delivering performance

Transcription

delivering
performance
Financial Statements 2014
Portfolio reporting & EKUITI NASIONAL BERHAD
portfolio
reporting
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2014
Ekuinas Direct (Tranche I) Fund
02
Ekuinas Direct (Tranche Ii) Fund
05
Ekuinas Outsourced (Tranche I) Fund
08
Ekuinas Outsourced (Tranche Ii) Fund
11
Notes To The Portfolio Reporting
14
EKUINAS DIRECT
(TRANCHE I) FUND
as at 31 December 2014
1
Fund Overview
Fund Name
Ekuinas Direct (Tranche I) Fund
Vintage Year
2010
Status
Fully deployed & 20% distributed
Capital Commitment
RM1.0 billion
Term
5 Years + 2 Years
Investment Period
3 to 5 Years
Legal Form & Structure
One fund manager and one investor
Fund: Ekuinas Direct (Tranche I) Fund
Fund Manager: Ekuiti Nasional Berhad
Fund’s Domicile : Malaysia
2
Geographical Focus
Malaysia
Investment Focus
Buy-Out and Growth Capital Fund
Industry Focus
-Education
-Oil & Gas
-Fast Moving Consumer Goods (FMCG)
-Retail & Leisure
-Healthcare
-Services
Ekuiti nasional berhad annual report 2014
EKUINAS DIRECT (TRANCHE I) FUND
2
Fund Net Assets Value (NAV) as at 31 December 2014
2013
RM million
Movement
RM million
2014
RM million
A.Capital Commitment
1,000.0
-
1,000.0
B.Capital Called
1,080.0
15.7
1,095.7
C.Capital Reinvested
166.0
2.0
168.0
1,246.0
17.7
1,263.7
40.0
-
40.0
1,286.0
17.7
1,303.7
43.1
17.2
60.3
558.8
(253.6)
305.2
Realised Gain from Divestment
68.6
259.1
327.7
Interest Expenses
(14.6)
(1.5)
(16.1)
D.Total Capital Contributed (B+C)
E.Debt Drawdown (Amortised Cost)
F.Total Capital Invested (D+E)
Plus increases/(decreases) to Net Assets Value:
Dividend Income
Net Unrealised Gain/(Loss) on Fair Value of Investments
Total Gross Portfolio Return
655.9
21.2
677.1
Organisational Expenses
(214.6)
22.3
(192.3)
Capital Distributions to Limited Partners (C+H)*
(463.3)
(411.2)
(874.5)
(22.0)
(367.7)
(389.7)
1,264.0
(350.0)
914.0
902.4
(130.3)
772.1
Net Decrease in Net Assets Value
G.Net Assets Value
Net Assets Value made up of:
Investments - at cost
Investments carried at Fair Value
558.8
(253.6)
305.2
1,461.2
(383.9)
1,077.3
36.4
(30.4)
6.0
Plus: Working Capital
(233.6)
64.3
(169.3)
Plus: Uncalled Capital
-
-
-
Equals Net Assets Value
1,264.0
(350.0)
914.0
Net Assets Value
1,264.0
(350.0)
914.0
297.3
413.2
710.5
1,561.3
63.2
1,624.5
Plus: Cash Balance
H.Capital Distributed
Total Net Assets Value plus Distributed Capital (G+H)
Refund of Capital
76.2
76.2
Gross IRR p.a.
25.5%
19.6%
Net IRR (before carried interest) p.a.
20.4%
15.3%
Carried Interest (RM million)
110.3
71.8
H/B Cash Distributions to Capital Called
0.3
0.6
G/B Net Assets Value to Capital Called
1.2
0.8
(G+H)/B Total Value to Capital Called
1.4
1.5
B/A Capital Called to Committed Capital
1.1
1.1
*
Includes deemed distribution for reinvested capital
3
EKUINAS DIRECT (TRANCHE I) FUND
3INVESTMENT PERFORMANCE
(a)Current Portfolio Summary as at 31 December 2014
Company
Alliance Cosmetics Group
APIIT Education Group
Cosmopoint Group
UNITAR International University
Date of Initial
Investment
Stake
%
Cost of
Investment
RM million
4 January 2010
20.0
39.9
18 February 2011
51.0
102.0
2 April 2012
90.0
246.0
21 May 2012
90.0
58.5
Burger King Malaysia
15 September 2011
74.1
68.2
San Francisco Coffee
12 September 2011
90.0
17.0
Revenue Valley Group
15 March 2012
85.8
64.6
Icon Offshore Berhad
19 November 2012
32.8
175.9
Fair Value
RM million
Gross Portfolio
Return
RM million
1,077.3
359.8
Gross IRR
19.6% p.a.
Net IRR
15.3% p.a.
772.1
Gross IRR is derived after interest expense. Net IRR is derived after management fees and other operating expenses.
(b)Realisation Summary as at 31 December 2014
Date of Disposal
Stake
%
Cost of
Investment
RM million
Total
Realisation
RM million
Tanjung Offshore Berhad*
14 November 2012
24.0
99.8
62.0
Konsortium Logistik Berhad
19 December 2012
61.6
241.0
347.4
25 June 2014
38.0
132.3
391.4
473.1
800.8
Company
Full realisation
Partial realisation
*
4
The divestment of Tanjung Offshore Berhad forms part of Ekuinas’ restructuring of its O&G portfolio as it reinvested the
proceeds into additional investment in Icon Offshore Berhad.
EKUINAS DIRECT
(TRANCHE II) FUND
1
Fund Overview
Fund Name
Ekuinas Direct (Tranche II) Fund
Vintage Year
2012
Status
Fully Committed
Capital Commitment
RM1.0 billion
Term
5 Years + 2 Years
Investment Period
3 to 5 Years
One fund manager and one investor
Fund: Ekuinas Direct (Tranche II) Fund
Fund Manager: Ekuiti Nasional Berhad
Geographical Focus
Malaysia
Investment Focus
Buy-Out and Growth Capital Fund
Industry Focus
-Education
-Oil & Gas
-Fast Moving Consumer Goods (FMCG)
-Retail & Leisure
-Healthcare
-Services
5
EKUINAS DIRECT (TRANCHE II) FUND
2
2013
RM million
B.Capital Called
Movement
RM million
2014
RM million
1,000.0
-
1,000.0
214.3
98.7
313.0
-
-
-
214.3
98.7
313.0
-
-
-
214.3
98.7
313.0
-
0.1
0.1
130.1
(59.2)
70.9
-
77.4
77.4
2.9
(2.9)
-
133.0
15.4
148.4
(45.3)
(18.1)
(63.4)
-
(97.8)
(97.8)
87.7
(100.5)
(12.8)
302.0
(1.8)
300.2
240.0
331.6
571.6
130.1
(59.2)
70.9
370.1
272.4
642.5
Plus increases/(decreases) to Net Assets Value:
Dividend Income
Realised Gain from Divestment
Interest Income
Capital Distributions to Limited Partners (C+H)*
G.Net Assets Value
1.5
0.4
1.9
(69.6)
(274.6)
(344.2)
-
-
-
302.0
(1.8)
300.2
Net Assets Value
302.0
(1.8)
300.2
-
97.8
97.8
302.0
96.0
398.0
Plus: Cash Balance
Gross IRR p.a.
68.9%
31.9%
50.4%
19.3%
21.9
21.1
-
0.3
1.4
1.0
1.4
1.3
0.2
0.3
*
6
Include deemed distribution for reinvested capital
EKUINAS DIRECT (TRANCHE II) FUND
(a)Current Portfolio Summary as at 31 December 2014
Company
Date of Initial
Investment Stake
%
Cost of
Investment
RM million
19 November 2012
9.5
51.1
Burger King Singapore
12 September 2012
100.0
42.1
Burger King Malaysia
27 November 2013
20.9
35.4
Primabaguz Sdn Bhd
27 November 2013
100.0
40.0
APIIT Sri Lanka
20 December 2013
90.0
20.3
San Francisco Coffee
23 May 2014
-
3.0
Revenue Valley Group
27 June 2014
-
8.0
24 July 2014
60.0
40.7
18 December 2014
95.5
331.0
Coolblog Sdn Bhd
Orkim Sdn Bhd
Total
Fair Value
RM million
Gross Portfolio
Return
RM million
642.5
71.0
Gross IRR
31.9% p.a.
Net IRR
19.3% p.a.
571.6
Gross IRR is derived after interest expense. Net IRR is derived after management fees and other operating expenses.
(b)Realisation Summary as at 31 December 2014
Company
Date of Disposal Stake
%
Cost of
Investment
RM million
Total
Realisation
RM million
76.6
154.0
Partial realisation
25 June 2014
7.9
7
EKUINAS OUTSOURCED
(TRANCHE I) FUND
1
Fund Overview
Fund Name
Ekuinas Outsourced (Tranche I) Fund
Vintage Year
2011
Status
Investing
Capital Commitment
RM400.0 million
Term
6 Years (+ 1 Year)
Investment Period
3 to 6 Years
One fund manager and multiple investors.
Outsourced to the following fund and fund managers:
1)Fund: Navis Malaysia Growth
Opportunities Fund I, L.P.
Fund Manager: Navis MGO I GP Ltd
Fund’s Domicile : Cayman Islands
2)Fund: CIMB National Equity Fund Ltd. P.
Fund Manager: CIMB General Partner Ltd
Fund’s Domicile : Labuan
3)Fund: TAP Fund L.P
Fund Manager: TAP Private Equity (Malaysia) Ltd
8
Geographical Focus
Malaysia
Investment Focus
Minority Growth Capital Fund
Industry Focus
General except for Ekuinas’ negative investment list
EKUINAS OUTSOURCED (TRANCHE I) FUND
2
2013
RM million
Movement
RM million
2014
RM million
400.0
-
400.0
B.Capital Called
209.9
74.4
284.3
-
-
-
209.9
74.4
284.3
-
-
-
209.9
74.4
284.3
-
-
-
14.6
42.2
56.8
(2.1)
0.3
(1.8)
-
-
-
12.5
42.5
55.0
(6.2)
(2.0)
(8.2)
-
-
-
6.3
40.5
46.8
216.2
114.9
331.1
201.6
72.7
274.3
14.6
42.2
56.8
216.2
114.9
331.1
Plus increases to Net Assets Value:
Dividend Income
Net Unrealised Gain on Fair Value of Investments
Realised Loss on Fair Value of Investments
Interest Expenses
Capital Distributions to Limited Partners (C+H)
Net Increase in Net Assets Value
G.Net Assets Value
Net Unrealised Gain on Fair Value of Investments
Plus: Cash Balance
-
-
-
-
-
-
-
-
-
216.2
114.9
331.1
Net Assets Value
216.2
114.9
331.1
-
-
-
216.2
114.9
331.1
Gross IRR p.a.
5.0%
10.6%
2.4%
8.8%
-
-
-
-
1.0
1.2
1.0
1.2
0.5
0.7
9
EKUINAS OUTSOURCED (TRANCHE I) FUND
Current Portfolio Summary as at 31 December 2014
Fund
Ekuinas
Commitment
RM million
Private
Capital
Commitment
RM million
Total Fund
Size
RM million
Ekuinas
Invested
Capital
RM million
Investment
by Others
RM million
Net Asset
Value
RM million
400.0
151.9
551.9
274.3
443.4
331.1
Gross IRR
10.6% p.a.
Net IRR
8.8% p.a.
Navis Malaysia Growth
Oppurtunities Fund I, L.P.
CIMB National Equity Fund
Ltd. P.
TAP Harimau Fund L.P
10
EKUINAS OUTSOURCED
(TRANCHE II) FUND
1
Fund Overview
Fund Name
Ekuinas Outsourced (Tranche II) Fund
Vintage Year
2013
Status
Investing
Capital Commitment
RM240.0 million
Term
7 Years (+ 1 Year)
Investment Period
3 to 7 Years
One fund manager and multiple investors.
Outsourced to the following fund and fund managers:
1)Fund: RMCP One Sdn Bhd
Fund Manager: RMCP Cayman Ltd
2)Fund: COPE Opportunities 3 Sdn Bhd
Fund Manager: CMS Opus Private Equity Sdn Bhd
3)Fund: Tael Tijari (OFM) L.P.
Fund Manager: TAEL Tijari Partners Ltd.
Fund’s Domicile : Cayman Islands
4)Fund: Tuas Capital Partners Malaysia Growth Fund I LP.
Fund Manager: Tuas Capital Partners MGF I General Partner Ltd.
Geographical Focus
Malaysia
Investment Focus
Minority Growth Capital Fund
Industry Focus
General except for Ekuinas’ negative investment list
11
EKUINAS OUTSOURCED (TRANCHE II) FUND
2
2013
RM million
Movement
RM million
2014
RM million
240.0
-
240.0
18.3
14.4
32.7
-
-
-
18.3
14.4
32.7
-
-
-
18.3
14.4
32.7
Dividend Income
-
-
-
Net Unrealised Loss on Fair Value of Investments
-
(15.5)
(15.5)
B.Capital Called
Plus decreases to Net Assets Value:
Realised Gain/(Loss) from Divestment
-
-
-
Interest Expenses
-
-
-
-
(15.5)
(15.5)
(1.2)
(1.2)
(2.4)
-
-
-
(1.2)
(16.7)
(17.9)
G.Net Assets Value
17.1
(2.3)
14.8
17.1
13.2
30.3
-
(15.5)
(15.5)
17.1
(2.3)
14.8
Capital Distributions to Limited Partners (C+H)
Net Unrealised Loss on Fair Value of Investments
Plus: Cash Balance
-
-
-
-
-
-
-
-
-
17.1
(2.3)
14.8
Net Assets Value
17.1
(2.3)
14.8
-
-
-
17.1
(2.3)
14.8
Gross IRR p.a.
N/M
N/M
12
N/M
N/M
-
-
-
-
0.9
0.5
0.9
0.5
0.1
0.1
EKUINAS OUTSOURCED (TRANCHE II) FUND
Portfolio Summary as at 31 December 2014
Fund
Ekuinas
Commitment
RM million
Private
Capital
Commitment
RM million
Total Fund
Size
RM million
Ekuinas
Invested
Capital
RM million
Investment
by Others
RM million
Net Asset
Value
RM million
240.0
135.1
375.1
30.3
33.2
14.8
Gross IRR
N/M
Net IRR
N/M
RMCP One Sdn Bhd
COPE Opportunities 3 Sdn Bhd
Tael Tijari (OFM) L.P.
Tuas Capital Partners Malaysia
Growth Fund I LP.
The financial performance for Ekuinas Outsourced (Tranche II) Fund is not presented as the fund is still in early stages of investments.
13
NOTES TO
THE PORTFOLIO REPORTING
1Notes to the Portfolio Reporting
The external auditor, PwC, was engaged by Ekuinas to perform certain procedures on the Portfolio Reporting on pages 1 to 12 for the
financial year ended 31 December 2014, and has checked the information on Funds’ Net Assets Value and Investment Performance as
at 31 December 2014 included therein to supporting source data, and re-performed computations, where applicable.
14
EKUITI (Incorporated
NASIONAL
BERHAD
in Malaysia)
Reports And Statutory Financial Statements
For The Financial Year Ended 31 December 2014
Directors’ Report
16
Statement By Directors
19
Statutory Declaration
19
Independent Auditors’ Report
20
Statement Of Comprehensive Income
22
Statement Of Financial Position
23
Statement Of Changes In Equity
24
Statement Of Cash Flows
25
Notes To The Financial Statements
26
15
directors' report
for the financial year ended 31 december 2014
The Directors have pleasure in submitting their report and the audited financial statements of the Company for the financial year ended
31 December 2014.
PRINCIPAL ACTIVITIES
The Company is principally engaged in providing investment management, financial, corporate and management advisory services to a
Government-linked private equity fund to promote equitable and sustainable Bumiputera economic participation via the creation of Malaysia’s
next generation of leading companies. There have been no significant changes in the nature of these activities during the financial year ended
31 December 2014.
FINANCIAL RESULTS
RM
Net profit for the financial year
14,451,442
DIVIDEND
No dividend has been paid, declared or proposed since the end of the previous financial year. The Directors do not recommend the payment
of any final dividend for the financial year ended 31 December 2014.
ISSUE OF SHARES
There were no changes in the authorised, issued and fully paid capital of the Company during the financial year.
RESERVES AND PROVISIONS
There were no material transfers to or from reserves or provisions during the financial year other than those disclosed in the financial statements
and notes to the financial statements.
DIRECTORS
The Directors who have held office since the date of last report are as follows:
Raja Tan Sri Dato’ Seri Arshad bin Raja Tun Uda
Datuk Noriyah binti Ahmad
Tan Sri Mohamed Jawhar bin Hassan
Tan Sri Mohamed Azman bin Yahya
Datuk Seri Dr Rahamat Bivi binti Yusoff
Dato’ Abdul Rahman bin Ahmad
In accordance with Article 65 of the Company’s Articles of Association, Tan Sri Mohamed Jawhar bin Hassan and Tan Sri Mohamed Azman bin
Yahya shall retire from the Board at the forthcoming Annual General Meeting and being eligible, offer themselves for re-election.
16
directors' report
DIRECTORS’ INTERESTS IN SHARES AND DEBENTURES
According to the Register of Directors’ Shareholdings maintained by the Company in accordance with Section 134 of the Companies Act,
1965, none of the Directors in office at the end of the financial year held any interest in shares, warrants, share options and debentures in the
Company or its related corporations during the financial year.
DIRECTORS’ BENEFITS
During and at the end of the financial year, no arrangements subsisted to which the Company is a party, being arrangements with the object or
objects of enabling the Directors of the Company to acquire benefits by means of the acquisition of shares in, or debentures of, the Company
or any other body corporate.
Since the date of last report, no Director has received or become entitled to receive a benefit (other than benefits included in the aggregate
amount of emoluments received or due and receivable by a Director as the fixed salary of a full-time employee of the Company as shown in
the financial statements) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which the
Director is a member, or with a company in which the Director has a substantial financial interest.
STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS
Before the financial statements of the Company were made out, the Directors took reasonable steps:
(a)
to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful debts
and satisfied themselves that there are no known bad debts that had been written off and that allowance need not be made for doubtful
debts; and
(b)
to ensure that any current assets, other than debts, which were unlikely to realise in the ordinary course of business, their values as shown
in the accounting records of the Company have been written down to an amount which they might be expected so to realise.
At the date of this report, the Directors are not aware of any circumstances:
(a)
which would render the amounts written off for bad debts or the amount of the allowance for doubtful debts in the financial statements
of the Company inadequate to any substantial extent; or
(b)
which would render the values attributed to current assets in the financial statements of the Company misleading; or
(c)
which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Company misleading or
inappropriate; or
(d)
not otherwise dealt with in this report or the financial statements, that would render any amount stated in the financial statements of the
Company misleading.
17
directors' report
STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS (continued)
No contingent or other liability has become enforceable or is likely to become enforceable within the period of twelve (12) months after the end
of the financial year which, in the opinion of the Directors, will or may substantially affect the ability of the Company to meet their obligations
when they fall due.
At the date of this report, there does not exist:
(a)
any charge on the assets of the Company which has arisen since the end of the financial year which secures the liability of any other
person; or
(b)
any contingent liability of the Company which has arisen since the end of the financial year.
At the date of this report, the Directors are not aware of any circumstances not otherwise dealt with in this report or the financial statements
which would render any amount stated in the financial statements misleading.
In the opinion of the Directors:
(a)
the results of the Company’s operations during the financial year were not substantially affected by any item, transaction or event of a
material and unusual nature; and
(b)
there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a
material and unusual nature likely to affect substantially the results of the operations of the Company for the financial year in which this
report is made.
HOLDING FOUNDATION
The Directors regard Yayasan Ekuiti Nasional, a foundation incorporated in Malaysia, as the Company’s holding foundation.
AUDITORS
The auditors, PricewaterhouseCoopers, have expressed their willingness to continue in office.
Signed on behalf of the Board of Directors in accordance with their resolution.
RAJA TAN SRI DATO’ SERI ARSHAD BIN RAJA TUN UDADATO’ ABDUL RAHMAN BIN AHMAD
DIRECTORDIRECTOR
Kuala Lumpur
20 March 2015
18
STATEMENT BY DIRECTORS
PURSUANT TO SECTION 169(15) OF THE COMPANIES ACT, 1965
We, Raja Tan Sri Dato’ Seri Arshad bin Raja Tun Uda and Dato’ Abdul Rahman bin Ahmad, being two of the Directors of Ekuiti Nasional Berhad,
state that, in the opinion of the Directors, the financial statements set out on pages 22 to 38 have been properly drawn up so as to give a true
and fair view of the state of affairs of the Company as at 31 December 2014 and of the results and cash flows of the Company for the financial
year ended on that date in accordance with the Malaysian Financial Reporting Standards, International Financial Reporting Standards and the
requirements of the Companies Act, 1965 in Malaysia.
RAJA TAN SRI DATO’ SERI ARSHAD BIN RAJA TUN UDADATO’ ABDUL RAHMAN BIN AHMAD
DIRECTORDIRECTOR
Kuala Lumpur
20 March 2015
STATUTORY DECLARATION
I, Mazhairul bin Jamaludin, being the Officer primarily responsible for the financial management of Ekuiti Nasional Berhad, do solemnly and
sincerely declare that the financial statements set out on pages 22 to 38 are, in my opinion, correct and I make this solemn declaration
conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.
MAZHAIRUL BIN JAMALUDIN
GROUP CHIEF FINANCIAL OFFICER
Subscribed and solemnly declared by the above named Mazhairul bin Jamaludin at Kuala Lumpur before me, on 20 March 2015.
COMMISSIONER FOR OATHS
19
INDEPENDENT AUDITORS’ REPORT
TO THE MEMBER OF EKUITI NASIONAL BERHAD
(Incorporated in Malaysia)
(Company No: 868265-U)
REPORT ON THE FINANCIAL STATEMENTS
We have audited the financial statements of Ekuiti Nasional Berhad on pages 22 to 38, which comprise the statement of financial position as
at 31 December 2014 of the Company, and the statement of comprehensive income, statement of changes in equity and statement of cash
flows of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory notes, as set
out on Notes 1 to 14.
Directors’ Responsibility for the Financial Statements
The Directors of the Company are responsible for the preparation of financial statements so as to give a true and fair view in accordance with
Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in
Malaysia. The Directors are also responsible for such internal control as the Directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with
approved standards on auditing in Malaysia. Those standards require that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures
selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to
fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation of financial statements that
give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies
used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial
statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the financial statements give a true and fair view of the financial position of the Company as of 31 December 2014 and of
its financial performance and cash flows for the year then ended in accordance with Malaysian Financial Reporting Standards, International
Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.
20
TO THE MEMBER OF EKUITI NASIONAL BERHAD
(Company No: 868265-U)
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
In accordance with the requirements of the Companies Act, 1965 in Malaysia, we also report that, in our opinion, the accounting and other
records and the registers required by the Act to be kept by the Company have been properly kept in accordance with the provisions of the Act.
OTHER MATTERS
This report is made solely to the member of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia
and for no other purpose. We do not assume responsibility to any other person for the content of this report.
PRICEWATERHOUSECOOPERSDATO’ MOHAMMAD FAIZ BIN MOHAMMAD AZMI
(No. AF: 1146)
(No. 2025/03/16 (J))
Chartered AccountantsChartered Accountant
Kuala Lumpur
20 March 2015
21
STATEMENT OF
COMPREHENSIVE INCOME
Note
2014
RM
2013
RM
Management fees
13.3
43,279,088
42,900,000
Treasury fees
13.3
8,907,247
4,478,416
1,842,341
1,068,319
68,963
2,460
683,012
-
54,780,651
48,449,195
(23,666,959)
(19,032,468)
(968,583)
(959,229)
Consultancy fees
(5,419,637)
(5,015,154)
Other expenses
(10,274,030)
(8,813,989)
INCOME
OTHER INCOME
Interest income
Gain on disposal of plant and equipment
Other income
TOTAL INCOME
EXPENSES
Employee benefit costs
5
Occupancy costs
Profit before taxation
6
14,451,442
14,628,355
Taxation
7
-
-
14,451,442
14,628,355
Total comprehensive income and net profit for the financial year
The significant accounting policies and other explanatory notes are set out on pages 26 to 38 of these financial statements.
22
STATEMENT OF
FINANCIAL POSITION
AS AT 31 DECEMBER 2014
Note
2014
RM
2013
RM
8
1,318,110
1,073,728
9
1,895,341
687,285
NON-CURRENT ASSET
Plant and equipment
CURRENT ASSETS
Other receivables, deposits and prepayments
Amount due from holding foundation
13.4
120
150
Amount due from related companies
13.4
2,778,689
1,435,269
5,772
5,772
57,202,950
42,819,679
61,882,872
44,948,155
13,376,897
10,686,777
37,537
-
13,414,434
10,686,777
48,468,438
34,261,378
49,786,548
35,335,106
Tax recoverable
Cash and cash equivalents
10
CURRENT LIABILITIES
Other payables and accruals
Amount due to a related company
11
13.4
NET CURRENT ASSETS
FINANCED BY:
Share capital
Retained earnings
12
9,900,002
9,900,002
39,886,546
25,435,104
49,786,548
35,335,106
23
STATEMENT OF
CHANGES IN EQUITY
Issued and fully paid
ordinary shares of RM1 each
Retained
earnings
RM
Total
RM
9,900,002
25,435,104
35,335,106
-
14,451,442
14,451,442
9,900,002
9,900,002
39,886,546
49,786,548
9,900,002
9,900,002
10,806,749
20,706,751
-
-
14,628,355
14,628,355
9,900,002
9,900,002
25,435,104
35,335,106
Number
of shares
Share
capital
RM
9,900,002
-
At 31 December 2014
At 1 January 2013
At 1 January 2014
Total comprehensive income for the financial year
Total comprehensive income for the financial year
At 31 December 2013
Distributable
24
STATEMENT OF
CASH FLOWS
Note
2014
RM
2013
RM
14,451,442
14,628,355
900,394
832,780
CASH FLOWS FROM OPERATING ACTIVITIES
Adjustments for:
Depreciation of plant and equipment
8
(68,963)
(2,460)
Interest income
(1,842,341)
(1,068,319)
Operating profit before working capital changes
13,440,532
14,390,356
(1,125,968)
(70,377)
30
12,501
Changes in working capital:
Other receivables, deposits and prepayments
Amount due to holding foundation
Amount due (from)/to related companies
(1,305,883)
4,865,661
Other payables and accruals
2,690,121
3,698,496
Cash generated from operations
13,698,832
22,896,637
-
475,911
1,760,251
1,037,552
15,459,083
24,410,100
(1,180,247)
(453,123)
104,435
4,699
Net cash flows used in investing activities
(1,075,812)
(448,424)
NET CHANGE IN CASH AND CASH EQUIVALENTS DURING THE FINANCIAL YEAR
14,383,271
23,961,676
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE FINANCIAL YEAR
42,819,679
18,858,003
57,202,950
42,819,679
Tax refund
Interest received
Net cash flows generated from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of plant and equipment
8
Proceeds from disposal of plant and equipment
CASH AND CASH EQUIVALENTS AT END OF THE FINANCIAL YEAR
10
25
NOTES TO THE
FINANCIAL STATEMENTS
The principal activities of the Company are to provide investment management, financial, corporate and management advisory services to a
Government-linked private equity fund to promote equitable and sustainable Bumiputera economic participation via the creation of Malaysia’s
next generation of leading companies. There have been no significant changes in the nature of these activities during the financial year.
The Company is a private limited company, incorporated and domiciled in Malaysia.
The address of the registered office of the Company is:
12th Floor, Bangunan Setia 1,
15 Lorong Dungun,
Bukit Damansara,
50490 Kuala Lumpur.
The principal place of business of the Company is:
Level 13, Surian Tower,
No 1, Jalan PJU 7/3,
Mutiara Damansara,
47810 Petaling Jaya,
Selangor Darul Ehsan.
The principal accounting policies applied in preparing the financial statements are set out below. These policies have been applied to
all years presented, unless otherwise stated.
1BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS
The financial statements of the Company have been prepared in accordance with the Malaysian Financial Reporting Standards (“MFRS”),
International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.
The financial statements have been prepared under the historical cost convention, unless otherwise stated in the notes to the financial
statements.
The preparation of financial statements in conformity with MFRS requires the use of certain critical accounting estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial
statements, and the reported amounts of revenues and expenses during the reported period. It also requires Directors to exercise their
judgement in the process of applying the Company’s accounting policies. Although these estimates and judgement are based on the
Directors’ best knowledge of current events and actions, actual results may differ. The areas involving a higher degree of judgement or
complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 3.
1.1
Standards, amendments to published standards and interpretations that are applicable and effective
The new accounting standards, amendments and improvements to published standards and interpretations that are effective for the
Company’s financial year beginning on or after 1 January 2014 are as follows:
•
•
•
•
•
26
Amendments to MFRS 132 ‘Offsetting Financial Assets and Financial Liabilities’
Amendments to MFRS 136 ‘Recoverable Amount Disclosures for Non-Financial Assets’
Amendments to MFRS 139 ‘Novation of Derivatives and Continuation of Hedge Accounting’
Amendments to MFRS 10, MFRS 12 and MFRS 127 ‘Investment entities’
IC Interpretation 21 ‘Levies’
Apart from the new presentation and disclosure requirements as disclosed in the financial statements, the adoption of the above
standards and amendments to published standards does not have any other material impact on the Company’s financial statements.
NOTES TO THE FINANCIAL STATEMENTS
1BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (continued)
1.2
Standards, amendments to published standards and interpretations to existing standards that are applicable to the
Company but not yet effective
•
MFRS 9 ‘Financial Instruments’ (effective from 1 January 2018) will replace MFRS 139 "Financial Instruments: Recognition and
Measurement". The complete version of MFRS 9 was issued in November 2014.
MFRS 9 retains but simplifies the mixed measurement model in MFRS 139 and establishes three primary measurement categories
for financial assets: amortised cost, fair value through profit or loss and fair value through other comprehensive income (“OCI”). The
basis of classification depends on the entity's business model and the contractual cash flow characteristics of the financial asset.
Investments in equity instruments are always measured at fair value through profit or loss with a irrevocable option at inception to
present changes in fair value in OCI (provided the instrument is not held for trading). A debt instrument is measured at amortised
cost only if the entity is holding it to collect contractual cash flows and the cash flows represent principal and interest.
For liabilities, the standard retains most of the MFRS 139 requirements. These include amortised cost accounting for most
financial liabilities, with bifurcation of embedded derivatives. The main change is that, in cases where the fair value option is taken
for financial liabilities, the part of a fair value change due to an entity’s own credit risk is recorded in other comprehensive income
rather than the income statement, unless this creates an accounting mismatch.
There is now a new expected credit losses model on impairment for all financial assets that replaces the incurred loss impairment
model used in MFRS 139. The expected credit losses model is forward-looking and eliminates the need for a trigger event to
have occurred before credit losses are recognised.
Unless otherwise disclosed, the above standards, amendments to published standards and interpretations to existing standards are not
anticipated to have any significant impact on the Company’s financial statements in the year of initial application.
2
SIGNIFICANT ACCOUNTING POLICIES
2.1
PLANT AND EQUIPMENT
Plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses. Cost includes
expenditure that is directly attributable to the acquisition of the asset and any other costs directly attributable to bringing the asset to
working condition for its intended use, and the costs of dismantling and removing the items and restoring the site on which they are
located. When significant parts of an item of plant and equipment have different useful lives, they are accounted for as separate items
(major components) of plant and equipment.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured
reliably. The carrying amount of the replaced part is derecognised to the income statement. All other repairs and maintenance costs are
charged to the income statement during the financial year in which they are incurred.
Plant and equipment are depreciated on the straight line basis to write off the cost of the assets, or their revalued amounts, to their
residual values over their estimated useful lives, summarised as follows:
Motor vehicles
Furniture and fittings
Office equipment
Renovation
Computer equipment
5 years
5 years
5 years
5 years
3 years
27
2
SIGNIFICANT ACCOUNTING POLICIES (continued)
2.1
PLANT AND EQUIPMENT (continued)
Depreciation methods, useful lives and residual values are reviewed and adjusted as appropriate at the end of the reporting year.
At the end of each reporting year, the Company assesses whether there is any indication of impairment. If such indications exist, an
analysis is performed to assess whether the carrying amount of the asset is fully recoverable. A write down is made if the carrying
amount exceeds the recoverable amount. See accounting policy Note 2.2 on impairment of non-financial assets.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount and are included in the income
statement from operations in the financial year the asset is de-recognised.
2.2IMPAIRMENT OF NON-FINANCIAL ASSETS
Non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. If any such indications exist, the asset’s recoverable amount is estimated. For the purpose of impairment
testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely
independent of the cash inflows of other assets or group of assets (“the cash generating units”). An impairment loss is recognised for
the amount by which the carrying amount of the asset exceeds its recoverable amount. The recoverable amount is the higher of an
asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels
for which there are separately identifiable cash flows (cash-generating units).
The impairment loss is charged to the income statement and any subsequent increase in recoverable amount is recognised in the
income statement. Any reversal is credited to the income statement to the extent of a previously recognised impairment loss.
2.3
FINANCIAL ASSETS
2.3.1Loans and receivables
2.3.1.1Classification
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in
an active market. They are included in current assets, except for maturities greater than twelve (12) months after the
end of the reporting year. These are classified as non-current assets. The Company’s loans and receivables comprise
of other receivables, deposits and prepayments, amount due from holding foundation, amount due from related
companies and cash and cash equivalents in the statement of financial position.
2.3.1.2Recognition and initial measurement
Financial assets are initially recognised at fair value plus transaction costs, for all financial assets not carried at fair value
through profit or loss.
2.3.1.3 Subsequent measurement
Loans and receivables are subsequently carried at amortised cost using the effective interest method.
28
2
2.3
FINANCIAL ASSETS (CONTINUED)
2.3.1Loans and receivables (continued)
2.3.1.4 Subsequent measurement - impairment of financial assets
The Company assesses at the end of the reporting year whether there is objective evidence that a financial asset or
group of financial assets is impaired. A financial asset or a group of financial assets is impaired and impairment losses
are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the
initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash
flows of the financial asset or group of financial assets that can be reliably estimated.
If in a subsequent year, the amount of the impairment loss decrease and the decrease can be related objectively to
an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed to the
extent that the carrying amount of the asset does not exceed its amortised cost at the reversal date. The amount of
reversal is recognised in the income statement.
As at the end of the reporting year, there is no recognition of impairment in the income statement.
2.3.1.5De-recognition
A financial asset is de-recognised when the rights to receive cash flows from loans and receivables have expired or
have been transferred and the Company has transferred substantially all risks and rewards of ownership.
2.4CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise of cash at bank and deposits which are subject to an insignificant risk of changes in value.
2.5PROVISIONS
Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, when it is
probable that an outflow of resources will be required to settle the obligations, and when a reliable estimate of the amount can be made.
2.6
FINANCIAL LIABILITIES
2.6.1Classification
Financial liabilities are classified according to the substance of the contractual arrangements entered into and the definitions of
a financial liability.
Financial liabilities, within the scope of MFRS 139 “Financial Instruments: Recognition and Measurement”, are recognised in the
statement of financial position when, and only when, the Company becomes party to the contractual provisions of the financial
instrument. Financial liabilities are classified as either financial liabilities at fair value through profit or loss or other financial
liabilities. The Company’s financial liabilities include other payables and accruals and amount due to a related company in the
statement of financial position.
2.6.2Recognition and measurement
Financial liabilities are recognised initially at fair value plus directly attributable transaction costs and are subsequently measured
at amortised cost using the effective interest method.
29
2
2.6
FINANCIAL LIABILITIES (Continued)
2.6.3De-recognition
2.7
A financial liability is derecognised when the obligation under the liability is extinguished when an existing financial liability is
replaced by another from the same party on substantially different terms, or the term of an existing liability are substantially
modified, such an exchange or modification is treated as a de-recognition of the original liability and the recognition of a new
liability, and the difference in the respective carrying amounts is recognised in the income statement.
SHARE CAPITAL
Ordinary shares are classified as equity. Distributions to holders of a financial instrument classified as an equity instrument are charged
directly to equity.
2.8REVENUE RECOGNITION
2.8.1Management fees and treasury fees
Management fees and treasury fees are recognised on an accrual basis when services are rendered.
2.8.2Interest income
Interest income is recognised on a time proportion basis, taking into account the principal outstanding and the effective rate over
the period to maturity, when it is determined that such income shall accrue to the Company.
2.9INCOME TAXES
Current tax expense is determined according to Malaysian tax laws and includes all taxes based upon the taxable profits.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the financial statements.
Tax rates enacted or substantively enacted by the reporting year end are used to determine deferred income tax.
Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the
temporary differences can be utilised.
2.10EMPLOYEE BENEFITS
2.10.1 Short term employee benefits
Wages, salaries, bonuses and non-monetary benefits are accrued in the period in which the associated services are rendered
by the employees of the Company.
2.10.2Defined contribution plan
The Company contributes to the Employees Provident Fund, the mutual defined contribution plan. Once the contributions have
been paid, the Company has no further payment obligations. The Company’s contributions to the Employees Provident Fund
are charged to the income statement in the financial period to which they relate.
30
3
SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES
The preparation of the Company’s financial statements requires management to make judgements, estimates and assumptions that
affect the reported amounts of assets and liabilities at the end of the reporting year. However, uncertainty about these assumptions and
estimates could result in outcomes that could require a material adjustment to the carrying amount of the assets or liabilities affected in
the future.
In the process of applying the Company’s accounting policies, the Directors and management have made the following judgements,
which have the most significant effect on the amounts recognised in the financial statements:
Deferred tax liability
As at the end of the reporting year, the Company has not recognised a deferred tax liability of RM 129,280 (2013: RM120,619) arising
from taxable temporary differences in relation to plant and equipment, as based on management’s estimates, the temporary differences
will reverse during the year of the tax exemption as disclosed in Note 7.
4
FINANCIAL RISK MANAGEMENT
4.1
Financial risk management objectives and policies
The Company’s overall financial risk management programme focuses on the unpredictability of financial markets and seeks to minimise
potential adverse effects on the financial performance of the Company. Financial risk management is carried out through risk reviews,
internal control systems and adherence to the Company’s financial risk management policies. The Board reviews these risks based on
the approved treasury policies and investment guidelines, which cover the management of these risks.
The Company is exposed to interest rate risk, credit risk and liquidity risk.
4.2Interest rate risk
The Company’s exposure to interest rate risk is mainly attributable to its interest bearing assets which are deposits with licensed
financial institutions (Note 10). The Company closely monitors the movement of interest rate to reduce the Company’s interest rate
exposure. At 31 December 2014, if interest rates on deposits with licensed financial institutions had been 100 basis points higher/lower
with all other variables held constant, post-tax profit for the year would have been RM566,000 (2013: RM422,500) higher/lower.
4.3Credit risk
The Company’s exposure to credit risk is limited as the Company is an investment management company. The Company’s exposure
to credit risk is on the carrying amount of cash and cash equivalents, other receivables, deposits and prepayments, amount due from
holding foundation and amount due from related companies which are repayable upon demand.
4.4Liquidity risk
The Company’s exposure to liquidity risk is on the undiscounted contractual payments of other payables and accruals and amount due
to a related company which are short-term and repayable within one year.
4.5Capital management
The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to
provide returns to the shareholder and to maintain an optimal capital structure to reduce the cost of capital. The Company is not subject
to any externally imposed capital requirements.
31
4
FINANCIAL RISK MANAGEMENT (continued)
4.6
Fair value estimation of the financial instruments
Financial instruments comprise of financial assets and financial liabilities. Fair value is the amount at which a financial asset could be
exchanged or a financial liability settled, between knowledgeable and willing parties in an arm’s length transaction. The information
presented herein represents the estimated fair values as at the end of the reporting year.
Where available, quoted and observable market prices are used as the measure of fair values. Where such quoted and observable market
prices are not available, fair values are estimated based on a range of methodologies and assumptions regarding risk characteristics
of various financial instruments, discount rates, estimates of future cash flows and other factors. Changes in the uncertainties and
assumptions could materially affect these estimates and the resulting fair value estimates.
The carrying amounts of current assets and current liabilities approximate their fair value due to the relatively short term nature of these
financial instruments.
4.7
Fair value hierarchy
Fair value hierarchy disclosure is not applicable to the Company as the Company’s assets and liabilities are short term financial
instruments for which the carrying amount approximates the fair values.
5EMPLOYEE BENEFIT COSTS
2013
RM
12,433,119
9,939,151
Defined contribution plan
2,115,232
1,770,171
Other employee benefits
9,118,608
7,323,146
23,666,959
19,032,468
Wages and salaries
Included in wages and salaries is Directors’ remuneration amounting to RM1,775,480 (2013: RM1,645,664).
32
2014
RM
6
PROFIT BEFORE TAXATION
2014
RM
2013
RM
41,450
34,650
5,850
5,450
Depreciation of plant and equipment
900,394
832,780
Rental of premises
708,858
714,520
68,963
2,460
2014
RM
2013
RM
-
-
Profit before taxation is arrived at after charging:
Auditors’ remuneration:
- Statutory audit
- Audit related fees
and after crediting:
7TAXATION
Current tax:
Malaysian taxation
Reconciliation between tax expense and the product of accounting profit multiplied by the Malaysian tax rate is as follows:
2014
RM
2013
RM
14,451,442
14,628,355
Tax calculated at rate of 25%
3,612,861
3,657,089
Income not subject to tax
(3,483,581)
(3,536,470)
(129,280)
(120,619)
-
-
Effect of temporary differences not recognised *
Taxation
On 26 November 2010, the Ministry of Finance granted income tax exemption for all statutory business income for a period of five (5)
years commencing from year of assessment 2009 until 2013 for the Company.
On 5 August 2013, the exemption was extended for an additional period of 5 years commencing from year of assessment 2014 until 2018.
*No deferred tax liability has been recognised in respect of the temporary differences arising from plant and equipment based on
management’s estimates that the temporary differences will reverse during the period of the tax exemption described above.
33
8
PLANT AND EQUIPMENT
Furniture
Motor
vehicles and fittings
RM
RM
Office
equipment Renovation
RM
RM
Computer
equipment
RM
Total
RM
Cost
At 1 January 2014
277,314
794,345
123,647
958,703
1,989,374
4,143,383
Additions
375,882
40,305
4,210
18,700
741,150
1,180,247
Disposal
(270,534)
-
-
-
(125,232)
(395,766)
At 31 December 2014
382,662
834,650
127,857
977,403
2,605,292
4,927,864
218,411
563,719
90,229
749,067
1,448,228
3,069,654
76,238
154,916
32,284
181,802
455,154
900,394
(235,102)
-
-
-
(125,192)
(360,294)
59,547
718,635
122,513
930,869
1,778,190
3,609,754
323,115
116,015
5,344
46,534
827,102
1,318,110
276,179
717,390
115,247
958,703
1,725,920
3,793,439
Additions
6,780
76,955
8,400
-
360,988
453,123
Disposal
(5,645)
-
-
-
(97,534)
(103,179)
277,314
794,345
123,647
958,703
1,989,374
4,143,383
166,401
415,535
65,303
559,296
1,131,280
2,337,815
55,415
148,184
24,925
189,771
414,485
832,780
(3,405)
-
-
-
(97,535)
(100,940)
218,411
563,719
90,228
749,067
1,448,230
3,069,655
58,903
230,626
33,419
209,636
541,144
1,073,728
Accumulated depreciation
At 1 January 2014
Charge for the financial year
Disposal
At 31 December 2014
Net book value
At 31 December 2014
Cost
At 1 January 2013
At 31 December 2013
Accumulated depreciation
At 1 January 2013
Charge for the financial year
Disposal
At 31 December 2013
Net book value
At 31 December 2013
34
9
OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS
2014
RM
2013
RM
1,267,386
196,942
Deposits
268,326
222,599
Prepayments
359,629
267,744
1,895,341
687,285
2014
RM
2013
RM
602,950
569,679
56,600,000
42,250,000
57,202,950
42,819,679
Other receivables
10CASH AND CASH EQUIVALENTS
Cash and bank balances
Deposits with licensed financial institutions
Bank balances are deposits held at call with licensed financial institutions.
The weighted average effective interest rate per annum of the deposits with licensed financial institutions as at 31 December 2014 is
3.57% (2013: 3.35%) with an average maturity period of 87 days (2013: 103 days).
11
OTHER PAYABLES AND ACCRUALS
2014
RM
Other payables
Accruals
12
2013
RM
512,240
504,039
12,864,657
10,182,738
13,376,897
10,686,777
2014
RM
2013
RM
100,000,000
100,000,000
9,900,002
9,900,002
SHARE CAPITAL
Authorised:
Ordinary shares of RM1 each
At 1 January/ 31 December
Issued and fully paid:
At 1 January/ 31 December
35
13
SIGNIFICANT RELATED PARTY DISCLOSURES
Parties are considered related if the party has the ability to control the other party or exercise significant influence over the other party
in making financial or operational decisions.
13.1The related parties of, and their relationships with the Company as at 31 December 2014, are as follows:
Related party
Relationship
Yayasan Ekuiti Nasional
Holding foundation which is formed by the Government of Malaysia
Ekuinas Capital Sdn Bhd
Related company
E-Cap (Internal) One Sdn Bhd
Related company
E-Cap (Internal) Two Sdn Bhd
Related company
E-Cap (Internal) Three Sdn Bhd
Related company
E-Cap (External) One Sdn Bhd
Related company
E-Cap (External) Two Sdn Bhd
Related company
Bendahara 1 Sdn Bhd
Related company
Awana Setia Sdn Bhd
Related company
Ilmu Education Group Sdn Bhd
Related company
Prinsip Lagenda Sdn Bhd
Related company
Integrated Food Group Sdn Bhd
Related company
Hallmark Odyssey Sdn Bhd
Related company
Tekun Prima Sdn Bhd
Related company
Revenue Valley Sdn Bhd
Related company
Lyndarahim Ventures Sdn Bhd
Related company
Related company
Related company
Cosmopoint Sdn Bhd
Related company
Unitar Capital Sdn Bhd
Related company
Skim Jejak Jaya Sdn Bhd
Related company
Tetap Kuasa Sdn Bhd
Related company
13.2 Key management personnel
Key management personnel are those persons having the authority and responsibility for planning, directing and controlling the activities
of the Company either directly or indirectly. The key management personnel of the Company include all the Directors of the Company
who make certain critical decisions in relation to the strategic direction of the Company.
Directors’ remuneration
36
2014
RM
2013
RM
1,775,480
1,645,664
13
SIGNIFICANT RELATED PARTY DISCLOSURES (continued)
13.3 Significant related party transactions
In addition to related party disclosures mentioned elsewhere in the financial statements, set out below are other significant related party
transactions.
2014
RM
2013
RM
15,704,088
20,000,000
E-Cap (External) One Sdn Bhd
2,000,000
2,000,000
E-Cap (Internal) Two Sdn Bhd
20,000,000
20,000,000
E-Cap (External) Two Sdn Bhd
1,200,000
900,000
E-Cap (Internal) Three Sdn Bhd
4,375,000
-
43,279,088
42,900,000
7,634,805
4,157,879
3,204
9,683
11,595
310,854
1,257,643
-
8,907,247
4,478,416
Management fees income
Treasury fees income
Bendahara Sdn Bhd
37
13
SIGNIFICANT RELATED PARTY DISCLOSURES (continued)
13.4 Significant related party balances
In addition to related party disclosures mentioned elsewhere in the financial statements, set out below are significant related party balances:
2014
RM
2013
RM
120
150
1,020,510
446,271
-
47,114
153,749
-
-
223,974
Amount due from holding foundation
Amount due from related companies
Bendahara 1 Sdn Bhd
Rancak Selera Sdn Bhd
-
218,985
23
9,672
Cosmo Restaurants Sdn Bhd
-
220,475
Revenue Valley Sdn Bhd
37,778
58,118
Lyndarahim Ventures Sdn Bhd
28,448
19,950
-
3,390
1,319
35,595
Cosmopoint Sdn Bhd
44,752
70,800
-
38,525
42,400
42,400
2,650
-
1,447,060
-
2,778,689
1,435,269
37,537
-
37,537
-
Unitar Capital Sdn Bhd
Tekun Prima Sdn Bhd
Skim Jejak Jaya Sdn Bhd
Tetap Kuasa Sdn Bhd
The above outstanding balances are unsecured, interest-free and repayable upon demand.
14AUTHORISATION FOR ISSUE OF FINANCIAL STATEMENTS
The financial statements have been authorised for issue in accordance with a resolution of the Board of Directors.
38
This page has been intentionally left blank.
www.ekuinas.com.my
Ekuiti Nasional Berhad 868265 U
Level 13 Surian Tower, No 1 Jalan PJU 7/3, Mutiara Damansara, 47810 Petaling Jaya, Selangor
Tel: +603 7710 7171 Fax: +603 7710 7173
delivering
performance
E-CAP (INTERNAL) ONE SDN BHD
E-CAP (INTERNAL) ONE SDN BHD
Directors' Report
02
Statement by Directors
05
05
Independent Auditors' Report
06
Statement of Comprehensive Income
08
Statement of Financial Position
09
Statement of Changes in Equity
10
Statement of Cash Flows
11
Notes to the Financial Statements
12
Directors' report
The Directors hereby submit their report and the audited financial statements of the Company for the financial year ended
31 December 2014.
The principal activities of the Company are to carry on the business of an investment holding company, to invest in private equity investments
and to acquire the shares of or invest in any company. There have been no significant changes in the nature of these activities during the financial year ended 31 December 2014.
FINANCIAL RESULTS
RM
29,992,544
Net loss for the financial year
DIVIDEND
ISSUE OF SHARES
During the financial year, the Company issued 88 ordinary shares at par value of RM1 each and 157,040 redeemable preference shares of
RM0.01 each at an issue price of RM100. The shares have been fully paid in cash.
A summary of the shares issued by the Company during the financial year from 1 January 2014 to 31 December 2014 is as follows:
Date of issue
Type
of share
Purpose
of issue
30 November 2014
Preference
31 December 2014
31 December 2014
Terms
of issue
Number
of shares
Par
value
RM
Working capital
100,000
0.01
99.99 Cash, at RM100
Ordinary
Working capital
88
1.00
- Cash, at par
Preference
Working capital
57,040
0.01
Premium
RM
The new shares issued during the financial year ranked pari passu in all respects with the existing shares of the Company.
There were no other changes in the authorised, issued and fully paid capital of the Company during the financial year.
REDEMPTION OF SHARES
Details of the decrease in issued and paid up share capital is as disclosed in Note 10 of the financial statements.
2
EKUITI NASIONAL BERHAD ANNUAL REPORT 2014
directors' report
DIRECTORS
In accordance with Article 66 of the Company’s Articles of Association, Dato’ Abdul Rahman bin Ahmad shall retire from the Board in the
forthcoming Annual General Meeting and being eligible, offers himself for re-election.
Since the date of last report, no Director has received or become entitled to receive a benefit by reason of a contract made by the Company
or a related corporation with the Director or with a firm of which the Director is a member, or with a company in which the Director has a
substantial financial interest.
(a)
to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of allowance for doubtful
debts and satisfied themselves that there are no known bad debts that had been written off and that allowance need not be made
for doubtful debts; and
(b)
to ensure that any current assets, other than debts, which were unlikely to realise in the ordinary course of business, their values as
shown in the accounting records of the Company have been written down to an amount which they might be expected so to realise.
(a)
(b)
(c)
inappropriate; or
(d)
Company misleading.
3
directors' report
STATUTORY INFORMATION ON THE FINANCIAL STATEMENTS (CONTINUED)
when they fall due.
(a)
person; or
(b)
(a)
the results of the Company’s operations for the financial year were not substantially affected by any item, transaction or event of a
material and unusual nature; and
(b)
report is made.
IMMEDIATE HOLDING COMPANY AND ULTIMATE HOLDING FOUNDATION
The Directors regard Ekuinas Capital Sdn Bhd, a company incorporated in Malaysia as the immediate holding company. The Directors regard
Yayasan Ekuiti Nasional, a foundation incorporated in Malaysia, as the Company’s ultimate holding foundation.
AUDITORS
RAJA TAN SRI DATO’ SERI ARSHAD BIN RAJA TUN UDA
DATO’ ABDUL RAHMAN BIN AHMAD
DIRECTORDIRECTOR
Kuala Lumpur
10 April 2015
4
We, Raja Tan Sri Dato’ Seri Arshad bin Raja Tun Uda and Dato’ Abdul Rahman bin Ahmad, being two of the Directors of E-Cap (Internal) One
Sdn Bhd, state that, in the opinion of the Directors, the financial statements set out on pages 8 to 30 have been properly drawn up so as to give
a true and fair view of the state of affairs of the Company as at 31 December 2014 and of the results and cash flows of the Company for the
financial year ended on that date in accordance with the Malaysian Financial Reporting Standards, International Financial Reporting Standards
and the requirements of the Companies Act, 1965 in Malaysia.
DIRECTOR
DIRECTOR
Kuala Lumpur
10 April 2015
I, Mazhairul bin Jamaludin, being the Officer primarily responsible for the financial management of E-Cap (Internal) One Sdn Bhd, do solemnly
and sincerely declare that the financial statements set out on pages 8 to 30 are, in my opinion, correct and I make this solemn declaration
conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960.
Subscribed and solemnly declared by the above named Mazhairul bin Jamaludin at Kuala Lumpur before me, on 10 April 2015.
5
TO THE MEMBER OF E-CAP (INTERNAL) ONE SDN BHD
(Company No: 894680-M)
We have audited the financial statements of E-Cap (Internal) One Sdn Bhd on pages 8 to 30, which comprise the statement of financial position
as at 31 December 2014 of the Company, the statement of comprehensive income, the statement of changes in equity and the statement of
cash flows of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory notes,
as set out on Notes 1 to 13.
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the
statements.
Opinion
6
TO THE MEMBER OF E-CAP (INTERNAL) ONE SDN BHD
OTHER MATTERS
PRICEWATERHOUSECOOPERS
(No. AF: 1146)
Chartered Accountants
DATO’ MOHAMMAD FAIZ BIN MOHAMMAD AZMI
(No. 2025/03/16 (J))
Chartered Accountant
Kuala Lumpur
10 April 2015
7
STATEMENT OF
Note
2014
RM
2013
RM
(483,937,504)
281,796,747
414,404,373
73,292,183
21,408
64,552
55,312,254
-
(14,199,469)
355,153,482
12.3
(15,704,088)
(20,000,000)
(88,987)
(66,929,414)
(Loss)/Profit before taxation
5
(29,992,544)
268,224,068
Taxation
6
-
-
(29,992,544)
268,224,068
INCOME
Net unrealised (loss)/gain on investments at fair value through profit or loss
Dividend income
12.3
Interest income
Other income
EXPENSES
Management fees
Other expenses
Total comprehensive (loss)/income and net (loss)/profit for the financial year
8
STATEMENT OF
Financial position
as at 31 DECEMBER 2014
Note
2014
RM
2013
RM
949,905,671
1,423,582,490
-
3,266,676
105,905
12,118,194
105,905
15,384,870
9
71,897,345
127,230,571
12.4
2,904,093
20,336,406
NON-CURRENT ASSET
Investments at fair value through profit or loss
7
CURRENT ASSETS
Amount due from subsidiaries
12.4
8
CURRENT LIABILITIES
Accruals
Amount due to immediate holding company
12.4
23
9,672
Amount due to subsidiaries
12.4
11,308,060
-
86,109,521
147,576,649
(86,003,616)
(132,191,779)
863,905,055
1,291,390,711
NET CURRENT LIABILITIES
FINANCED BY:
Share capital
10
39,069
78,731
Share premium
11
385,179,178
782,635,628
Capital redemption reserve
Retained earnings
78,664
37,344
478,605,144
508,639,008
863,905,055
1,291,390,711
9
STATEMENT OF
changes in equity
for the financial year ended 31 DECEMBER 2014
ordinary shares of
RM1 each
redeemable preference
shares of RM0.01 each
Non-distributable
Distributable
Retained
earnings
RM
Number
of shares
Share
capital
RM
Number
of shares
Share
capital
RM
Share
premium
RM
Capital
redemption
reserve
RM
459
459
7,827,139
78,272
782,635,628
37,344
10,11
88
88
157,040
1,570
15,702,430
-
-
15,704,088
Redemption of shares
during the
financial year
10,11
-
-
(4,132,002)
(41,320)
(413,158,880)
41,320
(41,320)
(413,200,200)
Total comprehensive
loss for the
financial year
-
-
-
-
-
-
(29,992,544)
(29,992,544)
At 31 December 2014
547
547
3,852,177
38,522
385,179,178
78,664
478,605,144
863,902,055
At 1 January 2013
399
399
11,193,845
111,938 1,119,272,562
-
Note
At 1 January 2014
Issuance of shares
during the
financial year
Total
RM
508,639,008 1,291,390,711
240,452,284 1,359,837,183
Issuance of shares
during the
financial year
10,11
60
60
367,727
3,677
36,769,023
-
-
36,772,760
during the
financial year
10,11
-
-
(3,734,433)
(37,343)
(373,405,957)
37,344
(37,344)
(373,443,300)
-
-
-
-
-
-
268,224,068
268,224,068
459
459
7,827,139
78,272
782,635,628
37,344
Total comprehensive
income for the
financial year
At 31 December 2013
508,639,008 1,291,390,711
10
STATEMENT OF
cash flows
Note
2014
RM
2013
RM
(29,992,544)
268,224,068
(414,404,373)
(73,292,183)
(21,408)
(64,552)
483,937,504
(281,796,747)
39,519,179
(86,929,414)
Accruals
(55,333,226)
66,865,155
Amount due (from)/to immediate holding company
(17,432,313)
25,236,740
Amount due to/(from) subsidiaries
14,574,736
(5,173,958)
(Loss)/profit before taxation
Adjustments for:
Dividend income
Interest income
Net unrealised loss/(gain) on investments at fair value through profit or loss
Operating profit/(loss) before working capital changes
(9,649)
(41,048)
Cash flows used in operating activities
(18,681,273)
(42,525)
Dividend received
414,404,373
73,292,183
21,408
64,552
395,744,508
73,314,210
-
289,756,051
(10,260,685)
(14,365,103)
(10,260,685)
275,390,948
88
60
15,704,000
36,772,700
Redemption of share capital
(413,200,200)
(373,443,300)
Net cash flows used in financing activities
(397,496,112)
(336,670,540)
(12,012,289)
12,034,618
12,118,194
83,576
105,905
12,118,194
Interest received
Net cash flows generated from operating activities
Redemption by subsidiaries
Additional capital call for investment
7.1
Net cash flows (used in)/generated from investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of ordinary shares
10
Proceeds from the issuance of redeemable preference shares
8
11
NOTES TO THE
FINANCIAL STATEMENTS
The principal activities of the Company are to carry on the business of an investment holding company, to invest in private equity investments and to acquire the shares of or invest in any company. There have been no significant changes in the nature of these activities
during the financial year.
15 Lorong Dungun,
Bukit Damansara,
50490 Kuala Lumpur.
Mutiara Damansara,
1
BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS
The financial statements have been prepared under the historical cost convention, as modified by the investments designated at fair
value through profit or loss.
statements, and the reported amounts of revenues and expenses during the reported year. It also requires Directors to exercise their
The Company recorded a net loss of RM29,992,544 for the financial year ended 31 December 2014 and as of that date, the Company
recorded net current liabilitites of RM86,003,616. The immediate holding company, Ekuinas Capital Sdn Bhd, has indicated its intention
to provide continuous financial support to the Company so as to enable the Company to meet its liability as and when they fall due and
to carry on its business without any significant curtailment of its operations. In view of the foregoing, the Directors consider that it is
appropriate to prepare the financial statements of the Company on a going concern basis.
12
1
BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (CONTINUED)
1.1
•
•
•
•
•
1.2
•
MFRS 9 retains but simplifies the mixed measurement model in MFRS 139 and establishes three primary measurement
categories for financial assets: amortised cost, fair value through profit or loss and fair value through other comprehensive
income (“OCI”). The basis of classification depends on the entity's business model and the contractual cash flow characteristics
of the financial asset. Investments in equity instruments are always measured at fair value through profit or loss with a irrevocable
option at inception to present changes in fair value in OCI (provided the instrument is not held for trading). A debt instrument is
measured at amortised cost only if the entity is holding it to collect contractual cash flows and the cash flows represent principal
and interest.
Unless otherwise disclosed, the above standards, amendments to published standards and interpretations to existing standards
are not anticipated to have any significant impact on the Company’s financial statements in the year of initial application.
13
2
2.1INVESTMENT ENTITY AND CONSOLIDATION
2.1.1Investment Entity
The Company has been deemed to meet the definition of an Investment Entity per MFRS 10 ‘Consolidated Financial Statements’
as the following conditions exist:
(a)
(b)
(c)
The Company obtained funds from its investor for the purpose of providing investment management services;
The Company commits to its investor that its business purpose is to invest funds solely for returns from capital
appreciation, investment income or both; and
The performance of investments made through its subsidiaries are measured and evaluated on a fair value basis.
The Company being an Investment Entity is exempted from preparing consolidated financial statements.
2.1.2Subsidiaries
The Company does not have any other subsidiaries other than those determined to be controlled subsidiary investments.
Controlled subsidiary investments are measured at fair value through profit or loss and not consolidated, in accordance with
MFRS 10. The fair value of controlled subsidiary investments is determined on a consistent basis to all other investments
measured at fair value through profit or loss, and as described in Note 4.7.
Controlled subsidiary investments include the special purpose entities (SPEs) over which the Company has the power to govern the
financial and operating policies generally accompanying a shareholding of an interest of more than one half of the voting rights or
otherwise has power to govern the financial and operating policies. Subsidiaries (SPEs) are incorporated for the purpose of holding
underlying investments (the ‘portfolio companies’) on behalf of the Company; as new SPEs are incorporated for each investment,
there are no business combinations. The SPEs have no operations other than their respective investment in portfolio companies
and providing a vehicle for the onward sale of a portfolio investment. The SPEs are also reflected at fair value, with the key fair value
driver being the investment in the underlying portfolio company investments that the SPEs hold on behalf of the Company. None
of the SPEs required consolidation as the SPEs are not deemed to be providing investment related services, as defined by MFRS
10.
Where the Company is deemed to control an underlying portfolio company, whereby the control be via voting rights or through
the ability to direct the relevant activities in return for access to a significant portion of the variable gains and losses derived from
those relevant activities, the underlying portfolio company and its results are also not consolidated and are instead reflected at
fair value through the profit or loss (through the reflection of the respective SPE that holds the underlying portfolio company value
in the Company’s financial statements).
Movements in the fair value of the Company’s portfolio companies may expose the Company to potential gains or losses in the
income statement.
2.1.3Associates
14
An associate is an entity, including an unincorporated entity such as partnership, over which the Company has significant
influence and that is neither a subsidiary nor an interest in a joint venture.
Investments that are held as part of the Company's investment portfolio are carried in the statement of financial position at fair
value through profit or loss even though the Company may have significant influence over those companies. This treatment
is permitted by MFRS 128, which allows investments that are held by Investment Entities to be recognised and measured
as at fair value through profit or loss in accordance with MFRS 13, with changes in fair value recognised in the statement of
comprehensive income in the period of the change.
2
SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
2.2
FINANCIAL ASSETS
2.2.1 Financial assets designated at fair value through profit or loss
Financial assets designated at fair value through profit or loss at inception are financial instruments that are not
classified as held for trading. The Company’s financial assets designated at fair value through profit or loss comprise
of investments at fair value through profit or loss in the statement of financial position.
2.2.1.2 Recognition and initial measurement
Financial assets designated at fair value through profit or loss are initially recognised at fair value. Transaction costs are
expensed as incurred in the income statement.
Subsequent to initial recognition, all financial assets designated at fair value through profit or loss are measured at fair
value. Gains and losses arising from changes in the fair value are presented in the income statement in the year in
which they arise.
A financial asset is de-recognised when the rights to receive cash flows from the investments have expired or have
been transferred and the Company has transferred substantially all risks and rewards of ownership.
2.2.2 Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in
an active market. They are included in current assets, except for maturities greater than twelve (12) months after the
end of the reporting year. These are classified as non-current assets. The Company’s loans and receivables comprise
of cash and cash equivalents in the statement of financial position.
15
2
2.2
2.2.2 Loans and receivables (continued)
2.2.2.4 Subsequent measurement – impairment of financial assets
2.3CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash at bank and deposits which are subject to an insignificant risk of changes in value.
2.4PROVISIONS
2.5
2.5.1Classification
Financial liabilities, within the scope of MFRS 139, are recognised in the statement of financial position when, and only when,
the Company becomes party to the contractual provisions of the financial instrument. Financial liabilities are classified as either
financial liabilities at fair value through profit or loss or other financial liabilities. The Company’s financial liabilities include accruals,
amount due to immediate holding company, amount due to a related company and amount due to subsidiaries in the statement
of financial position.
2.5.2 Recognition and measurement
Financial liabilities are recognised initially at fair value plus directly attributable transaction costs and are subsequently measured
at amortised cost using the effective interest method.
16
2
2.5
FINANCIAL LIABILITIES (continued)
2.5.3De-recognition
2.6
SHARE CAPITAL
Ordinary shares are classified as equity. Other shares are classified as equity and/or liability according to the economic substance of the
particular instrument.
Distributions to holders of a financial instrument classified as an equity instrument are charged directly to equity.
2.7
REVENUE RECOGNITION
2.7.1 Dividend income
Dividend income is recognised when the right to receive payment is established.
2.7.2Interest income
Interest income is recognised on a time proportion basis, taking into account the principal outstanding and the effective rate over
the period to maturity, when it is determined that such income shall accrue to the Company.
2.8CARRIED INTEREST
Carried interest represents the fees payable to the Fund Management Company and is computed and accrued at each financial year
end based on the valuation of the investments in the Fund’s portfolio of companies, after accounting for appropriate outflow payments/
inflow receipts in accordance with the terms stated in the Global Fund Management Agreement. Any increase or decrease in carried
interest is recognised in the income statement.
2.9INCOME TAXES
Tax rates enacted or substantively enacted by the reporting year are used to determine deferred income tax.
17
3
The preparation of the Company’s financial statements requires management to make judgements, estimates and assumptions that affect
the reported amounts of assets and liabilities at the end of the reporting year. However, uncertainty about these assumptions and estimates
could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in the future.
In the process of applying the Company’s accounting policies, the Directors and management have made the following judgements
(a)
Valuation of unquoted investments
The Company carries its investments at fair value, with changes in fair values being recognised in the income statement. The
Company estimates the fair values of its unquoted investments based on the net assets valuation method and enterprise
valuation method as recommended by the International Private Equity and Venture Capital Valuation Guidelines. Based on
management’s estimates and judgements, the Company applied a marketability and liquidity discount rate on the selected
comparable companies’ earning multiples in deriving the fair value of the unquoted investments. Where expectations differ from
original estimates, the difference will impact the fair value of the unquoted investments.
(b)Carried interest
Carried interest represents the amount payable to Ekuiti Nasional Berhad, the Fund Management Company, based on the
valuation of investments in the Fund’s portfolio of companies. Significant judgements are required in determining the extent of
the carried interest expense to be recognised which is dependent on the valuation of the Fund’s portfolio. Where expectations
differ from original estimates, the difference will impact the recognition of carried interest.
4
4.1
The Company is exposed to market price risks, credit risk and liquidity risk.
4.2Market price risks
The Company’s exposure to market price risk is limited to those unquoted investments in which its fair value is determined using
the enterprise valuation methods as recommended by the International Private Equity and Venture Capital Valuation Guidelines to
derive a fair value based on multiples of comparable listed companies. An unquoted investment is exposed to market price risk of the
comparable companies.
The impact of a higher/lower selected comparable companies’ discounted earnings multiples is disclosed in Note 4.8.
18
4
FINANCIAL RISK MANAGEMENT (CONTINUED)
4.3Interest rate risk
The Company's interest rate risk arises from cash and cash equivalents.
At 31 December 2014, if interest rates had been 100 basis points higher/lower with all other variables held constant, post-tax profit for
the financial year would have been RM nil (2013:RM 120,000) lower/higher.
4.4Credit risk
The Company’s exposure to credit risk is limited as the Company is an investment holding company. The Company’s exposure to credit
risk is on the carrying amount of cash and cash equivalents.
4.5Liquidity risk
The Company’s exposure to liquidity risk is limited as the Company is an investment holding company with the cash management
and treasury managed by Ekuiti Nasional Berhad (“Ekuinas”), a related company. Furthermore, the Company has the ability to obtain
funding through the immediate holding company to ensure settlement of all transaction costs and expenses. The Company’s exposure
to liquidity risk is on the undiscounted contractual payment of accruals, amount due to immediate holding company, amount due to a
related company and amount due to subsidiaries all of which are short term and repayable within one year.
The Company maintains a level of cash and cash equivalents deemed adequate by the management to ensure, as far as possible, that
it will have sufficient liquidity to meet its liabilities when they fall due.
4.7
Financial instruments comprise financial assets and financial liabilities. Fair value is the amount at which a financial asset could be
exchanged or a financial liability settled, between knowledgeable and willing parties in an orderly transaction between market participants
at the measurement date. The information presented herein represents the estimates of fair values as at the end of the reporting year.
Methodologies and assumptions had been used in deriving the fair values of the investments at fair value through profit or loss at the
end of the reporting year as disclosed in Note 3 to the financial statements.
19
4
4.8
The different levels have been defined as follows:
(i)
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date;
(ii)
Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly or indirectly; and
(iii)
Level 3 inputs are unobservable inputs that have been applied in the models to value the respective asset or liability.
The following table presents the Company’s financial instruments that are measured at fair value, other than the short term financial
instruments:
Level 1
RM
Level 2
RM
Level 3
RM
Total
RM
-
-
949,905,671
949,905,671
-
-
1,423,582,490
1,423,582,490
At 31 December 2014
Financial assets
At 31 December 2013
Financial assets
Investments classified within Level 3 have significant unobservable inputs, as they are traded infrequently. As observable prices are
not available for this investment, the fair value of the unquoted investment is based on valuation methods as recommended by the
International Private Equity and the Venture Capital Valuation Guidelines, namely net assets valuation method and enterprise valuation
method.
The main input into the net assets valuation method for these unquoted investments is the net assets value of the investment.
The main input into the enterprise valuation method for this unquoted investment include earnings before interest, taxes, depreciation
and amortisation (“EBITDA”), comparable companies’ earning multiples and marketability discount.
In assessing fair value, management of Ekuiti Nasional Berhad (fund management company) performs quarterly valuation assessments
of all portfolio companies and these will be tabled to the Board of Directors on a quarterly basis.
20
4
4.8
Fair value hierarchy (continued)
The following table presents the movement in Level 3 financial instruments for the financial year ended 31 December 2014:
Investments at fair value
through profit or loss
At 1 January
Additional capital call for investments
2014
RM
2013
RM
1,423,582,490
1,417,176,691
10,260,685
14,365,103
-
(289,756,051)
(483,937,504)
281,796,747
At 31 December
949,905,671
1,423,582,490
Significant unobservable inputs
The following table discloses the valuation techniques and significant unobservable inputs by the Company for assets recognised at fair
value and classified as Level 3 along with the range of values used for those significant unobservable inputs.
Asset
Fair value
at 31.12.2014
Valuation
technique
Reasonable
Range of
Significant
unobservable unobservable possible
shift
inputs
inputs
Change in
valuation
RM897,605,671
NAV
NAV
-
+/-5%
+/- RM44,880,000
RM52,300,000
Enterprise
valuation
Discounted
multiple
10x -20x
+/-5%
+/- RM2,615,000
Valuation process applied by the Company for Level 3 fair value
The Company has an established framework in respect to the measurement of fair values of financial instruments. This includes a team
that has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values, and reports directly to
senior management. The team regularly reviews significant unobservable inputs and valuation adjustments.
21
4
4.9
Financial instruments by category
Loans and
receivables
RM
Designated
at fair value
through
profit or loss
RM
Total
RM
-
949,905,671
949,905,671
105,905
-
105,905
Total
105,905
949,905,671
950,011,576
71,897,345
-
71,897,345
2,904,093
-
2,904,093
At 31 December 2014
Financial assets
Financial liabilities
Accruals
23
-
23
Amount due to subsidiaries
11,308,060
-
11,308,060
Total
86,109,521
-
86,109,521
At 31 December 2013
Financial assets
-
1,423,582,490
1,423,582,490
3,266,676
-
3,266,676
12,118,194
-
12,118,194
Total
15,384,870
1,423,582,490
1,438,967,360
127,230,571
-
127,230,571
20,336,406
-
20,336,406
9,672
-
9,672
147,576,649
-
147,576,649
Accruals
Total
22
5
(Loss)/PROFIT BEFORE TAXATION
2014
RM
2013
RM
24,850
21,850
2014
RM
2013
RM
-
-
(Loss)/Profit before taxation is arrived at after charging:
Auditors’ remuneration
6TAXATION
Current tax:
Malaysian taxation
Reconciliation between tax expense and the product of accounting (loss)/profit multiplied by the Malaysian tax rate is as follows:
2014
RM
2013
RM
(29,992,544)
268,224,068
Tax calculated at rate 25%
(7,498,136)
67,056,017
(117,434,509)
(88,788,371)
Expenses not deductible
124,932,645
21,732,354
-
-
Taxation
On 26 November 2010, the Ministry of Finance granted income tax exemption on the statutory business income for a period of five (5)
years commencing from year of assessment 2009 until 2014 for the Company.
On 5 August 2013, the exemption was extended for an additional period of 5 years commencing from year of assessment 2014 until
2018 for the company.
7INVESTMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS
2014
RM
2013
RM
Investment in subsidiaries (Note 7.1)
897,605,671
1,377,458,949
Investment in an associate (Note 7.2)
52,300,000
46,123,541
949,905,671
1,423,582,490
23
7INVESTMENTS AT FAIR VALUE THROUGH PROFIT OR LOSS (CONTINUED)
7.1Investment in subsidiaries
2014
RM
2013
RM
1,377,458,949
1,357,145,243
10,260,685
14,365,103
-
(289,756,051)
Net unrealised (loss)/gain on investments at fair value
(490,113,963)
295,704,654
At 31 December
897,605,671
1,377,458,949
Unquoted shares, at fair value:
At 1 January
The details of the investment in subsidiaries are as follows:
Company’s
effective interest
Name
Place of
incorporation
Principal activity
Relationship
2014
%
2013
%
Bendahara 1 Sdn Bhd*
Malaysia
Investment holding
Subsidiary
100.0
100.0
Integrated Food Group
Sdn Bhd**
Malaysia
Investment holding
Subsidiary
100.0
100.0
Simbol Minda Sdn Bhd***
Malaysia
Investment holding
Subsidiary
100.0
100.0
Hallmark Odyssey Sdn Bhd*
Malaysia
Investment holding
Subsidiary
80.0
80.0
Malaysia
Investment holding
Subsidiary
100.0
100.0
Malaysia
Investment holding
Subsidiary
100.0
100.0
Subsidiary of Simbol Minda
Sdn Bhd
Ilmu Education Group Sdn Bhd***
Subsidiaries of Integrated Food
Group Sdn Bhd
Prinsip Lagenda Sdn Bhd**
Awana Setia Sdn Bhd**
Malaysia
Investment holding
Subsidiary
100.0
100.0
Rancak Selera Sdn Bhd**
Malaysia
Investment holding
Subsidiary
100.0
-
CoolBlog Apps Sdn Bhd**
Malaysia
Investment holding
Subsidiary
60.0
-
Malaysia
Investment holding
Subsidiary
33.9
70.5
Subsidiary of Hallmark Odyssey
Sdn Bhd
Icon Offshore Berhad*@
* Audited by PricewaterhouseCoopers, Malaysia
** Audited by KPMG, Malaysia
*** Audited by Ernst & Young, Malaysia
@ Listed on the Bursa Malaysia Stock Exchange
24
7.2Investment in an associate
2014
RM
2013
RM
46,123,541
60,031,448
6,176,459
(13,907,907)
52,300,000
46,123,541
At 1 January
Net unrealised gain/(loss) on investment at fair value through profit or loss
At 31 December
The details of the investment in an associate are as follows:
Name
Place of
incorporation
Forma South East Asia
Holdings ****
Republic of
Mauritius
Company’s
effective interest
Principal activity
Relationship
2014
%
2013
%
Investment holding
Associate
25.0
25.0
**** Audited by another audit firm
8CASH AND CASH EQUIVALENTS
Cash at bank
Deposit with licensed financial institutions
2014
RM
2013
RM
105,905
118,194
-
12,000,000
105,905
12,118,194
Bank balances are deposits held at call with licensed financial institutions.
The weighted average effective interest rate per annum of the deposits with licensed financial institution as at 31 December 2014 is
3.00% (2013: 3.15%) with an average maturity period of 30 days (2013: Nil).
9ACCRUALS
2014
RM
2013
RM
Carried interest
71,847,495
127,159,752
Other accruals
49,850
70,819
71,897,345
127,230,571
Accruals are non-interest bearing.
25
10
SHARE CAPITAL
Authorised
RM
Issued
and fully paid
RM
100,000,000
459
-
88
100,000,000
547
90,000
78,272
-
1,570
At 1 January 2014
Issuance of shares during the financial year
At 31 December 2014
Redeemable preference shares of RM0.01 each
At 1 January 2014
Redemption of shares during the financial year
At 31 December 2014
Total issued and fully paid capital
-
(41,320)
90,000
38,522
100,090,000
39,069
100,000,000
399
-
60
100,000,000
459
90,000
111,938
At 1 January 2013
At 31 December 2013
At 1 January 2013
-
3,677
-
(37,343)
90,000
78,272
100,090,000
78,731
At 31 December 2013
The main features of the redeemable preference shares (“RPS”) are as follows:
•
The holders of the shares shall be entitled to any dividend declared.
•
The RPS shall rank pari passu among themselves and in priority of ordinary shares.
•
The holders of the RPS shall be entitled to receive all notices, accounts and report which holder of the ordinary shares are entitled
to.
•
The holders of the RPS shall only be entitled to vote at the meetings convened for the purpose of transacting to the following
items of the business:
(a)Variation, whether directly or indirectly of the rights attached to the RPS
(b)Winding up of the Company
(c)
Such other circumstances as may be expressly provided under law from time to time in respect of preference shares
26
10
SHARE CAPITAL (CONTINUED)
The main features of the redeemable preference shares (“RPS”) are as follows (continued):
•
Subject to the Companies Act, 1965, the Company shall have the right at any time, to redeem all or part of the RPS at a price
of RM100 per RPS (“Redemption Amount”).
•
The RPS are not convertible into ordinary shares or any other classes of shares in the Company.
The RPS are classified as equity as they are redeemable but only at the Company’s option, and any dividends are discretionary.
During the financial year, the Company issued 88 ordinary shares at par value of RM1 each and 157,040 redeemable preference shares
of RM0.01 each at an issue price of RM100. The shares have been fully paid in cash.
Date of issue
Type
of share
Purpose
of issue
30 November 2014
Preference
31 December 2014
Ordinary
31 December 2014
Preference
Terms
Premium of issue
RM
Number
of shares
Par
value
RM
Working capital
100,000
0.01
Working capital
88
1.00
- Cash, at par
Working capital
57,040
0.01
During the financial year, the Company redeemed 4,132,002 redeemable preference shares of RM0.01 each at an issue price of
RM100. The shares have been fully paid in cash.
A summary of the shares redeemed by the Company during the financial year ended 31 December 2014 is as follows:
Date of
redemption
Type
of share
Purpose
of redemption
Number
of shares
Par
value
RM
31 December 2014
Redeemable
preference
shares
Capital repayment
4,132,002
0.01
Terms
Premium of issue
RM
27
11
SHARE PREMIUM
2014
RM
2013
RM
782,635,628
1,119,272,562
15,702,430
36,769,023
(413,158,880)
(373,405,957)
At 31 December
385,179,178
782,635,628
At 1 January
12
12.1The related parties of, and their relationship with the Company, are as follows:
28
Related party
Relationship
Ultimate holding foundation which is formed by the Government of Malaysia
Immediate holding company
Ekuiti Nasional Berhad
Related company
Bendahara 1 Sdn Bhd
Subsidiary company
Simbol Minda Sdn Bhd
Subsidiary company
Subsidiary company
Subsidiary company
Forma South East Asia Holdings
Associate company
12
SIGNIFICANT RELATED PARTY DISCLOSURES (CONTINUED)
of the Company either directly or indirectly. The key management personnel of the Company includes all the Directors of the Company
who make certain critical decisions in relation to the strategic direction of the Company.
The Company has no key management personnel compensation during the financial year.
12.3 Significant related party transactions
In addition to related party disclosures mentioned elsewhere in the financial statements, set out below are other significant related party
transactions.
2014
RM
2013
RM
(15,704,088)
(20,000,000)
(3,204)
(9,682)
4,787,734
6,012,996
Management fees
Treasury fees
Dividend income
Forma South East Asia Holdings
Bendahara 1 Sdn Bhd
387,839,210
-
21,777,429
67,279,187
414,404,373
73,292,183
29
12
Included in the Company’s statement of financial position are the following significant related party balances:
2014
RM
2013
RM
(2,904,093)
(20,336,406)
Amount due (to)/from subsidiaries
Simbol Minda Sdn Bhd
(67)
1,512,433
(373,952)
1,752,817
(10,934,041)
1,426
(11,308,060)
3,266,676
(23)
(9,672)
The above outstanding balances are unsecured, interest-free, and repayable upon demand.
30
www.ekuinas.com.my
Tel: +603 7710 7171 Fax: +603 7710 7173
delivering
performance
E-CAP (INTERNAL) two SDN BHD
E-CAP (INTERNAL) TWO SDN BHD
Directors' Report
02
05
05
06
08
09
10
11
12
directors' report
The Directors hereby submit their report and the audited financial statements of the Company for the financial year ended
31 December 2014.
and to acquire the shares of or invest in any company. There have been no significant changes in the nature of these activities during the
financial year ended 31 December 2014.
FINANCIAL RESULTS
RM
2,030,231
DIVIDEND
No dividend has been paid, declared or proposed since the previous financial year. The Directors do not recommend the payment of any final
dividend for the financial year ended 31 December 2014.
ISSUE OF SHARES
During the financial year, the Company issued 88 ordinary shares at par value of RM1 each and 986,911 preference shares of RM0.01 each at
an issue price of RM100. The shares have been fully paid in cash.
Date of issue
Type
of share
Purpose
of issue
30 June 2014
Ordinary
30 June 2014
Preference
Terms
Premium of issue
RM
Number
of shares
Par
value
RM
Working capital
58
1.00
- Cash, at par
Working capital
345,035
0.01
31 December 2014
Ordinary
Working capital
30
1.00
- Cash, at par
31 December 2014
Preference
Working capital
641,876
0.01
The new shares issued during the financial year ranked pari passu in all respects with the existing shares of the Company.
REDEMPTION OF SHARES
Details of the decrease in issued and paid up share capital is as disclosed in Note 8 in the financial statement.
2
directors' report
DIRECTORS
Syed Yasir Arafat bin Syed Abd Kadir
In accordance with Article 66 of the Company’s Article of Association, there will be no retirement by rotation in the subsequent Annual General
Meeting since the number of directors being in office at the end of the financial year is only two.
Since the date of last report, no Director has received or become entitled to receive a benefit by reason of a contract made by the Company or
a related corporation with the Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial
financial interest.
(a)
debts; and
(b)
(a)
(b)
(c)
inappropriate; or
(d)
Company misleading.
3
directors' report
when they fall due.
(a)
person; or
(b)
(a)
the results of the Company’s operations for the financial year were not substantially affected by any item, transaction or event of a material
and unusual nature; and
(b)
report is made.
The Directors regard Ekuinas Capital Sdn Bhd, a company incorporated in Malaysia as the immediate holding company. The Directors regard
AUDITORS
SYED YASIR ARAFAT BIN SYED ABD KADIR
DIRECTORDIRECTOR
Kuala Lumpur
10 April 2015
4
We, Dato’ Abdul Rahman bin Ahmad and Syed Yasir Arafat bin Syed Abd Kadir, being two of the Directors of E-Cap (Internal) Two Sdn Bhd,
DIRECTORDIRECTOR
Kuala Lumpur
10 April 2015
I, Mazhairul bin Jamaludin, being the Officer primarily responsible for the financial management of E-Cap (Internal) Two Sdn Bhd, do solemnly
Subscribed and solemnly declared by the above named Mazhairul bin Jamaludin at Kuala Lumpur before me, on 10 April 2015.
5
TO THE MEMBER OF E-CAP (INTERNAL) TWO SDN BHD
(Company No: 1009148-X)
We have audited the financial statements of E-Cap (Internal) Two Sdn Bhd on pages 8 to 30, which comprise the statement of financial position
as at 31 December 2014 of the Company, the statement of comprehensive income, the statement of changes in equity and the statement of
cash flows of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory notes,
as set out on Notes 1 to 11.
statements.
Opinion
6
TO THE MEMBER OF E-CAP (INTERNAL) TWO SDN BHD
(Company No: 1009148-X)
OTHER MATTERS
(No. AF: 1146)
(No. 2025/03/16 (J))
Kuala Lumpur
10 April 2015
7
STATEMENT OF
Note
2014
RM
2013
RM
INCOME
7
(78,327,995)
112,253,644
Dividend income
10.3
95,509,755
-
Interest income
10.3
2,409,954
4,853,460
802,329
-
20,394,043
117,107,104
(20,000,000)
(20,000,000)
(2,409,954)
(4,853,460)
Other income
EXPENSES
Management fees
10.3
Interest expense
(14,320)
(18,448,413)
5
(2,030,231)
73,805,231
Taxation
6
-
-
(2,030,231)
73,805,231
Other expenses
Total comprehensive (loss)/income and net (loss)/profit for the financial year
8
STATEMENT OF
FINANCIAL POSITION
AS AT 31 DECEMBER 2014
Note
2014
RM
2013
RM
327,150,845
323,902,438
-
47,154,490
327,150,845
371,056,928
-
1,250,064
NON-CURRENT ASSETS
Advance to an associate
7
10.4
CURRENT ASSETS
Amount due from immediate holding company
10.4
Amount due from a related company
10.4
2,783,057
400,000
10.4
331,024,289
-
333,807,346
1,650,064
CURRENT LIABILITIES
21,149,649
21,949,571
10.4
325,871,399
-
10.4
4,749,933
-
Amount due to an associate
10.4
8,352,494
1,573,532
360,123,535
23,523,103
(26,316,189)
(21,873,039)
300,834,656
349,183,889
Accruals
NET CURRENT LIABILITIES
FINANCED BY:
Share capital
8
21,817
21,646
Share premium
9
215,084,791
214,249,474
9,786
-
85,718,262
87,758,279
300,834,656
302,029,399
-
47,154,490
300,834,656
349,183,889
Capital redemption reserve
Retained earnings
NON-CURRENT LIABILITY
Advance from immediate holding company
10.4
9
STATEMENT OF
CHANGES IN EQUITY
ordinary shares
of RM1 each
Note
At 1 January 2014
Non-distributable Distributable
Number
of shares
Share
capital
RM
Number
of shares
Share
capital
RM
Share
premium
RM
Capital
redemption
reserve
RM
Retained
earnings
RM
Total
RM
219
219
2,142,709
21,427
214,249,474
-
87,758,279
302,029,399
Issuance of shares
during the
financial year
8,9
88
88
986,911
9,869
98,681,231
-
-
98,691,188
Redemption of
shares during the
financial year
8,9
-
-
(978,557)
(9,786)
(97,845,914)
9,786
(9,786)
(97,855,700)
Total comprehensive
loss for the
financial year
-
-
-
-
-
-
(2,030,231)
(2,030,231)
At 31 December 2014
307
307
2,151,063
21,510
215,084,791
9,786
85,718,262
300,834,656
68
68
900,064
9,001
89,997,400
-
13,953,048
103,959,517
151
151
1,242,645
12,426
124,252,074
-
-
124,264,651
-
-
-
-
-
-
73,805,231
73,805,231
219
219
2,142,709
21,427
214,249,474
-
87,758,279
302,029,399
At 1 January 2013
Issuance of shares
during the
financial year
Total comprehensive
income for the
financial year
At 31 December 2013
8,9
10
STATEMENT OF
CASH FLOWS
Note
2014
RM
2013
RM
(2,030,231)
73,805,231
Net unrealised loss/(gain) on investments at fair value through profit or loss
78,327,995
(112,253,644)
Operating profit/(loss) before working capital changes
76,297,764
(38,448,413)
(799,922)
18,368,437
327,121,463
(1,250,064)
Adjustments for:
Accruals
Amount due from/(to) immediate holding company
Amount due from/(to) a related company
Net cash flows generated from/(used in) operating activities
2,366,943
(5,400,000)
(331,024,296)
-
6,778,962
1,573,872
80,740,914
(25,156,168)
Acquisition of investments
7
(6)
(86,116,473)
Additional investments
7
(81,576,396)
(12,992,010)
(81,576,402)
(99,108,483)
Proceeds from issuance of ordinary shares
8
88
151
Proceeds from issuance of redeemable preference shares
9
98,691,100
124,254,500
Redemption of redeemable preference shares
(97,855,700)
-
(47,154,490)
12,200,000
Advance to an associate company
47,154,490
(12,200,000)
835,488
124,264,651
-
-
-
-
-
-
Net cash flows generated from financing activities
11
Notes to the
financial statement
The principal activities of the Company are to carry on the business of an investment holding company, to invest in private equity
investments and to acquire the shares of or invest in any company. There have been no significant changes in the nature of these
activities during the financial year.
15 Lorong Dungun, Bukit Damansara,
50490 Kuala Lumpur.
Mutiara Damansara,
1
judgement in the process of applying the the Company’s accounting policies. Although these estimates and judgement are based on
the Directors’ best knowledge of current events and actions, actual results may differ. The areas involving a higher degree of judgement
or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in Note 3.
The Company recorded a net loss of RM2,030,231 for the financial year ended 31 December 2014 and as of that date, the Company
recorded net current liabilities of RM26,316,189. The immediate holding company, Ekuinas Capital Sdn Bhd, has indicated its intention
to provide continuous financial support to the Company so as to enable the Company to meet its liability as and when they fall due and
12
1
1.1
•
•
•
•
•
1.2
•
and interest.
Unless otherwise disclosed, the above standards, amendments to published standards and interpretations to existing standards
are not anticipated to have any significant impact on the Company’s financial statements in the year of initial application.
13
2
2.1.1Investment Entity
(a)
(b)
(c)
2.1.2Subsidiaries
measured at fair value through profit or loss, and as described in Note 4.6.
Controlled subsidiary investments include the special purpose entities (SPEs) over which the Company has the power to govern the
financial and operating policies generally accompanying a shareholding of an interest of more than one half of the voting rights or
otherwise has power to govern the financial and operating policies. Subsidiaries (SPEs) are incorporated for the purpose of holding
underlying investments (the ‘portfolio companies’) on behalf of the Company; as new SPEs are incorporated for each investment,
there are no business combinations. The SPEs have no operations other than their respective investment in portfolio companies
and providing a vehicle for the onward sale of a portfolio investment. The SPEs are also reflected at fair value, with the key fair value
driver being the investment in the underlying portfolio company investments that the SPEs hold on behalf of the Company. None
of the SPEs required consolidation as the SPEs are not deemed to be providing investment related services, as defined by MFRS
10.
Where the Company is deemed to control an underlying portfolio company, whereby the control be via voting rights or through
the ability to direct the relevant activities in return for access to a significant portion of the variable gains and losses derived from
those relevant activities, the underlying portfolio company and its results are also not consolidated and are instead reflected at
fair value through the profit or loss (through the reflection of the respective SPE that holds the underlying portfolio company value
in the Company’s financial statements).
Movements in the fair value of the Company’s portfolio companies may expose the Company to potential gains or losses in the
income statement.
2.1.3Associates
14
An associate is an entity, including an unincorporated entity such as partnership, over which the Company has significant
influence and that is neither a subsidiary nor an interest in a joint venture.
Investments that are held as part of the Company's investment portfolio are carried in the balance sheet at fair value even
though the Company may have significant influence over those companies. This treatment is permitted by MFRS 128, which
allows investments that are held by Investment Entities to be recognised and measured as at fair value through profit or loss and
accounted for in accordance with MFRS 13, with changes in fair value recognised in the statement of comprehensive income in
the period of the change.
2
2.2
OTHER INVESTMENTS
Other investments are designated at fair value through profit or loss. Changes in the fair value of other investments are recognised in
the income statement in the year which the changes arise.
On disposal of such investments, the difference between the net disposal proceeds and its carrying amount is included in the income
statement.
2.3
FINANCIAL ASSETS
2.3.1.2
Recognition and initial measurement
2.3.1.3
Subsequent measurement
value. Gains and losses arising from changes in the fair value are presented in the income statement in the year in
which they arise.
2.3.2Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an
active market. They are included in current assets, except for maturities greater than twelve (12) months after the end
of the reporting year. These are classified as non-current assets. The Company’s loans and receivables comprise of
amount due from immediate holding company, amount due from a related company and amount due from subsidiaries
in the statement of financial position.
15
2
2.3
2.3.2Loans and receivables (continued)
2.3.2.2
Recognition and initial measurement
2.3.2.3
Subsequent measurement
2.3.2.4
Subsequent measurement – impairment of financial assets
2.4PROVISIONS
2.5
2.5.1Classification
Financial liabilities, within the scope of MFRS 139, are recognised in the statement of financial position when, and only when,
the Company becomes party to the contractual provisions of the financial instrument. Financial liabilities are classified as either
financial liabilities at fair value through profit or loss or other financial liabilities. The Company’s financial liabilities comprise of
amount due to immediate holding company, amount due to an associate, amount due to a related company and accruals in the
statement of financial position.
16
2
2.5
FINANCIAL LIABILITIES (CONTINUED)
Accruals are recognised initially at fair value plus directly attributable transaction costs and are subsequently measured at
amortised cost using the effective interest method.
2.5.3De-recognition
2.6
SHARE CAPITAL
2.7INCOME TAXES
2.8CARRIED INTEREST
17
3
The preparation of the Company’s financial statements requires the management to make judgements, estimates and assumptions that affect
(a)
Company estimates the fair values of its unquoted investments based on net asset valuation, net realisable value and enterprise
valuation methods as at 31 December 2014 as recommended by the International Private Equity and Venture Capital Valuation
Guidelines. Based on management’s estimates and judgements, the Company applied a marketability and liquidity discount
rate on the selected comparable companies’ earnings multiple in deriving the fair value of the unquoted investment. Where
expectations differ from original estimates, the difference will impact the fair value of the unquoted investment.
(b)Carried interest
Carried interest represents the amount payable to Ekuiti Nasional Berhad, the Fund Management Company, based on the
valuation of investments in the Fund’s portfolio of companies. Significant judgements are required in determining the extent of
the carried interest expense to be recognised which is dependent on the valuation of the Fund’s portfolio. Where expectations
differ from original estimates, the difference will impact the recognition of carried interest.
4
4.1
The Company is exposed to market price risk, credit risk and liquidity risk.
4.2Market price risk
The Company’s exposure to market price risk is limited to those unquoted investments in which its fair value is determined using
the enterprise valuation and net assets valuation methods as recommended by the International Private Equity and Venture Capital
Valuation Guidelines to derive a fair value based on multiples of comparable listed companies. An unquoted investment is exposed to
market price risk of the comparable companies.
4.3Credit risk
18
The Company’s exposure to credit risk is limited as the Company is an investment holding company. The Company’s exposure to
credit risk is on the carrying amount of amount due from immediate holding company, amount due from a subsidiary company, amount
due from an associate company and amount due from a related company. All these balances are repayable upon demand, except for
advance to an associate in 2013.
4
4.4Liquidity risk
and treasury managed by Ekuiti Nasional Berhad (“Ekuinas”), a related company. Furthermore, the Company has the ability to obtain
funding through the immediate holding company to ensure settlement of all transaction costs and expenses. The Company’s exposure
to liquidity risk is on the undiscounted contractual payment of amount due to immediate holding company, amount due to a related
company, amount due to an associate company and accruals.
The Company maintains a level of cash and cash equivalents deemed adequate by the management to ensure, as far as possible, that
it will have sufficient liquidity to meet its liabilities when they fall due.
The table below summarises the maturity profile of the Company’s financial liabilities as at the end of the reporting year based on
undiscounted contractual payments.
Less
than
1 year
RM
1–3
years
RM
21,149,649
-
325,871,399
-
4,749,993
-
8,352,494
At 31 December 2014
Accruals
360,123,535
-
21,949,571
-
At 31 December 2013
Accruals
-
47,154,490
1,573,532
-
23,523,103
47,154,490
19
4
4.6
Financial instruments comprise of financial assets and financial liabilities. Fair value is the amount at which a financial asset could
be exchanged or a financial liability settled, between knowledgeable and willing parties in an orderly transaction between market
participants at the measurement date. The information presented herein represents the estimates of fair values as at the end of the
reporting year.
Methodologies and assumptions had been used in deriving the fair values of the investments at the end of the reporting year as
disclosed in Note 3 to the financial statements.
The fair value of the non-current balance ie. advance to an associate is nil (2013: RM47,154,490). The fair value is estimated using the
prevailing market rates on the reporting date.
4.7
(i)
measurement date;
(ii)
(iii)
instruments.
Level 1
RM
Level 2
RM
Level 3
RM
Total
RM
-
-
327,150,845
327,150,845
-
-
323,902,438
323,902,438
At 31 December 2014
Financial assets
At 31 December 2013
Financial assets
20
4
4.7
Investments classified within Level 3 have significant unobservable inputs, as they are traded infrequently. As observable prices are
not available for this investment, the fair value of the unquoted investment is based on valuation methods as recommended by the
International Private Equity and the Venture Capital Valuation Guidelines, namely net assets valuation method, enterprise valuation
method and net realisable value.
The main input into the net assets valuation method for these unquoted investments is the net assets value of the investment.
The main input into the enterprise valuation method for these unquoted investments include earnings before interest, taxes, depreciation
and amortisation (“EBITDA”), comparable companies’ earnings multiple and marketability discount.
The main input for net realisable value for the unquoted investment is the amount realisable for the investment.
In assessing fair value, management of Ekuiti Nasional Berhad (fund management company) performs quarterly valuation assessments
of all portfolio companies and these will be tabled to the Board of Directors on a quarterly basis.
2014
RM
2013
RM
323,902,438
112,540,311
6
86,116,473
81,576,396
12,992,010
(78,327,995)
112,253,644
At 31 December
327,150,845
323,902,438
At 1 January
Acquisition of investment
21
4
4.7
The following table discloses the valuation techniques and significant unobservable inputs by the Company for assets recognised at fair
Asset
Fair Value at
31.12.2014
Valuation
technique
Significant
unobservable
inputs
Reasonable
possible shift
Change in
valuation
Investment in subsidiaries
RM52,858,647
NAV
NAV
+/-5%
RM2,642,932
Investment in an associate
RM96,734,115
NAV
NAV
+/-5%
RM4,836,705
Other investments
RM70,848,733
Net realisable
value
Net realisable
value
+/-5%
RM3,542,437
RM41,850,881
NAV
NAV
+/-5%
RM2,092,544
RM64,858,469
Enterprise
valuation
Discounted
multiple
+/-5%
RM3,242,923
22
4
4.8
Loans and
receivables
RM
Designated
at fair value
through
profit or loss
RM
Total
RM
-
327,150,845
327,150,845
2,783,057
-
2,783,057
331,024,289
-
331,024,289
Total
333,807,346
327,150,845
660,958,191
21,149,649
-
21,149,649
At 31 December 2014
Financial assets
Accruals
325,871,399
-
325,871,399
4,749,993
-
4,749,993
8,352,494
-
8,352,494
360,123,535
-
360,123,535
-
323,902,438
323,902,438
1,250,064
-
1,250,064
Total
At 31 December 2013
Financial assets
Amount due from immediate holding company
400,000
-
400,000
47,154,490
-
47,154,490
Total
48,804,554
323,902,438
372,706,992
21,949,571
-
21,949,571
Accruals
1,573,532
-
1,573,532
47,154,490
-
47,154,490
Total
70,677,593
-
70,677,593
23
5
(LOSS)/PROFIT BEFORE TAXATION
2014
RM
2013
RM
7,400
3,650
2014
RM
2013
RM
-
-
(Loss)/Profit before taxation is arrived at after charging:
6TAXATION
Current tax:
Malaysian taxation
Reconciliation between tax expense and the product of accounting (loss)/profit multiplied by the Malaysian tax rate is as follows:
2014
RM
2013
RM
(2,030,231)
73,805,231
(507,558)
18,451,308
(24,680,510)
(29,276,776)
Expenses not deductible
25,188,068
10,825,468
-
-
(Loss)/Profit before taxation
Taxation
On 5 August 2013, the Ministry of Finance granted income tax exemption on the statutory business income for a period of five (5) years
commencing from year of assessment 2012 until 2016 for the Company.
2014
RM
2013
RM
Investment in subsidiaries (Note 7.1)
52,858,647
36,634,596
Investment in an associate (Note 7.2)
96,734,115
199,534,466
177,558,083
87,733,376
327,150,845
323,902,438
Other investments (Note 7.3)
24
7.1Investment in subsidiaries
2014
RM
2013
RM
36,634,596
-
6
37,090,718
3,410,642
-
Unrealised gain/(loss) on investments at fair value through profit or loss
12,813,403
(456,122)
At 31 December
52,858,647
36,634,596
At 1 January
The details of the investment in subsidiaries are as follows:
Company’s
effective interest
2014
%
2013
%
Subsidiary
100
100
Name
Country of
incorporation
Principal activity
Relationship
Tekun Prima Sdn Bhd
Malaysia
Investment holding
Tetap Kuasa Sdn Bhd
Malaysia
Investment holding
Subsidiary
100
-
Nexus Leap Sdn Bhd
Malaysia
Investment holding
Subsidiary
100
-
Premier Agenda Sdn Bhd
Malaysia
Investment holding
Subsidiary
100
-
Manufacturer of premium halal meat
Subsidiary
100
100
Shipping operations, ship brokering
and shipping management of Clean
Petroleum Product (CPP)
Subsidiary
91
-
Subsidiary of Tekun Prima Sdn Bhd
PrimaBaguz Sdn Bhd
Malaysia
Subsidiary of Tetap Kuasa Sdn Bhd
Orkim Sdn Bhd
Malaysia
The significant investment activities during the financial year ended 31 December 2014 were as follows:
(a)On 8 May 2014, the Company had acquired 100% of the issued and paid up ordinary share capital totalling 2 ordinary shares
of RM1 each of Tetap Kuasa Sdn Bhd (“Tetap Kuasa”), a company incorporated in Malaysia which is an investment holding
company, for a total cash consideration of RM2.
(b)On 28 October 2014, the Company had acquired 100% of the issued and paid up ordinary share capital totalling 2 ordinary
shares of RM1 each of Premier Agenda Sdn Bhd (“Premier Agenda”), a company incorporated in Malaysia which is an investment
holding company, for a total cash consideration of RM2.
(c)On 12 December 2014, the Company had acquired 100% of the issued and paid up ordinary share capital totalling 2 ordinary
shares of RM1 each of Nexus Leap Sdn Bhd (“Nexus Leap”), a company incorporated in Malaysia which is an investment
holding company, for a total cash consideration of RM2.
(d)On 18 December 2014, Tetap Kuasa had acquired 91% equity interest in Orkim Sdn Bhd, a company incorporated in Malaysia,
for a total cash consideration of RM331,021,261.
25
7.2Investment in an associate
2014
RM
2013
RM
199,534,466
99,260,034
-
402,000
(102,800,351)
99,872,432
96,734,115
199,534,466
At 1 January
Unrealised (loss)/gain on investments at fair value through profit or loss
At 31 December
The details of the investment in an associate are as follows:
Company’s
effective interest
7.3
Name
Country of
incorporation
Principal activity
Relationship
Malaysia
Investment holding
Associate
2014
%
2013
%
8.4
20.0
Other investments
2014
RM
2013
RM
At 1 January
87,733,376
13,280,277
78,165,754
12,590,010
-
49,025,755
11,658,953
12,837,334
177,558,083
87,733,376
Net unrealised gain on fair value of investments at fair value through profit or loss
Other investments relate to the Company’s interest in the Redeemable Preference Shares (“RPS”) of Rancak Selera Sdn Bhd (“Rancak
Selera”), Integrated Food Group Sdn Bhd (“IFG”), Prinsip Lagenda (“Prinsip”) and Ilmu Education Group Sdn Bhd (“Ilmu”) During
the financial year ended 31 December 2014, the Company made additional capital investments of RM25,611,620, RM49,286,800,
RM3,000,000 and RM267,334 in the RPS B of Rancak Selera, IFG, Prinsip and Ilmu respectively.
26
8
SHARE CAPITAL
Authorised
RM
Issued
and fully paid
RM
100,000,000
219
-
88
100,000,000
307
At 1 January 2014
At 31 December 2014
At 1 January 2014
90,000
21,427
-
9,869
-
(9,786)
90,000
21,510
100,090,000
21,817
At 31 December 2014
At 1 January 2013
100,000,000
68
-
151
100,000,000
219
At 31 December 2013
At 1 January 2013
90,000
9,001
-
12,426
90,000
21,427
100,090,000
21,646
At 31 December 2013
A summary of the shares issued by the Company for the financial year ended 31 December 2014 are as follows:
Date of issue
Type
of share
Purpose
of issue
30 June 2014
Ordinary
30 June 2014
Preference
Terms
Premium of issue
RM
Number
of shares
Par
value
RM
Working capital
58
1.00
- Cash, at par
Working capital
345,035
0.01
31 December 2014
Ordinary
Working capital
30
1.00
- Cash, at par
31 December 2014
Preference
Working capital
641,876
0.01
During the financial year, the Company redeemed 978,557 redeemable preference shares of RM0.01 each at an issue price of RM100.
The shares have been fully paid in cash.
27
8
A summary of the shares redeemed by the Company during the financial year ended 31 December 2014 is as follows:
Date of redemption
Type of share
31 December 2014
Redeemable
preference
shares
Purpose of
redemption
Number of
shares
Par value
Premium
Term of issue
Capital
repayment
978,557
0.01
99.99
Cash at RM100
•
•
•
The holders of the RPS shall be entitled to receive all notices, accounts and report which holder of the ordinary shares are entitled to.
•
(a)Variation, whether directly or indirectly, of the rights attached to the RPS.
(b)Winding-up of the Company.
(c)
Such other circumstances as may be expressly provided under the law from time to time in respect of preference shares.
•
•
9
SHARE PREMIUM
2014
RM
2013
RM
214,249,474
89,997,400
98,681,231
124,252,074
(97,845,914)
-
At 31 December
215,084,791
214,249,474
At 1 January
28
10
10.1The related parties of, and their relationships with the Company, are as follows:
Related party
Relationship
Tekun Prima Sdn Bhd
Subsidiary company
Tetap Kuasa Sdn Bhd
Subsidiary company
Associate company
Related company
Related company
Related company
Prinsip Lagenda Sdn Bhd
Related company
Related company
of the Company either directly or indirectly.
The key management personnel of the Company includes all the Directors of the Company who make certain critical decisions in
relation to the strategic direction of the Company.
10.3 Significant related party transaction
In addition to related party disclosures mentioned elsewhere in the financial statements, set out below is other significant related party
transaction.
2014
RM
2013
RM
95,509,755
-
2,409,954
-
(20,000,000)
(20,000,000)
Dividend income
Interest income
Management fees expenses
29
10
Included in the Company’s statement of financial position are the following significant related party balances:
2014
RM
2013
RM
-
47,154,490
(325,871,399)
1,250,064
2,783,057
400,000
331,024,293
-
Premier Agenda Sdn Bhd
(2)
-
Nexus Leap Sdn Bhd
(2)
-
331,024,289
-
(4,749,993)
-
(8,352,494)
(1,573,532)
-
(47,154,490)
Amount due (to)/from immediate holding company
Amount due from subsidiary companies
Tetap Kuasa Sdn Bhd
Amount due to an associate company
The above outstanding balances are unsecured, interest-free and repayable upon demand, except for advance to Hallmark Odyssey
Sdn Bhd and advance from Ekuinas Capital Sdn Bhd, which are interest-free for a period of 3 years. The amount has been fully paid
in 2014.
30
www.ekuinas.com.my
Tel: +603 7710 7171 Fax: +603 7710 7173
delivering
performance
E-CAP (EXTERNAL) ONE SDN BHD
E-CAP (ExTERNAL) ONE SDN BHD
Directors' Report
02
05
05
06
08
09
10
11
12
Directors' report
The Directors have pleasure in submitting their report and the audited financial statements of the Company for the financial year ended
31 December 2014.
financial year ending 31 December 2014.
FINANCIAL RESULTS
RM
40,452,369
Net profit for the financial year
DIVIDEND
ISSUE OF SHARES
Date of issue
Type
of share
Purpose
of issue
Number
of shares
Par
value
RM
Premium
RM
Terms
of issue
30 June 2014
Ordinary
Working capital
46
1.00
- Cash, at par
30 June 2014
Preference
Working capital
407,460
0.01
31 December 2014
Ordinary
Working capital
10
1.00
- Cash, at par
31 December 2014
Preference
Working capital
335,918
0.01
2
ekuiti nasional berhad annual report 2014
directors' report
DIRECTORS
The Directors who have held office since the date of the last report are as follows:
Mazhairul bin Jamaludin
In accordance with Article 66 of the Company’s Articles of Association, Mazhairul bin Jamaludin shall retire from the Board in the forthcoming
Annual General Meeting and being eligible, offers himself for re-election.
Since the date of last report, no Director has received or become entitled to receive a benefit by reason of a contract made by the Company or
a related corporation with the Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial
financial interest.
(a)
debts; and
(b)
(a)
(b)
(c)
inappropriate; or
(d)
Company misleading.
3
directors' report
when they fall due.
(a)
person; or
(b)
(a)
(b)
report is made.
The Directors regard Ekuinas Capital Sdn Bhd, a company incorporated in Malaysia, as the immediate holding company. The Directors regard
AUDITORS
DIRECTORDIRECTOR
Kuala Lumpur
20 March 2015
4
We, Raja Tan Sri Dato’ Seri Arshad bin Raja Tun Uda and Mazhairul bin Jamaludin, being two of the Directors of E-Cap (External) One Sdn Bhd,
DIRECTORDIRECTOR
Kuala Lumpur
20 March 2015
I, Mazhairul bin Jamaludin, the Officer primarily responsible for the financial management of E-Cap (External) One Sdn Bhd, do solemnly
5
TO THE MEMBER OF E-CAP (external) one SDN BHD
(Company No: 894679-t)
We have audited the financial statements of E-Cap (External) One Sdn Bhd on pages 8 to 24, which comprise the statement of financial position
as at 31 December 2014 of the Company and the statement of comprehensive income, changes in equity and cash flows of the Company
for the financial year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on Notes 1 to 12.
the Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965
in Malaysia. The Directors are also responsible for such internal control as the Directors determine is necessary to enable the preparation of
selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud
or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation of financial statements that give a true
and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial statements.
Opinion
In our opinion, the financial statements give a true and fair view of the financial position of the Company as of 31 December 2014 and of its
financial performance and cash flows for the year then ended in accordance with the Malaysian Financial Reporting Standards, International
6
TO THE MEMBER OF E-CAP (external) One SDN BHD
(Company No: 894679-T)
OTHER MATTERS
(No. AF: 1146)
(No. 2025/03/16 (J))
Kuala Lumpur
20 March 2015
7
STATEMENT OF
Note
2014
RM
2013
RM
42,474,400
30,826,668
42,474,400
30,826,668
(2,000,000)
(2,000,000)
(22,031)
(57,394)
INCOME
Unrealised gain on investment at fair value through profit or loss
7
EXPENSES
Management fees
10.3
Other expenses
5
40,452,369
28,769,274
Taxation
6
-
-
40,452,369
28,769,274
Total comprehensive income and net profit for the financial year
8
STATEMENT OF
Financial Position
As at 31 DECEMBER 2014
Note
2014
RM
2013
RM
331,025,396
216,229,521
Accruals
18,850
13,200
NET CURRENT LIABILITY
18,850
13,200
331,006,546
216,216,321
NON-CURRENT ASSET
7
CURRENT LIABILITY
FINANCED BY:
Share capital
8
3,028,764
3,021,275
Share premium
9
281,212,376
206,882,009
46,765,406
6,313,037
331,006,546
216,216,321
Retained earnings
9
STATEMENT OF
changes in equity
ordinary shares of
RM1 each
Nondistributable
Distributable
Number
of shares
Share
capital
RM
Number
of shares
Share
capital
RM
Share
premium
RM
Retained
earnings
RM
Total
RM
3,000,584
3,000,584
2,069,027
20,691
206,882,009
6,313,037
216,216,321
56
56
743,378
7,433
74,330,367
-
74,337,856
-
-
-
-
-
40,452,369
40,452,369
At 31 December 2014
3,000,640
3,000,640
2,812,405
28,124
281,212,376
46,765,406
331,006,546
At 1 January 2013
3,000,281
3,000,281
908,761
9,088
90,867,012
(22,456,237)
71,420,144
303
303
1,160,266
11,603
116,014,997
-
116,026,903
-
-
-
-
-
28,769,274
28,769,274
3,000,584
3,000,584
2,069,027
20,691
206,882,009
6,313,037
216,216,321
Note
At 1 January 2014
Issuance of shares during the
financial year
8, 9
Total comprehensive income for
the financial year
financial year
8, 9
Total comprehensive income for the
financial year
At 31 December 2013
10
STATEMENT OF
CASH FLOWS
Note
2014
RM
2013
RM
40,452,369
28,769,274
(42,474,400)
(30,826,668)
(2,022,031)
(2,057,394)
5,650
(1,200)
(2,016,381)
(2,058,594)
Adjustment for:
Unrealised gain on investments at fair value through profit or loss
7
Operating loss before working capital changes
Accruals
Net cash flows used in operating activities
7
-
(922,192)
7
(72,321,475)
(113,046,117)
(72,321,475)
(113,968,309)
56
303
74,337,800
116,026,600
74,337,856
116,026,903
-
-
-
-
-
-
8
8, 9
11
Notes to the
financial statement
15 Lorong Dungun,
Bukit Damansara,
50490 Kuala Lumpur.
Mutiara Damansara,
1
The Company recorded net current liabilities of RM18,850 (2013: RM13,200) for the financial year ended 31 December 2014. The
immediate holding company, Ekuinas Capital Sdn Bhd, has indicated its intention to provide continuous financial support to the
Company so as to enable the Company to meet its liability as and when they fall due and to carry on its business without any significant
curtailment of its operations. In view of the foregoing, the Directors consider that it is appropriate to prepare the financial statements of
the Company on a going concern basis.
12
1
1.1
Standards, amendments to published standards and interpretations that are applicable and effective:
•
•
•
•
•
1.2
Company but not yet effective:
•
and interest.
There is now a new expected credit losses model on impairment for all financial assets that replaces the incurred loss impairment model
used in MFRS 139. The expected credit losses model is forward-looking and eliminates the need for a trigger event to have occurred
before credit losses are recognised.
13
2
2.1.1Investment entity
(a)
(b)
(c)
2.1.2Subsidiaries
measured at fair value through profit or loss, and as described in note 4.5.
Movements in the fair value of the Company’s portfolio company may expose the Company to potential gains or losses in the
income statement.
2.2
FINANCIAL ASSETS
value. Gains and losses arising from changes in the fair value are presented in the income statement in the period in
which they arise.
14
2
2.3PROVISIONS
Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, when it
is probable that an outflow of resources will be required to settle the obligations, and when a reliable estimate of the amount can be
made.
2.4
2.4.1Classification
liabilities. The Company’s financial liability comprises of accruals in the statement of financial position.
2.4.3De-recognition
2.5
SHARE CAPITAL
2.6CARRIED INTEREST
15
2
2.7INCOME TAXES
3
Company estimates the fair values of its unquoted investments based on the net assets valuation method as at 31 December 2014,
as recommended by the International Private Equity and Venture Capital Valuation Guidelines. Where expectations differ from original
estimates, the difference will impact the fair value of the unquoted investments.
4
4.1
The Company is exposed to market price risk and liquidity risk.
Unquoted investment is exposed to market price risk of the comparable companies. The fair value of unquoted investment is based on
net assets valuation method.
If the fair value adjustment of the investments is 5% higher/lower, with all other variables held constant, the Company’s profit after tax
would have been RM16,500,000 higher/lower (2013: RM10,810,000). As at the end of the reporting year, the unquoted investments
have been recognised at fair value.
16
4
4.3 Liquidity risk
and treasury is managed by Ekuiti Nasional Berhad (“Ekuinas”), a related company. Furthermore, the Company has the
ability to obtain funding through the immediate holding company to ensure settlement of all transaction costs and expenses.
The Company’s exposure to liquidity risk is on the undiscounted contractual payments of accruals which are short-term and repayable
within one year.
4.5
exchanged or a financial liability settled, between knowledgeable and willing parties in orderly transaction between market participants
Methodologies and assumptions had been used in deriving the fair values of the investments at the end of the reporting year as
As at 31 December 2014 the carrying amounts of current liabilities approximate their fair value due to the relatively short term nature of
these financial instruments.
4.6
(i)
measurement date;
(ii)
(iii)
Level 3 input are unobservable inputs that have been applied in the models to value the respective asset or liability.
17
4
4.6
instruments:
Level 1
RM
Level 2
RM
Level 3
RM
Total
RM
-
-
331,025,396
331,025,396
-
-
216,229,521
216,229,521
At 31 December 2014
Financial asset
At 31 December 2013
Financial asset
Investments classified within Level 3 have significant unobservable inputs, as they are not quoted in active markets. In determining
the fair value, the Company relies on the net asset value (“NAV”) as reported in the latest available financial statements and capital
account statements provided by the general partner, unless the Company is aware of reasons that such a valuation may not be the
approximation of fair value. In such cases, the Company will make adjustments to the NAV obtained in order to determine carrying value
that more appropriately reflects the fair value at the reporting date.
The following table presents the movement in Level 3 financial instruments:
2014
RM
2013
RM
216,229,521
71,434,544
-
922,192
72,321,475
113,046,117
42,474,400
30,826,668
331,025,396
216,229,521
At 1 January
At 31 December
18
4
4.6
The following table discloses the valuation techniques and significant unobservable inputs by the Company for asset recognised at fair
Asset
Fair Value at
31.12.2014
Valuation
technique
Significant
unobservable
inputs
Reasonable
possible shift
Change in
valuation
RM331,025,396
NAV
NAV
+/- 5%
RM16,500,000
If the NAV had been 5% higher/lower, with all other variable held constant, the Company’s profit after tax would have been RM16,500,000
higher/lower.
The Company has an established control framework in respect to the measurement of fair values of financial instruments. This includes
a team that has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values, and reports
directly to senior management. The team regularly reviews significant unobservable inputs and valuation adjustments.
4.7
Loans and
receivables
RM
Designated
at fair value
through
profit or loss
RM
Total
RM
-
331,025,396
331,025,396
18,850
-
18,850
-
216,229,521
216,229,521
13,200
-
13,200
At 31 December 2014
Financial asset
Financial liability
Accruals
At 31 December 2013
Financial asset
Financial liability
Accruals
19
5
PROFIT BEFORE TAXATION
2014
RM
2013
RM
11,950
10,325
2014
RM
2013
RM
-
-
Profit before taxation is arrived at after charging:
6TAXATION
Current tax:
Malaysian taxation
Reconciliation between tax expense and the product of accounting profit multiplied by the Malaysian tax rate is as follows:
2014
RM
2013
RM
40,452,369
28,769,274
10,113,092
7,192,319
(10,618,600)
(7,706,668)
505,508
514,349
-
-
Unrecognised tax losses
Taxation
On 26 November 2010, the Ministry of Finance granted income tax exemption on the statutory business income for a period of 5 years
commencing from year of assessment 2009 until 2014 for the Company.
On 5 August 2013, the exemption was extended for an additional period of 5 years commencing from year of assessment 2014 until 2018.
20
2014
RM
2013
RM
216,229,521
71,434,544
-
922,192
72,321,475
113,046,117
42,474,400
30,826,668
331,025,396
216,229,521
At 1 January
At 31 December
The details of the investments are as follows:
Company’s
effective interest
Place of
incorporation
Principal activity
Relationship
2014
%
2013
%
Navis Malaysia
Growth Opportunities
Fund I, L.P. *
Cayman Islands
Investment holding
Subsidiary
69.6
69.6
CIMB National Equity
Fund Ltd. P. *
Labuan
Investment holding
Subsidiary
80.0
80.0
Asiasons Harimau
Fund L.P. *
Labuan
Investment holding
Subsidiary
72.0
72.0
Name
During the year, the Company made additional drawdowns into Navis Malaysia Growth Opportunities Fund I, L.P. that amounted to
RM21,420,000.
During the year, the Company made additional drawdowns into CIMB National Equity Fund Ltd. P. that amounted to RM30,119,547.
During the year, the Company made additional drawdowns into Asiasons Harimau Fund L.P. that amounted to RM21,113,956.
21
8
SHARE CAPITAL
Authorised
RM
Issued and
fully paid
RM
100,000,000
3,000,584
-
56
100,000,000
3,000,640
90,000
20,691
-
7,433
90,000
28,124
100,090,000
3,028,764
100,000,000
3,000,281
-
303
100,000,000
3,000,584
90,000
9,088
-
11,603
90,000
20,691
100,090,000
3,021,275
At 1 January 2014
Issuance of share during the financial year
At 31 December 2014
At 1 January 2014
At 31 December 2014
Total
At 1 January 2013
At 31 December 2013
At 1 January 2013
Issuance of share during the financial period
At 31 December 2013
Total
22
8
A summary of the shares issued by the Company for the financial year ended 31 December 2014 is as follows:
Date of
issue
Type
of share
Purpose
of issue
Number
of shares
Par
value
RM
Premium
RM
30 June 2014
Ordinary
Working capital
46
1.00
-
30 June 2014
Preference
Working capital
407,460
0.01
99.99
31 December 2014
Ordinary
Working capital
10
1.00
-
31 December 2014
Preference
Working capital
335,918
0.01
99.99
Terms
of issue
Cash, at par
Cash, at RM100
Cash, at par
Cash, at RM100
•
•
•
The holders of the RPS shall be entitled to receive all notices, accounts, and report which holder of the ordinary shares are
entitled to.
•
(b)Winding-up of the Company.
(c)
•
•
9
SHARE PREMIUM
At 1 January
At 31 December
2014
RM
2013
RM
206,882,009
90,867,012
74,330,367
116,014,997
281,212,376
206,882,009
23
10
Related party
Relationship
Related company
transaction.
2014
RM
2013
RM
(2,000,000)
(2,000,000)
2014
RM
2013
RM
Capital committed and contracted for
125,735,805
198,389,308
Capital called
274,264,195
201,610,692
400,000,000
400,000,000
Management Fees
11CAPITAL COMMITTED
These are capital committed under the Ekuinas Outsourced Programme.
24
www.ekuinas.com.my
Tel: +603 7710 7171 Fax: +603 7710 7173
delivering
performance
E-CAP (EXTERNAL) TWO SDN BHD
E-CAP (ExTERNAL) TWO SDN BHD
Directors' Report
02
05
05
06
08
09
10
11
12
Directors' report
The Directors hereby submit their report and the audited financial statements of the Company for the financial year ended 31 December 2014.
financial year ended 31 December 2014.
FINANCIAL RESULTS
RM
16,640,217
DIVIDEND
ISSUE OF SHARES
A summary of the shares issued by the Company during the financial year 31 December 2014 is as follows:
Date of issue
Type
of share
Purpose
of issue
30 September 2014
Ordinary
Terms
of issue
Number
of shares
Par
value
RM
Working capital
89
1.00
- Cash, at par
Premium
RM
30 September 2014
Preference
Working capital
78,426
0.01
31 December 2014
Ordinary
Working capital
58
1.00
- Cash, at par
31 December 2014
Preference
Working capital
64,713
0.01
The new shares issued during the financial period ranked pari passu in all respects with the existing shares of the Company.
There were no other changes in the authorised, issued and fully paid capital of the Company during the financial year ended 31 December 2014.
2
directors' report
DIRECTORS
The Directors who have held office since the date of incorporation are as follows:
Syed Yasir Arafat bin Syed Abd Kadir
Mazhairul bin Jamaludin
In accordance with Article 66 of the Company’s Articles of Association, there will be no retirement by rotation in the subsequent Annual General
Meeting since the number of directors being in office at the end of the financial year is only two.
Company or its related corporations during the financial year ended 31 December 2014.
Since the date of incorporation, no Director has received or become entitled to receive a benefit by reason of a contract made by the Company
or a related corporation with the Director or with a firm of which the Director is a member, or with a company in which the Director has a
substantial financial interest.
(a)
debts; and
(b)
(a)
(b)
(c)
inappropriate; or
(d)
Company misleading.
3
directors' report
when they fall due.
(a)
person; or
(b)
(a)
(b)
there has not arisen in the interval between the end of the financial period and the date of this report any item, transaction or event of a
report is made.
The Directors regard Ekuinas Capital Sdn Bhd, a company incorporated in Malaysia, as the immediate holding company. The Directors regard
AUDITORS
DIRECTORDIRECTOR
Kuala Lumpur
20 March 2015
4
We, Syed Yasir Arafat bin Syed Abd Kadir and Mazhairul bin Jamaludin, being two of the Directors of E-Cap (External) Two Sdn Bhd, state that,
in the opinion of the Directors, the financial statements set out on pages 8 to 24 have been properly drawn up so as to give a true and fair view
of the state of affairs of the Company as at 31 December 2014 and of the results and cash flows of the Company for the financial year ended
on that date in accordance with the Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements
of the Companies Act, 1965 in Malaysia.
DIRECTORDIRECTOR
Kuala Lumpur
20 March 2015
I, Mazhairul bin Jamaludin, being the Officer primarily responsible for the financial management of E-Cap (External) Two Sdn Bhd, do solemnly
5
TO THE MEMBER OF E-CAP (external) two SDN BHD
We have audited the financial statements of E-Cap (External) Two Sdn Bhd on pages 8 to 24, which comprise the statement of financial position
as at 31 December 2014 of the Company and the statements of comprehensive income, changes in equity and cash flows of the Company
for the financial year then ended, and a summary of significant accounting policies and other explanatory notes, as set out on Notes 1 to 12.
The Directors of the Company are responsible for the preparation of financial statements that give a true and fair view in accordance with
the Malaysian Financial Reporting Standards, International Financial Reporting Standards and the Companies Act, 1965 in Malaysia, and for
such internal control as the Directors determine are necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
selected depend on our judgement, including the assessment of risks of material misstatement of the financial statements, whether due to fraud
or error. In making those risk assessments, we consider internal control relevant to the Company’s preparation of financial statements that give a
true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial statements.
Opinion
In our opinion, the financial statements give a true and fair view of the financial position of the Company as of 31 December 2014 and of its
financial performance and cash flows for the year then ended in accordance with the Malaysian Financial Reporting Standards, International
6
TO THE MEMBER OF E-CAP (external) TWO SDN BHD
OTHER MATTERS
(No. AF: 1146)
(No. 2025/03/16 (J))
Kuala Lumpur
20 March 2015
7
STATEMENT OF
Financial
period from
9.7.2012
(date of
incorporation)
to 31.12.2013
RM
Note
Year ended
31.12.2014
RM
7
(15,425,926)
-
10.3
(1,200,000)
(900,000)
-
(290,280)
Loss
Unrealised loss on investment at fair value through profit or loss
EXPENSES
Management fees
Consultancy fees
(14,291)
(13,790)
Loss before taxation
5
(16,640,217)
(1,204,070)
Taxation
6
-
-
(16,640,217)
(1,204,070)
Other expenses
Total comprehensive loss and net loss for the financial year/period
8
STATEMENT OF
Financial Position
As at 31 DECEMBER 2014
Note
31.12.2014
RM
31.12.2013
RM
7
14,820,750
17,145,140
Accruals
14,980
13,200
NET CURRENT LIABILITY
14,980
13,200
14,805,770
17,131,940
NON-CURRENT ASSET
CURRENT LIABILITY
FINANCED BY:
Share capital
8
3,621
2,043
Share premium
9
32,646,436
18,333,967
(17,844,287)
(1,204,070)
14,805,770
17,131,940
Accumulated loss
9
STATEMENT OF
changes in equity
ordinary shares of
RM1 each
Note
Share
capital
RM
Number
of shares
Share
capital
RM
Share
premium
RM
Accumulated
loss
RM
Total
RM
210
210
183,358
1,833
18,333,967
(1,204,070)
17,131,940
147
147
143,139
1,431
14,312,469
-
14,314,047
-
-
-
-
-
(16,640,217)
(16,640,217)
357
357
326,497
3,264
32,646,436
(17,844,287)
14,805,770
2
2
-
-
-
-
2
208
208
183,358
1,833
18,333,967
-
18,336,008
-
-
-
-
-
(1,204,070)
(1,204,070)
210
210
183,358
1,833
18,333,967
(1,204,070)
17,131,940
8, 9
Total comprehensive loss for the
financial year
At 31 December 2014
At 9 July 2012
(date of incorporation)
financial period
Nondistributable
Number
of shares
At 1 January 2014
financial year
8, 9
Total comprehensive loss for the
financial period
At 31 December 2013
10
STATEMENT OF
CASH FLOWS
Financial
year ended
31.12.2014
RM
Financial
period from
9.7.2012
(date of
incorporation)
to 31.12.2013
RM
(16,640,217)
(1,204,070)
Net unrealised loss on investments at fair value through profit or loss
15,425,926
-
Operating loss before working capital changes
(1,214,291)
-
1,780
13,200
(1,212,511)
(1,190,870)
Note
Adjustment for:
Accruals
Net cash flows used in operating activities
7
-
(834,144)
7
(13,101,536)
(16,310,996)
(13,101,536)
(17,145,140)
147
210
14,313,900
18,335,800
14,314,047
18,336,010
NET CHANGE IN CASH AND CASH EQUIVALENTS DURING THE FINANCIAL YEAR/PERIOD
-
-
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE FINANCIAL YEAR/PERIOD
-
-
CASH AND CASH EQUIVALENTS AT END OF THE FINANCIAL YEAR/PERIOD
-
-
8
8, 9
11
Notes to the
financial statement
15 Lorong Dungun,
Bukit Damansara,
50490 Kuala Lumpur.
Mutiara Damansara,
The principal accounting policies applied in preparing the financial statements are set out below. These policies have been applied to all
years presented, unless otherwise stated.
1
The Company recorded net loss of RM16,640,217 for the financial year ended 31 December 2014 and as of that date, the Company
recorded net current liabilities of RM14,980. The immediate holding company, Ekuinas Capital Sdn Bhd, has indicated its intention to
provide continuous financial support to the Company so as to enable the Company to meet its liability as and when they fall due and
12
1
1.1
Standards, amendments to published standards and interpretations that are applicable and effective:
•
•
•
•
•
1.2
Company but not yet effective:
•
and interest.
There is now a new expected credit losses model on impairment for all financial assets that replaces the incurred loss impairment model
used in MFRS 139. The expected credit losses model is forward-looking and eliminates the need for a trigger event to have occurred
before credit losses are recognised.
13
2
2.1.1Investment entity
(a)
(b)
(c)
2.1.2Subsidiaries
measured at fair value through profit or loss, and as described in note 4.5.
Movements in the fair value of the Company’s portfolio company may expose the Company to potential gains or losses in the
income statement.
2.2
FINANCIAL ASSETS
value. Gains and losses arising from changes in the fair value are presented in the income statement in the period in
which they arise.
14
2
2.3PROVISIONS
Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events, when it
is probable that an outflow of resources will be required to settle the obligations, and when a reliable estimate of the amount can be made.
2.4
2.4.1Classification
liabilities. The Company’s financial liability comprises of accruals in the statement of financial position.
2.4.3De-recognition
2.5
SHARE CAPITAL
2.6CARRIED INTEREST
15
2
2.7INCOME TAXES
Current tax expense is determined according to the Malaysian tax laws and includes all taxes based upon the taxable profits.
Tax rates enacted or substantively enacted by the reporting period are used to determine deferred income tax.
3
the reported amounts of assets and liabilities at the end of the reporting period. However, uncertainty about these assumptions and estimates
In the process of applying the Company’s accounting policies, the Directors and management have made the following judgements which
have the most significant effect on the amounts recognised in the financial statements:
The Company carries its investments at fair value, with changes in fair values being recognised in the income statement. The Company
estimates the fair values of its unquoted investments based on the net assets valuation method as at 31 December 2014, as
recommended by the International Private Equity and Venture Capital Valuation Guidelines. Where expectations differ from original
estimates, the difference will impact the fair value of the unquoted investments.
4
4.1
The Company is exposed to market price risk and liquidity risk.
Unquoted investment is exposed to market price risk of the comparable companies. The fair value of unquoted investment is based on
net assets valuation method.
If the fair value adjustment of the investments is 5% higher/lower, with all other variables held constant, the Company’s loss after tax
would have been RM741,000 (2013:RM857,000) lower/higher. As at the end of the reporting year, the unquoted investments have been
recognised at fair value.
16
4
4.3 Liquidity risk
and treasury is managed by Ekuiti Nasional Berhad (“Ekuinas”), a related company. Furthermore, the Company has the
ability to obtain funding through the immediate holding company to ensure settlement of all transaction costs and expenses.
The Company’s exposure to liquidity risk is on the undiscounted contractual payments of accruals which are short-term and repayable
within one year.
4.5
exchanged or a financial liability settled, between knowledgeable and willing parties in an orderly transaction between market participants
Methodologies and assumptions had been used in deriving the fair values of the investments at the end of the reporting period as
The carrying amounts of current liabilities approximate their fair value due to the relatively short term nature of these financial instruments.
4.6
(i)
measurement date;
(ii)
(iii)
17
4
4.6
instruments.
Level 1
RM
Level 2
RM
Level 3
RM
Total
RM
-
-
14,820,750
14,820,750
-
-
17,145,140
17,145,140
At 31 December 2014
Financial asset
At 31 December 2013
Financial asset
Investments classified within Level 3 have significant unobservable inputs, as they are not quoted in active markets. In determining
the fair value, the Company relies on the net asset value (‘NAV”) as reported in the latest available financial statements and capital
account statements provided by the general partner, unless the Company is aware of reasons that such a valuation may not be the
approximation of fair value. In such cases, the Company will make adjustments to the NAV obtained in order to determine carrying value
that more appropriately reflects the fair value at the reporting date.
2014
RM
2013
RM
17,145,140
-
Investments at fair value through profit or loss:
At 1 January/date of incorporation
-
834,144
13,101,536
16,310,996
Net unrealised loss on investments at fair value through profit or loss
(15,425,926)
-
At 31 December
14,820,750
17,145,140
Acquisition during the financial year/period
The following table discloses the valuation techniques and significant unobservable inputs by the Company for asset recognised at fair
18
Asset
Fair Value at
31.12.2014
Valuation
technique
Significant
unobservable
inputs
Reasonable
possible shift
Change in
valuation
RM14,820,750
NAV
NAV
+/- 5%
RM741,000
4
4.6
If the NAV had been 5% higher/lower, with all other variable held constant, the Company’s profit after tax would have been RM741,000
lower/higher.
4.7
Loans and
receivables
RM
Designated
at fair value
through
profit or loss
RM
Total
RM
-
14,820,750
14,820,750
14,980
-
14,980
-
17,145,140
17,145,140
13,200
-
13,200
At 31 December 2014
Financial asset
Financial liability
Accruals
At 31 December 2013
Financial asset
Financial liability
Accruals
5LOSS BEFORE TAXATION
Financial
year ended
31.12.2014
RM
Financial period
from 9.7.2012 (date
of incorporation)
to 31.12.2013
RM
Loss before taxation is arrived at after charging:
8,080
9,800
19
6TAXATION
Financial
year ended
31.12.2014
RM
Financial period
from 9.7.2012 (date
of incorporation)
to 31.12.2013
RM
Current tax:
Malaysian taxation
-
Reconciliation between tax expense and the product of accounting loss multiplied by the Malaysian tax rate is as follows:
Financial
year ended
31.12.2014
RM
Financial period
from 9.7.2012 (date
of incorporation)
to 31.12.2013
RM
(16,640,217)
(1,204,070)
(4,160,054)
(301,018)
3,856,481
-
303,573
301,018
-
-
Unrecognised tax losses
Taxation
-
On 5 August 2013, the Ministry of Finance granted income tax exemption on the statutory business income for a period of 5 years
commencing from year of assessment 2012 until 2016 for the Company. As such, tax loss for the year has not been recognised.
At 1 January/9 July 2012 (date of incorporation)
2013
RM
17,145,140
-
-
834,144
13,101,536
16,310,996
Net unrealised loss on investment at fair value through profit or loss
(15,425,926)
-
At 31 December
14,820,750
17,145,140
Acquisition of investments
20
2014
RM
The details of the investments are as follows:
Company’s
effective interest
Name
Place of
incorporation
Principal activity
Relationship
2014
%
2013
%
RMCP One Sdn Bhd*
Malaysia
Investment holding
Subsidiary
55.0
55.0
COPE Opportunities 3 Sdn Bhd*
Malaysia
Investment holding
Subsidiary
75.0
75.0
Tuas Capital Partners Malaysia
Growth Fund I L.P.*
Malaysia
Investment holding
Subsidiary
71.0
71.0
TAEL Tijari (OFM) L.P.*
Cayman Islands
Investment holding
Subsidiary
59.0
59.0
On 16 January and 15 August 2014, the Company made additional drawdowns into RMCP One Sdn Bhd that amounted to RM5,400,000
and RM4,200,000 respectively.
On 30 June and 22 December 2014, the Company made additional drawdowns into COPE Opportunities 3 Sdn Bhd that amounted
to RM637,500 and RM626,250 respectively.
On 9 January and 31 July 2014, the Company made additional drawdowns into TAEL Tijari (OFM) L.P. that amounted to RM595,068
and RM416,936 respectively.
On 16 January and 1 July 2014, the Company made additional drawdowns into Tuas Capital Partners Malaysia Growth Fund I L.P. that
amounted to RM600,000 and RM625,782 respectively.
21
8
SHARE CAPITAL
Authorised
RM
Issued and
fully paid
RM
100,000,000
210
-
147
100,000,000
357
90,000
1,833
-
1,431
90,000
3,264
100,090,000
3,621
100,000,000
2
-
208
100,000,000
210
90,000
-
-
1,833
90,000
1,833
100,090,000
2,043
At 1 January 2014
Issued during the financial year
At 31 December 2014
At 1 January 2014
Issued during the financial year
At 31 December 2014
Total
At 9 July 2012 (date of incorporation)
Issued during the financial period
At 31 December 2013
At 9 July 2012 (date of incorporation)
Issued during the financial period
At 31 December 2013
Total
22
8
During the financial year, the Company issued 147 ordinary shares at par value of RM1 each and 143,139 redeemable preference
shares of RM0.01 each at an issue price of RM100. The shares have been fully paid in cash.
A summary of the shares issued by the Company during the financial year 31 December 2014 is as follows:
Date of
issue
Type
of share
Purpose
of issue
Number
of shares
Par
value
RM
30 September 2014
Ordinary
30 September 2014
Preference
Working capital
89
1.00
-
Working capital
78,426
0.01
99.99
31 December 2014
Ordinary
Working capital
58
1.00
-
31 December 2014
Preference
Working capital
64,713
0.01
99.99
Premium
RM
Terms
of issue
Cash, at par
Cash, at RM100
Cash, at par
Cash, at RM100
•
•
•
The holders of the RPS shall be entitled to receive all notices, accounts, and report which holder of the ordinary shares are entitled
to.
•
(b)
Winding-up of the Company.
(c)
•
•
9
SHARE PREMIUM
2014
RM
2013
RM
At 1 January
18,333,967
-
14,312,469
18,333,967
At 31 December
32,646,436
18,333,967
23
10
Related party
Relationship
Related company
transaction.
2014
RM
2013
RM
(1,200,000)
(900,000)
2014
RM
2013
RM
209,753,324
222,854,860
30,246,676
17,145,140
240,000,000
240,000,000
Management fees expenses
11CAPITAL COMMITTED
Capital committed and contracted for
Capital called
These are capital committed under the Ekuinas Outsourced Programme.
24
www.ekuinas.com.my
Tel: +603 7710 7171 Fax: +603 7710 7173

delivering performance

Transcription

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