HOMERIZ-Cover to Page 30.pdf

8/17/2019 HOMERIZ-Cover to Page 30.pdf

1/32

HOMERITZ CORPORATION BERHAD (Company No. 805792-X) | Annual Report 2014

FURNITURE

INSPIRATION

Stylish and suits our tasteTake it from dream to reality


2/32

HOMERITZ CORPORATION BERHAD(Company No. 805792-X)

Corporate Structure

Home Upholstery Industries

Sdn Bhd (“HUI”)

100%U. S. Furniture

Manufacturing Sdn Bhd(“USF”)

100%Embrace Industries

Sdn Bhd (“EISB”)

65%

Contents 01 Corporate Informaon

02 Managing Director’s Statement

04 Financial Highlights 05 Board Of Directors’ Prole07 Statement On Corporate Social Responsibility 08 Statement On Corporate Governance 18 Audit Commiee Report

22

Statement On Risk Management AndInternal Control

24 Statement On Directors’ Responsibilies25 Addional Compliance Informaon26 Directors’ Report

30 Statement By Directors

30Statutory Declaraon

31 Independent Auditors’ Report 33 Statements Of Financial Posion 34 Statements Of Prot Or Loss And

Other Comprehensive Income

35 Statements Of Changes In Equity 37 Statements Of Cash Flows 39 Notes To The Financial Statements 82 List Of Properes 84 Analysis Of Shareholdings 86 Noce Of Annual General Meeng 88 Statement Accompanying Noce Of

Annual General Meeng Proxy Form


3/32

Corporate Information

AUDIT COMMITTEE

Chairman

Mohd Khasan Bin Ahmad(Independent Non-Execuve Director)

Members

Datuk Tay Puay Chuan

(Independent Non-Execuve Director)

Teo Seng Kuang


NOMINATING COMMITTEE

Chairman



Members

Mohd Khasan Bin Ahmad


Teo Seng Kuang


REMUNERATION COMMITTEE

ChairmanTeo Seng Kuang


Members





SENIOR INDEPENDENT

NON EXECUTIVE DIRECTOR



COMPANY SECRETARY

Pang Kah Man (MIA 18831)

AUDITORS

Crowe Horwath (AF 1018)

Chartered Accountants

No. 8, 2nd Floor

Jalan Pesta 1/1

Taman Tun Dr Ismail 1

Jalan Bakri

84000 Muar, Johor

REGISTRAR

Tricor Investor & Issuing House Services

Sdn Bhd (11324-H) (Formerly known as

Equini Services Sdn Bhd)

Level 17, The Gardens North Tower

Mid Valley City, Lingkaran Syed Putra

59200 Kuala Lumpur

Telephone number : 603 2264 3883

Facsimile number : 603 2282 1886

REGISTERED OFFICE

No. 7, 1st Floor

Jalan Pesta 1/1

Taman Tun Dr Ismail 1

Jalan Bakri

84000 Muar, Johor



PRINCIPAL PLACE OF BUSINESS

Lot 8726 PTD 6023

Batu 8 Kawasan Perindustrian Bukit Bakri84200 Muar, Johor



PRINCIPAL BANKERS

AmBank (M) Berhad

HSBC Bank (Malaysia) Berhad

WEB-SITE ADDRESS

www.homeritzcorp.com

DATE OF LISTING

19 February 2010

STOCK EXCHANGE LISTING

Main Market of Bursa Malaysia Securies

BerhadStock Name : HOMERIZ

Stock Code : 5160

Sector : Consumer Products

BOARD OF DIRECTORS

Chua Fen Fa

(Managing Director)

Tee Hwee Ing

(Execuve Director)





Teo Seng Kuang


1Homeritz Corporaon Berhad (Company No. 805792-X) • ANNUAL REPORT 2014


4/32

GROUP’S PERFORMANCE REVIEW

Our Group’s revenue and prots have been steadily growing

since FYE 2011. FYE 2014 has been another strong year for

our Group, building further on good performance in FYE

2013. Our Group’s revenue for FYE 2014 rose by 12.6% to

RM127.18 million compared to RM112.91 million recorded in

FYE 2013. The increase of revenue in FYE 2014 was aributed

by the increase in volume of product sold and strengthening

in US Dollar (“USD”). As of the improvement in revenue and

strengthening in USD against Ringgit Malaysia (‘RM”), theprot before tax (“PBT”) for FYE 2014 had improved 28.6% to

RM26.45 million compared with FYE 2013.

On a per share basis, our Group made basic earnings per

share (“EPS”) of 10.12 cents in FYE 2014 versus 7.56 cents

in FYE 2013. In FYE 2014, total shareholders’ equity stood at

RM92.15 million and net asset per share was RM0.46.

During the year under review, the Group focused in its core

business of design, manufacture, and sale of upholstered

home furniture which includes upholstered sofas, upholstered

dining chairs and upholstered bed frames. We connue

diversifying our customer’s base spanning across more than

50 countries, including Europe, Australia, New Zealand, Northand South America, South Africa and the Middle East.

DIVIDENDS

The Board of Directors is proposing a nal single er tax-

exempt dividend of 15.5% equivalent to 3.10 cents per share

amounng to RM6.2 million for FYE 2014. The proposed

nal dividend is subject to shareholders’ approval in the

forthcoming Annual General Meeng.

The total dividend paid and proposed by the Company in

respect of the FYE 2014 is 25.5 % of par value (equivalent

to 5.10 cents per share) amounng to approximately RM10.2

million. This represents about 50% of the consolidated net

prot aributable to owners of the Company for FYE 2014.

Dear valued shareholders,

On behalf the Board of

Directors, it is my pleasure

to present to you the Annual

Report and the Audited

Financial Statements of

Homeritz Corporaon Berhad

for the nancial year ended

31 August (“FYE”) 2014.

ManagingDirec tor’sStatement

Homeritz Corporaon Berhad (Company No. 805792-X) • ANNUAL REPORT 20142


5/32

OUTLOOK AND PROSPECTS

Our Group is operang in global economic uncertaines

as well as facing increases in its raw materials costs and

uctuaon in foreign exchange rates.

Moving forward, our Group will connue to remain

focused in its core business and connuing to develop new

products, new design for existing products, derive better

cost efficiencies and eecve cost management across all

funcons. Our Group will connue diversifying its customer’sbase and broadening geographical coverage into other

regions.

Barring unforeseen circumstances, the Board expects that

our Group will connue to be protable in the nancial year

ending 2015.

APPRECIATION

On behalf of the Board of Directors, I would like to express

my hearelt appreciaon to fellow board members and

management team for their unring eorts and invaluable

contribuons to the connued growth and success of

our Group. The gratude and thanks are also extended to

our business associates, suppliers, bankers, customers,

regulatory bodies, shareholders for their ongoing support

and assistance. Let us connue to strive together in many

years to come.

With Best Wishes

CHUA FEN FATT

MANAGING DIRECTOR

Australasia

North America

Europe

CentralAmerica

South America

South Africa

Middle East

Japan

HOMERITZ CORPORATION BERHAD



6/32

Financial Highlights

REVENUE(RM’000)

1 0 9 ,

9 6 9

8 9 ,

8 2 6

1 0 3 ,

2 4 6

1 1 2 ,

9 0 5

1 2 7 ,

1 7 6

2010 2011 2012 2013 2014

EQUITY ATTRIBUTABLE TO OWNERS

OF THE COMPANY (RM’000)

5 7 ,

2 4 4

6 2 ,

8 8 5

7 2 , 7 8 5

8 1 , 4 0 3

9 2 ,

1 5 0

2010 2011 2012 2013 2014

PROFIT ATTRIBUTABLE TO OWNERS

OF THE COMPANY (RM’000)

2 0

, 0 5 5

1 0 ,

8 1 2

1 4 , 7 0 0

1 5 , 1 1 8

2 0 ,

2 4 7

2010 2011 2012 2013 2014

NET ASSETS PER SHARE (RM)

0 .

4 6

0 .

2 9

0 .

3 1

0 . 3

6 0 . 4 1

2010 2011 2012 2013 2014


Financial Year End 2010

RM’000

2011

RM’000

2012

RM’000

2013

RM’000

2014

RM’000

Revenue 109,969 89,826 103,246 112,905 127,176

Prot before tax 21,689 12,036 17,673 20,566 26,450

Prot aer taxaon 20,055 11,072 16,750 17,941 24,303

Prot aributable to owners of the

Company20,055 10,812 14,700 15,118 20,247

Equity aributable to owners of the

Company57,244 62,885 72,785 81,403 92,150

Deposit, bank and cash balance 19,595 11,705 24,472 34,710 51,586

Number of ordinary shares of RM0.20

each assumed to be in issue (‘000)200,000 200,000 200,000 200,000 200,000

Net assets per share (RM) 0.29 0.31 0.36 0.41 0.46


7/32

CHUA FEN FATTManaging Director

Aged 44, Malaysian

Chua Fen Fa was appointed to the Board on 2 November 2009. He is one of the founders of HUI in 1997 and since then, he

has been the driving force in the Group and has been instrumental in the success, growth and development of the Group. He

has had more than 27 years of hands-on experience in the furniture industry parcularly in the upholstered home furniture.

Throughout his working career, he has worked in dierent levels and capacies and involved in various aspects of the industry,

from being a producon operator to sample maker and product designer.

Prior to seng up of HUI, he was also involved in the sub-contracng of upholstered home furniture acvies and started his

own manufacturing business, Home Sofa Industries, in 1996. Over the years, he has accumulated various technical know-how

and experse in the art of manufacturing and designing upholstered home furniture.

As the Managing Director, he provides the Group with its corporate vision and business strategies and is primarily responsible

for the overall business, strategic planning, design and development, and the enre operaons of the Group.

Currently, he does not hold any directorship in any other public companies.

TEE HWEE INGExecuve Director

Aged 43, Malaysian

Tee Hwee Ing was appointed to the Board on 2 November 2009. She is the co-founder of HUI together with Chua Fen Fa in1997. Prior to joining the Group, she worked with UOB Card Centre (Singapore) and Avenue Securies Sdn Bhd in 1990 and

1992 respecvely. She has over 17 years of working experience in the upholstered home furniture industry. As the Execuve

Director, she is primarily responsible for the overall corporate and administrave funcons of the Group.

Currently, she does not hold any directorship in any other public companies.

MOHD KHASAN BIN AHMADIndependent Non-Execuve Director

Aged 53, Malaysian

Mohd Khasan Bin Ahmad was appointed to the Board on 2 November 2009. He is also the Chairman of the Audit Commiee and

a member of the Nominang and Remuneraon Commiees of the Company. Mohd Khasan obtained a diploma in Accountancy

and later graduated with a degree in Accountancy from Universi Teknologi Mara. He is a member of the Malaysian Instute

of Accountants (MIA). He served Bank Negara Malaysia for a period of about 7 years from 1986, the last 2 years of which he

was seconded to the Capital Issues Commiee (CIC) as its Principal Assistant Secretary. Subsequently, he joined the Securies

Commission in 1993 for a period of about 5 years and his last capacity was an Assistant Manager in its Issues and Investment

Division. During the tenure of his above appointments, he was involved in reviewing various corporate exercises, ranging from

inial public oerings, mergers and acquisions, reverse take-overs, issuance of bonds and other capital raising exercises.

He le the Securies Commission and joined the private sector in 1997. Currently, he sits on the Boards of Ta Win Holdings

Berhad, Crest Builder Holdings Berhad and Farm’s Best Berhad as Independent Non-Execuve Director. He also sits on the

Board of several other private limited companies.

Board Of Directors’ Profile



8/32

Board Of Directors’ Profile(Cont’d)

DATUK TAY PUAY CHUANIndependent Non-Execuve Director

Aged 50, Malaysian

Datuk Tay Puay Chuan was appointed to the Board on 2 November 2009. He is also the Chairman of the Nominang Commiee

and a member of the Audit and Remuneraon Commiees of the Company. He started his career with the Polis Di Raja

Malaysia, Bukit Aman in 1987 and later le the police force as a Police Inspector in 1992. He joined Fajar Sawmill Sdn Bhd as

a Factory Manager from 1992 to 1997. In 1997, he obtained a Bachelor of Law (Honours) degree from University of London,

United Kingdom. He was called to the Bar and admied as an advocate and solicitor in 1998. He was the partner in Fazilah,

Ong Chee Seong & Associates from 1998 to 2003 unl he set up his own legal pracce, Tay Puay Chuan & Co in Muar, Johor in

2003.

Currently, he sits on the Boards of Sern Kou Resources Berhad and Guan Chong Berhad as Independent Non-ExecuveDirector.

TEO SENG KUANGIndependent Non-Execuve Director

Age 44, Malaysian

Teo Seng Kuang was appointed to the Board on 5 January 2012. He is also the Chairman of the Remuneraon Commiee and

a member of the Audit and Nominang Commiees of the Company. He received his Master of Business Administraon from

Honolulu University, Hawaii, USA in 2003. He has a background of more than 15 years of working experience in management

related posion in sectors/industries such as manufacturing, electronic and furniture. He is a member of the Malaysian

Instute of Management (“MIM”) and member of Financial Planning Associaon of Malaysia (“FPAM”). He has served as an

Operaon Director of Xin Guang Premier Corporaon Sdn Bhd since 2004.

Currently, he does not hold any directorship in any other public companies.

Notes to Board of Directors’ Prole:

1. Tee Hwee Ing is the spouse of Chua Fen Fa. Save as disclosed, none of the directors has any family relaonship with any

director of the Company.

2. All directors does not have conict of interest with the Company and has not been convicted for any oences within the

past ten (10) years other than for trac oences, if any.

3. Please refer to the analysis of shareholdings of this Annual Report for the details of the directors’ shareholdings in the

Company.

4. Details of number of Board meengs aended by directors during the nancial year are set out in page 13 of this Annual

Report.

6 Homeritz Corporaon Berhad (Company No. 805792-X) • ANNUAL REPORT 2014


9/32


10/32

The Board of Directors (“Board”) recognises the importance of good corporate governance in ensuring that the interest of theGroup, shareholders and other stakeholders are protected.

The Board is fully dedicated to connuously evaluang the Group’s corporate governance pracces and procedures with a view

to ensure the principles and recommendaons in corporate governance as spulated by the Malaysian Code on Corporate

Governance 2012 (“MCCG 2012”) are applied and adhered to safeguard shareholders’ investments and protect the interests

of all stakeholders.

This statement thus describes the posion of the Group in regard to each of the eight (8) principles and twenty six (26)

recommendaons made in the MCCG 2012, nong and explaining excepons as they arise.

APPLICATION OF PRINCIPLES AND RECOMMENDATIONS

Principle 1: Establish Clear Roles and Responsibilies

1.1 The Board should establish clear funcons reserved for the board and those delegated to management

The Board has established a Board Charter (“the Charter”) that has set out the roles, responsibilies and powers of

the Board, taking into account corporate governance obligaons, best pracces, and relevant regulaons. The Board

reviews the Charter from me to mes and as necessary to ensure consistency and compliance with regulatory and legal

requirements, which shall take precedence over any spulaon of the Charter.

The details of the Charter are accessible through Group’s website at www.homeritzcorp.com.

1.2 The Board should establish clear roles and responsibilies in discharging its duciary and leadership funcons

1.2.1 Reviewing and adopng a strategic plan for the Group

The Board considers, and aer discussion and amendment as required, approves strategic plan proposed by

management. All Board’s decisions are recorded in the minutes, including the deliberaon for each decision,

along with acons to be taken and the individuals responsible for implementaon. Relevant Board decisions are

communicated to Senior Management for implementaon with a reasonable meframe.

1.2.2 Overseeing the conduct of the Group’s business

The Board shall meet quarterly and at any such mes as it deems necessary to fulll its responsibilies. The Board

is provided with an agenda and comprehensive board papers on a mely basis prior to board meengs. This is to

ensure the Directors to discharge their dues and responsibilies competently and in a well-informed manner.

The Company Secretary records all the deliberaons including pernent issues, the substance of inquiries andresponses, Board members’ suggesons and the decision made in the Minutes of the Board meengs. The Minutes

of every Board meeng are also circulated to the Directors for their perusal prior to conrmaon of the Minutes

at the following Board meeng.

1.2.3 Idenfying principal risks and ensuring the implementaon of appropriate internal controls and migaon

measures.

The Board acknowledges that it is responsible for ensuring that a sound system of risk management and internal

control is maintained and that it has reviewed the eecveness of these systems to safeguard shareholders’ interest

and the Group’s assets. Further details of the Group’s system of internal controls are set out in the Statement on

Risk Management and Internal Control secon of this Annual Report.

Statement On Corporate Governance



11/32

1.2.4 Succession planning

The Board recognises the importance to aract and retain key management personnel. Hence, the Board has made

concerted eorts to idenfy and groom middle management at all key areas as an integral part of the management

succession plan. The plan also includes oering a compeve remuneraon package to and providing training and

career development opportunies for employees in all key funcons of the Group’s operaons.

1.2.5 Overseeing the development and implementaon of a shareholder communicaons policy for the Group.

The Group acknowledges the need for investors to be informed of all material business and corporate developments

aecng the Group. The channels of communicaon to shareholders for informaon of the Group are as follow:

i. announcement of quarterly results on quarterly basis;

ii. the issue of the Company’s Annual Reports;iii. announcements to Bursa Malaysia Securies Berhad;

iv. ad-hoc press statements and interviews, where appropriate; and

v. Group’s website at www.homeritzcorp.com.

The Board welcomes shareholders’ parcipaon at the Annual General Meeng, which serves as an important

means for shareholders’ communicaon. Noce of the Annual General Meeng and Annual Reports are sent to

shareholders twenty one (21) days prior to the meeng. Shareholders are encouraged to aend and parcipate

at the Annual General Meeng by raising quesons on the resoluons being proposed or on the Group’s business

operaons in general.

1.2.6 Reviewing the adequacy and the integrity of the management informaon and internal controls system of the

Group.

The Board acknowledges its overall responsibility for maintaining a sound system of internal controls that provides

reasonable assessment of eecve and ecient operaons, internal nancial controls and compliance with laws

and regulaons as well as with internal procedures and guidelines. The eecveness of the systems of internal

controls of the Group is reviewed periodically by the Audit Commiee. Further details of the Group’s system of

internal controls are set out in the Statement on Risk Management and Internal Control secon of this Annual

Report.

1.3 The Board should formalise ethical standards through a code of conduct and ensure its compliance

The Group has put in place a whistle-blowing policy and a summary of the Code of Conduct is viewable on the Group’s

website.

1.4 The Board should ensure that the Group’s strategies promote sustainability

The Board reviews operaonal pracces which impact on sustainability of environment, governance and social aspects

of its business on a regular basis. The Group’s ESG (Environmental, Social and Governance “ESG”) policy is published on

the Group’s website.

1.5 The Board should have procedures to allow its members access to informaon and advice

The Board has full, unrestricted and mely access to all informaon pertaining to the Group’s business aairs. All members

of the Board have access to the advice and services of the Company Secretary and are entled to obtain professional

opinions or advice from external consultants when the need arises at the expense of the Group. The Company Secretary

aends all Board meengs and is responsible for ensuring that Board procedures as well as statutory and regulatory

requirements relang to the dues and responsibilies of the Directors are complied with.

Statement On Corporate Governance (Cont’d)



12/32


1.6 The Board should ensure it is supported by a suitably qualied and competent Company Secretary

It is the Board’s responsibility to retain the services of a competent Company Secretary. The Board is assisted by the

Nominang Commiee in the appointment and assessment of the Company Secretary, as specied in its Term of

Reference.

The Board is supported by a suitably qualied and competent Company Secretary in discharging its roles and responsibilies.

Every Board member has ready and unrestricted access to the advice and the services of the Company Secretary in

ensuring the eecve funconing of the Board. The Company Secretary also ensures compliance of lisng and related

statutory obligaons and procedures are followed and minimises deviaon. The Directors are also regularly updated and

advised by the Company Secretary on new statutory and regulatory requirements issued by regulatory authories, and

the resultant implicaons to the Company and the Directors in relaon to their dues and responsibilies. The Company

Secretary is experienced, competent and knowledgeable on new statutes and direcves issued by regulatory authories.

The Company Secretary briefs the Board on proposed contents and mings of material announcements to be made tothe Bursa Malaysia Securies Berhad (“Bursa Securies”).

1.7 The Board should formalise, periodically review and make public its board charter

The Charter was formalized in July 2013 and will be reviewed from me to me. The Charter is displayed on the Group’s

website.

Principle 2: Strengthen Composion

2.1 The Board should establish a Nominang Commiee which should comprise exclusively of Non-Execuve Directors, a

majority of whom must be independent

The Nominang Commiee was established on 02 November 2009 and consists of the following members:

Director Designaon Directorship

Datuk Tay Puay Chuan Chairman Independent Non-Execuve Director

Mohd Khasan Bin Ahmad Member Independent Non-Execuve Director

Teo Seng Kuang Member Independent Non-Execuve Director

The Nominang Commiee operates under its terms of reference and had two (2) meeng convened during nancial

year under review.

The main funcons of the Nominang Commiee include the following:-

• to idenfy and recommend to the Board suitable nominees for appointment to the Board and Board Commiees;

• to assess the eecveness of the Board, the Board Commiees, the contribuon of each Director and the Company

Secretary on an on-going basis;

• to review regularly the board structure, size and composion and make recommendaons to the Board with regard

to any adjustments that are deemed necessary;

• to consider in making its recommendaons, candidates for directorships proposed by the Execuve Directors or

any other senior execuve or any other Director or Shareholder;



13/32


• to assist the Board in its annual review of its required mix of skills and experience and other qualies, includingcore competencies of which Non-Execuve Directors should bring to the Board;

• to recommend to the Board the connuaon in service of Execuve Director(s) and Director(s) who are due for

rerement by rotaon;

• to assess the independence of the Independent Directors annually; and

• to review the training needs for the Directors’ regularly, and disclose details in the annual report as appropriate.

2.2 The Nominang Commiee should develop, maintain and review the criteria to be used in the recruitment process

and annual assessment of Directors

The Nominang Commiee’s Terms of Reference species in details its dues and funcons, which relate to therecruitment of Directors and the criteria used and procedures in their selecon and in evaluang the overall eecveness

of the Board.

2.3 The Board should establish formal and transparent remuneraon policies and procedures to aract and retain

directors

The Remuneraon Commiee was established on 02 November 2009 and consists of the following members:

Director Designaon Directorship

Teo Seng Kuang Chairman Independent Non-Execuve Director

Mohd Khasan Bin Ahmad Member Independent Non-Execuve Director

Datuk Tay Puay Chuan Member Independent Non-Execuve Director

The Remuneraon Commiee operates under its terms of reference and had one (1) meeng convened during nancial

year under review.

The main funcons of the Remuneraon Commiee include the following:-

• to consider and recommend to the Board the remuneraon framework for Execuve Directors;

• to formulate the remuneraon packages to aract, retain and movate Execuve Directors of the quality required

to manage the business of the Group successfully;

• to act in line with the direcons of the Board of Directors; and

• to consider and examine such other maers as the Remuneraon Commiee considers appropriate.

The remuneraon and entlements of the Non-Execuve Directors shall be a maer to be decided by the Board as a

whole with the Director concerned abstained from deliberaon and vong on his individual remuneraon.

The Remuneraon Commiee adopts the principles recommended by the MCCG 2012 in determining the Directors’

remuneraon whereby the Execuve Directors’ remuneraon is designed to link rewards to the Group’s performance

whilst the remuneraon of the Non-Execuve Directors is determined in accordance with their experience, experse

and the level of responsibilies undertaken. The Directors’ fees are subject to the approval of the shareholders of the

Company at the Annual General Meengs.



14/32

Details of Directors’ remuneraon paid and payable to the Directors of the Company for the nancial year ended (“FYE”)31 August 2014 by category and successive bands of RM50,000 are as follows:

Execuve Non-Execuve

Directors Directors Total

(RM) (RM) (RM)

Allowances 8,400 12,600 21,000

Bonuses 216,000 - 216,000

EPF 205,200 - 205,200

Fee - 100,800 100,800

Salaries 864,000 - 864,000

SOCSO 1,240 - 1,240

Benets-in-kind 53,150 - 53,150

1,347,990 113,400 1,461,390

Number of Directors

Execuve Non-Execuve

Directors Directors Total

RM 1 - RM 50,000 - 3 3

RM 600,001 - RM 650,000 2 - 2

Details of individual Director’s remuneraon are not disclosed in this report as the Board is of the view that the aboveDirectors’ remuneraon disclosure by band and analysis between Execuve and Non-Execuve Directors has appropriately

served the accountability and transparency aspects of the MCCG 2012.

Principle 3: Reinforce Independence

3.1 The Board should undertake an assessment of its Independent Directors annually

The Board has adopted the legal and regulatory denion of Independent Directors as specied in the Main Market

Lisng Requirements of Bursa Malaysia. All the Directors have given their undertakings to comply with the Main Market

Lisng Requirements (“Lisng Requirements”) and the Independent Directors have conrmed their independence in

wring.

The Nominang Commiee is specically tasked to assess the independence of Independent Directors upon admission,

annually and when any new interest or relaonship develops.

3.2 The tenure of an Independent Director should not exceed a cumulave term of nine (9) years.

The Board has implemented a nine (9) year policy for Independent Directors, in line with Recommendaon 3.2 of the

MCCG 2012. Upon compleon of the nine years, an Independent Director may connue to serve on the Board subject to

the Director’s re-designaon as a Non-Independent Director.

3.3 The Board will jusfy in the noce convening the Annual General Meeng and submit for shareholders’ approval the

retenon of all Independent Directors who have served the Group for an aggregate of more than nine (9) years at

every Annual General Meeng

In the event the Board intends to retain an Independent Director who has served the Group for an aggregate of more

than nine (9) years, it would have to jusfy in the noce convening the Annual General Meeng and seek shareholders’

approval the retenon of such Independent Director at every Annual General Meeng. As at the date of this Statement,

none of the Independent Directors has reached nine years of service since their appointment as Directors.




15/32

3.4 The posions of Chairman and Chief Execuve Ocer (“CEO”) should be held by dierent individuals, and the Chairmanmust be a Non-Execuve member of the board

Due to the relavely small size of the Group, the Board is of the view that the current size and composion is opmum

and well balanced, and caters eecvely to the scope of the Group’s operaons. Hence, the Board does not intend to

appoint an Independent Chairman and CEO to the Board.

3.5 The Board must comprise a majority of Independent Directors where the Chairman of the Board is not an Independent

Director

The Board currently consists of ve (5) members comprising two (2) Execuve Directors and three (3) Independent Non-

Execuve Directors. In this respect, the Company complies with the requirement of the Lisng Requirements of Bursa

Securies for Independent Non-Execuve Directors to make up at least one-third (1/3) of the Board membership.

Notwithstanding that the Board does not have an independent Chairman and CEO, it is of the opinion that its strong

representaon of high caliber Independent Non-Execuve Directors provides the necessary balance in ensuring that

the strategies proposed by the Management are fully discussed and deliberated, and the interests of the shareholders,

employees, customers, suppliers and other stakeholders are taken into consideraon.

Datuk Tay Puay Chuan also performs the role as the Senior Independent Director to facilitate communicaons with any

shareholders and stakeholders whose concerns could be inappropriate to be dealt with by the Managing Director or the

Execuve Director.

Principle 4: Foster Commitment

4.1 The Board should set out expectaons on me commitment for its members and protocols for accepng newdirectorships

All the Directors are expected to devote sucient me to carry out their responsibilies and are required to nofy the

Board before accepng any new directorships. The Board ordinarily schedules four meengs in a year. This is evidenced

by the aendance record of the Directors at Board Meengs during the nancial year under review, as set out in the

table below:

Directors Directorship Number of Meengs Aended

Chua Fen Fa Managing Director 5/5

Tee Hwee Ing Execuve Director 5/5

Mohd Khasan Bin Ahmad Independent Non-Execuve Director 5/5

Teo Seng Kuang Independent Non-Execuve Director 5/5Datuk Tay Puay Chuan Independent Non-Execuve Director 5/5

Where any direcons or decisions are required expediously or urgently for the Board between the regular meengs,

special meengs of the Board will be convened by the Company Secretary, aer consultaon with the Managing Director.

The agenda for the meeng of the Board is set by the Company Secretary in consultaon with the Managing Director.

Notwithstanding that no specic quantum of me has been xed, all the Board members must be able to commit

sucient me to the Company’s maers and are required to nofy the Board before accepng any new directorships.

To ensure the Directors have the me to focus and fulll their roles and responsibilies eecvely, one criterion as

agreed by the Board is that they must not hold directorships at more than ve public listed companies (as prescribed in

Paragraph 15.06 of Lisng Requirements).




16/32

4.2 The Board should ensure its members have access to appropriate connuing educaon programme

The requirement to undertake connuing educaon is built into the Charter and the training undertaken by the Directors

are reviewed by the Nominang Commiee annually. All the Directors have aended the Mandatory Accreditaon

Programme. Details of training programme aended by the Directors during the nancial year under review are set out

as below:

Directors Training Programme Aended

Chua Fen Fa • Seminar Pekerja Asing 2013

• GST Training

Tee Hwee Ing • GST Training

• GST Awareness Programme

Mohd Khasan Bin Ahmad • Enhanced Understanding of Risk Management and Internal Control for CFOs,

IAs and ROs

• GST Training

Teo Seng Kuang • SME GST Applicaon Workshop

Datuk Tay Puay Chuan • GST Training

• Strategy for corporate sustainability under economic pressure

Principle 5: Uphold Integrity In Financial Reporng

5.1 The Audit Commiee should ensure nancial statements comply with applicable nancial reporng standards

This requirement is built into Terms of Reference of the Audit Commiee which states parcularly that the Audit

Commiee should review the nancial statements to ensure that the Group is in compliance with accounng standards,

the regulaons of the Companies Act, 1965, Lisng Requirements and other legislave and reporng requirements.

The Board aims to present a balanced, insighul and mely assessment of the Group’s nancial posion and prospects by

ensuring quality nancial reporng through the annual audited nancial statements and quarterly nancial results to its

stakeholders, in parcular, shareholders, investors and the regulatory authories. The Audit Commiee assists the Board

in overseeing the Group’s nancial reporng processes and the accuracy, consistency and the applicaon of accounng

standards and policies; and for reasonableness and prudence in making esmates, statements and explanaon prior to

submission to the Board for its approval.

The Board is responsible to ensure that the nancial statements are properly drawn up in accordance with the provisions

of the Companies Act, 1965 in Malaysia and applicable approved Financial Reporng Standards issued by the Malaysian

Accounng Standards Board so as to give a true and fair view of the state of aairs of the Group and of the Company as

at the end of the nancial year and of the results of their operaons and cash ows for the year ended on that date. A

statement by the Directors of their responsibilies in preparing the nancial statements is set out separately on page 24

of this Annual Report.




17/32

5.2 The Audit Commiee should have policies and procedures to assess the suitability and independence of externalauditors

The Board, through the Audit Commiee maintains a formal and transparent relaonship with the Group’s External

Auditors in seeking valuable professional advice and in ensuring compliance with the applicable approved Financial

Reporng Standards issued by the Malaysian Accounng Standards Board in Malaysia.

The Audit Commiee is delegated with the task of assessing whether the External Auditors are suitable for re-appointment,

of which the competency and independence are key consideraons. This is spelt out in the Terms of Reference of the

Audit Commiee

Accordingly, the Audit Commiee had on 2 December 2014, assessed the independence of Messrs. Crowe Horwath

(“CH”) as External Auditors of the Company as well as reviewed the level of non-audit services to be rendered by CH

to the Company for the nancial year under review. Having sased itself with their technical competency and auditindependence and fulllment of criteria as set out in the External Auditors Assessment and Independence Policy, the

Audit Commiee recommended their re-appointment to the Board, upon which the shareholders’ approval will be

sought at the forthcoming Seventh Annual General Meeng.

Principle 6: Recognise And Manage Risk

6.1 The Board should establish a sound framework to manage risks

The Board recognizes that idencaon and priorizaon of the Group’s business risks is a crical element of a broader

risk management program.

As an on-going process, signicant business risks faced by the Group are idened and evaluated and consideraon isgiven on the potenal impact of achieving the business objecves. This includes examining principal business risks in

crical areas, assessing the likelihood of material exposures and idenfying the measures taken to migate, avoid or

eliminate these risks. Further details of the Group’s risk management framework are set out in the Statement on Risk

Management and Internal Control secon of this Annual Report.

6.2 The Board should establish an internal audit funcon which reports directly to the Audit Commiee

The Board recognises that eecve monitoring on a connuous basis is a vital component of sound internal control

systems. The Group has an out-sourcing arrangement with an independent internal audit service provider in relaon

to its internal audit funcon to examine and evaluate the adequacy and eecveness of the Group’s internal control

systems of the business units.

Principle 7: Ensure Timely and High Quality Disclosure

7.1 The Board should ensure the Group has appropriate corporate disclosure policies and procedures

The Board has established a Corporate Disclosure Policy which serves as a guide to ensure broad disseminaon of

material informaon in a comprehensive, accurate and mely manner and in accordance with all applicable legal

and regulatory requirements. This aims to promote eecve communicaon with shareholders and encourage their

parcipaon and feedback at the Annual General Meengs. Not only is this policy established to comply with the

requirements of Main Market Lisng Requirements of Bursa Securies pertaining to connuing disclosure, but it also

adopts the recommendaons as recommended in the MCCG 2012. The Board ensures that the Group complies with all

the applicable corporate disclosure laws and regulaons.




18/32

7.2 The Board should encourage the Group to leverage on informaon technology for eecve disseminaon ofinformaon

The Board supports the use of informaon technology for the eecve disseminaon of informaon. The Group has

established a website at www.homeritzcorp.com which has served as a useful reference source of informaon to the

shareholders, investment analysts, business partners and other stakeholders

Principle 8: Strengthen Relaonship between the Group And Shareholders

8.1 The Board should take reasonable steps to encourage shareholder parcipaon at general meengs

The Board values the parcipaon of shareholders at general meengs and recognises their contribuons as valuable

feedback for the conduct of the Group’s businesses. Noce of the Annual General Meeng and Annual Reports are sentto shareholders at least twenty one (21) days prior to the meeng.

This would allow the shareholders to make necessary arrangements to aend and parcipate either in person, by

corporate representave, by proxy or by aorney together with the Noce of Annual General Meeng, which provides

informaon to shareholders with regard to, among others, details of the Annual General Meeng, their entlement to

aend the Annual General Meeng, the right to appoint proxy and also qualicaon of proxy.

In line with Paragraph 7.21A(2) of Lisng Requirements for further promong parcipaon of members through proxies,

the Chairman of the Annual General Meeng will brief the members, corporate representaves and proxies present

of their right to speak and vote on the resoluons set out in the Noce of the 7th Annual General Meeng dated 30

December 2014. The Arcles of Associaon further entles a member to vote in person, by corporate representave, by

proxy or by aorney. Essenally, a corporate representave, proxy or aorney shall be entled to vote both on a show

of hands and on a poll as if they were a member of the Company.

8.2 The Board should encourage poll vong

At the commencement of all general meengs, the Chairman of the Annual General Meeng will inform the shareholders

of their rights to a poll vong. All the resoluons set out in the Noce of the Annual General Meeng are put to vote by

a show of hands. Separate resoluons are proposed for substanally separate issues at the meeng and the Chairman

declares the number of proxy votes received, both for and against each separate resoluon where appropriate. From

2013 onwards, the Group shall endeavour, whenever possible, to put to vote of substanve resoluons at the Annual

General Meeng by poll. The outcome of the Annual General Meeng will be announced to Bursa Securies on the same

meeng day.

8.3 The Board should promote eecve communicaon and proacve engagements with shareholders

The Board values dialogue with both instuonal and individual investors, and recognises that mely and equal

disseminaon of relevant informaon should be made to these groups without favouring one group over another.

Management meets with shareholders and investment analysts from me to me to explain the group’s strategy,

performance and major developments, and to receive feedback. The proceedings of the 7th Annual General Meeng

will include the Chairman’s brieng on the Company’s overall performance for the nancial year under review, the

presentaon of the external auditors’ unqualied report to the shareholders, and a Q&A session during which the Board

members and senior management will interact and converse with shareholders at the 7th Annual General Meeng

within the bounds of propriety. To maintain a high level of transparency and enable the Board to eecvely review and

address any issues or concerns, shareholders may direct their queries and/or concerns to the Senior Independent Non-

Execuve Director via a dedicated electronic mail.




19/32

COMPLIANCE STATEMENT

The Board is pleased to report that this Statement provides the corporate governance pracces of the Group with reference to

the MCCG 2012. The Board considers and is sased that the Group has fullled its obligaons under the broad principles as

set out in the MCCG 2012. However, the Board has reserved several of the Recommendaons and their Commentaries and has

raonalized and provided juscaons as below for the deviaons in this Statement. Nevertheless, the Group will connue to

strengthen its governance pracces to safeguard the best interests of its shareholders and other stakeholders.

Deviaons from the Recommendaons on the MCCG 2012

Recommendaon 2.2

The Nominang Commiee should develop, maintain and review the criteria to be used in the recruitment process and annual

assessment of Directors.

Deviaon

The Board does not set the limit for gender diversicaon of its board composion as the appointment of Directors is based

on merits without giving regards to the gender of the appointed Directors. All this while, the Board recognises the value of

female members of the Board. The female representaon in the Board consists of 20% of the number of the Directors.

This Statement was presented and approved at the meeng of the Board on 2 December 2014.




20/32

COMPOSITION AND MEMBERS

The Current Audit Commiee comprises three (3) members of the Board which are all Independent Non-Execuve Directors.

The members of the Audit Commiee, their respecve designaons and directorship are as follows:-

• Mohd Khasan Bin Ahmad

Chairman, Independent Non-Execuve Director

• Datuk Tay Puay Chuan

Member, Independent Non-Execuve Director

• Teo Seng Kuang

Member, Independent Non-Execuve Director

TERM OF REFERENCE

Objecves

The primary objecve of the Audit Commiee is to assist the Board in fullling their responsibilies relang to accounng and

reporng pracces of the Company and each of its subsidiaries (collecvely referred to as “the Group”). In addion, the Audit

Commiee will:-

• oversee and appraise the quality of the audit conducted by the Group’s External Auditors and the Internal Auditors in

order to strengthen the condence of the public in the Groups’ reported results;

• maintain, by scheduling regular meengs, open lines of communicaon amongst the Board, the External Auditors

and the Internal Auditors, to exchange view and informaon as well as to conrm their respecve authority and

responsibilies;

• review related party transacons entered into by the Group to ensure that such transacons are undertaken on the

Group’s normal commercial terms and that the internal control procedures with regards to such transacons are

sucient;

• provide assistance to the Board in fullling its duciary responsibilies relang to the Group’s administrave, operang

and accounng controls; and

• act upon the Board’s request to invesgate and report on any issues or concerns on the management of the Group.

Composion

The Audit Commiee shall be appointed by the Board from among their number and compose no fewer than three (3)

members. All members of the Audit Commiee must be Non-Execuve Directors with a majority of them being Independent

Directors.

At least one (1) member of the Audit Commiee:-

• must be a Member of the Malaysian Instute of Accountants (MIA); or

• if he is not a Member of MIA, he must have at least three (3) years’ working experience and:-

- he must have passed the examinaons specied in Part 1 of the 1st Schedule of the Accountants Act 1967; or

- he must be a Member of one of the Associaons of Accountant specied in Part II of the 1st Schedule of theAccountants Act 1967; or

Audit Committee Report



21/32

Audit Committee Report(Cont’d)

• he must have:-- a degree/masters/doctorate in accounng or nance and at least three (3) years’ post qualicaon experience in

accounng or nance; or

- at least seven (7) years’ experience being a chief nancial ocer of a corporaon or having the funcon primarily

responsible for the management of the nancial aairs of a corporaon.

The members of the Audit Commiee shall elect a Chairman from among their number who shall be an Independent Non-

Execuve Director. No Alternate Director is appointed as a member of the Audit Commiee.

In the event that if a member of the Audit Commiee vacates oce resulng in the total number reduced to below three (3),

the Board shall, within three (3) months of that event, appoints a new member to make up the minimum number of three (3).

Meengs

The Audit Commiee will meet at least once quarterly and such addional meengs as the Chairman shall decide in order

to fulll its dues. In addion, the Chairman may call a meeng if a request is made by any Commiee Member, the Group’s

Managing Director, the External Auditors or the Internal Auditors where applicable.

Senior managements, representaves of the External Auditors and Internal Auditors should normally be invited to aend Audit

Commiee Meengs. Other Board Members may aend meeng upon the invitaon of the Audit Commiee. However, the

Audit Commiee should meet with the External Auditors without Execuve Board Members present at least twice a year.

The Company Secretary shall be the secretary of the Commiee and shall be responsible for keeping the minutes of meengs

of the Commiee, and circulang them to Commiee Members and to other members of the Board. A quorum for a meeng

shall be two (2) members, with the majority of the members present shall be Independent Directors. The Audit Commiee

must prepare an Audit Commiee Report at the end of the nancial year in the Annual Report of the Group which summaries

the Audit Commiee’s acvies during the nancial year and the related signicant ndings.

Authority

The Audit Commiee is authorised to invesgate any acvity of the Group within its Terms and Reference and all employees

shall be directed to co-operate with any request made by the Audit Commiee. The Audit Commiee shall have unrestricted

access to all informaon pertaining to the Group and have direct communicaon channels with the external and internal

Auditors, and to the senior management of the Group. The Audit Commiee shall be empowered to engage persons or experts

having special competence as necessary to assist the Audit Commiee in fullling its responsibilies.

Dues and Responsibilies

The dues and responsibilies of the Audit Commiee shall be as follows:-

• to consider and recommend the nominaon and appointment of the External Auditors, the audit fees, the quesons of

their resignaon or dismissal and any other related maers;

• to oversee all maers pertaining to audit including the review of the audit plan and audit report with the External

Auditors;

• to review the nancial statements of the Group, and to discuss problems and reservaons arising from the interim and

nal results, and any maers that the External Auditors may wish to discuss (in the absence of the management where

necessary);

• the Chairman of the Audit Commiee to engage on a connuous basis with senior management such as the Chairman,

the CEO, the Finance Director, the External Auditors as well as the Internal Auditors in order to be kept informed of

maers aecng the Group ;



22/32

• in relaon to the internal audit funcon:- review the adequacy of the scope, funcon, competency and resources of the internal audit funcon, and that it

has the necessary authority to carry out its works; and

- review the internal audit programme and results of the internal audit process and where necessary ensure that

appropriate acon is taken on the recommendaons of the internal audit funcon;

• to review any related pares transacons that may arise within the Group;

• to review the applicaon of corporate governance principles and the extent of the Group’s compliance with the

Recommendaons set out under the MCCG 2012;

• to consider all areas of signicant nancial risk and arrangement in place to contain those risks to acceptable levels;

• to ensure that the Group is in compliance with the regulaons of the Companies Act, 1965, Main Market LisngRequirements of Bursa Securies and other legislave and reporng requirements;

• to idenfy and direct any special project or invesgate and to report on any issues or concerns in regards to the

management of the Group; and

• such other funcons as may be agreed by the Audit Commiee and the Board.

SUMMARY OF ACTIVITIES

A total of ve (5) Audit Commiee meengs were held for FYE 2014. The details of aendance of each Audit Commiee

member are as follows:

Name of Members Aendance

Mohd Khasan Bin Ahmad 5/5

Datuk Tay Puay Chuan 5/5

Teo Seng Kuang 5/5

The main acvies undertaken by the Commiee during the nancial year under review included the following:

• reviewed the unaudited quarterly nancial results of the Group prior to making recommendaons for the Board’s

approval and subsequent announcements;

• reviewed the potenal related party transacon and any conict of interest situaon that may arise within the Company

or the Group including any transacon, procedure or course of conduct that raises quesons of management integrity;• reviewed and evaluated factors relang to the independence of the External Auditors. The Audit Commiee worked

closely with the External Auditors in establishing procedures in assessing the suitability and independence of the External

Auditors, in conrming that they are, and have been, independent throughout the conduct of the audit engagement with

the Group in accordance with the independence criteria set out by the Internaonal Federaon of Accountants and the

MIA;

• considered and recommended to the Board of Directors the appointment of the External and Internal Auditors and

payments of fees;

• reviewed the internal audit planning, internal audit reports, audit ndings, audit recommendaons made and

management’s responses to these recommendaons and acons taken to improve the system of internal control and

procedures;

• reviewed with the External Auditors the audit planning memorandum covering the audit objecves and approach, audit

plan, key audit areas and relevant technical pronouncements and accounng standards issued by Malaysian Accounng

Standards Board;• reviewed with the External Auditors the audit review memorandum covering the results of the audit of the audited

nancial statements and audit report in parcular, accounng issues and signicant audit adjustments arising from the

external audit;

Audit Committee Report (Cont’d)



23/32

• reviewed the annual nancial statements of the Group prior to submission to the Board for consideraon and approval;• reviewed the applicaon of Corporate Governance principles and the extent of the Group’s compliance with the

Recommendaons set out under the MCCG 2012;

• reviewed the Statement on Risk Management and Internal Control for disclosure in this Annual Report; and

• reviewed the Annual Report to ensure adherence to legal and regulatory reporng requirements and appropriate

resoluon of all accounng maers requiring signicant judgement.

INTERNAL AUDIT FUNCTION

The Board acknowledges that it is responsible for maintaining sound systems of internal control which provide reasonable

assessment of eecve operaons, internal nancial controls and compliance with laws and regulaons as well as with internal

procedures and guidelines.

The Group has engaged an external independent consultant to carry out the internal audit funcon to assist the Audit

Commiee in maintaining sound systems of internal control. The internal audits were undertaken to provide independent

assessment on the accuracy, eciency and eecveness of the Group‘s internal control systems.

An overview of the Group’s approach in maintaining sound systems of internal control is set out in the Statement on Risk

Management and Internal Control on pages 22 to 24 of this Annual Report.

Audit Committee Report (Cont’d)



24/32

INTRODUCTION

The Board is pleased to present below its Statement on Risk Management and Internal Control of the Group for the nancial

year under review unl the date of approval, prepared in accordance with the Guidelines for Directors of Listed Issuers on the

issuance of Statement on Risk Management and Internal Control pursuant to paragraph 15.26(b) of the Main Market Lisng

Requirements released by Bursa Securies.

BOARD RESPONSIBILITY

The Board acknowledges that it is responsible for ensuring that a sound system of risk management and internal control is

maintained and that it has reviewed the eecveness of these systems to safeguard shareholders’ interest and the Group’s

asset.

During the nancial year under review, the Managing Director and Group Accountant have provided assurance to the Board

that the Group’s risk management and internal control systems have been operated adequately and eecvely, in all materials

aspects, based on the risk management framework and pracces adopted by the Group.

However, in view of limitaons that are inherent in any systems of risk management and internal control, such systems are

designed to manage, rather than eliminate, the risk of failure to achieve business objecves of the Group and can only provide

reasonable rather than obsolete assurance against material misstatement or loss.

RISK MANAGEMENT FRAMEWORK

The Board considers risk management to be fundamental to good management pracce and a signicant aspect of corporate

governance. Eecve management of risk will provide an essenal contribuon towards the achievement of the Group’sstrategic and operaonal objecves and goals.

Risk management forms an integral part of the Group’s decision making and roune management, and are incorporated within

the strategic and operaonal planning processes at all levels across the Group.

In order to achieve a sound system of risk management and internal control, the board and management ensure that the

risk management and control framework is embedded into the culture, processes and structures of the Group and to the

achievement of its business objecves.

The Board arms that there is an on-going process for idenfying, evaluang and managing the signicant risks faced by major

companies in the Group. The results of this process, including risk migang measures taken by Management to address key

risks idened, are periodically reviewed by the Board.

The other features of the Group’s risk managements systems include the following:

• Policies, procedures, guidelines, templates and the likes are being developed to assist in ensuring an awareness of what is

an acceptable level of risk and that risks and opportunies are managed consistently and eecvely across the Group;

• The risk registers are used as one of the business tools to highlight the risks exposures and their risks migaon. The risk

registers are updated as and when there are changes to business environment or regulatory guidelines;

• The Heads of department are required to undertake risk assessments against their business plan strategies and other

signicant acvies and to maintain risk registers that reect an appropriate risk prole; and

• Periodic operaonal/management meengs are held to ensure that the risks idened are monitored and related

internal controls are communicated to the management.

Statement On Risk Management And Internal Control



25/32

Statement On Risk Management And Internal Control (Cont’d)

INTERNAL CONTROL SYSTEM

Internal Audit Funcon

The Board recognises that eecve monitoring on a connuous basis is a vital component of sound internal control systems.

The Group has an out-sourcing arrangement with an independent internal audit service provider in relaon to its internal

audit funcon to examine and evaluate the adequacy and eecveness of the Group’s internal control systems of the business

units. The internal audit adopts a risk-based approach and prepares its audit strategy and plan based on the risk proles of

individual business units of the Group. These plans are updated and approved by the Audit Commiee regularly. The internal

audit appraises and contributes towards improving the Group’s risk management and control systems, and reports to the

Audit Commiee on a regular basis. The professional fee incurred for the internal audit funcon in respect of FYE 2014 was

RM22,500.

The other features of the Group’s systems of internal control include the following:

• Wrien communicaon of the Company values, the expected code of conduct, policies and procedures;

• Clearly dened objecves and term of reference of the board of directors and its commiees;

• Clear organisaon structure with delineated reporng lines;

• The Audit Commiee reviews the quarterly nancial results, annual report, audited nancial statements, Group’s risk

prole and internal control issues idened by the External Auditors, Internal Auditors and the management. The Audit

Commiee also monitors the implementaon of the recommendaons proposed by the External Auditors and Internal

Auditors;

• A reporng system where informaon on nancial performance and key business indicators are provided to the AuditCommiee and the Board on a quarterly basis for review;

• Periodic management meengs are held to provide a forum where management undertakes overall responsibility for

periodic reviews to idenfy, discuss and resolve key operaonal issues, to further improve its eecveness;

• Appointment of sta is based on the required level of qualicaon, experience and competency to fulll their

responsibilies. Training and development is provided for selected sta to further enhance their skills and capabilies.

In addion, a formal employee appraisal to evaluate and measure employee’s performance and their competency is

performed at least once a year.

REVIEW OF THE STATEMENT BY EXTERNAL AUDITORS

As required by paragraph 15.23 of the Main Market Lisng Requirements of Bursa Securies, the External Auditors have

reviewed this Statement on Risk Management and Internal Control for inclusion in the annual report of the Group for FYE2014.

Their review was performed in accordance with the Recommended Pracce Guide (“RPG”) 5 issued by the Malaysian Instute

of Accountants.

The External Auditors have opined to the Board that nothing has come to their aenon that causes them to believe that

this Statement intended to be included in the annual report is not prepared, in all material aspects, in accordance with the

disclosures required by paragraphs 41 and 42 of the Statement on Risk Management and Internal Control: Guidelines for

Directors of Listed Issuers to be set out, nor is factually inaccurate.

RPG 5 does not require the External Auditors to and they did not consider whether this Statement covers all risks and controls,

or to form an opinion on the eecveness of the Group’s risk management and internal control system.



26/32

Statement On Risk Management And Internal Control (Cont’d)

Statement On Directors’ Responsibilities

In Relation To The AuditedFinancial Statements

CONCLUSION

The Board has reviewed the adequacy and eecveness of the system of risk management and internal controls, and that

relevant acons have been or are being taken, as the case may be, to remedy the signicant weaknesses idened from the

review, which was largely based on the outcome of observaons raised by the Internal Auditors and External Auditors directly

to the Audit Commiee.

The Board is of the view that the risk management and internal control systems are sasfactory and report that there were

no signicant internal control deciencies or weaknesses that resulted in material losses or conngencies that would require

disclosure in the Group’s Annual Report for the nancial year under review.

This statement was approved at the meeng of the Board on 2 December 2014.

The Directors are responsible for the preparaon of nancial statements for each nancial year. They are responsible for

ensuring that these nancial statements give a true and fair view of the state of aairs of the Group and of the Company

and the results and cash ows of the Group and of the Company for the nancial year then ended. The nancial statements

are prepared on a going concern basis, in accordance with applicable approved accounng standards and comply with the

provisions of the Companies Act, 1965. It is the duty of the Directors to review the appropriateness of the basis before adopng

the nancial statements and present them before the Annual General Meeng together with their Report and the Auditors’

Report thereon.

The Directors are responsible for ensuring that proper accounng and other records are kept to suciently explain the

transacons recorded. In preparing the nancial statements, the Directors are required to exercise judgment to make certain

esmates that are reasonable, prudent and relevant to be incorporated in the nancial statements. The Directors are also

responsible for safeguarding the assets of the Group and hence for taking reasonable steps to prevent and detect fraud and

other irregularies.

This above statement is approved at the meeng of the Board on 2 December 2014.



27/32

1. Ulisaon of Proceeds from Issuance of Inial Public Oering (“IPO”)

The Company did not raise funds through any corporate proposal during the nancial year under review.

2. Share Buy-back

The Company did not enter into any share buy-back transacons during the nancial year under review.

3. Opons, Warrants or Converble Securies

The Company did not issue any opons, warrants or converble securies during the nancial year under review.

4. American Depository Receipt (ADR) or Global Depository Receipt (GDR) Programme

The Company did not sponsor any ADR or GDR programme during the nancial year under review.

5. Sancons and / or Penales Imposed

There were no public sancons and / or penales imposed on the Company and its subsidiaries, Directors or Management

by the relevant regulatory bodies during the nancial year under review.

6. Non-Audit Fees

The amount of non-audit fees incurred for the services rendered to the Group by the External Auditors for the nancial

year under review amounted to RM2,500.00.

7. Variaons in Results

There were no variaons of 10% or more between the audited results and unaudited results of the Group for the nancial

year. The Company and its subsidiaries did not issue any prot esmates, forecast or projecon for the nancial year

under review.

8. Prot Guarantee

No prot guarantee was provided by the Company or its subsidiaries during the nancial year under review.

9. Material Contracts

During the nancial year under review, there were no material contracts entered into by the Company and its subsidiaries

involving Directors’ and / or substanal Shareholders’ interests.

Additional Compliance Information



28/32

Directors’ Report

The directors have pleasure in subming their report together with the audited nancial statements of the Group and of theCompany for the nancial year ended 31 August 2014.

PRINCIPAL ACTIVITIES

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

principal acvies of the subsidiaries are disclosed in Note 5 to the nancial statements.

There have been no signicant changes in the nature of these principal acvies during the nancial year.

RESULTS

Group Company

RM RM

Prot for the nancial year 24,303,054 9,462,107

Aributable to :

Owners of the Company 20,247,048 9,462,107

Non-controlling interests 4,056,006 -

24,303,054 9,462,107

In the opinion of the directors, the results of the operaons of the Group and of the Company during the nancial year havenot been substanally aected by any item, transacon or event of a material and unusual nature.

DIVIDENDS

Dividends paid or declared by the Company since the end of the previous nancial year were as follows :

(a) A nal single er tax-exempt dividend of 13.75% equivalent to 2.75 sen per ordinary share amounng to RM 5,500,000

which was proposed in respect of nancial year ended 31 August 2013 and dealt with in the previous director’s report,

was approved by the shareholders at the Annual General Meeng held on 19 February 2014 and subsequently paid

on 17 March 2014. The payment was made to the shareholders whose name appeared in the Company’s Record of

Depositors on 21 February 2014.

(b) A rst interim single er tax-exempt dividend of 5.00% equivalent to 1.00 sen per ordinary share amounng to RM

2,000,000 in respect of the nancial year ended 31 August 2014 was declared on 28 April 2014 and subsequently paid

on 13 June 2014. The payment was made to the shareholders whose name appeared in the Company’s Record of

Depositors on 28 May 2014.

(c) A second interim single er tax-exempt dividend of 5.00% equivalent to 1.00 sen per ordinary share amounng to RM

2,000,000 in respect of the nancial year ended 31 August 2014 was declared on 24 July 2014 and subsequently paid on

12 September 2014. The payment was made to the shareholder’s whose name appeared in the Company’s Record of

Depositors on 2 September 2014.

The Board of Directors proposed a nal single er tax-exempt dividend of 15.50% equivalent to 3.10 sen per ordinary share

amounng to RM 6,200,000 in respect of the nancial year ended 31 August 2014. This dividend is subject to the shareholders’

approval at the forthcoming Annual General Meeng and has not been included as a liability in the nancial statements.Such dividend, if approved by the shareholders, will be accounted for in equity as an appropriaon of retained prots for the

nancial year ending 31 August 2015.



29/32

Directors’ Report (Cont’d)

RESERVES AND PROVISIONS

There were no material transfers to or from reserves or provisions during the nancial year save as disclosed in the nancial

statements.

ISSUES OF SHARES AND DEBENTURES

There were no issue of shares and debentures during the nancial year.

OPTIONS GRANTED OVER UNISSUED SHARES

No opons have been granted by the Company to any person to take up any unissued shares of the Company during the

nancial year.

DIRECTORS

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

Chua Fen Fa

Tee Hwee Ing (f)



Teo Seng Kuang

DIRECTORS’ INTERESTS

According to the register of directors’ shareholdings, the interests of directors holding oce at the end of the nancial year in

shares of the Company and its related corporaons are as follows :

Number of Ordinary Shares of RM 0.20 Each

Balance at Sold/ Balance at

01.09.2013 Bought Transferred 31.08.2014

Chua Fen Fa

- Direct 71,839,800 - (3,000,000) 68,839,800

- Indirect (1) 71,839,800 - (3,000,000) 68,839,800

Tee Hwee Ing (f)

- Direct 71,839,800 - (3,000,000) 68,839,800

- Indirect

(1)

71,839,800 - (3,000,000) 68,839,800Mohd Khasan Bin Ahmad 20,000 - - 20,000


- Direct 20,000 - - 20,000

- Indirect (1) 60,000 - (60,000) -

Teo Seng Kuang

- Direct 82,500 - - 82,500

- Indirect (2) 23,000 - - 23,000

Notes :

(1) Deemed interest by virtue of his/her spouse’s interests in the Company.

(2) Deemed interest by virtue of his nominee’s interest in the Company.

By virtue of their interests in the shares of the Company, Mr. Chua Fen Fa and Madam Tee Hwee Ing are also deemed to have

an interest in the shares of its subsidiaries to the extent that the Company has an interest.



30/32


DIRECTORS’ BENEFITS

Since the end of the previous nancial year, none of the directors has received or become entled to receive any benet (other

than benets included in the aggregate amount of emoluments received or due and receivable by the directors as disclosed in

Note 19 to the nancial statements) by reason of a contract made by the Company or a related corporaon with the director

or with a rm of which the director is a member, or with a company in which the director has a substanal nancial interest.

During and at the end of the nancial year, no arrangements subsisted to which the Company was a party, whereby the

directors of the Company might acquire benets by means of the acquision of shares in, or debentures of, the Company or

any other body corporate.

OTHER STATUTORY INFORMATION

(a) Before the statements of nancial posion and statements of prot or loss and other comprehensive income of the

Group and of the Company were made out, the directors took reasonable steps :

(i) to ascertain that proper acon had been taken in relaon to the wring o of bad debts and the making of

allowance for doubul debts and have sased themselves that there were no known bad debts to be wrien o

and that no allowance for doubul debts had been made ; and

(ii) to ensure that any current assets which were unlikely to realise their values as shown in the accounng records in

the ordinary course of business had been wrien down to an amount which they might be expected so to realise.

(b) At the date of this report, the directors are not aware of any circumstances :

(i) which would necessitate the wring o of bad debts or the seng up of allowance for doubul debts in respectof the nancial statements of the Group and of the Company ; or

(ii) which would render the values aributed to current assets in the nancial statements of the Group and of the

Company misleading ; or

(iii) which have arisen which render adherence to the exisng method of valuaon of assets or liabilies of the Group

and of the Company misleading or inappropriate ; or

(iv) not otherwise dealt with in this report or nancial statements of the Group and of the Company which would

render any amount stated in the nancial statements misleading.

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

(i) any charge on the assets of the Group and of the Company which has arisen since the end of the nancial year

which secures the liabilies of any other person ; or

(ii) any conngent liability in respect of the Group and of the Company which has arisen since the end of the nancial

year.

(d) In the opinion of the directors :

(i) no conngent or other liability has become enforceable, or is likely to become enforceable within the period

of twelve months aer the end of the nancial year which will or may aect the ability of the Group and of the

Company to meet their obligaons as and when they fall due ; and

(ii) no item, transacon or event of a material and unusual nature has arisen in the interval between the end of thenancial year and the date of this report which is likely to aect substanally the results of the operaons of the

Group and of the Company for the nancial year in which this report is made.



31/32

AUDITORS

The auditors, Messrs. Crowe Horwath, have expressed their willingness to connue in oce.

Signed on behalf of the Board in accordance with a resoluon of the directors :

CHUA FEN FATT

Director

TEE HWEE ING (f)Director

Muar, Johor Darul Takzim

Date : 2 December 2014




32/32

Documents

HOMERIZ-Cover to Page 30.pdf