently he is the Managing Director of Bina Darulaman Berhad. He does not hold any shares in the Company

During the financial year, he has attended all the meetings of the Board.

Owing to his meritorious service to the nation, he has been bestowed with numerous awards from His Majesty the King and His Majesty the State Rulers respectively. Renowned for promoting security and stability in the region, he was conferred awards by His Majesty the King of Thailand, His Majesty the Ruler of Brunei, His Excellency the President of the Republic of the Philippines, His Excellency the President of the Republic of Singapore and His Excellency the President of Indonesia.

Having led an illustrious career and rendered remarkable service to the nation and the MAF for four decades, Jeneral Tan Sri Abdul Aziz handed over his portfolio as Chief of Defence Force to his successor on 1 September 2009.

Having retired from the Military career, he is again reenlisted into the Government services in May 2010 and posted as the Ambassador of Malaysia to France, accredited as well to Portugal and Monaco. He is currently the Chairman of Heitech Defence System Sdn. Bhd. and the Chairman of Perbadanan Perwira Niaga (Malaysia) (Pernama)

He has no family relationship with other Directors or major shareholders of the Company. There is no conflict of interest with the Company. Within the last 10 years, he has not been convicted for any offences. He is not a member of any Board Committee of the Company and he does not hold any directorships in other public companies. He does not hold any shares in the Company.

During the financial year, he has attended all the meetings of the Board.

DATO’ IZHAM BIN YUSOFF Independent Non-Executive Director

Dato’ Izham Bin Yusoff, a Malaysian, aged 47, is an Independent Non-Executive Director of the Company. He was appointed to the Board on 1 October 2013

He graduated with Bachelor of Accounting, University of Miami and Master of Business Administration (Accounting and International Business), University of Miami. He also and Associate Member of Institute of Internal Auditors Malaysia

Dato’ Izham bin Yusoff began his career with Citibank NA in Miami as Assistant Business Planning & Analysis Manager in 1992 before joining Procter & Gamble in Singapore as Financial Analysis Manager, Corporate from 1992 to 1995. He joined Citibank Berhad in Malaysia as Financial Controller in 1995, and was the Corporate Strategy Manager with Maxis Berhad from 1996 to 1997. He was Special Assistant to the Managing Director of EON Berhad from 1998 to 2002, Managing Director of Amanah Raya Berhad from 2002 to 2004, and the CEO of KUB Malaysia Berhad from 2004 to 2007. He was also the COO of Ninebio Sdn Bhd and its Executive Director from August 2007 to January 2010 and remained a Non-Executive Director until October 2010

He had served numerous companies as director including :

Director, Bursa Malaysia (2004-2013) Director, AKN Technology Bhd (2009-2012) Director, Satang Holdings Berhad (2008-2010)

He has no family relationship with other Directors or major shareholders of the Company. There is no conflict of interest with the Company. Within the last 10 years, he has not been convicted for any offences. He is not a member of any Board Committee of the Company and currently he is the Managing Director of Bina Darulaman Berhad. He does not hold any shares in the Company

During the financial year, he has attended all the meetings of the Board.

Owing to his meritorious service to the nation, he has been bestowed with numerous awards from His Majesty the King and His Majesty the State Rulers respectively. Renowned for promoting security and stability in the region, he was conferred awards by His Majesty the King of Thailand, His Majesty the Ruler of Brunei, His Excellency the President of the Republic of the Philippines, His Excellency the President of the Republic of Singapore and His Excellency the President of Indonesia.

Having led an illustrious career and rendered remarkable service to the nation and the MAF for four decades, Jeneral Tan Sri Abdul Aziz handed over his portfolio as Chief of Defence Force to his successor on 1 September 2009.

Having retired from the Military career, he is again reenlisted into the Government services in May 2010 and posted as the Ambassador of Malaysia to France, accredited as well to Portugal and Monaco. He is currently the Chairman of Heitech Defence System Sdn. Bhd. and the Chairman of Perbadanan Perwira Niaga (Malaysia) (Pernama)

He has no family relationship with other Directors or major shareholders of the Company. There is no conflict of interest with the Company. Within the last 10 years, he has not been convicted for any offences. He is not a member of any Board Committee of the Company and he does not hold any directorships in other public companies. He does not hold any shares in the Company.

During the financial year, he has attended all the meetings of the Board.

DATO’ IZHAM BIN YUSOFF Independent Non-Executive Director

Dato’ Izham Bin Yusoff, a Malaysian, aged 47, is an Independent Non-Executive Director of the Company. He was appointed to the Board on 1 October 2013

He graduated with Bachelor of Accounting, University of Miami and Master of Business Administration (Accounting and International Business), University of Miami. He also and Associate Member of Institute of Internal Auditors Malaysia

Dato’ Izham bin Yusoff began his career with Citibank NA in Miami as Assistant Business Planning & Analysis Manager in 1992 before joining Procter & Gamble in Singapore as Financial Analysis Manager, Corporate from 1992 to 1995. He joined Citibank Berhad in Malaysia as Financial Controller in 1995, and was the Corporate Strategy Manager with Maxis Berhad from 1996 to 1997. He was Special Assistant to the Managing Director of EON Berhad from 1998 to 2002, Managing Director of Amanah Raya Berhad from 2002 to 2004, and the CEO of KUB Malaysia Berhad from 2004 to 2007. He was also the COO of Ninebio Sdn Bhd and its Executive Director from August 2007 to January 2010 and remained a Non-Executive Director until October 2010

He had served numerous companies as director including :

Director, Bursa Malaysia (2004-2013) Director, AKN Technology Bhd (2009-2012) Director, Satang Holdings Berhad (2008-2010)

He has no family relationship with other Directors or major shareholders of the Company. There is no conflict of interest with the Company. Within the last 10 years, he has not been convicted for any offences. He is not a member of any Board Committee of the Company and currently he is the Managing Director of Bina Darulaman Berhad. He does not hold any shares in the Company

During the financial year, he has attended all the meetings of the Board.

Owing to his meritorious service to the nation, he has been bestowed with numerous awards from His Majesty the King and His Majesty the State Rulers respectively. Renowned for promoting security and stability in the region, he was conferred awards by His Majesty the King of Thailand, His Majesty the Ruler of Brunei, His Excellency the President of the Republic of the Philippines, His Excellency the President of the Republic of Singapore and His Excellency the President of Indonesia.

Having led an illustrious career and rendered remarkable service to the nation and the MAF for four decades, Jeneral Tan Sri Abdul Aziz handed over his portfolio as Chief of Defence Force to his successor on 1 September 2009.

Having retired from the Military career, he is again reenlisted into the Government services in May 2010 and posted as the Ambassador of Malaysia to France, accredited as well to Portugal and Monaco. He is currently the Chairman of Heitech Defence System Sdn. Bhd. and the Chairman of Perbadanan Perwira Niaga (Malaysia) (Pernama)

He has no family relationship with other Directors or major shareholders of the Company. There is no conflict of interest with the Company. Within the last 10 years, he has not been convicted for any offences. He is not a member of any Board Committee of the Company and he does not hold any directorships in other public companies. He does not hold any shares in the Company.

During the financial year, he has attended all the meetings of the Board.

DATO’ IZHAM BIN YUSOFF Independent Non-Executive Director

Dato’ Izham Bin Yusoff, a Malaysian, aged 47, is an Independent Non-Executive Director of the Company. He was appointed to the Board on 1 October 2013

He graduated with Bachelor of Accounting, University of Miami and Master of Business Administration (Accounting and International Business), University of Miami. He also and Associate Member of Institute of Internal Auditors Malaysia

Dato’ Izham bin Yusoff began his career with Citibank NA in Miami as Assistant Business Planning & Analysis Manager in 1992 before joining Procter & Gamble in Singapore as Financial Analysis Manager, Corporate from 1992 to 1995. He joined Citibank Berhad in Malaysia as Financial Controller in 1995, and was the Corporate Strategy Manager with Maxis Berhad from 1996 to 1997. He was Special Assistant to the Managing Director of EON Berhad from 1998 to 2002, Managing Director of Amanah Raya Berhad from 2002 to 2004, and the CEO of KUB Malaysia Berhad from 2004 to 2007. He was also the COO of Ninebio Sdn Bhd and its Executive Director from August 2007 to January 2010 and remained a Non-Executive Director until October 2010

He had served numerous companies as director including :

Director, Bursa Malaysia (2004-2013) Director, AKN Technology Bhd (2009-2012) Director, Satang Holdings Berhad (2008-2010)

He has no family relationship with other Directors or major shareholders of the Company. There is no conflict of interest with the Company. Within the last 10 years, he has not been convicted for any offences. He is not a member of any Board Committee of the Company and currently he is the Managing Director of Bina Darulaman Berhad. He does not hold any shares in the Company

During the financial year, he has attended all the meetings of the Board.

RAYA INTERNATIONAL BERHAD Annual Report 2013

5

Directors’ Profile (Cont’d)

MEJAR ISMAIL BIN AHMAD (RTD) Non-Independent Non-Executive Director

Mejar Ismail Bin Ahmad, a Malaysian, aged 65, is a Non-Independent Non-Executive Director of the Company. He was appointed to the Board on 9 October 2013.

He obtained his Masters in Business Administration from Asian Institute of Management, Manila,. He also holds LLB Hons from University of Wolverhampton, United Kingdom, Master of Law (LLM) from University of London, United Kingdom and possesses Certificate in Legal Practice.

He served in the Malaysian Army for 17 years and attended courses both local and overseas. In 1983, he joined Perwira Niaga Malaysia (Pernama), a wholly-owned subsidiary of LTAT, a wholesale and international trading company. His last position in Pernama was Deputy General Manager before he left in 1999. He was the CEO of Odasaja Sdn. Bhd. in its formative year and later became the Group Executive Director of the same. He left Odasaja Sdn. Bhd. in December 2002. He is now the Chairman of Era Bazil Resources Sdn. Bhd. and Managing Director of Zagma Sdn. Bhd.

He and Ezrul Ehsan (Executive Director) are father and son. Mejar Ismail has no other family relationship with other Directors or major shareholders of the Company. There is no conflict of interest with the Company. Within the last 10 years, he has not been convicted for any offences. He is not a member of any Board Committee of the Company and he also sits on the Board of MLABS Systems Berhad and SCAN Associates Berhad.

He does not hold any shares in the Company. During the financial year, he has attended all the meetings of the Board.

EZRUL EHSAN BIN ISMAIL Executive Director

Encik Ezrul Ehsan, a Malaysian, aged 35, is an Executive Director of the Company. He was appointed to the Board on 28 August 2012.

He holds a Certificate in Information Technology at Canberra Institute of Technology, Australia

He started his career as an IT Executive with Linkos Network Sdn. Bhd. In 2003, he was invloved in planning and organizing the operation of the information system, developed and implement policies for electronic data processing, maintaining hardware and software system. In 2006, Encik Ezrul Ehsan joined Carpet Raya Sdn. Bhd. as a Credit Controller. In 2010, Encik Ezrul joined a public listed company, Equine Capital Berhad as Sales and Marketing Executive to promote products to customers, source for clients and potential project to the Company and responsible for collection of payment.

He and Mejar Ismail (Non-Independent Non-Executive Director) are father and son. He has no other family relationship with other Directors or major shareholders of the Company. There is no conflict of interest with the Company. Within the last 10 years, he has not been convicted for any offences. He is a member of Remuneration Committee

He does not hold any shares in the Company and does not hold any directorships in other public companies. During the financial year, he has attended all the meetings of the Board.

RAYA INTERNATIONAL BERHAD Annual Report 2013

6DATO’ MALEK RADZUAN BIN SAHARIN Non-Independent Non-Executive Director

Dato’ Malek Radzuan, a Malaysian, aged 56, was appointed to the Board on 27 August 2012 as Independent Non-Executive Director. He was subsequently re-designated as Non-Independent Non- Executive Director on 2 October 2013.

He holds a Degree of Arts from College University Octawa Florida. After graduation, Dato' Malek Radzuan pursued his career in music, his first album was launched in 1980 and the subsequent album as was launched in 1981. As of todate, Dato' Malek has launched a total of 23 albums

In 2003, Dato’ Malek Radzuan became a member of PAPITA (Persatuan Penyanyi-Pemuzik Penulis Lagu Tanahair). With his vast experience in music industry, Dato' Malek was appointed as Deputy President of PAPITA and he is still serving in the association. Dato' Malek has possessed more than 30 years of experience in music and singing.

In 2006, Dato' Malek become a member of Association/Pertubuhan Perniagaan Melayu. Dato' Malek also own a tourism company which has been operating for the past five years.

With his vast experience in the industry, Dato’ Malek was appointed as the Director of Yayasan Artis 1Malaysia in May 2012.

He has no family relationship with other Directors or major shareholders of the Company. There is no conflict of interest with the Company. Within the last 10 years, he has not been convicted for any offences. There is no conflict of interest with the Company. He is a member of Audit Committee and Remuneration Committee and Chairman of Nomination Committee.

He does not hold any shares in the Company and does not hold any directorships in other public companies. During the financial year, he has attended all the meetings of the Board.

MOHD SHUKRI BIN ABDULLAH Independent Non-Executive Director

Encik Mohd Shukri, a Malaysian, aged 48, is an Independent Non-Executive Director of the Company. He was appointed to the Board on 1 March 2012.

He started his career with Shell Malaysia Trading Sdn. Bhd. as a Forecourt Executive in the Marketing Retail Development Division in 1990. Three years later he joined Panmart Development Sdn. Bhd.

In 1998, he was appointed as the Contracts & Promotions Manager for Carpet Raya Sdn. Bhd. ("Carpet Raya"). With his vast experience, Encik Mohd Shukri contributed tremendously to the overall growth of the company to become one of the leading companies in the industry. At present, he is the appointed director for Carpet Raya.

Besides Carpet Raya, he is also a director in a number of companies such as TJ Oil Land Services Sdn. Bhd., Asia Canggih Sdn. Bhd., Affluent Corridor Sdn.Bhd., Radiant Splendour Sdn. Bhd., Dekad Darat Sdn. Bhd. and Prudent Plus Sdn. Bhd. Through these companies, he oversees the acquisition and sale of landmark properties in Kuala Lumpur such as Angkasaraya, Glomac Tower, offices and residences within KLCC vicinity.

Directors’ Profile (Cont’d)

DATO’ MALEK RADZUAN BIN SAHARIN Non-Independent Non-Executive Director

Dato’ Malek Radzuan, a Malaysian, aged 56, was appointed to the Board on 27 August 2012 as Independent Non-Executive Director. He was subsequently re-designated as Non-Independent Non- Executive Director on 2 October 2013.

He holds a Degree of Arts from College University Octawa Florida. After graduation, Dato' Malek Radzuan pursued his career in music, his first album was launched in 1980 and the subsequent album as was launched in 1981. As of todate, Dato' Malek has launched a total of 23 albums

In 2003, Dato’ Malek Radzuan became a member of PAPITA (Persatuan Penyanyi-Pemuzik Penulis Lagu Tanahair). With his vast experience in music industry, Dato' Malek was appointed as Deputy President of PAPITA and he is still serving in the association. Dato' Malek has possessed more than 30 years of experience in music and singing.

In 2006, Dato' Malek become a member of Association/Pertubuhan Perniagaan Melayu. Dato' Malek also own a tourism company which has been operating for the past five years.

With his vast experience in the industry, Dato’ Malek was appointed as the Director of Yayasan Artis 1Malaysia in May 2012.

He has no family relationship with other Directors or major shareholders of the Company. There is no conflict of interest with the Company. Within the last 10 years, he has not been convicted for any offences. There is no conflict of interest with the Company. He is a member of Audit Committee and Remuneration Committee and Chairman of Nomination Committee.

He does not hold any shares in the Company and does not hold any directorships in other public companies. During the financial year, he has attended all the meetings of the Board.

MOHD SHUKRI BIN ABDULLAH Independent Non-Executive Director

Encik Mohd Shukri, a Malaysian, aged 48, is an Independent Non-Executive Director of the Company. He was appointed to the Board on 1 March 2012.

He started his career with Shell Malaysia Trading Sdn. Bhd. as a Forecourt Executive in the Marketing Retail Development Division in 1990. Three years later he joined Panmart Development Sdn. Bhd.

In 1998, he was appointed as the Contracts & Promotions Manager for Carpet Raya Sdn. Bhd. ("Carpet Raya"). With his vast experience, Encik Mohd Shukri contributed tremendously to the overall growth of the company to become one of the leading companies in the industry. At present, he is the appointed director for Carpet Raya.

Besides Carpet Raya, he is also a director in a number of companies such as TJ Oil Land Services Sdn. Bhd., Asia Canggih Sdn. Bhd., Affluent Corridor Sdn.Bhd., Radiant Splendour Sdn. Bhd., Dekad Darat Sdn. Bhd. and Prudent Plus Sdn. Bhd. Through these companies, he oversees the acquisition and sale of landmark properties in Kuala Lumpur such as Angkasaraya, Glomac Tower, offices and residences within KLCC vicinity.

DATO’ MALEK RADZUAN BIN SAHARIN Non-Independent Non-Executive Director

Dato’ Malek Radzuan, a Malaysian, aged 56, was appointed to the Board on 27 August 2012 as Independent Non-Executive Director. He was subsequently re-designated as Non-Independent Non- Executive Director on 2 October 2013.

He holds a Degree of Arts from College University Octawa Florida. After graduation, Dato' Malek Radzuan pursued his career in music, his first album was launched in 1980 and the subsequent album as was launched in 1981. As of todate, Dato' Malek has launched a total of 23 albums

In 2003, Dato’ Malek Radzuan became a member of PAPITA (Persatuan Penyanyi-Pemuzik Penulis Lagu Tanahair). With his vast experience in music industry, Dato' Malek was appointed as Deputy President of PAPITA and he is still serving in the association. Dato' Malek has possessed more than 30 years of experience in music and singing.

In 2006, Dato' Malek become a member of Association/Pertubuhan Perniagaan Melayu. Dato' Malek also own a tourism company which has been operating for the past five years.

With his vast experience in the industry, Dato’ Malek was appointed as the Director of Yayasan Artis 1Malaysia in May 2012.

He has no family relationship with other Directors or major shareholders of the Company. There is no conflict of interest with the Company. Within the last 10 years, he has not been convicted for any offences. There is no conflict of interest with the Company. He is a member of Audit Committee and Remuneration Committee and Chairman of Nomination Committee.

He does not hold any shares in the Company and does not hold any directorships in other public companies. During the financial year, he has attended all the meetings of the Board.

MOHD SHUKRI BIN ABDULLAH Independent Non-Executive Director

Encik Mohd Shukri, a Malaysian, aged 48, is an Independent Non-Executive Director of the Company. He was appointed to the Board on 1 March 2012.

He started his career with Shell Malaysia Trading Sdn. Bhd. as a Forecourt Executive in the Marketing Retail Development Division in 1990. Three years later he joined Panmart Development Sdn. Bhd.

In 1998, he was appointed as the Contracts & Promotions Manager for Carpet Raya Sdn. Bhd. ("Carpet Raya"). With his vast experience, Encik Mohd Shukri contributed tremendously to the overall growth of the company to become one of the leading companies in the industry. At present, he is the appointed director for Carpet Raya.

Besides Carpet Raya, he is also a director in a number of companies such as TJ Oil Land Services Sdn. Bhd., Asia Canggih Sdn. Bhd., Affluent Corridor Sdn.Bhd., Radiant Splendour Sdn. Bhd., Dekad Darat Sdn. Bhd. and Prudent Plus Sdn. Bhd. Through these companies, he oversees the acquisition and sale of landmark properties in Kuala Lumpur such as Angkasaraya, Glomac Tower, offices and residences within KLCC vicinity.

DATO’ MALEK RADZUAN BIN SAHARIN Non-Independent Non-Executive Director

Dato’ Malek Radzuan, a Malaysian, aged 56, was appointed to the Board on 27 August 2012 as Independent Non-Executive Director. He was subsequently re-designated as Non-Independent Non- Executive Director on 2 October 2013.

He holds a Degree of Arts from College University Octawa Florida. After graduation, Dato' Malek Radzuan pursued his career in music, his first album was launched in 1980 and the subsequent album as was launched in 1981. As of todate, Dato' Malek has launched a total of 23 albums

In 2003, Dato’ Malek Radzuan became a member of PAPITA (Persatuan Penyanyi-Pemuzik Penulis Lagu Tanahair). With his vast experience in music industry, Dato' Malek was appointed as Deputy President of PAPITA and he is still serving in the association. Dato' Malek has possessed more than 30 years of experience in music and singing.

In 2006, Dato' Malek become a member of Association/Pertubuhan Perniagaan Melayu. Dato' Malek also own a tourism company which has been operating for the past five years.

With his vast experience in the industry, Dato’ Malek was appointed as the Director of Yayasan Artis 1Malaysia in May 2012.

He has no family relationship with other Directors or major shareholders of the Company. There is no conflict of interest with the Company. Within the last 10 years, he has not been convicted for any offences. There is no conflict of interest with the Company. He is a member of Audit Committee and Remuneration Committee and Chairman of Nomination Committee.

He does not hold any shares in the Company and does not hold any directorships in other public companies. During the financial year, he has attended all the meetings of the Board.

MOHD SHUKRI BIN ABDULLAH Independent Non-Executive Director

Encik Mohd Shukri, a Malaysian, aged 48, is an Independent Non-Executive Director of the Company. He was appointed to the Board on 1 March 2012.

He started his career with Shell Malaysia Trading Sdn. Bhd. as a Forecourt Executive in the Marketing Retail Development Division in 1990. Three years later he joined Panmart Development Sdn. Bhd.

In 1998, he was appointed as the Contracts & Promotions Manager for Carpet Raya Sdn. Bhd. ("Carpet Raya"). With his vast experience, Encik Mohd Shukri contributed tremendously to the overall growth of the company to become one of the leading companies in the industry. At present, he is the appointed director for Carpet Raya.

Besides Carpet Raya, he is also a director in a number of companies such as TJ Oil Land Services Sdn. Bhd., Asia Canggih Sdn. Bhd., Affluent Corridor Sdn.Bhd., Radiant Splendour Sdn. Bhd., Dekad Darat Sdn. Bhd. and Prudent Plus Sdn. Bhd. Through these companies, he oversees the acquisition and sale of landmark properties in Kuala Lumpur such as Angkasaraya, Glomac Tower, offices and residences within KLCC vicinity.

DATO’ MALEK RADZUAN BIN SAHARIN Non-Independent Non-Executive Director

Dato’ Malek Radzuan, a Malaysian, aged 56, was appointed to the Board on 27 August 2012 as Independent Non-Executive Director. He was subsequently re-designated as Non-Independent Non- Executive Director on 2 October 2013.

He holds a Degree of Arts from College University Octawa Florida. After graduation, Dato' Malek Radzuan pursued his career in music, his first album was launched in 1980 and the subsequent album as was launched in 1981. As of todate, Dato' Malek has launched a total of 23 albums

In 2003, Dato’ Malek Radzuan became a member of PAPITA (Persatuan Penyanyi-Pemuzik Penulis Lagu Tanahair). With his vast experience in music industry, Dato' Malek was appointed as Deputy President of PAPITA and he is still serving in the association. Dato' Malek has possessed more than 30 years of experience in music and singing.

In 2006, Dato' Malek become a member of Association/Pertubuhan Perniagaan Melayu. Dato' Malek also own a tourism company which has been operating for the past five years.

With his vast experience in the industry, Dato’ Malek was appointed as the Director of Yayasan Artis 1Malaysia in May 2012.

He has no family relationship with other Directors or major shareholders of the Company. There is no conflict of interest with the Company. Within the last 10 years, he has not been convicted for any offences. There is no conflict of interest with the Company. He is a member of Audit Committee and Remuneration Committee and Chairman of Nomination Committee.

He does not hold any shares in the Company and does not hold any directorships in other public companies. During the financial year, he has attended all the meetings of the Board.

MOHD SHUKRI BIN ABDULLAH Independent Non-Executive Director

Encik Mohd Shukri, a Malaysian, aged 48, is an Independent Non-Executive Director of the Company. He was appointed to the Board on 1 March 2012.

He started his career with Shell Malaysia Trading Sdn. Bhd. as a Forecourt Executive in the Marketing Retail Development Division in 1990. Three years later he joined Panmart Development Sdn. Bhd.

In 1998, he was appointed as the Contracts & Promotions Manager for Carpet Raya Sdn. Bhd. ("Carpet Raya"). With his vast experience, Encik Mohd Shukri contributed tremendously to the overall growth of the company to become one of the leading companies in the industry. At present, he is the appointed director for Carpet Raya.

Besides Carpet Raya, he is also a director in a number of companies such as TJ Oil Land Services Sdn. Bhd., Asia Canggih Sdn. Bhd., Affluent Corridor Sdn.Bhd., Radiant Splendour Sdn. Bhd., Dekad Darat Sdn. Bhd. and Prudent Plus Sdn. Bhd. Through these companies, he oversees the acquisition and sale of landmark properties in Kuala Lumpur such as Angkasaraya, Glomac Tower, offices and residences within KLCC vicinity.

DATO’ MALEK RADZUAN BIN SAHARIN Non-Independent Non-Executive Director

Dato’ Malek Radzuan, a Malaysian, aged 56, was appointed to the Board on 27 August 2012 as Independent Non-Executive Director. He was subsequently re-designated as Non-Independent Non- Executive Director on 2 October 2013.

He holds a Degree of Arts from College University Octawa Florida. After graduation, Dato' Malek Radzuan pursued his career in music, his first album was launched in 1980 and the subsequent album as was launched in 1981. As of todate, Dato' Malek has launched a total of 23 albums

In 2003, Dato’ Malek Radzuan became a member of PAPITA (Persatuan Penyanyi-Pemuzik Penulis Lagu Tanahair). With his vast experience in music industry, Dato' Malek was appointed as Deputy President of PAPITA and he is still serving in the association. Dato' Malek has possessed more than 30 years of experience in music and singing.

In 2006, Dato' Malek become a member of Association/Pertubuhan Perniagaan Melayu. Dato' Malek also own a tourism company which has been operating for the past five years.

With his vast experience in the industry, Dato’ Malek was appointed as the Director of Yayasan Artis 1Malaysia in May 2012.

He has no family relationship with other Directors or major shareholders of the Company. There is no conflict of interest with the Company. Within the last 10 years, he has not been convicted for any offences. There is no conflict of interest with the Company. He is a member of Audit Committee and Remuneration Committee and Chairman of Nomination Committee.

He does not hold any shares in the Company and does not hold any directorships in other public companies. During the financial year, he has attended all the meetings of the Board.

MOHD SHUKRI BIN ABDULLAH Independent Non-Executive Director

Encik Mohd Shukri, a Malaysian, aged 48, is an Independent Non-Executive Director of the Company. He was appointed to the Board on 1 March 2012.

He started his career with Shell Malaysia Trading Sdn. Bhd. as a Forecourt Executive in the Marketing Retail Development Division in 1990. Three years later he joined Panmart Development Sdn. Bhd.

In 1998, he was appointed as the Contracts & Promotions Manager for Carpet Raya Sdn. Bhd. ("Carpet Raya"). With his vast experience, Encik Mohd Shukri contributed tremendously to the overall growth of the company to become one of the leading companies in the industry. At present, he is the appointed director for Carpet Raya.

Besides Carpet Raya, he is also a director in a number of companies such as TJ Oil Land Services Sdn. Bhd., Asia Canggih Sdn. Bhd., Affluent Corridor Sdn.Bhd., Radiant Splendour Sdn. Bhd., Dekad Darat Sdn. Bhd. and Prudent Plus Sdn. Bhd. Through these companies, he oversees the acquisition and sale of landmark properties in Kuala Lumpur such as Angkasaraya, Glomac Tower, offices and residences within KLCC vicinity.

DATO’ MALEK RADZUAN BIN SAHARIN Non-Independent Non-Executive Director

Dato’ Malek Radzuan, a Malaysian, aged 56, was appointed to the Board on 27 August 2012 as Independent Non-Executive Director. He was subsequently re-designated as Non-Independent Non- Executive Director on 2 October 2013.

He holds a Degree of Arts from College University Octawa Florida. After graduation, Dato' Malek Radzuan pursued his career in music, his first album was launched in 1980 and the subsequent album as was launched in 1981. As of todate, Dato' Malek has launched a total of 23 albums

In 2003, Dato’ Malek Radzuan became a member of PAPITA (Persatuan Penyanyi-Pemuzik Penulis Lagu Tanahair). With his vast experience in music industry, Dato' Malek was appointed as Deputy President of PAPITA and he is still serving in the association. Dato' Malek has possessed more than 30 years of experience in music and singing.

In 2006, Dato' Malek become a member of Association/Pertubuhan Perniagaan Melayu. Dato' Malek also own a tourism company which has been operating for the past five years.

With his vast experience in the industry, Dato’ Malek was appointed as the Director of Yayasan Artis 1Malaysia in May 2012.

He has no family relationship with other Directors or major shareholders of the Company. There is no conflict of interest with the Company. Within the last 10 years, he has not been convicted for any offences. There is no conflict of interest with the Company. He is a member of Audit Committee and Remuneration Committee and Chairman of Nomination Committee.

He does not hold any shares in the Company and does not hold any directorships in other public companies. During the financial year, he has attended all the meetings of the Board.

MOHD SHUKRI BIN ABDULLAH Independent Non-Executive Director

Encik Mohd Shukri, a Malaysian, aged 48, is an Independent Non-Executive Director of the Company. He was appointed to the Board on 1 March 2012.

He started his career with Shell Malaysia Trading Sdn. Bhd. as a Forecourt Executive in the Marketing Retail Development Division in 1990. Three years later he joined Panmart Development Sdn. Bhd.

In 1998, he was appointed as the Contracts & Promotions Manager for Carpet Raya Sdn. Bhd. ("Carpet Raya"). With his vast experience, Encik Mohd Shukri contributed tremendously to the overall growth of the company to become one of the leading companies in the industry. At present, he is the appointed director for Carpet Raya.

Besides Carpet Raya, he is also a director in a number of companies such as TJ Oil Land Services Sdn. Bhd., Asia Canggih Sdn. Bhd., Affluent Corridor Sdn.Bhd., Radiant Splendour Sdn. Bhd., Dekad Darat Sdn. Bhd. and Prudent Plus Sdn. Bhd. Through these companies, he oversees the acquisition and sale of landmark properties in Kuala Lumpur such as Angkasaraya, Glomac Tower, offices and residences within KLCC vicinity.

DATO’ MALEK RADZUAN BIN SAHARIN Non-Independent Non-Executive Director

Dato’ Malek Radzuan, a Malaysian, aged 56, was appointed to the Board on 27 August 2012 as Independent Non-Executive Director. He was subsequently re-designated as Non-Independent Non- Executive Director on 2 October 2013.

He holds a Degree of Arts from College University Octawa Florida. After graduation, Dato' Malek Radzuan pursued his career in music, his first album was launched in 1980 and the subsequent album as was launched in 1981. As of todate, Dato' Malek has launched a total of 23 albums

In 2003, Dato’ Malek Radzuan became a member of PAPITA (Persatuan Penyanyi-Pemuzik Penulis Lagu Tanahair). With his vast experience in music industry, Dato' Malek was appointed as Deputy President of PAPITA and he is still serving in the association. Dato' Malek has possessed more than 30 years of experience in music and singing.

In 2006, Dato' Malek become a member of Association/Pertubuhan Perniagaan Melayu. Dato' Malek also own a tourism company which has been operating for the past five years.

With his vast experience in the industry, Dato’ Malek was appointed as the Director of Yayasan Artis 1Malaysia in May 2012.

He has no family relationship with other Directors or major shareholders of the Company. There is no conflict of interest with the Company. Within the last 10 years, he has not been convicted for any offences. There is no conflict of interest with the Company. He is a member of Audit Committee and Remuneration Committee and Chairman of Nomination Committee.

He does not hold any shares in the Company and does not hold any directorships in other public companies. During the financial year, he has attended all the meetings of the Board.

MOHD SHUKRI BIN ABDULLAH Independent Non-Executive Director

Encik Mohd Shukri, a Malaysian, aged 48, is an Independent Non-Executive Director of the Company. He was appointed to the Board on 1 March 2012.

He started his career with Shell Malaysia Trading Sdn. Bhd. as a Forecourt Executive in the Marketing Retail Development Division in 1990. Three years later he joined Panmart Development Sdn. Bhd.

In 1998, he was appointed as the Contracts & Promotions Manager for Carpet Raya Sdn. Bhd. ("Carpet Raya"). With his vast experience, Encik Mohd Shukri contributed tremendously to the overall growth of the company to become one of the leading companies in the industry. At present, he is the appointed director for Carpet Raya.

Besides Carpet Raya, he is also a director in a number of companies such as TJ Oil Land Services Sdn. Bhd., Asia Canggih Sdn. Bhd., Affluent Corridor Sdn.Bhd., Radiant Splendour Sdn. Bhd., Dekad Darat Sdn. Bhd. and Prudent Plus Sdn. Bhd. Through these companies, he oversees the acquisition and sale of landmark properties in Kuala Lumpur such as Angkasaraya, Glomac Tower, offices and residences within KLCC vicinity.

DATO’ MALEK RADZUAN BIN SAHARIN Non-Independent Non-Executive Director

Dato’ Malek Radzuan, a Malaysian, aged 56, was appointed to the Board on 27 August 2012 as Independent Non-Executive Director. He was subsequently re-designated as Non-Independent Non- Executive Director on 2 October 2013.

He holds a Degree of Arts from College University Octawa Florida. After graduation, Dato' Malek Radzuan pursued his career in music, his first album was launched in 1980 and the subsequent album as was launched in 1981. As of todate, Dato' Malek has launched a total of 23 albums

In 2003, Dato’ Malek Radzuan became a member of PAPITA (Persatuan Penyanyi-Pemuzik Penulis Lagu Tanahair). With his vast experience in music industry, Dato' Malek was appointed as Deputy President of PAPITA and he is still serving in the association. Dato' Malek has possessed more than 30 years of experience in music and singing.

In 2006, Dato' Malek become a member of Association/Pertubuhan Perniagaan Melayu. Dato' Malek also own a tourism company which has been operating for the past five years.

With his vast experience in the industry, Dato’ Malek was appointed as the Director of Yayasan Artis 1Malaysia in May 2012.

He has no family relationship with other Directors or major shareholders of the Company. There is no conflict of interest with the Company. Within the last 10 years, he has not been convicted for any offences. There is no conflict of interest with the Company. He is a member of Audit Committee and Remuneration Committee and Chairman of Nomination Committee.

He does not hold any shares in the Company and does not hold any directorships in other public companies. During the financial year, he has attended all the meetings of the Board.

MOHD SHUKRI BIN ABDULLAH Independent Non-Executive Director

Encik Mohd Shukri, a Malaysian, aged 48, is an Independent Non-Executive Director of the Company. He was appointed to the Board on 1 March 2012.

He started his career with Shell Malaysia Trading Sdn. Bhd. as a Forecourt Executive in the Marketing Retail Development Division in 1990. Three years later he joined Panmart Development Sdn. Bhd.

In 1998, he was appointed as the Contracts & Promotions Manager for Carpet Raya Sdn. Bhd. ("Carpet Raya"). With his vast experience, Encik Mohd Shukri contributed tremendously to the overall growth of the company to become one of the leading companies in the industry. At present, he is the appointed director for Carpet Raya.

Besides Carpet Raya, he is also a director in a number of companies such as TJ Oil Land Services Sdn. Bhd., Asia Canggih Sdn. Bhd., Affluent Corridor Sdn.Bhd., Radiant Splendour Sdn. Bhd., Dekad Darat Sdn. Bhd. and Prudent Plus Sdn. Bhd. Through these companies, he oversees the acquisition and sale of landmark properties in Kuala Lumpur such as Angkasaraya, Glomac Tower, offices and residences within KLCC vicinity.

RAYA INTERNATIONAL BERHAD Annual Report 2013

7He established Shapers Malaysia Sdn. Bhd. in 2000 to focus on his passion to effectively produce promotional activities for organisations by garnering support from their industry partners. His passion for the Halal Industry saw him founding and organising the first Malaysia International Halal Showcase in 2004 and in 2010, he founded another Halal related exposition called Halal Fiesta (HALFEST) focusing on Halal certified local products.

He has no family relationship with other Directors or major shareholders of the Company. There is no conflict of interest with the Company. Within the last 10 years, he has not been convicted for any offences. There is no conflict of interest with the Company. He is the Chairman of Audit Committee and member of Nomination Committee.

He does not hold any shares in the Company and does not hold any directorships in other public companies. During the financial year, he has attended three (3) out of five (5) meetings of the Board.

ABDUL LATIF BIN ABDUL RAHIM Non-Independent Non-Executive Director

Encik Abdul Latif, a Malaysian, aged 56, is a Non-Independent Non-Executive Director of the Company. He was appointed to the Board on 1 October 2013.

He holds a Diploma In Business Administration.

Encik Abdul Latif began his career in year 1982 with Malaysian Tobacco as a senior executive. In year 1992, he joined Regal Marketing Sdn. Bhd. as Business Executive and worked until 1998. He is currently the General Manager of Azeera Management Consultant (M) Sdn Bhd which he has joined since year 1998.

He has no family relationship with other Directors or major shareholders of the Company. There is no conflict of interest with the Company. Within the last 10 years, he has not been convicted for any offences. There is no conflict of interest with the Company. He is not a member of any Board Committee of the Company.

He does not hold any shares in the Company and does not hold any directorships in other public companies. During the financial year, he has attended all the meetings of the Board.

Directors’ Profile (Cont’d)

RAYA INTERNATIONAL BERHAD Annual Report 2013

8

CHAIRMAN’S STATEMENT

Dear Shareholders,

On behalf of the Board of Directors, I am pleased to present the Annual Report and Audited Financial Statements for the financial year ended 31 December 2013 of the Raya International Berhad (“Raya”).

FINANCIAL REVIEW

The Group has posted an improved profit after tax of RM 89,165 as compared to a profit after tax of RM 72,879 in 2012.

Revenue achieved for the financial year ended 31 December 2013 was RM 2,424,165 as compared to RM 871,987 registered in 2012 reflecting an increase of about 178% due to higher sales in Air Filtration products.

PROSPECTS

As for the prospects for current financial year, the Company is currently deliberating on the viability of the existing business of the Group and are considering options available to improve its long term and sustainable future growth

APPRECIATION

On behalf of the Board, I would like to record my sincere appreciation to our valued shareholders, customers, business associates, financiers, relevant authorities and other stakeholders for their continuous support and trust in our Group during the past year.

Finally, my personal appreciation to my fellow members of the Board for their untiring effort in charting the strategic direction and corporate values of the Group. We will continue to deliver long term value to our customers and stakeholders.

We look forward to your continuous trust and support for the year 2014.

Thank you.

JENERAL TAN SRI ABDUL AZIZ BIN ZAINAL (RTD) Chairman

Chairman’s Statement

RAYA INTERNATIONAL BERHAD Annual Report 2013

9

Statement of Corporate GovernanceSTATEMENT OF CORPORATE GOVERNANCE

The Board of Directors (“the Board”) of Raya International Berhad (“Raya”) recognizes the importance of upholding the highest standards of corporate governance in conducting the Group’s business activities and discharging the Board’s fiduciary responsibilities to protect and enhance the shareholder’s value. Premised on this, the Board is committed to the best of its ability under the present circumstances of the Company to ensure that high standards of corporate governance are practised throughout the Company and to apply the principles and best practices as governed by the Listing Requirements of the ACE Market of Bursa Malaysia Securities Berhad (“Listing Requirements”) and Malaysian Code on Corporate Governance (“Code”)

This statement describes the Company’s compliance with the principles of the Code.

A. DIRECTORS

i. The Board

The Board is primarily responsible for the strategic directions of the Company. In addition, the Board also oversees the conduct of the Company‘s business, whereby it devises and puts in place adequate systems of control, focuses primarily on the mitigation of any foreseeable or potential risk besetting the Company.

ii. Board Balance

The current Board has seven (7) directors comprising one (1) Executive Director, three (3) are Non-Independent Non-Executive Directors and three (3) Independent Non-Executive Directors. More than one-third (1/3) of the current Board is represented by Independent Non-Executive Directors who are independent of management and free from any business or other relationship which could interfere with the exercise of independent judgment on the Board’s deliberation and decision making, each of whom brings with him vast and varied experiences, exposure and expertise.

The profile of each member of the current Board is set out on Directors’ profile of this Annual Report.

The Chairman of the Board holds a Non-Executive position and is primarily responsible for matters pertaining to the Board and the overall conduct of the Group. The Executive Director oversees the day to day management and running of the Group and the implementation of the Board’s decision and policies.

RAYA INTERNATIONAL BERHAD Annual Report 2013

10The presence of three (3) Independent Non-Executive Directors is essential in providing unbiased views and impartiality to the Board’s deliberation and decision-making process. In addition, the non-executive directors ensure that matters and issues brought to the Board are fully discussed and examined, taking into account the interest of all stakeholders in the Group. In order to ensure the effectiveness of the Independent Directors.

In line with the Code, the tenure of an Independent Director shall not exceed nine (9) years consecutively. Upon completion of the nine (9) years, an Independent Director may continue to serve on the Board subject to his redesignation as a Non-Independent Non-Executive Director should an Independent Director be retained after 9 years, his retention must be approved by the shareholders.

iii. Board Meetings

To ensure that the Raya Group is managed properly, the current Board is scheduled to meet at least four (4) times a year, with additional meetings being convened when necessary. Besides that, the Board also approves matters through the circulation of Director’ Circular Resolution in accordance with the Articles of Association of the Company.

During the financial year ended 31 December 2013, the Board met five (5) times. The details of the Director’s attendances at the Board Meetings during their tenure in office are set out below:-

No Name of Directors No of Meetings attended during the time the

Directors hold office

%

1. *Jeneral Tan Sri Abdul Aziz Bin Zainal (Rtd) Independent Non-Executive Director

1/1 100

2. **Dato’ Izham Bin Yusoff Independent Non-Executive Director

1/1 100

3. Dato’ Malek Radzuan Bin Saharin Non-Independent Non-Executive Director

5/5 100

4. ***Mr. Deepak Jaikishan A/L Jaikishan Rewachand Managing Director

3/3 100

5. ****Mr. Arulampalam A/L S Mariampillai Independent Non-Executive Director

4/5 80

6. Encik Ezrul Ehsan Bin Ismail Executive Director

5/5 100

Statement of Corporate Governance (Cont’d)

RAYA INTERNATIONAL BERHAD Annual Report 2013

11No Name of Directors No of Meetings attended

during the time the Directors hold office

%

7. Encik Mohd Shukri Bin Abdullah Independent Non-Executive Director

3/5 60

8. *****Encik Abdul Latif Bin Abdul Rahim Non- Independent Non-Executive Director

1/1 100

9. ##Mr. Rajesh A/L Jaikishan Non-Independent Non-Executive Director

1/1 100

10. ###Mejar Ismail Bin Ahmad (Rtd) Non-Independent Non-Executive Director

1/1 100

11. ####Mr. Naresh Kumar Kukereja @ Lender Lal A/L K. Lal Independent Non-Executive Director

0/0 N/A

Notes:

* Appointed on 10 October 2013 ** Appointed on 1 October 2013 *** Appointed on 10 May 2013 and subsequently resigned on 30 May 2014 ****Resigned on 30 May 2014 ***** Appointed on 1 October 2013 ## Appointed on 2 October 2013 and subsequently resigned on 30 May 2014 ### Appointed on 9 October 2013 #### Appointed on 26 December 2013

iv. Supply of Information and Access to Advice

The Board is provided with comprehensive board papers on a timely manner prior to board meetings. This is to ensure and enable the members of the Board to discharge their duties and responsibilities competently in a well-informed manner. All members of the Board have unhindered access to the advice and services of the Company Secretary, and where necessary, may seek independent professional advisers for advice for the purpose of discharging their statutory and fiduciary duties. Every Director also has unrestricted access to all information with regard to the activities of the Raya Group.

v. Directors Training

All Directors had attended the Mandatory Accreditation Programme for Directors of Public Listed Companies (“MAP”) except Encik Abdul Latif Bin Abdul Rahim. He will attend the MAP in due course pursuant to the Listing Requirements pending registration with Bursatra Sdn Bhd.

Statement of Corporate Governance (Cont’d)

RAYA INTERNATIONAL BERHAD Annual Report 2013

12vi. Re-election of Directors

In accordance with the Company’s Articles of Association, one-third (1/3) of the directors shall retire from office and be eligible for re-election at each Annual General Meeting and all directors shall retire from office at least once in every three (3) years but shall be eligible for re-election. Directors appointed during the year will be subject to retirement and re-election by shareholders in the Annual General Meeting.

Directors over seventy (70) years of age are required to retire and submit themselves for re-appointment annually in accordance with Section 129(6) of the Companies Act, 1965. Presently, none of the Directors is subject to such retirement and re-appointment.

vii. Board Committees

The Board has set up the following Committees to assist the Board in discharging their duties and decision making:-

(a) Audit Committee

Pursuant to the resignation of Mr. Naresh Kumar Kukereja @ Lender Lal A/L K. Lal and Mr. Arulampalam A/L S Mariampillai as Directors of the Company on 30 May 2014, the current Audit Committee comprises two (2) members as follows:-

Chairman : Encik Mohd Shukri Bin Abdullah Independent Non-Executive Director

Member : Dato’ Malek Radzuan Bin Saharin Non- Independent Non-Executive Director

The Audit Committee Report is set out on page 16 to 20 of this Annual Report.

(b) Nomination Committee

The Nomination Committee comprises the following members:-

Chairman : Dato’ Malek Radzuan Bin Saharin Non- Independent Non-Executive Director

Members : Arulampalam A/L S Mariampillai

Independent Non-Executive Director (resigned on 30 May 2014)

Encik Mohd Shukri Bin Abdullah Independent Non-Executive Director

The terms of reference of the Nomination Committee are as follows:-

• To regularly review the Board structure, size and composition. • To recommend candidates for the approval of the Board to fill vacancies in the Board.

vi. Re-election of Directors

In accordance with the Company’s Articles of Association, one-third (1/3) of the directors shall retire from office and be eligible for re-election at each Annual General Meeting and all directors shall retire from office at least once in every three (3) years but shall be eligible for re-election. Directors appointed during the year will be subject to retirement and re-election by shareholders in the Annual General Meeting.

Directors over seventy (70) years of age are required to retire and submit themselves for re-appointment annually in accordance with Section 129(6) of the Companies Act, 1965. Presently, none of the Directors is subject to such retirement and re-appointment.

vii. Board Committees

The Board has set up the following Committees to assist the Board in discharging their duties and decision making:-

(a) Audit Committee

Pursuant to the resignation of Mr. Naresh Kumar Kukereja @ Lender Lal A/L K. Lal and Mr. Arulampalam A/L S Mariampillai as Directors of the Company on 30 May 2014, the current Audit Committee comprises two (2) members as follows:-

Chairman : Encik Mohd Shukri Bin Abdullah Independent Non-Executive Director

Member : Dato’ Malek Radzuan Bin Saharin Non- Independent Non-Executive Director

The Audit Committee Report is set out on page 16 to 20 of this Annual Report.

(b) Nomination Committee

The Nomination Committee comprises the following members:-

Chairman : Dato’ Malek Radzuan Bin Saharin Non- Independent Non-Executive Director

Members : Arulampalam A/L S Mariampillai

Independent Non-Executive Director (resigned on 30 May 2014)

Encik Mohd Shukri Bin Abdullah Independent Non-Executive Director

The terms of reference of the Nomination Committee are as follows:-

• To regularly review the Board structure, size and composition. • To recommend candidates for the approval of the Board to fill vacancies in the Board.

vi. Re-election of Directors

In accordance with the Company’s Articles of Association, one-third (1/3) of the directors shall retire from office and be eligible for re-election at each Annual General Meeting and all directors shall retire from office at least once in every three (3) years but shall be eligible for re-election. Directors appointed during the year will be subject to retirement and re-election by shareholders in the Annual General Meeting.

Directors over seventy (70) years of age are required to retire and submit themselves for re-appointment annually in accordance with Section 129(6) of the Companies Act, 1965. Presently, none of the Directors is subject to such retirement and re-appointment.

vii. Board Committees

The Board has set up the following Committees to assist the Board in discharging their duties and decision making:-

(a) Audit Committee

Pursuant to the resignation of Mr. Naresh Kumar Kukereja @ Lender Lal A/L K. Lal and Mr. Arulampalam A/L S Mariampillai as Directors of the Company on 30 May 2014, the current Audit Committee comprises two (2) members as follows:-

Chairman : Encik Mohd Shukri Bin Abdullah Independent Non-Executive Director

Member : Dato’ Malek Radzuan Bin Saharin Non- Independent Non-Executive Director

The Audit Committee Report is set out on page 16 to 20 of this Annual Report.

(b) Nomination Committee

The Nomination Committee comprises the following members:-

Chairman : Dato’ Malek Radzuan Bin Saharin Non- Independent Non-Executive Director

Members : Arulampalam A/L S Mariampillai

Independent Non-Executive Director (resigned on 30 May 2014)

Encik Mohd Shukri Bin Abdullah Independent Non-Executive Director

The terms of reference of the Nomination Committee are as follows:-

• To regularly review the Board structure, size and composition. • To recommend candidates for the approval of the Board to fill vacancies in the Board.

vi. Re-election of Directors

In accordance with the Company’s Articles of Association, one-third (1/3) of the directors shall retire from office and be eligible for re-election at each Annual General Meeting and all directors shall retire from office at least once in every three (3) years but shall be eligible for re-election. Directors appointed during the year will be subject to retirement and re-election by shareholders in the Annual General Meeting.

Directors over seventy (70) years of age are required to retire and submit themselves for re-appointment annually in accordance with Section 129(6) of the Companies Act, 1965. Presently, none of the Directors is subject to such retirement and re-appointment.

vii. Board Committees

The Board has set up the following Committees to assist the Board in discharging their duties and decision making:-

(a) Audit Committee

Pursuant to the resignation of Mr. Naresh Kumar Kukereja @ Lender Lal A/L K. Lal and Mr. Arulampalam A/L S Mariampillai as Directors of the Company on 30 May 2014, the current Audit Committee comprises two (2) members as follows:-

Chairman : Encik Mohd Shukri Bin Abdullah Independent Non-Executive Director

Member : Dato’ Malek Radzuan Bin Saharin Non- Independent Non-Executive Director

The Audit Committee Report is set out on page 16 to 20 of this Annual Report.

(b) Nomination Committee

The Nomination Committee comprises the following members:-

Chairman : Dato’ Malek Radzuan Bin Saharin Non- Independent Non-Executive Director

Members : Arulampalam A/L S Mariampillai

Independent Non-Executive Director (resigned on 30 May 2014)

Encik Mohd Shukri Bin Abdullah Independent Non-Executive Director

The terms of reference of the Nomination Committee are as follows:-

• To regularly review the Board structure, size and composition. • To recommend candidates for the approval of the Board to fill vacancies in the Board.

vi. Re-election of Directors

In accordance with the Company’s Articles of Association, one-third (1/3) of the directors shall retire from office and be eligible for re-election at each Annual General Meeting and all directors shall retire from office at least once in every three (3) years but shall be eligible for re-election. Directors appointed during the year will be subject to retirement and re-election by shareholders in the Annual General Meeting.

Directors over seventy (70) years of age are required to retire and submit themselves for re-appointment annually in accordance with Section 129(6) of the Companies Act, 1965. Presently, none of the Directors is subject to such retirement and re-appointment.

vii. Board Committees

The Board has set up the following Committees to assist the Board in discharging their duties and decision making:-

(a) Audit Committee

Pursuant to the resignation of Mr. Naresh Kumar Kukereja @ Lender Lal A/L K. Lal and Mr. Arulampalam A/L S Mariampillai as Directors of the Company on 30 May 2014, the current Audit Committee comprises two (2) members as follows:-

Chairman : Encik Mohd Shukri Bin Abdullah Independent Non-Executive Director

Member : Dato’ Malek Radzuan Bin Saharin Non- Independent Non-Executive Director

The Audit Committee Report is set out on page 16 to 20 of this Annual Report.

(b) Nomination Committee

The Nomination Committee comprises the following members:-

Chairman : Dato’ Malek Radzuan Bin Saharin Non- Independent Non-Executive Director

Members : Arulampalam A/L S Mariampillai

Independent Non-Executive Director (resigned on 30 May 2014)

Encik Mohd Shukri Bin Abdullah Independent Non-Executive Director

The terms of reference of the Nomination Committee are as follows:-

• To regularly review the Board structure, size and composition. • To recommend candidates for the approval of the Board to fill vacancies in the Board.

vi. Re-election of Directors

In accordance with the Company’s Articles of Association, one-third (1/3) of the directors shall retire from office and be eligible for re-election at each Annual General Meeting and all directors shall retire from office at least once in every three (3) years but shall be eligible for re-election. Directors appointed during the year will be subject to retirement and re-election by shareholders in the Annual General Meeting.

Directors over seventy (70) years of age are required to retire and submit themselves for re-appointment annually in accordance with Section 129(6) of the Companies Act, 1965. Presently, none of the Directors is subject to such retirement and re-appointment.

vii. Board Committees

The Board has set up the following Committees to assist the Board in discharging their duties and decision making:-

(a) Audit Committee

Pursuant to the resignation of Mr. Naresh Kumar Kukereja @ Lender Lal A/L K. Lal and Mr. Arulampalam A/L S Mariampillai as Directors of the Company on 30 May 2014, the current Audit Committee comprises two (2) members as follows:-

Chairman : Encik Mohd Shukri Bin Abdullah Independent Non-Executive Director

Member : Dato’ Malek Radzuan Bin Saharin Non- Independent Non-Executive Director

The Audit Committee Report is set out on page 16 to 20 of this Annual Report.

(b) Nomination Committee

The Nomination Committee comprises the following members:-

Chairman : Dato’ Malek Radzuan Bin Saharin Non- Independent Non-Executive Director

Members : Arulampalam A/L S Mariampillai

Independent Non-Executive Director (resigned on 30 May 2014)

Encik Mohd Shukri Bin Abdullah Independent Non-Executive Director

The terms of reference of the Nomination Committee are as follows:-

• To regularly review the Board structure, size and composition. • To recommend candidates for the approval of the Board to fill vacancies in the Board.

vi. Re-election of Directors

In accordance with the Company’s Articles of Association, one-third (1/3) of the directors shall retire from office and be eligible for re-election at each Annual General Meeting and all directors shall retire from office at least once in every three (3) years but shall be eligible for re-election. Directors appointed during the year will be subject to retirement and re-election by shareholders in the Annual General Meeting.

Directors over seventy (70) years of age are required to retire and submit themselves for re-appointment annually in accordance with Section 129(6) of the Companies Act, 1965. Presently, none of the Directors is subject to such retirement and re-appointment.

vii. Board Committees

The Board has set up the following Committees to assist the Board in discharging their duties and decision making:-

(a) Audit Committee

Pursuant to the resignation of Mr. Naresh Kumar Kukereja @ Lender Lal A/L K. Lal and Mr. Arulampalam A/L S Mariampillai as Directors of the Company on 30 May 2014, the current Audit Committee comprises two (2) members as follows:-

Chairman : Encik Mohd Shukri Bin Abdullah Independent Non-Executive Director

Member : Dato’ Malek Radzuan Bin Saharin Non- Independent Non-Executive Director

The Audit Committee Report is set out on page 16 to 20 of this Annual Report.

(b) Nomination Committee

The Nomination Committee comprises the following members:-

Chairman : Dato’ Malek Radzuan Bin Saharin Non- Independent Non-Executive Director

Members : Arulampalam A/L S Mariampillai

Independent Non-Executive Director (resigned on 30 May 2014)

Encik Mohd Shukri Bin Abdullah Independent Non-Executive Director

The terms of reference of the Nomination Committee are as follows:-

• To regularly review the Board structure, size and composition. • To recommend candidates for the approval of the Board to fill vacancies in the Board.

vi. Re-election of Directors

In accordance with the Company’s Articles of Association, one-third (1/3) of the directors shall retire from office and be eligible for re-election at each Annual General Meeting and all directors shall retire from office at least once in every three (3) years but shall be eligible for re-election. Directors appointed during the year will be subject to retirement and re-election by shareholders in the Annual General Meeting.

Directors over seventy (70) years of age are required to retire and submit themselves for re-appointment annually in accordance with Section 129(6) of the Companies Act, 1965. Presently, none of the Directors is subject to such retirement and re-appointment.

vii. Board Committees

The Board has set up the following Committees to assist the Board in discharging their duties and decision making:-

(a) Audit Committee

Pursuant to the resignation of Mr. Naresh Kumar Kukereja @ Lender Lal A/L K. Lal and Mr. Arulampalam A/L S Mariampillai as Directors of the Company on 30 May 2014, the current Audit Committee comprises two (2) members as follows:-

Chairman : Encik Mohd Shukri Bin Abdullah Independent Non-Executive Director

Member : Dato’ Malek Radzuan Bin Saharin Non- Independent Non-Executive Director

The Audit Committee Report is set out on page 16 to 20 of this Annual Report.

(b) Nomination Committee

The Nomination Committee comprises the following members:-

Chairman : Dato’ Malek Radzuan Bin Saharin Non- Independent Non-Executive Director

Members : Arulampalam A/L S Mariampillai

Independent Non-Executive Director (resigned on 30 May 2014)

Encik Mohd Shukri Bin Abdullah Independent Non-Executive Director

The terms of reference of the Nomination Committee are as follows:-

• To regularly review the Board structure, size and composition. • To recommend candidates for the approval of the Board to fill vacancies in the Board.

vi. Re-election of Directors

In accordance with the Company’s Articles of Association, one-third (1/3) of the directors shall retire from office and be eligible for re-election at each Annual General Meeting and all directors shall retire from office at least once in every three (3) years but shall be eligible for re-election. Directors appointed during the year will be subject to retirement and re-election by shareholders in the Annual General Meeting.

Directors over seventy (70) years of age are required to retire and submit themselves for re-appointment annually in accordance with Section 129(6) of the Companies Act, 1965. Presently, none of the Directors is subject to such retirement and re-appointment.

vii. Board Committees

The Board has set up the following Committees to assist the Board in discharging their duties and decision making:-

(a) Audit Committee

Pursuant to the resignation of Mr. Naresh Kumar Kukereja @ Lender Lal A/L K. Lal and Mr. Arulampalam A/L S Mariampillai as Directors of the Company on 30 May 2014, the current Audit Committee comprises two (2) members as follows:-

Chairman : Encik Mohd Shukri Bin Abdullah Independent Non-Executive Director

Member : Dato’ Malek Radzuan Bin Saharin Non- Independent Non-Executive Director

The Audit Committee Report is set out on page 16 to 20 of this Annual Report.

(b) Nomination Committee

The Nomination Committee comprises the following members:-

Chairman : Dato’ Malek Radzuan Bin Saharin Non- Independent Non-Executive Director

Members : Arulampalam A/L S Mariampillai

Independent Non-Executive Director (resigned on 30 May 2014)

Encik Mohd Shukri Bin Abdullah Independent Non-Executive Director

The terms of reference of the Nomination Committee are as follows:-

• To regularly review the Board structure, size and composition. • To recommend candidates for the approval of the Board to fill vacancies in the Board.

vi. Re-election of Directors

In accordance with the Company’s Articles of Association, one-third (1/3) of the directors shall retire from office and be eligible for re-election at each Annual General Meeting and all directors shall retire from office at least once in every three (3) years but shall be eligible for re-election. Directors appointed during the year will be subject to retirement and re-election by shareholders in the Annual General Meeting.

Directors over seventy (70) years of age are required to retire and submit themselves for re-appointment annually in accordance with Section 129(6) of the Companies Act, 1965. Presently, none of the Directors is subject to such retirement and re-appointment.

vii. Board Committees

The Board has set up the following Committees to assist the Board in discharging their duties and decision making:-

(a) Audit Committee

Pursuant to the resignation of Mr. Naresh Kumar Kukereja @ Lender Lal A/L K. Lal and Mr. Arulampalam A/L S Mariampillai as Directors of the Company on 30 May 2014, the current Audit Committee comprises two (2) members as follows:-

Chairman : Encik Mohd Shukri Bin Abdullah Independent Non-Executive Director

Member : Dato’ Malek Radzuan Bin Saharin Non- Independent Non-Executive Director

The Audit Committee Report is set out on page 16 to 20 of this Annual Report.

(b) Nomination Committee

The Nomination Committee comprises the following members:-

Chairman : Dato’ Malek Radzuan Bin Saharin Non- Independent Non-Executive Director

Members : Arulampalam A/L S Mariampillai

Independent Non-Executive Director (resigned on 30 May 2014)

Encik Mohd Shukri Bin Abdullah Independent Non-Executive Director

The terms of reference of the Nomination Committee are as follows:-

• To regularly review the Board structure, size and composition. • To recommend candidates for the approval of the Board to fill vacancies in the Board.

vi. Re-election of Directors

In accordance with the Company’s Articles of Association, one-third (1/3) of the directors shall retire from office and be eligible for re-election at each Annual General Meeting and all directors shall retire from office at least once in every three (3) years but shall be eligible for re-election. Directors appointed during the year will be subject to retirement and re-election by shareholders in the Annual General Meeting.

Directors over seventy (70) years of age are required to retire and submit themselves for re-appointment annually in accordance with Section 129(6) of the Companies Act, 1965. Presently, none of the Directors is subject to such retirement and re-appointment.

vii. Board Committees

The Board has set up the following Committees to assist the Board in discharging their duties and decision making:-

(a) Audit Committee

Pursuant to the resignation of Mr. Naresh Kumar Kukereja @ Lender Lal A/L K. Lal and Mr. Arulampalam A/L S Mariampillai as Directors of the Company on 30 May 2014, the current Audit Committee comprises two (2) members as follows:-

Chairman : Encik Mohd Shukri Bin Abdullah Independent Non-Executive Director

Member : Dato’ Malek Radzuan Bin Saharin Non- Independent Non-Executive Director

The Audit Committee Report is set out on page 16 to 20 of this Annual Report.

(b) Nomination Committee

The Nomination Committee comprises the following members:-

Chairman : Dato’ Malek Radzuan Bin Saharin Non- Independent Non-Executive Director

Members : Arulampalam A/L S Mariampillai

Independent Non-Executive Director (resigned on 30 May 2014)

Encik Mohd Shukri Bin Abdullah Independent Non-Executive Director

The terms of reference of the Nomination Committee are as follows:-

• To regularly review the Board structure, size and composition. • To recommend candidates for the approval of the Board to fill vacancies in the Board.

vi. Re-election of Directors

In accordance with the Company’s Articles of Association, one-third (1/3) of the directors shall retire from office and be eligible for re-election at each Annual General Meeting and all directors shall retire from office at least once in every three (3) years but shall be eligible for re-election. Directors appointed during the year will be subject to retirement and re-election by shareholders in the Annual General Meeting.

Directors over seventy (70) years of age are required to retire and submit themselves for re-appointment annually in accordance with Section 129(6) of the Companies Act, 1965. Presently, none of the Directors is subject to such retirement and re-appointment.

vii. Board Committees

The Board has set up the following Committees to assist the Board in discharging their duties and decision making:-

(a) Audit Committee

Pursuant to the resignation of Mr. Naresh Kumar Kukereja @ Lender Lal A/L K. Lal and Mr. Arulampalam A/L S Mariampillai as Directors of the Company on 30 May 2014, the current Audit Committee comprises two (2) members as follows:-

Chairman : Encik Mohd Shukri Bin Abdullah Independent Non-Executive Director

Member : Dato’ Malek Radzuan Bin Saharin Non- Independent Non-Executive Director

The Audit Committee Report is set out on page 16 to 20 of this Annual Report.

(b) Nomination Committee

The Nomination Committee comprises the following members:-

Chairman : Dato’ Malek Radzuan Bin Saharin Non- Independent Non-Executive Director

Members : Arulampalam A/L S Mariampillai

Independent Non-Executive Director (resigned on 30 May 2014)

Encik Mohd Shukri Bin Abdullah Independent Non-Executive Director

The terms of reference of the Nomination Committee are as follows:-

• To regularly review the Board structure, size and composition. • To recommend candidates for the approval of the Board to fill vacancies in the Board.

vi. Re-election of Directors

In accordance with the Company’s Articles of Association, one-third (1/3) of the directors shall retire from office and be eligible for re-election at each Annual General Meeting and all directors shall retire from office at least once in every three (3) years but shall be eligible for re-election. Directors appointed during the year will be subject to retirement and re-election by shareholders in the Annual General Meeting.

Directors over seventy (70) years of age are required to retire and submit themselves for re-appointment annually in accordance with Section 129(6) of the Companies Act, 1965. Presently, none of the Directors is subject to such retirement and re-appointment.

vii. Board Committees

The Board has set up the following Committees to assist the Board in discharging their duties and decision making:-

(a) Audit Committee

Pursuant to the resignation of Mr. Naresh Kumar Kukereja @ Lender Lal A/L K. Lal and Mr. Arulampalam A/L S Mariampillai as Directors of the Company on 30 May 2014, the current Audit Committee comprises two (2) members as follows:-

Chairman : Encik Mohd Shukri Bin Abdullah Independent Non-Executive Director

Member : Dato’ Malek Radzuan Bin Saharin Non- Independent Non-Executive Director

The Audit Committee Report is set out on page 16 to 20 of this Annual Report.

(b) Nomination Committee

The Nomination Committee comprises the following members:-

Chairman : Dato’ Malek Radzuan Bin Saharin Non- Independent Non-Executive Director

Members : Arulampalam A/L S Mariampillai

Independent Non-Executive Director (resigned on 30 May 2014)

Encik Mohd Shukri Bin Abdullah Independent Non-Executive Director

The terms of reference of the Nomination Committee are as follows:-

• To regularly review the Board structure, size and composition. • To recommend candidates for the approval of the Board to fill vacancies in the Board.

vi. Re-election of Directors

In accordance with the Company’s Articles of Association, one-third (1/3) of the directors shall retire from office and be eligible for re-election at each Annual General Meeting and all directors shall retire from office at least once in every three (3) years but shall be eligible for re-election. Directors appointed during the year will be subject to retirement and re-election by shareholders in the Annual General Meeting.

Directors over seventy (70) years of age are required to retire and submit themselves for re-appointment annually in accordance with Section 129(6) of the Companies Act, 1965. Presently, none of the Directors is subject to such retirement and re-appointment.

vii. Board Committees

The Board has set up the following Committees to assist the Board in discharging their duties and decision making:-

(a) Audit Committee

Pursuant to the resignation of Mr. Naresh Kumar Kukereja @ Lender Lal A/L K. Lal and Mr. Arulampalam A/L S Mariampillai as Directors of the Company on 30 May 2014, the current Audit Committee comprises two (2) members as follows:-

Chairman : Encik Mohd Shukri Bin Abdullah Independent Non-Executive Director

Member : Dato’ Malek Radzuan Bin Saharin Non- Independent Non-Executive Director

The Audit Committee Report is set out on page 16 to 20 of this Annual Report.

(b) Nomination Committee

The Nomination Committee comprises the following members:-

Chairman : Dato’ Malek Radzuan Bin Saharin Non- Independent Non-Executive Director

Members : Arulampalam A/L S Mariampillai

Independent Non-Executive Director (resigned on 30 May 2014)

Encik Mohd Shukri Bin Abdullah Independent Non-Executive Director

The terms of reference of the Nomination Committee are as follows:-

• To regularly review the Board structure, size and composition. • To recommend candidates for the approval of the Board to fill vacancies in the Board.

vi. Re-election of Directors

In accordance with the Company’s Articles of Association, one-third (1/3) of the directors shall retire from office and be eligible for re-election at each Annual General Meeting and all directors shall retire from office at least once in every three (3) years but shall be eligible for re-election. Directors appointed during the year will be subject to retirement and re-election by shareholders in the Annual General Meeting.

Directors over seventy (70) years of age are required to retire and submit themselves for re-appointment annually in accordance with Section 129(6) of the Companies Act, 1965. Presently, none of the Directors is subject to such retirement and re-appointment.

vii. Board Committees

The Board has set up the following Committees to assist the Board in discharging their duties and decision making:-

(a) Audit Committee

Pursuant to the resignation of Mr. Naresh Kumar Kukereja @ Lender Lal A/L K. Lal and Mr. Arulampalam A/L S Mariampillai as Directors of the Company on 30 May 2014, the current Audit Committee comprises two (2) members as follows:-

Chairman : Encik Mohd Shukri Bin Abdullah Independent Non-Executive Director

Member : Dato’ Malek Radzuan Bin Saharin Non- Independent Non-Executive Director

The Audit Committee Report is set out on page 16 to 20 of this Annual Report.

(b) Nomination Committee

The Nomination Committee comprises the following members:-

Chairman : Dato’ Malek Radzuan Bin Saharin Non- Independent Non-Executive Director

Members : Arulampalam A/L S Mariampillai

Independent Non-Executive Director (resigned on 30 May 2014)

Encik Mohd Shukri Bin Abdullah Independent Non-Executive Director

The terms of reference of the Nomination Committee are as follows:-

• To regularly review the Board structure, size and composition. • To recommend candidates for the approval of the Board to fill vacancies in the Board.

vi. Re-election of Directors

In accordance with the Company’s Articles of Association, one-third (1/3) of the directors shall retire from office and be eligible for re-election at each Annual General Meeting and all directors shall retire from office at least once in every three (3) years but shall be eligible for re-election. Directors appointed during the year will be subject to retirement and re-election by shareholders in the Annual General Meeting.

Directors over seventy (70) years of age are required to retire and submit themselves for re-appointment annually in accordance with Section 129(6) of the Companies Act, 1965. Presently, none of the Directors is subject to such retirement and re-appointment.

vii. Board Committees

The Board has set up the following Committees to assist the Board in discharging their duties and decision making:-

(a) Audit Committee

Pursuant to the resignation of Mr. Naresh Kumar Kukereja @ Lender Lal A/L K. Lal and Mr. Arulampalam A/L S Mariampillai as Directors of the Company on 30 May 2014, the current Audit Committee comprises two (2) members as follows:-

Chairman : Encik Mohd Shukri Bin Abdullah Independent Non-Executive Director

Member : Dato’ Malek Radzuan Bin Saharin Non- Independent Non-Executive Director

The Audit Committee Report is set out on page 16 to 20 of this Annual Report.

(b) Nomination Committee

The Nomination Committee comprises the following members:-

Chairman : Dato’ Malek Radzuan Bin Saharin Non- Independent Non-Executive Director

Members : Arulampalam A/L S Mariampillai

Independent Non-Executive Director (resigned on 30 May 2014)

Encik Mohd Shukri Bin Abdullah Independent Non-Executive Director

The terms of reference of the Nomination Committee are as follows:-

• To regularly review the Board structure, size and composition. • To recommend candidates for the approval of the Board to fill vacancies in the Board.

Statement of Corporate Governance (Cont’d)

RAYA INTERNATIONAL BERHAD Annual Report 2013

13

• To annually review the required mix of skills and experience and other qualities and competencies which non-executive directors should bring to the Board.

• To annually assess the effectiveness of the Board as a whole, the committee of the Board and contributions of each individual director of the Board.

The Nomination Committee has met once during the financial year ended 31 December 2013.

(c) Remuneration Committee

The Company has an established framework of principles to evaluate performance and reward for executive directors. Remuneration packages for the executive directors are formulated to be competitive and realistic, emphasis being placed on performance, with aims to attract, motivate and retain executive directors of high caliber to the Group. For non-executive directors, the level of remuneration commensurate with the level of responsibilities undertaken by them for the Company.

The Remuneration Committee comprises the following members:-

Chairman : Arulampalam A/L S Mariampillai Independent Non-Executive Director (resigned on 30 May 2014)

Members : Ezrul Ehsan Bin Ismail Executive Director

Dato’ Malek Radzuan Bin Saharin Non-Independent Non-Executive Director

The term of reference of the Remuneration Committee are as follows:-

• To review and determine, at least once annually, adjustments to the remuneration package including benefits-in-kind of each executive director, taking into account the performance of the individual, the inflation price index and where necessary, information from independent sources on remuneration packages for the equivalent jobs in the industry.

• To review and determine the quantum of performance related bonuses, benefits-in-kind and Employee Share Options, if available, to be given to the executive directors.

• To consider and execute the renewal of the service contract of executive directors as and when due, as well as the service contracts and remuneration packages for newly appointed executive directors prior to their appointments.

B. DIRECTORS’ REMUNERATION

The Directors are satisfied that the current level of remuneration is in line with the responsibilities expected.

• To annually review the required mix of skills and experience and other qualities and competencies which non-executive directors should bring to the Board.

• To annually assess the effectiveness of the Board as a whole, the committee of the Board and contributions of each individual director of the Board.

The Nomination Committee has met once during the financial year ended 31 December 2013.

(c) Remuneration Committee

The Company has an established framework of principles to evaluate performance and reward for executive directors. Remuneration packages for the executive directors are formulated to be competitive and realistic, emphasis being placed on performance, with aims to attract, motivate and retain executive directors of high caliber to the Group. For non-executive directors, the level of remuneration commensurate with the level of responsibilities undertaken by them for the Company.

The Remuneration Committee comprises the following members:-

Chairman : Arulampalam A/L S Mariampillai Independent Non-Executive Director (resigned on 30 May 2014)

Members : Ezrul Ehsan Bin Ismail Executive Director

Dato’ Malek Radzuan Bin Saharin Non-Independent Non-Executive Director

The term of reference of the Remuneration Committee are as follows:-

• To review and determine, at least once annually, adjustments to the remuneration package including benefits-in-kind of each executive director, taking into account the performance of the individual, the inflation price index and where necessary, information from independent sources on remuneration packages for the equivalent jobs in the industry.

• To review and determine the quantum of performance related bonuses, benefits-in-kind and Employee Share Options, if available, to be given to the executive directors.

• To consider and execute the renewal of the service contract of executive directors as and when due, as well as the service contracts and remuneration packages for newly appointed executive directors prior to their appointments.

B. DIRECTORS’ REMUNERATION

The Directors are satisfied that the current level of remuneration is in line with the responsibilities expected.

• To annually review the required mix of skills and experience and other qualities and competencies which non-executive directors should bring to the Board.

• To annually assess the effectiveness of the Board as a whole, the committee of the Board and contributions of each individual director of the Board.

The Nomination Committee has met once during the financial year ended 31 December 2013.

(c) Remuneration Committee

The Company has an established framework of principles to evaluate performance and reward for executive directors. Remuneration packages for the executive directors are formulated to be competitive and realistic, emphasis being placed on performance, with aims to attract, motivate and retain executive directors of high caliber to the Group. For non-executive directors, the level of remuneration commensurate with the level of responsibilities undertaken by them for the Company.

The Remuneration Committee comprises the following members:-

Chairman : Arulampalam A/L S Mariampillai Independent Non-Executive Director (resigned on 30 May 2014)

Members : Ezrul Ehsan Bin Ismail Executive Director

Dato’ Malek Radzuan Bin Saharin Non-Independent Non-Executive Director

The term of reference of the Remuneration Committee are as follows:-

• To review and determine, at least once annually, adjustments to the remuneration package including benefits-in-kind of each executive director, taking into account the performance of the individual, the inflation price index and where necessary, information from independent sources on remuneration packages for the equivalent jobs in the industry.

• To review and determine the quantum of performance related bonuses, benefits-in-kind and Employee Share Options, if available, to be given to the executive directors.

• To consider and execute the renewal of the service contract of executive directors as and when due, as well as the service contracts and remuneration packages for newly appointed executive directors prior to their appointments.

B. DIRECTORS’ REMUNERATION

The Directors are satisfied that the current level of remuneration is in line with the responsibilities expected.

• To annually review the required mix of skills and experience and other qualities and competencies which non-executive directors should bring to the Board.

• To annually assess the effectiveness of the Board as a whole, the committee of the Board and contributions of each individual director of the Board.

The Nomination Committee has met once during the financial year ended 31 December 2013.

(c) Remuneration Committee

The Company has an established framework of principles to evaluate performance and reward for executive directors. Remuneration packages for the executive directors are formulated to be competitive and realistic, emphasis being placed on performance, with aims to attract, motivate and retain executive directors of high caliber to the Group. For non-executive directors, the level of remuneration commensurate with the level of responsibilities undertaken by them for the Company.

The Remuneration Committee comprises the following members:-

Chairman : Arulampalam A/L S Mariampillai Independent Non-Executive Director (resigned on 30 May 2014)

Members : Ezrul Ehsan Bin Ismail Executive Director

Dato’ Malek Radzuan Bin Saharin Non-Independent Non-Executive Director

The term of reference of the Remuneration Committee are as follows:-

• To review and determine, at least once annually, adjustments to the remuneration package including benefits-in-kind of each executive director, taking into account the performance of the individual, the inflation price index and where necessary, information from independent sources on remuneration packages for the equivalent jobs in the industry.

• To review and determine the quantum of performance related bonuses, benefits-in-kind and Employee Share Options, if available, to be given to the executive directors.

• To consider and execute the renewal of the service contract of executive directors as and when due, as well as the service contracts and remuneration packages for newly appointed executive directors prior to their appointments.

B. DIRECTORS’ REMUNERATION

The Directors are satisfied that the current level of remuneration is in line with the responsibilities expected.

• To annually review the required mix of skills and experience and other qualities and competencies which non-executive directors should bring to the Board.

• To annually assess the effectiveness of the Board as a whole, the committee of the Board and contributions of each individual director of the Board.

The Nomination Committee has met once during the financial year ended 31 December 2013.

(c) Remuneration Committee

The Company has an established framework of principles to evaluate performance and reward for executive directors. Remuneration packages for the executive directors are formulated to be competitive and realistic, emphasis being placed on performance, with aims to attract, motivate and retain executive directors of high caliber to the Group. For non-executive directors, the level of remuneration commensurate with the level of responsibilities undertaken by them for the Company.

The Remuneration Committee comprises the following members:-

Chairman : Arulampalam A/L S Mariampillai Independent Non-Executive Director (resigned on 30 May 2014)

Members : Ezrul Ehsan Bin Ismail Executive Director

Dato’ Malek Radzuan Bin Saharin Non-Independent Non-Executive Director

The term of reference of the Remuneration Committee are as follows:-

• To review and determine, at least once annually, adjustments to the remuneration package including benefits-in-kind of each executive director, taking into account the performance of the individual, the inflation price index and where necessary, information from independent sources on remuneration packages for the equivalent jobs in the industry.

• To review and determine the quantum of performance related bonuses, benefits-in-kind and Employee Share Options, if available, to be given to the executive directors.

• To consider and execute the renewal of the service contract of executive directors as and when due, as well as the service contracts and remuneration packages for newly appointed executive directors prior to their appointments.

B. DIRECTORS’ REMUNERATION

The Directors are satisfied that the current level of remuneration is in line with the responsibilities expected.

• To annually review the required mix of skills and experience and other qualities and competencies which non-executive directors should bring to the Board.

• To annually assess the effectiveness of the Board as a whole, the committee of the Board and contributions of each individual director of the Board.

The Nomination Committee has met once during the financial year ended 31 December 2013.

(c) Remuneration Committee

The Company has an established framework of principles to evaluate performance and reward for executive directors. Remuneration packages for the executive directors are formulated to be competitive and realistic, emphasis being placed on performance, with aims to attract, motivate and retain executive directors of high caliber to the Group. For non-executive directors, the level of remuneration commensurate with the level of responsibilities undertaken by them for the Company.

The Remuneration Committee comprises the following members:-

Chairman : Arulampalam A/L S Mariampillai Independent Non-Executive Director (resigned on 30 May 2014)

Members : Ezrul Ehsan Bin Ismail Executive Director

Dato’ Malek Radzuan Bin Saharin Non-Independent Non-Executive Director

The term of reference of the Remuneration Committee are as follows:-

• To review and determine, at least once annually, adjustments to the remuneration package including benefits-in-kind of each executive director, taking into account the performance of the individual, the inflation price index and where necessary, information from independent sources on remuneration packages for the equivalent jobs in the industry.

• To review and determine the quantum of performance related bonuses, benefits-in-kind and Employee Share Options, if available, to be given to the executive directors.

• To consider and execute the renewal of the service contract of executive directors as and when due, as well as the service contracts and remuneration packages for newly appointed executive directors prior to their appointments.

B. DIRECTORS’ REMUNERATION

The Directors are satisfied that the current level of remuneration is in line with the responsibilities expected.

Statement of Corporate Governance (Cont’d)

RAYA INTERNATIONAL BERHAD Annual Report 2013

14The aggregate Directors’ remuneration paid or payable to all Directors of the Company categorised into appropriate components for the financial year ended 31 December 2013 are as follows:-

Remuneration (RM’000) Non-Executive Directors

Executive Directors

Total

Salaries - 38 38 Fees 9 - 9 Bonuses - - - Payroll based expenses - EPF - 5 5 Meeting Allowance - - - Benefits-in-kind - - - Total 9 43 52

Number of Director Range of Remuneration Non-Executive

Directors Executive Directors

Total

Below RM 50,000 2 1 3 RM 50,000 – RM 100,000 - - - RM 100,000 – RM 150,000 - - - RM 150,000 – RM 200,000 - - -

C. RELATIONSHIP WITH SHAREHOLDERS

The Company maintains various methods of dissemination of information important to shareholders, stakeholders and the public at large through timely announcement of events, quarterly announcement of financial results and product information on the Company’s various website.

The Annual General Meeting also provides an opportunity for the shareholder to seek and clarify any issues relevant to the Company. Shareholders are encouraged to meet and communicate with the Board at Annual General Meeting and to vote on all resolutions.

D. ACCOUNTABILITY AND AUDIT

i. Financial Reporting

The Board aims to provide a balanced and understandable assessment of the Group’s financial position and prospects through the annual report as well as quarterly financial results to its shareholders.

It is the Board’s responsibility to ensure that the financial statements are prepared in accordance with the Companies Act, 1965 and the applicable approved accounting standards set by Malaysian Accounting Standard Board so as to present a balanced and fair assessment of the Group's financial position and prospects. The Directors are also responsible for keeping proper accounting records, safeguarding the assets of the Company and taking reasonable steps to prevent and enable detection of fraud and other irregularities.

Statement of Corporate Governance (Cont’d)

RAYA INTERNATIONAL BERHAD Annual Report 2013

15ii. Statement of Directors’ Responsibility in respect of the Financial Statements

The Malaysian Company Law requires the Directors to prepare financial statements for each financial year, which give a true and fair view of the state of affairs of the Company and the results and cash flow of the Company for that period.

In preparing those financial statements, the Directors are required to:-

a) Select suitable accounting policies and then apply them consistently; b) State whether applicable accounting standards have been followed; c) Make judgments and estimates that are reasonable and prudent; and d) Prepared the financial statements on a going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Directors are responsible for keeping proper accounting records, which disclose with reasonable accuracy, at any time, the financial position of the Company. The Directors are also responsible for safeguarding the assets of the Company and for taking reasonable steps for the prevention and detection of fraud and irregularities.

iii. Internal Control

The Board acknowledges its overall responsibility for maintaining a sound system of internal controls to safeguard shareholders' investment and the Group's assets. However, the Board recognizes that such system is structured to manage rather than eliminate the possibility of encountering risk of failure to achieve corporate objectives.

The Statement of Risk Management and Internal Controls is set out on page 21 of the Annual Report providing an overview of the state of internal controls within the Group.

iv. Relationships with Auditors

The Board has established a transparent relationship with the external auditors through the Audit Committee, which has been accorded the authority to communicate directly with the external auditors. The auditors in turn are able to highlight matters which require the attention of the Board effectively to the Audit Committee in terms of compliance with the accounting standards and other related regulatory requirements.

v. Corporate Social Responsibilities The Company did not undertake any corporate social responsiblity activities or practices during the financial year under review.

Statement of Corporate Governance (Cont’d)

RAYA INTERNATIONAL BERHAD Annual Report 2013

16

AUDIT COMMITTEE REPORT

The Audit Committee was established with the primary objective to provide assistance to the Board in fulfilling its fiduciary responsibilities relating to the corporate governance and practices for the Group, to improve the business efficiency and enhance the independent role of external and internal auditors.

1. Composition of Audit Committee

Pursuant to the resignation of Mr. Naresh Kumar Kukereja @ Lender Lal A/L K. Lal and Mr. Arulampalam A/L S Mariampillai as Directors of the Company on 30 May 2014, the current Audit Committee comprises two (2) members as follows:-

Chairman : Encik Mohd Shukri Bin Abdullah Independent Non-Executive Director

Member : Dato’ Malek Radzuan Bin Saharin Non- Independent Non-Executive Director

2. Terms Of Reference

Composition

The Audit Committee shall be appointed by the Board from amongst their members, who fulfils the following requirements:-

a) The Audit Committee must be composed of no fewer than three (3) members. In the event of any vacancy in the Audit Committee resulting in the non-compliance of the above, the Company must fill the vacancy within three (3) months.

b) All the Audit Committee members must be non-executive directors, with a majority of them being independent directors.

c) All the Audit Committee members must be financially literate, with at least one member :-

• must be a member of the Malaysian Institute of Accountants; or • if he is not a member of the Malaysian Institute of Accountants, he must have at least three

(3) years’ working experience and:- • he must have passed the examinations specified in Part I of the 1st Schedule of the

Accountants Act 1967; or • he must be a member of one of the Associations of Accountants specified in Part II of the 1st

Schedule of the Accountants Act 1967; or • fulfils such other requirements as prescribed or approved by the Exchange.

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

Audit Committee Report

RAYA INTERNATIONAL BERHAD Annual Report 2013

17e) The member of the Audit Committee shall elect a Chairman from among themselves who shall be

an Independent Director. The Chairman of the Audit Committee should engage on a continuous basis with senior management, the head of internal audit and the external auditors in order to be kept informed of matters affecting the Company.

All members of the Audit Committee, including the Chairman, will hold office only so long as they serve as Directors of the Company. The Board must review the term of office and performance of the Audit Committee and each of its members at least once every three (3) years to determine whether the Audit Committee has carried out its duties in accordance with its terms of reference.

Secretary of the Audit Committee

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

Duties and Responsibilities of the Audit Committee

The following are the main duties and responsibilities of the Audit Committee collectively:-

(a) Review the following and report the same to the Board of the Company:-

(i) oversee the Company’s internal control; (ii) with the external auditors, the audit plan; (iii) with the external auditors, his evaluation of the system of internal controls; (iv) with the external auditors, his audit report; (v) the assistance given by the employees of the Company to the external auditors and the

internal auditors; (vi) the adequacy of the scope, functions, competency and resources of the internal audit

functions and that it has the necessary authority to carry out its work (vii) the internal audit programme, processes, the results of the internal audit programme,

processes or investigation undertaken and whether or not appropriate action is taken on the recommendations of the internal audit function;

(viii) the quarterly results and year end financial statements, prior to the approval by the Board, focusing particularly on :- • changes in or implementation of major accounting policy changes; • significant and unusual events; and • compliance with accounting standards and other legal requirements;

(ix) any related party transaction and conflict of interest situation that may arise within the Company or group including any transaction, procedure or course of conduct that raises questions of management integrity;

(x) any letter of resignation from the external auditors and any questions of resignation or dismissal; and

(xi) whether there is reason (supported by grounds) to believe that the Company’s external auditor is not suitable for re-appointment;

(b) Oversee the Company’s internal control structure to ensure operational effectiveness and efficiency, reduce risk of inaccurate financial reporting, protect the Company’s assets from misappropriation and encourage legal and regulatory compliance;

Audit Committee Report (Cont’d)

RAYA INTERNATIONAL BERHAD Annual Report 2013

18(c) Assist the Board in identifying the principal risks in the achievement of the Company’s objectives and

ensuring the implementation of appropriate systems to manage these risks;

(d) Recommend to the Board on the appointment and re-appointment of the external auditors and their audit fee, after taking into consideration the independence and objectivity of the external auditors and the cost effectiveness of the audit;

(e) Discuss with the external auditors before the audit commences the nature and scope of the audit and ensure co-ordination where more than one audit firm is involved;

(f) Discuss problems and reservations arising from the audits and any matter the auditors may wish to discuss in the absence of the management where necessary;

(g) Review the external auditor’s management letter and management’s response therein;

(h) In relation to the internal audit function:-

a. review the adequacy of the scope, functions and resources of the internal audit function and that it has the necessary authority to carry out its work;

b. review the internal audit programme and results of the internal audit process and, where necessary, ensure that appropriate actions are taken on the recommendations of the internal audit function;

c. review any appraisal or assessment of the performance of members of the internal audit function;

d. approve any appointment of termination of senior staff members of the internal audit function; and

e. take cognizance of resignations of internal audit staff members and provide the resigning staff member an opportunity to submit his reasons for resigning;

(i) Consider the major findings of internal investigations and management’s response;

(j) To review the effectiveness of the internal controls and risk management processes of the Company; and

(k) Consider other matters as defined by the Board.

Rights of the Audit Committee

In carrying out its duties and responsibilities, the Audit Committee will:- • have the authority to investigate any matter within its terms of reference; • have the resources which are required to perform its duties; • have full and unrestricted access to any information pertaining to the Company; • have direct communication channels with the external auditors and person(s) carrying out the internal

audit function or activity; • be able to obtain independent professional or other advice and to invite outsiders with relevant

experience and expertise to attend the Audit Committee meeting (if required) and to brief the Audit Committee; and

• be able to convene meetings with the external auditors, the internal auditors or both, excluding the attendance of other directors and employees of the Company, whenever deemed necessary.

Audit Committee Report (Cont’d)

RAYA INTERNATIONAL BERHAD Annual Report 2013

19Conduct of Meetings

a) The Audit Committee will meet at least four (4) times in each financial year although additional meetings may be called at any time, at the discretion of the Chairman of the Audit Committee.

b) The quorum shall consist of a majority of independent committee members and shall not be less than two (2).

c) Recommendations to the Audit Committee are submitted to the Board for approval.

d) The Company Secretary shall be in attendance at each Audit Committee meeting and record the proceedings of the meeting thereat.

e) Minutes of each meeting shall be kept as part of the statutory record of the Company upon confirmation by the Audit Committee and a copy shall be distributed to each member of the Board.

f) The Managing Director and other officers may be invited to attend where their presence are considered appropriate as determined by the Audit Committee Chairman.

g) The internal auditors and/or external auditors have the right to appear and be heard at any meeting of the Audit Committee.

h) Upon the request of the internal auditors and/or external auditors, the Audit Committee Chairman shall also convene a meeting of the Audit Committee to consider any matter the auditor(s) believes should be brought to the attention of the Board or the shareholders.

i) The Audit Committee must be able to convene meetings with external auditors without the presence of the executive board members and management at least twice a year and whenever deemed necessary.

j) Where the Audit Committee is of the view that a matter reported by it to the Board has not been satisfactorily resolved resulting in a breach or Bursa Malaysia Securities Berhad requirements, the Audit Committee must promptly report such matter to Bursa Malaysia Securities Berhad.

k) The attendance at any particular Audit Committee meeting by other directors and employees of the Company shall be at the Audit Committee’s invitation and discretion and must be specific to the relevant meeting.

SUMMARY OF ACTIVITIES

The Audit Committee is scheduled to meet at least four (4) times a year, with additional meetings being convened when necessary.

Audit Committee Report (Cont’d)

RAYA INTERNATIONAL BERHAD Annual Report 2013

20Details of the attendance during the ended 31 December 2013 are as follows:-

No Name of Directors No of Meetings attended during the time the Directors hold office

%

1. Encik Mohd Shukri Bin Abdullah Independent Non-Executive Director

5/5 100

2. Dato’ Malek Radzuan Bin Saharin Non-Independent Non-Executive Director

5/5 100

3. *Mr. Arulampalam A/L S Mariampillai Independent Non-Executive Director

4/5 80

4. **Mr. Naresh Kumar Kukereja @ Lender Lal A/L K. Lal Independent Non-Executive Director

0/0 0

Notes:

*Resigned as Director on 30 May 2014 ** Appointed on 26 December 2013 and subsequently resigned as Director on 30 May 2014

During the year under review, the following were the activities of the Audit Committee:-

(a) Reviewed the quarterly financial results and ensured that the financial reporting and disclosure requirements of relevant authorities had been complied with, focusing particularly on:-

(1) changes in or implementation of major accounting policies and practices; (2) the on-going concern assumption; (3) significant and unusual event; and (4) compliance with accounting standards and other legal policies and requirements.

(b) Reviewed the related party transactions and conflict of interest situation, if any, within the Company or group including any transactions, procedures or course of conduct that raised questions of management integrity in the ordinary course of business.

(c) Reviewed the audit strategy and plan of the external auditors.

(d) Meetings with external auditors.

INTERNAL AUDIT FUNCTION

The Internal Audit function was outsourced to Messrs. Sterling Business Alignment Consulting Sdn Bhd.

During the financial year under review, the Internal Auditors had assessed the effectiveness of the internal control environment of the Accounts and Finance function of the Company and the Group. All the findings raised by the Internal Audit Function have been appropriately addressed by management. The fee in respect of the internal audit function for the financial year ended 31 December 2013 is approximately RM 10,000.00

Audit Committee Report (Cont’d)

RAYA INTERNATIONAL BERHAD Annual Report 2013

21

STATEMENT ON RISK MANAGEMENT & INTERNAL CONTROL

INTRODUCTION The Board is committed to maintaining a sound system of internal control of the Company and is pleased to provide the following statement, which outlines the nature and scope of internal control of the Company during the year.

THE BOARD’S RESPONSIBILITIES

The Board of Directors recognizes the importance of sound internal controls and risk management in safeguarding the assets of the Group. However, such systems are designed to manage rather than eliminate the business risk totally. It should be noted that any system could provide only reasonable and not absolute assurance against material misstatement or fraud. The Group has in place an on-going process to identify, evaluate, monitor and manage any significant risks through the internal controls set out in order to attain a reasonable assurance that business objectives have been met. These controls are regularly reviewed by the Board and subject to continuous improvement.

THE RISK MANAGEMENT PROCESS

Apart from financial controls, the Group’s system of internal controls also cover operational and compliance controls and most importantly, risk management. As part of the risk management process, the Board assisted by the Audit Committee, is continuously identifying, assessing and managing significant business risks faced by the Group throughout the financial year.

The process will be regularly reviewed by the Board through the Audit Committee and is in accordance with the guidance as contained in the Internal Control Guidelines.

THE INTERNAL CONTROL PROCESS

The other key features of the Group’s internal control system include the following: • An organization structure with defined lines of responsibility and appropriate reporting structure

including proper approval and authorization limit for approving capital expenditure and expenses within the Group;

• The Audit Committee had appointed an outsourced independent professional internal audit service provider to discharge the internal audit function which performs regular and systematic review of the internal controls to assess and provide sufficient assurance on the effectiveness of the systems of internal control and to highlight significant risks impacting the Group with recommendation for improvement; and

• The Audit Committee will regularly review reports by the independent professional internal audit service provider and conducts annual assessment on the adequacy of the function’s scope of work and resources.

The Group continues to take measures to enhance and strengthen the internal control environment.

The Board is of the view that there is no significant breakdown or weaknesses in the system of internal control of the Group that may have material impact against the operations of the Group for the financial year ended 31 December 2013.

Statement on Risk Management & Internal Control

RAYA INTERNATIONAL BERHAD Annual Report 2013

22

STATEMENT OF VERIFICATION ON ALLOCATION OF OPTION PURSUANT TO EMPLOYEE SHARE OPTION SCHEME

The Audit Committee has verified that there was no option granted for the year ended

31 December 2013.

Statement of Verification on Allocation of Optionpursuant to Employee Share Option Scheme

RAYA INTERNATIONAL BERHAD Annual Report 2013

23

OTHER COMPLIANCE INFORMATION

1. UTILISATION OF PROCEEDS

There were no proceeds raised by the Company from any corporate proposal during the financial year.

2. SHARE BUYBACK

During the financial year, the Company did not enter into any share buyback transaction.

3. OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES

During the financial year, no option, warrants or convertible securities were issued by the Company.

4. DEPOSITORY RECEIPT PROGRAMME

During the financial year, the Company did not sponsor any Depository Receipt programme.

5. SANCTIONS AND/OR PENALTIES

During the financial year, there were no sanctions and/or penalties imposed on the Company and its subsidiaries, directors or management by the relevant regulatory bodies.

6. NON-AUDIT FEES

There were no non-audit fees paid to the external auditors by the Group for the financial year.

7. PROFIT ESTIMATES, FORECAST OR PROJECTION

There was no profit estimate, forecast or projection issued by the Company and/or its subsidiaries for the financial year.

8. VARIATION OF RESULTS

The variance between the audited results (net profit after tax) and the unaudited results announced is less than 10%.

9. PROFIT GUARANTEE

There was no profit guarantee issued by the Company and/or its subsidiaries for the financial year.

10. MATERIAL CONTRACTS

There were no material contracts entered into by the Company and its subsidiaries which involved the directors and substantial shareholders’ interest during the financial year ended 31 December 2013.

11. REVALUATION POLICY ON LANDED PROPERTIES

In December 2013, the Group undertook a revaluation exercise on its freehold land and building. The basis of valuation is the “market value” as defined under the Malaysian Valuation Guidances.

12. RECURRENT RELATED PARTY TRANSACTION OF REVENUE NATURE

The Company does not have any recurrent related party transaction of revenue nature during the financial year.

Other Compliance Information

RAYA INTERNATIONAL BERHAD Annual Report 2013

24

Directors’ Report

Company No:412406-T

PRINCIPAL ACTIVITIES

CHANGE OF LEGAL ENTITY NAME

FINANCIAL RESULTS

The results of the operations of the Group and of the Company for the financial year are as follows:

There have been no significant changes in the nature of the principal activities of the Company and itssubsidiaries during the financial year.

On 9th July 2013, the Company changed its name from Envair Holding Berhad to Raya InternationalBerhad.

RAYA INTERNATIONAL BERHAD(Formerly known as Envair Holding Berhad)

(Incorporated in Malaysia)

DIRECTORS’ REPORT

The Company is principally engaged in investment holding and the provision of management services.

The principal activities of the subsidiaries are as disclosed in Note 13 to the Financial Statements.

The directors hereby submit their report together with the audited financial statements of the Group and ofthe Company for the financial year ended 31st December 2013.

The results of the operations of the Group and of the Company for the financial year are as follows:

GROUP COMPANYRM RM

Net profit for the financial year 89,165 716,879

Attributable to:Equity holders of the Company 89,165 716,879

DIVIDENDS

RESERVES AND PROVISIONS

ISSUE OF SHARES AND DEBENTURES

In the opinion of the directors, the results of operations of the Group and of the Company during thefinancial year were not substantially affected by any item, transaction or event of a material and unusualnature other than the exceptional items as disclosed in the Financial Statements.

No dividend has been paid or declared by the Company since the end of the previous financial year. Thedirectors also do not recommend the payment of any dividend in respect of the current financial year.

There were no material transfers to or from reserves or provisions during the financial year other than thosedisclosed in the Financial Statements.

There were no changes in the authorised, issued and paid-up capital of the Company during the financialyear. There were no debentures issued during the financial year.

1

RAYA INTERNATIONAL BERHAD Annual Report 2013

25

Company No:412406-T

SHARE OPTIONS

DIRECTORS

The names of the directors in office since the date of the last report:

Mohd Shukri Bin Abdullah Ezrul Ehsan Bin IsmailArulampalam A/L S MariampillaiDato' Malek Radzuan Bin SaharinDeepak Jaikishan A/L Jaikishan Rewachand (appointed on 10.5.2013)Izham Bin Yusoff (appointed on 1.10.2013)Abdul Latif Bin Abdul Rahim (appointed on 1.10.2013)

Mejar Ismail Bin Ahmad (B) (appointed on 9.10.2013)Jeneral Tan Sri Abdul Aziz Bin Zainal (B) (appointed on 10.10.2013)Naresh Kumar Kukeraja @ Lender Lal A/L K.Lal (appointed on 26.12.2013)Poh Hou Liang (appointed on 28.5.2013; resigned on 26.9.2013)

No options have been granted by the Company to any parties during the financial year to take up unissuedshares of the Company.

No shares have been issued during the financial year by virtue of the exercise of any options to take upunissued shares of the Company. As at the end of the financial year, there were no unissued shares of theCompany under options.

Rajesh A/L Jaikishan (appointed on 2.10.2013)

DIRECTORS’ BENEFITS

Bought Sold 31.12.2013

Shares in the Company

Registered in name of directors

Arulampalam A/L S Mariampillai 100,000 - - 100,000 Deepak Jaikishan A/L Jaikishan Rewachand 19,997,900 6,869,200 - 26,867,100

Since the end of the previous financial year, no director of the Company has received or become entitled toreceive any benefit (other than the benefit included in the aggregate amount of emoluments received or dueand receivable by directors as disclosed in the financial statements or the fixed salary of full-time employeesof the Company) by reason of a contract made by the Company or a related corporation with the director orwith a firm of which the director is a member, or with a company in which the director has a substantialfinancial interest.

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

The shareholdings in the Company and in the related companies of those who were directors at the end ofthe financial year, as recorded in the Register of Directors' Shareholdings kept by the Company underSection 134 of the Companies Act, 1965, are as follows:

DIRECTORS' INTERESTS

Balance as at 1.1.2013/ date of

appointment

Balance as at

Number of ordinary shares of RM0.10 each

2

Directors’ Report (Cont’d)Company No:412406-T

SHARE OPTIONS

DIRECTORS

The names of the directors in office since the date of the last report:

Mohd Shukri Bin Abdullah Ezrul Ehsan Bin IsmailArulampalam A/L S MariampillaiDato' Malek Radzuan Bin SaharinDeepak Jaikishan A/L Jaikishan Rewachand (appointed on 10.5.2013)Izham Bin Yusoff (appointed on 1.10.2013)Abdul Latif Bin Abdul Rahim (appointed on 1.10.2013)

Mejar Ismail Bin Ahmad (B) (appointed on 9.10.2013)Jeneral Tan Sri Abdul Aziz Bin Zainal (B) (appointed on 10.10.2013)Naresh Kumar Kukeraja @ Lender Lal A/L K.Lal (appointed on 26.12.2013)Poh Hou Liang (appointed on 28.5.2013; resigned on 26.9.2013)

No options have been granted by the Company to any parties during the financial year to take up unissuedshares of the Company.

No shares have been issued during the financial year by virtue of the exercise of any options to take upunissued shares of the Company. As at the end of the financial year, there were no unissued shares of theCompany under options.

Rajesh A/L Jaikishan (appointed on 2.10.2013)

DIRECTORS’ BENEFITS

Bought Sold 31.12.2013

Shares in the Company

Registered in name of directors

Arulampalam A/L S Mariampillai 100,000 - - 100,000 Deepak Jaikishan A/L Jaikishan Rewachand 19,997,900 6,869,200 - 26,867,100

Since the end of the previous financial year, no director of the Company has received or become entitled toreceive any benefit (other than the benefit included in the aggregate amount of emoluments received or dueand receivable by directors as disclosed in the financial statements or the fixed salary of full-time employeesof the Company) by reason of a contract made by the Company or a related corporation with the director orwith a firm of which the director is a member, or with a company in which the director has a substantialfinancial interest.

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

The shareholdings in the Company and in the related companies of those who were directors at the end ofthe financial year, as recorded in the Register of Directors' Shareholdings kept by the Company underSection 134 of the Companies Act, 1965, are as follows:

DIRECTORS' INTERESTS

Balance as at 1.1.2013/ date of

appointment

Balance as at

Number of ordinary shares of RM0.10 each

2

Company No:412406-T

SHARE OPTIONS

DIRECTORS

The names of the directors in office since the date of the last report:

Mohd Shukri Bin Abdullah Ezrul Ehsan Bin IsmailArulampalam A/L S MariampillaiDato' Malek Radzuan Bin SaharinDeepak Jaikishan A/L Jaikishan Rewachand (appointed on 10.5.2013)Izham Bin Yusoff (appointed on 1.10.2013)Abdul Latif Bin Abdul Rahim (appointed on 1.10.2013)

Mejar Ismail Bin Ahmad (B) (appointed on 9.10.2013)Jeneral Tan Sri Abdul Aziz Bin Zainal (B) (appointed on 10.10.2013)Naresh Kumar Kukeraja @ Lender Lal A/L K.Lal (appointed on 26.12.2013)Poh Hou Liang (appointed on 28.5.2013; resigned on 26.9.2013)

No options have been granted by the Company to any parties during the financial year to take up unissuedshares of the Company.

No shares have been issued during the financial year by virtue of the exercise of any options to take upunissued shares of the Company. As at the end of the financial year, there were no unissued shares of theCompany under options.

Rajesh A/L Jaikishan (appointed on 2.10.2013)

DIRECTORS’ BENEFITS

Bought Sold 31.12.2013

Shares in the Company

Registered in name of directors

Arulampalam A/L S Mariampillai 100,000 - - 100,000 Deepak Jaikishan A/L Jaikishan Rewachand 19,997,900 6,869,200 - 26,867,100

Since the end of the previous financial year, no director of the Company has received or become entitled toreceive any benefit (other than the benefit included in the aggregate amount of emoluments received or dueand receivable by directors as disclosed in the financial statements or the fixed salary of full-time employeesof the Company) by reason of a contract made by the Company or a related corporation with the director orwith a firm of which the director is a member, or with a company in which the director has a substantialfinancial interest.

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

The shareholdings in the Company and in the related companies of those who were directors at the end ofthe financial year, as recorded in the Register of Directors' Shareholdings kept by the Company underSection 134 of the Companies Act, 1965, are as follows:

DIRECTORS' INTERESTS

Balance as at 1.1.2013/ date of

appointment

Balance as at

Number of ordinary shares of RM0.10 each

2

Company No:412406-T

SHARE OPTIONS

DIRECTORS

The names of the directors in office since the date of the last report:

Mohd Shukri Bin Abdullah Ezrul Ehsan Bin IsmailArulampalam A/L S MariampillaiDato' Malek Radzuan Bin SaharinDeepak Jaikishan A/L Jaikishan Rewachand (appointed on 10.5.2013)Izham Bin Yusoff (appointed on 1.10.2013)Abdul Latif Bin Abdul Rahim (appointed on 1.10.2013)

Mejar Ismail Bin Ahmad (B) (appointed on 9.10.2013)Jeneral Tan Sri Abdul Aziz Bin Zainal (B) (appointed on 10.10.2013)Naresh Kumar Kukeraja @ Lender Lal A/L K.Lal (appointed on 26.12.2013)Poh Hou Liang (appointed on 28.5.2013; resigned on 26.9.2013)

No options have been granted by the Company to any parties during the financial year to take up unissuedshares of the Company.

No shares have been issued during the financial year by virtue of the exercise of any options to take upunissued shares of the Company. As at the end of the financial year, there were no unissued shares of theCompany under options.

Rajesh A/L Jaikishan (appointed on 2.10.2013)

DIRECTORS’ BENEFITS

Bought Sold 31.12.2013

Shares in the Company

Registered in name of directors

Arulampalam A/L S Mariampillai 100,000 - - 100,000 Deepak Jaikishan A/L Jaikishan Rewachand 19,997,900 6,869,200 - 26,867,100

Since the end of the previous financial year, no director of the Company has received or become entitled toreceive any benefit (other than the benefit included in the aggregate amount of emoluments received or dueand receivable by directors as disclosed in the financial statements or the fixed salary of full-time employeesof the Company) by reason of a contract made by the Company or a related corporation with the director orwith a firm of which the director is a member, or with a company in which the director has a substantialfinancial interest.

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

The shareholdings in the Company and in the related companies of those who were directors at the end ofthe financial year, as recorded in the Register of Directors' Shareholdings kept by the Company underSection 134 of the Companies Act, 1965, are as follows:

DIRECTORS' INTERESTS

Balance as at 1.1.2013/ date of

appointment

Balance as at

Number of ordinary shares of RM0.10 each

2

Company No:412406-T

SHARE OPTIONS

DIRECTORS

The names of the directors in office since the date of the last report:

Mohd Shukri Bin Abdullah Ezrul Ehsan Bin IsmailArulampalam A/L S MariampillaiDato' Malek Radzuan Bin SaharinDeepak Jaikishan A/L Jaikishan Rewachand (appointed on 10.5.2013)Izham Bin Yusoff (appointed on 1.10.2013)Abdul Latif Bin Abdul Rahim (appointed on 1.10.2013)

Mejar Ismail Bin Ahmad (B) (appointed on 9.10.2013)Jeneral Tan Sri Abdul Aziz Bin Zainal (B) (appointed on 10.10.2013)Naresh Kumar Kukeraja @ Lender Lal A/L K.Lal (appointed on 26.12.2013)Poh Hou Liang (appointed on 28.5.2013; resigned on 26.9.2013)

No options have been granted by the Company to any parties during the financial year to take up unissuedshares of the Company.

No shares have been issued during the financial year by virtue of the exercise of any options to take upunissued shares of the Company. As at the end of the financial year, there were no unissued shares of theCompany under options.

Rajesh A/L Jaikishan (appointed on 2.10.2013)

DIRECTORS’ BENEFITS

Bought Sold 31.12.2013

Shares in the Company

Registered in name of directors

Arulampalam A/L S Mariampillai 100,000 - - 100,000 Deepak Jaikishan A/L Jaikishan Rewachand 19,997,900 6,869,200 - 26,867,100

Since the end of the previous financial year, no director of the Company has received or become entitled toreceive any benefit (other than the benefit included in the aggregate amount of emoluments received or dueand receivable by directors as disclosed in the financial statements or the fixed salary of full-time employeesof the Company) by reason of a contract made by the Company or a related corporation with the director orwith a firm of which the director is a member, or with a company in which the director has a substantialfinancial interest.

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

The shareholdings in the Company and in the related companies of those who were directors at the end ofthe financial year, as recorded in the Register of Directors' Shareholdings kept by the Company underSection 134 of the Companies Act, 1965, are as follows:

DIRECTORS' INTERESTS

Balance as at 1.1.2013/ date of

appointment

Balance as at

Number of ordinary shares of RM0.10 each

2

Company No:412406-T

SHARE OPTIONS

DIRECTORS

The names of the directors in office since the date of the last report:

Mohd Shukri Bin Abdullah Ezrul Ehsan Bin IsmailArulampalam A/L S MariampillaiDato' Malek Radzuan Bin SaharinDeepak Jaikishan A/L Jaikishan Rewachand (appointed on 10.5.2013)Izham Bin Yusoff (appointed on 1.10.2013)Abdul Latif Bin Abdul Rahim (appointed on 1.10.2013)

Mejar Ismail Bin Ahmad (B) (appointed on 9.10.2013)Jeneral Tan Sri Abdul Aziz Bin Zainal (B) (appointed on 10.10.2013)Naresh Kumar Kukeraja @ Lender Lal A/L K.Lal (appointed on 26.12.2013)Poh Hou Liang (appointed on 28.5.2013; resigned on 26.9.2013)

No options have been granted by the Company to any parties during the financial year to take up unissuedshares of the Company.

No shares have been issued during the financial year by virtue of the exercise of any options to take upunissued shares of the Company. As at the end of the financial year, there were no unissued shares of theCompany under options.

Rajesh A/L Jaikishan (appointed on 2.10.2013)

DIRECTORS’ BENEFITS

Bought Sold 31.12.2013

Shares in the Company

Registered in name of directors

Arulampalam A/L S Mariampillai 100,000 - - 100,000 Deepak Jaikishan A/L Jaikishan Rewachand 19,997,900 6,869,200 - 26,867,100

Since the end of the previous financial year, no director of the Company has received or become entitled toreceive any benefit (other than the benefit included in the aggregate amount of emoluments received or dueand receivable by directors as disclosed in the financial statements or the fixed salary of full-time employeesof the Company) by reason of a contract made by the Company or a related corporation with the director orwith a firm of which the director is a member, or with a company in which the director has a substantialfinancial interest.

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

The shareholdings in the Company and in the related companies of those who were directors at the end ofthe financial year, as recorded in the Register of Directors' Shareholdings kept by the Company underSection 134 of the Companies Act, 1965, are as follows:

DIRECTORS' INTERESTS

Balance as at 1.1.2013/ date of

appointment

Balance as at

Number of ordinary shares of RM0.10 each

2

RAYA INTERNATIONAL BERHAD Annual Report 2013

26

Company No:412406-T

Bought Sold 31.12.2013

Deemed interest by virtue of shares held

by immediate family members of the directors

Deepak Jaikishan A/L Jaikishan Rewachand 530,000 - - 530,000 Rajesh A/L Jaikishan 27,397,100 - - 27,397,100

OTHER STATUTORY INFORMATION

a)

(i)

By virtue of the above directors' interest in the shares of the Company, the abovementioned directors arealso deemed to have an interest in the shares of the subsidiaries to the extent that the Company has aninterest.

to ascertain that proper action had been taken in relation to the writing off of bad debts and themaking of allowance for doubtful debts and satisfied themselves that all known bad debts had been

Before the statements of profit or loss and other comprehensive income and statements of financialposition of the Group and of the Company were made out, the directors took reasonable steps:

Balance as at 1.1.2013/ date of

appointment

Balance as at

Number of ordinary shares of RM0.10 each

None of the other directors in office at the end of the financial year held shares or had beneficial interest inthe shares of the Company or its related companies during or at the beginning and end of the financial year.

(ii)

b) Other than as stated, at the date of this report, the directors are not aware of any circumstances:

(i)

(ii)

(iii)

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

(i)

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

making of allowance for doubtful debts and satisfied themselves that all known bad debts had beenwritten off and that adequate allowance had been made for doubtful debts; and

As at 31st December 2013, the accumulated losses of the Group and of the Company were RM16,346,864and RM7,944,216 respectively which arose from losses sustained in prior years. As mentioned in Note 4 a)to the Financial Statements, the financial statements have been prepared on the basis of accountingprinciples applicable to a going concern which presumes that the future operating results will improve andconsequently, the realisation of assets and settlement of liabilities will occur in the ordinary course ofbusiness.

to ensure that any current assets which were unlikely to realise in the ordinary course of businesstheir values as shown in the financial statements of the Group and of the Company have beenwritten down to an amount which they might be expected to realise.

which have arisen which render adherence to the existing method of valuation of assets or liabilitiesof the Group and of the Company misleading or inappropriate.

any charge on the assets of the Group and of the Company which has arisen since the end of thefinancial year which secures the liability of any other person; or

which would render the amount written off for bad debts or the amount of the allowance for doubtfuldebts in the financial statements of the Group and of the Company inadequate to any substantialextent; or

which would render the values attributable to current assets in the financial statements of the Groupand of the Company misleading; or

3

Directors’ Report (Cont’d)Company No:412406-T

Bought Sold 31.12.2013

Deemed interest by virtue of shares held

by immediate family members of the directors

Deepak Jaikishan A/L Jaikishan Rewachand 530,000 - - 530,000 Rajesh A/L Jaikishan 27,397,100 - - 27,397,100

OTHER STATUTORY INFORMATION

a)

(i)

By virtue of the above directors' interest in the shares of the Company, the abovementioned directors arealso deemed to have an interest in the shares of the subsidiaries to the extent that the Company has aninterest.

to ascertain that proper action had been taken in relation to the writing off of bad debts and themaking of allowance for doubtful debts and satisfied themselves that all known bad debts had been

Before the statements of profit or loss and other comprehensive income and statements of financialposition of the Group and of the Company were made out, the directors took reasonable steps:

Balance as at 1.1.2013/ date of

appointment

Balance as at

Number of ordinary shares of RM0.10 each

None of the other directors in office at the end of the financial year held shares or had beneficial interest inthe shares of the Company or its related companies during or at the beginning and end of the financial year.

(ii)

b) Other than as stated, at the date of this report, the directors are not aware of any circumstances:

(i)

(ii)

(iii)

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

(i)

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

making of allowance for doubtful debts and satisfied themselves that all known bad debts had beenwritten off and that adequate allowance had been made for doubtful debts; and

As at 31st December 2013, the accumulated losses of the Group and of the Company were RM16,346,864and RM7,944,216 respectively which arose from losses sustained in prior years. As mentioned in Note 4 a)to the Financial Statements, the financial statements have been prepared on the basis of accountingprinciples applicable to a going concern which presumes that the future operating results will improve andconsequently, the realisation of assets and settlement of liabilities will occur in the ordinary course ofbusiness.

to ensure that any current assets which were unlikely to realise in the ordinary course of businesstheir values as shown in the financial statements of the Group and of the Company have beenwritten down to an amount which they might be expected to realise.

which have arisen which render adherence to the existing method of valuation of assets or liabilitiesof the Group and of the Company misleading or inappropriate.

any charge on the assets of the Group and of the Company which has arisen since the end of thefinancial year which secures the liability of any other person; or

which would render the amount written off for bad debts or the amount of the allowance for doubtfuldebts in the financial statements of the Group and of the Company inadequate to any substantialextent; or

which would render the values attributable to current assets in the financial statements of the Groupand of the Company misleading; or

3

Company No:412406-T

Bought Sold 31.12.2013

Deemed interest by virtue of shares held

by immediate family members of the directors

Deepak Jaikishan A/L Jaikishan Rewachand 530,000 - - 530,000 Rajesh A/L Jaikishan 27,397,100 - - 27,397,100

OTHER STATUTORY INFORMATION

a)

(i)

By virtue of the above directors' interest in the shares of the Company, the abovementioned directors arealso deemed to have an interest in the shares of the subsidiaries to the extent that the Company has aninterest.

to ascertain that proper action had been taken in relation to the writing off of bad debts and themaking of allowance for doubtful debts and satisfied themselves that all known bad debts had been

Before the statements of profit or loss and other comprehensive income and statements of financialposition of the Group and of the Company were made out, the directors took reasonable steps:

Balance as at 1.1.2013/ date of

appointment

Balance as at

Number of ordinary shares of RM0.10 each

None of the other directors in office at the end of the financial year held shares or had beneficial interest inthe shares of the Company or its related companies during or at the beginning and end of the financial year.

(ii)

b) Other than as stated, at the date of this report, the directors are not aware of any circumstances:

(i)

(ii)

(iii)

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

(i)

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

making of allowance for doubtful debts and satisfied themselves that all known bad debts had beenwritten off and that adequate allowance had been made for doubtful debts; and

As at 31st December 2013, the accumulated losses of the Group and of the Company were RM16,346,864and RM7,944,216 respectively which arose from losses sustained in prior years. As mentioned in Note 4 a)to the Financial Statements, the financial statements have been prepared on the basis of accountingprinciples applicable to a going concern which presumes that the future operating results will improve andconsequently, the realisation of assets and settlement of liabilities will occur in the ordinary course ofbusiness.

to ensure that any current assets which were unlikely to realise in the ordinary course of businesstheir values as shown in the financial statements of the Group and of the Company have beenwritten down to an amount which they might be expected to realise.

which have arisen which render adherence to the existing method of valuation of assets or liabilitiesof the Group and of the Company misleading or inappropriate.

any charge on the assets of the Group and of the Company which has arisen since the end of thefinancial year which secures the liability of any other person; or

which would render the amount written off for bad debts or the amount of the allowance for doubtfuldebts in the financial statements of the Group and of the Company inadequate to any substantialextent; or

which would render the values attributable to current assets in the financial statements of the Groupand of the Company misleading; or

3

Company No:412406-T

Bought Sold 31.12.2013

Deemed interest by virtue of shares held

by immediate family members of the directors

Deepak Jaikishan A/L Jaikishan Rewachand 530,000 - - 530,000 Rajesh A/L Jaikishan 27,397,100 - - 27,397,100

OTHER STATUTORY INFORMATION

a)

(i)

By virtue of the above directors' interest in the shares of the Company, the abovementioned directors arealso deemed to have an interest in the shares of the subsidiaries to the extent that the Company has aninterest.

to ascertain that proper action had been taken in relation to the writing off of bad debts and themaking of allowance for doubtful debts and satisfied themselves that all known bad debts had been

Before the statements of profit or loss and other comprehensive income and statements of financialposition of the Group and of the Company were made out, the directors took reasonable steps:

Balance as at 1.1.2013/ date of

appointment

Balance as at

Number of ordinary shares of RM0.10 each

None of the other directors in office at the end of the financial year held shares or had beneficial interest inthe shares of the Company or its related companies during or at the beginning and end of the financial year.

(ii)

b) Other than as stated, at the date of this report, the directors are not aware of any circumstances:

(i)

(ii)

(iii)

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

(i)

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

making of allowance for doubtful debts and satisfied themselves that all known bad debts had beenwritten off and that adequate allowance had been made for doubtful debts; and

As at 31st December 2013, the accumulated losses of the Group and of the Company were RM16,346,864and RM7,944,216 respectively which arose from losses sustained in prior years. As mentioned in Note 4 a)to the Financial Statements, the financial statements have been prepared on the basis of accountingprinciples applicable to a going concern which presumes that the future operating results will improve andconsequently, the realisation of assets and settlement of liabilities will occur in the ordinary course ofbusiness.

to ensure that any current assets which were unlikely to realise in the ordinary course of businesstheir values as shown in the financial statements of the Group and of the Company have beenwritten down to an amount which they might be expected to realise.

which have arisen which render adherence to the existing method of valuation of assets or liabilitiesof the Group and of the Company misleading or inappropriate.

any charge on the assets of the Group and of the Company which has arisen since the end of thefinancial year which secures the liability of any other person; or

which would render the amount written off for bad debts or the amount of the allowance for doubtfuldebts in the financial statements of the Group and of the Company inadequate to any substantialextent; or

which would render the values attributable to current assets in the financial statements of the Groupand of the Company misleading; or

3

Company No:412406-T

Bought Sold 31.12.2013

Deemed interest by virtue of shares held

by immediate family members of the directors

Deepak Jaikishan A/L Jaikishan Rewachand 530,000 - - 530,000 Rajesh A/L Jaikishan 27,397,100 - - 27,397,100

OTHER STATUTORY INFORMATION

a)

(i)

By virtue of the above directors' interest in the shares of the Company, the abovementioned directors arealso deemed to have an interest in the shares of the subsidiaries to the extent that the Company has aninterest.

to ascertain that proper action had been taken in relation to the writing off of bad debts and themaking of allowance for doubtful debts and satisfied themselves that all known bad debts had been

Before the statements of profit or loss and other comprehensive income and statements of financialposition of the Group and of the Company were made out, the directors took reasonable steps:

Balance as at 1.1.2013/ date of

appointment

Balance as at

Number of ordinary shares of RM0.10 each

None of the other directors in office at the end of the financial year held shares or had beneficial interest inthe shares of the Company or its related companies during or at the beginning and end of the financial year.

(ii)

b) Other than as stated, at the date of this report, the directors are not aware of any circumstances:

(i)

(ii)

(iii)

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

(i)

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

making of allowance for doubtful debts and satisfied themselves that all known bad debts had beenwritten off and that adequate allowance had been made for doubtful debts; and

As at 31st December 2013, the accumulated losses of the Group and of the Company were RM16,346,864and RM7,944,216 respectively which arose from losses sustained in prior years. As mentioned in Note 4 a)to the Financial Statements, the financial statements have been prepared on the basis of accountingprinciples applicable to a going concern which presumes that the future operating results will improve andconsequently, the realisation of assets and settlement of liabilities will occur in the ordinary course ofbusiness.

to ensure that any current assets which were unlikely to realise in the ordinary course of businesstheir values as shown in the financial statements of the Group and of the Company have beenwritten down to an amount which they might be expected to realise.

which have arisen which render adherence to the existing method of valuation of assets or liabilitiesof the Group and of the Company misleading or inappropriate.

any charge on the assets of the Group and of the Company which has arisen since the end of thefinancial year which secures the liability of any other person; or

which would render the amount written off for bad debts or the amount of the allowance for doubtfuldebts in the financial statements of the Group and of the Company inadequate to any substantialextent; or

which would render the values attributable to current assets in the financial statements of the Groupand of the Company misleading; or

3

Company No:412406-T

Bought Sold 31.12.2013

Deemed interest by virtue of shares held

by immediate family members of the directors

Deepak Jaikishan A/L Jaikishan Rewachand 530,000 - - 530,000 Rajesh A/L Jaikishan 27,397,100 - - 27,397,100

OTHER STATUTORY INFORMATION

a)

(i)

By virtue of the above directors' interest in the shares of the Company, the abovementioned directors arealso deemed to have an interest in the shares of the subsidiaries to the extent that the Company has aninterest.

to ascertain that proper action had been taken in relation to the writing off of bad debts and themaking of allowance for doubtful debts and satisfied themselves that all known bad debts had been

Before the statements of profit or loss and other comprehensive income and statements of financialposition of the Group and of the Company were made out, the directors took reasonable steps:

Balance as at 1.1.2013/ date of

appointment

Balance as at

Number of ordinary shares of RM0.10 each

None of the other directors in office at the end of the financial year held shares or had beneficial interest inthe shares of the Company or its related companies during or at the beginning and end of the financial year.

(ii)

b) Other than as stated, at the date of this report, the directors are not aware of any circumstances:

(i)

(ii)

(iii)

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

(i)

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

making of allowance for doubtful debts and satisfied themselves that all known bad debts had beenwritten off and that adequate allowance had been made for doubtful debts; and

As at 31st December 2013, the accumulated losses of the Group and of the Company were RM16,346,864and RM7,944,216 respectively which arose from losses sustained in prior years. As mentioned in Note 4 a)to the Financial Statements, the financial statements have been prepared on the basis of accountingprinciples applicable to a going concern which presumes that the future operating results will improve andconsequently, the realisation of assets and settlement of liabilities will occur in the ordinary course ofbusiness.

to ensure that any current assets which were unlikely to realise in the ordinary course of businesstheir values as shown in the financial statements of the Group and of the Company have beenwritten down to an amount which they might be expected to realise.

which have arisen which render adherence to the existing method of valuation of assets or liabilitiesof the Group and of the Company misleading or inappropriate.

any charge on the assets of the Group and of the Company which has arisen since the end of thefinancial year which secures the liability of any other person; or

which would render the amount written off for bad debts or the amount of the allowance for doubtfuldebts in the financial statements of the Group and of the Company inadequate to any substantialextent; or

which would render the values attributable to current assets in the financial statements of the Groupand of the Company misleading; or

3

Company No:412406-T

Bought Sold 31.12.2013

Deemed interest by virtue of shares held

by immediate family members of the directors

Deepak Jaikishan A/L Jaikishan Rewachand 530,000 - - 530,000 Rajesh A/L Jaikishan 27,397,100 - - 27,397,100

OTHER STATUTORY INFORMATION

a)

(i)

By virtue of the above directors' interest in the shares of the Company, the abovementioned directors arealso deemed to have an interest in the shares of the subsidiaries to the extent that the Company has aninterest.

to ascertain that proper action had been taken in relation to the writing off of bad debts and themaking of allowance for doubtful debts and satisfied themselves that all known bad debts had been

Before the statements of profit or loss and other comprehensive income and statements of financialposition of the Group and of the Company were made out, the directors took reasonable steps:

Balance as at 1.1.2013/ date of

appointment

Balance as at

Number of ordinary shares of RM0.10 each

None of the other directors in office at the end of the financial year held shares or had beneficial interest inthe shares of the Company or its related companies during or at the beginning and end of the financial year.

(ii)

b) Other than as stated, at the date of this report, the directors are not aware of any circumstances:

(i)

(ii)

(iii)

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

(i)

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

making of allowance for doubtful debts and satisfied themselves that all known bad debts had beenwritten off and that adequate allowance had been made for doubtful debts; and

As at 31st December 2013, the accumulated losses of the Group and of the Company were RM16,346,864and RM7,944,216 respectively which arose from losses sustained in prior years. As mentioned in Note 4 a)to the Financial Statements, the financial statements have been prepared on the basis of accountingprinciples applicable to a going concern which presumes that the future operating results will improve andconsequently, the realisation of assets and settlement of liabilities will occur in the ordinary course ofbusiness.

to ensure that any current assets which were unlikely to realise in the ordinary course of businesstheir values as shown in the financial statements of the Group and of the Company have beenwritten down to an amount which they might be expected to realise.

which have arisen which render adherence to the existing method of valuation of assets or liabilitiesof the Group and of the Company misleading or inappropriate.

any charge on the assets of the Group and of the Company which has arisen since the end of thefinancial year which secures the liability of any other person; or

which would render the amount written off for bad debts or the amount of the allowance for doubtfuldebts in the financial statements of the Group and of the Company inadequate to any substantialextent; or

which would render the values attributable to current assets in the financial statements of the Groupand of the Company misleading; or

3

RAYA INTERNATIONAL BERHAD Annual Report 2013

27

Company No:412406-T

d)

e)

f)

AUDITORS

In the opinion of the directors, there has not arisen in the interval between the end of the financial yearand the date of this report any item, transaction or event of a material and unusual nature likely to affectsubstantially the results of the operations of the Group and of the Company for the financial year inwhich this report is made other than the subsequent event as disclosed in Note 29 to the FinancialStatements.

No contingent liability or other liability of the Group and of the Company has become enforceable, or islikely to become enforceable within the period of twelve months after the end of the financial year whichin the opinion of the directors, will or may substantially affect the ability of the Group and of theCompany to meet their obligations as and when they fall due other than those as disclosed in Note 25to the Financial Statements.

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

The auditors, Messrs. STYL Associates, have indicated their willingness to continue in office.

Signed on behalf of the Board in accordance with a resolution of the directors,

EZRUL EHSAN BIN ISMAIL

Director Director

Kuala Lumpur

Date: 29th April 2014

JENERAL TAN SRI ABDUL AZIZ BIN ZAINAL

4

Directors’ Report (Cont’d)

RAYA INTERNATIONAL BERHAD Annual Report 2013

28

Company No:412406-T

We, JENERAL TAN SRI ABDUL AZIZ BIN ZAINAL and EZRUL EHSAN BIN ISMAIL, being two of thedirectors of Raya International Berhad (formerly known as Envair Holding Berhad), do hereby state that, inthe opinion of the directors, the accompanying financial statements are drawn up in accordance withMalaysian Financial Reporting Standards, International Financial Reporting Standards and therequirements of the Companies Act, 1965 so as to give a true and fair view of the financial position of theGroup and of the Company as at 31st December 2013 and of their financial performance and cash flows ofthe Group and of the Company for the year then ended.

The supplementary information set out in Note 30, which is not part of the financial statements, is preparedin all material respects, in accordance with Guidance on Special Matter No.1 "Determination of Realisedand Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia SecuritiesBerhad Listing Requirements" as issued by the Malaysian Institute of Accountants and the directive ofBursa Malaysia Securities Berhad.

RAYA INTERNATIONAL BERHAD(Formerly known as Envair Holding Berhad)

(Incorporated in Malaysia)

STATEMENT BY DIRECTORS

Signed on behalf of the Board in accordance with a resolution of the directors,

JENERAL TAN SRI ABDUL AZIZ BIN ZAINAL EZRUL EHSAN BIN ISMAILDirector

Kuala Lumpur

Date: 29th April 2014

EZRUL EHSAN BIN ISMAIL

Subscribed and solemnly declared by the

abovenamed EZRUL EHSAN BIN ISMAIL, at Petaling Jaya, on 29th April 2014

Before me:

S.Arokiadass A.M.NNo. B 390

STATUTORY DECLARATION

I, EZRUL EHSAN BIN ISMAIL, being the director primarily responsible for the financial management ofRaya International Berhad (formerly known as Envair Holding Berhad), do solemnly and sincerely declarethat the accompanying financial statements are, in my opinion, correct and I make this solemn declarationconscientiously believing the same to be true, and by virtue of the provisions of the Statutory DeclarationsAct, 1960.

Director

5

Statement by Directors

Statutory Declaration

Company No:412406-T

We, JENERAL TAN SRI ABDUL AZIZ BIN ZAINAL and EZRUL EHSAN BIN ISMAIL, being two of thedirectors of Raya International Berhad (formerly known as Envair Holding Berhad), do hereby state that, inthe opinion of the directors, the accompanying financial statements are drawn up in accordance withMalaysian Financial Reporting Standards, International Financial Reporting Standards and therequirements of the Companies Act, 1965 so as to give a true and fair view of the financial position of theGroup and of the Company as at 31st December 2013 and of their financial performance and cash flows ofthe Group and of the Company for the year then ended.

The supplementary information set out in Note 30, which is not part of the financial statements, is preparedin all material respects, in accordance with Guidance on Special Matter No.1 "Determination of Realisedand Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia SecuritiesBerhad Listing Requirements" as issued by the Malaysian Institute of Accountants and the directive ofBursa Malaysia Securities Berhad.

RAYA INTERNATIONAL BERHAD(Formerly known as Envair Holding Berhad)

(Incorporated in Malaysia)

STATEMENT BY DIRECTORS

Signed on behalf of the Board in accordance with a resolution of the directors,

JENERAL TAN SRI ABDUL AZIZ BIN ZAINAL EZRUL EHSAN BIN ISMAILDirector

Kuala Lumpur

Date: 29th April 2014

EZRUL EHSAN BIN ISMAIL

Subscribed and solemnly declared by the

abovenamed EZRUL EHSAN BIN ISMAIL, at Petaling Jaya, on 29th April 2014

Before me:

S.Arokiadass A.M.NNo. B 390

STATUTORY DECLARATION

I, EZRUL EHSAN BIN ISMAIL, being the director primarily responsible for the financial management ofRaya International Berhad (formerly known as Envair Holding Berhad), do solemnly and sincerely declarethat the accompanying financial statements are, in my opinion, correct and I make this solemn declarationconscientiously believing the same to be true, and by virtue of the provisions of the Statutory DeclarationsAct, 1960.

Director

5

RAYA INTERNATIONAL BERHAD Annual Report 2013

29

Company No:412406-T

Chartered Accountants

REPORT ON THE FINANCIAL STATEMENTS

Directors' Responsibility for the Financial Statements

Auditors' Responsibility

Opinion

No: 107B Jalan Aminuddin BakiTaman Tun Dr. Ismail 60000 Kuala Lumpur

AF 1929 Tel: 03-77275573 Fax: 03-77270771

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF

STYL ASSOCIATES

RAYA INTERNATIONAL BERHAD(Formerly known as Envair Holding Berhad)

(Incorporated in Malaysia)

We have audited the financial statements of Raya International Berhad (formerly known as Envair HoldingBerhad), which comprise the statements of financial position as at 31st December 2013 of the Group and of theCompany, and the statements of profit or loss and other comprehensive income, statements of changes inequity and statements of cash flows of the Group and of the Company for the year then ended, and a summaryof significant accounting policies and other explanatory information, as set out on pages 32 to 65.

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

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

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

In our opinion, the financial statements give a true and fair view of the financial position of the Group and of theCompany as at 31st December 2013 and of their financial performance and cash flows for the year then endedin accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards andthe requirements of the Companies Act, 1965 in Malaysia.

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

6

Independent Auditors’ Reportto the members of Raya International Berhad (formerly known as Envair Holding Berhad)(Incorporated in Malaysia)

RAYA INTERNATIONAL BERHAD Annual Report 2013

30

Company No:412406-T

Chartered Accountants

(a)

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

In our opinion, the accounting and other records and the registers required by the Act to be kept by theCompany have been properly kept in accordance with the provisions of the Act.

Without qualifying our opinion, we draw attention to Note 4 a) to the Financial Statements which indicates thatthe accumulated losses of the Group and of the Company as at 31st December 2013 were RM16,346,864 andRM7,944,216 respectively. The successful turnaround plan for the Group and the Company is one of the keyfactors for the sustainability of the Group's and of the Company's operations and for the Group and theCompany to continue as going concerns in the foreseeable future. The validity of the going concernsassumption is therefore dependent on the successful implementation of the turnaround plan in the future. In theevent the going concern assumption is no longer valid, the Group and the Company may not be able todischarge its liabilities in the normal course of business and adjustments may have to be made to reflect suchsituation. The financial statements of the Group and of the Company do not include any adjustment relating tothe amounts and classification of assets and liabilities that might be necessary should the Group and theCompany be unable to continue as going concerns.

Fax: 03-77270771

Emphasis of Matter

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

No: 107B Jalan Aminuddin Baki

Taman Tun Dr. Ismail 60000 Kuala Lumpur

AF 1929 Tel: 03-77275573

STYL ASSOCIATES

(b)

(c)

(d)

OTHER REPORTING RESPONSIBILITIES

We are satisfied that the financial statements of the subsidiaries that have been consolidated with theCompany's financial statements are in form and content appropriate and proper for the purposes of thepreparation of the consolidated financial statements of the Group and we have received satisfactoryinformation and explanations required by us for those purposes.

The auditors' reports on the financial statements of the subsidiaries did not contain any qualification or anyadverse comment made under Section 174(3) of the Act other than as disclosed in Note 13 to the FinancialStatements.

The supplementary information set out in Note 30 is disclosed to meet the requirement of Bursa MalaysiaSecurities Berhad and is not part of the financial statements. The directors are responsible for the preparation ofthe supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realisedand Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities BerhadListing Requirements, as issued by the Malaysian Institute of Accountants ("MIA Guidance") and the directive ofBursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all materialrespects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

We have considered the financial statements and the auditors' reports of all the subsidiaries of which wehave not acted as auditors, which are indicated in Note 13 to the Financial Statements.

7

Independent Auditors’ Report (Cont’d)

RAYA INTERNATIONAL BERHAD Annual Report 2013

31

Company No:412406-T

Chartered Accountants

OTHER MATTERS

STYL ASSOCIATESFirm No. AF 1929Chartered Accountants

TAN CHIN HUATApproval No: 2037/06/14(J)

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

Fax: 03-77270771

STYL ASSOCIATESNo: 107B Jalan Aminuddin Baki

Taman Tun Dr. Ismail 60000 Kuala Lumpur

AF 1929 Tel: 03-77275573

Approval No: 2037/06/14(J)Chartered Accountant

Date: 29th April 2014

Kuala Lumpur

8

Independent Auditors’ Report (Cont’d)

RAYA INTERNATIONAL BERHAD Annual Report 2013

32

Company No:412406-T

RAYA INTERNATIONAL BERHAD(Formerly known as Envair Holding Berhad)

(Incorporated in Malaysia)

2013 2012 2013 2012Note RM RM RM RM

(Incorporated in Malaysia)

STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31ST DECEMBER 2013

GROUP COMPANY

Revenue 6 2,424,165 871,987 - -

Other operating income 7 834,842 1,603,860 831,000 1,133,881

Raw materials and consumables used (625,279) (341,006) - - (169,023) (318,528) - -

Purchases and other direct costs (373,950) (24,644) - - Staff costs (175,689) (262,329) (175,689) (260,133)

Changes in inventories of finished goods

Staff costs (175,689) (262,329) (175,689) (260,133) Depreciation of property,

plant and equipment 12 (563,155) (579,551) (8,412) (8,560) Directors' remuneration 8 (51,931) (45,864) (51,931) (45,864) Other operating expenses 7 (452,925) (824,883) 236,032 314,557

Profit from operations 847,055 79,042 831,000 1,133,881

Finance costs 9 (495,767) (474,663) - - Finance costs 9 (495,767) (474,663) - -

Profit/(Loss) before tax 351,288 (395,621) 831,000 1,133,881

Income tax credit/(expense) 10 (262,123) 468,500 (114,121) -

Profit for the financial year 89,165 72,879 716,879 1,133,881

Other comprehensive income, net of tax:Item that will not be reclassified subsequently

to profit or lossGain on revaluation of property, plant and equipment 173,755 - - -

Total comprehensive income for the financial year 262,920 72,879 716,879 1,133,881 financial year 262,920 72,879 716,879 1,133,881

Profit attributable to:Equity holders of the Company 89,165 72,879 716,879 1,133,881

Total comprehensive income attributable to:Equity holders of the Company 262,920 72,879 716,879 1,133,881

Earnings per share attributable to Earnings per share attributable to equity holders of the Company:

Basic (sen) 11 0.08 -

Diluted (sen) 11 N/A N/A

The accompanying Notes form an integral part of the Financial Statements.

9

Company No:412406-T

RAYA INTERNATIONAL BERHAD(Formerly known as Envair Holding Berhad)

(Incorporated in Malaysia)

2013 2012 2013 2012Note RM RM RM RM

(Incorporated in Malaysia)

STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 31ST DECEMBER 2013

GROUP COMPANY

Revenue 6 2,424,165 871,987 - -

Other operating income 7 834,842 1,603,860 831,000 1,133,881

Raw materials and consumables used (625,279) (341,006) - - (169,023) (318,528) - -

Purchases and other direct costs (373,950) (24,644) - - Staff costs (175,689) (262,329) (175,689) (260,133)

Changes in inventories of finished goods

Staff costs (175,689) (262,329) (175,689) (260,133) Depreciation of property,

plant and equipment 12 (563,155) (579,551) (8,412) (8,560) Directors' remuneration 8 (51,931) (45,864) (51,931) (45,864) Other operating expenses 7 (452,925) (824,883) 236,032 314,557

Profit from operations 847,055 79,042 831,000 1,133,881

Finance costs 9 (495,767) (474,663) - - Finance costs 9 (495,767) (474,663) - -

Profit/(Loss) before tax 351,288 (395,621) 831,000 1,133,881

Income tax credit/(expense) 10 (262,123) 468,500 (114,121) -

Profit for the financial year 89,165 72,879 716,879 1,133,881

Other comprehensive income, net of tax:Item that will not be reclassified subsequently

to profit or lossGain on revaluation of property, plant and equipment 173,755 - - -

Total comprehensive income for the financial year 262,920 72,879 716,879 1,133,881 financial year 262,920 72,879 716,879 1,133,881

Profit attributable to:Equity holders of the Company 89,165 72,879 716,879 1,133,881

Total comprehensive income attributable to:Equity holders of the Company 262,920 72,879 716,879 1,133,881

Earnings per share attributable to Earnings per share attributable to equity holders of the Company:

Basic (sen) 11 0.08 -

Diluted (sen) 11 N/A N/A

The accompanying Notes form an integral part of the Financial Statements.

9

Statements of Profit or Loss and Other Comprehensive Incomefor the year ended 31st December 2013

RAYA INTERNATIONAL BERHAD Annual Report 2013

33

Company No:412406-T

2013 2012 2013 2012Note RM RM RM RM

ASSETSNon-Current assets

Property, plant and equipment 12 8,626,058 9,014,358 11,881 19,193

Investments in subsidiaries 13 - - 599,800 499,800

Deferred tax assets 14 195,383 463,057 - -

Goodwill on consolidation 15 95,527 - - - Total Non-Current Assets 8,916,968 9,477,415 611,681 518,993

Current AssetsInventories 16 975,337 1,769,639 - -

Trade receivables 17 2,851,135 1,185,432 - -

Other receivables and prepaid expenses 17 485,355 659,846 59,675 52,190

Tax recoverable 42,810 42,810 - -

Amount owing by subsidiaries 13 - - 11,925,058 12,307,731

Cash and bank balances 45,162 12,051 15,514 584

RAYA INTERNATIONAL BERHAD

(Formerly known as Envair Holding Berhad)(Incorporated in Malaysia)

STATEMENTS OF FINANCIAL POSITION AS AT 31ST DECEMBER 2013

GROUP COMPANY

Cash and bank balances 45,162 12,051 15,514 584 Total Current Assets 4,399,799 3,669,778 12,000,247 12,360,505

Total Assets 13,316,767 13,147,193 12,611,928 12,879,498

EQUITY AND LIABILITIESCapital and ReservesShare capital 18 11,855,580 11,855,580 11,855,580 11,855,580

Reserves 19 (5,432,190) (5,695,110) (131,744) (131,744)

Equity Attributable to Owners of the Company 6,423,390 6,160,470 11,723,836 11,723,836

Non-controlling interests 1,917 - - - Total Equity 6,425,307 6,160,470 11,723,836 11,723,836

Non-Current LiabilitiesFinance lease liabilities 20 17,612 38,756 - - Term loans 21 3,963,472 4,025,395 - - Deferred tax liabilities 14 3,629 9,180 - -

Total Non-Current Liabilities 3,984,713 4,073,331 - -

Current LiabilitiesTrade payables 22 686,663 317,282 - -

Other payables and accrued expenses 22 370,556 1,430,989 264,694 1,138,603

Bank borrowings 23 996,865 1,163,245 - 15,183

Amount owing to directors 24 850,787 - 247,007 -

Tax liabilities 1,876 1,876 1,876 1,876

Total Current Liabilities 2,906,747 2,913,392 513,577 1,155,662 Total Liabilities 6,891,460 6,986,723 513,577 1,155,662

Total Equity and Liabilities 13,316,767 13,147,193 12,237,413 12,879,498

The accompanying Notes form an integral part of the Financial Statements.

10

Statements of Financial Positionas at 31st December 2013

Company No:412406-T

2013 2012 2013 2012Note RM RM RM RM

ASSETSNon-Current assets

Property, plant and equipment 12 8,626,058 9,014,358 11,881 19,193

Investments in subsidiaries 13 - - 599,800 499,800

Deferred tax assets 14 195,383 463,057 - -

Goodwill on consolidation 15 95,527 - - - Total Non-Current Assets 8,916,968 9,477,415 611,681 518,993

Current AssetsInventories 16 975,337 1,769,639 - -

Trade receivables 17 2,851,135 1,185,432 - -

Other receivables and prepaid expenses 17 485,355 659,846 59,675 52,190

Tax recoverable 42,810 42,810 - -

Amount owing by subsidiaries 13 - - 11,925,058 12,307,731

Cash and bank balances 45,162 12,051 15,514 584

RAYA INTERNATIONAL BERHAD

(Formerly known as Envair Holding Berhad)(Incorporated in Malaysia)

STATEMENTS OF FINANCIAL POSITION AS AT 31ST DECEMBER 2013

GROUP COMPANY

Cash and bank balances 45,162 12,051 15,514 584 Total Current Assets 4,399,799 3,669,778 12,000,247 12,360,505

Total Assets 13,316,767 13,147,193 12,611,928 12,879,498

EQUITY AND LIABILITIESCapital and ReservesShare capital 18 11,855,580 11,855,580 11,855,580 11,855,580

Reserves 19 (5,432,190) (5,695,110) (131,744) (131,744)

Equity Attributable to Owners of the Company 6,423,390 6,160,470 11,723,836 11,723,836

Non-controlling interests 1,917 - - - Total Equity 6,425,307 6,160,470 11,723,836 11,723,836

Non-Current LiabilitiesFinance lease liabilities 20 17,612 38,756 - - Term loans 21 3,963,472 4,025,395 - - Deferred tax liabilities 14 3,629 9,180 - -

Total Non-Current Liabilities 3,984,713 4,073,331 - -

Current LiabilitiesTrade payables 22 686,663 317,282 - -

Other payables and accrued expenses 22 370,556 1,430,989 264,694 1,138,603

Bank borrowings 23 996,865 1,163,245 - 15,183

Amount owing to directors 24 850,787 - 247,007 -

Tax liabilities 1,876 1,876 1,876 1,876

Total Current Liabilities 2,906,747 2,913,392 513,577 1,155,662 Total Liabilities 6,891,460 6,986,723 513,577 1,155,662

Total Equity and Liabilities 13,316,767 13,147,193 12,237,413 12,879,498

The accompanying Notes form an integral part of the Financial Statements.

10

RAYA INTERNATIONAL BERHAD Annual Report 2013

34

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11

RAYA INTERNATIONAL BERHAD Annual Report 2013

35

Com

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No:

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12

RAYA INTERNATIONAL BERHAD Annual Report 2013

36

Company No:412406-T

2013 2012 2013 2012RM RM RM RM

CASH FLOWS FROM OPERATING ACTIVITIESProfit/(Loss) before tax 351,288 (395,621) 831,000 1,133,881 Adjustments for: Bad debts written off 507 237,301 - 2,563 Depreciation of property, plant and

equipment 563,155 579,551 8,412 8,560 Impairment loss on receivables 156,575 95,372 - - Inventories written down 107,706 479,217 - - Exceptional items: Waiver of shareholder's advance (831,000) (1,133,881) (831,000) (1,133,881) Impairment loss on investments in

subsidiary - - - 4,195 Reversal of impairment loss on trade

receivables - (30,165) - - Interest income - (3,185) - -

RAYA INTERNATIONAL BERHAD(Formerly known as Envair Holding Berhad)

(Incorporated in Malaysia)

STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED 31ST DECEMBER 2013

GROUP COMPANY

Interest income - (3,185) - - Finance costs 495,767 474,663 - - Operating profit/(loss) before working capital changes 843,998 303,252 8,412 15,318 Changes in working capital: Decrease in inventories 686,596 388,718 - - Increase in trade receivables (1,770,822) (1,255,792) - (2,563) (Increase)/Decrease in other receivables

and prepaid expenses 122,528 179,743 (7,485) (44,558) (Increase)/Decrease in amount owing

by subsidiaries - - 382,673 (1,087,177) Increase/(Decrease) in trade payables 369,381 (3,784) - - Increase/(Decrease) in other payables and

accrued expenses (1,062,033) 1,409,411 (873,909) 1,544,577 Increase in amount owing to directors 1,681,787 - 1,078,007 - Cash Generated From/(Used In) Operations 871,435 1,021,548 587,698 425,597 Interest received - 3,185 - - Interest paid (495,767) (474,663) - - Tax refunded - 535 - -

Net Cash From/(Used In) OperatingActivities 375,668 550,605 587,698 425,597

(Forward)

13

Statements of Cash Flowsfor the year ended 31st December 2013

Company No:412406-T

2013 2012 2013 2012RM RM RM RM

CASH FLOWS FROM OPERATING ACTIVITIESProfit/(Loss) before tax 351,288 (395,621) 831,000 1,133,881 Adjustments for: Bad debts written off 507 237,301 - 2,563 Depreciation of property, plant and

equipment 563,155 579,551 8,412 8,560 Impairment loss on receivables 156,575 95,372 - - Inventories written down 107,706 479,217 - - Exceptional items: Waiver of shareholder's advance (831,000) (1,133,881) (831,000) (1,133,881) Impairment loss on investments in

subsidiary - - - 4,195 Reversal of impairment loss on trade

receivables - (30,165) - - Interest income - (3,185) - -

RAYA INTERNATIONAL BERHAD(Formerly known as Envair Holding Berhad)

(Incorporated in Malaysia)

STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED 31ST DECEMBER 2013

GROUP COMPANY

Interest income - (3,185) - - Finance costs 495,767 474,663 - - Operating profit/(loss) before working capital changes 843,998 303,252 8,412 15,318 Changes in working capital: Decrease in inventories 686,596 388,718 - - Increase in trade receivables (1,770,822) (1,255,792) - (2,563) (Increase)/Decrease in other receivables

and prepaid expenses 122,528 179,743 (7,485) (44,558) (Increase)/Decrease in amount owing

by subsidiaries - - 382,673 (1,087,177) Increase/(Decrease) in trade payables 369,381 (3,784) - - Increase/(Decrease) in other payables and

accrued expenses (1,062,033) 1,409,411 (873,909) 1,544,577 Increase in amount owing to directors 1,681,787 - 1,078,007 - Cash Generated From/(Used In) Operations 871,435 1,021,548 587,698 425,597 Interest received - 3,185 - - Interest paid (495,767) (474,663) - - Tax refunded - 535 - -

Net Cash From/(Used In) OperatingActivities 375,668 550,605 587,698 425,597

(Forward)

13

RAYA INTERNATIONAL BERHAD Annual Report 2013

37

Company No:412406-T

2013 2012 2013 2012RM RM RM RM

CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment (1,100) - (1,100) - Acquisition of investment in

subsidiary (Note 13) (92,010) - (100,000) -

Net Cash Used In Investing Activities (93,110) - (101,100) -

CASH FLOWS FROM FINANCING ACTIVITIES Repayment of term loans (57,348) (567,122) - - Repayment of finance lease obligations (59,471) (46,034) - - Decrease in bank borrowings, excluding

bank overdraft and long term borrowings - current portion - (35,418) - -

Net Cash Used In Financing Activities (116,819) (648,574) - -

NET INCREASE/(DECREASE) IN CASH

RAYA INTERNATIONAL BERHAD(Formerly known as Envair Holding Berhad)

(Incorporated in Malaysia)

STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED 31ST DECEMBER 2013

GROUP COMPANY

NET INCREASE/(DECREASE) IN CASHAND CASH EQUIVALENTS 165,739 (97,969) 486,598 425,597

CASH AND CASH EQUIVALENTSBROUGHT FORWARD (917,226) (819,257) 457,534 31,937

CASH AND CASH EQUIVALENTS CARRIED FORWARD (751,487) (917,226) 944,132 457,534

Cash and cash equivalents carried forward consist of:

Cash and bank balances 45,162 12,051 15,514 584 Bank overdraft (Note 23) (796,649) (929,277) - (15,183)

(751,487) (917,226) 15,514 (14,599)

The accompanying Notes form an integral part of the Financial Statements.The accompanying Notes form an integral part of the Financial Statements.

14

Statements of Cash Flows (Cont’d)Company No:412406-T

2013 2012 2013 2012RM RM RM RM

CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment (1,100) - (1,100) - Acquisition of investment in

subsidiary (Note 13) (92,010) - (100,000) -

Net Cash Used In Investing Activities (93,110) - (101,100) -

CASH FLOWS FROM FINANCING ACTIVITIES Repayment of term loans (57,348) (567,122) - - Repayment of finance lease obligations (59,471) (46,034) - - Decrease in bank borrowings, excluding

bank overdraft and long term borrowings - current portion - (35,418) - -

Net Cash Used In Financing Activities (116,819) (648,574) - -

NET INCREASE/(DECREASE) IN CASH

RAYA INTERNATIONAL BERHAD(Formerly known as Envair Holding Berhad)

(Incorporated in Malaysia)

STATEMENTS OF CASH FLOWS FOR THE YEAR ENDED 31ST DECEMBER 2013

GROUP COMPANY

NET INCREASE/(DECREASE) IN CASHAND CASH EQUIVALENTS 165,739 (97,969) 486,598 425,597

CASH AND CASH EQUIVALENTSBROUGHT FORWARD (917,226) (819,257) 457,534 31,937

CASH AND CASH EQUIVALENTS CARRIED FORWARD (751,487) (917,226) 944,132 457,534

Cash and cash equivalents carried forward consist of:

Cash and bank balances 45,162 12,051 15,514 584 Bank overdraft (Note 23) (796,649) (929,277) - (15,183)

(751,487) (917,226) 15,514 (14,599)

The accompanying Notes form an integral part of the Financial Statements.The accompanying Notes form an integral part of the Financial Statements.

14

RAYA INTERNATIONAL BERHAD Annual Report 2013

38

Company No:412406-T

1) GENERAL INFORMATION

On 9th July 2013, the Company changed its name from Envair Holding Berhad to Raya International Berhad.

The financial statements are presented in Ringgit Malaysia (RM).

2) BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS

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

The Company is principally engaged in investment holding and the provision of management services. Theprincipal activities of the subsidiaries are as disclosed in Note 13 to the Financial Statements. There havebeen no significant changes in the nature of the principal activities of the Company and its subsidiaries duringthe financial year.

The registered office and principal place of business of the Company is located at No: D2-1-11, No. 1, SolarisDutamas, Jalan Dutamas, Taman Sri Hartamas, 50480 Kuala Lumpur.

The financial statements have been authorised by the Board of Directors for issuance on 29th April 2014.

RAYA INTERNATIONAL BERHAD(Formerly known as Envair Holding Berhad)

(Incorporated in Malaysia)

NOTES TO THE FINANCIAL STATEMENTS

2) BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS

MFRS 3 Business Combinations

MFRS 10 Consolidated Financial Statements

MFRS 11 Joint Arrangements

MFRS 12 Disclosure of Interests in Other Entities

MFRS 13 Fair Value Measurement

MFRS 119 Employee Benefits (revised)

MFRS 127 Consolidated and Separate Financial Statements (revised)

MFRS 128 Investments in Associates and Joint Ventures (revised)

Amendments to MFRS 1 First-time Adoption of MFRS - Government Loans

Amendments to MFRS 7 Financial Instruments: Disclosures - Offsetting Financial Assets and

Financial Liabilities

Amendments to MFRS 10 Consolidated Financial Statements: Transition Guidance

Amendments to MFRS 11 Joint Arrangements: Transition Guidance

Amendments to MFRS 12 Disclosure of Interests in Other Entities: Transition Guidance

Amendments to MFRS 101 Presentation of Items of Other Comprehensive Income

Annual Improvements to IC Interpretations and MFRSs 2009 - 2011 Cycle

The accounting policies adopted by the Group and the Company are consistent with those adopted in theprevious year, except as follows:

At the beginning of the current financial year, the Group and the Company adopted the new and revisedMFRSs which are mandatory for financial period beginning on or after 1st January 2013.

The financial statements of the Group and of the Company have been prepared in accordance with MalaysianFinancial Reporting Standards (MFRS), International Financial Reporting Standards (IFRS) and therequirements of the Companies Act, 1965 in Malaysia.

The adoption of the above standards and interpretations did not have any impact on the financial statementsof the Group and of the Company.

Adoption of Standards, Amendments and Issues Committee ("IC") Interpretations

15

Notes to the Financial Statements

RAYA INTERNATIONAL BERHAD Annual Report 2013

39

Notes to the Financial Statements (Cont’d)

Company No:412406-T

Standards and Interpretations in issue but not yet effective

Amendments to MFRS 132 Offsetting Financial Assets and Financial Liabilities 1st January 2014

Amendments to MFRS 10, Investment Entities 1st January 2014

MFRS 12 and MFRS 127

Amendments to MFRS 136 Recoverable Amount Disclosures for Non-Financial 1st January 2014 Assets

Amendments to MFRS 139 Novation of Derivatives and Continuation of Hedge 1st January 2014 Accounting

IC Interpretation 21 Levies 1st January 2014Amendments to MFRS 201 Property Development Activities 1st January 2014Amendments to MFRS 2 Share-based Payment 1st July 2014Amendments to MFRS 3 Business Combinations 1st July 2014Amendments to MFRS 8 Operating Segments 1st July 2014Amendments to MFRS 13 Fair Value Measurement 1st July 2014Amendments to MFRS 116 Annual Improvements to MFRSs 2010 - 2012 Cycle 1st July 2014Amendments to MFRS 119 Defined Benefit Plans: Employee Contribution 1st July 2014

At the date of authorisation for issue of these financial statements, the following new and revised standardsand amendments were in issue but not yet effective. The Group and the Company intend to adopt thesestandards, if applicable, when they become effective.

Effective for annual period

beginning on or after

Amendments to MFRS 119 Defined Benefit Plans: Employee Contribution 1st July 2014Amendments to MFRS 124 Related Party Disclosures 1st July 2014Amendments to MFRS 138 Intangible Assets 1st July 2014Amendments to MFRS 140 Investment Property 1st July 2014MFRS 9 Financial Instruments 1st January 2015

MFRS 9 Financial Instruments

3) FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The directors expect that the adoption of the above standards and interpretations will have no material impacton the financial statements in the period of initial application except as discussed below:

MFRS 9 Financial Instruments, addresses the classification, measurement and recognition of financial assetsand financial liabilities. MFRS 9 was issued in November 2009 and October 2010. It replaces the parts ofMFRS 139 that relate to the classification and measurement of financial instruments. MFRS 9 requiresfinancial assets to be classified into two measurement categories: those measured at fair value and thosemeasured at amortised cost. The determination is made at initial recognition. The classification depends onthe entity’s business model for managing its financial instruments and the contractual cash flowcharacteristics of the instrument. For financial liabilities, the standard retains most of the MFRS 139requirements. The main change is that, in cases where the fair value option is taken for financial liabilities, thepart of a fair value change due to an entity’s own credit risk is recorded in other comprehensive income ratherthan profit or loss, unless this creates an accounting mismatch.

The operations of the Group are subject to a variety of financial risks, including market risk (foreign currencyexchange risk and interest rate risk), credit risk, and liquidity risk. The Group has adopted a financial riskmanagement framework with the principal objective of effectively managing these risks and minimising anypotential adverse effects on the financial performance of the Group and of the Company.

16

RAYA INTERNATIONAL BERHAD Annual Report 2013

40

Notes to the Financial Statements (Cont’d)

Company No:412406-T

(i)

GROUP

The Group's variable rate borrowings are exposed to a risk of change in cash flows due to changes ininterest rates. The Group’s investment in financial assets are mainly short term in nature and mostlyplaced in financial deposits.

Market risk is the risk that changes in market prices, such as foreign currency exchange risk, interest rate riskand other prices will affect the Group's financial position and cash flows.

Interest rate risk is the risk that the fair value or future cash flows of the Group’s financial instruments willfluctuate because of changes in market interest rates.

The Group has in place policies to manage its competitive risks from its competitors in providing betteralternatives in terms of better services.

An increase of 100 basis point at the reporting date would have increase in loss before tax by the amountshown below and a decrease would have an equal but opposite effect. This analysis assumes that allother variables, remain constant.

Interest rate risk

Changes in interest rates are not expected to have a significant impact on the Group’s profit or loss.

Cash flow sensitivity analysis for variable rate instruments

Market risk

GROUPRM

44,493

The ageing of trade receivables as at the end of the reporting period was:

2013 2012RM RM

Not past due 812,345 - Past due 31 - 120 days 344,482 - Past due more than 120 days 4,555,910 3,955,178

5,712,737 3,955,178

Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Asat the end of the reporting period, the maximum exposure to credit risk arising from receivables isrepresented by the carrying amounts in the statements of financial position.

Management has taken reasonable steps to ensure that receivables that are neither past due nor impairedare measured at their realisable values. A significant portion of these receivables are regular customers thathave been transacting with the Group. The Group uses ageing analysis to monitor the credit quality of thereceivables. Any receivables having significant balances past due more than 120 days, which are deemed tohave higher credit risk, are monitored individually.

Credit risk is the risk of a financial loss to the Group if a customer or counterparty to a financial instrumentfails to meet its contractual obligations. The Group's exposure to credit risk arises principally from itsreceivables from customers. The Company's exposure to credit risk arises principally from loans andadvances to subsidiary.

GROUP

Increase in loss before tax

Credit risk

17

Company No:412406-T

(i)

GROUP

The Group's variable rate borrowings are exposed to a risk of change in cash flows due to changes ininterest rates. The Group’s investment in financial assets are mainly short term in nature and mostlyplaced in financial deposits.

Market risk is the risk that changes in market prices, such as foreign currency exchange risk, interest rate riskand other prices will affect the Group's financial position and cash flows.

Interest rate risk is the risk that the fair value or future cash flows of the Group’s financial instruments willfluctuate because of changes in market interest rates.

The Group has in place policies to manage its competitive risks from its competitors in providing betteralternatives in terms of better services.

An increase of 100 basis point at the reporting date would have increase in loss before tax by the amountshown below and a decrease would have an equal but opposite effect. This analysis assumes that allother variables, remain constant.

Interest rate risk

Changes in interest rates are not expected to have a significant impact on the Group’s profit or loss.

Cash flow sensitivity analysis for variable rate instruments

Market risk

GROUPRM

44,493

The ageing of trade receivables as at the end of the reporting period was:

2013 2012RM RM

Not past due 812,345 - Past due 31 - 120 days 344,482 - Past due more than 120 days 4,555,910 3,955,178

5,712,737 3,955,178

Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Asat the end of the reporting period, the maximum exposure to credit risk arising from receivables isrepresented by the carrying amounts in the statements of financial position.

Management has taken reasonable steps to ensure that receivables that are neither past due nor impairedare measured at their realisable values. A significant portion of these receivables are regular customers thathave been transacting with the Group. The Group uses ageing analysis to monitor the credit quality of thereceivables. Any receivables having significant balances past due more than 120 days, which are deemed tohave higher credit risk, are monitored individually.

Credit risk is the risk of a financial loss to the Group if a customer or counterparty to a financial instrumentfails to meet its contractual obligations. The Group's exposure to credit risk arises principally from itsreceivables from customers. The Company's exposure to credit risk arises principally from loans andadvances to subsidiary.

GROUP

Increase in loss before tax

Credit risk

17

Company No:412406-T

(i)

GROUP

The Group's variable rate borrowings are exposed to a risk of change in cash flows due to changes ininterest rates. The Group’s investment in financial assets are mainly short term in nature and mostlyplaced in financial deposits.

Market risk is the risk that changes in market prices, such as foreign currency exchange risk, interest rate riskand other prices will affect the Group's financial position and cash flows.

Interest rate risk is the risk that the fair value or future cash flows of the Group’s financial instruments willfluctuate because of changes in market interest rates.

The Group has in place policies to manage its competitive risks from its competitors in providing betteralternatives in terms of better services.

An increase of 100 basis point at the reporting date would have increase in loss before tax by the amountshown below and a decrease would have an equal but opposite effect. This analysis assumes that allother variables, remain constant.

Interest rate risk

Changes in interest rates are not expected to have a significant impact on the Group’s profit or loss.

Cash flow sensitivity analysis for variable rate instruments

Market risk

GROUPRM

44,493

The ageing of trade receivables as at the end of the reporting period was:

2013 2012RM RM

Not past due 812,345 - Past due 31 - 120 days 344,482 - Past due more than 120 days 4,555,910 3,955,178

5,712,737 3,955,178

Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Asat the end of the reporting period, the maximum exposure to credit risk arising from receivables isrepresented by the carrying amounts in the statements of financial position.

Management has taken reasonable steps to ensure that receivables that are neither past due nor impairedare measured at their realisable values. A significant portion of these receivables are regular customers thathave been transacting with the Group. The Group uses ageing analysis to monitor the credit quality of thereceivables. Any receivables having significant balances past due more than 120 days, which are deemed tohave higher credit risk, are monitored individually.

Credit risk is the risk of a financial loss to the Group if a customer or counterparty to a financial instrumentfails to meet its contractual obligations. The Group's exposure to credit risk arises principally from itsreceivables from customers. The Company's exposure to credit risk arises principally from loans andadvances to subsidiary.

GROUP

Increase in loss before tax

Credit risk

17

Company No:412406-T

(i)

GROUP

The Group's variable rate borrowings are exposed to a risk of change in cash flows due to changes ininterest rates. The Group’s investment in financial assets are mainly short term in nature and mostlyplaced in financial deposits.

Market risk is the risk that changes in market prices, such as foreign currency exchange risk, interest rate riskand other prices will affect the Group's financial position and cash flows.

Interest rate risk is the risk that the fair value or future cash flows of the Group’s financial instruments willfluctuate because of changes in market interest rates.

The Group has in place policies to manage its competitive risks from its competitors in providing betteralternatives in terms of better services.

An increase of 100 basis point at the reporting date would have increase in loss before tax by the amountshown below and a decrease would have an equal but opposite effect. This analysis assumes that allother variables, remain constant.

Interest rate risk

Changes in interest rates are not expected to have a significant impact on the Group’s profit or loss.

Cash flow sensitivity analysis for variable rate instruments

Market risk

GROUPRM

44,493

The ageing of trade receivables as at the end of the reporting period was:

2013 2012RM RM

Not past due 812,345 - Past due 31 - 120 days 344,482 - Past due more than 120 days 4,555,910 3,955,178

5,712,737 3,955,178

Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Asat the end of the reporting period, the maximum exposure to credit risk arising from receivables isrepresented by the carrying amounts in the statements of financial position.

Management has taken reasonable steps to ensure that receivables that are neither past due nor impairedare measured at their realisable values. A significant portion of these receivables are regular customers thathave been transacting with the Group. The Group uses ageing analysis to monitor the credit quality of thereceivables. Any receivables having significant balances past due more than 120 days, which are deemed tohave higher credit risk, are monitored individually.

Credit risk is the risk of a financial loss to the Group if a customer or counterparty to a financial instrumentfails to meet its contractual obligations. The Group's exposure to credit risk arises principally from itsreceivables from customers. The Company's exposure to credit risk arises principally from loans andadvances to subsidiary.

GROUP

Increase in loss before tax

Credit risk

17

Company No:412406-T

(i)

GROUP

The Group's variable rate borrowings are exposed to a risk of change in cash flows due to changes ininterest rates. The Group’s investment in financial assets are mainly short term in nature and mostlyplaced in financial deposits.

Market risk is the risk that changes in market prices, such as foreign currency exchange risk, interest rate riskand other prices will affect the Group's financial position and cash flows.

Interest rate risk is the risk that the fair value or future cash flows of the Group’s financial instruments willfluctuate because of changes in market interest rates.

The Group has in place policies to manage its competitive risks from its competitors in providing betteralternatives in terms of better services.

An increase of 100 basis point at the reporting date would have increase in loss before tax by the amountshown below and a decrease would have an equal but opposite effect. This analysis assumes that allother variables, remain constant.

Interest rate risk

Changes in interest rates are not expected to have a significant impact on the Group’s profit or loss.

Cash flow sensitivity analysis for variable rate instruments

Market risk

GROUPRM

44,493

The ageing of trade receivables as at the end of the reporting period was:

2013 2012RM RM

Not past due 812,345 - Past due 31 - 120 days 344,482 - Past due more than 120 days 4,555,910 3,955,178

5,712,737 3,955,178

Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. Asat the end of the reporting period, the maximum exposure to credit risk arising from receivables isrepresented by the carrying amounts in the statements of financial position.

Management has taken reasonable steps to ensure that receivables that are neither past due nor impairedare measured at their realisable values. A significant portion of these receivables are regular customers thathave been transacting with the Group. The Group uses ageing analysis to monitor the credit quality of thereceivables. Any receivables having significant balances past due more than 120 days, which are deemed tohave higher credit risk, are monitored individually.

Credit risk is the risk of a financial loss to the Group if a customer or counterparty to a financial instrumentfails to meet its contractual obligations. The Group's exposure to credit risk arises principally from itsreceivables from customers. The Company's exposure to credit risk arises principally from loans andadvances to subsidiary.

GROUP

Increase in loss before tax

Credit risk

17

RAYA INTERNATIONAL BERHAD Annual Report 2013

41

Notes to the Financial Statements (Cont’d)

Company No:412406-T

The movements in the allowance for impairment losses of receivables during the financial year were:

2013 2012RM RM

As at beginning of year 2,769,746 2,704,539 Impairment loss recognised 91,856 95,372 Reversal of impairment loss - (30,165) As at end of year 2,861,602 2,769,746

Liquidity risk

Fair values

The carrying amounts of the financial assets and financial liabilities as reported in the statements of financialposition as at 31st December 2013 approximate their fair values of these assets and liabilities because they

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as and when they falldue.

The fair value of financial instruments refer to the amount at which the instrument could be exchanged for orsettled between knowledgeable and willing parties in an arm’s length transactions.

GROUP

The Group practises prudent liquidity risk management to minimise the mismatch of financial assets andliabilities and to maintain sufficient funds for contingent funding requirement of working capital.

The Group is not subject to any externally imposed capital requirements.

The debt-to-equity ratios as at 31st December 2013 and as at 31st December 2012 were as follows:

2013 2012RM RM

Total borrowings 4,977,949 5,227,396 Less: Cash and cash equivalents (45,162) (12,051)Net debt 4,932,787 5,215,345 Total equity 6,425,307 6,160,470 Debt-to-equity ratio 0.77 0.85

position as at 31st December 2013 approximate their fair values of these assets and liabilities because theyare either within the normal credit terms or they have short-term maturity period.

The primary objective of the Group's capital management is to safeguard the Group's ability to continue as agoing concern, and to maintain an optimal capital structure so as to provide returns for shareholders.

The Group manages its capital structure and makes adjustments to it in light of changes in economicconditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment toshareholders, return capital to shareholders or issue new shares. No changes were made in the objectives,policies or processes compared to the previous financial year.

Capital Risk Management

GROUP

18

RAYA INTERNATIONAL BERHAD Annual Report 2013

42

Notes to the Financial Statements (Cont’d)

Company No:412406-T

4) SIGNIFICANT ACCOUNTING POLICIES

a) Basis of Accounting

(i)

(ii) Level 2 are inputs, other than quoted prices included within Level 1, that are observable for the assetor liability, either directly or indirectly; and

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities thatthe entity can access at the measurement date;

The financial statements are prepared under the historical cost convention unless otherwise indicated inthe accounting policies below and except for certain non-current assets that are measured at revaluedamounts and also on the basis of accounting principles applicable to a going-concern. Historical cost isgenerally based on the fair value of the consideration given in exchange for assets.

In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3based on the degree to which the inputs to the fair value measurements are observable and thesignificance of the inputs to the fair value measurement in its entirety, which are described as follows:

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderlytransaction between market participants at the measurement date, regardless of whether that price isdirectly observable or estimated using another valuation technique. In estimating the fair value of anasset or a liability, the Group takes into account the characteristics of the asset or liability if marketparticipants would take those characteristics into account when pricing the asset or liability at themeasurement date.

(iii)

b) Revenue Recognition

c) Employee Benefits

(i) Short term benefits

Gross dividend income from investment is recognised when the right to received payment is established.Management fee, administrative charges, rental income and interest income are recognised on accrualbasis, taking into account the effective yield on asset.

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

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

Revenue is recognised when it is probable that the economic benefits associated with the transaction willflow to the enterprise and the amount of the revenue can be measured reliably. Revenue is measured atthe fair value of consideration received or receivable, net of returns, allowances and trade discounts.

As at 31st December 2013, the Group's and the Company's accumulated losses were RM16,346,864and RM7,944,216 respectively. The successful turnaround plan for the Group and the Company is one ofthe key factors for the sustainability of the Group's and of the Company's operations and for the Groupand the Company to continue as going concerns in the foreseeable future. The validity of the goingconcerns assumption is therefore dependent on the successful implementation of the turnaround plan inthe future. In the event the going concern assumption is no longer valid, the Group and the Companymay not be able to discharge its liabilities in the normal course of business and adjustments may have tobe made to reflect such situation.

19

Company No:412406-T

4) SIGNIFICANT ACCOUNTING POLICIES

a) Basis of Accounting

(i)

(ii) Level 2 are inputs, other than quoted prices included within Level 1, that are observable for the assetor liability, either directly or indirectly; and

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities thatthe entity can access at the measurement date;

The financial statements are prepared under the historical cost convention unless otherwise indicated inthe accounting policies below and except for certain non-current assets that are measured at revaluedamounts and also on the basis of accounting principles applicable to a going-concern. Historical cost isgenerally based on the fair value of the consideration given in exchange for assets.

In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3based on the degree to which the inputs to the fair value measurements are observable and thesignificance of the inputs to the fair value measurement in its entirety, which are described as follows:

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderlytransaction between market participants at the measurement date, regardless of whether that price isdirectly observable or estimated using another valuation technique. In estimating the fair value of anasset or a liability, the Group takes into account the characteristics of the asset or liability if marketparticipants would take those characteristics into account when pricing the asset or liability at themeasurement date.

(iii)

b) Revenue Recognition

c) Employee Benefits

(i) Short term benefits

Gross dividend income from investment is recognised when the right to received payment is established.Management fee, administrative charges, rental income and interest income are recognised on accrualbasis, taking into account the effective yield on asset.

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

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

Revenue is recognised when it is probable that the economic benefits associated with the transaction willflow to the enterprise and the amount of the revenue can be measured reliably. Revenue is measured atthe fair value of consideration received or receivable, net of returns, allowances and trade discounts.

As at 31st December 2013, the Group's and the Company's accumulated losses were RM16,346,864and RM7,944,216 respectively. The successful turnaround plan for the Group and the Company is one ofthe key factors for the sustainability of the Group's and of the Company's operations and for the Groupand the Company to continue as going concerns in the foreseeable future. The validity of the goingconcerns assumption is therefore dependent on the successful implementation of the turnaround plan inthe future. In the event the going concern assumption is no longer valid, the Group and the Companymay not be able to discharge its liabilities in the normal course of business and adjustments may have tobe made to reflect such situation.

19

Company No:412406-T

4) SIGNIFICANT ACCOUNTING POLICIES

a) Basis of Accounting

(i)

(ii) Level 2 are inputs, other than quoted prices included within Level 1, that are observable for the assetor liability, either directly or indirectly; and

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities thatthe entity can access at the measurement date;

The financial statements are prepared under the historical cost convention unless otherwise indicated inthe accounting policies below and except for certain non-current assets that are measured at revaluedamounts and also on the basis of accounting principles applicable to a going-concern. Historical cost isgenerally based on the fair value of the consideration given in exchange for assets.

In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3based on the degree to which the inputs to the fair value measurements are observable and thesignificance of the inputs to the fair value measurement in its entirety, which are described as follows:

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderlytransaction between market participants at the measurement date, regardless of whether that price isdirectly observable or estimated using another valuation technique. In estimating the fair value of anasset or a liability, the Group takes into account the characteristics of the asset or liability if marketparticipants would take those characteristics into account when pricing the asset or liability at themeasurement date.

(iii)

b) Revenue Recognition

c) Employee Benefits

(i) Short term benefits

Gross dividend income from investment is recognised when the right to received payment is established.Management fee, administrative charges, rental income and interest income are recognised on accrualbasis, taking into account the effective yield on asset.

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

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

Revenue is recognised when it is probable that the economic benefits associated with the transaction willflow to the enterprise and the amount of the revenue can be measured reliably. Revenue is measured atthe fair value of consideration received or receivable, net of returns, allowances and trade discounts.

As at 31st December 2013, the Group's and the Company's accumulated losses were RM16,346,864and RM7,944,216 respectively. The successful turnaround plan for the Group and the Company is one ofthe key factors for the sustainability of the Group's and of the Company's operations and for the Groupand the Company to continue as going concerns in the foreseeable future. The validity of the goingconcerns assumption is therefore dependent on the successful implementation of the turnaround plan inthe future. In the event the going concern assumption is no longer valid, the Group and the Companymay not be able to discharge its liabilities in the normal course of business and adjustments may have tobe made to reflect such situation.

19

Company No:412406-T

4) SIGNIFICANT ACCOUNTING POLICIES

a) Basis of Accounting

(i)

(ii) Level 2 are inputs, other than quoted prices included within Level 1, that are observable for the assetor liability, either directly or indirectly; and

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities thatthe entity can access at the measurement date;

The financial statements are prepared under the historical cost convention unless otherwise indicated inthe accounting policies below and except for certain non-current assets that are measured at revaluedamounts and also on the basis of accounting principles applicable to a going-concern. Historical cost isgenerally based on the fair value of the consideration given in exchange for assets.

In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3based on the degree to which the inputs to the fair value measurements are observable and thesignificance of the inputs to the fair value measurement in its entirety, which are described as follows:

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderlytransaction between market participants at the measurement date, regardless of whether that price isdirectly observable or estimated using another valuation technique. In estimating the fair value of anasset or a liability, the Group takes into account the characteristics of the asset or liability if marketparticipants would take those characteristics into account when pricing the asset or liability at themeasurement date.

(iii)

b) Revenue Recognition

c) Employee Benefits

(i) Short term benefits

Gross dividend income from investment is recognised when the right to received payment is established.Management fee, administrative charges, rental income and interest income are recognised on accrualbasis, taking into account the effective yield on asset.

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

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

Revenue is recognised when it is probable that the economic benefits associated with the transaction willflow to the enterprise and the amount of the revenue can be measured reliably. Revenue is measured atthe fair value of consideration received or receivable, net of returns, allowances and trade discounts.

As at 31st December 2013, the Group's and the Company's accumulated losses were RM16,346,864and RM7,944,216 respectively. The successful turnaround plan for the Group and the Company is one ofthe key factors for the sustainability of the Group's and of the Company's operations and for the Groupand the Company to continue as going concerns in the foreseeable future. The validity of the goingconcerns assumption is therefore dependent on the successful implementation of the turnaround plan inthe future. In the event the going concern assumption is no longer valid, the Group and the Companymay not be able to discharge its liabilities in the normal course of business and adjustments may have tobe made to reflect such situation.

19

Company No:412406-T

4) SIGNIFICANT ACCOUNTING POLICIES

a) Basis of Accounting

(i)

(ii) Level 2 are inputs, other than quoted prices included within Level 1, that are observable for the assetor liability, either directly or indirectly; and

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities thatthe entity can access at the measurement date;

The financial statements are prepared under the historical cost convention unless otherwise indicated inthe accounting policies below and except for certain non-current assets that are measured at revaluedamounts and also on the basis of accounting principles applicable to a going-concern. Historical cost isgenerally based on the fair value of the consideration given in exchange for assets.

In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3based on the degree to which the inputs to the fair value measurements are observable and thesignificance of the inputs to the fair value measurement in its entirety, which are described as follows:

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderlytransaction between market participants at the measurement date, regardless of whether that price isdirectly observable or estimated using another valuation technique. In estimating the fair value of anasset or a liability, the Group takes into account the characteristics of the asset or liability if marketparticipants would take those characteristics into account when pricing the asset or liability at themeasurement date.

(iii)

b) Revenue Recognition

c) Employee Benefits

(i) Short term benefits

Gross dividend income from investment is recognised when the right to received payment is established.Management fee, administrative charges, rental income and interest income are recognised on accrualbasis, taking into account the effective yield on asset.

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

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

Revenue is recognised when it is probable that the economic benefits associated with the transaction willflow to the enterprise and the amount of the revenue can be measured reliably. Revenue is measured atthe fair value of consideration received or receivable, net of returns, allowances and trade discounts.

As at 31st December 2013, the Group's and the Company's accumulated losses were RM16,346,864and RM7,944,216 respectively. The successful turnaround plan for the Group and the Company is one ofthe key factors for the sustainability of the Group's and of the Company's operations and for the Groupand the Company to continue as going concerns in the foreseeable future. The validity of the goingconcerns assumption is therefore dependent on the successful implementation of the turnaround plan inthe future. In the event the going concern assumption is no longer valid, the Group and the Companymay not be able to discharge its liabilities in the normal course of business and adjustments may have tobe made to reflect such situation.

19

RAYA INTERNATIONAL BERHAD Annual Report 2013

43

Notes to the Financial Statements (Cont’d)

Company No:412406-T

(ii) Defined contributions plans

d) Foreign Currency Conversion

(i) Functional and Presentation Currency

(ii) Foreign Currency Transactions

e) Income Taxes

(i) Current tax

Foreign currency transactions are translated into the functional currency using the exchange ratesprevailing at the dates of the transactions. Foreign exchange gains and losses resulting from thesettlement of such transactions and from the translation at year end exchange rates of monetaryassets and liabilities denominated in foreign currencies are recognised in profit or loss.

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

As required by law, companies in Malaysia make contributions to the state pension scheme,Employees Provident Fund. Such contributions are recognised as an expense in profit or loss asincurred.

(ii) Deferred tax

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off currenttax assets against current tax liabilities and when they relate to income taxes levied by the sametaxation authority and the Group and the Company intend to settle its current tax assets andliabilities on a net basis.

Current tax assets and liabilities are measured at the amount expected to be recovered from or paidto the taxation authorities. The tax rates and tax laws used to compute the amount are those that areenacted or substantially enacted by the financial year end.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period andreduced to the extent that it is no longer probable that sufficient taxable profits will be available toallow all or part of the asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in theperiod in which the liability is settled or the asset realised, based on tax rates (and tax laws) thathave been enacted or substantively enacted by the end of the reporting period. The measurement ofdeferred tax liabilities and assets reflects the tax consequences that would follow from the manner inwhich the Group and the Company expect, at the end of the reporting period, to recover or settle thecarrying amount of its assets and liabilities.

Current taxes are recognised in profit or loss, except to the extent that the tax relates to itemsrecognised outside profit or loss, either in other comprehensive income or directly in equity.

Deferred tax is recognised on temporary differences between the carrying amounts of assets andliabilities in the financial statements and the corresponding tax bases used in the computation oftaxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences.Deferred tax assets are generally recognised for all deductible temporary differences, unused taxlosses and unused tax credits to the extent that it is probable that taxable profit will be availableagainst which those deductible temporary differences, unused tax losses and unused tax credits canbe utilised.

20

Company No:412406-T

(ii) Defined contributions plans

d) Foreign Currency Conversion

(i) Functional and Presentation Currency

(ii) Foreign Currency Transactions

e) Income Taxes

(i) Current tax

Foreign currency transactions are translated into the functional currency using the exchange ratesprevailing at the dates of the transactions. Foreign exchange gains and losses resulting from thesettlement of such transactions and from the translation at year end exchange rates of monetaryassets and liabilities denominated in foreign currencies are recognised in profit or loss.

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

As required by law, companies in Malaysia make contributions to the state pension scheme,Employees Provident Fund. Such contributions are recognised as an expense in profit or loss asincurred.

(ii) Deferred tax

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off currenttax assets against current tax liabilities and when they relate to income taxes levied by the sametaxation authority and the Group and the Company intend to settle its current tax assets andliabilities on a net basis.

Current tax assets and liabilities are measured at the amount expected to be recovered from or paidto the taxation authorities. The tax rates and tax laws used to compute the amount are those that areenacted or substantially enacted by the financial year end.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period andreduced to the extent that it is no longer probable that sufficient taxable profits will be available toallow all or part of the asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in theperiod in which the liability is settled or the asset realised, based on tax rates (and tax laws) thathave been enacted or substantively enacted by the end of the reporting period. The measurement ofdeferred tax liabilities and assets reflects the tax consequences that would follow from the manner inwhich the Group and the Company expect, at the end of the reporting period, to recover or settle thecarrying amount of its assets and liabilities.

Current taxes are recognised in profit or loss, except to the extent that the tax relates to itemsrecognised outside profit or loss, either in other comprehensive income or directly in equity.

Deferred tax is recognised on temporary differences between the carrying amounts of assets andliabilities in the financial statements and the corresponding tax bases used in the computation oftaxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences.Deferred tax assets are generally recognised for all deductible temporary differences, unused taxlosses and unused tax credits to the extent that it is probable that taxable profit will be availableagainst which those deductible temporary differences, unused tax losses and unused tax credits canbe utilised.

20

Company No:412406-T

(ii) Defined contributions plans

d) Foreign Currency Conversion

(i) Functional and Presentation Currency

(ii) Foreign Currency Transactions

e) Income Taxes

(i) Current tax

Foreign currency transactions are translated into the functional currency using the exchange ratesprevailing at the dates of the transactions. Foreign exchange gains and losses resulting from thesettlement of such transactions and from the translation at year end exchange rates of monetaryassets and liabilities denominated in foreign currencies are recognised in profit or loss.

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

As required by law, companies in Malaysia make contributions to the state pension scheme,Employees Provident Fund. Such contributions are recognised as an expense in profit or loss asincurred.

(ii) Deferred tax

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off currenttax assets against current tax liabilities and when they relate to income taxes levied by the sametaxation authority and the Group and the Company intend to settle its current tax assets andliabilities on a net basis.

Current tax assets and liabilities are measured at the amount expected to be recovered from or paidto the taxation authorities. The tax rates and tax laws used to compute the amount are those that areenacted or substantially enacted by the financial year end.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period andreduced to the extent that it is no longer probable that sufficient taxable profits will be available toallow all or part of the asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in theperiod in which the liability is settled or the asset realised, based on tax rates (and tax laws) thathave been enacted or substantively enacted by the end of the reporting period. The measurement ofdeferred tax liabilities and assets reflects the tax consequences that would follow from the manner inwhich the Group and the Company expect, at the end of the reporting period, to recover or settle thecarrying amount of its assets and liabilities.

Current taxes are recognised in profit or loss, except to the extent that the tax relates to itemsrecognised outside profit or loss, either in other comprehensive income or directly in equity.

Deferred tax is recognised on temporary differences between the carrying amounts of assets andliabilities in the financial statements and the corresponding tax bases used in the computation oftaxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences.Deferred tax assets are generally recognised for all deductible temporary differences, unused taxlosses and unused tax credits to the extent that it is probable that taxable profit will be availableagainst which those deductible temporary differences, unused tax losses and unused tax credits canbe utilised.

20

Company No:412406-T

(ii) Defined contributions plans

d) Foreign Currency Conversion

(i) Functional and Presentation Currency

(ii) Foreign Currency Transactions

e) Income Taxes

(i) Current tax

Foreign currency transactions are translated into the functional currency using the exchange ratesprevailing at the dates of the transactions. Foreign exchange gains and losses resulting from thesettlement of such transactions and from the translation at year end exchange rates of monetaryassets and liabilities denominated in foreign currencies are recognised in profit or loss.

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

As required by law, companies in Malaysia make contributions to the state pension scheme,Employees Provident Fund. Such contributions are recognised as an expense in profit or loss asincurred.

(ii) Deferred tax

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off currenttax assets against current tax liabilities and when they relate to income taxes levied by the sametaxation authority and the Group and the Company intend to settle its current tax assets andliabilities on a net basis.

Current tax assets and liabilities are measured at the amount expected to be recovered from or paidto the taxation authorities. The tax rates and tax laws used to compute the amount are those that areenacted or substantially enacted by the financial year end.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period andreduced to the extent that it is no longer probable that sufficient taxable profits will be available toallow all or part of the asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in theperiod in which the liability is settled or the asset realised, based on tax rates (and tax laws) thathave been enacted or substantively enacted by the end of the reporting period. The measurement ofdeferred tax liabilities and assets reflects the tax consequences that would follow from the manner inwhich the Group and the Company expect, at the end of the reporting period, to recover or settle thecarrying amount of its assets and liabilities.

Current taxes are recognised in profit or loss, except to the extent that the tax relates to itemsrecognised outside profit or loss, either in other comprehensive income or directly in equity.

Deferred tax is recognised on temporary differences between the carrying amounts of assets andliabilities in the financial statements and the corresponding tax bases used in the computation oftaxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences.Deferred tax assets are generally recognised for all deductible temporary differences, unused taxlosses and unused tax credits to the extent that it is probable that taxable profit will be availableagainst which those deductible temporary differences, unused tax losses and unused tax credits canbe utilised.

20

Company No:412406-T

(ii) Defined contributions plans

d) Foreign Currency Conversion

(i) Functional and Presentation Currency

(ii) Foreign Currency Transactions

e) Income Taxes

(i) Current tax

Foreign currency transactions are translated into the functional currency using the exchange ratesprevailing at the dates of the transactions. Foreign exchange gains and losses resulting from thesettlement of such transactions and from the translation at year end exchange rates of monetaryassets and liabilities denominated in foreign currencies are recognised in profit or loss.

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

As required by law, companies in Malaysia make contributions to the state pension scheme,Employees Provident Fund. Such contributions are recognised as an expense in profit or loss asincurred.

(ii) Deferred tax

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off currenttax assets against current tax liabilities and when they relate to income taxes levied by the sametaxation authority and the Group and the Company intend to settle its current tax assets andliabilities on a net basis.

Current tax assets and liabilities are measured at the amount expected to be recovered from or paidto the taxation authorities. The tax rates and tax laws used to compute the amount are those that areenacted or substantially enacted by the financial year end.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period andreduced to the extent that it is no longer probable that sufficient taxable profits will be available toallow all or part of the asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in theperiod in which the liability is settled or the asset realised, based on tax rates (and tax laws) thathave been enacted or substantively enacted by the end of the reporting period. The measurement ofdeferred tax liabilities and assets reflects the tax consequences that would follow from the manner inwhich the Group and the Company expect, at the end of the reporting period, to recover or settle thecarrying amount of its assets and liabilities.

Current taxes are recognised in profit or loss, except to the extent that the tax relates to itemsrecognised outside profit or loss, either in other comprehensive income or directly in equity.

Deferred tax is recognised on temporary differences between the carrying amounts of assets andliabilities in the financial statements and the corresponding tax bases used in the computation oftaxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences.Deferred tax assets are generally recognised for all deductible temporary differences, unused taxlosses and unused tax credits to the extent that it is probable that taxable profit will be availableagainst which those deductible temporary differences, unused tax losses and unused tax credits canbe utilised.

20

Company No:412406-T

(ii) Defined contributions plans

d) Foreign Currency Conversion

(i) Functional and Presentation Currency

(ii) Foreign Currency Transactions

e) Income Taxes

(i) Current tax

Foreign currency transactions are translated into the functional currency using the exchange ratesprevailing at the dates of the transactions. Foreign exchange gains and losses resulting from thesettlement of such transactions and from the translation at year end exchange rates of monetaryassets and liabilities denominated in foreign currencies are recognised in profit or loss.

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

As required by law, companies in Malaysia make contributions to the state pension scheme,Employees Provident Fund. Such contributions are recognised as an expense in profit or loss asincurred.

(ii) Deferred tax

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off currenttax assets against current tax liabilities and when they relate to income taxes levied by the sametaxation authority and the Group and the Company intend to settle its current tax assets andliabilities on a net basis.

Current tax assets and liabilities are measured at the amount expected to be recovered from or paidto the taxation authorities. The tax rates and tax laws used to compute the amount are those that areenacted or substantially enacted by the financial year end.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period andreduced to the extent that it is no longer probable that sufficient taxable profits will be available toallow all or part of the asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in theperiod in which the liability is settled or the asset realised, based on tax rates (and tax laws) thathave been enacted or substantively enacted by the end of the reporting period. The measurement ofdeferred tax liabilities and assets reflects the tax consequences that would follow from the manner inwhich the Group and the Company expect, at the end of the reporting period, to recover or settle thecarrying amount of its assets and liabilities.

Current taxes are recognised in profit or loss, except to the extent that the tax relates to itemsrecognised outside profit or loss, either in other comprehensive income or directly in equity.

Deferred tax is recognised on temporary differences between the carrying amounts of assets andliabilities in the financial statements and the corresponding tax bases used in the computation oftaxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences.Deferred tax assets are generally recognised for all deductible temporary differences, unused taxlosses and unused tax credits to the extent that it is probable that taxable profit will be availableagainst which those deductible temporary differences, unused tax losses and unused tax credits canbe utilised.

20

Company No:412406-T

(ii) Defined contributions plans

d) Foreign Currency Conversion

(i) Functional and Presentation Currency

(ii) Foreign Currency Transactions

e) Income Taxes

(i) Current tax

Foreign currency transactions are translated into the functional currency using the exchange ratesprevailing at the dates of the transactions. Foreign exchange gains and losses resulting from thesettlement of such transactions and from the translation at year end exchange rates of monetaryassets and liabilities denominated in foreign currencies are recognised in profit or loss.

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

As required by law, companies in Malaysia make contributions to the state pension scheme,Employees Provident Fund. Such contributions are recognised as an expense in profit or loss asincurred.

(ii) Deferred tax

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off currenttax assets against current tax liabilities and when they relate to income taxes levied by the sametaxation authority and the Group and the Company intend to settle its current tax assets andliabilities on a net basis.

Current tax assets and liabilities are measured at the amount expected to be recovered from or paidto the taxation authorities. The tax rates and tax laws used to compute the amount are those that areenacted or substantially enacted by the financial year end.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period andreduced to the extent that it is no longer probable that sufficient taxable profits will be available toallow all or part of the asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in theperiod in which the liability is settled or the asset realised, based on tax rates (and tax laws) thathave been enacted or substantively enacted by the end of the reporting period. The measurement ofdeferred tax liabilities and assets reflects the tax consequences that would follow from the manner inwhich the Group and the Company expect, at the end of the reporting period, to recover or settle thecarrying amount of its assets and liabilities.

Current taxes are recognised in profit or loss, except to the extent that the tax relates to itemsrecognised outside profit or loss, either in other comprehensive income or directly in equity.

Deferred tax is recognised on temporary differences between the carrying amounts of assets andliabilities in the financial statements and the corresponding tax bases used in the computation oftaxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences.Deferred tax assets are generally recognised for all deductible temporary differences, unused taxlosses and unused tax credits to the extent that it is probable that taxable profit will be availableagainst which those deductible temporary differences, unused tax losses and unused tax credits canbe utilised.

20

Company No:412406-T

(ii) Defined contributions plans

d) Foreign Currency Conversion

(i) Functional and Presentation Currency

(ii) Foreign Currency Transactions

e) Income Taxes

(i) Current tax

Foreign currency transactions are translated into the functional currency using the exchange ratesprevailing at the dates of the transactions. Foreign exchange gains and losses resulting from thesettlement of such transactions and from the translation at year end exchange rates of monetaryassets and liabilities denominated in foreign currencies are recognised in profit or loss.

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

As required by law, companies in Malaysia make contributions to the state pension scheme,Employees Provident Fund. Such contributions are recognised as an expense in profit or loss asincurred.

(ii) Deferred tax

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off currenttax assets against current tax liabilities and when they relate to income taxes levied by the sametaxation authority and the Group and the Company intend to settle its current tax assets andliabilities on a net basis.

Current tax assets and liabilities are measured at the amount expected to be recovered from or paidto the taxation authorities. The tax rates and tax laws used to compute the amount are those that areenacted or substantially enacted by the financial year end.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period andreduced to the extent that it is no longer probable that sufficient taxable profits will be available toallow all or part of the asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in theperiod in which the liability is settled or the asset realised, based on tax rates (and tax laws) thathave been enacted or substantively enacted by the end of the reporting period. The measurement ofdeferred tax liabilities and assets reflects the tax consequences that would follow from the manner inwhich the Group and the Company expect, at the end of the reporting period, to recover or settle thecarrying amount of its assets and liabilities.

Current taxes are recognised in profit or loss, except to the extent that the tax relates to itemsrecognised outside profit or loss, either in other comprehensive income or directly in equity.

Deferred tax is recognised on temporary differences between the carrying amounts of assets andliabilities in the financial statements and the corresponding tax bases used in the computation oftaxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences.Deferred tax assets are generally recognised for all deductible temporary differences, unused taxlosses and unused tax credits to the extent that it is probable that taxable profit will be availableagainst which those deductible temporary differences, unused tax losses and unused tax credits canbe utilised.

20

Company No:412406-T

(ii) Defined contributions plans

d) Foreign Currency Conversion

(i) Functional and Presentation Currency

(ii) Foreign Currency Transactions

e) Income Taxes

(i) Current tax

Foreign currency transactions are translated into the functional currency using the exchange ratesprevailing at the dates of the transactions. Foreign exchange gains and losses resulting from thesettlement of such transactions and from the translation at year end exchange rates of monetaryassets and liabilities denominated in foreign currencies are recognised in profit or loss.

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

As required by law, companies in Malaysia make contributions to the state pension scheme,Employees Provident Fund. Such contributions are recognised as an expense in profit or loss asincurred.

(ii) Deferred tax

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off currenttax assets against current tax liabilities and when they relate to income taxes levied by the sametaxation authority and the Group and the Company intend to settle its current tax assets andliabilities on a net basis.

Current tax assets and liabilities are measured at the amount expected to be recovered from or paidto the taxation authorities. The tax rates and tax laws used to compute the amount are those that areenacted or substantially enacted by the financial year end.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period andreduced to the extent that it is no longer probable that sufficient taxable profits will be available toallow all or part of the asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in theperiod in which the liability is settled or the asset realised, based on tax rates (and tax laws) thathave been enacted or substantively enacted by the end of the reporting period. The measurement ofdeferred tax liabilities and assets reflects the tax consequences that would follow from the manner inwhich the Group and the Company expect, at the end of the reporting period, to recover or settle thecarrying amount of its assets and liabilities.

Current taxes are recognised in profit or loss, except to the extent that the tax relates to itemsrecognised outside profit or loss, either in other comprehensive income or directly in equity.

Deferred tax is recognised on temporary differences between the carrying amounts of assets andliabilities in the financial statements and the corresponding tax bases used in the computation oftaxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences.Deferred tax assets are generally recognised for all deductible temporary differences, unused taxlosses and unused tax credits to the extent that it is probable that taxable profit will be availableagainst which those deductible temporary differences, unused tax losses and unused tax credits canbe utilised.

20

Company No:412406-T

(ii) Defined contributions plans

d) Foreign Currency Conversion

(i) Functional and Presentation Currency

(ii) Foreign Currency Transactions

e) Income Taxes

(i) Current tax

Foreign currency transactions are translated into the functional currency using the exchange ratesprevailing at the dates of the transactions. Foreign exchange gains and losses resulting from thesettlement of such transactions and from the translation at year end exchange rates of monetaryassets and liabilities denominated in foreign currencies are recognised in profit or loss.

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

As required by law, companies in Malaysia make contributions to the state pension scheme,Employees Provident Fund. Such contributions are recognised as an expense in profit or loss asincurred.

(ii) Deferred tax

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off currenttax assets against current tax liabilities and when they relate to income taxes levied by the sametaxation authority and the Group and the Company intend to settle its current tax assets andliabilities on a net basis.

Current tax assets and liabilities are measured at the amount expected to be recovered from or paidto the taxation authorities. The tax rates and tax laws used to compute the amount are those that areenacted or substantially enacted by the financial year end.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period andreduced to the extent that it is no longer probable that sufficient taxable profits will be available toallow all or part of the asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in theperiod in which the liability is settled or the asset realised, based on tax rates (and tax laws) thathave been enacted or substantively enacted by the end of the reporting period. The measurement ofdeferred tax liabilities and assets reflects the tax consequences that would follow from the manner inwhich the Group and the Company expect, at the end of the reporting period, to recover or settle thecarrying amount of its assets and liabilities.

Current taxes are recognised in profit or loss, except to the extent that the tax relates to itemsrecognised outside profit or loss, either in other comprehensive income or directly in equity.

Deferred tax is recognised on temporary differences between the carrying amounts of assets andliabilities in the financial statements and the corresponding tax bases used in the computation oftaxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences.Deferred tax assets are generally recognised for all deductible temporary differences, unused taxlosses and unused tax credits to the extent that it is probable that taxable profit will be availableagainst which those deductible temporary differences, unused tax losses and unused tax credits canbe utilised.

20

Company No:412406-T

(ii) Defined contributions plans

d) Foreign Currency Conversion

(i) Functional and Presentation Currency

(ii) Foreign Currency Transactions

e) Income Taxes

(i) Current tax

Foreign currency transactions are translated into the functional currency using the exchange ratesprevailing at the dates of the transactions. Foreign exchange gains and losses resulting from thesettlement of such transactions and from the translation at year end exchange rates of monetaryassets and liabilities denominated in foreign currencies are recognised in profit or loss.

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

As required by law, companies in Malaysia make contributions to the state pension scheme,Employees Provident Fund. Such contributions are recognised as an expense in profit or loss asincurred.

(ii) Deferred tax

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off currenttax assets against current tax liabilities and when they relate to income taxes levied by the sametaxation authority and the Group and the Company intend to settle its current tax assets andliabilities on a net basis.

Current tax assets and liabilities are measured at the amount expected to be recovered from or paidto the taxation authorities. The tax rates and tax laws used to compute the amount are those that areenacted or substantially enacted by the financial year end.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period andreduced to the extent that it is no longer probable that sufficient taxable profits will be available toallow all or part of the asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in theperiod in which the liability is settled or the asset realised, based on tax rates (and tax laws) thathave been enacted or substantively enacted by the end of the reporting period. The measurement ofdeferred tax liabilities and assets reflects the tax consequences that would follow from the manner inwhich the Group and the Company expect, at the end of the reporting period, to recover or settle thecarrying amount of its assets and liabilities.

Current taxes are recognised in profit or loss, except to the extent that the tax relates to itemsrecognised outside profit or loss, either in other comprehensive income or directly in equity.

Deferred tax is recognised on temporary differences between the carrying amounts of assets andliabilities in the financial statements and the corresponding tax bases used in the computation oftaxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences.Deferred tax assets are generally recognised for all deductible temporary differences, unused taxlosses and unused tax credits to the extent that it is probable that taxable profit will be availableagainst which those deductible temporary differences, unused tax losses and unused tax credits canbe utilised.

20

Company No:412406-T

(ii) Defined contributions plans

d) Foreign Currency Conversion

(i) Functional and Presentation Currency

(ii) Foreign Currency Transactions

e) Income Taxes

(i) Current tax

Foreign currency transactions are translated into the functional currency using the exchange ratesprevailing at the dates of the transactions. Foreign exchange gains and losses resulting from thesettlement of such transactions and from the translation at year end exchange rates of monetaryassets and liabilities denominated in foreign currencies are recognised in profit or loss.

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

As required by law, companies in Malaysia make contributions to the state pension scheme,Employees Provident Fund. Such contributions are recognised as an expense in profit or loss asincurred.

(ii) Deferred tax

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off currenttax assets against current tax liabilities and when they relate to income taxes levied by the sametaxation authority and the Group and the Company intend to settle its current tax assets andliabilities on a net basis.

Current tax assets and liabilities are measured at the amount expected to be recovered from or paidto the taxation authorities. The tax rates and tax laws used to compute the amount are those that areenacted or substantially enacted by the financial year end.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period andreduced to the extent that it is no longer probable that sufficient taxable profits will be available toallow all or part of the asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in theperiod in which the liability is settled or the asset realised, based on tax rates (and tax laws) thathave been enacted or substantively enacted by the end of the reporting period. The measurement ofdeferred tax liabilities and assets reflects the tax consequences that would follow from the manner inwhich the Group and the Company expect, at the end of the reporting period, to recover or settle thecarrying amount of its assets and liabilities.

Current taxes are recognised in profit or loss, except to the extent that the tax relates to itemsrecognised outside profit or loss, either in other comprehensive income or directly in equity.

Deferred tax is recognised on temporary differences between the carrying amounts of assets andliabilities in the financial statements and the corresponding tax bases used in the computation oftaxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences.Deferred tax assets are generally recognised for all deductible temporary differences, unused taxlosses and unused tax credits to the extent that it is probable that taxable profit will be availableagainst which those deductible temporary differences, unused tax losses and unused tax credits canbe utilised.

20

Company No:412406-T

(ii) Defined contributions plans

d) Foreign Currency Conversion

(i) Functional and Presentation Currency

(ii) Foreign Currency Transactions

e) Income Taxes

(i) Current tax

Foreign currency transactions are translated into the functional currency using the exchange ratesprevailing at the dates of the transactions. Foreign exchange gains and losses resulting from thesettlement of such transactions and from the translation at year end exchange rates of monetaryassets and liabilities denominated in foreign currencies are recognised in profit or loss.

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

As required by law, companies in Malaysia make contributions to the state pension scheme,Employees Provident Fund. Such contributions are recognised as an expense in profit or loss asincurred.

(ii) Deferred tax

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off currenttax assets against current tax liabilities and when they relate to income taxes levied by the sametaxation authority and the Group and the Company intend to settle its current tax assets andliabilities on a net basis.

Current tax assets and liabilities are measured at the amount expected to be recovered from or paidto the taxation authorities. The tax rates and tax laws used to compute the amount are those that areenacted or substantially enacted by the financial year end.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period andreduced to the extent that it is no longer probable that sufficient taxable profits will be available toallow all or part of the asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in theperiod in which the liability is settled or the asset realised, based on tax rates (and tax laws) thathave been enacted or substantively enacted by the end of the reporting period. The measurement ofdeferred tax liabilities and assets reflects the tax consequences that would follow from the manner inwhich the Group and the Company expect, at the end of the reporting period, to recover or settle thecarrying amount of its assets and liabilities.

Current taxes are recognised in profit or loss, except to the extent that the tax relates to itemsrecognised outside profit or loss, either in other comprehensive income or directly in equity.

Deferred tax is recognised on temporary differences between the carrying amounts of assets andliabilities in the financial statements and the corresponding tax bases used in the computation oftaxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences.Deferred tax assets are generally recognised for all deductible temporary differences, unused taxlosses and unused tax credits to the extent that it is probable that taxable profit will be availableagainst which those deductible temporary differences, unused tax losses and unused tax credits canbe utilised.

20

Company No:412406-T

(ii) Defined contributions plans

d) Foreign Currency Conversion

(i) Functional and Presentation Currency

(ii) Foreign Currency Transactions

e) Income Taxes

(i) Current tax

Foreign currency transactions are translated into the functional currency using the exchange ratesprevailing at the dates of the transactions. Foreign exchange gains and losses resulting from thesettlement of such transactions and from the translation at year end exchange rates of monetaryassets and liabilities denominated in foreign currencies are recognised in profit or loss.

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

As required by law, companies in Malaysia make contributions to the state pension scheme,Employees Provident Fund. Such contributions are recognised as an expense in profit or loss asincurred.

(ii) Deferred tax

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off currenttax assets against current tax liabilities and when they relate to income taxes levied by the sametaxation authority and the Group and the Company intend to settle its current tax assets andliabilities on a net basis.

Current tax assets and liabilities are measured at the amount expected to be recovered from or paidto the taxation authorities. The tax rates and tax laws used to compute the amount are those that areenacted or substantially enacted by the financial year end.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period andreduced to the extent that it is no longer probable that sufficient taxable profits will be available toallow all or part of the asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in theperiod in which the liability is settled or the asset realised, based on tax rates (and tax laws) thathave been enacted or substantively enacted by the end of the reporting period. The measurement ofdeferred tax liabilities and assets reflects the tax consequences that would follow from the manner inwhich the Group and the Company expect, at the end of the reporting period, to recover or settle thecarrying amount of its assets and liabilities.

Current taxes are recognised in profit or loss, except to the extent that the tax relates to itemsrecognised outside profit or loss, either in other comprehensive income or directly in equity.

Deferred tax is recognised on temporary differences between the carrying amounts of assets andliabilities in the financial statements and the corresponding tax bases used in the computation oftaxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences.Deferred tax assets are generally recognised for all deductible temporary differences, unused taxlosses and unused tax credits to the extent that it is probable that taxable profit will be availableagainst which those deductible temporary differences, unused tax losses and unused tax credits canbe utilised.

20

Company No:412406-T

(ii) Defined contributions plans

d) Foreign Currency Conversion

(i) Functional and Presentation Currency

(ii) Foreign Currency Transactions

e) Income Taxes

(i) Current tax

Foreign currency transactions are translated into the functional currency using the exchange ratesprevailing at the dates of the transactions. Foreign exchange gains and losses resulting from thesettlement of such transactions and from the translation at year end exchange rates of monetaryassets and liabilities denominated in foreign currencies are recognised in profit or loss.

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

As required by law, companies in Malaysia make contributions to the state pension scheme,Employees Provident Fund. Such contributions are recognised as an expense in profit or loss asincurred.

(ii) Deferred tax

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off currenttax assets against current tax liabilities and when they relate to income taxes levied by the sametaxation authority and the Group and the Company intend to settle its current tax assets andliabilities on a net basis.

Current tax assets and liabilities are measured at the amount expected to be recovered from or paidto the taxation authorities. The tax rates and tax laws used to compute the amount are those that areenacted or substantially enacted by the financial year end.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period andreduced to the extent that it is no longer probable that sufficient taxable profits will be available toallow all or part of the asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in theperiod in which the liability is settled or the asset realised, based on tax rates (and tax laws) thathave been enacted or substantively enacted by the end of the reporting period. The measurement ofdeferred tax liabilities and assets reflects the tax consequences that would follow from the manner inwhich the Group and the Company expect, at the end of the reporting period, to recover or settle thecarrying amount of its assets and liabilities.

Current taxes are recognised in profit or loss, except to the extent that the tax relates to itemsrecognised outside profit or loss, either in other comprehensive income or directly in equity.

Deferred tax is recognised on temporary differences between the carrying amounts of assets andliabilities in the financial statements and the corresponding tax bases used in the computation oftaxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences.Deferred tax assets are generally recognised for all deductible temporary differences, unused taxlosses and unused tax credits to the extent that it is probable that taxable profit will be availableagainst which those deductible temporary differences, unused tax losses and unused tax credits canbe utilised.

20

Company No:412406-T

(ii) Defined contributions plans

d) Foreign Currency Conversion

(i) Functional and Presentation Currency

(ii) Foreign Currency Transactions

e) Income Taxes

(i) Current tax

Foreign currency transactions are translated into the functional currency using the exchange ratesprevailing at the dates of the transactions. Foreign exchange gains and losses resulting from thesettlement of such transactions and from the translation at year end exchange rates of monetaryassets and liabilities denominated in foreign currencies are recognised in profit or loss.

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

As required by law, companies in Malaysia make contributions to the state pension scheme,Employees Provident Fund. Such contributions are recognised as an expense in profit or loss asincurred.

(ii) Deferred tax

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off currenttax assets against current tax liabilities and when they relate to income taxes levied by the sametaxation authority and the Group and the Company intend to settle its current tax assets andliabilities on a net basis.

Current tax assets and liabilities are measured at the amount expected to be recovered from or paidto the taxation authorities. The tax rates and tax laws used to compute the amount are those that areenacted or substantially enacted by the financial year end.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period andreduced to the extent that it is no longer probable that sufficient taxable profits will be available toallow all or part of the asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in theperiod in which the liability is settled or the asset realised, based on tax rates (and tax laws) thathave been enacted or substantively enacted by the end of the reporting period. The measurement ofdeferred tax liabilities and assets reflects the tax consequences that would follow from the manner inwhich the Group and the Company expect, at the end of the reporting period, to recover or settle thecarrying amount of its assets and liabilities.

Current taxes are recognised in profit or loss, except to the extent that the tax relates to itemsrecognised outside profit or loss, either in other comprehensive income or directly in equity.

Deferred tax is recognised on temporary differences between the carrying amounts of assets andliabilities in the financial statements and the corresponding tax bases used in the computation oftaxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences.Deferred tax assets are generally recognised for all deductible temporary differences, unused taxlosses and unused tax credits to the extent that it is probable that taxable profit will be availableagainst which those deductible temporary differences, unused tax losses and unused tax credits canbe utilised.

20

RAYA INTERNATIONAL BERHAD Annual Report 2013

44

Notes to the Financial Statements (Cont’d)

Company No:412406-T

f) Property, Plant and Equipment

All items of property, plant and equipment are initially recorded at cost. The cost of an item of property,plant and equipment is recognised as an asset if, and only if, it is probable that future economic benefitsassociated with the item will flow to the Group and the cost of the item can be measured reliably.

Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, asappropriate, only when it is probable that future economic benefits associated with the item will flow to theGroup and the cost of the item can be measured reliably. The carrying amount of the replaced part isderecognised. All other repairs and maintenance are charged to profit or loss during the financial year inwhich they are incurred.

Subsequent to recognition, property, plant and equipment are stated at cost less accumulateddepreciation and any accumulated impairment losses.

Freehold land and building are stated at valuation and are revalued at regular intervals of at least once inevery three years by the directors based on the valuation reports of independent professional valuersusing the "open market value on existing use" basis with additional valuation in the intervening yearswhere market conditions indicate that the carrying values of the revalued assets differ materially from themarket value.

An increase in the carrying amount arising from revaluation of property, plant and equipment is creditedto the revaluation reserve account as revaluation surplus. Any deficit arising from revaluation is chargedagainst the revaluation reserve account to the extent of a previous surplus held in the revaluation reserveaccount for the same asset. In all other cases, a decrease in carrying amount is charged to profit or loss.An increase in revaluation directly related to a previous decrease in carrying amount for that same asset

%

Freehold building and renovation 2 - 10Furniture, fittings and other equipment 15Tools and equipment 15Motor vehicles 20Computers 15Office equipment 15

The carrying values of property, plant and equipment are reviewed for impairment when events or changein circumstances indicate that the carrying value may not be recoverable. The residual values, usefullives and depreciation methods are reviewed at each financial year end, and adjusted prospectively, ifappropriate.

An item of property, plant and equipment is derecognised upon disposal or when no future economicbenefits are expected from its use or disposal. Gain or loss arising from the disposal of an asset isdetermined as the difference between the estimated net disposal proceed and the carrying amount of theasset, and is recognised in profit or loss.

Freehold land is not depreciated as it has an infinite life. Depreciation of other property, plant andequipment is calculated to write off the cost of the property, plant and equipment on a straight-line basisover the expected useful lives of the property, plant and equipment concerned. The annual depreciationrates used are as follows:

An increase in revaluation directly related to a previous decrease in carrying amount for that same assetthat was recognised as an expense, is credited to profit or loss to the extent that it offsets the previouslyrecorded decrease.

21

RAYA INTERNATIONAL BERHAD Annual Report 2013

45

Notes to the Financial Statements (Cont’d)

Company No:412406-T

g)

-

-

-

-

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

- Rights arising from other contractual arrangements; and

The consolidated financial statements comprise the financial statements of the Company and itssubsidiaries as at the reporting date. The financial statements of the subsidiaries used in the preparationof the consolidated financial statements are prepared for the same reporting date as the Company.Consistent accounting policies are applied for like transactions and events in similar circumstances.

When the Company has less than a majority of the voting rights of an investee, the Company considersthe following in assessing whether or not the Company's voting rights in an investee are sufficient to giveit power over the investee:

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

Subsidiaries and Basis of Consolidation

The Company controls an investee if and only if the Company has all the following:

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

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

The size of the Company's holding of voting rights relative to the size and dispersion of holdings ofthe other vote holders;

- Rights arising from other contractual arrangements; and

-

h) Goodwill

Goodwill represents the excess of the cost of acquisition of subsidiaries and associates over the fairvalue of the Group's share of their identifiable net assets at the date of acquisition.

When the Group loses control of a subsidiary, a gain or loss calculated as the difference between (i) theaggregate of the fair value of the consideration received and the fair value of any retained interest and (ii)the previous carrying amount of the assets and liabilities of the subsidiary and any non-controllinginterest, is recognised in profit or loss. The subsidiary’s cumulative gain or loss which has beenrecognised in other comprehensive income and accumulated in equity are reclassified to profit or loss orwhere applicable, transferred directly to retained earnings. The fair value of any investment retained inthe former subsidiary at the date control is lost is regarded as the cost on initial recognition of theinvestment.

Subsidiaries are consolidated when the Company obtains control over the subsidiary and ceases whenthe Company losses control of the subsidiary. All intra-group balances, income and expenses andunrealised gains and losses resulting from intra-group transactions are eliminated in full.

Losses of subsidiaries are attributable to the non-controlling interests even if that results in a deficitbalance.

Changes in the Group's ownership interests in subsidiaries that do not result in the Group losing controlover the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group'sinterest and the non-controlling interests are adjusted to reflect the changes in their relative interests inthe subsidiaries. The resulting difference is recognised directly in equity and attributed to owners of theCompany.

Any additional facts and circumstances that indicate that the Company has, or does not have, thecurrent ability to direct the relevant activities at the time that decisions need to be made, includingvoting patterns at previous shareholders' meeting.

22

Company No:412406-T

g)

-

-

-

-

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

- Rights arising from other contractual arrangements; and

The consolidated financial statements comprise the financial statements of the Company and itssubsidiaries as at the reporting date. The financial statements of the subsidiaries used in the preparationof the consolidated financial statements are prepared for the same reporting date as the Company.Consistent accounting policies are applied for like transactions and events in similar circumstances.

When the Company has less than a majority of the voting rights of an investee, the Company considersthe following in assessing whether or not the Company's voting rights in an investee are sufficient to giveit power over the investee:

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

Subsidiaries and Basis of Consolidation

The Company controls an investee if and only if the Company has all the following:

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

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

The size of the Company's holding of voting rights relative to the size and dispersion of holdings ofthe other vote holders;

- Rights arising from other contractual arrangements; and

-

h) Goodwill

Goodwill represents the excess of the cost of acquisition of subsidiaries and associates over the fairvalue of the Group's share of their identifiable net assets at the date of acquisition.

When the Group loses control of a subsidiary, a gain or loss calculated as the difference between (i) theaggregate of the fair value of the consideration received and the fair value of any retained interest and (ii)the previous carrying amount of the assets and liabilities of the subsidiary and any non-controllinginterest, is recognised in profit or loss. The subsidiary’s cumulative gain or loss which has beenrecognised in other comprehensive income and accumulated in equity are reclassified to profit or loss orwhere applicable, transferred directly to retained earnings. The fair value of any investment retained inthe former subsidiary at the date control is lost is regarded as the cost on initial recognition of theinvestment.

Subsidiaries are consolidated when the Company obtains control over the subsidiary and ceases whenthe Company losses control of the subsidiary. All intra-group balances, income and expenses andunrealised gains and losses resulting from intra-group transactions are eliminated in full.

Losses of subsidiaries are attributable to the non-controlling interests even if that results in a deficitbalance.

Changes in the Group's ownership interests in subsidiaries that do not result in the Group losing controlover the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group'sinterest and the non-controlling interests are adjusted to reflect the changes in their relative interests inthe subsidiaries. The resulting difference is recognised directly in equity and attributed to owners of theCompany.

Any additional facts and circumstances that indicate that the Company has, or does not have, thecurrent ability to direct the relevant activities at the time that decisions need to be made, includingvoting patterns at previous shareholders' meeting.

22

Company No:412406-T

g)

-

-

-

-

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

- Rights arising from other contractual arrangements; and

The consolidated financial statements comprise the financial statements of the Company and itssubsidiaries as at the reporting date. The financial statements of the subsidiaries used in the preparationof the consolidated financial statements are prepared for the same reporting date as the Company.Consistent accounting policies are applied for like transactions and events in similar circumstances.

When the Company has less than a majority of the voting rights of an investee, the Company considersthe following in assessing whether or not the Company's voting rights in an investee are sufficient to giveit power over the investee:

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

Subsidiaries and Basis of Consolidation

The Company controls an investee if and only if the Company has all the following:

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

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

The size of the Company's holding of voting rights relative to the size and dispersion of holdings ofthe other vote holders;

- Rights arising from other contractual arrangements; and

-

h) Goodwill

Goodwill represents the excess of the cost of acquisition of subsidiaries and associates over the fairvalue of the Group's share of their identifiable net assets at the date of acquisition.

When the Group loses control of a subsidiary, a gain or loss calculated as the difference between (i) theaggregate of the fair value of the consideration received and the fair value of any retained interest and (ii)the previous carrying amount of the assets and liabilities of the subsidiary and any non-controllinginterest, is recognised in profit or loss. The subsidiary’s cumulative gain or loss which has beenrecognised in other comprehensive income and accumulated in equity are reclassified to profit or loss orwhere applicable, transferred directly to retained earnings. The fair value of any investment retained inthe former subsidiary at the date control is lost is regarded as the cost on initial recognition of theinvestment.

Subsidiaries are consolidated when the Company obtains control over the subsidiary and ceases whenthe Company losses control of the subsidiary. All intra-group balances, income and expenses andunrealised gains and losses resulting from intra-group transactions are eliminated in full.

Losses of subsidiaries are attributable to the non-controlling interests even if that results in a deficitbalance.

Changes in the Group's ownership interests in subsidiaries that do not result in the Group losing controlover the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group'sinterest and the non-controlling interests are adjusted to reflect the changes in their relative interests inthe subsidiaries. The resulting difference is recognised directly in equity and attributed to owners of theCompany.

Any additional facts and circumstances that indicate that the Company has, or does not have, thecurrent ability to direct the relevant activities at the time that decisions need to be made, includingvoting patterns at previous shareholders' meeting.

22

Company No:412406-T

g)

-

-

-

-

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

- Rights arising from other contractual arrangements; and

The consolidated financial statements comprise the financial statements of the Company and itssubsidiaries as at the reporting date. The financial statements of the subsidiaries used in the preparationof the consolidated financial statements are prepared for the same reporting date as the Company.Consistent accounting policies are applied for like transactions and events in similar circumstances.

When the Company has less than a majority of the voting rights of an investee, the Company considersthe following in assessing whether or not the Company's voting rights in an investee are sufficient to giveit power over the investee:

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

Subsidiaries and Basis of Consolidation

The Company controls an investee if and only if the Company has all the following:

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

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

The size of the Company's holding of voting rights relative to the size and dispersion of holdings ofthe other vote holders;

- Rights arising from other contractual arrangements; and

-

h) Goodwill

Goodwill represents the excess of the cost of acquisition of subsidiaries and associates over the fairvalue of the Group's share of their identifiable net assets at the date of acquisition.

When the Group loses control of a subsidiary, a gain or loss calculated as the difference between (i) theaggregate of the fair value of the consideration received and the fair value of any retained interest and (ii)the previous carrying amount of the assets and liabilities of the subsidiary and any non-controllinginterest, is recognised in profit or loss. The subsidiary’s cumulative gain or loss which has beenrecognised in other comprehensive income and accumulated in equity are reclassified to profit or loss orwhere applicable, transferred directly to retained earnings. The fair value of any investment retained inthe former subsidiary at the date control is lost is regarded as the cost on initial recognition of theinvestment.

Subsidiaries are consolidated when the Company obtains control over the subsidiary and ceases whenthe Company losses control of the subsidiary. All intra-group balances, income and expenses andunrealised gains and losses resulting from intra-group transactions are eliminated in full.

Losses of subsidiaries are attributable to the non-controlling interests even if that results in a deficitbalance.

Changes in the Group's ownership interests in subsidiaries that do not result in the Group losing controlover the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group'sinterest and the non-controlling interests are adjusted to reflect the changes in their relative interests inthe subsidiaries. The resulting difference is recognised directly in equity and attributed to owners of theCompany.

Any additional facts and circumstances that indicate that the Company has, or does not have, thecurrent ability to direct the relevant activities at the time that decisions need to be made, includingvoting patterns at previous shareholders' meeting.

22

Company No:412406-T

g)

-

-

-

-

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

- Rights arising from other contractual arrangements; and

The consolidated financial statements comprise the financial statements of the Company and itssubsidiaries as at the reporting date. The financial statements of the subsidiaries used in the preparationof the consolidated financial statements are prepared for the same reporting date as the Company.Consistent accounting policies are applied for like transactions and events in similar circumstances.

When the Company has less than a majority of the voting rights of an investee, the Company considersthe following in assessing whether or not the Company's voting rights in an investee are sufficient to giveit power over the investee:

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

Subsidiaries and Basis of Consolidation

The Company controls an investee if and only if the Company has all the following:

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

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

The size of the Company's holding of voting rights relative to the size and dispersion of holdings ofthe other vote holders;

- Rights arising from other contractual arrangements; and

-

h) Goodwill

Goodwill represents the excess of the cost of acquisition of subsidiaries and associates over the fairvalue of the Group's share of their identifiable net assets at the date of acquisition.

When the Group loses control of a subsidiary, a gain or loss calculated as the difference between (i) theaggregate of the fair value of the consideration received and the fair value of any retained interest and (ii)the previous carrying amount of the assets and liabilities of the subsidiary and any non-controllinginterest, is recognised in profit or loss. The subsidiary’s cumulative gain or loss which has beenrecognised in other comprehensive income and accumulated in equity are reclassified to profit or loss orwhere applicable, transferred directly to retained earnings. The fair value of any investment retained inthe former subsidiary at the date control is lost is regarded as the cost on initial recognition of theinvestment.

Subsidiaries are consolidated when the Company obtains control over the subsidiary and ceases whenthe Company losses control of the subsidiary. All intra-group balances, income and expenses andunrealised gains and losses resulting from intra-group transactions are eliminated in full.

Losses of subsidiaries are attributable to the non-controlling interests even if that results in a deficitbalance.

Changes in the Group's ownership interests in subsidiaries that do not result in the Group losing controlover the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group'sinterest and the non-controlling interests are adjusted to reflect the changes in their relative interests inthe subsidiaries. The resulting difference is recognised directly in equity and attributed to owners of theCompany.

Any additional facts and circumstances that indicate that the Company has, or does not have, thecurrent ability to direct the relevant activities at the time that decisions need to be made, includingvoting patterns at previous shareholders' meeting.

22

Company No:412406-T

g)

-

-

-

-

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

- Rights arising from other contractual arrangements; and

The consolidated financial statements comprise the financial statements of the Company and itssubsidiaries as at the reporting date. The financial statements of the subsidiaries used in the preparationof the consolidated financial statements are prepared for the same reporting date as the Company.Consistent accounting policies are applied for like transactions and events in similar circumstances.

When the Company has less than a majority of the voting rights of an investee, the Company considersthe following in assessing whether or not the Company's voting rights in an investee are sufficient to giveit power over the investee:

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

Subsidiaries and Basis of Consolidation

The Company controls an investee if and only if the Company has all the following:

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

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

The size of the Company's holding of voting rights relative to the size and dispersion of holdings ofthe other vote holders;

- Rights arising from other contractual arrangements; and

-

h) Goodwill

Goodwill represents the excess of the cost of acquisition of subsidiaries and associates over the fairvalue of the Group's share of their identifiable net assets at the date of acquisition.

When the Group loses control of a subsidiary, a gain or loss calculated as the difference between (i) theaggregate of the fair value of the consideration received and the fair value of any retained interest and (ii)the previous carrying amount of the assets and liabilities of the subsidiary and any non-controllinginterest, is recognised in profit or loss. The subsidiary’s cumulative gain or loss which has beenrecognised in other comprehensive income and accumulated in equity are reclassified to profit or loss orwhere applicable, transferred directly to retained earnings. The fair value of any investment retained inthe former subsidiary at the date control is lost is regarded as the cost on initial recognition of theinvestment.

Subsidiaries are consolidated when the Company obtains control over the subsidiary and ceases whenthe Company losses control of the subsidiary. All intra-group balances, income and expenses andunrealised gains and losses resulting from intra-group transactions are eliminated in full.

Losses of subsidiaries are attributable to the non-controlling interests even if that results in a deficitbalance.

Changes in the Group's ownership interests in subsidiaries that do not result in the Group losing controlover the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group'sinterest and the non-controlling interests are adjusted to reflect the changes in their relative interests inthe subsidiaries. The resulting difference is recognised directly in equity and attributed to owners of theCompany.

Any additional facts and circumstances that indicate that the Company has, or does not have, thecurrent ability to direct the relevant activities at the time that decisions need to be made, includingvoting patterns at previous shareholders' meeting.

22

Company No:412406-T

g)

-

-

-

-

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

- Rights arising from other contractual arrangements; and

The consolidated financial statements comprise the financial statements of the Company and itssubsidiaries as at the reporting date. The financial statements of the subsidiaries used in the preparationof the consolidated financial statements are prepared for the same reporting date as the Company.Consistent accounting policies are applied for like transactions and events in similar circumstances.

When the Company has less than a majority of the voting rights of an investee, the Company considersthe following in assessing whether or not the Company's voting rights in an investee are sufficient to giveit power over the investee:

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

Subsidiaries and Basis of Consolidation

The Company controls an investee if and only if the Company has all the following:

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

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

The size of the Company's holding of voting rights relative to the size and dispersion of holdings ofthe other vote holders;

- Rights arising from other contractual arrangements; and

-

h) Goodwill

Goodwill represents the excess of the cost of acquisition of subsidiaries and associates over the fairvalue of the Group's share of their identifiable net assets at the date of acquisition.

When the Group loses control of a subsidiary, a gain or loss calculated as the difference between (i) theaggregate of the fair value of the consideration received and the fair value of any retained interest and (ii)the previous carrying amount of the assets and liabilities of the subsidiary and any non-controllinginterest, is recognised in profit or loss. The subsidiary’s cumulative gain or loss which has beenrecognised in other comprehensive income and accumulated in equity are reclassified to profit or loss orwhere applicable, transferred directly to retained earnings. The fair value of any investment retained inthe former subsidiary at the date control is lost is regarded as the cost on initial recognition of theinvestment.

Subsidiaries are consolidated when the Company obtains control over the subsidiary and ceases whenthe Company losses control of the subsidiary. All intra-group balances, income and expenses andunrealised gains and losses resulting from intra-group transactions are eliminated in full.

Losses of subsidiaries are attributable to the non-controlling interests even if that results in a deficitbalance.

Changes in the Group's ownership interests in subsidiaries that do not result in the Group losing controlover the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group'sinterest and the non-controlling interests are adjusted to reflect the changes in their relative interests inthe subsidiaries. The resulting difference is recognised directly in equity and attributed to owners of theCompany.

Any additional facts and circumstances that indicate that the Company has, or does not have, thecurrent ability to direct the relevant activities at the time that decisions need to be made, includingvoting patterns at previous shareholders' meeting.

22

Company No:412406-T

g)

-

-

-

-

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

- Rights arising from other contractual arrangements; and

The consolidated financial statements comprise the financial statements of the Company and itssubsidiaries as at the reporting date. The financial statements of the subsidiaries used in the preparationof the consolidated financial statements are prepared for the same reporting date as the Company.Consistent accounting policies are applied for like transactions and events in similar circumstances.

When the Company has less than a majority of the voting rights of an investee, the Company considersthe following in assessing whether or not the Company's voting rights in an investee are sufficient to giveit power over the investee:

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

Subsidiaries and Basis of Consolidation

The Company controls an investee if and only if the Company has all the following:

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

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

The size of the Company's holding of voting rights relative to the size and dispersion of holdings ofthe other vote holders;

- Rights arising from other contractual arrangements; and

-

h) Goodwill

Goodwill represents the excess of the cost of acquisition of subsidiaries and associates over the fairvalue of the Group's share of their identifiable net assets at the date of acquisition.

When the Group loses control of a subsidiary, a gain or loss calculated as the difference between (i) theaggregate of the fair value of the consideration received and the fair value of any retained interest and (ii)the previous carrying amount of the assets and liabilities of the subsidiary and any non-controllinginterest, is recognised in profit or loss. The subsidiary’s cumulative gain or loss which has beenrecognised in other comprehensive income and accumulated in equity are reclassified to profit or loss orwhere applicable, transferred directly to retained earnings. The fair value of any investment retained inthe former subsidiary at the date control is lost is regarded as the cost on initial recognition of theinvestment.

Subsidiaries are consolidated when the Company obtains control over the subsidiary and ceases whenthe Company losses control of the subsidiary. All intra-group balances, income and expenses andunrealised gains and losses resulting from intra-group transactions are eliminated in full.

Losses of subsidiaries are attributable to the non-controlling interests even if that results in a deficitbalance.

Changes in the Group's ownership interests in subsidiaries that do not result in the Group losing controlover the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group'sinterest and the non-controlling interests are adjusted to reflect the changes in their relative interests inthe subsidiaries. The resulting difference is recognised directly in equity and attributed to owners of theCompany.

Any additional facts and circumstances that indicate that the Company has, or does not have, thecurrent ability to direct the relevant activities at the time that decisions need to be made, includingvoting patterns at previous shareholders' meeting.

22

Company No:412406-T

g)

-

-

-

-

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

- Rights arising from other contractual arrangements; and

The consolidated financial statements comprise the financial statements of the Company and itssubsidiaries as at the reporting date. The financial statements of the subsidiaries used in the preparationof the consolidated financial statements are prepared for the same reporting date as the Company.Consistent accounting policies are applied for like transactions and events in similar circumstances.

When the Company has less than a majority of the voting rights of an investee, the Company considersthe following in assessing whether or not the Company's voting rights in an investee are sufficient to giveit power over the investee:

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

Subsidiaries and Basis of Consolidation

The Company controls an investee if and only if the Company has all the following:

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

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

The size of the Company's holding of voting rights relative to the size and dispersion of holdings ofthe other vote holders;

- Rights arising from other contractual arrangements; and

-

h) Goodwill

Goodwill represents the excess of the cost of acquisition of subsidiaries and associates over the fairvalue of the Group's share of their identifiable net assets at the date of acquisition.

When the Group loses control of a subsidiary, a gain or loss calculated as the difference between (i) theaggregate of the fair value of the consideration received and the fair value of any retained interest and (ii)the previous carrying amount of the assets and liabilities of the subsidiary and any non-controllinginterest, is recognised in profit or loss. The subsidiary’s cumulative gain or loss which has beenrecognised in other comprehensive income and accumulated in equity are reclassified to profit or loss orwhere applicable, transferred directly to retained earnings. The fair value of any investment retained inthe former subsidiary at the date control is lost is regarded as the cost on initial recognition of theinvestment.

Subsidiaries are consolidated when the Company obtains control over the subsidiary and ceases whenthe Company losses control of the subsidiary. All intra-group balances, income and expenses andunrealised gains and losses resulting from intra-group transactions are eliminated in full.

Losses of subsidiaries are attributable to the non-controlling interests even if that results in a deficitbalance.

Changes in the Group's ownership interests in subsidiaries that do not result in the Group losing controlover the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group'sinterest and the non-controlling interests are adjusted to reflect the changes in their relative interests inthe subsidiaries. The resulting difference is recognised directly in equity and attributed to owners of theCompany.

Any additional facts and circumstances that indicate that the Company has, or does not have, thecurrent ability to direct the relevant activities at the time that decisions need to be made, includingvoting patterns at previous shareholders' meeting.

22

Company No:412406-T

g)

-

-

-

-

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

- Rights arising from other contractual arrangements; and

The consolidated financial statements comprise the financial statements of the Company and itssubsidiaries as at the reporting date. The financial statements of the subsidiaries used in the preparationof the consolidated financial statements are prepared for the same reporting date as the Company.Consistent accounting policies are applied for like transactions and events in similar circumstances.

When the Company has less than a majority of the voting rights of an investee, the Company considersthe following in assessing whether or not the Company's voting rights in an investee are sufficient to giveit power over the investee:

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

Subsidiaries and Basis of Consolidation

The Company controls an investee if and only if the Company has all the following:

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

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

The size of the Company's holding of voting rights relative to the size and dispersion of holdings ofthe other vote holders;

- Rights arising from other contractual arrangements; and

-

h) Goodwill

Goodwill represents the excess of the cost of acquisition of subsidiaries and associates over the fairvalue of the Group's share of their identifiable net assets at the date of acquisition.

When the Group loses control of a subsidiary, a gain or loss calculated as the difference between (i) theaggregate of the fair value of the consideration received and the fair value of any retained interest and (ii)the previous carrying amount of the assets and liabilities of the subsidiary and any non-controllinginterest, is recognised in profit or loss. The subsidiary’s cumulative gain or loss which has beenrecognised in other comprehensive income and accumulated in equity are reclassified to profit or loss orwhere applicable, transferred directly to retained earnings. The fair value of any investment retained inthe former subsidiary at the date control is lost is regarded as the cost on initial recognition of theinvestment.

Subsidiaries are consolidated when the Company obtains control over the subsidiary and ceases whenthe Company losses control of the subsidiary. All intra-group balances, income and expenses andunrealised gains and losses resulting from intra-group transactions are eliminated in full.

Losses of subsidiaries are attributable to the non-controlling interests even if that results in a deficitbalance.

Changes in the Group's ownership interests in subsidiaries that do not result in the Group losing controlover the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group'sinterest and the non-controlling interests are adjusted to reflect the changes in their relative interests inthe subsidiaries. The resulting difference is recognised directly in equity and attributed to owners of theCompany.

Any additional facts and circumstances that indicate that the Company has, or does not have, thecurrent ability to direct the relevant activities at the time that decisions need to be made, includingvoting patterns at previous shareholders' meeting.

22

Company No:412406-T

g)

-

-

-

-

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

- Rights arising from other contractual arrangements; and

The consolidated financial statements comprise the financial statements of the Company and itssubsidiaries as at the reporting date. The financial statements of the subsidiaries used in the preparationof the consolidated financial statements are prepared for the same reporting date as the Company.Consistent accounting policies are applied for like transactions and events in similar circumstances.

When the Company has less than a majority of the voting rights of an investee, the Company considersthe following in assessing whether or not the Company's voting rights in an investee are sufficient to giveit power over the investee:

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

Subsidiaries and Basis of Consolidation

The Company controls an investee if and only if the Company has all the following:

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

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

The size of the Company's holding of voting rights relative to the size and dispersion of holdings ofthe other vote holders;

- Rights arising from other contractual arrangements; and

-

h) Goodwill

Goodwill represents the excess of the cost of acquisition of subsidiaries and associates over the fairvalue of the Group's share of their identifiable net assets at the date of acquisition.

When the Group loses control of a subsidiary, a gain or loss calculated as the difference between (i) theaggregate of the fair value of the consideration received and the fair value of any retained interest and (ii)the previous carrying amount of the assets and liabilities of the subsidiary and any non-controllinginterest, is recognised in profit or loss. The subsidiary’s cumulative gain or loss which has beenrecognised in other comprehensive income and accumulated in equity are reclassified to profit or loss orwhere applicable, transferred directly to retained earnings. The fair value of any investment retained inthe former subsidiary at the date control is lost is regarded as the cost on initial recognition of theinvestment.

Subsidiaries are consolidated when the Company obtains control over the subsidiary and ceases whenthe Company losses control of the subsidiary. All intra-group balances, income and expenses andunrealised gains and losses resulting from intra-group transactions are eliminated in full.

Losses of subsidiaries are attributable to the non-controlling interests even if that results in a deficitbalance.

Changes in the Group's ownership interests in subsidiaries that do not result in the Group losing controlover the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group'sinterest and the non-controlling interests are adjusted to reflect the changes in their relative interests inthe subsidiaries. The resulting difference is recognised directly in equity and attributed to owners of theCompany.

Any additional facts and circumstances that indicate that the Company has, or does not have, thecurrent ability to direct the relevant activities at the time that decisions need to be made, includingvoting patterns at previous shareholders' meeting.

22

Company No:412406-T

g)

-

-

-

-

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

- Rights arising from other contractual arrangements; and

The consolidated financial statements comprise the financial statements of the Company and itssubsidiaries as at the reporting date. The financial statements of the subsidiaries used in the preparationof the consolidated financial statements are prepared for the same reporting date as the Company.Consistent accounting policies are applied for like transactions and events in similar circumstances.

When the Company has less than a majority of the voting rights of an investee, the Company considersthe following in assessing whether or not the Company's voting rights in an investee are sufficient to giveit power over the investee:

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

Subsidiaries and Basis of Consolidation

The Company controls an investee if and only if the Company has all the following:

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

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

The size of the Company's holding of voting rights relative to the size and dispersion of holdings ofthe other vote holders;

- Rights arising from other contractual arrangements; and

-

h) Goodwill

Goodwill represents the excess of the cost of acquisition of subsidiaries and associates over the fairvalue of the Group's share of their identifiable net assets at the date of acquisition.

When the Group loses control of a subsidiary, a gain or loss calculated as the difference between (i) theaggregate of the fair value of the consideration received and the fair value of any retained interest and (ii)the previous carrying amount of the assets and liabilities of the subsidiary and any non-controllinginterest, is recognised in profit or loss. The subsidiary’s cumulative gain or loss which has beenrecognised in other comprehensive income and accumulated in equity are reclassified to profit or loss orwhere applicable, transferred directly to retained earnings. The fair value of any investment retained inthe former subsidiary at the date control is lost is regarded as the cost on initial recognition of theinvestment.

Subsidiaries are consolidated when the Company obtains control over the subsidiary and ceases whenthe Company losses control of the subsidiary. All intra-group balances, income and expenses andunrealised gains and losses resulting from intra-group transactions are eliminated in full.

Losses of subsidiaries are attributable to the non-controlling interests even if that results in a deficitbalance.

Changes in the Group's ownership interests in subsidiaries that do not result in the Group losing controlover the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group'sinterest and the non-controlling interests are adjusted to reflect the changes in their relative interests inthe subsidiaries. The resulting difference is recognised directly in equity and attributed to owners of theCompany.

Any additional facts and circumstances that indicate that the Company has, or does not have, thecurrent ability to direct the relevant activities at the time that decisions need to be made, includingvoting patterns at previous shareholders' meeting.

22

Company No:412406-T

g)

-

-

-

-

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

- Rights arising from other contractual arrangements; and

The consolidated financial statements comprise the financial statements of the Company and itssubsidiaries as at the reporting date. The financial statements of the subsidiaries used in the preparationof the consolidated financial statements are prepared for the same reporting date as the Company.Consistent accounting policies are applied for like transactions and events in similar circumstances.

When the Company has less than a majority of the voting rights of an investee, the Company considersthe following in assessing whether or not the Company's voting rights in an investee are sufficient to giveit power over the investee:

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

Subsidiaries and Basis of Consolidation

The Company controls an investee if and only if the Company has all the following:

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

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

The size of the Company's holding of voting rights relative to the size and dispersion of holdings ofthe other vote holders;

- Rights arising from other contractual arrangements; and

-

h) Goodwill

Goodwill represents the excess of the cost of acquisition of subsidiaries and associates over the fairvalue of the Group's share of their identifiable net assets at the date of acquisition.

When the Group loses control of a subsidiary, a gain or loss calculated as the difference between (i) theaggregate of the fair value of the consideration received and the fair value of any retained interest and (ii)the previous carrying amount of the assets and liabilities of the subsidiary and any non-controllinginterest, is recognised in profit or loss. The subsidiary’s cumulative gain or loss which has beenrecognised in other comprehensive income and accumulated in equity are reclassified to profit or loss orwhere applicable, transferred directly to retained earnings. The fair value of any investment retained inthe former subsidiary at the date control is lost is regarded as the cost on initial recognition of theinvestment.

Subsidiaries are consolidated when the Company obtains control over the subsidiary and ceases whenthe Company losses control of the subsidiary. All intra-group balances, income and expenses andunrealised gains and losses resulting from intra-group transactions are eliminated in full.

Losses of subsidiaries are attributable to the non-controlling interests even if that results in a deficitbalance.

Changes in the Group's ownership interests in subsidiaries that do not result in the Group losing controlover the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group'sinterest and the non-controlling interests are adjusted to reflect the changes in their relative interests inthe subsidiaries. The resulting difference is recognised directly in equity and attributed to owners of theCompany.

Any additional facts and circumstances that indicate that the Company has, or does not have, thecurrent ability to direct the relevant activities at the time that decisions need to be made, includingvoting patterns at previous shareholders' meeting.

22

Company No:412406-T

g)

-

-

-

-

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

- Rights arising from other contractual arrangements; and

The consolidated financial statements comprise the financial statements of the Company and itssubsidiaries as at the reporting date. The financial statements of the subsidiaries used in the preparationof the consolidated financial statements are prepared for the same reporting date as the Company.Consistent accounting policies are applied for like transactions and events in similar circumstances.

When the Company has less than a majority of the voting rights of an investee, the Company considersthe following in assessing whether or not the Company's voting rights in an investee are sufficient to giveit power over the investee:

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

Subsidiaries and Basis of Consolidation

The Company controls an investee if and only if the Company has all the following:

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

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

The size of the Company's holding of voting rights relative to the size and dispersion of holdings ofthe other vote holders;

- Rights arising from other contractual arrangements; and

-

h) Goodwill

Goodwill represents the excess of the cost of acquisition of subsidiaries and associates over the fairvalue of the Group's share of their identifiable net assets at the date of acquisition.

When the Group loses control of a subsidiary, a gain or loss calculated as the difference between (i) theaggregate of the fair value of the consideration received and the fair value of any retained interest and (ii)the previous carrying amount of the assets and liabilities of the subsidiary and any non-controllinginterest, is recognised in profit or loss. The subsidiary’s cumulative gain or loss which has beenrecognised in other comprehensive income and accumulated in equity are reclassified to profit or loss orwhere applicable, transferred directly to retained earnings. The fair value of any investment retained inthe former subsidiary at the date control is lost is regarded as the cost on initial recognition of theinvestment.

Subsidiaries are consolidated when the Company obtains control over the subsidiary and ceases whenthe Company losses control of the subsidiary. All intra-group balances, income and expenses andunrealised gains and losses resulting from intra-group transactions are eliminated in full.

Losses of subsidiaries are attributable to the non-controlling interests even if that results in a deficitbalance.

Changes in the Group's ownership interests in subsidiaries that do not result in the Group losing controlover the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group'sinterest and the non-controlling interests are adjusted to reflect the changes in their relative interests inthe subsidiaries. The resulting difference is recognised directly in equity and attributed to owners of theCompany.

Any additional facts and circumstances that indicate that the Company has, or does not have, thecurrent ability to direct the relevant activities at the time that decisions need to be made, includingvoting patterns at previous shareholders' meeting.

22

Company No:412406-T

g)

-

-

-

-

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

- Rights arising from other contractual arrangements; and

The consolidated financial statements comprise the financial statements of the Company and itssubsidiaries as at the reporting date. The financial statements of the subsidiaries used in the preparationof the consolidated financial statements are prepared for the same reporting date as the Company.Consistent accounting policies are applied for like transactions and events in similar circumstances.

When the Company has less than a majority of the voting rights of an investee, the Company considersthe following in assessing whether or not the Company's voting rights in an investee are sufficient to giveit power over the investee:

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

Subsidiaries and Basis of Consolidation

The Company controls an investee if and only if the Company has all the following:

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

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

The size of the Company's holding of voting rights relative to the size and dispersion of holdings ofthe other vote holders;

- Rights arising from other contractual arrangements; and

-

h) Goodwill

Goodwill represents the excess of the cost of acquisition of subsidiaries and associates over the fairvalue of the Group's share of their identifiable net assets at the date of acquisition.

When the Group loses control of a subsidiary, a gain or loss calculated as the difference between (i) theaggregate of the fair value of the consideration received and the fair value of any retained interest and (ii)the previous carrying amount of the assets and liabilities of the subsidiary and any non-controllinginterest, is recognised in profit or loss. The subsidiary’s cumulative gain or loss which has beenrecognised in other comprehensive income and accumulated in equity are reclassified to profit or loss orwhere applicable, transferred directly to retained earnings. The fair value of any investment retained inthe former subsidiary at the date control is lost is regarded as the cost on initial recognition of theinvestment.

Subsidiaries are consolidated when the Company obtains control over the subsidiary and ceases whenthe Company losses control of the subsidiary. All intra-group balances, income and expenses andunrealised gains and losses resulting from intra-group transactions are eliminated in full.

Losses of subsidiaries are attributable to the non-controlling interests even if that results in a deficitbalance.

Changes in the Group's ownership interests in subsidiaries that do not result in the Group losing controlover the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group'sinterest and the non-controlling interests are adjusted to reflect the changes in their relative interests inthe subsidiaries. The resulting difference is recognised directly in equity and attributed to owners of theCompany.

Any additional facts and circumstances that indicate that the Company has, or does not have, thecurrent ability to direct the relevant activities at the time that decisions need to be made, includingvoting patterns at previous shareholders' meeting.

22

Company No:412406-T

g)

-

-

-

-

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

- Rights arising from other contractual arrangements; and

The consolidated financial statements comprise the financial statements of the Company and itssubsidiaries as at the reporting date. The financial statements of the subsidiaries used in the preparationof the consolidated financial statements are prepared for the same reporting date as the Company.Consistent accounting policies are applied for like transactions and events in similar circumstances.

When the Company has less than a majority of the voting rights of an investee, the Company considersthe following in assessing whether or not the Company's voting rights in an investee are sufficient to giveit power over the investee:

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

Subsidiaries and Basis of Consolidation

The Company controls an investee if and only if the Company has all the following:

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

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

The size of the Company's holding of voting rights relative to the size and dispersion of holdings ofthe other vote holders;

- Rights arising from other contractual arrangements; and

-

h) Goodwill

Goodwill represents the excess of the cost of acquisition of subsidiaries and associates over the fairvalue of the Group's share of their identifiable net assets at the date of acquisition.

When the Group loses control of a subsidiary, a gain or loss calculated as the difference between (i) theaggregate of the fair value of the consideration received and the fair value of any retained interest and (ii)the previous carrying amount of the assets and liabilities of the subsidiary and any non-controllinginterest, is recognised in profit or loss. The subsidiary’s cumulative gain or loss which has beenrecognised in other comprehensive income and accumulated in equity are reclassified to profit or loss orwhere applicable, transferred directly to retained earnings. The fair value of any investment retained inthe former subsidiary at the date control is lost is regarded as the cost on initial recognition of theinvestment.

Subsidiaries are consolidated when the Company obtains control over the subsidiary and ceases whenthe Company losses control of the subsidiary. All intra-group balances, income and expenses andunrealised gains and losses resulting from intra-group transactions are eliminated in full.

Losses of subsidiaries are attributable to the non-controlling interests even if that results in a deficitbalance.

Changes in the Group's ownership interests in subsidiaries that do not result in the Group losing controlover the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group'sinterest and the non-controlling interests are adjusted to reflect the changes in their relative interests inthe subsidiaries. The resulting difference is recognised directly in equity and attributed to owners of theCompany.

Any additional facts and circumstances that indicate that the Company has, or does not have, thecurrent ability to direct the relevant activities at the time that decisions need to be made, includingvoting patterns at previous shareholders' meeting.

22

Company No:412406-T

g)

-

-

-

-

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

- Rights arising from other contractual arrangements; and

The consolidated financial statements comprise the financial statements of the Company and itssubsidiaries as at the reporting date. The financial statements of the subsidiaries used in the preparationof the consolidated financial statements are prepared for the same reporting date as the Company.Consistent accounting policies are applied for like transactions and events in similar circumstances.

When the Company has less than a majority of the voting rights of an investee, the Company considersthe following in assessing whether or not the Company's voting rights in an investee are sufficient to giveit power over the investee:

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

Subsidiaries and Basis of Consolidation

The Company controls an investee if and only if the Company has all the following:

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

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

The size of the Company's holding of voting rights relative to the size and dispersion of holdings ofthe other vote holders;

- Rights arising from other contractual arrangements; and

-

h) Goodwill

Goodwill represents the excess of the cost of acquisition of subsidiaries and associates over the fairvalue of the Group's share of their identifiable net assets at the date of acquisition.

When the Group loses control of a subsidiary, a gain or loss calculated as the difference between (i) theaggregate of the fair value of the consideration received and the fair value of any retained interest and (ii)the previous carrying amount of the assets and liabilities of the subsidiary and any non-controllinginterest, is recognised in profit or loss. The subsidiary’s cumulative gain or loss which has beenrecognised in other comprehensive income and accumulated in equity are reclassified to profit or loss orwhere applicable, transferred directly to retained earnings. The fair value of any investment retained inthe former subsidiary at the date control is lost is regarded as the cost on initial recognition of theinvestment.

Subsidiaries are consolidated when the Company obtains control over the subsidiary and ceases whenthe Company losses control of the subsidiary. All intra-group balances, income and expenses andunrealised gains and losses resulting from intra-group transactions are eliminated in full.

Losses of subsidiaries are attributable to the non-controlling interests even if that results in a deficitbalance.

Changes in the Group's ownership interests in subsidiaries that do not result in the Group losing controlover the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group'sinterest and the non-controlling interests are adjusted to reflect the changes in their relative interests inthe subsidiaries. The resulting difference is recognised directly in equity and attributed to owners of theCompany.

Any additional facts and circumstances that indicate that the Company has, or does not have, thecurrent ability to direct the relevant activities at the time that decisions need to be made, includingvoting patterns at previous shareholders' meeting.

22

RAYA INTERNATIONAL BERHAD Annual Report 2013

46

Notes to the Financial Statements (Cont’d)

Company No:412406-T

i) Investments in Subsidiaries

j) Finance Lease

Any excess of the Group's share of the identifiable net assets at the date of acquisition over the cost ofacquisition is recognised immediately in the statements of profit or loss and other comprehensive income.

Leases in terms of which the Group assumes substantially all the risks and rewards of ownership areclassified as finance leases. On initial recognition, the leased asset is measured at an amount equal tothe lower of its fair value and the present value of the minimum lease payments. Subsequent to initialrecognition, the asset is accounted for in accordance with the accounting policy applicable to that asset.

In the Company's separate financial statements, investments in subsidiaries are stated at cost lessaccumulated impairment losses. On disposal of such investments, the difference between disposalproceeds and their carrying amounts are recognised in profit or loss.

Goodwill is tested annually for impairment and carried at cost less accumulated impairment losses.Impairment losses on goodwill (inclusive of impairment losses recognised in a previous interim period)are not reversed. Gains and losses on the disposal of a subsidiary include the carrying amount ofgoodwill relating to the subsidiary sold.

Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation ismade to those cash-generating units or groups of cash-generating units that are expected to benefit fromthe synergies of the business combination in which the goodwill arose, identified according to operatingsegments.

k) Inventories

l) Financial Instruments

i)

Financial instruments are recognised in the financial statements when, and only when, the Groupand the Company become a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that aredirectly attributable to the acquisition or issue of the financial assets and financial liabilities (otherthan financial assets and financial liabilities at fair value through profit or loss) are added to ordeducted from the fair value of the financial assets or financial liabilities, as appropriate, on initialrecognition. Transaction costs that are directly attributable to the acquisition of financial assets orfinancial liabilities at fair value through profit or loss are recognised immediately in profit or loss.

Inventories are valued at the lower of cost (determined principally on the first-in, first-out method) and netrealisable value. Cost consists of purchases and other direct costs incurred in bringing the inventories toits present condition and location.

Net realisable value is the estimated selling price in the ordinary course of business, less the costs ofcompletion and selling expenses.

Minimum lease payments made under finance leases are apportioned between the finance expenses andthe reduction of the outstanding liability. The finance expense is allocated to each period during the leaseterm so as to produce a constant periodic rate of interest on the remaining balance of the liability.Contingent lease payments are accounted for by revising the minimum lease payments over theremaining term of the lease when the lease adjustment is confirmed.

Initial recognition and measurement

23

RAYA INTERNATIONAL BERHAD Annual Report 2013

47

Notes to the Financial Statements (Cont’d)

Company No:412406-T

ii)

a)

The Group classifies its financial assets in the following categories: at fair value through profit or loss(FVTPL), held-to-maturity, loans and receivables and available-for-sale. The classification dependson the purpose for which the financial assets were acquired. Management determines theclassification at initial recognition.

Financial assets are classified as financial assets at fair value through profit or loss if they areheld for trading or are designated as such upon initial recognition. Financial assets held fortrading are derivatives (including separated embedded derivatives) or financial assets acquiredprincipally for the purpose of selling in the near term.

Financial assets at fair value through profit or loss could be presented as current or non-current.

Subsequent to initial recognition, financial assets at fair value through profit or loss are measuredat fair value. Any gains or losses arising from changes in fair value are recognised in profit orloss. Net gains or net losses on financial assets at fair value through profit or loss do not includeexchange differences, interest and dividend income. Exchange differences, interest and dividendincome on financial assets at fair value through profit or loss are recognised separately in profitor loss as part of other losses or other income.

The Group categories financial instruments as follows:

Financial assets

Financial assets at fair value through profit or loss

Financial instrument categories and subsequent measurement

b)

c)

d)

Available-for-sale financial assets are non-derivatives that are either designated in this categoryor not classified in any of the other categories. After initial recognition, available-for-sale financialassets are measured at fair value. Any gains or losses from changes in fair value of the financialassets are recognised in other comprehensive income, except that impairment losses, foreignexchange gains and losses on monetary instruments and interest calculated using the effectiveinterest method are recognised in profit or loss. The cumulative gain or loss previouslyrecognised in other comprehensive income is reclassified from equity to profit or loss as areclassification adjustment when the financial asset is derecognised. Interest income calculatedusing the effective interest method is recognised in profit or loss. Dividends on available-for-saleequity instrument are recognised in profit or loss when the Company's right to receive payment isestablished.

Financial assets at fair value through profit or loss could be presented as current or non-current.Financial assets that are held primarily for trading purposes are presented as current whereasfinancial assets that are not held primarily for trading purposes are presented as current or non-current based on the settlement date.

Loans and receivables are non-derivative financial assets with fixed or determinable paymentsthat are not quoted in an active market. Loans and receivables are measured at amortised costusing the effective interest method, less any impairment. Interest income is recognised byapplying the effective interest rate, except for short-term receivables when the recognition ofinterest would be immaterial.

Held-to-maturity investments are non-derivative financial assets with fixed or determinablepayments and fixed maturity dates that the Group has the positive intent and ability to hold tomaturity. Subsequent to initial recognition, held-to-maturity investments are measured atamortised cost using the effective interest method less any impairment.

Held-to-maturity investments

Loans and receivables

Available-for-sale (AFS) financial assets

24

Company No:412406-T

ii)

a)

The Group classifies its financial assets in the following categories: at fair value through profit or loss(FVTPL), held-to-maturity, loans and receivables and available-for-sale. The classification dependson the purpose for which the financial assets were acquired. Management determines theclassification at initial recognition.

Financial assets are classified as financial assets at fair value through profit or loss if they areheld for trading or are designated as such upon initial recognition. Financial assets held fortrading are derivatives (including separated embedded derivatives) or financial assets acquiredprincipally for the purpose of selling in the near term.

Financial assets at fair value through profit or loss could be presented as current or non-current.

Subsequent to initial recognition, financial assets at fair value through profit or loss are measuredat fair value. Any gains or losses arising from changes in fair value are recognised in profit orloss. Net gains or net losses on financial assets at fair value through profit or loss do not includeexchange differences, interest and dividend income. Exchange differences, interest and dividendincome on financial assets at fair value through profit or loss are recognised separately in profitor loss as part of other losses or other income.

The Group categories financial instruments as follows:

Financial assets

Financial assets at fair value through profit or loss

Financial instrument categories and subsequent measurement

b)

c)

d)

Available-for-sale financial assets are non-derivatives that are either designated in this categoryor not classified in any of the other categories. After initial recognition, available-for-sale financialassets are measured at fair value. Any gains or losses from changes in fair value of the financialassets are recognised in other comprehensive income, except that impairment losses, foreignexchange gains and losses on monetary instruments and interest calculated using the effectiveinterest method are recognised in profit or loss. The cumulative gain or loss previouslyrecognised in other comprehensive income is reclassified from equity to profit or loss as areclassification adjustment when the financial asset is derecognised. Interest income calculatedusing the effective interest method is recognised in profit or loss. Dividends on available-for-saleequity instrument are recognised in profit or loss when the Company's right to receive payment isestablished.

Financial assets at fair value through profit or loss could be presented as current or non-current.Financial assets that are held primarily for trading purposes are presented as current whereasfinancial assets that are not held primarily for trading purposes are presented as current or non-current based on the settlement date.

Loans and receivables are non-derivative financial assets with fixed or determinable paymentsthat are not quoted in an active market. Loans and receivables are measured at amortised costusing the effective interest method, less any impairment. Interest income is recognised byapplying the effective interest rate, except for short-term receivables when the recognition ofinterest would be immaterial.

Held-to-maturity investments are non-derivative financial assets with fixed or determinablepayments and fixed maturity dates that the Group has the positive intent and ability to hold tomaturity. Subsequent to initial recognition, held-to-maturity investments are measured atamortised cost using the effective interest method less any impairment.

Held-to-maturity investments

Loans and receivables

Available-for-sale (AFS) financial assets

24

Company No:412406-T

ii)

a)

The Group classifies its financial assets in the following categories: at fair value through profit or loss(FVTPL), held-to-maturity, loans and receivables and available-for-sale. The classification dependson the purpose for which the financial assets were acquired. Management determines theclassification at initial recognition.

Financial assets are classified as financial assets at fair value through profit or loss if they areheld for trading or are designated as such upon initial recognition. Financial assets held fortrading are derivatives (including separated embedded derivatives) or financial assets acquiredprincipally for the purpose of selling in the near term.

Financial assets at fair value through profit or loss could be presented as current or non-current.

Subsequent to initial recognition, financial assets at fair value through profit or loss are measuredat fair value. Any gains or losses arising from changes in fair value are recognised in profit orloss. Net gains or net losses on financial assets at fair value through profit or loss do not includeexchange differences, interest and dividend income. Exchange differences, interest and dividendincome on financial assets at fair value through profit or loss are recognised separately in profitor loss as part of other losses or other income.

The Group categories financial instruments as follows:

Financial assets

Financial assets at fair value through profit or loss

Financial instrument categories and subsequent measurement

b)

c)

d)

Available-for-sale financial assets are non-derivatives that are either designated in this categoryor not classified in any of the other categories. After initial recognition, available-for-sale financialassets are measured at fair value. Any gains or losses from changes in fair value of the financialassets are recognised in other comprehensive income, except that impairment losses, foreignexchange gains and losses on monetary instruments and interest calculated using the effectiveinterest method are recognised in profit or loss. The cumulative gain or loss previouslyrecognised in other comprehensive income is reclassified from equity to profit or loss as areclassification adjustment when the financial asset is derecognised. Interest income calculatedusing the effective interest method is recognised in profit or loss. Dividends on available-for-saleequity instrument are recognised in profit or loss when the Company's right to receive payment isestablished.

Financial assets at fair value through profit or loss could be presented as current or non-current.Financial assets that are held primarily for trading purposes are presented as current whereasfinancial assets that are not held primarily for trading purposes are presented as current or non-current based on the settlement date.

Loans and receivables are non-derivative financial assets with fixed or determinable paymentsthat are not quoted in an active market. Loans and receivables are measured at amortised costusing the effective interest method, less any impairment. Interest income is recognised byapplying the effective interest rate, except for short-term receivables when the recognition ofinterest would be immaterial.

Held-to-maturity investments are non-derivative financial assets with fixed or determinablepayments and fixed maturity dates that the Group has the positive intent and ability to hold tomaturity. Subsequent to initial recognition, held-to-maturity investments are measured atamortised cost using the effective interest method less any impairment.

Held-to-maturity investments

Loans and receivables

Available-for-sale (AFS) financial assets

24

Company No:412406-T

ii)

a)

The Group classifies its financial assets in the following categories: at fair value through profit or loss(FVTPL), held-to-maturity, loans and receivables and available-for-sale. The classification dependson the purpose for which the financial assets were acquired. Management determines theclassification at initial recognition.

Financial assets are classified as financial assets at fair value through profit or loss if they areheld for trading or are designated as such upon initial recognition. Financial assets held fortrading are derivatives (including separated embedded derivatives) or financial assets acquiredprincipally for the purpose of selling in the near term.

Financial assets at fair value through profit or loss could be presented as current or non-current.

Subsequent to initial recognition, financial assets at fair value through profit or loss are measuredat fair value. Any gains or losses arising from changes in fair value are recognised in profit orloss. Net gains or net losses on financial assets at fair value through profit or loss do not includeexchange differences, interest and dividend income. Exchange differences, interest and dividendincome on financial assets at fair value through profit or loss are recognised separately in profitor loss as part of other losses or other income.

The Group categories financial instruments as follows:

Financial assets

Financial assets at fair value through profit or loss

Financial instrument categories and subsequent measurement

b)

c)

d)

Available-for-sale financial assets are non-derivatives that are either designated in this categoryor not classified in any of the other categories. After initial recognition, available-for-sale financialassets are measured at fair value. Any gains or losses from changes in fair value of the financialassets are recognised in other comprehensive income, except that impairment losses, foreignexchange gains and losses on monetary instruments and interest calculated using the effectiveinterest method are recognised in profit or loss. The cumulative gain or loss previouslyrecognised in other comprehensive income is reclassified from equity to profit or loss as areclassification adjustment when the financial asset is derecognised. Interest income calculatedusing the effective interest method is recognised in profit or loss. Dividends on available-for-saleequity instrument are recognised in profit or loss when the Company's right to receive payment isestablished.

Financial assets at fair value through profit or loss could be presented as current or non-current.Financial assets that are held primarily for trading purposes are presented as current whereasfinancial assets that are not held primarily for trading purposes are presented as current or non-current based on the settlement date.

Loans and receivables are non-derivative financial assets with fixed or determinable paymentsthat are not quoted in an active market. Loans and receivables are measured at amortised costusing the effective interest method, less any impairment. Interest income is recognised byapplying the effective interest rate, except for short-term receivables when the recognition ofinterest would be immaterial.

Held-to-maturity investments are non-derivative financial assets with fixed or determinablepayments and fixed maturity dates that the Group has the positive intent and ability to hold tomaturity. Subsequent to initial recognition, held-to-maturity investments are measured atamortised cost using the effective interest method less any impairment.

Held-to-maturity investments

Loans and receivables

Available-for-sale (AFS) financial assets

24

Company No:412406-T

ii)

a)

The Group classifies its financial assets in the following categories: at fair value through profit or loss(FVTPL), held-to-maturity, loans and receivables and available-for-sale. The classification dependson the purpose for which the financial assets were acquired. Management determines theclassification at initial recognition.

Financial assets are classified as financial assets at fair value through profit or loss if they areheld for trading or are designated as such upon initial recognition. Financial assets held fortrading are derivatives (including separated embedded derivatives) or financial assets acquiredprincipally for the purpose of selling in the near term.

Financial assets at fair value through profit or loss could be presented as current or non-current.

Subsequent to initial recognition, financial assets at fair value through profit or loss are measuredat fair value. Any gains or losses arising from changes in fair value are recognised in profit orloss. Net gains or net losses on financial assets at fair value through profit or loss do not includeexchange differences, interest and dividend income. Exchange differences, interest and dividendincome on financial assets at fair value through profit or loss are recognised separately in profitor loss as part of other losses or other income.

The Group categories financial instruments as follows:

Financial assets

Financial assets at fair value through profit or loss

Financial instrument categories and subsequent measurement

b)

c)

d)

Available-for-sale financial assets are non-derivatives that are either designated in this categoryor not classified in any of the other categories. After initial recognition, available-for-sale financialassets are measured at fair value. Any gains or losses from changes in fair value of the financialassets are recognised in other comprehensive income, except that impairment losses, foreignexchange gains and losses on monetary instruments and interest calculated using the effectiveinterest method are recognised in profit or loss. The cumulative gain or loss previouslyrecognised in other comprehensive income is reclassified from equity to profit or loss as areclassification adjustment when the financial asset is derecognised. Interest income calculatedusing the effective interest method is recognised in profit or loss. Dividends on available-for-saleequity instrument are recognised in profit or loss when the Company's right to receive payment isestablished.

Financial assets at fair value through profit or loss could be presented as current or non-current.Financial assets that are held primarily for trading purposes are presented as current whereasfinancial assets that are not held primarily for trading purposes are presented as current or non-current based on the settlement date.

Loans and receivables are non-derivative financial assets with fixed or determinable paymentsthat are not quoted in an active market. Loans and receivables are measured at amortised costusing the effective interest method, less any impairment. Interest income is recognised byapplying the effective interest rate, except for short-term receivables when the recognition ofinterest would be immaterial.

Held-to-maturity investments are non-derivative financial assets with fixed or determinablepayments and fixed maturity dates that the Group has the positive intent and ability to hold tomaturity. Subsequent to initial recognition, held-to-maturity investments are measured atamortised cost using the effective interest method less any impairment.

Held-to-maturity investments

Loans and receivables

Available-for-sale (AFS) financial assets

24

Company No:412406-T

ii)

a)

The Group classifies its financial assets in the following categories: at fair value through profit or loss(FVTPL), held-to-maturity, loans and receivables and available-for-sale. The classification dependson the purpose for which the financial assets were acquired. Management determines theclassification at initial recognition.

Financial assets are classified as financial assets at fair value through profit or loss if they areheld for trading or are designated as such upon initial recognition. Financial assets held fortrading are derivatives (including separated embedded derivatives) or financial assets acquiredprincipally for the purpose of selling in the near term.

Financial assets at fair value through profit or loss could be presented as current or non-current.

Subsequent to initial recognition, financial assets at fair value through profit or loss are measuredat fair value. Any gains or losses arising from changes in fair value are recognised in profit orloss. Net gains or net losses on financial assets at fair value through profit or loss do not includeexchange differences, interest and dividend income. Exchange differences, interest and dividendincome on financial assets at fair value through profit or loss are recognised separately in profitor loss as part of other losses or other income.

The Group categories financial instruments as follows:

Financial assets

Financial assets at fair value through profit or loss

Financial instrument categories and subsequent measurement

b)

c)

d)

Available-for-sale financial assets are non-derivatives that are either designated in this categoryor not classified in any of the other categories. After initial recognition, available-for-sale financialassets are measured at fair value. Any gains or losses from changes in fair value of the financialassets are recognised in other comprehensive income, except that impairment losses, foreignexchange gains and losses on monetary instruments and interest calculated using the effectiveinterest method are recognised in profit or loss. The cumulative gain or loss previouslyrecognised in other comprehensive income is reclassified from equity to profit or loss as areclassification adjustment when the financial asset is derecognised. Interest income calculatedusing the effective interest method is recognised in profit or loss. Dividends on available-for-saleequity instrument are recognised in profit or loss when the Company's right to receive payment isestablished.

Financial assets at fair value through profit or loss could be presented as current or non-current.Financial assets that are held primarily for trading purposes are presented as current whereasfinancial assets that are not held primarily for trading purposes are presented as current or non-current based on the settlement date.

Loans and receivables are non-derivative financial assets with fixed or determinable paymentsthat are not quoted in an active market. Loans and receivables are measured at amortised costusing the effective interest method, less any impairment. Interest income is recognised byapplying the effective interest rate, except for short-term receivables when the recognition ofinterest would be immaterial.

Held-to-maturity investments are non-derivative financial assets with fixed or determinablepayments and fixed maturity dates that the Group has the positive intent and ability to hold tomaturity. Subsequent to initial recognition, held-to-maturity investments are measured atamortised cost using the effective interest method less any impairment.

Held-to-maturity investments

Loans and receivables

Available-for-sale (AFS) financial assets

24

Company No:412406-T

ii)

a)

The Group classifies its financial assets in the following categories: at fair value through profit or loss(FVTPL), held-to-maturity, loans and receivables and available-for-sale. The classification dependson the purpose for which the financial assets were acquired. Management determines theclassification at initial recognition.

Financial assets are classified as financial assets at fair value through profit or loss if they areheld for trading or are designated as such upon initial recognition. Financial assets held fortrading are derivatives (including separated embedded derivatives) or financial assets acquiredprincipally for the purpose of selling in the near term.

Financial assets at fair value through profit or loss could be presented as current or non-current.

Subsequent to initial recognition, financial assets at fair value through profit or loss are measuredat fair value. Any gains or losses arising from changes in fair value are recognised in profit orloss. Net gains or net losses on financial assets at fair value through profit or loss do not includeexchange differences, interest and dividend income. Exchange differences, interest and dividendincome on financial assets at fair value through profit or loss are recognised separately in profitor loss as part of other losses or other income.

The Group categories financial instruments as follows:

Financial assets

Financial assets at fair value through profit or loss

Financial instrument categories and subsequent measurement

b)

c)

d)

Available-for-sale financial assets are non-derivatives that are either designated in this categoryor not classified in any of the other categories. After initial recognition, available-for-sale financialassets are measured at fair value. Any gains or losses from changes in fair value of the financialassets are recognised in other comprehensive income, except that impairment losses, foreignexchange gains and losses on monetary instruments and interest calculated using the effectiveinterest method are recognised in profit or loss. The cumulative gain or loss previouslyrecognised in other comprehensive income is reclassified from equity to profit or loss as areclassification adjustment when the financial asset is derecognised. Interest income calculatedusing the effective interest method is recognised in profit or loss. Dividends on available-for-saleequity instrument are recognised in profit or loss when the Company's right to receive payment isestablished.

Financial assets at fair value through profit or loss could be presented as current or non-current.Financial assets that are held primarily for trading purposes are presented as current whereasfinancial assets that are not held primarily for trading purposes are presented as current or non-current based on the settlement date.

Loans and receivables are non-derivative financial assets with fixed or determinable paymentsthat are not quoted in an active market. Loans and receivables are measured at amortised costusing the effective interest method, less any impairment. Interest income is recognised byapplying the effective interest rate, except for short-term receivables when the recognition ofinterest would be immaterial.

Held-to-maturity investments are non-derivative financial assets with fixed or determinablepayments and fixed maturity dates that the Group has the positive intent and ability to hold tomaturity. Subsequent to initial recognition, held-to-maturity investments are measured atamortised cost using the effective interest method less any impairment.

Held-to-maturity investments

Loans and receivables

Available-for-sale (AFS) financial assets

24

Company No:412406-T

ii)

a)

The Group classifies its financial assets in the following categories: at fair value through profit or loss(FVTPL), held-to-maturity, loans and receivables and available-for-sale. The classification dependson the purpose for which the financial assets were acquired. Management determines theclassification at initial recognition.

Financial assets are classified as financial assets at fair value through profit or loss if they areheld for trading or are designated as such upon initial recognition. Financial assets held fortrading are derivatives (including separated embedded derivatives) or financial assets acquiredprincipally for the purpose of selling in the near term.

Financial assets at fair value through profit or loss could be presented as current or non-current.

Subsequent to initial recognition, financial assets at fair value through profit or loss are measuredat fair value. Any gains or losses arising from changes in fair value are recognised in profit orloss. Net gains or net losses on financial assets at fair value through profit or loss do not includeexchange differences, interest and dividend income. Exchange differences, interest and dividendincome on financial assets at fair value through profit or loss are recognised separately in profitor loss as part of other losses or other income.

The Group categories financial instruments as follows:

Financial assets

Financial assets at fair value through profit or loss

Financial instrument categories and subsequent measurement

b)

c)

d)

Available-for-sale financial assets are non-derivatives that are either designated in this categoryor not classified in any of the other categories. After initial recognition, available-for-sale financialassets are measured at fair value. Any gains or losses from changes in fair value of the financialassets are recognised in other comprehensive income, except that impairment losses, foreignexchange gains and losses on monetary instruments and interest calculated using the effectiveinterest method are recognised in profit or loss. The cumulative gain or loss previouslyrecognised in other comprehensive income is reclassified from equity to profit or loss as areclassification adjustment when the financial asset is derecognised. Interest income calculatedusing the effective interest method is recognised in profit or loss. Dividends on available-for-saleequity instrument are recognised in profit or loss when the Company's right to receive payment isestablished.

Financial assets at fair value through profit or loss could be presented as current or non-current.Financial assets that are held primarily for trading purposes are presented as current whereasfinancial assets that are not held primarily for trading purposes are presented as current or non-current based on the settlement date.

Loans and receivables are non-derivative financial assets with fixed or determinable paymentsthat are not quoted in an active market. Loans and receivables are measured at amortised costusing the effective interest method, less any impairment. Interest income is recognised byapplying the effective interest rate, except for short-term receivables when the recognition ofinterest would be immaterial.

Held-to-maturity investments are non-derivative financial assets with fixed or determinablepayments and fixed maturity dates that the Group has the positive intent and ability to hold tomaturity. Subsequent to initial recognition, held-to-maturity investments are measured atamortised cost using the effective interest method less any impairment.

Held-to-maturity investments

Loans and receivables

Available-for-sale (AFS) financial assets

24

Company No:412406-T

ii)

a)

The Group classifies its financial assets in the following categories: at fair value through profit or loss(FVTPL), held-to-maturity, loans and receivables and available-for-sale. The classification dependson the purpose for which the financial assets were acquired. Management determines theclassification at initial recognition.

Financial assets are classified as financial assets at fair value through profit or loss if they areheld for trading or are designated as such upon initial recognition. Financial assets held fortrading are derivatives (including separated embedded derivatives) or financial assets acquiredprincipally for the purpose of selling in the near term.

Financial assets at fair value through profit or loss could be presented as current or non-current.

Subsequent to initial recognition, financial assets at fair value through profit or loss are measuredat fair value. Any gains or losses arising from changes in fair value are recognised in profit orloss. Net gains or net losses on financial assets at fair value through profit or loss do not includeexchange differences, interest and dividend income. Exchange differences, interest and dividendincome on financial assets at fair value through profit or loss are recognised separately in profitor loss as part of other losses or other income.

The Group categories financial instruments as follows:

Financial assets

Financial assets at fair value through profit or loss

Financial instrument categories and subsequent measurement

b)

c)

d)

Available-for-sale financial assets are non-derivatives that are either designated in this categoryor not classified in any of the other categories. After initial recognition, available-for-sale financialassets are measured at fair value. Any gains or losses from changes in fair value of the financialassets are recognised in other comprehensive income, except that impairment losses, foreignexchange gains and losses on monetary instruments and interest calculated using the effectiveinterest method are recognised in profit or loss. The cumulative gain or loss previouslyrecognised in other comprehensive income is reclassified from equity to profit or loss as areclassification adjustment when the financial asset is derecognised. Interest income calculatedusing the effective interest method is recognised in profit or loss. Dividends on available-for-saleequity instrument are recognised in profit or loss when the Company's right to receive payment isestablished.

Financial assets at fair value through profit or loss could be presented as current or non-current.Financial assets that are held primarily for trading purposes are presented as current whereasfinancial assets that are not held primarily for trading purposes are presented as current or non-current based on the settlement date.

Loans and receivables are non-derivative financial assets with fixed or determinable paymentsthat are not quoted in an active market. Loans and receivables are measured at amortised costusing the effective interest method, less any impairment. Interest income is recognised byapplying the effective interest rate, except for short-term receivables when the recognition ofinterest would be immaterial.

Held-to-maturity investments are non-derivative financial assets with fixed or determinablepayments and fixed maturity dates that the Group has the positive intent and ability to hold tomaturity. Subsequent to initial recognition, held-to-maturity investments are measured atamortised cost using the effective interest method less any impairment.

Held-to-maturity investments

Loans and receivables

Available-for-sale (AFS) financial assets

24

Company No:412406-T

ii)

a)

The Group classifies its financial assets in the following categories: at fair value through profit or loss(FVTPL), held-to-maturity, loans and receivables and available-for-sale. The classification dependson the purpose for which the financial assets were acquired. Management determines theclassification at initial recognition.

Financial assets are classified as financial assets at fair value through profit or loss if they areheld for trading or are designated as such upon initial recognition. Financial assets held fortrading are derivatives (including separated embedded derivatives) or financial assets acquiredprincipally for the purpose of selling in the near term.

Financial assets at fair value through profit or loss could be presented as current or non-current.

Subsequent to initial recognition, financial assets at fair value through profit or loss are measuredat fair value. Any gains or losses arising from changes in fair value are recognised in profit orloss. Net gains or net losses on financial assets at fair value through profit or loss do not includeexchange differences, interest and dividend income. Exchange differences, interest and dividendincome on financial assets at fair value through profit or loss are recognised separately in profitor loss as part of other losses or other income.

The Group categories financial instruments as follows:

Financial assets

Financial assets at fair value through profit or loss

Financial instrument categories and subsequent measurement

b)

c)

d)

Available-for-sale financial assets are non-derivatives that are either designated in this categoryor not classified in any of the other categories. After initial recognition, available-for-sale financialassets are measured at fair value. Any gains or losses from changes in fair value of the financialassets are recognised in other comprehensive income, except that impairment losses, foreignexchange gains and losses on monetary instruments and interest calculated using the effectiveinterest method are recognised in profit or loss. The cumulative gain or loss previouslyrecognised in other comprehensive income is reclassified from equity to profit or loss as areclassification adjustment when the financial asset is derecognised. Interest income calculatedusing the effective interest method is recognised in profit or loss. Dividends on available-for-saleequity instrument are recognised in profit or loss when the Company's right to receive payment isestablished.

Financial assets at fair value through profit or loss could be presented as current or non-current.Financial assets that are held primarily for trading purposes are presented as current whereasfinancial assets that are not held primarily for trading purposes are presented as current or non-current based on the settlement date.

Loans and receivables are non-derivative financial assets with fixed or determinable paymentsthat are not quoted in an active market. Loans and receivables are measured at amortised costusing the effective interest method, less any impairment. Interest income is recognised byapplying the effective interest rate, except for short-term receivables when the recognition ofinterest would be immaterial.

Held-to-maturity investments are non-derivative financial assets with fixed or determinablepayments and fixed maturity dates that the Group has the positive intent and ability to hold tomaturity. Subsequent to initial recognition, held-to-maturity investments are measured atamortised cost using the effective interest method less any impairment.

Held-to-maturity investments

Loans and receivables

Available-for-sale (AFS) financial assets

24

Company No:412406-T

ii)

a)

The Group classifies its financial assets in the following categories: at fair value through profit or loss(FVTPL), held-to-maturity, loans and receivables and available-for-sale. The classification dependson the purpose for which the financial assets were acquired. Management determines theclassification at initial recognition.

Financial assets are classified as financial assets at fair value through profit or loss if they areheld for trading or are designated as such upon initial recognition. Financial assets held fortrading are derivatives (including separated embedded derivatives) or financial assets acquiredprincipally for the purpose of selling in the near term.

Financial assets at fair value through profit or loss could be presented as current or non-current.

Subsequent to initial recognition, financial assets at fair value through profit or loss are measuredat fair value. Any gains or losses arising from changes in fair value are recognised in profit orloss. Net gains or net losses on financial assets at fair value through profit or loss do not includeexchange differences, interest and dividend income. Exchange differences, interest and dividendincome on financial assets at fair value through profit or loss are recognised separately in profitor loss as part of other losses or other income.

The Group categories financial instruments as follows:

Financial assets

Financial assets at fair value through profit or loss

Financial instrument categories and subsequent measurement

b)

c)

d)

Available-for-sale financial assets are non-derivatives that are either designated in this categoryor not classified in any of the other categories. After initial recognition, available-for-sale financialassets are measured at fair value. Any gains or losses from changes in fair value of the financialassets are recognised in other comprehensive income, except that impairment losses, foreignexchange gains and losses on monetary instruments and interest calculated using the effectiveinterest method are recognised in profit or loss. The cumulative gain or loss previouslyrecognised in other comprehensive income is reclassified from equity to profit or loss as areclassification adjustment when the financial asset is derecognised. Interest income calculatedusing the effective interest method is recognised in profit or loss. Dividends on available-for-saleequity instrument are recognised in profit or loss when the Company's right to receive payment isestablished.

Financial assets at fair value through profit or loss could be presented as current or non-current.Financial assets that are held primarily for trading purposes are presented as current whereasfinancial assets that are not held primarily for trading purposes are presented as current or non-current based on the settlement date.

Loans and receivables are non-derivative financial assets with fixed or determinable paymentsthat are not quoted in an active market. Loans and receivables are measured at amortised costusing the effective interest method, less any impairment. Interest income is recognised byapplying the effective interest rate, except for short-term receivables when the recognition ofinterest would be immaterial.

Held-to-maturity investments are non-derivative financial assets with fixed or determinablepayments and fixed maturity dates that the Group has the positive intent and ability to hold tomaturity. Subsequent to initial recognition, held-to-maturity investments are measured atamortised cost using the effective interest method less any impairment.

Held-to-maturity investments

Loans and receivables

Available-for-sale (AFS) financial assets

24

Company No:412406-T

ii)

a)

The Group classifies its financial assets in the following categories: at fair value through profit or loss(FVTPL), held-to-maturity, loans and receivables and available-for-sale. The classification dependson the purpose for which the financial assets were acquired. Management determines theclassification at initial recognition.

Financial assets are classified as financial assets at fair value through profit or loss if they areheld for trading or are designated as such upon initial recognition. Financial assets held fortrading are derivatives (including separated embedded derivatives) or financial assets acquiredprincipally for the purpose of selling in the near term.

Financial assets at fair value through profit or loss could be presented as current or non-current.

Subsequent to initial recognition, financial assets at fair value through profit or loss are measuredat fair value. Any gains or losses arising from changes in fair value are recognised in profit orloss. Net gains or net losses on financial assets at fair value through profit or loss do not includeexchange differences, interest and dividend income. Exchange differences, interest and dividendincome on financial assets at fair value through profit or loss are recognised separately in profitor loss as part of other losses or other income.

The Group categories financial instruments as follows:

Financial assets

Financial assets at fair value through profit or loss

Financial instrument categories and subsequent measurement

b)

c)

d)

Available-for-sale financial assets are non-derivatives that are either designated in this categoryor not classified in any of the other categories. After initial recognition, available-for-sale financialassets are measured at fair value. Any gains or losses from changes in fair value of the financialassets are recognised in other comprehensive income, except that impairment losses, foreignexchange gains and losses on monetary instruments and interest calculated using the effectiveinterest method are recognised in profit or loss. The cumulative gain or loss previouslyrecognised in other comprehensive income is reclassified from equity to profit or loss as areclassification adjustment when the financial asset is derecognised. Interest income calculatedusing the effective interest method is recognised in profit or loss. Dividends on available-for-saleequity instrument are recognised in profit or loss when the Company's right to receive payment isestablished.

Financial assets at fair value through profit or loss could be presented as current or non-current.Financial assets that are held primarily for trading purposes are presented as current whereasfinancial assets that are not held primarily for trading purposes are presented as current or non-current based on the settlement date.

Loans and receivables are non-derivative financial assets with fixed or determinable paymentsthat are not quoted in an active market. Loans and receivables are measured at amortised costusing the effective interest method, less any impairment. Interest income is recognised byapplying the effective interest rate, except for short-term receivables when the recognition ofinterest would be immaterial.

Held-to-maturity investments are non-derivative financial assets with fixed or determinablepayments and fixed maturity dates that the Group has the positive intent and ability to hold tomaturity. Subsequent to initial recognition, held-to-maturity investments are measured atamortised cost using the effective interest method less any impairment.

Held-to-maturity investments

Loans and receivables

Available-for-sale (AFS) financial assets

24

Company No:412406-T

ii)

a)

The Group classifies its financial assets in the following categories: at fair value through profit or loss(FVTPL), held-to-maturity, loans and receivables and available-for-sale. The classification dependson the purpose for which the financial assets were acquired. Management determines theclassification at initial recognition.

Financial assets are classified as financial assets at fair value through profit or loss if they areheld for trading or are designated as such upon initial recognition. Financial assets held fortrading are derivatives (including separated embedded derivatives) or financial assets acquiredprincipally for the purpose of selling in the near term.

Financial assets at fair value through profit or loss could be presented as current or non-current.

Subsequent to initial recognition, financial assets at fair value through profit or loss are measuredat fair value. Any gains or losses arising from changes in fair value are recognised in profit orloss. Net gains or net losses on financial assets at fair value through profit or loss do not includeexchange differences, interest and dividend income. Exchange differences, interest and dividendincome on financial assets at fair value through profit or loss are recognised separately in profitor loss as part of other losses or other income.

The Group categories financial instruments as follows:

Financial assets

Financial assets at fair value through profit or loss

Financial instrument categories and subsequent measurement

b)

c)

d)

Available-for-sale financial assets are non-derivatives that are either designated in this categoryor not classified in any of the other categories. After initial recognition, available-for-sale financialassets are measured at fair value. Any gains or losses from changes in fair value of the financialassets are recognised in other comprehensive income, except that impairment losses, foreignexchange gains and losses on monetary instruments and interest calculated using the effectiveinterest method are recognised in profit or loss. The cumulative gain or loss previouslyrecognised in other comprehensive income is reclassified from equity to profit or loss as areclassification adjustment when the financial asset is derecognised. Interest income calculatedusing the effective interest method is recognised in profit or loss. Dividends on available-for-saleequity instrument are recognised in profit or loss when the Company's right to receive payment isestablished.

Financial assets at fair value through profit or loss could be presented as current or non-current.Financial assets that are held primarily for trading purposes are presented as current whereasfinancial assets that are not held primarily for trading purposes are presented as current or non-current based on the settlement date.

Loans and receivables are non-derivative financial assets with fixed or determinable paymentsthat are not quoted in an active market. Loans and receivables are measured at amortised costusing the effective interest method, less any impairment. Interest income is recognised byapplying the effective interest rate, except for short-term receivables when the recognition ofinterest would be immaterial.

Held-to-maturity investments are non-derivative financial assets with fixed or determinablepayments and fixed maturity dates that the Group has the positive intent and ability to hold tomaturity. Subsequent to initial recognition, held-to-maturity investments are measured atamortised cost using the effective interest method less any impairment.

Held-to-maturity investments

Loans and receivables

Available-for-sale (AFS) financial assets

24

Company No:412406-T

ii)

a)

The Group classifies its financial assets in the following categories: at fair value through profit or loss(FVTPL), held-to-maturity, loans and receivables and available-for-sale. The classification dependson the purpose for which the financial assets were acquired. Management determines theclassification at initial recognition.

Financial assets are classified as financial assets at fair value through profit or loss if they areheld for trading or are designated as such upon initial recognition. Financial assets held fortrading are derivatives (including separated embedded derivatives) or financial assets acquiredprincipally for the purpose of selling in the near term.

Financial assets at fair value through profit or loss could be presented as current or non-current.

Subsequent to initial recognition, financial assets at fair value through profit or loss are measuredat fair value. Any gains or losses arising from changes in fair value are recognised in profit orloss. Net gains or net losses on financial assets at fair value through profit or loss do not includeexchange differences, interest and dividend income. Exchange differences, interest and dividendincome on financial assets at fair value through profit or loss are recognised separately in profitor loss as part of other losses or other income.

The Group categories financial instruments as follows:

Financial assets

Financial assets at fair value through profit or loss

Financial instrument categories and subsequent measurement

b)

c)

d)

Available-for-sale financial assets are non-derivatives that are either designated in this categoryor not classified in any of the other categories. After initial recognition, available-for-sale financialassets are measured at fair value. Any gains or losses from changes in fair value of the financialassets are recognised in other comprehensive income, except that impairment losses, foreignexchange gains and losses on monetary instruments and interest calculated using the effectiveinterest method are recognised in profit or loss. The cumulative gain or loss previouslyrecognised in other comprehensive income is reclassified from equity to profit or loss as areclassification adjustment when the financial asset is derecognised. Interest income calculatedusing the effective interest method is recognised in profit or loss. Dividends on available-for-saleequity instrument are recognised in profit or loss when the Company's right to receive payment isestablished.

Financial assets at fair value through profit or loss could be presented as current or non-current.Financial assets that are held primarily for trading purposes are presented as current whereasfinancial assets that are not held primarily for trading purposes are presented as current or non-current based on the settlement date.

Loans and receivables are non-derivative financial assets with fixed or determinable paymentsthat are not quoted in an active market. Loans and receivables are measured at amortised costusing the effective interest method, less any impairment. Interest income is recognised byapplying the effective interest rate, except for short-term receivables when the recognition ofinterest would be immaterial.

Held-to-maturity investments are non-derivative financial assets with fixed or determinablepayments and fixed maturity dates that the Group has the positive intent and ability to hold tomaturity. Subsequent to initial recognition, held-to-maturity investments are measured atamortised cost using the effective interest method less any impairment.

Held-to-maturity investments

Loans and receivables

Available-for-sale (AFS) financial assets

24

RAYA INTERNATIONAL BERHAD Annual Report 2013

48

Notes to the Financial Statements (Cont’d)

Company No:412406-T

Financial liabilities

a) Financial liabilities at fair value through profit or loss

A financial liability is classified as held for trading if:

a) it has been acquired principally for the purpose of repurchasing it in the near term; or

b)

Available-for-sale financial assets are included in non-current assets unless the investmentmatures or management intends to dispose of it within 12 months of the end of the reportingperiod.

Financial assets are de-recognised when the rights to receive cash flows from the investments haveexpired or have been transferred and the Group has transferred substantially all risks and rewards ofownership.

Financial liabilities are classified as either financial liabilities at fair value through profit or loss orother financial liabilities.

Financial liabilities are classified as financial liabilities at fair value through profit or loss when thefinancial liability is either held for trading or it is designated as financial liabilities at fair valuethrough profit or loss.

on initial recognition it is part of a portfolio of identified financial instruments that the Groupmanages together and has a recent actual pattern of short-term profit-taking; or

c)

a)

b)

c)

b) Other financial liabilities

A financial liability other than a financial liability held for trading may be designated as financialliabilities at fair value through profit or loss upon initial recognition if:

such designation eliminates or significantly reduces a measurement or recognitioninconsistency that would otherwise arise; or

the financial liability forms part of a group of financial assets or financial liabilities or both,which is managed and its performance is evaluated on a fair value basis, in accordance withthe Group's documented risk management or investment strategy, and information about thegrouping is provided internally on that basis; or

it forms part of a contract containing one or more embedded derivatives, and MFRS 139Financial Instruments: Recognition and Measurement permits the entire combined contract(asset or liability) to be designated as financial liabilities at fair value through profit or loss.

it is a derivative that is not designated and effective as a hedging instrument.

Financial liabilities at fair value through profit or loss are stated at fair value, with any gains orlosses arising on remeasurement recognised in profit or loss. The net gain or loss recognised inprofit or loss incorporates any interest paid on the financial liability and is included in the 'othergains and losses' line item in the statements of comprehensive income.

Other financial liabilities, including borrowings, are initially measured at fair value, net oftransaction costs and are subsequently measured at amortised cost using the effective interestmethod, with interest expense recognised on an effective yield basis.

The effective interest method is a method of calculating the amortised cost of a financial liabilityand of allocating interest expense over the relevant period. The effective interest rate is theexactly discounts estimated future cash payments through the expected life of the financialliability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

25

Company No:412406-T

Financial liabilities

a) Financial liabilities at fair value through profit or loss

A financial liability is classified as held for trading if:

a) it has been acquired principally for the purpose of repurchasing it in the near term; or

b)

Available-for-sale financial assets are included in non-current assets unless the investmentmatures or management intends to dispose of it within 12 months of the end of the reportingperiod.

Financial assets are de-recognised when the rights to receive cash flows from the investments haveexpired or have been transferred and the Group has transferred substantially all risks and rewards ofownership.

Financial liabilities are classified as either financial liabilities at fair value through profit or loss orother financial liabilities.

Financial liabilities are classified as financial liabilities at fair value through profit or loss when thefinancial liability is either held for trading or it is designated as financial liabilities at fair valuethrough profit or loss.

on initial recognition it is part of a portfolio of identified financial instruments that the Groupmanages together and has a recent actual pattern of short-term profit-taking; or

c)

a)

b)

c)

b) Other financial liabilities

A financial liability other than a financial liability held for trading may be designated as financialliabilities at fair value through profit or loss upon initial recognition if:

such designation eliminates or significantly reduces a measurement or recognitioninconsistency that would otherwise arise; or

the financial liability forms part of a group of financial assets or financial liabilities or both,which is managed and its performance is evaluated on a fair value basis, in accordance withthe Group's documented risk management or investment strategy, and information about thegrouping is provided internally on that basis; or

it forms part of a contract containing one or more embedded derivatives, and MFRS 139Financial Instruments: Recognition and Measurement permits the entire combined contract(asset or liability) to be designated as financial liabilities at fair value through profit or loss.

it is a derivative that is not designated and effective as a hedging instrument.

Financial liabilities at fair value through profit or loss are stated at fair value, with any gains orlosses arising on remeasurement recognised in profit or loss. The net gain or loss recognised inprofit or loss incorporates any interest paid on the financial liability and is included in the 'othergains and losses' line item in the statements of comprehensive income.

Other financial liabilities, including borrowings, are initially measured at fair value, net oftransaction costs and are subsequently measured at amortised cost using the effective interestmethod, with interest expense recognised on an effective yield basis.

The effective interest method is a method of calculating the amortised cost of a financial liabilityand of allocating interest expense over the relevant period. The effective interest rate is theexactly discounts estimated future cash payments through the expected life of the financialliability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

25

Company No:412406-T

Financial liabilities

a) Financial liabilities at fair value through profit or loss

A financial liability is classified as held for trading if:

a) it has been acquired principally for the purpose of repurchasing it in the near term; or

b)

Available-for-sale financial assets are included in non-current assets unless the investmentmatures or management intends to dispose of it within 12 months of the end of the reportingperiod.

Financial assets are de-recognised when the rights to receive cash flows from the investments haveexpired or have been transferred and the Group has transferred substantially all risks and rewards ofownership.

Financial liabilities are classified as either financial liabilities at fair value through profit or loss orother financial liabilities.

Financial liabilities are classified as financial liabilities at fair value through profit or loss when thefinancial liability is either held for trading or it is designated as financial liabilities at fair valuethrough profit or loss.

on initial recognition it is part of a portfolio of identified financial instruments that the Groupmanages together and has a recent actual pattern of short-term profit-taking; or

c)

a)

b)

c)

b) Other financial liabilities

A financial liability other than a financial liability held for trading may be designated as financialliabilities at fair value through profit or loss upon initial recognition if:

such designation eliminates or significantly reduces a measurement or recognitioninconsistency that would otherwise arise; or

the financial liability forms part of a group of financial assets or financial liabilities or both,which is managed and its performance is evaluated on a fair value basis, in accordance withthe Group's documented risk management or investment strategy, and information about thegrouping is provided internally on that basis; or

it forms part of a contract containing one or more embedded derivatives, and MFRS 139Financial Instruments: Recognition and Measurement permits the entire combined contract(asset or liability) to be designated as financial liabilities at fair value through profit or loss.

it is a derivative that is not designated and effective as a hedging instrument.

Financial liabilities at fair value through profit or loss are stated at fair value, with any gains orlosses arising on remeasurement recognised in profit or loss. The net gain or loss recognised inprofit or loss incorporates any interest paid on the financial liability and is included in the 'othergains and losses' line item in the statements of comprehensive income.

Other financial liabilities, including borrowings, are initially measured at fair value, net oftransaction costs and are subsequently measured at amortised cost using the effective interestmethod, with interest expense recognised on an effective yield basis.

The effective interest method is a method of calculating the amortised cost of a financial liabilityand of allocating interest expense over the relevant period. The effective interest rate is theexactly discounts estimated future cash payments through the expected life of the financialliability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

25

Company No:412406-T

Financial liabilities

a) Financial liabilities at fair value through profit or loss

A financial liability is classified as held for trading if:

a) it has been acquired principally for the purpose of repurchasing it in the near term; or

b)

Available-for-sale financial assets are included in non-current assets unless the investmentmatures or management intends to dispose of it within 12 months of the end of the reportingperiod.

Financial assets are de-recognised when the rights to receive cash flows from the investments haveexpired or have been transferred and the Group has transferred substantially all risks and rewards ofownership.

Financial liabilities are classified as either financial liabilities at fair value through profit or loss orother financial liabilities.

Financial liabilities are classified as financial liabilities at fair value through profit or loss when thefinancial liability is either held for trading or it is designated as financial liabilities at fair valuethrough profit or loss.

on initial recognition it is part of a portfolio of identified financial instruments that the Groupmanages together and has a recent actual pattern of short-term profit-taking; or

c)

a)

b)

c)

b) Other financial liabilities

A financial liability other than a financial liability held for trading may be designated as financialliabilities at fair value through profit or loss upon initial recognition if:

such designation eliminates or significantly reduces a measurement or recognitioninconsistency that would otherwise arise; or

the financial liability forms part of a group of financial assets or financial liabilities or both,which is managed and its performance is evaluated on a fair value basis, in accordance withthe Group's documented risk management or investment strategy, and information about thegrouping is provided internally on that basis; or

it forms part of a contract containing one or more embedded derivatives, and MFRS 139Financial Instruments: Recognition and Measurement permits the entire combined contract(asset or liability) to be designated as financial liabilities at fair value through profit or loss.

it is a derivative that is not designated and effective as a hedging instrument.

Financial liabilities at fair value through profit or loss are stated at fair value, with any gains orlosses arising on remeasurement recognised in profit or loss. The net gain or loss recognised inprofit or loss incorporates any interest paid on the financial liability and is included in the 'othergains and losses' line item in the statements of comprehensive income.

Other financial liabilities, including borrowings, are initially measured at fair value, net oftransaction costs and are subsequently measured at amortised cost using the effective interestmethod, with interest expense recognised on an effective yield basis.

The effective interest method is a method of calculating the amortised cost of a financial liabilityand of allocating interest expense over the relevant period. The effective interest rate is theexactly discounts estimated future cash payments through the expected life of the financialliability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

25

Company No:412406-T

Financial liabilities

a) Financial liabilities at fair value through profit or loss

A financial liability is classified as held for trading if:

a) it has been acquired principally for the purpose of repurchasing it in the near term; or

b)

Available-for-sale financial assets are included in non-current assets unless the investmentmatures or management intends to dispose of it within 12 months of the end of the reportingperiod.

Financial assets are de-recognised when the rights to receive cash flows from the investments haveexpired or have been transferred and the Group has transferred substantially all risks and rewards ofownership.

Financial liabilities are classified as either financial liabilities at fair value through profit or loss orother financial liabilities.

Financial liabilities are classified as financial liabilities at fair value through profit or loss when thefinancial liability is either held for trading or it is designated as financial liabilities at fair valuethrough profit or loss.

on initial recognition it is part of a portfolio of identified financial instruments that the Groupmanages together and has a recent actual pattern of short-term profit-taking; or

c)

a)

b)

c)

b) Other financial liabilities

A financial liability other than a financial liability held for trading may be designated as financialliabilities at fair value through profit or loss upon initial recognition if:

such designation eliminates or significantly reduces a measurement or recognitioninconsistency that would otherwise arise; or

the financial liability forms part of a group of financial assets or financial liabilities or both,which is managed and its performance is evaluated on a fair value basis, in accordance withthe Group's documented risk management or investment strategy, and information about thegrouping is provided internally on that basis; or

it forms part of a contract containing one or more embedded derivatives, and MFRS 139Financial Instruments: Recognition and Measurement permits the entire combined contract(asset or liability) to be designated as financial liabilities at fair value through profit or loss.

it is a derivative that is not designated and effective as a hedging instrument.

Financial liabilities at fair value through profit or loss are stated at fair value, with any gains orlosses arising on remeasurement recognised in profit or loss. The net gain or loss recognised inprofit or loss incorporates any interest paid on the financial liability and is included in the 'othergains and losses' line item in the statements of comprehensive income.

Other financial liabilities, including borrowings, are initially measured at fair value, net oftransaction costs and are subsequently measured at amortised cost using the effective interestmethod, with interest expense recognised on an effective yield basis.

The effective interest method is a method of calculating the amortised cost of a financial liabilityand of allocating interest expense over the relevant period. The effective interest rate is theexactly discounts estimated future cash payments through the expected life of the financialliability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

25

Company No:412406-T

Financial liabilities

a) Financial liabilities at fair value through profit or loss

A financial liability is classified as held for trading if:

a) it has been acquired principally for the purpose of repurchasing it in the near term; or

b)

Available-for-sale financial assets are included in non-current assets unless the investmentmatures or management intends to dispose of it within 12 months of the end of the reportingperiod.

Financial assets are de-recognised when the rights to receive cash flows from the investments haveexpired or have been transferred and the Group has transferred substantially all risks and rewards ofownership.

Financial liabilities are classified as either financial liabilities at fair value through profit or loss orother financial liabilities.

Financial liabilities are classified as financial liabilities at fair value through profit or loss when thefinancial liability is either held for trading or it is designated as financial liabilities at fair valuethrough profit or loss.

on initial recognition it is part of a portfolio of identified financial instruments that the Groupmanages together and has a recent actual pattern of short-term profit-taking; or

c)

a)

b)

c)

b) Other financial liabilities

A financial liability other than a financial liability held for trading may be designated as financialliabilities at fair value through profit or loss upon initial recognition if:

such designation eliminates or significantly reduces a measurement or recognitioninconsistency that would otherwise arise; or

the financial liability forms part of a group of financial assets or financial liabilities or both,which is managed and its performance is evaluated on a fair value basis, in accordance withthe Group's documented risk management or investment strategy, and information about thegrouping is provided internally on that basis; or

it forms part of a contract containing one or more embedded derivatives, and MFRS 139Financial Instruments: Recognition and Measurement permits the entire combined contract(asset or liability) to be designated as financial liabilities at fair value through profit or loss.

it is a derivative that is not designated and effective as a hedging instrument.

Financial liabilities at fair value through profit or loss are stated at fair value, with any gains orlosses arising on remeasurement recognised in profit or loss. The net gain or loss recognised inprofit or loss incorporates any interest paid on the financial liability and is included in the 'othergains and losses' line item in the statements of comprehensive income.

Other financial liabilities, including borrowings, are initially measured at fair value, net oftransaction costs and are subsequently measured at amortised cost using the effective interestmethod, with interest expense recognised on an effective yield basis.

The effective interest method is a method of calculating the amortised cost of a financial liabilityand of allocating interest expense over the relevant period. The effective interest rate is theexactly discounts estimated future cash payments through the expected life of the financialliability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

25

Company No:412406-T

Financial liabilities

a) Financial liabilities at fair value through profit or loss

A financial liability is classified as held for trading if:

a) it has been acquired principally for the purpose of repurchasing it in the near term; or

b)

Available-for-sale financial assets are included in non-current assets unless the investmentmatures or management intends to dispose of it within 12 months of the end of the reportingperiod.

Financial assets are de-recognised when the rights to receive cash flows from the investments haveexpired or have been transferred and the Group has transferred substantially all risks and rewards ofownership.

Financial liabilities are classified as either financial liabilities at fair value through profit or loss orother financial liabilities.

Financial liabilities are classified as financial liabilities at fair value through profit or loss when thefinancial liability is either held for trading or it is designated as financial liabilities at fair valuethrough profit or loss.

on initial recognition it is part of a portfolio of identified financial instruments that the Groupmanages together and has a recent actual pattern of short-term profit-taking; or

c)

a)

b)

c)

b) Other financial liabilities

A financial liability other than a financial liability held for trading may be designated as financialliabilities at fair value through profit or loss upon initial recognition if:

such designation eliminates or significantly reduces a measurement or recognitioninconsistency that would otherwise arise; or

the financial liability forms part of a group of financial assets or financial liabilities or both,which is managed and its performance is evaluated on a fair value basis, in accordance withthe Group's documented risk management or investment strategy, and information about thegrouping is provided internally on that basis; or

it forms part of a contract containing one or more embedded derivatives, and MFRS 139Financial Instruments: Recognition and Measurement permits the entire combined contract(asset or liability) to be designated as financial liabilities at fair value through profit or loss.

it is a derivative that is not designated and effective as a hedging instrument.

Financial liabilities at fair value through profit or loss are stated at fair value, with any gains orlosses arising on remeasurement recognised in profit or loss. The net gain or loss recognised inprofit or loss incorporates any interest paid on the financial liability and is included in the 'othergains and losses' line item in the statements of comprehensive income.

Other financial liabilities, including borrowings, are initially measured at fair value, net oftransaction costs and are subsequently measured at amortised cost using the effective interestmethod, with interest expense recognised on an effective yield basis.

The effective interest method is a method of calculating the amortised cost of a financial liabilityand of allocating interest expense over the relevant period. The effective interest rate is theexactly discounts estimated future cash payments through the expected life of the financialliability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

25

Company No:412406-T

Financial liabilities

a) Financial liabilities at fair value through profit or loss

A financial liability is classified as held for trading if:

a) it has been acquired principally for the purpose of repurchasing it in the near term; or

b)

Available-for-sale financial assets are included in non-current assets unless the investmentmatures or management intends to dispose of it within 12 months of the end of the reportingperiod.

Financial assets are de-recognised when the rights to receive cash flows from the investments haveexpired or have been transferred and the Group has transferred substantially all risks and rewards ofownership.

Financial liabilities are classified as either financial liabilities at fair value through profit or loss orother financial liabilities.

Financial liabilities are classified as financial liabilities at fair value through profit or loss when thefinancial liability is either held for trading or it is designated as financial liabilities at fair valuethrough profit or loss.

on initial recognition it is part of a portfolio of identified financial instruments that the Groupmanages together and has a recent actual pattern of short-term profit-taking; or

c)

a)

b)

c)

b) Other financial liabilities

A financial liability other than a financial liability held for trading may be designated as financialliabilities at fair value through profit or loss upon initial recognition if:

such designation eliminates or significantly reduces a measurement or recognitioninconsistency that would otherwise arise; or

the financial liability forms part of a group of financial assets or financial liabilities or both,which is managed and its performance is evaluated on a fair value basis, in accordance withthe Group's documented risk management or investment strategy, and information about thegrouping is provided internally on that basis; or

it forms part of a contract containing one or more embedded derivatives, and MFRS 139Financial Instruments: Recognition and Measurement permits the entire combined contract(asset or liability) to be designated as financial liabilities at fair value through profit or loss.

it is a derivative that is not designated and effective as a hedging instrument.

Financial liabilities at fair value through profit or loss are stated at fair value, with any gains orlosses arising on remeasurement recognised in profit or loss. The net gain or loss recognised inprofit or loss incorporates any interest paid on the financial liability and is included in the 'othergains and losses' line item in the statements of comprehensive income.

Other financial liabilities, including borrowings, are initially measured at fair value, net oftransaction costs and are subsequently measured at amortised cost using the effective interestmethod, with interest expense recognised on an effective yield basis.

The effective interest method is a method of calculating the amortised cost of a financial liabilityand of allocating interest expense over the relevant period. The effective interest rate is theexactly discounts estimated future cash payments through the expected life of the financialliability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

25

Company No:412406-T

Financial liabilities

a) Financial liabilities at fair value through profit or loss

A financial liability is classified as held for trading if:

a) it has been acquired principally for the purpose of repurchasing it in the near term; or

b)

Available-for-sale financial assets are included in non-current assets unless the investmentmatures or management intends to dispose of it within 12 months of the end of the reportingperiod.

Financial assets are de-recognised when the rights to receive cash flows from the investments haveexpired or have been transferred and the Group has transferred substantially all risks and rewards ofownership.

Financial liabilities are classified as either financial liabilities at fair value through profit or loss orother financial liabilities.

Financial liabilities are classified as financial liabilities at fair value through profit or loss when thefinancial liability is either held for trading or it is designated as financial liabilities at fair valuethrough profit or loss.

on initial recognition it is part of a portfolio of identified financial instruments that the Groupmanages together and has a recent actual pattern of short-term profit-taking; or

c)

a)

b)

c)

b) Other financial liabilities

A financial liability other than a financial liability held for trading may be designated as financialliabilities at fair value through profit or loss upon initial recognition if:

such designation eliminates or significantly reduces a measurement or recognitioninconsistency that would otherwise arise; or

the financial liability forms part of a group of financial assets or financial liabilities or both,which is managed and its performance is evaluated on a fair value basis, in accordance withthe Group's documented risk management or investment strategy, and information about thegrouping is provided internally on that basis; or

it forms part of a contract containing one or more embedded derivatives, and MFRS 139Financial Instruments: Recognition and Measurement permits the entire combined contract(asset or liability) to be designated as financial liabilities at fair value through profit or loss.

it is a derivative that is not designated and effective as a hedging instrument.

Financial liabilities at fair value through profit or loss are stated at fair value, with any gains orlosses arising on remeasurement recognised in profit or loss. The net gain or loss recognised inprofit or loss incorporates any interest paid on the financial liability and is included in the 'othergains and losses' line item in the statements of comprehensive income.

Other financial liabilities, including borrowings, are initially measured at fair value, net oftransaction costs and are subsequently measured at amortised cost using the effective interestmethod, with interest expense recognised on an effective yield basis.

The effective interest method is a method of calculating the amortised cost of a financial liabilityand of allocating interest expense over the relevant period. The effective interest rate is theexactly discounts estimated future cash payments through the expected life of the financialliability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

25

Company No:412406-T

Financial liabilities

a) Financial liabilities at fair value through profit or loss

A financial liability is classified as held for trading if:

a) it has been acquired principally for the purpose of repurchasing it in the near term; or

b)

Available-for-sale financial assets are included in non-current assets unless the investmentmatures or management intends to dispose of it within 12 months of the end of the reportingperiod.

Financial assets are de-recognised when the rights to receive cash flows from the investments haveexpired or have been transferred and the Group has transferred substantially all risks and rewards ofownership.

Financial liabilities are classified as either financial liabilities at fair value through profit or loss orother financial liabilities.

Financial liabilities are classified as financial liabilities at fair value through profit or loss when thefinancial liability is either held for trading or it is designated as financial liabilities at fair valuethrough profit or loss.

on initial recognition it is part of a portfolio of identified financial instruments that the Groupmanages together and has a recent actual pattern of short-term profit-taking; or

c)

a)

b)

c)

b) Other financial liabilities

A financial liability other than a financial liability held for trading may be designated as financialliabilities at fair value through profit or loss upon initial recognition if:

such designation eliminates or significantly reduces a measurement or recognitioninconsistency that would otherwise arise; or

the financial liability forms part of a group of financial assets or financial liabilities or both,which is managed and its performance is evaluated on a fair value basis, in accordance withthe Group's documented risk management or investment strategy, and information about thegrouping is provided internally on that basis; or

it forms part of a contract containing one or more embedded derivatives, and MFRS 139Financial Instruments: Recognition and Measurement permits the entire combined contract(asset or liability) to be designated as financial liabilities at fair value through profit or loss.

it is a derivative that is not designated and effective as a hedging instrument.

Financial liabilities at fair value through profit or loss are stated at fair value, with any gains orlosses arising on remeasurement recognised in profit or loss. The net gain or loss recognised inprofit or loss incorporates any interest paid on the financial liability and is included in the 'othergains and losses' line item in the statements of comprehensive income.

Other financial liabilities, including borrowings, are initially measured at fair value, net oftransaction costs and are subsequently measured at amortised cost using the effective interestmethod, with interest expense recognised on an effective yield basis.

The effective interest method is a method of calculating the amortised cost of a financial liabilityand of allocating interest expense over the relevant period. The effective interest rate is theexactly discounts estimated future cash payments through the expected life of the financialliability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

25

Company No:412406-T

Financial liabilities

a) Financial liabilities at fair value through profit or loss

A financial liability is classified as held for trading if:

a) it has been acquired principally for the purpose of repurchasing it in the near term; or

b)

Available-for-sale financial assets are included in non-current assets unless the investmentmatures or management intends to dispose of it within 12 months of the end of the reportingperiod.

Financial assets are de-recognised when the rights to receive cash flows from the investments haveexpired or have been transferred and the Group has transferred substantially all risks and rewards ofownership.

Financial liabilities are classified as either financial liabilities at fair value through profit or loss orother financial liabilities.

Financial liabilities are classified as financial liabilities at fair value through profit or loss when thefinancial liability is either held for trading or it is designated as financial liabilities at fair valuethrough profit or loss.

on initial recognition it is part of a portfolio of identified financial instruments that the Groupmanages together and has a recent actual pattern of short-term profit-taking; or

c)

a)

b)

c)

b) Other financial liabilities

A financial liability other than a financial liability held for trading may be designated as financialliabilities at fair value through profit or loss upon initial recognition if:

such designation eliminates or significantly reduces a measurement or recognitioninconsistency that would otherwise arise; or

the financial liability forms part of a group of financial assets or financial liabilities or both,which is managed and its performance is evaluated on a fair value basis, in accordance withthe Group's documented risk management or investment strategy, and information about thegrouping is provided internally on that basis; or

it forms part of a contract containing one or more embedded derivatives, and MFRS 139Financial Instruments: Recognition and Measurement permits the entire combined contract(asset or liability) to be designated as financial liabilities at fair value through profit or loss.

it is a derivative that is not designated and effective as a hedging instrument.

Financial liabilities at fair value through profit or loss are stated at fair value, with any gains orlosses arising on remeasurement recognised in profit or loss. The net gain or loss recognised inprofit or loss incorporates any interest paid on the financial liability and is included in the 'othergains and losses' line item in the statements of comprehensive income.

Other financial liabilities, including borrowings, are initially measured at fair value, net oftransaction costs and are subsequently measured at amortised cost using the effective interestmethod, with interest expense recognised on an effective yield basis.

The effective interest method is a method of calculating the amortised cost of a financial liabilityand of allocating interest expense over the relevant period. The effective interest rate is theexactly discounts estimated future cash payments through the expected life of the financialliability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

25

Company No:412406-T

Financial liabilities

a) Financial liabilities at fair value through profit or loss

A financial liability is classified as held for trading if:

a) it has been acquired principally for the purpose of repurchasing it in the near term; or

b)

Available-for-sale financial assets are included in non-current assets unless the investmentmatures or management intends to dispose of it within 12 months of the end of the reportingperiod.

Financial assets are de-recognised when the rights to receive cash flows from the investments haveexpired or have been transferred and the Group has transferred substantially all risks and rewards ofownership.

Financial liabilities are classified as either financial liabilities at fair value through profit or loss orother financial liabilities.

Financial liabilities are classified as financial liabilities at fair value through profit or loss when thefinancial liability is either held for trading or it is designated as financial liabilities at fair valuethrough profit or loss.

on initial recognition it is part of a portfolio of identified financial instruments that the Groupmanages together and has a recent actual pattern of short-term profit-taking; or

c)

a)

b)

c)

b) Other financial liabilities

A financial liability other than a financial liability held for trading may be designated as financialliabilities at fair value through profit or loss upon initial recognition if:

such designation eliminates or significantly reduces a measurement or recognitioninconsistency that would otherwise arise; or

the financial liability forms part of a group of financial assets or financial liabilities or both,which is managed and its performance is evaluated on a fair value basis, in accordance withthe Group's documented risk management or investment strategy, and information about thegrouping is provided internally on that basis; or

it forms part of a contract containing one or more embedded derivatives, and MFRS 139Financial Instruments: Recognition and Measurement permits the entire combined contract(asset or liability) to be designated as financial liabilities at fair value through profit or loss.

it is a derivative that is not designated and effective as a hedging instrument.

Financial liabilities at fair value through profit or loss are stated at fair value, with any gains orlosses arising on remeasurement recognised in profit or loss. The net gain or loss recognised inprofit or loss incorporates any interest paid on the financial liability and is included in the 'othergains and losses' line item in the statements of comprehensive income.

Other financial liabilities, including borrowings, are initially measured at fair value, net oftransaction costs and are subsequently measured at amortised cost using the effective interestmethod, with interest expense recognised on an effective yield basis.

The effective interest method is a method of calculating the amortised cost of a financial liabilityand of allocating interest expense over the relevant period. The effective interest rate is theexactly discounts estimated future cash payments through the expected life of the financialliability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

25

Company No:412406-T

Financial liabilities

a) Financial liabilities at fair value through profit or loss

A financial liability is classified as held for trading if:

a) it has been acquired principally for the purpose of repurchasing it in the near term; or

b)

Available-for-sale financial assets are included in non-current assets unless the investmentmatures or management intends to dispose of it within 12 months of the end of the reportingperiod.

Financial assets are de-recognised when the rights to receive cash flows from the investments haveexpired or have been transferred and the Group has transferred substantially all risks and rewards ofownership.

Financial liabilities are classified as either financial liabilities at fair value through profit or loss orother financial liabilities.

Financial liabilities are classified as financial liabilities at fair value through profit or loss when thefinancial liability is either held for trading or it is designated as financial liabilities at fair valuethrough profit or loss.

on initial recognition it is part of a portfolio of identified financial instruments that the Groupmanages together and has a recent actual pattern of short-term profit-taking; or

c)

a)

b)

c)

b) Other financial liabilities

A financial liability other than a financial liability held for trading may be designated as financialliabilities at fair value through profit or loss upon initial recognition if:

such designation eliminates or significantly reduces a measurement or recognitioninconsistency that would otherwise arise; or

the financial liability forms part of a group of financial assets or financial liabilities or both,which is managed and its performance is evaluated on a fair value basis, in accordance withthe Group's documented risk management or investment strategy, and information about thegrouping is provided internally on that basis; or

it forms part of a contract containing one or more embedded derivatives, and MFRS 139Financial Instruments: Recognition and Measurement permits the entire combined contract(asset or liability) to be designated as financial liabilities at fair value through profit or loss.

it is a derivative that is not designated and effective as a hedging instrument.

Financial liabilities at fair value through profit or loss are stated at fair value, with any gains orlosses arising on remeasurement recognised in profit or loss. The net gain or loss recognised inprofit or loss incorporates any interest paid on the financial liability and is included in the 'othergains and losses' line item in the statements of comprehensive income.

Other financial liabilities, including borrowings, are initially measured at fair value, net oftransaction costs and are subsequently measured at amortised cost using the effective interestmethod, with interest expense recognised on an effective yield basis.

The effective interest method is a method of calculating the amortised cost of a financial liabilityand of allocating interest expense over the relevant period. The effective interest rate is theexactly discounts estimated future cash payments through the expected life of the financialliability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

25

Company No:412406-T

Financial liabilities

a) Financial liabilities at fair value through profit or loss

A financial liability is classified as held for trading if:

a) it has been acquired principally for the purpose of repurchasing it in the near term; or

b)

Available-for-sale financial assets are included in non-current assets unless the investmentmatures or management intends to dispose of it within 12 months of the end of the reportingperiod.

Financial assets are de-recognised when the rights to receive cash flows from the investments haveexpired or have been transferred and the Group has transferred substantially all risks and rewards ofownership.

Financial liabilities are classified as either financial liabilities at fair value through profit or loss orother financial liabilities.

Financial liabilities are classified as financial liabilities at fair value through profit or loss when thefinancial liability is either held for trading or it is designated as financial liabilities at fair valuethrough profit or loss.

on initial recognition it is part of a portfolio of identified financial instruments that the Groupmanages together and has a recent actual pattern of short-term profit-taking; or

c)

a)

b)

c)

b) Other financial liabilities

A financial liability other than a financial liability held for trading may be designated as financialliabilities at fair value through profit or loss upon initial recognition if:

such designation eliminates or significantly reduces a measurement or recognitioninconsistency that would otherwise arise; or

the financial liability forms part of a group of financial assets or financial liabilities or both,which is managed and its performance is evaluated on a fair value basis, in accordance withthe Group's documented risk management or investment strategy, and information about thegrouping is provided internally on that basis; or

it forms part of a contract containing one or more embedded derivatives, and MFRS 139Financial Instruments: Recognition and Measurement permits the entire combined contract(asset or liability) to be designated as financial liabilities at fair value through profit or loss.

it is a derivative that is not designated and effective as a hedging instrument.

Financial liabilities at fair value through profit or loss are stated at fair value, with any gains orlosses arising on remeasurement recognised in profit or loss. The net gain or loss recognised inprofit or loss incorporates any interest paid on the financial liability and is included in the 'othergains and losses' line item in the statements of comprehensive income.

Other financial liabilities, including borrowings, are initially measured at fair value, net oftransaction costs and are subsequently measured at amortised cost using the effective interestmethod, with interest expense recognised on an effective yield basis.

The effective interest method is a method of calculating the amortised cost of a financial liabilityand of allocating interest expense over the relevant period. The effective interest rate is theexactly discounts estimated future cash payments through the expected life of the financialliability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

25

Company No:412406-T

Financial liabilities

a) Financial liabilities at fair value through profit or loss

A financial liability is classified as held for trading if:

a) it has been acquired principally for the purpose of repurchasing it in the near term; or

b)

Available-for-sale financial assets are included in non-current assets unless the investmentmatures or management intends to dispose of it within 12 months of the end of the reportingperiod.

Financial assets are de-recognised when the rights to receive cash flows from the investments haveexpired or have been transferred and the Group has transferred substantially all risks and rewards ofownership.

Financial liabilities are classified as either financial liabilities at fair value through profit or loss orother financial liabilities.

Financial liabilities are classified as financial liabilities at fair value through profit or loss when thefinancial liability is either held for trading or it is designated as financial liabilities at fair valuethrough profit or loss.

on initial recognition it is part of a portfolio of identified financial instruments that the Groupmanages together and has a recent actual pattern of short-term profit-taking; or

c)

a)

b)

c)

b) Other financial liabilities

A financial liability other than a financial liability held for trading may be designated as financialliabilities at fair value through profit or loss upon initial recognition if:

such designation eliminates or significantly reduces a measurement or recognitioninconsistency that would otherwise arise; or

the financial liability forms part of a group of financial assets or financial liabilities or both,which is managed and its performance is evaluated on a fair value basis, in accordance withthe Group's documented risk management or investment strategy, and information about thegrouping is provided internally on that basis; or

it forms part of a contract containing one or more embedded derivatives, and MFRS 139Financial Instruments: Recognition and Measurement permits the entire combined contract(asset or liability) to be designated as financial liabilities at fair value through profit or loss.

it is a derivative that is not designated and effective as a hedging instrument.

Financial liabilities at fair value through profit or loss are stated at fair value, with any gains orlosses arising on remeasurement recognised in profit or loss. The net gain or loss recognised inprofit or loss incorporates any interest paid on the financial liability and is included in the 'othergains and losses' line item in the statements of comprehensive income.

Other financial liabilities, including borrowings, are initially measured at fair value, net oftransaction costs and are subsequently measured at amortised cost using the effective interestmethod, with interest expense recognised on an effective yield basis.

The effective interest method is a method of calculating the amortised cost of a financial liabilityand of allocating interest expense over the relevant period. The effective interest rate is theexactly discounts estimated future cash payments through the expected life of the financialliability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

25

Company No:412406-T

Financial liabilities

a) Financial liabilities at fair value through profit or loss

A financial liability is classified as held for trading if:

a) it has been acquired principally for the purpose of repurchasing it in the near term; or

b)

Available-for-sale financial assets are included in non-current assets unless the investmentmatures or management intends to dispose of it within 12 months of the end of the reportingperiod.

Financial assets are de-recognised when the rights to receive cash flows from the investments haveexpired or have been transferred and the Group has transferred substantially all risks and rewards ofownership.

Financial liabilities are classified as either financial liabilities at fair value through profit or loss orother financial liabilities.

Financial liabilities are classified as financial liabilities at fair value through profit or loss when thefinancial liability is either held for trading or it is designated as financial liabilities at fair valuethrough profit or loss.

on initial recognition it is part of a portfolio of identified financial instruments that the Groupmanages together and has a recent actual pattern of short-term profit-taking; or

c)

a)

b)

c)

b) Other financial liabilities

A financial liability other than a financial liability held for trading may be designated as financialliabilities at fair value through profit or loss upon initial recognition if:

such designation eliminates or significantly reduces a measurement or recognitioninconsistency that would otherwise arise; or

the financial liability forms part of a group of financial assets or financial liabilities or both,which is managed and its performance is evaluated on a fair value basis, in accordance withthe Group's documented risk management or investment strategy, and information about thegrouping is provided internally on that basis; or

it forms part of a contract containing one or more embedded derivatives, and MFRS 139Financial Instruments: Recognition and Measurement permits the entire combined contract(asset or liability) to be designated as financial liabilities at fair value through profit or loss.

it is a derivative that is not designated and effective as a hedging instrument.

Financial liabilities at fair value through profit or loss are stated at fair value, with any gains orlosses arising on remeasurement recognised in profit or loss. The net gain or loss recognised inprofit or loss incorporates any interest paid on the financial liability and is included in the 'othergains and losses' line item in the statements of comprehensive income.

Other financial liabilities, including borrowings, are initially measured at fair value, net oftransaction costs and are subsequently measured at amortised cost using the effective interestmethod, with interest expense recognised on an effective yield basis.

The effective interest method is a method of calculating the amortised cost of a financial liabilityand of allocating interest expense over the relevant period. The effective interest rate is theexactly discounts estimated future cash payments through the expected life of the financialliability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

25

Company No:412406-T

Financial liabilities

a) Financial liabilities at fair value through profit or loss

A financial liability is classified as held for trading if:

a) it has been acquired principally for the purpose of repurchasing it in the near term; or

b)

Available-for-sale financial assets are included in non-current assets unless the investmentmatures or management intends to dispose of it within 12 months of the end of the reportingperiod.

Financial assets are de-recognised when the rights to receive cash flows from the investments haveexpired or have been transferred and the Group has transferred substantially all risks and rewards ofownership.

Financial liabilities are classified as either financial liabilities at fair value through profit or loss orother financial liabilities.

Financial liabilities are classified as financial liabilities at fair value through profit or loss when thefinancial liability is either held for trading or it is designated as financial liabilities at fair valuethrough profit or loss.

on initial recognition it is part of a portfolio of identified financial instruments that the Groupmanages together and has a recent actual pattern of short-term profit-taking; or

c)

a)

b)

c)

b) Other financial liabilities

A financial liability other than a financial liability held for trading may be designated as financialliabilities at fair value through profit or loss upon initial recognition if:

such designation eliminates or significantly reduces a measurement or recognitioninconsistency that would otherwise arise; or

the financial liability forms part of a group of financial assets or financial liabilities or both,which is managed and its performance is evaluated on a fair value basis, in accordance withthe Group's documented risk management or investment strategy, and information about thegrouping is provided internally on that basis; or

it forms part of a contract containing one or more embedded derivatives, and MFRS 139Financial Instruments: Recognition and Measurement permits the entire combined contract(asset or liability) to be designated as financial liabilities at fair value through profit or loss.

it is a derivative that is not designated and effective as a hedging instrument.

Financial liabilities at fair value through profit or loss are stated at fair value, with any gains orlosses arising on remeasurement recognised in profit or loss. The net gain or loss recognised inprofit or loss incorporates any interest paid on the financial liability and is included in the 'othergains and losses' line item in the statements of comprehensive income.

Other financial liabilities, including borrowings, are initially measured at fair value, net oftransaction costs and are subsequently measured at amortised cost using the effective interestmethod, with interest expense recognised on an effective yield basis.

The effective interest method is a method of calculating the amortised cost of a financial liabilityand of allocating interest expense over the relevant period. The effective interest rate is theexactly discounts estimated future cash payments through the expected life of the financialliability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

25

Company No:412406-T

Financial liabilities

a) Financial liabilities at fair value through profit or loss

A financial liability is classified as held for trading if:

a) it has been acquired principally for the purpose of repurchasing it in the near term; or

b)

Available-for-sale financial assets are included in non-current assets unless the investmentmatures or management intends to dispose of it within 12 months of the end of the reportingperiod.

Financial assets are de-recognised when the rights to receive cash flows from the investments haveexpired or have been transferred and the Group has transferred substantially all risks and rewards ofownership.

Financial liabilities are classified as either financial liabilities at fair value through profit or loss orother financial liabilities.

Financial liabilities are classified as financial liabilities at fair value through profit or loss when thefinancial liability is either held for trading or it is designated as financial liabilities at fair valuethrough profit or loss.

on initial recognition it is part of a portfolio of identified financial instruments that the Groupmanages together and has a recent actual pattern of short-term profit-taking; or

c)

a)

b)

c)

b) Other financial liabilities

A financial liability other than a financial liability held for trading may be designated as financialliabilities at fair value through profit or loss upon initial recognition if:

such designation eliminates or significantly reduces a measurement or recognitioninconsistency that would otherwise arise; or

the financial liability forms part of a group of financial assets or financial liabilities or both,which is managed and its performance is evaluated on a fair value basis, in accordance withthe Group's documented risk management or investment strategy, and information about thegrouping is provided internally on that basis; or

it forms part of a contract containing one or more embedded derivatives, and MFRS 139Financial Instruments: Recognition and Measurement permits the entire combined contract(asset or liability) to be designated as financial liabilities at fair value through profit or loss.

it is a derivative that is not designated and effective as a hedging instrument.

Financial liabilities at fair value through profit or loss are stated at fair value, with any gains orlosses arising on remeasurement recognised in profit or loss. The net gain or loss recognised inprofit or loss incorporates any interest paid on the financial liability and is included in the 'othergains and losses' line item in the statements of comprehensive income.

Other financial liabilities, including borrowings, are initially measured at fair value, net oftransaction costs and are subsequently measured at amortised cost using the effective interestmethod, with interest expense recognised on an effective yield basis.

The effective interest method is a method of calculating the amortised cost of a financial liabilityand of allocating interest expense over the relevant period. The effective interest rate is theexactly discounts estimated future cash payments through the expected life of the financialliability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

25

RAYA INTERNATIONAL BERHAD Annual Report 2013

49

Notes to the Financial Statements (Cont’d)Company No:412406-T

iii)

m) Impairment of Non- Financial Assets

At the end of each reporting period, the Group reviews the carrying amounts of its non-current assets todetermine whether there is any indication that those assets have suffered an impairment loss. If any suchindication exists, the recoverable amount of the asset is estimated in order to determine the extent of theimpairment loss (if any). Where it is not possible to estimate the recoverable amount of an individualasset, the Group estimates the recoverable amount of the cash-generating unit to which the assetbelongs.

Recoverable amount is the higher of fair value less costs to sell and value-in-use. In assessing value-in-

The Group assesses at each reporting date whether there is objective evidence that a financial assetor a group of financial assets is impaired. In the case of equity securities classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its cost is taken asevidence that the securities are impaired. If any such evidence exists for available-for-sale financialassets, the cumulative loss - measured as the difference between the acquisition cost and thecurrent fair value, less impairment loss on that financial asset previously recognised in profit or loss -is removed from equity and recognised in profit or loss. Impairment losses recognised in profit orloss on equity instruments are not reversed through profit or loss.

Impairment of Financial Assets

The Group derecognises financial liabilities when, and only when, the Group's obligations aredischarged, cancelled or they expire. The difference between the carrying amount of the financialliability derecognised and the consideration paid or payable is recognised in profit or loss.

n) Provisions

o)

Recoverable amount is the higher of fair value less costs to sell and value-in-use. In assessing value-in-use, the estimated future cash flows are discounted to their present value using a pre-tax discount ratethat reflects current market assessments of the time value of money and the risk specific to the asset. Ifthe recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carryingamount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount.An impairment loss is recognised immediately in profit or loss unless the asset is carried at a revaluedamount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of anyunutilised previously recognised revaluation surplus for the same asset.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generatingunit) is increased to the revised estimate of its recoverable amount, but so that the increased carryingamount does not exceed the carrying amount that would have been determined had no impairment lossbeen recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss isrecognised immediately in profit or loss.

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets,which are assets that necessarily take a substantial period of time to get ready for their intended use orsale, are added to the cost of those assets, until such time as the assets are substantially ready for theirintended use or sale.

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of apast event, it is probable that an outflow of economic resources will be required to settle the obligationand the amount of the obligation can be estimated reliably.

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is nolonger probable that an outflow of economic resources will be required to settle the obligation, theprovision is reversed. If the effect of the time value of money is material, provisions are discounted usinga current pre tax rate that reflects, where appropriate, the risks specific to the liability. When discountingis used, the increase in the provision due to the passage of time is recognised as a finance cost.

Borrowing Costs

26

Company No:412406-T

iii)

m) Impairment of Non- Financial Assets

At the end of each reporting period, the Group reviews the carrying amounts of its non-current assets todetermine whether there is any indication that those assets have suffered an impairment loss. If any suchindication exists, the recoverable amount of the asset is estimated in order to determine the extent of theimpairment loss (if any). Where it is not possible to estimate the recoverable amount of an individualasset, the Group estimates the recoverable amount of the cash-generating unit to which the assetbelongs.

Recoverable amount is the higher of fair value less costs to sell and value-in-use. In assessing value-in-

The Group assesses at each reporting date whether there is objective evidence that a financial assetor a group of financial assets is impaired. In the case of equity securities classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its cost is taken asevidence that the securities are impaired. If any such evidence exists for available-for-sale financialassets, the cumulative loss - measured as the difference between the acquisition cost and thecurrent fair value, less impairment loss on that financial asset previously recognised in profit or loss -is removed from equity and recognised in profit or loss. Impairment losses recognised in profit orloss on equity instruments are not reversed through profit or loss.

Impairment of Financial Assets

The Group derecognises financial liabilities when, and only when, the Group's obligations aredischarged, cancelled or they expire. The difference between the carrying amount of the financialliability derecognised and the consideration paid or payable is recognised in profit or loss.

n) Provisions

o)

Recoverable amount is the higher of fair value less costs to sell and value-in-use. In assessing value-in-use, the estimated future cash flows are discounted to their present value using a pre-tax discount ratethat reflects current market assessments of the time value of money and the risk specific to the asset. Ifthe recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carryingamount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount.An impairment loss is recognised immediately in profit or loss unless the asset is carried at a revaluedamount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of anyunutilised previously recognised revaluation surplus for the same asset.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generatingunit) is increased to the revised estimate of its recoverable amount, but so that the increased carryingamount does not exceed the carrying amount that would have been determined had no impairment lossbeen recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss isrecognised immediately in profit or loss.

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets,which are assets that necessarily take a substantial period of time to get ready for their intended use orsale, are added to the cost of those assets, until such time as the assets are substantially ready for theirintended use or sale.

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of apast event, it is probable that an outflow of economic resources will be required to settle the obligationand the amount of the obligation can be estimated reliably.

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is nolonger probable that an outflow of economic resources will be required to settle the obligation, theprovision is reversed. If the effect of the time value of money is material, provisions are discounted usinga current pre tax rate that reflects, where appropriate, the risks specific to the liability. When discountingis used, the increase in the provision due to the passage of time is recognised as a finance cost.

Borrowing Costs

26

Company No:412406-T

iii)

m) Impairment of Non- Financial Assets

At the end of each reporting period, the Group reviews the carrying amounts of its non-current assets todetermine whether there is any indication that those assets have suffered an impairment loss. If any suchindication exists, the recoverable amount of the asset is estimated in order to determine the extent of theimpairment loss (if any). Where it is not possible to estimate the recoverable amount of an individualasset, the Group estimates the recoverable amount of the cash-generating unit to which the assetbelongs.

Recoverable amount is the higher of fair value less costs to sell and value-in-use. In assessing value-in-

The Group assesses at each reporting date whether there is objective evidence that a financial assetor a group of financial assets is impaired. In the case of equity securities classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its cost is taken asevidence that the securities are impaired. If any such evidence exists for available-for-sale financialassets, the cumulative loss - measured as the difference between the acquisition cost and thecurrent fair value, less impairment loss on that financial asset previously recognised in profit or loss -is removed from equity and recognised in profit or loss. Impairment losses recognised in profit orloss on equity instruments are not reversed through profit or loss.

Impairment of Financial Assets

The Group derecognises financial liabilities when, and only when, the Group's obligations aredischarged, cancelled or they expire. The difference between the carrying amount of the financialliability derecognised and the consideration paid or payable is recognised in profit or loss.

n) Provisions

o)

Recoverable amount is the higher of fair value less costs to sell and value-in-use. In assessing value-in-use, the estimated future cash flows are discounted to their present value using a pre-tax discount ratethat reflects current market assessments of the time value of money and the risk specific to the asset. Ifthe recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carryingamount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount.An impairment loss is recognised immediately in profit or loss unless the asset is carried at a revaluedamount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of anyunutilised previously recognised revaluation surplus for the same asset.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generatingunit) is increased to the revised estimate of its recoverable amount, but so that the increased carryingamount does not exceed the carrying amount that would have been determined had no impairment lossbeen recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss isrecognised immediately in profit or loss.

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets,which are assets that necessarily take a substantial period of time to get ready for their intended use orsale, are added to the cost of those assets, until such time as the assets are substantially ready for theirintended use or sale.

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of apast event, it is probable that an outflow of economic resources will be required to settle the obligationand the amount of the obligation can be estimated reliably.

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is nolonger probable that an outflow of economic resources will be required to settle the obligation, theprovision is reversed. If the effect of the time value of money is material, provisions are discounted usinga current pre tax rate that reflects, where appropriate, the risks specific to the liability. When discountingis used, the increase in the provision due to the passage of time is recognised as a finance cost.

Borrowing Costs

26

Company No:412406-T

iii)

m) Impairment of Non- Financial Assets

At the end of each reporting period, the Group reviews the carrying amounts of its non-current assets todetermine whether there is any indication that those assets have suffered an impairment loss. If any suchindication exists, the recoverable amount of the asset is estimated in order to determine the extent of theimpairment loss (if any). Where it is not possible to estimate the recoverable amount of an individualasset, the Group estimates the recoverable amount of the cash-generating unit to which the assetbelongs.

Recoverable amount is the higher of fair value less costs to sell and value-in-use. In assessing value-in-

The Group assesses at each reporting date whether there is objective evidence that a financial assetor a group of financial assets is impaired. In the case of equity securities classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its cost is taken asevidence that the securities are impaired. If any such evidence exists for available-for-sale financialassets, the cumulative loss - measured as the difference between the acquisition cost and thecurrent fair value, less impairment loss on that financial asset previously recognised in profit or loss -is removed from equity and recognised in profit or loss. Impairment losses recognised in profit orloss on equity instruments are not reversed through profit or loss.

Impairment of Financial Assets

The Group derecognises financial liabilities when, and only when, the Group's obligations aredischarged, cancelled or they expire. The difference between the carrying amount of the financialliability derecognised and the consideration paid or payable is recognised in profit or loss.

n) Provisions

o)

Recoverable amount is the higher of fair value less costs to sell and value-in-use. In assessing value-in-use, the estimated future cash flows are discounted to their present value using a pre-tax discount ratethat reflects current market assessments of the time value of money and the risk specific to the asset. Ifthe recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carryingamount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount.An impairment loss is recognised immediately in profit or loss unless the asset is carried at a revaluedamount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of anyunutilised previously recognised revaluation surplus for the same asset.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generatingunit) is increased to the revised estimate of its recoverable amount, but so that the increased carryingamount does not exceed the carrying amount that would have been determined had no impairment lossbeen recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss isrecognised immediately in profit or loss.

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets,which are assets that necessarily take a substantial period of time to get ready for their intended use orsale, are added to the cost of those assets, until such time as the assets are substantially ready for theirintended use or sale.

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of apast event, it is probable that an outflow of economic resources will be required to settle the obligationand the amount of the obligation can be estimated reliably.

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is nolonger probable that an outflow of economic resources will be required to settle the obligation, theprovision is reversed. If the effect of the time value of money is material, provisions are discounted usinga current pre tax rate that reflects, where appropriate, the risks specific to the liability. When discountingis used, the increase in the provision due to the passage of time is recognised as a finance cost.

Borrowing Costs

26

Company No:412406-T

iii)

m) Impairment of Non- Financial Assets

At the end of each reporting period, the Group reviews the carrying amounts of its non-current assets todetermine whether there is any indication that those assets have suffered an impairment loss. If any suchindication exists, the recoverable amount of the asset is estimated in order to determine the extent of theimpairment loss (if any). Where it is not possible to estimate the recoverable amount of an individualasset, the Group estimates the recoverable amount of the cash-generating unit to which the assetbelongs.

Recoverable amount is the higher of fair value less costs to sell and value-in-use. In assessing value-in-

The Group assesses at each reporting date whether there is objective evidence that a financial assetor a group of financial assets is impaired. In the case of equity securities classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its cost is taken asevidence that the securities are impaired. If any such evidence exists for available-for-sale financialassets, the cumulative loss - measured as the difference between the acquisition cost and thecurrent fair value, less impairment loss on that financial asset previously recognised in profit or loss -is removed from equity and recognised in profit or loss. Impairment losses recognised in profit orloss on equity instruments are not reversed through profit or loss.

Impairment of Financial Assets

The Group derecognises financial liabilities when, and only when, the Group's obligations aredischarged, cancelled or they expire. The difference between the carrying amount of the financialliability derecognised and the consideration paid or payable is recognised in profit or loss.

n) Provisions

o)

Recoverable amount is the higher of fair value less costs to sell and value-in-use. In assessing value-in-use, the estimated future cash flows are discounted to their present value using a pre-tax discount ratethat reflects current market assessments of the time value of money and the risk specific to the asset. Ifthe recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carryingamount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount.An impairment loss is recognised immediately in profit or loss unless the asset is carried at a revaluedamount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of anyunutilised previously recognised revaluation surplus for the same asset.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generatingunit) is increased to the revised estimate of its recoverable amount, but so that the increased carryingamount does not exceed the carrying amount that would have been determined had no impairment lossbeen recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss isrecognised immediately in profit or loss.

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets,which are assets that necessarily take a substantial period of time to get ready for their intended use orsale, are added to the cost of those assets, until such time as the assets are substantially ready for theirintended use or sale.

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of apast event, it is probable that an outflow of economic resources will be required to settle the obligationand the amount of the obligation can be estimated reliably.

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is nolonger probable that an outflow of economic resources will be required to settle the obligation, theprovision is reversed. If the effect of the time value of money is material, provisions are discounted usinga current pre tax rate that reflects, where appropriate, the risks specific to the liability. When discountingis used, the increase in the provision due to the passage of time is recognised as a finance cost.

Borrowing Costs

26

Company No:412406-T

iii)

m) Impairment of Non- Financial Assets

At the end of each reporting period, the Group reviews the carrying amounts of its non-current assets todetermine whether there is any indication that those assets have suffered an impairment loss. If any suchindication exists, the recoverable amount of the asset is estimated in order to determine the extent of theimpairment loss (if any). Where it is not possible to estimate the recoverable amount of an individualasset, the Group estimates the recoverable amount of the cash-generating unit to which the assetbelongs.

Recoverable amount is the higher of fair value less costs to sell and value-in-use. In assessing value-in-

The Group assesses at each reporting date whether there is objective evidence that a financial assetor a group of financial assets is impaired. In the case of equity securities classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its cost is taken asevidence that the securities are impaired. If any such evidence exists for available-for-sale financialassets, the cumulative loss - measured as the difference between the acquisition cost and thecurrent fair value, less impairment loss on that financial asset previously recognised in profit or loss -is removed from equity and recognised in profit or loss. Impairment losses recognised in profit orloss on equity instruments are not reversed through profit or loss.

Impairment of Financial Assets

The Group derecognises financial liabilities when, and only when, the Group's obligations aredischarged, cancelled or they expire. The difference between the carrying amount of the financialliability derecognised and the consideration paid or payable is recognised in profit or loss.

n) Provisions

o)

Recoverable amount is the higher of fair value less costs to sell and value-in-use. In assessing value-in-use, the estimated future cash flows are discounted to their present value using a pre-tax discount ratethat reflects current market assessments of the time value of money and the risk specific to the asset. Ifthe recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carryingamount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount.An impairment loss is recognised immediately in profit or loss unless the asset is carried at a revaluedamount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of anyunutilised previously recognised revaluation surplus for the same asset.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generatingunit) is increased to the revised estimate of its recoverable amount, but so that the increased carryingamount does not exceed the carrying amount that would have been determined had no impairment lossbeen recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss isrecognised immediately in profit or loss.

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets,which are assets that necessarily take a substantial period of time to get ready for their intended use orsale, are added to the cost of those assets, until such time as the assets are substantially ready for theirintended use or sale.

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of apast event, it is probable that an outflow of economic resources will be required to settle the obligationand the amount of the obligation can be estimated reliably.

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is nolonger probable that an outflow of economic resources will be required to settle the obligation, theprovision is reversed. If the effect of the time value of money is material, provisions are discounted usinga current pre tax rate that reflects, where appropriate, the risks specific to the liability. When discountingis used, the increase in the provision due to the passage of time is recognised as a finance cost.

Borrowing Costs

26

Company No:412406-T

iii)

m) Impairment of Non- Financial Assets

At the end of each reporting period, the Group reviews the carrying amounts of its non-current assets todetermine whether there is any indication that those assets have suffered an impairment loss. If any suchindication exists, the recoverable amount of the asset is estimated in order to determine the extent of theimpairment loss (if any). Where it is not possible to estimate the recoverable amount of an individualasset, the Group estimates the recoverable amount of the cash-generating unit to which the assetbelongs.

Recoverable amount is the higher of fair value less costs to sell and value-in-use. In assessing value-in-

The Group assesses at each reporting date whether there is objective evidence that a financial assetor a group of financial assets is impaired. In the case of equity securities classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its cost is taken asevidence that the securities are impaired. If any such evidence exists for available-for-sale financialassets, the cumulative loss - measured as the difference between the acquisition cost and thecurrent fair value, less impairment loss on that financial asset previously recognised in profit or loss -is removed from equity and recognised in profit or loss. Impairment losses recognised in profit orloss on equity instruments are not reversed through profit or loss.

Impairment of Financial Assets

The Group derecognises financial liabilities when, and only when, the Group's obligations aredischarged, cancelled or they expire. The difference between the carrying amount of the financialliability derecognised and the consideration paid or payable is recognised in profit or loss.

n) Provisions

o)

Recoverable amount is the higher of fair value less costs to sell and value-in-use. In assessing value-in-use, the estimated future cash flows are discounted to their present value using a pre-tax discount ratethat reflects current market assessments of the time value of money and the risk specific to the asset. Ifthe recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carryingamount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount.An impairment loss is recognised immediately in profit or loss unless the asset is carried at a revaluedamount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of anyunutilised previously recognised revaluation surplus for the same asset.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generatingunit) is increased to the revised estimate of its recoverable amount, but so that the increased carryingamount does not exceed the carrying amount that would have been determined had no impairment lossbeen recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss isrecognised immediately in profit or loss.

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets,which are assets that necessarily take a substantial period of time to get ready for their intended use orsale, are added to the cost of those assets, until such time as the assets are substantially ready for theirintended use or sale.

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of apast event, it is probable that an outflow of economic resources will be required to settle the obligationand the amount of the obligation can be estimated reliably.

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is nolonger probable that an outflow of economic resources will be required to settle the obligation, theprovision is reversed. If the effect of the time value of money is material, provisions are discounted usinga current pre tax rate that reflects, where appropriate, the risks specific to the liability. When discountingis used, the increase in the provision due to the passage of time is recognised as a finance cost.

Borrowing Costs

26

Company No:412406-T

iii)

m) Impairment of Non- Financial Assets

At the end of each reporting period, the Group reviews the carrying amounts of its non-current assets todetermine whether there is any indication that those assets have suffered an impairment loss. If any suchindication exists, the recoverable amount of the asset is estimated in order to determine the extent of theimpairment loss (if any). Where it is not possible to estimate the recoverable amount of an individualasset, the Group estimates the recoverable amount of the cash-generating unit to which the assetbelongs.

Recoverable amount is the higher of fair value less costs to sell and value-in-use. In assessing value-in-

The Group assesses at each reporting date whether there is objective evidence that a financial assetor a group of financial assets is impaired. In the case of equity securities classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its cost is taken asevidence that the securities are impaired. If any such evidence exists for available-for-sale financialassets, the cumulative loss - measured as the difference between the acquisition cost and thecurrent fair value, less impairment loss on that financial asset previously recognised in profit or loss -is removed from equity and recognised in profit or loss. Impairment losses recognised in profit orloss on equity instruments are not reversed through profit or loss.

Impairment of Financial Assets

The Group derecognises financial liabilities when, and only when, the Group's obligations aredischarged, cancelled or they expire. The difference between the carrying amount of the financialliability derecognised and the consideration paid or payable is recognised in profit or loss.

n) Provisions

o)

Recoverable amount is the higher of fair value less costs to sell and value-in-use. In assessing value-in-use, the estimated future cash flows are discounted to their present value using a pre-tax discount ratethat reflects current market assessments of the time value of money and the risk specific to the asset. Ifthe recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carryingamount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount.An impairment loss is recognised immediately in profit or loss unless the asset is carried at a revaluedamount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of anyunutilised previously recognised revaluation surplus for the same asset.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generatingunit) is increased to the revised estimate of its recoverable amount, but so that the increased carryingamount does not exceed the carrying amount that would have been determined had no impairment lossbeen recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss isrecognised immediately in profit or loss.

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets,which are assets that necessarily take a substantial period of time to get ready for their intended use orsale, are added to the cost of those assets, until such time as the assets are substantially ready for theirintended use or sale.

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of apast event, it is probable that an outflow of economic resources will be required to settle the obligationand the amount of the obligation can be estimated reliably.

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is nolonger probable that an outflow of economic resources will be required to settle the obligation, theprovision is reversed. If the effect of the time value of money is material, provisions are discounted usinga current pre tax rate that reflects, where appropriate, the risks specific to the liability. When discountingis used, the increase in the provision due to the passage of time is recognised as a finance cost.

Borrowing Costs

26

Company No:412406-T

iii)

m) Impairment of Non- Financial Assets

At the end of each reporting period, the Group reviews the carrying amounts of its non-current assets todetermine whether there is any indication that those assets have suffered an impairment loss. If any suchindication exists, the recoverable amount of the asset is estimated in order to determine the extent of theimpairment loss (if any). Where it is not possible to estimate the recoverable amount of an individualasset, the Group estimates the recoverable amount of the cash-generating unit to which the assetbelongs.

Recoverable amount is the higher of fair value less costs to sell and value-in-use. In assessing value-in-

The Group assesses at each reporting date whether there is objective evidence that a financial assetor a group of financial assets is impaired. In the case of equity securities classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its cost is taken asevidence that the securities are impaired. If any such evidence exists for available-for-sale financialassets, the cumulative loss - measured as the difference between the acquisition cost and thecurrent fair value, less impairment loss on that financial asset previously recognised in profit or loss -is removed from equity and recognised in profit or loss. Impairment losses recognised in profit orloss on equity instruments are not reversed through profit or loss.

Impairment of Financial Assets

The Group derecognises financial liabilities when, and only when, the Group's obligations aredischarged, cancelled or they expire. The difference between the carrying amount of the financialliability derecognised and the consideration paid or payable is recognised in profit or loss.

n) Provisions

o)

Recoverable amount is the higher of fair value less costs to sell and value-in-use. In assessing value-in-use, the estimated future cash flows are discounted to their present value using a pre-tax discount ratethat reflects current market assessments of the time value of money and the risk specific to the asset. Ifthe recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carryingamount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount.An impairment loss is recognised immediately in profit or loss unless the asset is carried at a revaluedamount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of anyunutilised previously recognised revaluation surplus for the same asset.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generatingunit) is increased to the revised estimate of its recoverable amount, but so that the increased carryingamount does not exceed the carrying amount that would have been determined had no impairment lossbeen recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss isrecognised immediately in profit or loss.

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets,which are assets that necessarily take a substantial period of time to get ready for their intended use orsale, are added to the cost of those assets, until such time as the assets are substantially ready for theirintended use or sale.

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of apast event, it is probable that an outflow of economic resources will be required to settle the obligationand the amount of the obligation can be estimated reliably.

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is nolonger probable that an outflow of economic resources will be required to settle the obligation, theprovision is reversed. If the effect of the time value of money is material, provisions are discounted usinga current pre tax rate that reflects, where appropriate, the risks specific to the liability. When discountingis used, the increase in the provision due to the passage of time is recognised as a finance cost.

Borrowing Costs

26

Company No:412406-T

iii)

m) Impairment of Non- Financial Assets

At the end of each reporting period, the Group reviews the carrying amounts of its non-current assets todetermine whether there is any indication that those assets have suffered an impairment loss. If any suchindication exists, the recoverable amount of the asset is estimated in order to determine the extent of theimpairment loss (if any). Where it is not possible to estimate the recoverable amount of an individualasset, the Group estimates the recoverable amount of the cash-generating unit to which the assetbelongs.

Recoverable amount is the higher of fair value less costs to sell and value-in-use. In assessing value-in-

The Group assesses at each reporting date whether there is objective evidence that a financial assetor a group of financial assets is impaired. In the case of equity securities classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its cost is taken asevidence that the securities are impaired. If any such evidence exists for available-for-sale financialassets, the cumulative loss - measured as the difference between the acquisition cost and thecurrent fair value, less impairment loss on that financial asset previously recognised in profit or loss -is removed from equity and recognised in profit or loss. Impairment losses recognised in profit orloss on equity instruments are not reversed through profit or loss.

Impairment of Financial Assets

The Group derecognises financial liabilities when, and only when, the Group's obligations aredischarged, cancelled or they expire. The difference between the carrying amount of the financialliability derecognised and the consideration paid or payable is recognised in profit or loss.

n) Provisions

o)

Recoverable amount is the higher of fair value less costs to sell and value-in-use. In assessing value-in-use, the estimated future cash flows are discounted to their present value using a pre-tax discount ratethat reflects current market assessments of the time value of money and the risk specific to the asset. Ifthe recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carryingamount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount.An impairment loss is recognised immediately in profit or loss unless the asset is carried at a revaluedamount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of anyunutilised previously recognised revaluation surplus for the same asset.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generatingunit) is increased to the revised estimate of its recoverable amount, but so that the increased carryingamount does not exceed the carrying amount that would have been determined had no impairment lossbeen recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss isrecognised immediately in profit or loss.

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets,which are assets that necessarily take a substantial period of time to get ready for their intended use orsale, are added to the cost of those assets, until such time as the assets are substantially ready for theirintended use or sale.

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of apast event, it is probable that an outflow of economic resources will be required to settle the obligationand the amount of the obligation can be estimated reliably.

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is nolonger probable that an outflow of economic resources will be required to settle the obligation, theprovision is reversed. If the effect of the time value of money is material, provisions are discounted usinga current pre tax rate that reflects, where appropriate, the risks specific to the liability. When discountingis used, the increase in the provision due to the passage of time is recognised as a finance cost.

Borrowing Costs

26

Company No:412406-T

iii)

m) Impairment of Non- Financial Assets

At the end of each reporting period, the Group reviews the carrying amounts of its non-current assets todetermine whether there is any indication that those assets have suffered an impairment loss. If any suchindication exists, the recoverable amount of the asset is estimated in order to determine the extent of theimpairment loss (if any). Where it is not possible to estimate the recoverable amount of an individualasset, the Group estimates the recoverable amount of the cash-generating unit to which the assetbelongs.

Recoverable amount is the higher of fair value less costs to sell and value-in-use. In assessing value-in-

The Group assesses at each reporting date whether there is objective evidence that a financial assetor a group of financial assets is impaired. In the case of equity securities classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its cost is taken asevidence that the securities are impaired. If any such evidence exists for available-for-sale financialassets, the cumulative loss - measured as the difference between the acquisition cost and thecurrent fair value, less impairment loss on that financial asset previously recognised in profit or loss -is removed from equity and recognised in profit or loss. Impairment losses recognised in profit orloss on equity instruments are not reversed through profit or loss.

Impairment of Financial Assets

The Group derecognises financial liabilities when, and only when, the Group's obligations aredischarged, cancelled or they expire. The difference between the carrying amount of the financialliability derecognised and the consideration paid or payable is recognised in profit or loss.

n) Provisions

o)

Recoverable amount is the higher of fair value less costs to sell and value-in-use. In assessing value-in-use, the estimated future cash flows are discounted to their present value using a pre-tax discount ratethat reflects current market assessments of the time value of money and the risk specific to the asset. Ifthe recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carryingamount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount.An impairment loss is recognised immediately in profit or loss unless the asset is carried at a revaluedamount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of anyunutilised previously recognised revaluation surplus for the same asset.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generatingunit) is increased to the revised estimate of its recoverable amount, but so that the increased carryingamount does not exceed the carrying amount that would have been determined had no impairment lossbeen recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss isrecognised immediately in profit or loss.

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets,which are assets that necessarily take a substantial period of time to get ready for their intended use orsale, are added to the cost of those assets, until such time as the assets are substantially ready for theirintended use or sale.

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of apast event, it is probable that an outflow of economic resources will be required to settle the obligationand the amount of the obligation can be estimated reliably.

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is nolonger probable that an outflow of economic resources will be required to settle the obligation, theprovision is reversed. If the effect of the time value of money is material, provisions are discounted usinga current pre tax rate that reflects, where appropriate, the risks specific to the liability. When discountingis used, the increase in the provision due to the passage of time is recognised as a finance cost.

Borrowing Costs

26

Company No:412406-T

iii)

m) Impairment of Non- Financial Assets

At the end of each reporting period, the Group reviews the carrying amounts of its non-current assets todetermine whether there is any indication that those assets have suffered an impairment loss. If any suchindication exists, the recoverable amount of the asset is estimated in order to determine the extent of theimpairment loss (if any). Where it is not possible to estimate the recoverable amount of an individualasset, the Group estimates the recoverable amount of the cash-generating unit to which the assetbelongs.

Recoverable amount is the higher of fair value less costs to sell and value-in-use. In assessing value-in-

The Group assesses at each reporting date whether there is objective evidence that a financial assetor a group of financial assets is impaired. In the case of equity securities classified as available-for-sale, a significant or prolonged decline in the fair value of the security below its cost is taken asevidence that the securities are impaired. If any such evidence exists for available-for-sale financialassets, the cumulative loss - measured as the difference between the acquisition cost and thecurrent fair value, less impairment loss on that financial asset previously recognised in profit or loss -is removed from equity and recognised in profit or loss. Impairment losses recognised in profit orloss on equity instruments are not reversed through profit or loss.

Impairment of Financial Assets

The Group derecognises financial liabilities when, and only when, the Group's obligations aredischarged, cancelled or they expire. The difference between the carrying amount of the financialliability derecognised and the consideration paid or payable is recognised in profit or loss.

n) Provisions

o)

Recoverable amount is the higher of fair value less costs to sell and value-in-use. In assessing value-in-use, the estimated future cash flows are discounted to their present value using a pre-tax discount ratethat reflects current market assessments of the time value of money and the risk specific to the asset. Ifthe recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carryingamount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount.An impairment loss is recognised immediately in profit or loss unless the asset is carried at a revaluedamount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of anyunutilised previously recognised revaluation surplus for the same asset.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generatingunit) is increased to the revised estimate of its recoverable amount, but so that the increased carryingamount does not exceed the carrying amount that would have been determined had no impairment lossbeen recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss isrecognised immediately in profit or loss.

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets,which are assets that necessarily take a substantial period of time to get ready for their intended use orsale, are added to the cost of those assets, until such time as the assets are substantially ready for theirintended use or sale.

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of apast event, it is probable that an outflow of economic resources will be required to settle the obligationand the amount of the obligation can be estimated reliably.

Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. If it is nolonger probable that an outflow of economic resources will be required to settle the obligation, theprovision is reversed. If the effect of the time value of money is material, provisions are discounted usinga current pre tax rate that reflects, where appropriate, the risks specific to the liability. When discountingis used, the increase in the provision due to the passage of time is recognised as a finance cost.

Borrowing Costs

26

RAYA INTERNATIONAL BERHAD Annual Report 2013

50

Notes to the Financial Statements (Cont’d)Company No:412406-T

p) Cash and Cash Equivalents

q)

r)

A contingent liability or asset is a possible obligation or asset that arises from past events and whoseexistence will be confirmed only by the occurrence or non-occurrence of uncertain future event(s) notwholly within the control of the Group.

Cash and cash equivalents comprise cash at bank and in hand, demand deposits and short term, highlyliquid investments that are readily convertible to known amount of cash and which are subject to aninsignificant risk of changes in value.

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

An equity instrument is any contract that evidences a residual interest in the assets of the Group and theCompany after deducting all of its liabilities. Ordinary shares are equity instruments.

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

Equity Instruments

Contingencies

Ordinary shares are recorded at the proceeds received, net of directly attributable incremental transactioncosts. Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity inthe period in which they are declared.

s) Operating Segments

5) CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

Critical judgements in applying the Group's and the Company's accounting policies

wholly within the control of the Group.

Operating segments are reported in a manner consistent with the internal reporting provided to the chiefoperating decision-maker.

An operating segment is a component of the Group that engages in business activities from which it mayearn revenues and incur expenses, including revenues and expenses that relate to transactions with anyof the Group's other components. An operating segment's operating results are reviewed regularly by thechief operating decision maker, which in this case is the Managing Director of the Group, to makedecisions about resources to be allocated to the segment and assess its performance, and for whichdiscrete financial information is available.

Contingent liabilities and assets are not recognised in the statements of financial position of the Group inthe current and previous financial year ends.

In the process of applying the Group's and the Company's accounting policies, which are described in Note 4above, management is of the opinion that there are no instances of application of judgement which areexpected to have significant effect on the amounts recognised in the financial statements.

The preparation of financial statements in conformity with Malaysian Financial Reporting Standards requiresthe use of certain critical accounting estimates and assumptions that affect the reported amounts of assetsand liabilities, and the reported results during the reported period. It also requires directors to exercise theirjudgement in the process of applying the Group's and the Company's accounting policies. Although theseestimates and judgement are based on the director's best knowledge of current events and actions, actualresults may differ.

27

Company No:412406-T

p) Cash and Cash Equivalents

q)

r)

A contingent liability or asset is a possible obligation or asset that arises from past events and whoseexistence will be confirmed only by the occurrence or non-occurrence of uncertain future event(s) notwholly within the control of the Group.

Cash and cash equivalents comprise cash at bank and in hand, demand deposits and short term, highlyliquid investments that are readily convertible to known amount of cash and which are subject to aninsignificant risk of changes in value.

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

An equity instrument is any contract that evidences a residual interest in the assets of the Group and theCompany after deducting all of its liabilities. Ordinary shares are equity instruments.

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

Equity Instruments

Contingencies

Ordinary shares are recorded at the proceeds received, net of directly attributable incremental transactioncosts. Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity inthe period in which they are declared.

s) Operating Segments

5) CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

Critical judgements in applying the Group's and the Company's accounting policies

wholly within the control of the Group.

Operating segments are reported in a manner consistent with the internal reporting provided to the chiefoperating decision-maker.

An operating segment is a component of the Group that engages in business activities from which it mayearn revenues and incur expenses, including revenues and expenses that relate to transactions with anyof the Group's other components. An operating segment's operating results are reviewed regularly by thechief operating decision maker, which in this case is the Managing Director of the Group, to makedecisions about resources to be allocated to the segment and assess its performance, and for whichdiscrete financial information is available.

Contingent liabilities and assets are not recognised in the statements of financial position of the Group inthe current and previous financial year ends.

In the process of applying the Group's and the Company's accounting policies, which are described in Note 4above, management is of the opinion that there are no instances of application of judgement which areexpected to have significant effect on the amounts recognised in the financial statements.

The preparation of financial statements in conformity with Malaysian Financial Reporting Standards requiresthe use of certain critical accounting estimates and assumptions that affect the reported amounts of assetsand liabilities, and the reported results during the reported period. It also requires directors to exercise theirjudgement in the process of applying the Group's and the Company's accounting policies. Although theseestimates and judgement are based on the director's best knowledge of current events and actions, actualresults may differ.

27

RAYA INTERNATIONAL BERHAD Annual Report 2013

51

Notes to the Financial Statements (Cont’d)

Company No:412406-T

Key sources of estimation uncertainty

(i) Impairment on receivables

(ii)

(iii) Deferred tax assets

Deferred tax assets are recognised for all unused tax losses and unabsorbed capital allowances to theextent that is probable that taxable profit will be available against which the losses can be utilised.

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 inrevisions to the valuation of inventories.

Management believes that there are no key assumptions made concerning the future, and other key sourcesof estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment tothe carrying amounts of assets and liabilities within the next financial year other than as follows:

The Group assesses at each reporting date whether there is any objective evidence that a financial assetis impaired. To determine whether there is objective evidence of impairment, the Group considers factorssuch as the probability of insolvency or significant financial difficulties of the debtor and default orsignificant delay in payments. Where there is objective evidence of impairment, the amount and timing offuture cash flows are estimated based on historical loss experience for assets with similar credit riskcharacteristics. The carrying amount of the Group's loans and receivable at the reporting date isdisclosed in Note 17 to the Financial Statements.

Write-down of inventories

6) REVENUE

2013 2012 2013 2012RM RM RM RM

Continuing operations Air filter 854,424 377,713 - - Cleanroom 408,037 479,600 - - Water filter 318,704 14,674 - - General trading 843,000 - - -

2,424,165 871,987 - -

7)

Included in other operating expenses/(income) are the following charges/(credits):

2013 2012 2013 2012RM RM RM RM

Auditors' remuneration 33,300 27,500 20,000 15,000 Bad debts written off 507 237,301 - 2,563 Impairment loss on investments in

subsidiary - - - 4,195 Impairment loss on receivables 156,575 95,372 - - Inventories written down 107,706 479,217 - - Rental of premises 11,800 - 11,800 -

extent that is probable that taxable profit will be available against which the losses can be utilised.Significant management judgement is required to determine the amount of deferred tax assets that canbe recognised, based upon the likely timing and level of future taxable profit together with future taxplanning strategies.

GROUP COMPANY

OTHER OPERATING EXPENSES/(INCOME)

GROUP COMPANY

28

Company No:412406-T

Key sources of estimation uncertainty

(i) Impairment on receivables

(ii)

(iii) Deferred tax assets

Deferred tax assets are recognised for all unused tax losses and unabsorbed capital allowances to theextent that is probable that taxable profit will be available against which the losses can be utilised.

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 inrevisions to the valuation of inventories.

Management believes that there are no key assumptions made concerning the future, and other key sourcesof estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment tothe carrying amounts of assets and liabilities within the next financial year other than as follows:

The Group assesses at each reporting date whether there is any objective evidence that a financial assetis impaired. To determine whether there is objective evidence of impairment, the Group considers factorssuch as the probability of insolvency or significant financial difficulties of the debtor and default orsignificant delay in payments. Where there is objective evidence of impairment, the amount and timing offuture cash flows are estimated based on historical loss experience for assets with similar credit riskcharacteristics. The carrying amount of the Group's loans and receivable at the reporting date isdisclosed in Note 17 to the Financial Statements.

Write-down of inventories

6) REVENUE

2013 2012 2013 2012RM RM RM RM

Continuing operations Air filter 854,424 377,713 - - Cleanroom 408,037 479,600 - - Water filter 318,704 14,674 - - General trading 843,000 - - -

2,424,165 871,987 - -

7)

Included in other operating expenses/(income) are the following charges/(credits):

2013 2012 2013 2012RM RM RM RM

Auditors' remuneration 33,300 27,500 20,000 15,000 Bad debts written off 507 237,301 - 2,563 Impairment loss on investments in

subsidiary - - - 4,195 Impairment loss on receivables 156,575 95,372 - - Inventories written down 107,706 479,217 - - Rental of premises 11,800 - 11,800 -

extent that is probable that taxable profit will be available against which the losses can be utilised.Significant management judgement is required to determine the amount of deferred tax assets that canbe recognised, based upon the likely timing and level of future taxable profit together with future taxplanning strategies.

GROUP COMPANY

OTHER OPERATING EXPENSES/(INCOME)

GROUP COMPANY

28

Company No:412406-T

Key sources of estimation uncertainty

(i) Impairment on receivables

(ii)

(iii) Deferred tax assets

Deferred tax assets are recognised for all unused tax losses and unabsorbed capital allowances to theextent that is probable that taxable profit will be available against which the losses can be utilised.

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 inrevisions to the valuation of inventories.

Management believes that there are no key assumptions made concerning the future, and other key sourcesof estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment tothe carrying amounts of assets and liabilities within the next financial year other than as follows:

The Group assesses at each reporting date whether there is any objective evidence that a financial assetis impaired. To determine whether there is objective evidence of impairment, the Group considers factorssuch as the probability of insolvency or significant financial difficulties of the debtor and default orsignificant delay in payments. Where there is objective evidence of impairment, the amount and timing offuture cash flows are estimated based on historical loss experience for assets with similar credit riskcharacteristics. The carrying amount of the Group's loans and receivable at the reporting date isdisclosed in Note 17 to the Financial Statements.

Write-down of inventories

6) REVENUE

2013 2012 2013 2012RM RM RM RM

Continuing operations Air filter 854,424 377,713 - - Cleanroom 408,037 479,600 - - Water filter 318,704 14,674 - - General trading 843,000 - - -

2,424,165 871,987 - -

7)

Included in other operating expenses/(income) are the following charges/(credits):

2013 2012 2013 2012RM RM RM RM

Auditors' remuneration 33,300 27,500 20,000 15,000 Bad debts written off 507 237,301 - 2,563 Impairment loss on investments in

subsidiary - - - 4,195 Impairment loss on receivables 156,575 95,372 - - Inventories written down 107,706 479,217 - - Rental of premises 11,800 - 11,800 -

extent that is probable that taxable profit will be available against which the losses can be utilised.Significant management judgement is required to determine the amount of deferred tax assets that canbe recognised, based upon the likely timing and level of future taxable profit together with future taxplanning strategies.

GROUP COMPANY

OTHER OPERATING EXPENSES/(INCOME)

GROUP COMPANY

28

Company No:412406-T

Key sources of estimation uncertainty

(i) Impairment on receivables

(ii)

(iii) Deferred tax assets

Deferred tax assets are recognised for all unused tax losses and unabsorbed capital allowances to theextent that is probable that taxable profit will be available against which the losses can be utilised.

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 inrevisions to the valuation of inventories.

Management believes that there are no key assumptions made concerning the future, and other key sourcesof estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment tothe carrying amounts of assets and liabilities within the next financial year other than as follows:

The Group assesses at each reporting date whether there is any objective evidence that a financial assetis impaired. To determine whether there is objective evidence of impairment, the Group considers factorssuch as the probability of insolvency or significant financial difficulties of the debtor and default orsignificant delay in payments. Where there is objective evidence of impairment, the amount and timing offuture cash flows are estimated based on historical loss experience for assets with similar credit riskcharacteristics. The carrying amount of the Group's loans and receivable at the reporting date isdisclosed in Note 17 to the Financial Statements.

Write-down of inventories

6) REVENUE

2013 2012 2013 2012RM RM RM RM

Continuing operations Air filter 854,424 377,713 - - Cleanroom 408,037 479,600 - - Water filter 318,704 14,674 - - General trading 843,000 - - -

2,424,165 871,987 - -

7)

Included in other operating expenses/(income) are the following charges/(credits):

2013 2012 2013 2012RM RM RM RM

Auditors' remuneration 33,300 27,500 20,000 15,000 Bad debts written off 507 237,301 - 2,563 Impairment loss on investments in

subsidiary - - - 4,195 Impairment loss on receivables 156,575 95,372 - - Inventories written down 107,706 479,217 - - Rental of premises 11,800 - 11,800 -

extent that is probable that taxable profit will be available against which the losses can be utilised.Significant management judgement is required to determine the amount of deferred tax assets that canbe recognised, based upon the likely timing and level of future taxable profit together with future taxplanning strategies.

GROUP COMPANY

OTHER OPERATING EXPENSES/(INCOME)

GROUP COMPANY

28

Company No:412406-T

Key sources of estimation uncertainty

(i) Impairment on receivables

(ii)

(iii) Deferred tax assets

Deferred tax assets are recognised for all unused tax losses and unabsorbed capital allowances to theextent that is probable that taxable profit will be available against which the losses can be utilised.

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 inrevisions to the valuation of inventories.

Management believes that there are no key assumptions made concerning the future, and other key sourcesof estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment tothe carrying amounts of assets and liabilities within the next financial year other than as follows:

The Group assesses at each reporting date whether there is any objective evidence that a financial assetis impaired. To determine whether there is objective evidence of impairment, the Group considers factorssuch as the probability of insolvency or significant financial difficulties of the debtor and default orsignificant delay in payments. Where there is objective evidence of impairment, the amount and timing offuture cash flows are estimated based on historical loss experience for assets with similar credit riskcharacteristics. The carrying amount of the Group's loans and receivable at the reporting date isdisclosed in Note 17 to the Financial Statements.

Write-down of inventories

6) REVENUE

2013 2012 2013 2012RM RM RM RM

Continuing operations Air filter 854,424 377,713 - - Cleanroom 408,037 479,600 - - Water filter 318,704 14,674 - - General trading 843,000 - - -

2,424,165 871,987 - -

7)

Included in other operating expenses/(income) are the following charges/(credits):

2013 2012 2013 2012RM RM RM RM

Auditors' remuneration 33,300 27,500 20,000 15,000 Bad debts written off 507 237,301 - 2,563 Impairment loss on investments in

subsidiary - - - 4,195 Impairment loss on receivables 156,575 95,372 - - Inventories written down 107,706 479,217 - - Rental of premises 11,800 - 11,800 -

extent that is probable that taxable profit will be available against which the losses can be utilised.Significant management judgement is required to determine the amount of deferred tax assets that canbe recognised, based upon the likely timing and level of future taxable profit together with future taxplanning strategies.

GROUP COMPANY

OTHER OPERATING EXPENSES/(INCOME)

GROUP COMPANY

28

Company No:412406-T

Key sources of estimation uncertainty

(i) Impairment on receivables

(ii)

(iii) Deferred tax assets

Deferred tax assets are recognised for all unused tax losses and unabsorbed capital allowances to theextent that is probable that taxable profit will be available against which the losses can be utilised.

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 inrevisions to the valuation of inventories.

Management believes that there are no key assumptions made concerning the future, and other key sourcesof estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment tothe carrying amounts of assets and liabilities within the next financial year other than as follows:

The Group assesses at each reporting date whether there is any objective evidence that a financial assetis impaired. To determine whether there is objective evidence of impairment, the Group considers factorssuch as the probability of insolvency or significant financial difficulties of the debtor and default orsignificant delay in payments. Where there is objective evidence of impairment, the amount and timing offuture cash flows are estimated based on historical loss experience for assets with similar credit riskcharacteristics. The carrying amount of the Group's loans and receivable at the reporting date isdisclosed in Note 17 to the Financial Statements.

Write-down of inventories

6) REVENUE

2013 2012 2013 2012RM RM RM RM

Continuing operations Air filter 854,424 377,713 - - Cleanroom 408,037 479,600 - - Water filter 318,704 14,674 - - General trading 843,000 - - -

2,424,165 871,987 - -

7)

Included in other operating expenses/(income) are the following charges/(credits):

2013 2012 2013 2012RM RM RM RM

Auditors' remuneration 33,300 27,500 20,000 15,000 Bad debts written off 507 237,301 - 2,563 Impairment loss on investments in

subsidiary - - - 4,195 Impairment loss on receivables 156,575 95,372 - - Inventories written down 107,706 479,217 - - Rental of premises 11,800 - 11,800 -

extent that is probable that taxable profit will be available against which the losses can be utilised.Significant management judgement is required to determine the amount of deferred tax assets that canbe recognised, based upon the likely timing and level of future taxable profit together with future taxplanning strategies.

GROUP COMPANY

OTHER OPERATING EXPENSES/(INCOME)

GROUP COMPANY

28

Company No:412406-T

Key sources of estimation uncertainty

(i) Impairment on receivables

(ii)

(iii) Deferred tax assets

Deferred tax assets are recognised for all unused tax losses and unabsorbed capital allowances to theextent that is probable that taxable profit will be available against which the losses can be utilised.

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 inrevisions to the valuation of inventories.

Management believes that there are no key assumptions made concerning the future, and other key sourcesof estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment tothe carrying amounts of assets and liabilities within the next financial year other than as follows:

The Group assesses at each reporting date whether there is any objective evidence that a financial assetis impaired. To determine whether there is objective evidence of impairment, the Group considers factorssuch as the probability of insolvency or significant financial difficulties of the debtor and default orsignificant delay in payments. Where there is objective evidence of impairment, the amount and timing offuture cash flows are estimated based on historical loss experience for assets with similar credit riskcharacteristics. The carrying amount of the Group's loans and receivable at the reporting date isdisclosed in Note 17 to the Financial Statements.

Write-down of inventories

6) REVENUE

2013 2012 2013 2012RM RM RM RM

Continuing operations Air filter 854,424 377,713 - - Cleanroom 408,037 479,600 - - Water filter 318,704 14,674 - - General trading 843,000 - - -

2,424,165 871,987 - -

7)

Included in other operating expenses/(income) are the following charges/(credits):

2013 2012 2013 2012RM RM RM RM

Auditors' remuneration 33,300 27,500 20,000 15,000 Bad debts written off 507 237,301 - 2,563 Impairment loss on investments in

subsidiary - - - 4,195 Impairment loss on receivables 156,575 95,372 - - Inventories written down 107,706 479,217 - - Rental of premises 11,800 - 11,800 -

extent that is probable that taxable profit will be available against which the losses can be utilised.Significant management judgement is required to determine the amount of deferred tax assets that canbe recognised, based upon the likely timing and level of future taxable profit together with future taxplanning strategies.

GROUP COMPANY

OTHER OPERATING EXPENSES/(INCOME)

GROUP COMPANY

28

Company No:412406-T

Key sources of estimation uncertainty

(i) Impairment on receivables

(ii)

(iii) Deferred tax assets

Deferred tax assets are recognised for all unused tax losses and unabsorbed capital allowances to theextent that is probable that taxable profit will be available against which the losses can be utilised.

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 inrevisions to the valuation of inventories.

Management believes that there are no key assumptions made concerning the future, and other key sourcesof estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment tothe carrying amounts of assets and liabilities within the next financial year other than as follows:

The Group assesses at each reporting date whether there is any objective evidence that a financial assetis impaired. To determine whether there is objective evidence of impairment, the Group considers factorssuch as the probability of insolvency or significant financial difficulties of the debtor and default orsignificant delay in payments. Where there is objective evidence of impairment, the amount and timing offuture cash flows are estimated based on historical loss experience for assets with similar credit riskcharacteristics. The carrying amount of the Group's loans and receivable at the reporting date isdisclosed in Note 17 to the Financial Statements.

Write-down of inventories

6) REVENUE

2013 2012 2013 2012RM RM RM RM

Continuing operations Air filter 854,424 377,713 - - Cleanroom 408,037 479,600 - - Water filter 318,704 14,674 - - General trading 843,000 - - -

2,424,165 871,987 - -

7)

Included in other operating expenses/(income) are the following charges/(credits):

2013 2012 2013 2012RM RM RM RM

Auditors' remuneration 33,300 27,500 20,000 15,000 Bad debts written off 507 237,301 - 2,563 Impairment loss on investments in

subsidiary - - - 4,195 Impairment loss on receivables 156,575 95,372 - - Inventories written down 107,706 479,217 - - Rental of premises 11,800 - 11,800 -

extent that is probable that taxable profit will be available against which the losses can be utilised.Significant management judgement is required to determine the amount of deferred tax assets that canbe recognised, based upon the likely timing and level of future taxable profit together with future taxplanning strategies.

GROUP COMPANY

OTHER OPERATING EXPENSES/(INCOME)

GROUP COMPANY

28

Company No:412406-T

Key sources of estimation uncertainty

(i) Impairment on receivables

(ii)

(iii) Deferred tax assets

Deferred tax assets are recognised for all unused tax losses and unabsorbed capital allowances to theextent that is probable that taxable profit will be available against which the losses can be utilised.

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 inrevisions to the valuation of inventories.

Management believes that there are no key assumptions made concerning the future, and other key sourcesof estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment tothe carrying amounts of assets and liabilities within the next financial year other than as follows:

The Group assesses at each reporting date whether there is any objective evidence that a financial assetis impaired. To determine whether there is objective evidence of impairment, the Group considers factorssuch as the probability of insolvency or significant financial difficulties of the debtor and default orsignificant delay in payments. Where there is objective evidence of impairment, the amount and timing offuture cash flows are estimated based on historical loss experience for assets with similar credit riskcharacteristics. The carrying amount of the Group's loans and receivable at the reporting date isdisclosed in Note 17 to the Financial Statements.

Write-down of inventories

6) REVENUE

2013 2012 2013 2012RM RM RM RM

Continuing operations Air filter 854,424 377,713 - - Cleanroom 408,037 479,600 - - Water filter 318,704 14,674 - - General trading 843,000 - - -

2,424,165 871,987 - -

7)

Included in other operating expenses/(income) are the following charges/(credits):

2013 2012 2013 2012RM RM RM RM

Auditors' remuneration 33,300 27,500 20,000 15,000 Bad debts written off 507 237,301 - 2,563 Impairment loss on investments in

subsidiary - - - 4,195 Impairment loss on receivables 156,575 95,372 - - Inventories written down 107,706 479,217 - - Rental of premises 11,800 - 11,800 -

extent that is probable that taxable profit will be available against which the losses can be utilised.Significant management judgement is required to determine the amount of deferred tax assets that canbe recognised, based upon the likely timing and level of future taxable profit together with future taxplanning strategies.

GROUP COMPANY

OTHER OPERATING EXPENSES/(INCOME)

GROUP COMPANY

28

Company No:412406-T

Key sources of estimation uncertainty

(i) Impairment on receivables

(ii)

(iii) Deferred tax assets

Deferred tax assets are recognised for all unused tax losses and unabsorbed capital allowances to theextent that is probable that taxable profit will be available against which the losses can be utilised.

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 inrevisions to the valuation of inventories.

Management believes that there are no key assumptions made concerning the future, and other key sourcesof estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment tothe carrying amounts of assets and liabilities within the next financial year other than as follows:

The Group assesses at each reporting date whether there is any objective evidence that a financial assetis impaired. To determine whether there is objective evidence of impairment, the Group considers factorssuch as the probability of insolvency or significant financial difficulties of the debtor and default orsignificant delay in payments. Where there is objective evidence of impairment, the amount and timing offuture cash flows are estimated based on historical loss experience for assets with similar credit riskcharacteristics. The carrying amount of the Group's loans and receivable at the reporting date isdisclosed in Note 17 to the Financial Statements.

Write-down of inventories

6) REVENUE

2013 2012 2013 2012RM RM RM RM

Continuing operations Air filter 854,424 377,713 - - Cleanroom 408,037 479,600 - - Water filter 318,704 14,674 - - General trading 843,000 - - -

2,424,165 871,987 - -

7)

Included in other operating expenses/(income) are the following charges/(credits):

2013 2012 2013 2012RM RM RM RM

Auditors' remuneration 33,300 27,500 20,000 15,000 Bad debts written off 507 237,301 - 2,563 Impairment loss on investments in

subsidiary - - - 4,195 Impairment loss on receivables 156,575 95,372 - - Inventories written down 107,706 479,217 - - Rental of premises 11,800 - 11,800 -

extent that is probable that taxable profit will be available against which the losses can be utilised.Significant management judgement is required to determine the amount of deferred tax assets that canbe recognised, based upon the likely timing and level of future taxable profit together with future taxplanning strategies.

GROUP COMPANY

OTHER OPERATING EXPENSES/(INCOME)

GROUP COMPANY

28

Company No:412406-T

Key sources of estimation uncertainty

(i) Impairment on receivables

(ii)

(iii) Deferred tax assets

Deferred tax assets are recognised for all unused tax losses and unabsorbed capital allowances to theextent that is probable that taxable profit will be available against which the losses can be utilised.

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 inrevisions to the valuation of inventories.

Management believes that there are no key assumptions made concerning the future, and other key sourcesof estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment tothe carrying amounts of assets and liabilities within the next financial year other than as follows:

The Group assesses at each reporting date whether there is any objective evidence that a financial assetis impaired. To determine whether there is objective evidence of impairment, the Group considers factorssuch as the probability of insolvency or significant financial difficulties of the debtor and default orsignificant delay in payments. Where there is objective evidence of impairment, the amount and timing offuture cash flows are estimated based on historical loss experience for assets with similar credit riskcharacteristics. The carrying amount of the Group's loans and receivable at the reporting date isdisclosed in Note 17 to the Financial Statements.

Write-down of inventories

6) REVENUE

2013 2012 2013 2012RM RM RM RM

Continuing operations Air filter 854,424 377,713 - - Cleanroom 408,037 479,600 - - Water filter 318,704 14,674 - - General trading 843,000 - - -

2,424,165 871,987 - -

7)

Included in other operating expenses/(income) are the following charges/(credits):

2013 2012 2013 2012RM RM RM RM

Auditors' remuneration 33,300 27,500 20,000 15,000 Bad debts written off 507 237,301 - 2,563 Impairment loss on investments in

subsidiary - - - 4,195 Impairment loss on receivables 156,575 95,372 - - Inventories written down 107,706 479,217 - - Rental of premises 11,800 - 11,800 -

extent that is probable that taxable profit will be available against which the losses can be utilised.Significant management judgement is required to determine the amount of deferred tax assets that canbe recognised, based upon the likely timing and level of future taxable profit together with future taxplanning strategies.

GROUP COMPANY

OTHER OPERATING EXPENSES/(INCOME)

GROUP COMPANY

28

Company No:412406-T

Key sources of estimation uncertainty

(i) Impairment on receivables

(ii)

(iii) Deferred tax assets

Deferred tax assets are recognised for all unused tax losses and unabsorbed capital allowances to theextent that is probable that taxable profit will be available against which the losses can be utilised.

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 inrevisions to the valuation of inventories.

Management believes that there are no key assumptions made concerning the future, and other key sourcesof estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment tothe carrying amounts of assets and liabilities within the next financial year other than as follows:

The Group assesses at each reporting date whether there is any objective evidence that a financial assetis impaired. To determine whether there is objective evidence of impairment, the Group considers factorssuch as the probability of insolvency or significant financial difficulties of the debtor and default orsignificant delay in payments. Where there is objective evidence of impairment, the amount and timing offuture cash flows are estimated based on historical loss experience for assets with similar credit riskcharacteristics. The carrying amount of the Group's loans and receivable at the reporting date isdisclosed in Note 17 to the Financial Statements.

Write-down of inventories

6) REVENUE

2013 2012 2013 2012RM RM RM RM

Continuing operations Air filter 854,424 377,713 - - Cleanroom 408,037 479,600 - - Water filter 318,704 14,674 - - General trading 843,000 - - -

2,424,165 871,987 - -

7)

Included in other operating expenses/(income) are the following charges/(credits):

2013 2012 2013 2012RM RM RM RM

Auditors' remuneration 33,300 27,500 20,000 15,000 Bad debts written off 507 237,301 - 2,563 Impairment loss on investments in

subsidiary - - - 4,195 Impairment loss on receivables 156,575 95,372 - - Inventories written down 107,706 479,217 - - Rental of premises 11,800 - 11,800 -

extent that is probable that taxable profit will be available against which the losses can be utilised.Significant management judgement is required to determine the amount of deferred tax assets that canbe recognised, based upon the likely timing and level of future taxable profit together with future taxplanning strategies.

GROUP COMPANY

OTHER OPERATING EXPENSES/(INCOME)

GROUP COMPANY

28

Company No:412406-T

Key sources of estimation uncertainty

(i) Impairment on receivables

(ii)

(iii) Deferred tax assets

Deferred tax assets are recognised for all unused tax losses and unabsorbed capital allowances to theextent that is probable that taxable profit will be available against which the losses can be utilised.

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 inrevisions to the valuation of inventories.

Management believes that there are no key assumptions made concerning the future, and other key sourcesof estimation uncertainty at the reporting date, that have a significant risk of causing a material adjustment tothe carrying amounts of assets and liabilities within the next financial year other than as follows:

The Group assesses at each reporting date whether there is any objective evidence that a financial assetis impaired. To determine whether there is objective evidence of impairment, the Group considers factorssuch as the probability of insolvency or significant financial difficulties of the debtor and default orsignificant delay in payments. Where there is objective evidence of impairment, the amount and timing offuture cash flows are estimated based on historical loss experience for assets with similar credit riskcharacteristics. The carrying amount of the Group's loans and receivable at the reporting date isdisclosed in Note 17 to the Financial Statements.

Write-down of inventories

6) REVENUE

2013 2012 2013 2012RM RM RM RM

Continuing operations Air filter 854,424 377,713 - - Cleanroom 408,037 479,600 - - Water filter 318,704 14,674 - - General trading 843,000 - - -

2,424,165 871,987 - -

7)

Included in other operating expenses/(income) are the following charges/(credits):

2013 2012 2013 2012RM RM RM RM

Auditors' remuneration 33,300 27,500 20,000 15,000 Bad debts written off 507 237,301 - 2,563 Impairment loss on investments in

subsidiary - - - 4,195 Impairment loss on receivables 156,575 95,372 - - Inventories written down 107,706 479,217 - - Rental of premises 11,800 - 11,800 -

extent that is probable that taxable profit will be available against which the losses can be utilised.Significant management judgement is required to determine the amount of deferred tax assets that canbe recognised, based upon the likely timing and level of future taxable profit together with future taxplanning strategies.

GROUP COMPANY

OTHER OPERATING EXPENSES/(INCOME)

GROUP COMPANY

28

RAYA INTERNATIONAL BERHAD Annual Report 2013

52

Notes to the Financial Statements (Cont’d)

Company No:412406-T

2013 2012 2013 2012RM RM RM RM

And crediting: Interest income - (3,185) - - Exceptional item: Waiver of shareholder's advance (831,000) (1,133,881) (831,000) (1,133,881) Reversal of impairment loss on trade receivables - (30,165) - - Rental income - (24,064) - -

8)

2013 2012 2013 2012RM RM RM RM

Executive directors: Salaries and other emoluments 38,113 40,934 38,113 40,934 Defined contribution plan 4,818 4,930 4,818 4,930

42,931 45,864 42,931 45,864 Non-executive directors: Fees 9,000 - 9,000 -

51,931 45,864 51,931 45,864

2013 2012Executive directors:

Below RM50,000 1 2

Non-executive directors:

Below RM50,000 2 -

9) FINANCE COSTS

2013 2012RM RM

Interest on: Bank overdraft 83,823 86,288 Finance lease 14,889 33,081 Term loans 397,055 355,294

495,767 474,663

10) INCOME TAX EXPENSE/(CREDIT)

2013 2012 2013 2012RM RM RM RM

Deferred tax in respect of: Tax assets (Note 14) 267,674 (463,057) - - Tax liabilities (Note 14) (5,551) (5,443) - -

262,123 (468,500) - -

GROUP COMPANY

DIRECTORS' REMUNERATION

GROUP COMPANY

Number of directors

GROUP

GROUP COMPANY

The number of directors of the Company whose total remuneration during the financial year fell within thefollowing bands is analysed below:

29

Company No:412406-T

2013 2012 2013 2012RM RM RM RM

And crediting: Interest income - (3,185) - - Exceptional item: Waiver of shareholder's advance (831,000) (1,133,881) (831,000) (1,133,881) Reversal of impairment loss on trade receivables - (30,165) - - Rental income - (24,064) - -

8)

2013 2012 2013 2012RM RM RM RM

Executive directors: Salaries and other emoluments 38,113 40,934 38,113 40,934 Defined contribution plan 4,818 4,930 4,818 4,930

42,931 45,864 42,931 45,864 Non-executive directors: Fees 9,000 - 9,000 -

51,931 45,864 51,931 45,864

2013 2012Executive directors:

Below RM50,000 1 2

Non-executive directors:

Below RM50,000 2 -

9) FINANCE COSTS

2013 2012RM RM

Interest on: Bank overdraft 83,823 86,288 Finance lease 14,889 33,081 Term loans 397,055 355,294

495,767 474,663

10) INCOME TAX EXPENSE/(CREDIT)

2013 2012 2013 2012RM RM RM RM

Deferred tax in respect of: Tax assets (Note 14) 267,674 (463,057) - - Tax liabilities (Note 14) (5,551) (5,443) - -

262,123 (468,500) - -

GROUP COMPANY

DIRECTORS' REMUNERATION

GROUP COMPANY

Number of directors

GROUP

GROUP COMPANY

The number of directors of the Company whose total remuneration during the financial year fell within thefollowing bands is analysed below:

29

Company No:412406-T

2013 2012 2013 2012RM RM RM RM

And crediting: Interest income - (3,185) - - Exceptional item: Waiver of shareholder's advance (831,000) (1,133,881) (831,000) (1,133,881) Reversal of impairment loss on trade receivables - (30,165) - - Rental income - (24,064) - -

8)

2013 2012 2013 2012RM RM RM RM

Executive directors: Salaries and other emoluments 38,113 40,934 38,113 40,934 Defined contribution plan 4,818 4,930 4,818 4,930

42,931 45,864 42,931 45,864 Non-executive directors: Fees 9,000 - 9,000 -

51,931 45,864 51,931 45,864

2013 2012Executive directors:

Below RM50,000 1 2

Non-executive directors:

Below RM50,000 2 -

9) FINANCE COSTS

2013 2012RM RM

Interest on: Bank overdraft 83,823 86,288 Finance lease 14,889 33,081 Term loans 397,055 355,294

495,767 474,663

10) INCOME TAX EXPENSE/(CREDIT)

2013 2012 2013 2012RM RM RM RM

Deferred tax in respect of: Tax assets (Note 14) 267,674 (463,057) - - Tax liabilities (Note 14) (5,551) (5,443) - -

262,123 (468,500) - -

GROUP COMPANY

DIRECTORS' REMUNERATION

GROUP COMPANY

Number of directors

GROUP

GROUP COMPANY

The number of directors of the Company whose total remuneration during the financial year fell within thefollowing bands is analysed below:

29

Company No:412406-T

2013 2012 2013 2012RM RM RM RM

And crediting: Interest income - (3,185) - - Exceptional item: Waiver of shareholder's advance (831,000) (1,133,881) (831,000) (1,133,881) Reversal of impairment loss on trade receivables - (30,165) - - Rental income - (24,064) - -

8)

2013 2012 2013 2012RM RM RM RM

Executive directors: Salaries and other emoluments 38,113 40,934 38,113 40,934 Defined contribution plan 4,818 4,930 4,818 4,930

42,931 45,864 42,931 45,864 Non-executive directors: Fees 9,000 - 9,000 -

51,931 45,864 51,931 45,864

2013 2012Executive directors:

Below RM50,000 1 2

Non-executive directors:

Below RM50,000 2 -

9) FINANCE COSTS

2013 2012RM RM

Interest on: Bank overdraft 83,823 86,288 Finance lease 14,889 33,081 Term loans 397,055 355,294

495,767 474,663

10) INCOME TAX EXPENSE/(CREDIT)

2013 2012 2013 2012RM RM RM RM

Deferred tax in respect of: Tax assets (Note 14) 267,674 (463,057) - - Tax liabilities (Note 14) (5,551) (5,443) - -

262,123 (468,500) - -

GROUP COMPANY

DIRECTORS' REMUNERATION

GROUP COMPANY

Number of directors

GROUP

GROUP COMPANY

The number of directors of the Company whose total remuneration during the financial year fell within thefollowing bands is analysed below:

29

Company No:412406-T

2013 2012 2013 2012RM RM RM RM

And crediting: Interest income - (3,185) - - Exceptional item: Waiver of shareholder's advance (831,000) (1,133,881) (831,000) (1,133,881) Reversal of impairment loss on trade receivables - (30,165) - - Rental income - (24,064) - -

8)

2013 2012 2013 2012RM RM RM RM

Executive directors: Salaries and other emoluments 38,113 40,934 38,113 40,934 Defined contribution plan 4,818 4,930 4,818 4,930

42,931 45,864 42,931 45,864 Non-executive directors: Fees 9,000 - 9,000 -

51,931 45,864 51,931 45,864

2013 2012Executive directors:

Below RM50,000 1 2

Non-executive directors:

Below RM50,000 2 -

9) FINANCE COSTS

2013 2012RM RM

Interest on: Bank overdraft 83,823 86,288 Finance lease 14,889 33,081 Term loans 397,055 355,294

495,767 474,663

10) INCOME TAX EXPENSE/(CREDIT)

2013 2012 2013 2012RM RM RM RM

Deferred tax in respect of: Tax assets (Note 14) 267,674 (463,057) - - Tax liabilities (Note 14) (5,551) (5,443) - -

262,123 (468,500) - -

GROUP COMPANY

DIRECTORS' REMUNERATION

GROUP COMPANY

Number of directors

GROUP

GROUP COMPANY

The number of directors of the Company whose total remuneration during the financial year fell within thefollowing bands is analysed below:

29

Company No:412406-T

2013 2012 2013 2012RM RM RM RM

And crediting: Interest income - (3,185) - - Exceptional item: Waiver of shareholder's advance (831,000) (1,133,881) (831,000) (1,133,881) Reversal of impairment loss on trade receivables - (30,165) - - Rental income - (24,064) - -

8)

2013 2012 2013 2012RM RM RM RM

Executive directors: Salaries and other emoluments 38,113 40,934 38,113 40,934 Defined contribution plan 4,818 4,930 4,818 4,930

42,931 45,864 42,931 45,864 Non-executive directors: Fees 9,000 - 9,000 -

51,931 45,864 51,931 45,864

2013 2012Executive directors:

Below RM50,000 1 2

Non-executive directors:

Below RM50,000 2 -

9) FINANCE COSTS

2013 2012RM RM

Interest on: Bank overdraft 83,823 86,288 Finance lease 14,889 33,081 Term loans 397,055 355,294

495,767 474,663

10) INCOME TAX EXPENSE/(CREDIT)

2013 2012 2013 2012RM RM RM RM

Deferred tax in respect of: Tax assets (Note 14) 267,674 (463,057) - - Tax liabilities (Note 14) (5,551) (5,443) - -

262,123 (468,500) - -

GROUP COMPANY

DIRECTORS' REMUNERATION

GROUP COMPANY

Number of directors

GROUP

GROUP COMPANY

The number of directors of the Company whose total remuneration during the financial year fell within thefollowing bands is analysed below:

29

Company No:412406-T

2013 2012 2013 2012RM RM RM RM

And crediting: Interest income - (3,185) - - Exceptional item: Waiver of shareholder's advance (831,000) (1,133,881) (831,000) (1,133,881) Reversal of impairment loss on trade receivables - (30,165) - - Rental income - (24,064) - -

8)

2013 2012 2013 2012RM RM RM RM

Executive directors: Salaries and other emoluments 38,113 40,934 38,113 40,934 Defined contribution plan 4,818 4,930 4,818 4,930

42,931 45,864 42,931 45,864 Non-executive directors: Fees 9,000 - 9,000 -

51,931 45,864 51,931 45,864

2013 2012Executive directors:

Below RM50,000 1 2

Non-executive directors:

Below RM50,000 2 -

9) FINANCE COSTS

2013 2012RM RM

Interest on: Bank overdraft 83,823 86,288 Finance lease 14,889 33,081 Term loans 397,055 355,294

495,767 474,663

10) INCOME TAX EXPENSE/(CREDIT)

2013 2012 2013 2012RM RM RM RM

Deferred tax in respect of: Tax assets (Note 14) 267,674 (463,057) - - Tax liabilities (Note 14) (5,551) (5,443) - -

262,123 (468,500) - -

GROUP COMPANY

DIRECTORS' REMUNERATION

GROUP COMPANY

Number of directors

GROUP

GROUP COMPANY

The number of directors of the Company whose total remuneration during the financial year fell within thefollowing bands is analysed below:

29

Company No:412406-T

2013 2012 2013 2012RM RM RM RM

And crediting: Interest income - (3,185) - - Exceptional item: Waiver of shareholder's advance (831,000) (1,133,881) (831,000) (1,133,881) Reversal of impairment loss on trade receivables - (30,165) - - Rental income - (24,064) - -

8)

2013 2012 2013 2012RM RM RM RM

Executive directors: Salaries and other emoluments 38,113 40,934 38,113 40,934 Defined contribution plan 4,818 4,930 4,818 4,930

42,931 45,864 42,931 45,864 Non-executive directors: Fees 9,000 - 9,000 -

51,931 45,864 51,931 45,864

2013 2012Executive directors:

Below RM50,000 1 2

Non-executive directors:

Below RM50,000 2 -

9) FINANCE COSTS

2013 2012RM RM

Interest on: Bank overdraft 83,823 86,288 Finance lease 14,889 33,081 Term loans 397,055 355,294

495,767 474,663

10) INCOME TAX EXPENSE/(CREDIT)

2013 2012 2013 2012RM RM RM RM

Deferred tax in respect of: Tax assets (Note 14) 267,674 (463,057) - - Tax liabilities (Note 14) (5,551) (5,443) - -

262,123 (468,500) - -

GROUP COMPANY

DIRECTORS' REMUNERATION

GROUP COMPANY

Number of directors

GROUP

GROUP COMPANY

The number of directors of the Company whose total remuneration during the financial year fell within thefollowing bands is analysed below:

29

Company No:412406-T

2013 2012 2013 2012RM RM RM RM

And crediting: Interest income - (3,185) - - Exceptional item: Waiver of shareholder's advance (831,000) (1,133,881) (831,000) (1,133,881) Reversal of impairment loss on trade receivables - (30,165) - - Rental income - (24,064) - -

8)

2013 2012 2013 2012RM RM RM RM

Executive directors: Salaries and other emoluments 38,113 40,934 38,113 40,934 Defined contribution plan 4,818 4,930 4,818 4,930

42,931 45,864 42,931 45,864 Non-executive directors: Fees 9,000 - 9,000 -

51,931 45,864 51,931 45,864

2013 2012Executive directors:

Below RM50,000 1 2

Non-executive directors:

Below RM50,000 2 -

9) FINANCE COSTS

2013 2012RM RM

Interest on: Bank overdraft 83,823 86,288 Finance lease 14,889 33,081 Term loans 397,055 355,294

495,767 474,663

10) INCOME TAX EXPENSE/(CREDIT)

2013 2012 2013 2012RM RM RM RM

Deferred tax in respect of: Tax assets (Note 14) 267,674 (463,057) - - Tax liabilities (Note 14) (5,551) (5,443) - -

262,123 (468,500) - -

GROUP COMPANY

DIRECTORS' REMUNERATION

GROUP COMPANY

Number of directors

GROUP

GROUP COMPANY

The number of directors of the Company whose total remuneration during the financial year fell within thefollowing bands is analysed below:

29

Company No:412406-T

2013 2012 2013 2012RM RM RM RM

And crediting: Interest income - (3,185) - - Exceptional item: Waiver of shareholder's advance (831,000) (1,133,881) (831,000) (1,133,881) Reversal of impairment loss on trade receivables - (30,165) - - Rental income - (24,064) - -

8)

2013 2012 2013 2012RM RM RM RM

Executive directors: Salaries and other emoluments 38,113 40,934 38,113 40,934 Defined contribution plan 4,818 4,930 4,818 4,930

42,931 45,864 42,931 45,864 Non-executive directors: Fees 9,000 - 9,000 -

51,931 45,864 51,931 45,864

2013 2012Executive directors:

Below RM50,000 1 2

Non-executive directors:

Below RM50,000 2 -

9) FINANCE COSTS

2013 2012RM RM

Interest on: Bank overdraft 83,823 86,288 Finance lease 14,889 33,081 Term loans 397,055 355,294

495,767 474,663

10) INCOME TAX EXPENSE/(CREDIT)

2013 2012 2013 2012RM RM RM RM

Deferred tax in respect of: Tax assets (Note 14) 267,674 (463,057) - - Tax liabilities (Note 14) (5,551) (5,443) - -

262,123 (468,500) - -

GROUP COMPANY

DIRECTORS' REMUNERATION

GROUP COMPANY

Number of directors

GROUP

GROUP COMPANY

The number of directors of the Company whose total remuneration during the financial year fell within thefollowing bands is analysed below:

29

Company No:412406-T

2013 2012 2013 2012RM RM RM RM

And crediting: Interest income - (3,185) - - Exceptional item: Waiver of shareholder's advance (831,000) (1,133,881) (831,000) (1,133,881) Reversal of impairment loss on trade receivables - (30,165) - - Rental income - (24,064) - -

8)

2013 2012 2013 2012RM RM RM RM

Executive directors: Salaries and other emoluments 38,113 40,934 38,113 40,934 Defined contribution plan 4,818 4,930 4,818 4,930

42,931 45,864 42,931 45,864 Non-executive directors: Fees 9,000 - 9,000 -

51,931 45,864 51,931 45,864

2013 2012Executive directors:

Below RM50,000 1 2

Non-executive directors:

Below RM50,000 2 -

9) FINANCE COSTS

2013 2012RM RM

Interest on: Bank overdraft 83,823 86,288 Finance lease 14,889 33,081 Term loans 397,055 355,294

495,767 474,663

10) INCOME TAX EXPENSE/(CREDIT)

2013 2012 2013 2012RM RM RM RM

Deferred tax in respect of: Tax assets (Note 14) 267,674 (463,057) - - Tax liabilities (Note 14) (5,551) (5,443) - -

262,123 (468,500) - -

GROUP COMPANY

DIRECTORS' REMUNERATION

GROUP COMPANY

Number of directors

GROUP

GROUP COMPANY

The number of directors of the Company whose total remuneration during the financial year fell within thefollowing bands is analysed below:

29

Company No:412406-T

2013 2012 2013 2012RM RM RM RM

And crediting: Interest income - (3,185) - - Exceptional item: Waiver of shareholder's advance (831,000) (1,133,881) (831,000) (1,133,881) Reversal of impairment loss on trade receivables - (30,165) - - Rental income - (24,064) - -

8)

2013 2012 2013 2012RM RM RM RM

Executive directors: Salaries and other emoluments 38,113 40,934 38,113 40,934 Defined contribution plan 4,818 4,930 4,818 4,930

42,931 45,864 42,931 45,864 Non-executive directors: Fees 9,000 - 9,000 -

51,931 45,864 51,931 45,864

2013 2012Executive directors:

Below RM50,000 1 2

Non-executive directors:

Below RM50,000 2 -

9) FINANCE COSTS

2013 2012RM RM

Interest on: Bank overdraft 83,823 86,288 Finance lease 14,889 33,081 Term loans 397,055 355,294

495,767 474,663

10) INCOME TAX EXPENSE/(CREDIT)

2013 2012 2013 2012RM RM RM RM

Deferred tax in respect of: Tax assets (Note 14) 267,674 (463,057) - - Tax liabilities (Note 14) (5,551) (5,443) - -

262,123 (468,500) - -

GROUP COMPANY

DIRECTORS' REMUNERATION

GROUP COMPANY

Number of directors

GROUP

GROUP COMPANY

The number of directors of the Company whose total remuneration during the financial year fell within thefollowing bands is analysed below:

29

RAYA INTERNATIONAL BERHAD Annual Report 2013

53

Notes to the Financial Statements (Cont’d)

Company No:412406-T

2013 2012 2013 2012RM RM RM RM

Accounting profit/(loss) 351,288 (395,621) 831,000 1,133,881

Tax at the applicable statutory income tax rate of 25% 87,822 (98,905) 207,750 165,437 Tax effects in respect of: Expenses that are not deductible for tax purposes 134,622 165,904 36,443 29,108 Utilisation of previous year's unrecognised deferred tax assets - (104,701) - - Recognition of previously unrecognised deferred tax assets (114,267) (577,333) - - Income not subject to tax (207,750) (299,248) (207,750) (283,470) Net deferred tax assets not recognised 361,696 445,783 77,678 88,925 Income tax expense/(credit) 262,123 (468,500) 114,121 -

11) EARNINGS PER ORDINARY SHARE

Basic earnings per share

GROUP COMPANY

A numerical reconciliation between the income tax expense/(credit) and the product of accounting profit/(loss)multiplied by the applicable statutory income tax rate, is as follows:

2013 2012

Earnings attributable to equity holders of the Company (RM) 89,165 - Weighted average number of ordinary shares in issue 118,555,800 118,555,800

Basic earnings per share (sen) 0.08 -

Diluted

The diluted earnings per share of the Group has not been presented as there are no dilutive potential ordinaryshares.

Basic earnings per share is calculated by dividing the profit for the year attributable to equity holders of theCompany by the weighted average number of ordinary shares in issue during the financial year as follows:

GROUP

30

RAYA INTERNATIONAL BERHAD Annual Report 2013

54

Notes to the Financial Statements (Cont’d)

Company No:412406-T

12) PROPERTY, PLANT AND EQUIPMENT

GROUPFreehold Furniture,building fittings and

Freehold and other Tools and Motor

land renovation equipment equipment vehicles Total

RM RM RM RM RM RM

2013

As at 1st January 2013 2,900,000 6,702,165 2,822,926 322,158 250,621 12,997,870

Additions - - 1,100 - - 1,100

Written off - - (319,647) (4,943) (68,501) (393,091)

Revaluation reserves 1,660,000 (1,486,245) - - - 173,755

Reclassifications (200,000) 256,920 113,515 (170,435) - -

As at 31st December 2013 4,360,000 5,472,840 2,617,894 146,780 182,120 12,779,634

Accumulated depreciationAs at 1st January 2013 - 992,401 2,507,836 322,158 161,117 3,983,512

Charge for the year - 212,568 317,169 3,416 30,002 563,155

Written off - - (319,647) (4,943) (68,501) (393,091)

Reclassifications - 191,169 (69,664) (181,007) 59,502 -

As at 31st December 2013 - 1,396,138 2,435,694 139,624 182,120 4,153,576

Net carrying amount

Cost/Valuation

Net carrying amountAt cost - - 182,200 7,156 - 189,356

At valuation 4,360,000 4,076,702 - - - 8,436,702

As at 31st December 2013 4,360,000 4,076,702 182,200 7,156 - 8,626,058

2012

As at 1st January 2012 2,900,000 6,702,165 2,822,926 322,158 250,621 12,997,870

Additions - - - - - -

As at 31st December 2012 2,900,000 6,702,165 2,822,926 322,158 250,621 12,997,870

Accumulated depreciationAs at 1st January 2012 - 800,520 2,156,166 322,158 125,117 3,403,961

Charge for the year - 191,881 351,670 - 36,000 579,551

As at 31st December 2012 - 992,401 2,507,836 322,158 161,117 3,983,512

Net carrying amountAt cost - - 315,090 - 89,504 404,594

At valuation 2,900,000 5,709,674 - - - 8,609,674

As at 31st December 2012 2,900,000 5,709,764 315,090 - 89,504 9,014,358

Cost/Valuation

(Forward)

31

Company No:412406-T

12) PROPERTY, PLANT AND EQUIPMENT

GROUPFreehold Furniture,building fittings and

Freehold and other Tools and Motor

land renovation equipment equipment vehicles Total

RM RM RM RM RM RM

2013

As at 1st January 2013 2,900,000 6,702,165 2,822,926 322,158 250,621 12,997,870

Additions - - 1,100 - - 1,100

Written off - - (319,647) (4,943) (68,501) (393,091)

Revaluation reserves 1,660,000 (1,486,245) - - - 173,755

Reclassifications (200,000) 256,920 113,515 (170,435) - -

As at 31st December 2013 4,360,000 5,472,840 2,617,894 146,780 182,120 12,779,634

Accumulated depreciationAs at 1st January 2013 - 992,401 2,507,836 322,158 161,117 3,983,512

Charge for the year - 212,568 317,169 3,416 30,002 563,155

Written off - - (319,647) (4,943) (68,501) (393,091)

Reclassifications - 191,169 (69,664) (181,007) 59,502 -

As at 31st December 2013 - 1,396,138 2,435,694 139,624 182,120 4,153,576

Net carrying amount

Cost/Valuation

Net carrying amountAt cost - - 182,200 7,156 - 189,356

At valuation 4,360,000 4,076,702 - - - 8,436,702

As at 31st December 2013 4,360,000 4,076,702 182,200 7,156 - 8,626,058

2012

As at 1st January 2012 2,900,000 6,702,165 2,822,926 322,158 250,621 12,997,870

Additions - - - - - -

As at 31st December 2012 2,900,000 6,702,165 2,822,926 322,158 250,621 12,997,870

Accumulated depreciationAs at 1st January 2012 - 800,520 2,156,166 322,158 125,117 3,403,961

Charge for the year - 191,881 351,670 - 36,000 579,551

As at 31st December 2012 - 992,401 2,507,836 322,158 161,117 3,983,512

Net carrying amountAt cost - - 315,090 - 89,504 404,594

At valuation 2,900,000 5,709,674 - - - 8,609,674

As at 31st December 2012 2,900,000 5,709,764 315,090 - 89,504 9,014,358

Cost/Valuation

(Forward)

31

RAYA INTERNATIONAL BERHAD Annual Report 2013

55

Notes to the Financial Statements (Cont’d)

Company No:412406-T

12) PROPERTY, PLANT AND EQUIPMENT

COMPANYOffice

Computers equipment TotalRM RM RM

2013CostAs at 1st January 2013 45,829 12,279 58,108

Additions - 1,100 1,100

As at 31st December 2013 45,829 13,379 59,208

Accumulated depreciationAs at 1st January 2013 31,907 7,008 38,915

Charge for the year 6,874 1,538 8,412

As at 31st December 2013 38,781 8,546 47,327

Net book value as at 31st December 2013 7,048 4,833 11,881

2012

CostAs at 1st January 2012 45,829 12,279 58,108

Additions - - -

As at 31st December 2012 45,829 12,279 58,108

Accumulated depreciationAs at 1st January 2012 25,034 5,321 30,355

Charge for the year 6,873 1,687 8,560

As at 31st December 2012 31,907 7,008 38,915

Net book value as at 31st December 2012 13,922 5,271 19,193

The details of the valuation of the Group's land and building are as follows:

Details of Year of property valuation Details of valuers RM

Freehold land 2009 Jamsari Mohamad Aris, MIS (M) Registered 2,900,000 Valuer of TD Aziz Sdn. Bhd.

Freehold building 2009 Jamsari Mohamad Aris, MIS (M) Registered 6,073,569

Valuer of TD Aziz Sdn. Bhd.

Freehold land 2013 JAZ International Malaysia Sdn. Bhd. 4,360,000

Freehold building 2013 JAZ International Malaysia Sdn. Bhd. 4,061,183

GROUPRevalued

amount

Assets of the Group with a total net carrying amount of RM69,738 (2012: RM89,504) were acquired underfinance lease.

The above landed properties are charged to banks for banking facilities granted to the Group as disclosed inNotes 21 and 23 to the Financial Statements.

Included in property, plant and equipment of the Group and of the Company are fully depreciated assets whichare still in use, with a cost of RM837,819 (2012: RM1,250,679) and RM2,389 (2012: RM Nil) respectively.

Freehold building 2013 JAZ International Malaysia Sdn. Bhd. 4,061,183

32

Company No:412406-T

12) PROPERTY, PLANT AND EQUIPMENT

COMPANYOffice

Computers equipment TotalRM RM RM

2013CostAs at 1st January 2013 45,829 12,279 58,108

Additions - 1,100 1,100

As at 31st December 2013 45,829 13,379 59,208

Accumulated depreciationAs at 1st January 2013 31,907 7,008 38,915

Charge for the year 6,874 1,538 8,412

As at 31st December 2013 38,781 8,546 47,327

Net book value as at 31st December 2013 7,048 4,833 11,881

2012

CostAs at 1st January 2012 45,829 12,279 58,108

Additions - - -

As at 31st December 2012 45,829 12,279 58,108

Accumulated depreciationAs at 1st January 2012 25,034 5,321 30,355

Charge for the year 6,873 1,687 8,560

As at 31st December 2012 31,907 7,008 38,915

Net book value as at 31st December 2012 13,922 5,271 19,193

The details of the valuation of the Group's land and building are as follows:

Details of Year of property valuation Details of valuers RM

Freehold land 2009 Jamsari Mohamad Aris, MIS (M) Registered 2,900,000 Valuer of TD Aziz Sdn. Bhd.

Freehold building 2009 Jamsari Mohamad Aris, MIS (M) Registered 6,073,569

Valuer of TD Aziz Sdn. Bhd.

Freehold land 2013 JAZ International Malaysia Sdn. Bhd. 4,360,000

Freehold building 2013 JAZ International Malaysia Sdn. Bhd. 4,061,183

GROUPRevalued

amount

Assets of the Group with a total net carrying amount of RM69,738 (2012: RM89,504) were acquired underfinance lease.

The above landed properties are charged to banks for banking facilities granted to the Group as disclosed inNotes 21 and 23 to the Financial Statements.

Included in property, plant and equipment of the Group and of the Company are fully depreciated assets whichare still in use, with a cost of RM837,819 (2012: RM1,250,679) and RM2,389 (2012: RM Nil) respectively.

Freehold building 2013 JAZ International Malaysia Sdn. Bhd. 4,061,183

32

Company No:412406-T

12) PROPERTY, PLANT AND EQUIPMENT

COMPANYOffice

Computers equipment TotalRM RM RM

2013CostAs at 1st January 2013 45,829 12,279 58,108

Additions - 1,100 1,100

As at 31st December 2013 45,829 13,379 59,208

Accumulated depreciationAs at 1st January 2013 31,907 7,008 38,915

Charge for the year 6,874 1,538 8,412

As at 31st December 2013 38,781 8,546 47,327

Net book value as at 31st December 2013 7,048 4,833 11,881

2012

CostAs at 1st January 2012 45,829 12,279 58,108

Additions - - -

As at 31st December 2012 45,829 12,279 58,108

Accumulated depreciationAs at 1st January 2012 25,034 5,321 30,355

Charge for the year 6,873 1,687 8,560

As at 31st December 2012 31,907 7,008 38,915

Net book value as at 31st December 2012 13,922 5,271 19,193

The details of the valuation of the Group's land and building are as follows:

Details of Year of property valuation Details of valuers RM

Freehold land 2009 Jamsari Mohamad Aris, MIS (M) Registered 2,900,000 Valuer of TD Aziz Sdn. Bhd.

Freehold building 2009 Jamsari Mohamad Aris, MIS (M) Registered 6,073,569

Valuer of TD Aziz Sdn. Bhd.

Freehold land 2013 JAZ International Malaysia Sdn. Bhd. 4,360,000

Freehold building 2013 JAZ International Malaysia Sdn. Bhd. 4,061,183

GROUPRevalued

amount

Assets of the Group with a total net carrying amount of RM69,738 (2012: RM89,504) were acquired underfinance lease.

The above landed properties are charged to banks for banking facilities granted to the Group as disclosed inNotes 21 and 23 to the Financial Statements.

Included in property, plant and equipment of the Group and of the Company are fully depreciated assets whichare still in use, with a cost of RM837,819 (2012: RM1,250,679) and RM2,389 (2012: RM Nil) respectively.

Freehold building 2013 JAZ International Malaysia Sdn. Bhd. 4,061,183

32

Company No:412406-T

12) PROPERTY, PLANT AND EQUIPMENT

COMPANYOffice

Computers equipment TotalRM RM RM

2013CostAs at 1st January 2013 45,829 12,279 58,108

Additions - 1,100 1,100

As at 31st December 2013 45,829 13,379 59,208

Accumulated depreciationAs at 1st January 2013 31,907 7,008 38,915

Charge for the year 6,874 1,538 8,412

As at 31st December 2013 38,781 8,546 47,327

Net book value as at 31st December 2013 7,048 4,833 11,881

2012

CostAs at 1st January 2012 45,829 12,279 58,108

Additions - - -

As at 31st December 2012 45,829 12,279 58,108

Accumulated depreciationAs at 1st January 2012 25,034 5,321 30,355

Charge for the year 6,873 1,687 8,560

As at 31st December 2012 31,907 7,008 38,915

Net book value as at 31st December 2012 13,922 5,271 19,193

The details of the valuation of the Group's land and building are as follows:

Details of Year of property valuation Details of valuers RM

Freehold land 2009 Jamsari Mohamad Aris, MIS (M) Registered 2,900,000 Valuer of TD Aziz Sdn. Bhd.

Freehold building 2009 Jamsari Mohamad Aris, MIS (M) Registered 6,073,569

Valuer of TD Aziz Sdn. Bhd.

Freehold land 2013 JAZ International Malaysia Sdn. Bhd. 4,360,000

Freehold building 2013 JAZ International Malaysia Sdn. Bhd. 4,061,183

GROUPRevalued

amount

Assets of the Group with a total net carrying amount of RM69,738 (2012: RM89,504) were acquired underfinance lease.

The above landed properties are charged to banks for banking facilities granted to the Group as disclosed inNotes 21 and 23 to the Financial Statements.

Included in property, plant and equipment of the Group and of the Company are fully depreciated assets whichare still in use, with a cost of RM837,819 (2012: RM1,250,679) and RM2,389 (2012: RM Nil) respectively.

Freehold building 2013 JAZ International Malaysia Sdn. Bhd. 4,061,183

32

Company No:412406-T

12) PROPERTY, PLANT AND EQUIPMENT

COMPANYOffice

Computers equipment TotalRM RM RM

2013CostAs at 1st January 2013 45,829 12,279 58,108

Additions - 1,100 1,100

As at 31st December 2013 45,829 13,379 59,208

Accumulated depreciationAs at 1st January 2013 31,907 7,008 38,915

Charge for the year 6,874 1,538 8,412

As at 31st December 2013 38,781 8,546 47,327

Net book value as at 31st December 2013 7,048 4,833 11,881

2012

CostAs at 1st January 2012 45,829 12,279 58,108

Additions - - -

As at 31st December 2012 45,829 12,279 58,108

Accumulated depreciationAs at 1st January 2012 25,034 5,321 30,355

Charge for the year 6,873 1,687 8,560

As at 31st December 2012 31,907 7,008 38,915

Net book value as at 31st December 2012 13,922 5,271 19,193

The details of the valuation of the Group's land and building are as follows:

Details of Year of property valuation Details of valuers RM

Freehold land 2009 Jamsari Mohamad Aris, MIS (M) Registered 2,900,000 Valuer of TD Aziz Sdn. Bhd.

Freehold building 2009 Jamsari Mohamad Aris, MIS (M) Registered 6,073,569

Valuer of TD Aziz Sdn. Bhd.

Freehold land 2013 JAZ International Malaysia Sdn. Bhd. 4,360,000

Freehold building 2013 JAZ International Malaysia Sdn. Bhd. 4,061,183

GROUPRevalued

amount

Assets of the Group with a total net carrying amount of RM69,738 (2012: RM89,504) were acquired underfinance lease.

The above landed properties are charged to banks for banking facilities granted to the Group as disclosed inNotes 21 and 23 to the Financial Statements.

Included in property, plant and equipment of the Group and of the Company are fully depreciated assets whichare still in use, with a cost of RM837,819 (2012: RM1,250,679) and RM2,389 (2012: RM Nil) respectively.

Freehold building 2013 JAZ International Malaysia Sdn. Bhd. 4,061,183

32

RAYA INTERNATIONAL BERHAD Annual Report 2013

56

Notes to the Financial Statements (Cont’d)

Company No:412406-T

13) INVESTMENTS IN SUBSIDIARIES

2013 2012RM RM

Unquoted shares - At cost 1,490,000 1,390,000 Less: Impairment loss (890,200) (890,200) Net 599,800 499,800

The details of the subsidiaries are as follows:

Name of Company 2013 2012% %

Envair Energy Sdn. 100 100 Bhd.

Quest Equipment 100 100 and Services Sdn.

Installation of cleanroom systemsand sale of air filters andcleanroom equipment. However,the subsidiary is temporarilyinactive since 2012.

Malaysia

Bhd.

COMPANY

Country of Equity InterestIncorporation Principal Activities

Malaysia Distribution and manufacturing ofair filters. However, the subsidiaryis temporarily inactive since 2011.

Quest Technology 100 100 Sdn. Bhd. @

Raya Consumable Sdn. 100 100 Bhd. (formerly knows as Quest Filter Sdn. Bhd.)

Quest System and 100 100 Engineering Sdn.

Youbicom Malaysia 70 - Sdn Bhd

All the above subsidiaries are audited by another firm of auditors other than auditors of the Company.

Manufacturing, and trading ofwater and air filters. Alsoprincipally involved in trading ofbeauty products.

Trading in air filters, cleanroomequipment and vinyl flooring andinstallation of cleanroom systems.Also principally involved ingeneral trading.

Distribution of wireless energysaving products. However, thesubsidiary is temporarily inactiveduring the financial year.

During the financial year, the Group acquired 70% equity interest in Youbicom Malaysia Sdn. Bhd., acompany incorporated in Malaysia, for a total consideration of RM100,000.

@ The auditors' reports on the financial statements of these subsidiaries include an emphasis of matterregarding the ability of these subsidiaries to continue as a going-concern in view of their capital deficiencypositions as at the end of the financial year. The financial statements of these subsidiaries have beenprepared on a going-concern basis as the Company has undertaken to continue providing financial support tothese subsidiaries.

Selling, installation, maintenanceand servicing of water treatmentequipment and sale of cleanroomfilters and equipment. However,the subsidiary is temporarilyinactive since 2011.

Malaysia

Malaysia

Malaysia

Malaysia

Bhd. @

33

Company No:412406-T

13) INVESTMENTS IN SUBSIDIARIES

2013 2012RM RM

Unquoted shares - At cost 1,490,000 1,390,000 Less: Impairment loss (890,200) (890,200) Net 599,800 499,800

The details of the subsidiaries are as follows:

Name of Company 2013 2012% %

Envair Energy Sdn. 100 100 Bhd.

Quest Equipment 100 100 and Services Sdn.

Installation of cleanroom systemsand sale of air filters andcleanroom equipment. However,the subsidiary is temporarilyinactive since 2012.

Malaysia

Bhd.

COMPANY

Country of Equity InterestIncorporation Principal Activities

Malaysia Distribution and manufacturing ofair filters. However, the subsidiaryis temporarily inactive since 2011.

Quest Technology 100 100 Sdn. Bhd. @

Raya Consumable Sdn. 100 100 Bhd. (formerly knows as Quest Filter Sdn. Bhd.)

Quest System and 100 100 Engineering Sdn.

Youbicom Malaysia 70 - Sdn Bhd

All the above subsidiaries are audited by another firm of auditors other than auditors of the Company.

Manufacturing, and trading ofwater and air filters. Alsoprincipally involved in trading ofbeauty products.

Trading in air filters, cleanroomequipment and vinyl flooring andinstallation of cleanroom systems.Also principally involved ingeneral trading.

Distribution of wireless energysaving products. However, thesubsidiary is temporarily inactiveduring the financial year.

During the financial year, the Group acquired 70% equity interest in Youbicom Malaysia Sdn. Bhd., acompany incorporated in Malaysia, for a total consideration of RM100,000.

@ The auditors' reports on the financial statements of these subsidiaries include an emphasis of matterregarding the ability of these subsidiaries to continue as a going-concern in view of their capital deficiencypositions as at the end of the financial year. The financial statements of these subsidiaries have beenprepared on a going-concern basis as the Company has undertaken to continue providing financial support tothese subsidiaries.

Selling, installation, maintenanceand servicing of water treatmentequipment and sale of cleanroomfilters and equipment. However,the subsidiary is temporarilyinactive since 2011.

Malaysia

Malaysia

Malaysia

Malaysia

Bhd. @

33

Company No:412406-T

13) INVESTMENTS IN SUBSIDIARIES

2013 2012RM RM

Unquoted shares - At cost 1,490,000 1,390,000 Less: Impairment loss (890,200) (890,200) Net 599,800 499,800

The details of the subsidiaries are as follows:

Name of Company 2013 2012% %

Envair Energy Sdn. 100 100 Bhd.

Quest Equipment 100 100 and Services Sdn.

Installation of cleanroom systemsand sale of air filters andcleanroom equipment. However,the subsidiary is temporarilyinactive since 2012.

Malaysia

Bhd.

COMPANY

Country of Equity InterestIncorporation Principal Activities

Malaysia Distribution and manufacturing ofair filters. However, the subsidiaryis temporarily inactive since 2011.

Quest Technology 100 100 Sdn. Bhd. @

Raya Consumable Sdn. 100 100 Bhd. (formerly knows as Quest Filter Sdn. Bhd.)

Quest System and 100 100 Engineering Sdn.

Youbicom Malaysia 70 - Sdn Bhd

All the above subsidiaries are audited by another firm of auditors other than auditors of the Company.

Manufacturing, and trading ofwater and air filters. Alsoprincipally involved in trading ofbeauty products.

Trading in air filters, cleanroomequipment and vinyl flooring andinstallation of cleanroom systems.Also principally involved ingeneral trading.

Distribution of wireless energysaving products. However, thesubsidiary is temporarily inactiveduring the financial year.

During the financial year, the Group acquired 70% equity interest in Youbicom Malaysia Sdn. Bhd., acompany incorporated in Malaysia, for a total consideration of RM100,000.

@ The auditors' reports on the financial statements of these subsidiaries include an emphasis of matterregarding the ability of these subsidiaries to continue as a going-concern in view of their capital deficiencypositions as at the end of the financial year. The financial statements of these subsidiaries have beenprepared on a going-concern basis as the Company has undertaken to continue providing financial support tothese subsidiaries.

Selling, installation, maintenanceand servicing of water treatmentequipment and sale of cleanroomfilters and equipment. However,the subsidiary is temporarilyinactive since 2011.

Malaysia

Malaysia

Malaysia

Malaysia

Bhd. @

33

Company No:412406-T

13) INVESTMENTS IN SUBSIDIARIES

2013 2012RM RM

Unquoted shares - At cost 1,490,000 1,390,000 Less: Impairment loss (890,200) (890,200) Net 599,800 499,800

The details of the subsidiaries are as follows:

Name of Company 2013 2012% %

Envair Energy Sdn. 100 100 Bhd.

Quest Equipment 100 100 and Services Sdn.

Installation of cleanroom systemsand sale of air filters andcleanroom equipment. However,the subsidiary is temporarilyinactive since 2012.

Malaysia

Bhd.

COMPANY

Country of Equity InterestIncorporation Principal Activities

Malaysia Distribution and manufacturing ofair filters. However, the subsidiaryis temporarily inactive since 2011.

Quest Technology 100 100 Sdn. Bhd. @

Raya Consumable Sdn. 100 100 Bhd. (formerly knows as Quest Filter Sdn. Bhd.)

Quest System and 100 100 Engineering Sdn.

Youbicom Malaysia 70 - Sdn Bhd

All the above subsidiaries are audited by another firm of auditors other than auditors of the Company.

Manufacturing, and trading ofwater and air filters. Alsoprincipally involved in trading ofbeauty products.

Trading in air filters, cleanroomequipment and vinyl flooring andinstallation of cleanroom systems.Also principally involved ingeneral trading.

Distribution of wireless energysaving products. However, thesubsidiary is temporarily inactiveduring the financial year.

During the financial year, the Group acquired 70% equity interest in Youbicom Malaysia Sdn. Bhd., acompany incorporated in Malaysia, for a total consideration of RM100,000.

@ The auditors' reports on the financial statements of these subsidiaries include an emphasis of matterregarding the ability of these subsidiaries to continue as a going-concern in view of their capital deficiencypositions as at the end of the financial year. The financial statements of these subsidiaries have beenprepared on a going-concern basis as the Company has undertaken to continue providing financial support tothese subsidiaries.

Selling, installation, maintenanceand servicing of water treatmentequipment and sale of cleanroomfilters and equipment. However,the subsidiary is temporarilyinactive since 2011.

Malaysia

Malaysia

Malaysia

Malaysia

Bhd. @

33

Company No:412406-T

13) INVESTMENTS IN SUBSIDIARIES

2013 2012RM RM

Unquoted shares - At cost 1,490,000 1,390,000 Less: Impairment loss (890,200) (890,200) Net 599,800 499,800

The details of the subsidiaries are as follows:

Name of Company 2013 2012% %

Envair Energy Sdn. 100 100 Bhd.

Quest Equipment 100 100 and Services Sdn.

Installation of cleanroom systemsand sale of air filters andcleanroom equipment. However,the subsidiary is temporarilyinactive since 2012.

Malaysia

Bhd.

COMPANY

Country of Equity InterestIncorporation Principal Activities

Malaysia Distribution and manufacturing ofair filters. However, the subsidiaryis temporarily inactive since 2011.

Quest Technology 100 100 Sdn. Bhd. @

Raya Consumable Sdn. 100 100 Bhd. (formerly knows as Quest Filter Sdn. Bhd.)

Quest System and 100 100 Engineering Sdn.

Youbicom Malaysia 70 - Sdn Bhd

All the above subsidiaries are audited by another firm of auditors other than auditors of the Company.

Manufacturing, and trading ofwater and air filters. Alsoprincipally involved in trading ofbeauty products.

Trading in air filters, cleanroomequipment and vinyl flooring andinstallation of cleanroom systems.Also principally involved ingeneral trading.

Distribution of wireless energysaving products. However, thesubsidiary is temporarily inactiveduring the financial year.

During the financial year, the Group acquired 70% equity interest in Youbicom Malaysia Sdn. Bhd., acompany incorporated in Malaysia, for a total consideration of RM100,000.

@ The auditors' reports on the financial statements of these subsidiaries include an emphasis of matterregarding the ability of these subsidiaries to continue as a going-concern in view of their capital deficiencypositions as at the end of the financial year. The financial statements of these subsidiaries have beenprepared on a going-concern basis as the Company has undertaken to continue providing financial support tothese subsidiaries.

Selling, installation, maintenanceand servicing of water treatmentequipment and sale of cleanroomfilters and equipment. However,the subsidiary is temporarilyinactive since 2011.

Malaysia

Malaysia

Malaysia

Malaysia

Bhd. @

33

Company No:412406-T

13) INVESTMENTS IN SUBSIDIARIES

2013 2012RM RM

Unquoted shares - At cost 1,490,000 1,390,000 Less: Impairment loss (890,200) (890,200) Net 599,800 499,800

The details of the subsidiaries are as follows:

Name of Company 2013 2012% %

Envair Energy Sdn. 100 100 Bhd.

Quest Equipment 100 100 and Services Sdn.

Installation of cleanroom systemsand sale of air filters andcleanroom equipment. However,the subsidiary is temporarilyinactive since 2012.

Malaysia

Bhd.

COMPANY

Country of Equity InterestIncorporation Principal Activities

Malaysia Distribution and manufacturing ofair filters. However, the subsidiaryis temporarily inactive since 2011.

Quest Technology 100 100 Sdn. Bhd. @

Raya Consumable Sdn. 100 100 Bhd. (formerly knows as Quest Filter Sdn. Bhd.)

Quest System and 100 100 Engineering Sdn.

Youbicom Malaysia 70 - Sdn Bhd

All the above subsidiaries are audited by another firm of auditors other than auditors of the Company.

Manufacturing, and trading ofwater and air filters. Alsoprincipally involved in trading ofbeauty products.

Trading in air filters, cleanroomequipment and vinyl flooring andinstallation of cleanroom systems.Also principally involved ingeneral trading.

Distribution of wireless energysaving products. However, thesubsidiary is temporarily inactiveduring the financial year.

During the financial year, the Group acquired 70% equity interest in Youbicom Malaysia Sdn. Bhd., acompany incorporated in Malaysia, for a total consideration of RM100,000.

@ The auditors' reports on the financial statements of these subsidiaries include an emphasis of matterregarding the ability of these subsidiaries to continue as a going-concern in view of their capital deficiencypositions as at the end of the financial year. The financial statements of these subsidiaries have beenprepared on a going-concern basis as the Company has undertaken to continue providing financial support tothese subsidiaries.

Selling, installation, maintenanceand servicing of water treatmentequipment and sale of cleanroomfilters and equipment. However,the subsidiary is temporarilyinactive since 2011.

Malaysia

Malaysia

Malaysia

Malaysia

Bhd. @

33

Company No:412406-T

13) INVESTMENTS IN SUBSIDIARIES

2013 2012RM RM

Unquoted shares - At cost 1,490,000 1,390,000 Less: Impairment loss (890,200) (890,200) Net 599,800 499,800

The details of the subsidiaries are as follows:

Name of Company 2013 2012% %

Envair Energy Sdn. 100 100 Bhd.

Quest Equipment 100 100 and Services Sdn.

Installation of cleanroom systemsand sale of air filters andcleanroom equipment. However,the subsidiary is temporarilyinactive since 2012.

Malaysia

Bhd.

COMPANY

Country of Equity InterestIncorporation Principal Activities

Malaysia Distribution and manufacturing ofair filters. However, the subsidiaryis temporarily inactive since 2011.

Quest Technology 100 100 Sdn. Bhd. @

Raya Consumable Sdn. 100 100 Bhd. (formerly knows as Quest Filter Sdn. Bhd.)

Quest System and 100 100 Engineering Sdn.

Youbicom Malaysia 70 - Sdn Bhd

All the above subsidiaries are audited by another firm of auditors other than auditors of the Company.

Manufacturing, and trading ofwater and air filters. Alsoprincipally involved in trading ofbeauty products.

Trading in air filters, cleanroomequipment and vinyl flooring andinstallation of cleanroom systems.Also principally involved ingeneral trading.

Distribution of wireless energysaving products. However, thesubsidiary is temporarily inactiveduring the financial year.

During the financial year, the Group acquired 70% equity interest in Youbicom Malaysia Sdn. Bhd., acompany incorporated in Malaysia, for a total consideration of RM100,000.

@ The auditors' reports on the financial statements of these subsidiaries include an emphasis of matterregarding the ability of these subsidiaries to continue as a going-concern in view of their capital deficiencypositions as at the end of the financial year. The financial statements of these subsidiaries have beenprepared on a going-concern basis as the Company has undertaken to continue providing financial support tothese subsidiaries.

Selling, installation, maintenanceand servicing of water treatmentequipment and sale of cleanroomfilters and equipment. However,the subsidiary is temporarilyinactive since 2011.

Malaysia

Malaysia

Malaysia

Malaysia

Bhd. @

33

Company No:412406-T

13) INVESTMENTS IN SUBSIDIARIES

2013 2012RM RM

Unquoted shares - At cost 1,490,000 1,390,000 Less: Impairment loss (890,200) (890,200) Net 599,800 499,800

The details of the subsidiaries are as follows:

Name of Company 2013 2012% %

Envair Energy Sdn. 100 100 Bhd.

Quest Equipment 100 100 and Services Sdn.

Installation of cleanroom systemsand sale of air filters andcleanroom equipment. However,the subsidiary is temporarilyinactive since 2012.

Malaysia

Bhd.

COMPANY

Country of Equity InterestIncorporation Principal Activities

Malaysia Distribution and manufacturing ofair filters. However, the subsidiaryis temporarily inactive since 2011.

Quest Technology 100 100 Sdn. Bhd. @

Raya Consumable Sdn. 100 100 Bhd. (formerly knows as Quest Filter Sdn. Bhd.)

Quest System and 100 100 Engineering Sdn.

Youbicom Malaysia 70 - Sdn Bhd

All the above subsidiaries are audited by another firm of auditors other than auditors of the Company.

Manufacturing, and trading ofwater and air filters. Alsoprincipally involved in trading ofbeauty products.

Trading in air filters, cleanroomequipment and vinyl flooring andinstallation of cleanroom systems.Also principally involved ingeneral trading.

Distribution of wireless energysaving products. However, thesubsidiary is temporarily inactiveduring the financial year.

During the financial year, the Group acquired 70% equity interest in Youbicom Malaysia Sdn. Bhd., acompany incorporated in Malaysia, for a total consideration of RM100,000.

@ The auditors' reports on the financial statements of these subsidiaries include an emphasis of matterregarding the ability of these subsidiaries to continue as a going-concern in view of their capital deficiencypositions as at the end of the financial year. The financial statements of these subsidiaries have beenprepared on a going-concern basis as the Company has undertaken to continue providing financial support tothese subsidiaries.

Selling, installation, maintenanceand servicing of water treatmentequipment and sale of cleanroomfilters and equipment. However,the subsidiary is temporarilyinactive since 2011.

Malaysia

Malaysia

Malaysia

Malaysia

Bhd. @

33

Company No:412406-T

13) INVESTMENTS IN SUBSIDIARIES

2013 2012RM RM

Unquoted shares - At cost 1,490,000 1,390,000 Less: Impairment loss (890,200) (890,200) Net 599,800 499,800

The details of the subsidiaries are as follows:

Name of Company 2013 2012% %

Envair Energy Sdn. 100 100 Bhd.

Quest Equipment 100 100 and Services Sdn.

Installation of cleanroom systemsand sale of air filters andcleanroom equipment. However,the subsidiary is temporarilyinactive since 2012.

Malaysia

Bhd.

COMPANY

Country of Equity InterestIncorporation Principal Activities

Malaysia Distribution and manufacturing ofair filters. However, the subsidiaryis temporarily inactive since 2011.

Quest Technology 100 100 Sdn. Bhd. @

Raya Consumable Sdn. 100 100 Bhd. (formerly knows as Quest Filter Sdn. Bhd.)

Quest System and 100 100 Engineering Sdn.

Youbicom Malaysia 70 - Sdn Bhd

All the above subsidiaries are audited by another firm of auditors other than auditors of the Company.

Manufacturing, and trading ofwater and air filters. Alsoprincipally involved in trading ofbeauty products.

Trading in air filters, cleanroomequipment and vinyl flooring andinstallation of cleanroom systems.Also principally involved ingeneral trading.

Distribution of wireless energysaving products. However, thesubsidiary is temporarily inactiveduring the financial year.

During the financial year, the Group acquired 70% equity interest in Youbicom Malaysia Sdn. Bhd., acompany incorporated in Malaysia, for a total consideration of RM100,000.

@ The auditors' reports on the financial statements of these subsidiaries include an emphasis of matterregarding the ability of these subsidiaries to continue as a going-concern in view of their capital deficiencypositions as at the end of the financial year. The financial statements of these subsidiaries have beenprepared on a going-concern basis as the Company has undertaken to continue providing financial support tothese subsidiaries.

Selling, installation, maintenanceand servicing of water treatmentequipment and sale of cleanroomfilters and equipment. However,the subsidiary is temporarilyinactive since 2011.

Malaysia

Malaysia

Malaysia

Malaysia

Bhd. @

33

Company No:412406-T

13) INVESTMENTS IN SUBSIDIARIES

2013 2012RM RM

Unquoted shares - At cost 1,490,000 1,390,000 Less: Impairment loss (890,200) (890,200) Net 599,800 499,800

The details of the subsidiaries are as follows:

Name of Company 2013 2012% %

Envair Energy Sdn. 100 100 Bhd.

Quest Equipment 100 100 and Services Sdn.

Installation of cleanroom systemsand sale of air filters andcleanroom equipment. However,the subsidiary is temporarilyinactive since 2012.

Malaysia

Bhd.

COMPANY

Country of Equity InterestIncorporation Principal Activities

Malaysia Distribution and manufacturing ofair filters. However, the subsidiaryis temporarily inactive since 2011.

Quest Technology 100 100 Sdn. Bhd. @

Raya Consumable Sdn. 100 100 Bhd. (formerly knows as Quest Filter Sdn. Bhd.)

Quest System and 100 100 Engineering Sdn.

Youbicom Malaysia 70 - Sdn Bhd

All the above subsidiaries are audited by another firm of auditors other than auditors of the Company.

Manufacturing, and trading ofwater and air filters. Alsoprincipally involved in trading ofbeauty products.

Trading in air filters, cleanroomequipment and vinyl flooring andinstallation of cleanroom systems.Also principally involved ingeneral trading.

Distribution of wireless energysaving products. However, thesubsidiary is temporarily inactiveduring the financial year.

During the financial year, the Group acquired 70% equity interest in Youbicom Malaysia Sdn. Bhd., acompany incorporated in Malaysia, for a total consideration of RM100,000.

@ The auditors' reports on the financial statements of these subsidiaries include an emphasis of matterregarding the ability of these subsidiaries to continue as a going-concern in view of their capital deficiencypositions as at the end of the financial year. The financial statements of these subsidiaries have beenprepared on a going-concern basis as the Company has undertaken to continue providing financial support tothese subsidiaries.

Selling, installation, maintenanceand servicing of water treatmentequipment and sale of cleanroomfilters and equipment. However,the subsidiary is temporarilyinactive since 2011.

Malaysia

Malaysia

Malaysia

Malaysia

Bhd. @

33

Company No:412406-T

13) INVESTMENTS IN SUBSIDIARIES

2013 2012RM RM

Unquoted shares - At cost 1,490,000 1,390,000 Less: Impairment loss (890,200) (890,200) Net 599,800 499,800

The details of the subsidiaries are as follows:

Name of Company 2013 2012% %

Envair Energy Sdn. 100 100 Bhd.

Quest Equipment 100 100 and Services Sdn.

Installation of cleanroom systemsand sale of air filters andcleanroom equipment. However,the subsidiary is temporarilyinactive since 2012.

Malaysia

Bhd.

COMPANY

Country of Equity InterestIncorporation Principal Activities

Malaysia Distribution and manufacturing ofair filters. However, the subsidiaryis temporarily inactive since 2011.

Quest Technology 100 100 Sdn. Bhd. @

Raya Consumable Sdn. 100 100 Bhd. (formerly knows as Quest Filter Sdn. Bhd.)

Quest System and 100 100 Engineering Sdn.

Youbicom Malaysia 70 - Sdn Bhd

All the above subsidiaries are audited by another firm of auditors other than auditors of the Company.

Manufacturing, and trading ofwater and air filters. Alsoprincipally involved in trading ofbeauty products.

Trading in air filters, cleanroomequipment and vinyl flooring andinstallation of cleanroom systems.Also principally involved ingeneral trading.

Distribution of wireless energysaving products. However, thesubsidiary is temporarily inactiveduring the financial year.

During the financial year, the Group acquired 70% equity interest in Youbicom Malaysia Sdn. Bhd., acompany incorporated in Malaysia, for a total consideration of RM100,000.

@ The auditors' reports on the financial statements of these subsidiaries include an emphasis of matterregarding the ability of these subsidiaries to continue as a going-concern in view of their capital deficiencypositions as at the end of the financial year. The financial statements of these subsidiaries have beenprepared on a going-concern basis as the Company has undertaken to continue providing financial support tothese subsidiaries.

Selling, installation, maintenanceand servicing of water treatmentequipment and sale of cleanroomfilters and equipment. However,the subsidiary is temporarilyinactive since 2011.

Malaysia

Malaysia

Malaysia

Malaysia

Bhd. @

33

Company No:412406-T

13) INVESTMENTS IN SUBSIDIARIES

2013 2012RM RM

Unquoted shares - At cost 1,490,000 1,390,000 Less: Impairment loss (890,200) (890,200) Net 599,800 499,800

The details of the subsidiaries are as follows:

Name of Company 2013 2012% %

Envair Energy Sdn. 100 100 Bhd.

Quest Equipment 100 100 and Services Sdn.

Installation of cleanroom systemsand sale of air filters andcleanroom equipment. However,the subsidiary is temporarilyinactive since 2012.

Malaysia

Bhd.

COMPANY

Country of Equity InterestIncorporation Principal Activities

Malaysia Distribution and manufacturing ofair filters. However, the subsidiaryis temporarily inactive since 2011.

Quest Technology 100 100 Sdn. Bhd. @

Raya Consumable Sdn. 100 100 Bhd. (formerly knows as Quest Filter Sdn. Bhd.)

Quest System and 100 100 Engineering Sdn.

Youbicom Malaysia 70 - Sdn Bhd

All the above subsidiaries are audited by another firm of auditors other than auditors of the Company.

Manufacturing, and trading ofwater and air filters. Alsoprincipally involved in trading ofbeauty products.

Trading in air filters, cleanroomequipment and vinyl flooring andinstallation of cleanroom systems.Also principally involved ingeneral trading.

Distribution of wireless energysaving products. However, thesubsidiary is temporarily inactiveduring the financial year.

During the financial year, the Group acquired 70% equity interest in Youbicom Malaysia Sdn. Bhd., acompany incorporated in Malaysia, for a total consideration of RM100,000.

@ The auditors' reports on the financial statements of these subsidiaries include an emphasis of matterregarding the ability of these subsidiaries to continue as a going-concern in view of their capital deficiencypositions as at the end of the financial year. The financial statements of these subsidiaries have beenprepared on a going-concern basis as the Company has undertaken to continue providing financial support tothese subsidiaries.

Selling, installation, maintenanceand servicing of water treatmentequipment and sale of cleanroomfilters and equipment. However,the subsidiary is temporarilyinactive since 2011.

Malaysia

Malaysia

Malaysia

Malaysia

Bhd. @

33

Company No:412406-T

13) INVESTMENTS IN SUBSIDIARIES

2013 2012RM RM

Unquoted shares - At cost 1,490,000 1,390,000 Less: Impairment loss (890,200) (890,200) Net 599,800 499,800

The details of the subsidiaries are as follows:

Name of Company 2013 2012% %

Envair Energy Sdn. 100 100 Bhd.

Quest Equipment 100 100 and Services Sdn.

Installation of cleanroom systemsand sale of air filters andcleanroom equipment. However,the subsidiary is temporarilyinactive since 2012.

Malaysia

Bhd.

COMPANY

Country of Equity InterestIncorporation Principal Activities

Malaysia Distribution and manufacturing ofair filters. However, the subsidiaryis temporarily inactive since 2011.

Quest Technology 100 100 Sdn. Bhd. @

Raya Consumable Sdn. 100 100 Bhd. (formerly knows as Quest Filter Sdn. Bhd.)

Quest System and 100 100 Engineering Sdn.

Youbicom Malaysia 70 - Sdn Bhd

All the above subsidiaries are audited by another firm of auditors other than auditors of the Company.

Manufacturing, and trading ofwater and air filters. Alsoprincipally involved in trading ofbeauty products.

Trading in air filters, cleanroomequipment and vinyl flooring andinstallation of cleanroom systems.Also principally involved ingeneral trading.

Distribution of wireless energysaving products. However, thesubsidiary is temporarily inactiveduring the financial year.

During the financial year, the Group acquired 70% equity interest in Youbicom Malaysia Sdn. Bhd., acompany incorporated in Malaysia, for a total consideration of RM100,000.

@ The auditors' reports on the financial statements of these subsidiaries include an emphasis of matterregarding the ability of these subsidiaries to continue as a going-concern in view of their capital deficiencypositions as at the end of the financial year. The financial statements of these subsidiaries have beenprepared on a going-concern basis as the Company has undertaken to continue providing financial support tothese subsidiaries.

Selling, installation, maintenanceand servicing of water treatmentequipment and sale of cleanroomfilters and equipment. However,the subsidiary is temporarilyinactive since 2011.

Malaysia

Malaysia

Malaysia

Malaysia

Bhd. @

33

Company No:412406-T

13) INVESTMENTS IN SUBSIDIARIES

2013 2012RM RM

Unquoted shares - At cost 1,490,000 1,390,000 Less: Impairment loss (890,200) (890,200) Net 599,800 499,800

The details of the subsidiaries are as follows:

Name of Company 2013 2012% %

Envair Energy Sdn. 100 100 Bhd.

Quest Equipment 100 100 and Services Sdn.

Installation of cleanroom systemsand sale of air filters andcleanroom equipment. However,the subsidiary is temporarilyinactive since 2012.

Malaysia

Bhd.

COMPANY

Country of Equity InterestIncorporation Principal Activities

Malaysia Distribution and manufacturing ofair filters. However, the subsidiaryis temporarily inactive since 2011.

Quest Technology 100 100 Sdn. Bhd. @

Raya Consumable Sdn. 100 100 Bhd. (formerly knows as Quest Filter Sdn. Bhd.)

Quest System and 100 100 Engineering Sdn.

Youbicom Malaysia 70 - Sdn Bhd

All the above subsidiaries are audited by another firm of auditors other than auditors of the Company.

Manufacturing, and trading ofwater and air filters. Alsoprincipally involved in trading ofbeauty products.

Trading in air filters, cleanroomequipment and vinyl flooring andinstallation of cleanroom systems.Also principally involved ingeneral trading.

Distribution of wireless energysaving products. However, thesubsidiary is temporarily inactiveduring the financial year.

During the financial year, the Group acquired 70% equity interest in Youbicom Malaysia Sdn. Bhd., acompany incorporated in Malaysia, for a total consideration of RM100,000.

@ The auditors' reports on the financial statements of these subsidiaries include an emphasis of matterregarding the ability of these subsidiaries to continue as a going-concern in view of their capital deficiencypositions as at the end of the financial year. The financial statements of these subsidiaries have beenprepared on a going-concern basis as the Company has undertaken to continue providing financial support tothese subsidiaries.

Selling, installation, maintenanceand servicing of water treatmentequipment and sale of cleanroomfilters and equipment. However,the subsidiary is temporarilyinactive since 2011.

Malaysia

Malaysia

Malaysia

Malaysia

Bhd. @

33

RAYA INTERNATIONAL BERHAD Annual Report 2013

57

Notes to the Financial Statements (Cont’d)

Company No:412406-T

The effect of the acquisition on the financial position of the Group as at end of the financial year is as follows:

GROUP2013RM

Net assets acquired:Cash and bank balances 7,990 Accrued expenses (1,600) Goodwill on consolidation 95,527 Non-controlling interests (1,917) Total cash consideration 100,000 Less: Cash and bank balances (7,990) Cash flow on acquisition, net of cash and cash equivalents acquired 92,010

14) DEFERRED TAXATION

2013 2012RM RM

Deferred tax assetsBalance as at beginning of the year 463,057 -

GROUP

The amount owing by subsidiaries, which arose mainly from expenses paid on behalf and advance given, isunsecured, interest-free and repayable on demand.

Balance as at beginning of the year 463,057 - Recognised in profit or loss (Note 10) (267,674) 463,057 Balance as at end of the year 195,383 463,057

Deferred tax liabilitiesBalance as at beginning of the year 9,180 14,623 Recognised in profit or loss (Note 10) (5,551) (5,443) Balance as at end of the year 3,629 9,180

15) GOODWILL ON CONSOLIDATION

2013 2012RM RM

Balance as at beginning of the year - - Arose from acquisition of subsidiary 95,527 - Balance as at end of the year 95,527 -

The discount rate based on the Group's weighted average cost of capital was applied in determining therecoverable amount of the respective CGU.

The recognised deferred tax assets are made up of unutilised tax losses while the recognised deferred taxliabilities are made up of temporary differences between tax capital allowances and book depreciation ofproperty, plant and equipment.

Goodwill in respect of acquisition of the subsidiary by the Group has been allocated to its cash-generating unit(CGU) where the recoverable amount of CGU has been based on value-in-use calculations using five yearfinancial projections.

GROUP

34

RAYA INTERNATIONAL BERHAD Annual Report 2013

58

Notes to the Financial Statements (Cont’d)

Company No:412406-T

16) INVENTORIES

2013 2012RM RM

At net realisable value:Raw materials 376,661 401,390 Finished goods 598,676 1,368,249

975,337 1,769,639

17) TRADE RECEIVABLES, OTHER RECEIVABLES AND PREPAID EXPENSES

2013 2012RM RM

Trade receivables 5,712,737 3,955,178 Less: Allowance for doubtful debts (2,861,602) (2,769,746) Net 2,851,135 1,185,432

Other receivables and prepaid expenses consist of:

2013 2012 2013 2012RM RM RM RM

Other receivables 2,584,870 2,700,042 2,520,151 2,518,066 Less: Allowance for doubtful debts (2,575,635) (2,510,916) (2,510,916) (2,510,916)

9,235 189,126 9,235 7,150 Refundable deposits 431,720 426,320 6,040 640 Prepaid expenses 44,400 44,400 44,400 44,400

485,355 659,846 59,675 52,190

The trade and other receivables are all denominated in Ringgit Malaysia.

18) SHARE CAPITAL

2013 2012RM RM

Authorised250,000,000 ordinary shares of RM0.10 each 25,000,000 25,000,000

Issued and fully paid11,855,580 11,855,580

GROUP

GROUP

GROUP COMPANY

Sensitivity to changes in assumptions

GROUP AND COMPANY

118,555,800 ordinary shares of RM0.10 each

Trade receivables comprise amounts receivable from the sale of goods. The credit period granted to theircustomers are assessed and approved on a case by case basis.

Management believes that no reasonable possible changes in any of the key assumptions above would causethe carrying values of the CGUs to materially exceed their recoverable amounts.

35

RAYA INTERNATIONAL BERHAD Annual Report 2013

59

Notes to the Financial Statements (Cont’d)

Company No:412406-T

19) RESERVES

2013 2012 2013 2012RM RM RM RM

Non-distributable reserves: Share premium 8,186,987 8,186,987 8,186,987 8,186,987 Revaluation reserve 2,727,687 2,553,932 - -

10,914,674 10,740,919 8,186,987 8,186,987

Accumulated loss (16,346,864) (16,436,029) (8,318,731) (8,318,731) (5,432,190) (5,695,110) (131,744) (131,744)

Share premium reserve

20) FINANCE LEASE LIABILITIES

2013 2012RM RM

Total finance lease instalments payable 56,992 131,352Less:Finance lease interest in suspense (12,950) (27,839) Principal outstanding 44,042 103,513

Portion payable within the next 12 months (Note 23) 26,430 64,757 (included in current liabilities)Portion payable after the next 12 months:

17,612 38,756 44,042 103,513

The interest rates on finance lease range from 2.35% to 4.20% (2012: 2.35% to 4.20%) per annum.

21) TERM LOANS

2013 2012RM RM

Secured term loans 4,137,258 4,194,606 Less: Portion payable within the next 12 months (Note 23) (173,786) (169,211) Non-current portion 3,963,472 4,025,395

GROUP COMPANY

Revaluation reserve

Revaluation reserve arose from revaluation of the Group's freehold land and building in 2009 and 2013.

GROUP

Payable between 1 and 2 years

GROUP

The reserve comprises the premium paid on subscription of shares in the Company over and above the parvalue of the shares net of share issue expenses.

36

RAYA INTERNATIONAL BERHAD Annual Report 2013

60

Notes to the Financial Statements (Cont’d)

Company No:412406-T

The non-current portion of the term loans is repayable as follows:

2013 2012RM RM

Financial years ending 31st December:- 221,155

225,565 337,206 3,737,907 3,467,034

i)ii)

22) TRADE PAYABLES, OTHER PAYABLES AND ACCRUED EXPENSES

Trade payables comprise amounts outstanding for trade purchases. The normal credit terms granted to theGroup and the Company for trade purchases range from 30 to 60 days and certain credit terms granted bythe suppliers were based on negotiation.

The fair value of term loans of the Group at the end of reporting period are RM1,830,837 (2012:RM2,057,431).

The above term loans bear interest at rates ranging from 5.85% to 8.60% (2012: 5.85% to 8.60%) per annumand are secured by the following:

201420152016 and thereafter

General facility agreement; andFirst legal charge over the landed property of the Group.

GROUP

Other payables and accrued expenses comprise:

2013 2012 2013 2012RM RM RM RM

Other payables 231,838 228,590 150,735 118,997 Amount owing to former shareholders/ directors 15,000 925,462 15,000 925,462 Accrued expenses 123,718 128,830 98,959 94,144

- 148,107 - - 370,556 1,430,989 264,694 1,138,603

The trade and other payables are all denominated in Ringgit Malaysia.

23) BANK BORROWINGS

2013 2012 2013 2012

RM RM RM RM

Bank overdraft 796,649 929,277 - 15,183 Finance lease - current portion (Note 20) 26,430 64,757 - - Term loans - current portion (Note 21) 173,786 169,211 - -

996,865 1,163,245 - 15,183

i) Legal charge over the Group's landed properties; andiii) A joint and several guarantee by certain directors of the Company in their personal capacities.

As at 31st December 2013, the Group has bank overdraft and other credit facilities (excluding finance leaseand term loans as mentioned in Notes 20 and 21) totalling RM2,025,000 (2012: RM5,350,000) obtained fromlicensed banks. These facilities bear interest range from 1.25% - 6.80% (2012: 1.25% - 6.80%) per annumand are secured by the following:

GROUP COMPANY

Deposits received in advance

GROUP COMPANY

37

Company No:412406-T

The non-current portion of the term loans is repayable as follows:

2013 2012RM RM

Financial years ending 31st December:- 221,155

225,565 337,206 3,737,907 3,467,034

i)ii)

22) TRADE PAYABLES, OTHER PAYABLES AND ACCRUED EXPENSES

Trade payables comprise amounts outstanding for trade purchases. The normal credit terms granted to theGroup and the Company for trade purchases range from 30 to 60 days and certain credit terms granted bythe suppliers were based on negotiation.

The fair value of term loans of the Group at the end of reporting period are RM1,830,837 (2012:RM2,057,431).

The above term loans bear interest at rates ranging from 5.85% to 8.60% (2012: 5.85% to 8.60%) per annumand are secured by the following:

201420152016 and thereafter

General facility agreement; andFirst legal charge over the landed property of the Group.

GROUP

Other payables and accrued expenses comprise:

2013 2012 2013 2012RM RM RM RM

Other payables 231,838 228,590 150,735 118,997 Amount owing to former shareholders/ directors 15,000 925,462 15,000 925,462 Accrued expenses 123,718 128,830 98,959 94,144

- 148,107 - - 370,556 1,430,989 264,694 1,138,603

The trade and other payables are all denominated in Ringgit Malaysia.

23) BANK BORROWINGS

2013 2012 2013 2012

RM RM RM RM

Bank overdraft 796,649 929,277 - 15,183 Finance lease - current portion (Note 20) 26,430 64,757 - - Term loans - current portion (Note 21) 173,786 169,211 - -

996,865 1,163,245 - 15,183

i) Legal charge over the Group's landed properties; andiii) A joint and several guarantee by certain directors of the Company in their personal capacities.

As at 31st December 2013, the Group has bank overdraft and other credit facilities (excluding finance leaseand term loans as mentioned in Notes 20 and 21) totalling RM2,025,000 (2012: RM5,350,000) obtained fromlicensed banks. These facilities bear interest range from 1.25% - 6.80% (2012: 1.25% - 6.80%) per annumand are secured by the following:

GROUP COMPANY

Deposits received in advance

GROUP COMPANY

37

Company No:412406-T

The non-current portion of the term loans is repayable as follows:

2013 2012RM RM

Financial years ending 31st December:- 221,155

225,565 337,206 3,737,907 3,467,034

i)ii)

22) TRADE PAYABLES, OTHER PAYABLES AND ACCRUED EXPENSES

Trade payables comprise amounts outstanding for trade purchases. The normal credit terms granted to theGroup and the Company for trade purchases range from 30 to 60 days and certain credit terms granted bythe suppliers were based on negotiation.

The fair value of term loans of the Group at the end of reporting period are RM1,830,837 (2012:RM2,057,431).

The above term loans bear interest at rates ranging from 5.85% to 8.60% (2012: 5.85% to 8.60%) per annumand are secured by the following:

201420152016 and thereafter

General facility agreement; andFirst legal charge over the landed property of the Group.

GROUP

Other payables and accrued expenses comprise:

2013 2012 2013 2012RM RM RM RM

Other payables 231,838 228,590 150,735 118,997 Amount owing to former shareholders/ directors 15,000 925,462 15,000 925,462 Accrued expenses 123,718 128,830 98,959 94,144

- 148,107 - - 370,556 1,430,989 264,694 1,138,603

The trade and other payables are all denominated in Ringgit Malaysia.

23) BANK BORROWINGS

2013 2012 2013 2012

RM RM RM RM

Bank overdraft 796,649 929,277 - 15,183 Finance lease - current portion (Note 20) 26,430 64,757 - - Term loans - current portion (Note 21) 173,786 169,211 - -

996,865 1,163,245 - 15,183

i) Legal charge over the Group's landed properties; andiii) A joint and several guarantee by certain directors of the Company in their personal capacities.

As at 31st December 2013, the Group has bank overdraft and other credit facilities (excluding finance leaseand term loans as mentioned in Notes 20 and 21) totalling RM2,025,000 (2012: RM5,350,000) obtained fromlicensed banks. These facilities bear interest range from 1.25% - 6.80% (2012: 1.25% - 6.80%) per annumand are secured by the following:

GROUP COMPANY

Deposits received in advance

GROUP COMPANY

37

Company No:412406-T

The non-current portion of the term loans is repayable as follows:

2013 2012RM RM

Financial years ending 31st December:- 221,155

225,565 337,206 3,737,907 3,467,034

i)ii)

22) TRADE PAYABLES, OTHER PAYABLES AND ACCRUED EXPENSES

Trade payables comprise amounts outstanding for trade purchases. The normal credit terms granted to theGroup and the Company for trade purchases range from 30 to 60 days and certain credit terms granted bythe suppliers were based on negotiation.

The fair value of term loans of the Group at the end of reporting period are RM1,830,837 (2012:RM2,057,431).

The above term loans bear interest at rates ranging from 5.85% to 8.60% (2012: 5.85% to 8.60%) per annumand are secured by the following:

201420152016 and thereafter

General facility agreement; andFirst legal charge over the landed property of the Group.

GROUP

Other payables and accrued expenses comprise:

2013 2012 2013 2012RM RM RM RM

Other payables 231,838 228,590 150,735 118,997 Amount owing to former shareholders/ directors 15,000 925,462 15,000 925,462 Accrued expenses 123,718 128,830 98,959 94,144

- 148,107 - - 370,556 1,430,989 264,694 1,138,603

The trade and other payables are all denominated in Ringgit Malaysia.

23) BANK BORROWINGS

2013 2012 2013 2012

RM RM RM RM

Bank overdraft 796,649 929,277 - 15,183 Finance lease - current portion (Note 20) 26,430 64,757 - - Term loans - current portion (Note 21) 173,786 169,211 - -

996,865 1,163,245 - 15,183

i) Legal charge over the Group's landed properties; andiii) A joint and several guarantee by certain directors of the Company in their personal capacities.

As at 31st December 2013, the Group has bank overdraft and other credit facilities (excluding finance leaseand term loans as mentioned in Notes 20 and 21) totalling RM2,025,000 (2012: RM5,350,000) obtained fromlicensed banks. These facilities bear interest range from 1.25% - 6.80% (2012: 1.25% - 6.80%) per annumand are secured by the following:

GROUP COMPANY

Deposits received in advance

GROUP COMPANY

37

Company No:412406-T

The non-current portion of the term loans is repayable as follows:

2013 2012RM RM

Financial years ending 31st December:- 221,155

225,565 337,206 3,737,907 3,467,034

i)ii)

22) TRADE PAYABLES, OTHER PAYABLES AND ACCRUED EXPENSES

Trade payables comprise amounts outstanding for trade purchases. The normal credit terms granted to theGroup and the Company for trade purchases range from 30 to 60 days and certain credit terms granted bythe suppliers were based on negotiation.

The fair value of term loans of the Group at the end of reporting period are RM1,830,837 (2012:RM2,057,431).

The above term loans bear interest at rates ranging from 5.85% to 8.60% (2012: 5.85% to 8.60%) per annumand are secured by the following:

201420152016 and thereafter

General facility agreement; andFirst legal charge over the landed property of the Group.

GROUP

Other payables and accrued expenses comprise:

2013 2012 2013 2012RM RM RM RM

Other payables 231,838 228,590 150,735 118,997 Amount owing to former shareholders/ directors 15,000 925,462 15,000 925,462 Accrued expenses 123,718 128,830 98,959 94,144

- 148,107 - - 370,556 1,430,989 264,694 1,138,603

The trade and other payables are all denominated in Ringgit Malaysia.

23) BANK BORROWINGS

2013 2012 2013 2012

RM RM RM RM

Bank overdraft 796,649 929,277 - 15,183 Finance lease - current portion (Note 20) 26,430 64,757 - - Term loans - current portion (Note 21) 173,786 169,211 - -

996,865 1,163,245 - 15,183

i) Legal charge over the Group's landed properties; andiii) A joint and several guarantee by certain directors of the Company in their personal capacities.

As at 31st December 2013, the Group has bank overdraft and other credit facilities (excluding finance leaseand term loans as mentioned in Notes 20 and 21) totalling RM2,025,000 (2012: RM5,350,000) obtained fromlicensed banks. These facilities bear interest range from 1.25% - 6.80% (2012: 1.25% - 6.80%) per annumand are secured by the following:

GROUP COMPANY

Deposits received in advance

GROUP COMPANY

37

Company No:412406-T

The non-current portion of the term loans is repayable as follows:

2013 2012RM RM

Financial years ending 31st December:- 221,155

225,565 337,206 3,737,907 3,467,034

i)ii)

22) TRADE PAYABLES, OTHER PAYABLES AND ACCRUED EXPENSES

Trade payables comprise amounts outstanding for trade purchases. The normal credit terms granted to theGroup and the Company for trade purchases range from 30 to 60 days and certain credit terms granted bythe suppliers were based on negotiation.

The fair value of term loans of the Group at the end of reporting period are RM1,830,837 (2012:RM2,057,431).

The above term loans bear interest at rates ranging from 5.85% to 8.60% (2012: 5.85% to 8.60%) per annumand are secured by the following:

201420152016 and thereafter

General facility agreement; andFirst legal charge over the landed property of the Group.

GROUP

Other payables and accrued expenses comprise:

2013 2012 2013 2012RM RM RM RM

Other payables 231,838 228,590 150,735 118,997 Amount owing to former shareholders/ directors 15,000 925,462 15,000 925,462 Accrued expenses 123,718 128,830 98,959 94,144

- 148,107 - - 370,556 1,430,989 264,694 1,138,603

The trade and other payables are all denominated in Ringgit Malaysia.

23) BANK BORROWINGS

2013 2012 2013 2012

RM RM RM RM

Bank overdraft 796,649 929,277 - 15,183 Finance lease - current portion (Note 20) 26,430 64,757 - - Term loans - current portion (Note 21) 173,786 169,211 - -

996,865 1,163,245 - 15,183

i) Legal charge over the Group's landed properties; andiii) A joint and several guarantee by certain directors of the Company in their personal capacities.

As at 31st December 2013, the Group has bank overdraft and other credit facilities (excluding finance leaseand term loans as mentioned in Notes 20 and 21) totalling RM2,025,000 (2012: RM5,350,000) obtained fromlicensed banks. These facilities bear interest range from 1.25% - 6.80% (2012: 1.25% - 6.80%) per annumand are secured by the following:

GROUP COMPANY

Deposits received in advance

GROUP COMPANY

37

Company No:412406-T

The non-current portion of the term loans is repayable as follows:

2013 2012RM RM

Financial years ending 31st December:- 221,155

225,565 337,206 3,737,907 3,467,034

i)ii)

22) TRADE PAYABLES, OTHER PAYABLES AND ACCRUED EXPENSES

Trade payables comprise amounts outstanding for trade purchases. The normal credit terms granted to theGroup and the Company for trade purchases range from 30 to 60 days and certain credit terms granted bythe suppliers were based on negotiation.

The fair value of term loans of the Group at the end of reporting period are RM1,830,837 (2012:RM2,057,431).

The above term loans bear interest at rates ranging from 5.85% to 8.60% (2012: 5.85% to 8.60%) per annumand are secured by the following:

201420152016 and thereafter

General facility agreement; andFirst legal charge over the landed property of the Group.

GROUP

Other payables and accrued expenses comprise:

2013 2012 2013 2012RM RM RM RM

Other payables 231,838 228,590 150,735 118,997 Amount owing to former shareholders/ directors 15,000 925,462 15,000 925,462 Accrued expenses 123,718 128,830 98,959 94,144

- 148,107 - - 370,556 1,430,989 264,694 1,138,603

The trade and other payables are all denominated in Ringgit Malaysia.

23) BANK BORROWINGS

2013 2012 2013 2012

RM RM RM RM

Bank overdraft 796,649 929,277 - 15,183 Finance lease - current portion (Note 20) 26,430 64,757 - - Term loans - current portion (Note 21) 173,786 169,211 - -

996,865 1,163,245 - 15,183

i) Legal charge over the Group's landed properties; andiii) A joint and several guarantee by certain directors of the Company in their personal capacities.

As at 31st December 2013, the Group has bank overdraft and other credit facilities (excluding finance leaseand term loans as mentioned in Notes 20 and 21) totalling RM2,025,000 (2012: RM5,350,000) obtained fromlicensed banks. These facilities bear interest range from 1.25% - 6.80% (2012: 1.25% - 6.80%) per annumand are secured by the following:

GROUP COMPANY

Deposits received in advance

GROUP COMPANY

37

Company No:412406-T

The non-current portion of the term loans is repayable as follows:

2013 2012RM RM

Financial years ending 31st December:- 221,155

225,565 337,206 3,737,907 3,467,034

i)ii)

22) TRADE PAYABLES, OTHER PAYABLES AND ACCRUED EXPENSES

Trade payables comprise amounts outstanding for trade purchases. The normal credit terms granted to theGroup and the Company for trade purchases range from 30 to 60 days and certain credit terms granted bythe suppliers were based on negotiation.

The fair value of term loans of the Group at the end of reporting period are RM1,830,837 (2012:RM2,057,431).

The above term loans bear interest at rates ranging from 5.85% to 8.60% (2012: 5.85% to 8.60%) per annumand are secured by the following:

201420152016 and thereafter

General facility agreement; andFirst legal charge over the landed property of the Group.

GROUP

Other payables and accrued expenses comprise:

2013 2012 2013 2012RM RM RM RM

Other payables 231,838 228,590 150,735 118,997 Amount owing to former shareholders/ directors 15,000 925,462 15,000 925,462 Accrued expenses 123,718 128,830 98,959 94,144

- 148,107 - - 370,556 1,430,989 264,694 1,138,603

The trade and other payables are all denominated in Ringgit Malaysia.

23) BANK BORROWINGS

2013 2012 2013 2012

RM RM RM RM

Bank overdraft 796,649 929,277 - 15,183 Finance lease - current portion (Note 20) 26,430 64,757 - - Term loans - current portion (Note 21) 173,786 169,211 - -

996,865 1,163,245 - 15,183

i) Legal charge over the Group's landed properties; andiii) A joint and several guarantee by certain directors of the Company in their personal capacities.

As at 31st December 2013, the Group has bank overdraft and other credit facilities (excluding finance leaseand term loans as mentioned in Notes 20 and 21) totalling RM2,025,000 (2012: RM5,350,000) obtained fromlicensed banks. These facilities bear interest range from 1.25% - 6.80% (2012: 1.25% - 6.80%) per annumand are secured by the following:

GROUP COMPANY

Deposits received in advance

GROUP COMPANY

37

Company No:412406-T

The non-current portion of the term loans is repayable as follows:

2013 2012RM RM

Financial years ending 31st December:- 221,155

225,565 337,206 3,737,907 3,467,034

i)ii)

22) TRADE PAYABLES, OTHER PAYABLES AND ACCRUED EXPENSES

Trade payables comprise amounts outstanding for trade purchases. The normal credit terms granted to theGroup and the Company for trade purchases range from 30 to 60 days and certain credit terms granted bythe suppliers were based on negotiation.

The fair value of term loans of the Group at the end of reporting period are RM1,830,837 (2012:RM2,057,431).

The above term loans bear interest at rates ranging from 5.85% to 8.60% (2012: 5.85% to 8.60%) per annumand are secured by the following:

201420152016 and thereafter

General facility agreement; andFirst legal charge over the landed property of the Group.

GROUP

Other payables and accrued expenses comprise:

2013 2012 2013 2012RM RM RM RM

Other payables 231,838 228,590 150,735 118,997 Amount owing to former shareholders/ directors 15,000 925,462 15,000 925,462 Accrued expenses 123,718 128,830 98,959 94,144

- 148,107 - - 370,556 1,430,989 264,694 1,138,603

The trade and other payables are all denominated in Ringgit Malaysia.

23) BANK BORROWINGS

2013 2012 2013 2012

RM RM RM RM

Bank overdraft 796,649 929,277 - 15,183 Finance lease - current portion (Note 20) 26,430 64,757 - - Term loans - current portion (Note 21) 173,786 169,211 - -

996,865 1,163,245 - 15,183

i) Legal charge over the Group's landed properties; andiii) A joint and several guarantee by certain directors of the Company in their personal capacities.

As at 31st December 2013, the Group has bank overdraft and other credit facilities (excluding finance leaseand term loans as mentioned in Notes 20 and 21) totalling RM2,025,000 (2012: RM5,350,000) obtained fromlicensed banks. These facilities bear interest range from 1.25% - 6.80% (2012: 1.25% - 6.80%) per annumand are secured by the following:

GROUP COMPANY

Deposits received in advance

GROUP COMPANY

37

Company No:412406-T

The non-current portion of the term loans is repayable as follows:

2013 2012RM RM

Financial years ending 31st December:- 221,155

225,565 337,206 3,737,907 3,467,034

i)ii)

22) TRADE PAYABLES, OTHER PAYABLES AND ACCRUED EXPENSES

Trade payables comprise amounts outstanding for trade purchases. The normal credit terms granted to theGroup and the Company for trade purchases range from 30 to 60 days and certain credit terms granted bythe suppliers were based on negotiation.

The fair value of term loans of the Group at the end of reporting period are RM1,830,837 (2012:RM2,057,431).

The above term loans bear interest at rates ranging from 5.85% to 8.60% (2012: 5.85% to 8.60%) per annumand are secured by the following:

201420152016 and thereafter

General facility agreement; andFirst legal charge over the landed property of the Group.

GROUP

Other payables and accrued expenses comprise:

2013 2012 2013 2012RM RM RM RM

Other payables 231,838 228,590 150,735 118,997 Amount owing to former shareholders/ directors 15,000 925,462 15,000 925,462 Accrued expenses 123,718 128,830 98,959 94,144

- 148,107 - - 370,556 1,430,989 264,694 1,138,603

The trade and other payables are all denominated in Ringgit Malaysia.

23) BANK BORROWINGS

2013 2012 2013 2012

RM RM RM RM

Bank overdraft 796,649 929,277 - 15,183 Finance lease - current portion (Note 20) 26,430 64,757 - - Term loans - current portion (Note 21) 173,786 169,211 - -

996,865 1,163,245 - 15,183

i) Legal charge over the Group's landed properties; andiii) A joint and several guarantee by certain directors of the Company in their personal capacities.

As at 31st December 2013, the Group has bank overdraft and other credit facilities (excluding finance leaseand term loans as mentioned in Notes 20 and 21) totalling RM2,025,000 (2012: RM5,350,000) obtained fromlicensed banks. These facilities bear interest range from 1.25% - 6.80% (2012: 1.25% - 6.80%) per annumand are secured by the following:

GROUP COMPANY

Deposits received in advance

GROUP COMPANY

37

Company No:412406-T

The non-current portion of the term loans is repayable as follows:

2013 2012RM RM

Financial years ending 31st December:- 221,155

225,565 337,206 3,737,907 3,467,034

i)ii)

22) TRADE PAYABLES, OTHER PAYABLES AND ACCRUED EXPENSES

Trade payables comprise amounts outstanding for trade purchases. The normal credit terms granted to theGroup and the Company for trade purchases range from 30 to 60 days and certain credit terms granted bythe suppliers were based on negotiation.

The fair value of term loans of the Group at the end of reporting period are RM1,830,837 (2012:RM2,057,431).

The above term loans bear interest at rates ranging from 5.85% to 8.60% (2012: 5.85% to 8.60%) per annumand are secured by the following:

201420152016 and thereafter

General facility agreement; andFirst legal charge over the landed property of the Group.

GROUP

Other payables and accrued expenses comprise:

2013 2012 2013 2012RM RM RM RM

Other payables 231,838 228,590 150,735 118,997 Amount owing to former shareholders/ directors 15,000 925,462 15,000 925,462 Accrued expenses 123,718 128,830 98,959 94,144

- 148,107 - - 370,556 1,430,989 264,694 1,138,603

The trade and other payables are all denominated in Ringgit Malaysia.

23) BANK BORROWINGS

2013 2012 2013 2012

RM RM RM RM

Bank overdraft 796,649 929,277 - 15,183 Finance lease - current portion (Note 20) 26,430 64,757 - - Term loans - current portion (Note 21) 173,786 169,211 - -

996,865 1,163,245 - 15,183

i) Legal charge over the Group's landed properties; andiii) A joint and several guarantee by certain directors of the Company in their personal capacities.

As at 31st December 2013, the Group has bank overdraft and other credit facilities (excluding finance leaseand term loans as mentioned in Notes 20 and 21) totalling RM2,025,000 (2012: RM5,350,000) obtained fromlicensed banks. These facilities bear interest range from 1.25% - 6.80% (2012: 1.25% - 6.80%) per annumand are secured by the following:

GROUP COMPANY

Deposits received in advance

GROUP COMPANY

37

Company No:412406-T

The non-current portion of the term loans is repayable as follows:

2013 2012RM RM

Financial years ending 31st December:- 221,155

225,565 337,206 3,737,907 3,467,034

i)ii)

22) TRADE PAYABLES, OTHER PAYABLES AND ACCRUED EXPENSES

Trade payables comprise amounts outstanding for trade purchases. The normal credit terms granted to theGroup and the Company for trade purchases range from 30 to 60 days and certain credit terms granted bythe suppliers were based on negotiation.

The fair value of term loans of the Group at the end of reporting period are RM1,830,837 (2012:RM2,057,431).

The above term loans bear interest at rates ranging from 5.85% to 8.60% (2012: 5.85% to 8.60%) per annumand are secured by the following:

201420152016 and thereafter

General facility agreement; andFirst legal charge over the landed property of the Group.

GROUP

Other payables and accrued expenses comprise:

2013 2012 2013 2012RM RM RM RM

Other payables 231,838 228,590 150,735 118,997 Amount owing to former shareholders/ directors 15,000 925,462 15,000 925,462 Accrued expenses 123,718 128,830 98,959 94,144

- 148,107 - - 370,556 1,430,989 264,694 1,138,603

The trade and other payables are all denominated in Ringgit Malaysia.

23) BANK BORROWINGS

2013 2012 2013 2012

RM RM RM RM

Bank overdraft 796,649 929,277 - 15,183 Finance lease - current portion (Note 20) 26,430 64,757 - - Term loans - current portion (Note 21) 173,786 169,211 - -

996,865 1,163,245 - 15,183

i) Legal charge over the Group's landed properties; andiii) A joint and several guarantee by certain directors of the Company in their personal capacities.

As at 31st December 2013, the Group has bank overdraft and other credit facilities (excluding finance leaseand term loans as mentioned in Notes 20 and 21) totalling RM2,025,000 (2012: RM5,350,000) obtained fromlicensed banks. These facilities bear interest range from 1.25% - 6.80% (2012: 1.25% - 6.80%) per annumand are secured by the following:

GROUP COMPANY

Deposits received in advance

GROUP COMPANY

37

Company No:412406-T

The non-current portion of the term loans is repayable as follows:

2013 2012RM RM

Financial years ending 31st December:- 221,155

225,565 337,206 3,737,907 3,467,034

i)ii)

22) TRADE PAYABLES, OTHER PAYABLES AND ACCRUED EXPENSES

Trade payables comprise amounts outstanding for trade purchases. The normal credit terms granted to theGroup and the Company for trade purchases range from 30 to 60 days and certain credit terms granted bythe suppliers were based on negotiation.

The fair value of term loans of the Group at the end of reporting period are RM1,830,837 (2012:RM2,057,431).

The above term loans bear interest at rates ranging from 5.85% to 8.60% (2012: 5.85% to 8.60%) per annumand are secured by the following:

201420152016 and thereafter

General facility agreement; andFirst legal charge over the landed property of the Group.

GROUP

Other payables and accrued expenses comprise:

2013 2012 2013 2012RM RM RM RM

Other payables 231,838 228,590 150,735 118,997 Amount owing to former shareholders/ directors 15,000 925,462 15,000 925,462 Accrued expenses 123,718 128,830 98,959 94,144

- 148,107 - - 370,556 1,430,989 264,694 1,138,603

The trade and other payables are all denominated in Ringgit Malaysia.

23) BANK BORROWINGS

2013 2012 2013 2012

RM RM RM RM

Bank overdraft 796,649 929,277 - 15,183 Finance lease - current portion (Note 20) 26,430 64,757 - - Term loans - current portion (Note 21) 173,786 169,211 - -

996,865 1,163,245 - 15,183

i) Legal charge over the Group's landed properties; andiii) A joint and several guarantee by certain directors of the Company in their personal capacities.

As at 31st December 2013, the Group has bank overdraft and other credit facilities (excluding finance leaseand term loans as mentioned in Notes 20 and 21) totalling RM2,025,000 (2012: RM5,350,000) obtained fromlicensed banks. These facilities bear interest range from 1.25% - 6.80% (2012: 1.25% - 6.80%) per annumand are secured by the following:

GROUP COMPANY

Deposits received in advance

GROUP COMPANY

37

Company No:412406-T

The non-current portion of the term loans is repayable as follows:

2013 2012RM RM

Financial years ending 31st December:- 221,155

225,565 337,206 3,737,907 3,467,034

i)ii)

22) TRADE PAYABLES, OTHER PAYABLES AND ACCRUED EXPENSES

Trade payables comprise amounts outstanding for trade purchases. The normal credit terms granted to theGroup and the Company for trade purchases range from 30 to 60 days and certain credit terms granted bythe suppliers were based on negotiation.

The fair value of term loans of the Group at the end of reporting period are RM1,830,837 (2012:RM2,057,431).

The above term loans bear interest at rates ranging from 5.85% to 8.60% (2012: 5.85% to 8.60%) per annumand are secured by the following:

201420152016 and thereafter

General facility agreement; andFirst legal charge over the landed property of the Group.

GROUP

Other payables and accrued expenses comprise:

2013 2012 2013 2012RM RM RM RM

Other payables 231,838 228,590 150,735 118,997 Amount owing to former shareholders/ directors 15,000 925,462 15,000 925,462 Accrued expenses 123,718 128,830 98,959 94,144

- 148,107 - - 370,556 1,430,989 264,694 1,138,603

The trade and other payables are all denominated in Ringgit Malaysia.

23) BANK BORROWINGS

2013 2012 2013 2012

RM RM RM RM

Bank overdraft 796,649 929,277 - 15,183 Finance lease - current portion (Note 20) 26,430 64,757 - - Term loans - current portion (Note 21) 173,786 169,211 - -

996,865 1,163,245 - 15,183

i) Legal charge over the Group's landed properties; andiii) A joint and several guarantee by certain directors of the Company in their personal capacities.

As at 31st December 2013, the Group has bank overdraft and other credit facilities (excluding finance leaseand term loans as mentioned in Notes 20 and 21) totalling RM2,025,000 (2012: RM5,350,000) obtained fromlicensed banks. These facilities bear interest range from 1.25% - 6.80% (2012: 1.25% - 6.80%) per annumand are secured by the following:

GROUP COMPANY

Deposits received in advance

GROUP COMPANY

37

Company No:412406-T

The non-current portion of the term loans is repayable as follows:

2013 2012RM RM

Financial years ending 31st December:- 221,155

225,565 337,206 3,737,907 3,467,034

i)ii)

22) TRADE PAYABLES, OTHER PAYABLES AND ACCRUED EXPENSES

Trade payables comprise amounts outstanding for trade purchases. The normal credit terms granted to theGroup and the Company for trade purchases range from 30 to 60 days and certain credit terms granted bythe suppliers were based on negotiation.

The fair value of term loans of the Group at the end of reporting period are RM1,830,837 (2012:RM2,057,431).

The above term loans bear interest at rates ranging from 5.85% to 8.60% (2012: 5.85% to 8.60%) per annumand are secured by the following:

201420152016 and thereafter

General facility agreement; andFirst legal charge over the landed property of the Group.

GROUP

Other payables and accrued expenses comprise:

2013 2012 2013 2012RM RM RM RM

Other payables 231,838 228,590 150,735 118,997 Amount owing to former shareholders/ directors 15,000 925,462 15,000 925,462 Accrued expenses 123,718 128,830 98,959 94,144

- 148,107 - - 370,556 1,430,989 264,694 1,138,603

The trade and other payables are all denominated in Ringgit Malaysia.

23) BANK BORROWINGS

2013 2012 2013 2012

RM RM RM RM

Bank overdraft 796,649 929,277 - 15,183 Finance lease - current portion (Note 20) 26,430 64,757 - - Term loans - current portion (Note 21) 173,786 169,211 - -

996,865 1,163,245 - 15,183

i) Legal charge over the Group's landed properties; andiii) A joint and several guarantee by certain directors of the Company in their personal capacities.

As at 31st December 2013, the Group has bank overdraft and other credit facilities (excluding finance leaseand term loans as mentioned in Notes 20 and 21) totalling RM2,025,000 (2012: RM5,350,000) obtained fromlicensed banks. These facilities bear interest range from 1.25% - 6.80% (2012: 1.25% - 6.80%) per annumand are secured by the following:

GROUP COMPANY

Deposits received in advance

GROUP COMPANY

37

Company No:412406-T

The non-current portion of the term loans is repayable as follows:

2013 2012RM RM

Financial years ending 31st December:- 221,155

225,565 337,206 3,737,907 3,467,034

i)ii)

22) TRADE PAYABLES, OTHER PAYABLES AND ACCRUED EXPENSES

Trade payables comprise amounts outstanding for trade purchases. The normal credit terms granted to theGroup and the Company for trade purchases range from 30 to 60 days and certain credit terms granted bythe suppliers were based on negotiation.

The fair value of term loans of the Group at the end of reporting period are RM1,830,837 (2012:RM2,057,431).

The above term loans bear interest at rates ranging from 5.85% to 8.60% (2012: 5.85% to 8.60%) per annumand are secured by the following:

201420152016 and thereafter

General facility agreement; andFirst legal charge over the landed property of the Group.

GROUP

Other payables and accrued expenses comprise:

2013 2012 2013 2012RM RM RM RM

Other payables 231,838 228,590 150,735 118,997 Amount owing to former shareholders/ directors 15,000 925,462 15,000 925,462 Accrued expenses 123,718 128,830 98,959 94,144

- 148,107 - - 370,556 1,430,989 264,694 1,138,603

The trade and other payables are all denominated in Ringgit Malaysia.

23) BANK BORROWINGS

2013 2012 2013 2012

RM RM RM RM

Bank overdraft 796,649 929,277 - 15,183 Finance lease - current portion (Note 20) 26,430 64,757 - - Term loans - current portion (Note 21) 173,786 169,211 - -

996,865 1,163,245 - 15,183

i) Legal charge over the Group's landed properties; andiii) A joint and several guarantee by certain directors of the Company in their personal capacities.

As at 31st December 2013, the Group has bank overdraft and other credit facilities (excluding finance leaseand term loans as mentioned in Notes 20 and 21) totalling RM2,025,000 (2012: RM5,350,000) obtained fromlicensed banks. These facilities bear interest range from 1.25% - 6.80% (2012: 1.25% - 6.80%) per annumand are secured by the following:

GROUP COMPANY

Deposits received in advance

GROUP COMPANY

37

RAYA INTERNATIONAL BERHAD Annual Report 2013

61

Notes to the Financial Statements (Cont’d)Company No:412406-T

24) AMOUNT OWING TO DIRECTORS

25) SIGNIFICANT RELATED PARTY DISCLOSURES

Compensation of key management personnel

2013 2012 2013 2012RM RM RM RM

Short-term employee benefits 47,113 157,191 47,113 157,191 EPF expenses 4,818 18,201 4,818 18,201 Total 51,931 175,392 51,931 175,392

Included in the total key management personnel cost are:

Key management personnel are those persons having authority and responsibility for planning, directing andcontrolling the activities of the Group and of the Company, directly or indirectly.

The remuneration of directors and other members of key management during the financial year are as follow:

The amount owing to directors, which arose mainly from expenses paid on behalf and advances given, isunsecured, interest-free and bears no fixed terms of repayment.

GROUP COMPANY

GROUP COMPANY

2013 2012 2013 2012RM RM RM RM

Directors' remuneration (Note 8) 51,931 45,864 51,931 45,864

GROUP COMPANY

38

RAYA INTERNATIONAL BERHAD Annual Report 2013

62

Notes to the Financial Statements (Cont’d)

Com

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No:

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39

RAYA INTERNATIONAL BERHAD Annual Report 2013

63

Notes to the Financial Statements (Cont’d)

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40

RAYA INTERNATIONAL BERHAD Annual Report 2013

64

Notes to the Financial Statements (Cont’d)

Company No:412406-T

26) SEGMENTAL INFORMATION

Secondary Reporting - Geographical Segments

27) CONTINGENT LIABILITIES

28) CORPORATE PROPOSALS

i)

As at 31st December 2013, the Company has contingent liabilities in respect of corporate guarantees issuedto financial institutions amounting to RM7,733,000 (2012: RM7,733,000) for banking facilities extended tocertain subsidiaries. The Company is also contingently liable in respect of corporate guarantees issued tosuppliers of certain subsidiaries in respect of supply agreements to supply product to the subsidiaries.

Proposed Private Placement of up to 11,855,580 new ordinary shares of RM0.10 each in the Companyrepresenting approximately ten percent (10%) of the existing issued and paid-up share capital of theCompany.

The Company proposed to undertake a private placement of up to 11,855,580 new ordinary shares ofRM0.10 each in the Company representing approximately ten percent (10%) of the existing issued andpaid-up share capital of the Company to provide an additional avenue to raise funds to meet its workingcapital in an expeditious manner without incurring interest costs compared to bank borrowings. Bursa

The Group's operations are entirely located in Malaysia. Therefore, information on geographical segments isnot presented.

On 16th December 2013, the Group announced the following proposals:

ii)

29)

capital in an expeditious manner without incurring interest costs compared to bank borrowings. BursaMalaysia Securities Berhad has vide its letter dated 30th January 2014 conditionally approved the listingand quotation of up to 11,855,580 new shares. As at the date of this report, Proposed Private Placementis pending completion.

Proposed Disposal by Raya Consumable Sdn. Bhd. (formerly known as Quest Filter Sdn. Bhd.), a wholly-owned subsidiary of the Company, of one (1) parcel of freehold land together with corner three (3) storeyoffice block annexed to a one and a half (1½) storey warehouse building to a third party for a cashconsideration of RM8,500,000.

On 9th April 2014, the Company entered into a Share Sale Agreement with certain third parties for theproposed acquisition of 400,000 ordinary shares of RM1 each in Voyager Line Communications Sdn. Bhd., acompany incorporated in Malaysia and which is principally involved in building, construction and generaltrading, representing 100% of the issued and paid-up share capital of that company for a total purchaseconsideration of RM1,100,000 vide issuance of 11,000,000 ordinary shares of RM0.10 each in the Companyat an issue price of RM0.10 per share. As at the date of this report, the Company is currently in the process ofobtaining approvals from the relevant authorities.

During the financial year, the Group entered into a conditional sale and purchase agreement with a thirdparty to dispose of one (1) parcel of freehold land together with corner three (3) storey office blockannexed to a one and a half (1½) storey warehouse building for a total cash consideration ofRM8,500,000. As at the date of this report, the Proposed Disposal is subject to the approval of theshareholders.

SUBSEQUENT EVENT

41

RAYA INTERNATIONAL BERHAD Annual Report 2013

65

Notes to the Financial Statements (Cont’d)

Company No:412406-T

30) SUPPLEMENTARY INFORMATION

2013 2012 2013 2012RM RM RM RM

- Realised (17,651,181) (16,431,044) (8,318,731) (8,318,731) - Unrealised 365,509 (9,180) - -

(17,285,672) (16,440,224) (8,318,731) (8,318,731) Add: Consolidation adjustments 938,808 4,195 - -

(16,346,864) (16,436,029) (8,318,731) (8,318,731)

The breakdown of the accumulated loss of the Group and of the Company as at 31st December 2013 intorealised and unrealised loss is presented in accordance with the directive issued by Bursa Malaysia SecuritiesBerhad dated 25th March 2011 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 BursaMalaysia Securities Berhad Listing Requirements, as issued by the Malaysia Institute of Accountants.

Accumulated loss carried forward are analysed as follows:

GROUP COMPANY

42

RAYA INTERNATIONAL BERHAD Annual Report 2013

66

LIST OF PROPERTIES

The details of the landed property of the Group as at 31 December 2013 are set out below:-

Location Approximate Land

Area/Built-up Area

Description/Use

Tenure/Date of Acquisition

Net carrying amount as at 31 December

2013

Age of building (years)

Raya Consumable Sdn Bhd (formerly

known as Quest Filter Sdn Bhd )

No. 6, Jalan Salung 33/26,Shah Alam Technology Park,

Section 33, 40400 Shah Alam

Selangor Darul Ehsan

Land area: Approximately 58,578 square

feet

Built-up floor area:

Approximately 66,632 square

feet

Corner three (3) storey

office block

annexed to a one and a half storey warehouse

building

Tenure: The land on which

the property is a erected is a freehold land

Date of acquisition: 9 March 2006

RM 8,421,183 14

List of Properties

RAYA INTERNATIONAL BERHAD Annual Report 2013

67

ANALYSIS OF SHAREHOLDINGS

Authorised Share Capital : RM25,000,000.00 (250,000,000 Ordinary Shares of RM0.10 each)

Issued and Fully Paid-up Share Capital : RM11,855,580.00 (118,555,800 Ordinary Shares of RM0.10 each)

Class of Shares : Ordinary Shares of RM0.10 Each

Voting Rights : One (1) vote per Ordinary Share

DISTRIBUTION OF SHAREHOLDINGS AS AT 2 JUNE 2014

Size of Shareholdings No of Shareholders

% No of Shares %

1- 99 20 1.58 876 0.00100-1,000 124 9.83 44,260 0.041,001-10,000 428 33.91 3,033,100 2.5610,001-100,000 549 43.51 21,473,010 18.11100,001 - less than 5% of the issued shares 139 11.01 72,307,754 60.995% and above of issued shares 2 0.16 21,696,800 18.3Total 1,262 100.0 118,555,800 100.0

SUBSTANTIAL SHAREHOLDINGS AS PER THE REGISTER OF SUBSTANTIAL SHAREHOLDERS AS AT 2 JUNE 2014

Direct Indirect No Name of Substantial Shareholder No of Shares % No of Shares %

1. *Tan Cheng Kiat 11,000,000 9.28 5,000,000 4.222. **Deepak Jaikishan A/L Jaikishan Rewachand 10,696,800 9.02 150,000 0.13

Note

* Deemed interest by virtue of his son, Mr Tan Seng Hu’s direct shareholdings in Raya **Deemed interest by virtue of his sister, Ms Renu A/P Jaikishan’s direct shareholdings in Raya

Analysis of Shareholdings

RAYA INTERNATIONAL BERHAD Annual Report 2013

68THIRTY (30) LARGEST SHAREHOLDERS AS AT 2 JUNE 2014

No Name of Shareholders No of Shares % 1. Tan Cheng Kiat 11,000,000 9.282. Deepak Jaikishan A/L Jaikishan Rewachand 10,696,800 9.023. Liew Kok Chiang 5,880,000 4.964. Tan Seng Hu 5,000,000 4.225. M & A Nominee (Tempatan) Sdn Bhd

Pledged Securities Account For Sarah Pauline A/P Melkees (M&A) 4,800,000 4.05

6. Maybank Securities Nominees (Tempatan) Sdn Bhd Pledged Securities Account For Jaikishan Rewachand A/L Rewachand Bhojumall (Rem 822-Margin)

2,200,000 1.86

7. Zhang Li 2,029,300 1.718. Wendy Ng Ai Hoon 2,012,000 1.699. Wai Ai Fan 2,000,000 1.6810. Choe Yang Choon 1,978,500 1.6711. Maybank Nominees (Tempatan) Sdn Bhd

Pledged Securities Account For Abd Rahim Bin Abd Kadir 1,731,900 1.46

12. Sucha Singh @ Gurmej Singh 1,500,000 1.2613. Amsec Nominees (Tempatan) Sdn Bhd

Pledged Securities Account For Satkunabalan A/L K Sabaratnam 1,250,000 1.05

14. Dharminder Singh A/L Amar Singh 1,230,000 1.0315. Wang Fook Weng 1,180,000 0.9916. Ranjit Singh A/L Harchand Singh 1,100,000 0.9217. Gan Kong Seng 1,000,000 0.8418. Tang Ah Kau 1,000,000 0.8419. Zhang Yang 997,000 0.8420. Alliancegroup Nominees (Tempatan) Sdn Bhd

Pledged Securities Account For Chan Chin Sun (8118032) 850,000 0.72

21. Yong Boon Fook 776,700 0.6522. Saroni Bin Judi 750,000 0.6223. Hlb Nominees (Tempatan) Sdn Bhd

Pledged Securities Account For Francis Kong @ Kong Fen Shin 705,000 0.59

24. Ho Yip Yin 643,900 0.5425. Public Nominees (Tempatan) Sdn Bhd

Pledged Securities Account For Lim Geok Choo (E-Bpj) 630,000 0.53

26. Public Invest Nominees (Tempatan) Sdn Bhd Exempt An For Phillip Securities Pte Ltd (Clients)

621,300 0.52

27. Pakirisamy Baskaran A/L P Thangavelu 600,000 0.5028. Wong Lit Meng 600,000 0.5029. Wong Lit Meng 600,000 0.5030. Maybank Nominees (Tempatan) Sdn Bhd -Chin Kah Seng 567,000 0.47

TOTAL 65,929,400 55.51

Analysis of Shareholdings (Cont’d)

RAYA INTERNATIONAL BERHAD Annual Report 2013

69RAYA INTERNATIONAL BERHAD (FORMERLY KNOWN AS ENVAIR HOLDING BERHAD)

(Company No: 412406-T) (Incorporated in Malaysia under the Companies Act, 1965)

NOTICE OF SEVENTEENTH ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT the Seventeenth Annual General Meeting (“AGM”) of Raya International Berhad (formerly known as Envair Holding Berhad) (“Raya” or the “Company”) will be held at Board Room Business Centre, Lobby Level, Le Meridien Hotel Kuala Lumpur, 2 Jalan Stesen Sentral, Kuala Lumpur Sentral, 50470 Kuala Lumpur on Monday, 30 June 2014 at 5.00 p.m, or at any adjournment thereof for the purpose of considering and if thought fit, passing the following resolution with or without modification:-

AGENDA

ORDINARY BUSINESS

1. To receive the Audited Financial Statements of the Company for the financial year ended 31 December 2013 together with the Reports of the Directors and Auditors thereon.

Please refer to Explanatory Note 1

2. To approve the payment of Directors’ Fees amounting to RM 9,000.00 for the financial year ended 31 December 2013

Resolution 1

3. To re-elect Dato’ Malek Radzuan Bin Saharin who retires pursuant to Article 92 of the Company’s Articles of Association.

Resolution 2

4. To-re-elect the following Directors who retire pursuant to Article 98 of the Company’s Articles of Association:-

4.1 Jeneral Tan Sri Abdul Aziz Bin Zainal (Rtd) 4.2 Dato’ Izham Bin Yusoff 4.3 Mejar Ismail Bin Ahmad (Rtd) 4.4 Encik Abdul Latif Bin Abdul Rahim

Resolution 3 Resolution 4 Resolution 5 Resolution 6

5. To re-appoint Messrs STYL Associates as the Auditors of the Company and to authorise the Board of Directors to fix their remuneration.

Resolution 7

SPECIAL BUSINESS

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

6. ORDINARY RESOLUTION 1 AUTHORITY TO ALLOT SHARES PURSUANT TO SECTION 132D OF THE COMPANIES ACT, 1965

“THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and are hereby authorised to allot and issue shares in the Company at any time and upon such terms and conditions and for such purposes as the Directors may in their absolute discretion, deem fit, provided that the aggregate number of shares to be issued pursuant to this resolution does not exceed ten per centum (10%) of the total issued capital of the Company at the time of issue AND THAT the Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares to be issued on Bursa Malaysia Securities Berhad AND THAT such authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company.”

Resolution 8

RAYA INTERNATIONAL BERHAD (FORMERLY KNOWN AS ENVAIR HOLDING BERHAD)

(Company No: 412406-T) (Incorporated in Malaysia under the Companies Act, 1965)

NOTICE OF SEVENTEENTH ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT the Seventeenth Annual General Meeting (“AGM”) of Raya International Berhad (formerly known as Envair Holding Berhad) (“Raya” or the “Company”) will be held at Board Room Business Centre, Lobby Level, Le Meridien Hotel Kuala Lumpur, 2 Jalan Stesen Sentral, Kuala Lumpur Sentral, 50470 Kuala Lumpur on Monday, 30 June 2014 at 5.00 p.m, or at any adjournment thereof for the purpose of considering and if thought fit, passing the following resolution with or without modification:-

AGENDA

ORDINARY BUSINESS

1. To receive the Audited Financial Statements of the Company for the financial year ended 31 December 2013 together with the Reports of the Directors and Auditors thereon.

Please refer to Explanatory Note 1

2. To approve the payment of Directors’ Fees amounting to RM 9,000.00 for the financial year ended 31 December 2013

Resolution 1

3. To re-elect Dato’ Malek Radzuan Bin Saharin who retires pursuant to Article 92 of the Company’s Articles of Association.

Resolution 2

4. To-re-elect the following Directors who retire pursuant to Article 98 of the Company’s Articles of Association:-

4.1 Jeneral Tan Sri Abdul Aziz Bin Zainal (Rtd) 4.2 Dato’ Izham Bin Yusoff 4.3 Mejar Ismail Bin Ahmad (Rtd) 4.4 Encik Abdul Latif Bin Abdul Rahim

Resolution 3 Resolution 4 Resolution 5 Resolution 6

5. To re-appoint Messrs STYL Associates as the Auditors of the Company and to authorise the Board of Directors to fix their remuneration.

Resolution 7

SPECIAL BUSINESS

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

6. ORDINARY RESOLUTION 1 AUTHORITY TO ALLOT SHARES PURSUANT TO SECTION 132D OF THE COMPANIES ACT, 1965

“THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and are hereby authorised to allot and issue shares in the Company at any time and upon such terms and conditions and for such purposes as the Directors may in their absolute discretion, deem fit, provided that the aggregate number of shares to be issued pursuant to this resolution does not exceed ten per centum (10%) of the total issued capital of the Company at the time of issue AND THAT the Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares to be issued on Bursa Malaysia Securities Berhad AND THAT such authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company.”

Resolution 8

RAYA INTERNATIONAL BERHAD (FORMERLY KNOWN AS ENVAIR HOLDING BERHAD)

(Company No: 412406-T) (Incorporated in Malaysia under the Companies Act, 1965)

NOTICE OF SEVENTEENTH ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT the Seventeenth Annual General Meeting (“AGM”) of Raya International Berhad (formerly known as Envair Holding Berhad) (“Raya” or the “Company”) will be held at Board Room Business Centre, Lobby Level, Le Meridien Hotel Kuala Lumpur, 2 Jalan Stesen Sentral, Kuala Lumpur Sentral, 50470 Kuala Lumpur on Monday, 30 June 2014 at 5.00 p.m, or at any adjournment thereof for the purpose of considering and if thought fit, passing the following resolution with or without modification:-

AGENDA

ORDINARY BUSINESS

1. To receive the Audited Financial Statements of the Company for the financial year ended 31 December 2013 together with the Reports of the Directors and Auditors thereon.

Please refer to Explanatory Note 1

2. To approve the payment of Directors’ Fees amounting to RM 9,000.00 for the financial year ended 31 December 2013

Resolution 1

3. To re-elect Dato’ Malek Radzuan Bin Saharin who retires pursuant to Article 92 of the Company’s Articles of Association.

Resolution 2

4. To-re-elect the following Directors who retire pursuant to Article 98 of the Company’s Articles of Association:-

4.1 Jeneral Tan Sri Abdul Aziz Bin Zainal (Rtd) 4.2 Dato’ Izham Bin Yusoff 4.3 Mejar Ismail Bin Ahmad (Rtd) 4.4 Encik Abdul Latif Bin Abdul Rahim

Resolution 3 Resolution 4 Resolution 5 Resolution 6

5. To re-appoint Messrs STYL Associates as the Auditors of the Company and to authorise the Board of Directors to fix their remuneration.

Resolution 7

SPECIAL BUSINESS

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

6. ORDINARY RESOLUTION 1 AUTHORITY TO ALLOT SHARES PURSUANT TO SECTION 132D OF THE COMPANIES ACT, 1965

“THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and are hereby authorised to allot and issue shares in the Company at any time and upon such terms and conditions and for such purposes as the Directors may in their absolute discretion, deem fit, provided that the aggregate number of shares to be issued pursuant to this resolution does not exceed ten per centum (10%) of the total issued capital of the Company at the time of issue AND THAT the Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares to be issued on Bursa Malaysia Securities Berhad AND THAT such authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company.”

Resolution 8

RAYA INTERNATIONAL BERHAD (FORMERLY KNOWN AS ENVAIR HOLDING BERHAD)

(Company No: 412406-T) (Incorporated in Malaysia under the Companies Act, 1965)

NOTICE OF SEVENTEENTH ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT the Seventeenth Annual General Meeting (“AGM”) of Raya International Berhad (formerly known as Envair Holding Berhad) (“Raya” or the “Company”) will be held at Board Room Business Centre, Lobby Level, Le Meridien Hotel Kuala Lumpur, 2 Jalan Stesen Sentral, Kuala Lumpur Sentral, 50470 Kuala Lumpur on Monday, 30 June 2014 at 5.00 p.m, or at any adjournment thereof for the purpose of considering and if thought fit, passing the following resolution with or without modification:-

AGENDA

ORDINARY BUSINESS

1. To receive the Audited Financial Statements of the Company for the financial year ended 31 December 2013 together with the Reports of the Directors and Auditors thereon.

Please refer to Explanatory Note 1

2. To approve the payment of Directors’ Fees amounting to RM 9,000.00 for the financial year ended 31 December 2013

Resolution 1

3. To re-elect Dato’ Malek Radzuan Bin Saharin who retires pursuant to Article 92 of the Company’s Articles of Association.

Resolution 2

4. To-re-elect the following Directors who retire pursuant to Article 98 of the Company’s Articles of Association:-

4.1 Jeneral Tan Sri Abdul Aziz Bin Zainal (Rtd) 4.2 Dato’ Izham Bin Yusoff 4.3 Mejar Ismail Bin Ahmad (Rtd) 4.4 Encik Abdul Latif Bin Abdul Rahim

Resolution 3 Resolution 4 Resolution 5 Resolution 6

5. To re-appoint Messrs STYL Associates as the Auditors of the Company and to authorise the Board of Directors to fix their remuneration.

Resolution 7

SPECIAL BUSINESS

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

6. ORDINARY RESOLUTION 1 AUTHORITY TO ALLOT SHARES PURSUANT TO SECTION 132D OF THE COMPANIES ACT, 1965

“THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and are hereby authorised to allot and issue shares in the Company at any time and upon such terms and conditions and for such purposes as the Directors may in their absolute discretion, deem fit, provided that the aggregate number of shares to be issued pursuant to this resolution does not exceed ten per centum (10%) of the total issued capital of the Company at the time of issue AND THAT the Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares to be issued on Bursa Malaysia Securities Berhad AND THAT such authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company.”

Resolution 8

RAYA INTERNATIONAL BERHAD (FORMERLY KNOWN AS ENVAIR HOLDING BERHAD)

(Company No: 412406-T) (Incorporated in Malaysia under the Companies Act, 1965)

NOTICE OF SEVENTEENTH ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT the Seventeenth Annual General Meeting (“AGM”) of Raya International Berhad (formerly known as Envair Holding Berhad) (“Raya” or the “Company”) will be held at Board Room Business Centre, Lobby Level, Le Meridien Hotel Kuala Lumpur, 2 Jalan Stesen Sentral, Kuala Lumpur Sentral, 50470 Kuala Lumpur on Monday, 30 June 2014 at 5.00 p.m, or at any adjournment thereof for the purpose of considering and if thought fit, passing the following resolution with or without modification:-

AGENDA

ORDINARY BUSINESS

1. To receive the Audited Financial Statements of the Company for the financial year ended 31 December 2013 together with the Reports of the Directors and Auditors thereon.

Please refer to Explanatory Note 1

2. To approve the payment of Directors’ Fees amounting to RM 9,000.00 for the financial year ended 31 December 2013

Resolution 1

3. To re-elect Dato’ Malek Radzuan Bin Saharin who retires pursuant to Article 92 of the Company’s Articles of Association.

Resolution 2

4. To-re-elect the following Directors who retire pursuant to Article 98 of the Company’s Articles of Association:-

4.1 Jeneral Tan Sri Abdul Aziz Bin Zainal (Rtd) 4.2 Dato’ Izham Bin Yusoff 4.3 Mejar Ismail Bin Ahmad (Rtd) 4.4 Encik Abdul Latif Bin Abdul Rahim

Resolution 3 Resolution 4 Resolution 5 Resolution 6

5. To re-appoint Messrs STYL Associates as the Auditors of the Company and to authorise the Board of Directors to fix their remuneration.

Resolution 7

SPECIAL BUSINESS

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

6. ORDINARY RESOLUTION 1 AUTHORITY TO ALLOT SHARES PURSUANT TO SECTION 132D OF THE COMPANIES ACT, 1965

“THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and are hereby authorised to allot and issue shares in the Company at any time and upon such terms and conditions and for such purposes as the Directors may in their absolute discretion, deem fit, provided that the aggregate number of shares to be issued pursuant to this resolution does not exceed ten per centum (10%) of the total issued capital of the Company at the time of issue AND THAT the Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares to be issued on Bursa Malaysia Securities Berhad AND THAT such authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company.”

Resolution 8

RAYA INTERNATIONAL BERHAD (FORMERLY KNOWN AS ENVAIR HOLDING BERHAD)

(Company No: 412406-T) (Incorporated in Malaysia under the Companies Act, 1965)

NOTICE OF SEVENTEENTH ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT the Seventeenth Annual General Meeting (“AGM”) of Raya International Berhad (formerly known as Envair Holding Berhad) (“Raya” or the “Company”) will be held at Board Room Business Centre, Lobby Level, Le Meridien Hotel Kuala Lumpur, 2 Jalan Stesen Sentral, Kuala Lumpur Sentral, 50470 Kuala Lumpur on Monday, 30 June 2014 at 5.00 p.m, or at any adjournment thereof for the purpose of considering and if thought fit, passing the following resolution with or without modification:-

AGENDA

ORDINARY BUSINESS

1. To receive the Audited Financial Statements of the Company for the financial year ended 31 December 2013 together with the Reports of the Directors and Auditors thereon.

Please refer to Explanatory Note 1

2. To approve the payment of Directors’ Fees amounting to RM 9,000.00 for the financial year ended 31 December 2013

Resolution 1

3. To re-elect Dato’ Malek Radzuan Bin Saharin who retires pursuant to Article 92 of the Company’s Articles of Association.

Resolution 2

4. To-re-elect the following Directors who retire pursuant to Article 98 of the Company’s Articles of Association:-

4.1 Jeneral Tan Sri Abdul Aziz Bin Zainal (Rtd) 4.2 Dato’ Izham Bin Yusoff 4.3 Mejar Ismail Bin Ahmad (Rtd) 4.4 Encik Abdul Latif Bin Abdul Rahim

Resolution 3 Resolution 4 Resolution 5 Resolution 6

5. To re-appoint Messrs STYL Associates as the Auditors of the Company and to authorise the Board of Directors to fix their remuneration.

Resolution 7

SPECIAL BUSINESS

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

6. ORDINARY RESOLUTION 1 AUTHORITY TO ALLOT SHARES PURSUANT TO SECTION 132D OF THE COMPANIES ACT, 1965

“THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and are hereby authorised to allot and issue shares in the Company at any time and upon such terms and conditions and for such purposes as the Directors may in their absolute discretion, deem fit, provided that the aggregate number of shares to be issued pursuant to this resolution does not exceed ten per centum (10%) of the total issued capital of the Company at the time of issue AND THAT the Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares to be issued on Bursa Malaysia Securities Berhad AND THAT such authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company.”

Resolution 8

RAYA INTERNATIONAL BERHAD (FORMERLY KNOWN AS ENVAIR HOLDING BERHAD)

(Company No: 412406-T) (Incorporated in Malaysia under the Companies Act, 1965)

NOTICE OF SEVENTEENTH ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT the Seventeenth Annual General Meeting (“AGM”) of Raya International Berhad (formerly known as Envair Holding Berhad) (“Raya” or the “Company”) will be held at Board Room Business Centre, Lobby Level, Le Meridien Hotel Kuala Lumpur, 2 Jalan Stesen Sentral, Kuala Lumpur Sentral, 50470 Kuala Lumpur on Monday, 30 June 2014 at 5.00 p.m, or at any adjournment thereof for the purpose of considering and if thought fit, passing the following resolution with or without modification:-

AGENDA

ORDINARY BUSINESS

1. To receive the Audited Financial Statements of the Company for the financial year ended 31 December 2013 together with the Reports of the Directors and Auditors thereon.

Please refer to Explanatory Note 1

2. To approve the payment of Directors’ Fees amounting to RM 9,000.00 for the financial year ended 31 December 2013

Resolution 1

3. To re-elect Dato’ Malek Radzuan Bin Saharin who retires pursuant to Article 92 of the Company’s Articles of Association.

Resolution 2

4. To-re-elect the following Directors who retire pursuant to Article 98 of the Company’s Articles of Association:-

4.1 Jeneral Tan Sri Abdul Aziz Bin Zainal (Rtd) 4.2 Dato’ Izham Bin Yusoff 4.3 Mejar Ismail Bin Ahmad (Rtd) 4.4 Encik Abdul Latif Bin Abdul Rahim

Resolution 3 Resolution 4 Resolution 5 Resolution 6

5. To re-appoint Messrs STYL Associates as the Auditors of the Company and to authorise the Board of Directors to fix their remuneration.

Resolution 7

SPECIAL BUSINESS

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

6. ORDINARY RESOLUTION 1 AUTHORITY TO ALLOT SHARES PURSUANT TO SECTION 132D OF THE COMPANIES ACT, 1965

“THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and are hereby authorised to allot and issue shares in the Company at any time and upon such terms and conditions and for such purposes as the Directors may in their absolute discretion, deem fit, provided that the aggregate number of shares to be issued pursuant to this resolution does not exceed ten per centum (10%) of the total issued capital of the Company at the time of issue AND THAT the Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares to be issued on Bursa Malaysia Securities Berhad AND THAT such authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company.”

Resolution 8

RAYA INTERNATIONAL BERHAD (FORMERLY KNOWN AS ENVAIR HOLDING BERHAD)

(Company No: 412406-T) (Incorporated in Malaysia under the Companies Act, 1965)

NOTICE OF SEVENTEENTH ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT the Seventeenth Annual General Meeting (“AGM”) of Raya International Berhad (formerly known as Envair Holding Berhad) (“Raya” or the “Company”) will be held at Board Room Business Centre, Lobby Level, Le Meridien Hotel Kuala Lumpur, 2 Jalan Stesen Sentral, Kuala Lumpur Sentral, 50470 Kuala Lumpur on Monday, 30 June 2014 at 5.00 p.m, or at any adjournment thereof for the purpose of considering and if thought fit, passing the following resolution with or without modification:-

AGENDA

ORDINARY BUSINESS

1. To receive the Audited Financial Statements of the Company for the financial year ended 31 December 2013 together with the Reports of the Directors and Auditors thereon.

Please refer to Explanatory Note 1

2. To approve the payment of Directors’ Fees amounting to RM 9,000.00 for the financial year ended 31 December 2013

Resolution 1

3. To re-elect Dato’ Malek Radzuan Bin Saharin who retires pursuant to Article 92 of the Company’s Articles of Association.

Resolution 2

4. To-re-elect the following Directors who retire pursuant to Article 98 of the Company’s Articles of Association:-

4.1 Jeneral Tan Sri Abdul Aziz Bin Zainal (Rtd) 4.2 Dato’ Izham Bin Yusoff 4.3 Mejar Ismail Bin Ahmad (Rtd) 4.4 Encik Abdul Latif Bin Abdul Rahim

Resolution 3 Resolution 4 Resolution 5 Resolution 6

5. To re-appoint Messrs STYL Associates as the Auditors of the Company and to authorise the Board of Directors to fix their remuneration.

Resolution 7

SPECIAL BUSINESS

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

6. ORDINARY RESOLUTION 1 AUTHORITY TO ALLOT SHARES PURSUANT TO SECTION 132D OF THE COMPANIES ACT, 1965

“THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and are hereby authorised to allot and issue shares in the Company at any time and upon such terms and conditions and for such purposes as the Directors may in their absolute discretion, deem fit, provided that the aggregate number of shares to be issued pursuant to this resolution does not exceed ten per centum (10%) of the total issued capital of the Company at the time of issue AND THAT the Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares to be issued on Bursa Malaysia Securities Berhad AND THAT such authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company.”

Resolution 8

RAYA INTERNATIONAL BERHAD (FORMERLY KNOWN AS ENVAIR HOLDING BERHAD)

(Company No: 412406-T) (Incorporated in Malaysia under the Companies Act, 1965)

NOTICE OF SEVENTEENTH ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT the Seventeenth Annual General Meeting (“AGM”) of Raya International Berhad (formerly known as Envair Holding Berhad) (“Raya” or the “Company”) will be held at Board Room Business Centre, Lobby Level, Le Meridien Hotel Kuala Lumpur, 2 Jalan Stesen Sentral, Kuala Lumpur Sentral, 50470 Kuala Lumpur on Monday, 30 June 2014 at 5.00 p.m, or at any adjournment thereof for the purpose of considering and if thought fit, passing the following resolution with or without modification:-

AGENDA

ORDINARY BUSINESS

1. To receive the Audited Financial Statements of the Company for the financial year ended 31 December 2013 together with the Reports of the Directors and Auditors thereon.

Please refer to Explanatory Note 1

2. To approve the payment of Directors’ Fees amounting to RM 9,000.00 for the financial year ended 31 December 2013

Resolution 1

3. To re-elect Dato’ Malek Radzuan Bin Saharin who retires pursuant to Article 92 of the Company’s Articles of Association.

Resolution 2

4. To-re-elect the following Directors who retire pursuant to Article 98 of the Company’s Articles of Association:-

4.1 Jeneral Tan Sri Abdul Aziz Bin Zainal (Rtd) 4.2 Dato’ Izham Bin Yusoff 4.3 Mejar Ismail Bin Ahmad (Rtd) 4.4 Encik Abdul Latif Bin Abdul Rahim

Resolution 3 Resolution 4 Resolution 5 Resolution 6

5. To re-appoint Messrs STYL Associates as the Auditors of the Company and to authorise the Board of Directors to fix their remuneration.

Resolution 7

SPECIAL BUSINESS

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

6. ORDINARY RESOLUTION 1 AUTHORITY TO ALLOT SHARES PURSUANT TO SECTION 132D OF THE COMPANIES ACT, 1965

“THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and are hereby authorised to allot and issue shares in the Company at any time and upon such terms and conditions and for such purposes as the Directors may in their absolute discretion, deem fit, provided that the aggregate number of shares to be issued pursuant to this resolution does not exceed ten per centum (10%) of the total issued capital of the Company at the time of issue AND THAT the Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares to be issued on Bursa Malaysia Securities Berhad AND THAT such authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company.”

Resolution 8

RAYA INTERNATIONAL BERHAD Annual Report 2013

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

in accordance with the Companies Act, 1965.

By Order of the Board RAYA INTERNATIONAL BERHAD (FORMERLY KNOWN AS ENVAIR HOLDING BERHAD)

WAN HASLINDA BINTI WAN YUSOFF (MAICSA 7055478) SANGAR NALLAPPAN (MACS 01413) Company Secretaries

Kuala Lumpur 6 June 2014

Notes:

1. A member of the Company who is entitled to attend and vote at this AGM is entitled to appoint a proxy/proxies, and in the case of a corporation, a duly authorised representative to attend and vote in its stead.

2. A proxy may but need not be a member of the Company. Where a member appoints more than one (1) proxy, he shall specify the proportions of his shareholdings to be represented by each 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”), the exempt authorised nominee may appoint any number of proxy (no limit) in respect of each omnibus account it holds.

4. The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorised in writing or if the appointor is a corporation, either under its common seal or under the hand of its attorney duly authorised in writing.

5. The instrument appointing a proxy must be deposited at the Registered Office of the Company situated at D2-1-11, No: 1, Solaris Dutamas, Jalan Dutamas, Taman Sri Hartamas 50480 Kuala Lumpur, not less than 48 hours before the time set for holding this meeting or at any adjournment thereof.

6. For the purpose of determining a member who shall be entitled to attend this AGM, only members whose name appears on the Record of Depositors as at 23 June 2014 shall be entitled to attend the said meeting or appoint proxy to attend and / or vote on his / her behalf.

EXPLANATORY NOTE 1 Item 1 of Agenda

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

Notice of Seventeenth Annual General Meeting (Cont’d)

RAYA INTERNATIONAL BERHAD Annual Report 2013

71EXPLANATORY NOTE ON SPECIAL BUSINESS

Ordinary Resolution 1

- Authority to allot shares pursuant to Section 132D of the Companies Act, 1965

The Proposed Ordinary Resolution 8, if passed, will empower the Directors of the Company from the date of the above Annual General Meeting, authority to allot and issue shares in the Company up to an aggregate amount of not exceeding 10% of the issued share capital of the Company for the time being for such purposes as they consider would be in the best interest of the Company and also to empower Directors to obtain approval from Bursa Malaysia Securities Berhad for the listing of and quotation for additional shares issued. This authority, unless revoked or varied at a general meeting, will expire at the next Annual General Meeting of the Company.

As at the date of this Notice, the Company did not issue any shares pursuant to the mandate granted to the Directors at the Sixteenth Annual General Meeting.

The renewal of this mandate will provide flexibility to the Company for any possible fund raising activities, including but not limited to further placing of shares, for the purpose of funding future investment, working capital and/or acquisition or to issue new shares as consideration for investments and/or acquisition which the Directors consider would be in the best interest of the Company

Notice of Seventeenth Annual General Meeting (Cont’d)

This page has been intentionally left blank

RAYA INTERNATIONAL BERHAD (FORMERLY KNOWN AS ENVAIR HOLDING BERHAD)

(Company No. 412406-T)

PROXY FORM

I/We (NRIC No./Company No. )

(FULL NAME IN CAPITAL LETTERS)of

(FULL ADDRESS)being a *member/*members of RAYA INTERNATIONAL BERHAD (Formerly known as ENVAIR HOLDING BERHAD)

hereby appoint *the Chairman of the meeting or(FULL NAME)

(NRIC No. )

of (FULL ADDRESS)

or failing whom (NRIC No. ) (FULL NAME) of

(FULL ADDRESS) As *my/*our proxy(ies) to vote for *me/*us and on *my/*our behalf at the Seventeenth Annual General Meeting of the Company, to be held at Board Room Business Centre, Lobby Level, Le Meridien Hotel Kuala Lumpur, 2 Jalan Stesen Sentral, Kuala Lumpur Sentral, 50470 Kuala Lumpur on Monday, 30 June 2014 at 5.00 p.m and, at every adjournment thereof for/against the resolution to be proposed thereat.

*My/*our proxy(ies) *is/*are to vote as indicated below:-

NO RESOLUTION FOR AGAINSTOrdinary Resolution 1 To approve the payment of Directors’ Fees Ordinary Resolution 2 To re-elect Dato’ Malek Radzuan Bin Saharin as DirectorOrdinary Resolution 3 To re-elect Jeneral Tan Sri Abdul Aziz Bin Zainal (Rtd) as Director Ordinary Resolution 4 To re-elect Dato’ Izham Bin Yusoff as Director Ordinary Resolution 5 To re-elect Mejar Ismail Bin Ahmad (Rtd) as Director Ordinary Resolution 6 To re-elect Encik Abdul Latif Bin Abdul Rahim as Director Ordinary Resolution 7 To re-appoint Messrs STYL Associates as the Auditors of the Company

and to authorise the Board of Directors to fix their remuneration

Ordinary Resolution 8 Authority To Allot Shares

Please indicate with an “X” in the appropriate spaces provided on how you wish your votes to be cast. If you do not indicate how you wish your proxy to vote at any resolution, the proxy may vote as he thinks fit.

CDS Account No.: Date this day of 2014 Number of Ordinary

Shares held:

[Signature/Common Seal of Shareholder (s)]* Delete if not applicable

Notes:-

1. A member of the Company who is entitled to attend and vote at this EGM is entitled to appoint a proxy/proxies, and in the case of a corporation, a duly authorised representative to attend and vote in its stead.

2. A proxy may but need not be a member of the Company. Where a member appoints more than one (1) proxy, he shall specify the proportions of his shareholdings to be represented by each 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”), the exempt authorised nominee may appoint any number of proxy (no limit) in respect of each omnibus account it holds.

4. The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorised in writing or if the appointor is a corporation, either under its common seal or under the hand of its attorney duly authorised in writing.

5. The instrument appointing a proxy must be deposited at the Registered Office of the Company situated at D2-1-11, No.1, Solaris Dutamas, Jalan Dutamas, Taman Sri Hartamas, 50480 Kuala Lumpur, not less than forty-eight (48) hours before the time set for holding this meeting or at any adjournment thereof.

6. For the purpose of determining a member who shall be entitled to attend this EGM, only members whose name appears on the Record of Depositors as at 23 June 2014 shall be entitled to attend the said meeting or appoint proxy to attend and/or vote on his/her behalf.

RAYA INTERNATIONAL BERHAD (FORMERLY KNOWN AS ENVAIR HOLDING BERHAD)

(Company No. 412406-T)

PROXY FORM

I/We (NRIC No./Company No. )

(FULL NAME IN CAPITAL LETTERS)of

(FULL ADDRESS)being a *member/*members of RAYA INTERNATIONAL BERHAD (Formerly known as ENVAIR HOLDING BERHAD)

hereby appoint *the Chairman of the meeting or(FULL NAME)

(NRIC No. )

of (FULL ADDRESS)

or failing whom (NRIC No. ) (FULL NAME) of

(FULL ADDRESS) As *my/*our proxy(ies) to vote for *me/*us and on *my/*our behalf at the Seventeenth Annual General Meeting of the Company, to be held at Board Room Business Centre, Lobby Level, Le Meridien Hotel Kuala Lumpur, 2 Jalan Stesen Sentral, Kuala Lumpur Sentral, 50470 Kuala Lumpur on Monday, 30 June 2014 at 5.00 p.m and, at every adjournment thereof for/against the resolution to be proposed thereat.

*My/*our proxy(ies) *is/*are to vote as indicated below:-

NO RESOLUTION FOR AGAINSTOrdinary Resolution 1 To approve the payment of Directors’ Fees Ordinary Resolution 2 To re-elect Dato’ Malek Radzuan Bin Saharin as DirectorOrdinary Resolution 3 To re-elect Jeneral Tan Sri Abdul Aziz Bin Zainal (Rtd) as Director Ordinary Resolution 4 To re-elect Dato’ Izham Bin Yusoff as Director Ordinary Resolution 5 To re-elect Mejar Ismail Bin Ahmad (Rtd) as Director Ordinary Resolution 6 To re-elect Encik Abdul Latif Bin Abdul Rahim as Director Ordinary Resolution 7 To re-appoint Messrs STYL Associates as the Auditors of the Company

and to authorise the Board of Directors to fix their remuneration

Ordinary Resolution 8 Authority To Allot Shares

Please indicate with an “X” in the appropriate spaces provided on how you wish your votes to be cast. If you do not indicate how you wish your proxy to vote at any resolution, the proxy may vote as he thinks fit.

CDS Account No.: Date this day of 2014 Number of Ordinary

Shares held:

[Signature/Common Seal of Shareholder (s)]* Delete if not applicable

Notes:-

1. A member of the Company who is entitled to attend and vote at this EGM is entitled to appoint a proxy/proxies, and in the case of a corporation, a duly authorised representative to attend and vote in its stead.

2. A proxy may but need not be a member of the Company. Where a member appoints more than one (1) proxy, he shall specify the proportions of his shareholdings to be represented by each 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”), the exempt authorised nominee may appoint any number of proxy (no limit) in respect of each omnibus account it holds.

4. The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorised in writing or if the appointor is a corporation, either under its common seal or under the hand of its attorney duly authorised in writing.

5. The instrument appointing a proxy must be deposited at the Registered Office of the Company situated at D2-1-11, No.1, Solaris Dutamas, Jalan Dutamas, Taman Sri Hartamas, 50480 Kuala Lumpur, not less than forty-eight (48) hours before the time set for holding this meeting or at any adjournment thereof.

6. For the purpose of determining a member who shall be entitled to attend this EGM, only members whose name appears on the Record of Depositors as at 23 June 2014 shall be entitled to attend the said meeting or appoint proxy to attend and/or vote on his/her behalf.

RAYA INTERNATIONAL BERHAD (FORMERLY KNOWN AS ENVAIR HOLDING BERHAD)

(Company No. 412406-T)

PROXY FORM

I/We (NRIC No./Company No. )

(FULL NAME IN CAPITAL LETTERS)of

(FULL ADDRESS)being a *member/*members of RAYA INTERNATIONAL BERHAD (Formerly known as ENVAIR HOLDING BERHAD)

hereby appoint *the Chairman of the meeting or(FULL NAME)

(NRIC No. )

of (FULL ADDRESS)

or failing whom (NRIC No. ) (FULL NAME) of

(FULL ADDRESS) As *my/*our proxy(ies) to vote for *me/*us and on *my/*our behalf at the Seventeenth Annual General Meeting of the Company, to be held at Board Room Business Centre, Lobby Level, Le Meridien Hotel Kuala Lumpur, 2 Jalan Stesen Sentral, Kuala Lumpur Sentral, 50470 Kuala Lumpur on Monday, 30 June 2014 at 5.00 p.m and, at every adjournment thereof for/against the resolution to be proposed thereat.

*My/*our proxy(ies) *is/*are to vote as indicated below:-

NO RESOLUTION FOR AGAINSTOrdinary Resolution 1 To approve the payment of Directors’ Fees Ordinary Resolution 2 To re-elect Dato’ Malek Radzuan Bin Saharin as DirectorOrdinary Resolution 3 To re-elect Jeneral Tan Sri Abdul Aziz Bin Zainal (Rtd) as Director Ordinary Resolution 4 To re-elect Dato’ Izham Bin Yusoff as Director Ordinary Resolution 5 To re-elect Mejar Ismail Bin Ahmad (Rtd) as Director Ordinary Resolution 6 To re-elect Encik Abdul Latif Bin Abdul Rahim as Director Ordinary Resolution 7 To re-appoint Messrs STYL Associates as the Auditors of the Company

and to authorise the Board of Directors to fix their remuneration

Ordinary Resolution 8 Authority To Allot Shares

Please indicate with an “X” in the appropriate spaces provided on how you wish your votes to be cast. If you do not indicate how you wish your proxy to vote at any resolution, the proxy may vote as he thinks fit.

CDS Account No.: Date this day of 2014 Number of Ordinary

Shares held:

[Signature/Common Seal of Shareholder (s)]* Delete if not applicable

Notes:-

1. A member of the Company who is entitled to attend and vote at this EGM is entitled to appoint a proxy/proxies, and in the case of a corporation, a duly authorised representative to attend and vote in its stead.

2. A proxy may but need not be a member of the Company. Where a member appoints more than one (1) proxy, he shall specify the proportions of his shareholdings to be represented by each 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”), the exempt authorised nominee may appoint any number of proxy (no limit) in respect of each omnibus account it holds.

4. The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorised in writing or if the appointor is a corporation, either under its common seal or under the hand of its attorney duly authorised in writing.

5. The instrument appointing a proxy must be deposited at the Registered Office of the Company situated at D2-1-11, No.1, Solaris Dutamas, Jalan Dutamas, Taman Sri Hartamas, 50480 Kuala Lumpur, not less than forty-eight (48) hours before the time set for holding this meeting or at any adjournment thereof.

6. For the purpose of determining a member who shall be entitled to attend this EGM, only members whose name appears on the Record of Depositors as at 23 June 2014 shall be entitled to attend the said meeting or appoint proxy to attend and/or vote on his/her behalf.

RAYA INTERNATIONAL BERHAD (FORMERLY KNOWN AS ENVAIR HOLDING BERHAD)

(Company No. 412406-T)

PROXY FORM

I/We (NRIC No./Company No. )

(FULL NAME IN CAPITAL LETTERS)of

(FULL ADDRESS)being a *member/*members of RAYA INTERNATIONAL BERHAD (Formerly known as ENVAIR HOLDING BERHAD)

hereby appoint *the Chairman of the meeting or(FULL NAME)

(NRIC No. )

of (FULL ADDRESS)

or failing whom (NRIC No. ) (FULL NAME) of

(FULL ADDRESS) As *my/*our proxy(ies) to vote for *me/*us and on *my/*our behalf at the Seventeenth Annual General Meeting of the Company, to be held at Board Room Business Centre, Lobby Level, Le Meridien Hotel Kuala Lumpur, 2 Jalan Stesen Sentral, Kuala Lumpur Sentral, 50470 Kuala Lumpur on Monday, 30 June 2014 at 5.00 p.m and, at every adjournment thereof for/against the resolution to be proposed thereat.

*My/*our proxy(ies) *is/*are to vote as indicated below:-

NO RESOLUTION FOR AGAINSTOrdinary Resolution 1 To approve the payment of Directors’ Fees Ordinary Resolution 2 To re-elect Dato’ Malek Radzuan Bin Saharin as DirectorOrdinary Resolution 3 To re-elect Jeneral Tan Sri Abdul Aziz Bin Zainal (Rtd) as Director Ordinary Resolution 4 To re-elect Dato’ Izham Bin Yusoff as Director Ordinary Resolution 5 To re-elect Mejar Ismail Bin Ahmad (Rtd) as Director Ordinary Resolution 6 To re-elect Encik Abdul Latif Bin Abdul Rahim as Director Ordinary Resolution 7 To re-appoint Messrs STYL Associates as the Auditors of the Company

and to authorise the Board of Directors to fix their remuneration

Ordinary Resolution 8 Authority To Allot Shares

Please indicate with an “X” in the appropriate spaces provided on how you wish your votes to be cast. If you do not indicate how you wish your proxy to vote at any resolution, the proxy may vote as he thinks fit.

CDS Account No.: Date this day of 2014 Number of Ordinary

Shares held:

[Signature/Common Seal of Shareholder (s)]* Delete if not applicable

Notes:-

1. A member of the Company who is entitled to attend and vote at this EGM is entitled to appoint a proxy/proxies, and in the case of a corporation, a duly authorised representative to attend and vote in its stead.

2. A proxy may but need not be a member of the Company. Where a member appoints more than one (1) proxy, he shall specify the proportions of his shareholdings to be represented by each 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”), the exempt authorised nominee may appoint any number of proxy (no limit) in respect of each omnibus account it holds.

4. The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorised in writing or if the appointor is a corporation, either under its common seal or under the hand of its attorney duly authorised in writing.

5. The instrument appointing a proxy must be deposited at the Registered Office of the Company situated at D2-1-11, No.1, Solaris Dutamas, Jalan Dutamas, Taman Sri Hartamas, 50480 Kuala Lumpur, not less than forty-eight (48) hours before the time set for holding this meeting or at any adjournment thereof.

6. For the purpose of determining a member who shall be entitled to attend this EGM, only members whose name appears on the Record of Depositors as at 23 June 2014 shall be entitled to attend the said meeting or appoint proxy to attend and/or vote on his/her behalf.

RAYA INTERNATIONAL BERHAD (FORMERLY KNOWN AS ENVAIR HOLDING BERHAD)

(Company No. 412406-T)

PROXY FORM

I/We (NRIC No./Company No. )

(FULL NAME IN CAPITAL LETTERS)of

(FULL ADDRESS)being a *member/*members of RAYA INTERNATIONAL BERHAD (Formerly known as ENVAIR HOLDING BERHAD)

hereby appoint *the Chairman of the meeting or(FULL NAME)

(NRIC No. )

of (FULL ADDRESS)

or failing whom (NRIC No. ) (FULL NAME) of

(FULL ADDRESS) As *my/*our proxy(ies) to vote for *me/*us and on *my/*our behalf at the Seventeenth Annual General Meeting of the Company, to be held at Board Room Business Centre, Lobby Level, Le Meridien Hotel Kuala Lumpur, 2 Jalan Stesen Sentral, Kuala Lumpur Sentral, 50470 Kuala Lumpur on Monday, 30 June 2014 at 5.00 p.m and, at every adjournment thereof for/against the resolution to be proposed thereat.

*My/*our proxy(ies) *is/*are to vote as indicated below:-

NO RESOLUTION FOR AGAINSTOrdinary Resolution 1 To approve the payment of Directors’ Fees Ordinary Resolution 2 To re-elect Dato’ Malek Radzuan Bin Saharin as DirectorOrdinary Resolution 3 To re-elect Jeneral Tan Sri Abdul Aziz Bin Zainal (Rtd) as Director Ordinary Resolution 4 To re-elect Dato’ Izham Bin Yusoff as Director Ordinary Resolution 5 To re-elect Mejar Ismail Bin Ahmad (Rtd) as Director Ordinary Resolution 6 To re-elect Encik Abdul Latif Bin Abdul Rahim as Director Ordinary Resolution 7 To re-appoint Messrs STYL Associates as the Auditors of the Company

and to authorise the Board of Directors to fix their remuneration

Ordinary Resolution 8 Authority To Allot Shares

Please indicate with an “X” in the appropriate spaces provided on how you wish your votes to be cast. If you do not indicate how you wish your proxy to vote at any resolution, the proxy may vote as he thinks fit.

CDS Account No.: Date this day of 2014 Number of Ordinary

Shares held:

[Signature/Common Seal of Shareholder (s)]* Delete if not applicable

Notes:-

1. A member of the Company who is entitled to attend and vote at this EGM is entitled to appoint a proxy/proxies, and in the case of a corporation, a duly authorised representative to attend and vote in its stead.

2. A proxy may but need not be a member of the Company. Where a member appoints more than one (1) proxy, he shall specify the proportions of his shareholdings to be represented by each 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”), the exempt authorised nominee may appoint any number of proxy (no limit) in respect of each omnibus account it holds.

4. The instrument appointing a proxy shall be in writing under the hand of the appointor or his attorney duly authorised in writing or if the appointor is a corporation, either under its common seal or under the hand of its attorney duly authorised in writing.

5. The instrument appointing a proxy must be deposited at the Registered Office of the Company situated at D2-1-11, No.1, Solaris Dutamas, Jalan Dutamas, Taman Sri Hartamas, 50480 Kuala Lumpur, not less than forty-eight (48) hours before the time set for holding this meeting or at any adjournment thereof.

6. For the purpose of determining a member who shall be entitled to attend this EGM, only members whose name appears on the Record of Depositors as at 23 June 2014 shall be entitled to attend the said meeting or appoint proxy to attend and/or vote on his/her behalf.

PLEASE FOLD HERE

RAYA INTERNATIONAL BERHAD (FORMERLY KNOWN AS ENVAIR HOLDING BERHAD)

(Company No. 412406-T) D2-1-11, No.1, Solaris Dutamas,

Jalan Dutamas, Taman Sri Hartamas, 50480 Kuala Lumpur.

PLEASE FOLD HERE

Affix stamp

Fold this flap for sealing

Then fold here

1st fold here

AFFIXSTAMP

A N N U A L 2 0 1 3 R E P O R T

RAYA INTERNATIONAL BERHAD (FORMERLY KNOWN AS ENVAIR HOLDING BERHAD)

(Company No. 412406-T)

RAYA

INTER

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D A

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RAYA INTERNATIONAL BERHAD (Company No. 412406-T)

D2-1-11, No.1, Solaris Dutamas, Jalan Dutamas, Taman Sri Hartamas, 50480 Kuala Lumpur. Tel : +603 6205 3586 Fax : +603 6205 3586

www.raya.com.my

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