PERFORMANCE REVIEW (CONT'D) Propose Fundraising: Multiple Exercise (cont'd). iv) A proposed share issue scheme of up to 30% of the total number of issued ordinary shares of the company (excluding any treasury shares) at any time during the duration of the share issue scheme (“Proposed SIS”). Therefore, this development is expected to influence the growth of the coconut and oil palm biomass materials market in 2020 and up to 2021.
DATO’ H’NG CHOON SENG
Mr. Kee started his career with Lion Plantation Sdn Bhd in 1987 as a management trainee and was then promoted to Plantation Manager in 1989. In 1991, he left Lion Plantation Sdn Bhd and joined PT Riau Sakti Plantations (RSUP) in the Sambu Group as Assistant General Manager and was promoted to General Manager in 1993.
CHEAH SWI CHUN
KEE SWEE LAI
DR. LO LIANG KHENG
HO WHYE CHONG
Provides leadership to the Council and is responsible for the development needs of the Council. The Board recognizes the importance of good corporate governance for the long-term sustainability of the Group.
FINANCIAL STATEMENTS
CORPORATE INFORMATION General
The Company is a public limited company incorporated and domiciled in Malaysia and listed on the ACE of Bursa Malaysia Securities Berhad. The principal place of business of the company is at Plot 2945 (Plot A2), Jalan Sungai Baong, Kawasan Perindustrian Perabut, Mukim 5, Sungai Baong, 14200 Sungai Bakap, Seberang Perai Selatan, Penang. The financial statements were approved for publication by the board of directors in accordance with the resolution of the directors on August 25, 2020.
The main activity of the company in the accounting period remains unchanged and is an investment holding company. The main activities of the subsidiaries are presented in note 7 to the financial statements.
BASIS OF PREPARATION 1 Statement of Compliance
- Basis of Measurement
BASIS OF PREPARATION (cont'd) 2 Basis of Measurement (cont'd)
- Functional and Presentation Currency
- Adoption of Amendments/Improvements to MFRS
BASIS OF PREPARATION (cont'd)
- Adoption of Amendments/Improvements to MFRS (cont'd)
- Adoption of Amendments/Improvements to MFRS (cont'd) MFRS 16 Leases (cont'd)
- Standards Issued But Not Yet Effective
- Standards Issued But Not Yet Effective (cont'd)
- Significant Accounting Estimates and Judgements
- Judgements made in applying accounting policies
- Significant Accounting Estimates and Judgements (cont'd) .2 Key sources of estimation uncertainty
The lease liability was recognized based on the present value of the remaining lease payments, discounted using the incremental borrowing rate at the date of initial application. Excluded initial direct costs from the measurement of the right-of-use asset at the date of initial application; and. New and amended standards and interpretations that have been issued, but not yet effective, by the date of publication of the Group's and the Company's financial statements are disclosed below.
The directors do not expect that the adoption of the Standards listed above will have a material impact on the financial statements of the Group and the Company in future periods. Management estimates the useful life of the plant and machinery to be between 5 and 50 years.
SIGNIFICANT ACCOUNTING POLICIES
- Basis of Consolidation (i) Subsidiaries
SIGNIFICANT ACCOUNTING POLICIES (cont'd) 1 Basis of Consolidation (cont'd)
- Property, Plant and Equipment
SIGNIFICANT ACCOUNTING POLICIES (cont'd) 2 Property, Plant and Equipment (cont'd)
- Leases
- Group as lessee
SIGNIFICANT ACCOUNTING POLICIES (cont'd) 3 Leases (cont'd)
- Lease liabilities
- Short term leases and leases of low-value assets
- Short term leases and leases of low-value assets (cont'd) Group as a lessee (cont'd)
- Group as a lessor
- Goodwill Arising on Consolidation
However, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term. Payments made under operating leases are recognized in profit or loss on a straight-line basis over the term of the lease. Rental incentives received are recognized in profit or loss as an integral part of the total rental expense, over the term of the lease.
Initial direct costs incurred in negotiating and agreeing an operating lease are added to the carrying amount of the leased asset and recognized over the term of the lease on the same basis as lease revenue. Goodwill arises upon the acquisition of subsidiaries and represents the excess of compensation transferred over the Group's share in the net fair value of the net identifiable assets, liabilities and contingent liabilities of the acquired company and the fair value of the non-controlling interest in the acquired company.
SIGNIFICANT ACCOUNTING POLICIES (cont'd) 4 Goodwill Arising on Consolidation (cont'd)
- Intangible Assets
- Impairment of Non-Financial Assets
SIGNIFICANT ACCOUNTING POLICIES (cont'd) 6 Impairment of Non-Financial Assets (cont'd)
- Financial Instruments .1 Initial recognition
- Classification and subsequent measurement of financial assets
SIGNIFICANT ACCOUNTING POLICIES (cont'd) 7 Financial Instruments (cont'd)
- Classification and measurement of financial assets (cont'd) (ii) Financial assets at fair value through profit or loss (“FVTPL”)
- Classification and subsequent measurement of financial liabilities
- Derivative financial instruments
- Impairment of financial assets
- Impairment of financial assets (cont'd)
- Offsetting of financial instruments
- Derecognition (cont'd)
- Financial guarantee contracts
- Inventories
- Non-current Assets Held for Sale
The valuation of the ECL is determined by a probability-weighted estimate of credit losses over the expected life of the financial instrument. When a financial asset is derecognized, the difference between the carrying amount and the sum of the consideration received (including any new asset acquired minus any new liabilities) and any cumulative gains or losses recognized in equity are included in the profit or loss account. loss. When a financial liability is derecognised, the difference between the carrying amount of the financial liability that has been repaid or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognized in profit or loss. loss account.
When settlement of the financial guarantee contract becomes probable, an estimate of the liability is made. If the book value of the financial guarantee contract is lower than the obligation, the book value is adjusted to the amount of the obligation and calculated as a provision.
SIGNIFICANT ACCOUNTING POLICIES (cont'd) 9 Non-current Assets Held for Sale (cont'd)
- Cash and Cash Equivalents
- Provisions
- Borrowing Costs
- Revenue Recognition
SIGNIFICANT ACCOUNTING POLICIES (cont'd) 13 Revenue Recognition (cont'd)
- Employee Benefits Short term benefits
- Income Tax
SIGNIFICANT ACCOUNTING POLICIES (cont'd) 15 Income Tax (cont'd)
- Goods and Services Tax (“GST”) and Sales and Service Tax (“SST”)
- Foreign Currency Transactions
SIGNIFICANT ACCOUNTING POLICIES (cont'd) 17 Foreign Currency Transactions (cont'd)
- Segment Reporting
- Share Capital, Share Issuance Costs and Dividends Classification
- Related Parties
SIGNIFICANT ACCOUNTING POLICIES (cont'd) 20 Related Parties (cont'd)
Short-term rental land Long-term rental land Factory building Renovation Office equipment, furniture and fixtures Electrical installation Machinery and equipment Motor vehicles. 4. PROPERTY, PLANT AND EQUIPMENT (continued) Freehold land Short-term lease land Long-term lease land Factory building Renovation Office equipment, furniture and fixtures Electrical installation Machinery and equipment Motor vehicles.
PROPERTY, PLANT AND EQUIPMENT (cont'd) COMPANY
PROPERTY, PLANT AND EQUIPMENT (cont'd)
RIGHT OF USE ASSETS AND LEASE LIABILITIES GROUP
RIGHT OF USE ASSETS AND LEASE LIABILITIES (cont'd) The following are the amounts recognised in profit or loss
INTANGIBLE ASSETS
INTANGIBLE ASSETS (cont'd) 2 Development costs
- Trademarks
INVESTMENT IN SUBSIDIARIES
INVESTMENT IN SUBSIDIARIES (cont'd)
The following is the accounting value of assets and liabilities, which is also the fair value on the acquisition date:.
TRADE AND OTHER RECEIVABLES
TRADE AND OTHER RECEIVABLES (cont'd)
INVENTORIES
CASH AND BANK BALANCES
NON-CURRENT ASSETS HELD FOR SALE
SHARE CAPITAL
OTHER RESERVES
RETAINED PROFITS COMPANY
BORROWINGS
BORROWINGS (cont’d) Breach of loan covenant
DEFERRED TAX LIABILITIES
TRADE AND OTHER PAYABLES
TRADE AND OTHER PAYABLES (cont’d)
DERIVATIVE FINANCIAL LIABILITIES
REVENUE
REVENUE (cont'd) Performance obligations
TAXATION
TAXATION (cont'd)
Deferred tax assets have not been recognized on the above temporary differences as it is not likely that taxable profit will be available in the foreseeable future to the extent that the above deductible temporary differences can be utilised. The amount and future availability of unused tax losses and unabsorbed capital allowances for which the related tax effects have not been accounted for at the end of the reporting period are as follows:.
LOSS PER SHARE GROUP
There is no adjusted loss per share because the company has no dilutive potential common shares at the end of the reporting period.
CAPITAL COMMITMENTS
SEGMENTAL INFORMATION
SEGMENTAL INFORMATION (cont'd) By business segments (cont'd)
When presenting information based on geographic areas, segment revenue is based on the geographic location of the customers from which the sales transactions originated. Accordingly, no additional disclosure is made about the geographical breakdown of the segment assets of the Group.
SEGMENTAL INFORMATION (cont'd) Geographical information (cont'd)
RELATED PARTY DISCLOSURES (i) Identity of related parties
RELATED PARTY DISCLOSURES (cont'd) (ii) Related party transactions
FINANCIAL INSTRUMENTS
- Categories of financial instruments
FINANCIAL INSTRUMENTS (cont’d)
- Categories of financial instruments (cont’d)
FINANCIAL INSTRUMENTS (cont’d) 2 Financial Risk Management
- Credit Risk
FINANCIAL INSTRUMENTS (cont’d) 3 Credit Risk (cont’d)
- Liquidity risk
The Company provides unsecured financial guarantees to financial institutions in respect of banking facilities extended to certain subsidiaries up to a limit of RM RM and the maximum exposure to credit risk is RM RM, which represents the outstanding facilities availed by the said subsidiaries at the end of the financial year. reporting period. The Company monitors the results of the subsidiaries and the reimbursements made by the subsidiaries on an ongoing basis. At the end of the reporting period there were no indications that the subsidiaries would default on repayment.
Liquidity risk is the risk that the Group and the Company will encounter difficulties in meeting financial obligations due to a lack of funds. The Group and the Company actively manage the debt maturity profile, operating cash flows and availability of funds in order to ensure that all repayment and financing needs are met.
FINANCIAL INSTRUMENTS (cont’d) 4 Liquidity risk (cont’d)
FINANCIAL INSTRUMENTS (cont’d) 5 Interest Rate Risk
- Foreign Currency Risk
- Fair value information
The table below shows the sensitivity to a reasonably possible change in foreign currency exchange rates against the Malaysian Ringgit, with all other variables held constant, of the Group's profit before tax. A 5% strengthening of the RM against the following currencies at the end of the reporting period would have increased or decreased the pre-tax loss by the amount shown below and a corresponding weakening would have had an equal but opposite effect. The carrying amount of financial assets and financial liabilities (other than those disclosed below) of the Group and the Company at the end of the reporting period approximate their fair values due to their short-term nature or that they are variable rate instruments that are repriced at market interest rates at or near the end of the reporting period.
The carrying amount of the long-term portion of finance lease liabilities is a reasonable approximation of fair values due to their insignificant impact of discounting. The table below analyzes financial instruments that are measured after initial recognition at fair value, grouped into levels 1 to 3 based on the degree to which the fair value is observable (see note 2.2 to the financial statements for definition of level 1 to 3 fair value hierarchy).
FINANCIAL INSTRUMENTS (cont’d) 7 Fair value information
- Reconciliation of liabilities arising from financing activities
CAPITAL MANAGEMENT
COMPARATIVE INFORMATION
SIGNIFICANT EVENTS DURING THE REPORTING PERIOD (a) Proposed Share Consolidation and Proposed Rights Issue
SIGNIFICANT EVENTS DURING THE REPORTING PERIOD (cont'd) (c) COVID-19 Pandemic Impact (cont'd)
EVENTS AFTER THE REPORTING PERIOD
EVENTS AFTER THE REPORTING PERIOD (cont'd) (b) Private placement
EVENTS AFTER THE REPORTING PERIOD (cont'd)
Deemed interested by virtue of the interests of his spouse Datin Khor Mooi Kim and his daughter H'ng Jia Qi in Heng Huat, as well as his shareholdings in Heng Huat Manufacturer Sdn Bhd (a company not within the Heng Huat Group) pursuant to Section 8 of CA 2016. Deemed interested by virtue of their interests in Skylitech Resources Sdn Bhd pursuant to Section 8 of CA 2016. Double-storey office building annexed with a single-storey detached factory/Used for oil palm EFB fiber manufacturing.
Two-storey office attached to a single-storey detached factory/used for the production of EFB fiber from oil palm. To receive the audited financial statements for the financial period from January 1, 2019 to March 31, 2020, together with the directors' and auditors' reports thereon.
AUTHORITY UNDER SECTIONS 75 AND 76 OF THE COMPANIES ACT, 2016 FOR THE DIRECTORS TO ISSUE SHARES
NOTICE IS HEREBY GIVEN THAT the Ninth Annual General Meeting of Heng Huat Resources Group Berhad (“Heng Huat” or the “Company”) will be held at No. To consider and, if deemed appropriate, adopt the following resolutions, with or without amendment, such as ordinary resolutions.
PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE
This authority, unless revoked or varied by the Company at a general meeting, shall terminate at the conclusion of the next Annual General Meeting of the Company. The 20% General Mandate, unless revoked or amended by the Company at the general meeting, will expire at the end of the Extended Use Period, i.e. Shareholders are required to register prior to the AGM to allow the company to make the necessary arrangements in connection with the meeting ie.
No individual is seeking election as a Director at the forthcoming 9th Annual General Meeting (“AGM”) of the Company. Grant Thornton as Auditors of the Company and to. authorize the directors to fix their remuneration.
