goodway integrated industries bhd

AnnuAl RepoRt 2014

GooDWAY InteGRAteD InDuStRIeS BHD(Incorporated In Malaysia, Company No. 618972-T)

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CONTENTS CORPORATE INFORMATION …………………………………………………... 1 CORPORATE STRUCTURE .................................................................................... 2 GROUP FINANCIAL HIGHLIGHTS …………………………………………..... 3 CHAIRMAN’S STATEMENT ……………………………………………………... 6 PROFILE OF THE BOARD OF DIRECTORS ……………………………............. 8 AUDIT AND RISK MANAGEMENT COMMITTEE REPORT ……...................... 13 STATEMENT ON CORPORATE GOVERNANCE ………………………………. 18 ADDITIONAL COMPLIANCE INFORMATION …………………………………. 27 CORPORATE SOCIAL RESPONSIBILITY (“CSR”) STATEMENT ....................... 28 STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL ..………. 32 STATEMENT OF DIRECTORS’ RESPONSIBILITIES ............................................. 35 FINANCIAL STATEMENTS

Directors’ Report ………………………………………………………………… 37 Independent Auditors’ Report ………………………........................................... 41 Consolidated Statement of Financial Position ...………………………………… 43 Consolidated Statement of Profit or Loss and Other Comprehensive Income ….. 44 Consolidated Statement of Changes in Equity …..……………………………… 45 Consolidated Statement of Cash Flows .………………………………………… 47 Statement of Financial Position ...……………………………………………….. 49 Statement of Profit or Loss and Other Comprehensive Income ………………… 50 Statement of Changes in Equity ………………………………………………… 51 Statement of Cash Flows ………………………………………………………… 52 Notes to the Financial Statements ………………………………………………. 53 Statement by Directors ………………………………………………………….. 138 Statutory Declaration ……………………………………………………………. 139

LIST OF GROUP PROPERTIES ……………………………………………………. 140 ANALYSIS OF SHAREHOLDINGS ……………………………………………….. 143 NOTICE OF ANNUAL GENERAL MEETING ……………………………………. 146 STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING 149 PROXY FORM ……………………………………………………….………………. Enclosed

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CORPORATE INFORMATION BOARD OF DIRECTORS Mok Yuen Lok (Chairman, Independent Non-Executive Director) Tai Boon Wee (Chief Executive Officer) Wong Ping Kiong (Chief Operating Officer) Ismail Bin Mahayudin (Independent Non-Executive Director) Lt Jen (B) Datuk Hj Adenan Bin Hj Mohamad Zain (Non-Independent Non-Executive Director) AUDIT AND RISK MANAGEMENT COMMITTEE Mok Yuen Lok (Chairman) Ismail Bin Mahayudin Lt Jen (B) Datuk Hj Adenan Bin Hj Mohamad Zain JOINT NOMINATION AND REMUNERATION COMMITTEE Ismail Bin Mahayudin (Chairman) Mok Yuen Lok

Lt Jen (B) Datuk Hj Adenan Bin Hj Mohamad Zain

COMPANY SECRETARY Foo Siew Loon (MAICSA 7006874) AUDITORS Kreston John & Gan (AF0113) 160-2-1, Kompleks Maluri Business Centre, Jalan Jejaka 55100 Kuala Lumpur Tel: 603-9287 1889 Fax: 603-9283 0889 PRINCIPAL BANKERS AmBank (Malaysia) Berhad Citibank Berhad HSBC Bank Malaysia Berhad CIMB Bank Berhad Maybank Islamic Bank Berhad PRINCIPAL PLACE OF BUSINESS Manufacturing Plant Lot PT 1654 & PT 1657 Nilai Industrial Estate 71800 Nilai Negeri Sembilan Darul Khusus Tel: 606-799 4833 Fax: 606-799 4866 Sales & Marketing / Corporate Office Level 6 A-06-03 Empire Tower 1 Empire Subang Jalan SS16/1 SS16, 47500 Subang Jaya Selangor Tel: 603-5632 9981 Fax: 603-5632 9980 Web: http://www.giibworld.com

REGISTERED OFFICE Level 33A, Menara 1 MK Kompleks 1 Mont’ Kiara No.1, Jalan Kiara Mont’ Kiara 50480 Kuala Lumpur Tel: 603-6201 8080 Fax: 603-6203 2788 SHARE REGISTRAR Symphony Share Registrars Sdn Bhd Level 6, Symphony House Pusat Dagangan Dana 1 Jalan PJU 1A/46 47301 Petaling Jaya Tel: 603-7841 8000 Fax: 603-7841 8152 STOCK EXCHANGE LISTING Main Market Bursa Malaysia Securities Berhad (“Bursa Securities”)

CONTENTS CORPORATE INFORMATION …………………………………………………... 1 CORPORATE STRUCTURE .................................................................................... 2 GROUP FINANCIAL HIGHLIGHTS …………………………………………..... 3 CHAIRMAN’S STATEMENT ……………………………………………………... 6 PROFILE OF THE BOARD OF DIRECTORS ……………………………............. 8 AUDIT AND RISK MANAGEMENT COMMITTEE REPORT ……...................... 13 STATEMENT ON CORPORATE GOVERNANCE ………………………………. 18 ADDITIONAL COMPLIANCE INFORMATION …………………………………. 27 CORPORATE SOCIAL RESPONSIBILITY (“CSR”) STATEMENT ....................... 28 STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL ..………. 32 STATEMENT OF DIRECTORS’ RESPONSIBILITIES ............................................. 35 FINANCIAL STATEMENTS

Directors’ Report ………………………………………………………………… 37 Independent Auditors’ Report ………………………........................................... 41 Consolidated Statement of Financial Position ...………………………………… 43 Consolidated Statement of Profit or Loss and Other Comprehensive Income ….. 44 Consolidated Statement of Changes in Equity …..……………………………… 45 Consolidated Statement of Cash Flows .………………………………………… 47 Statement of Financial Position ...……………………………………………….. 49 Statement of Profit or Loss and Other Comprehensive Income ………………… 50 Statement of Changes in Equity ………………………………………………… 51 Statement of Cash Flows ………………………………………………………… 52 Notes to the Financial Statements ………………………………………………. 53 Statement by Directors ………………………………………………………….. 138 Statutory Declaration ……………………………………………………………. 139

LIST OF GROUP PROPERTIES ……………………………………………………. 140 ANALYSIS OF SHAREHOLDINGS ……………………………………………….. 143 NOTICE OF ANNUAL GENERAL MEETING ……………………………………. 146 STATEMENT ACCOMPANYING NOTICE OF ANNUAL GENERAL MEETING 149 PROXY FORM ……………………………………………………….………………. Enclosed

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CORPORATE STRUCTURE

RUBBER COMPOUNDING

GOODWAY RUBBER INDUSTRIES SDN BHD

GOODWAY RUBBER COMPANY PTY LTD

GOODWAY SUPERCOOL PTY LTD

GOODWAY EUROPE (SWEDEN) A.B.

PT VULKANISIR GOODWAY INDONESIA

GOODWAY SIMPLEX (HK) PTE LIMITED

GOODWAY INTEGRATED INDUSTRIES BERHAD

JIANGSU GOODWAY RUBBER PRODUCTS CO., LTD

TYRE RETREADING

BIG WHEEL GREEN TYRES SDN BHD

BIG WHEEL (MALAYSIA) SDN BHD

BIGWHEEL OTR SDN BHD

RETAILING &WHOLESALE OF NATURAL

RUBBER

GOODWAY SMR SDN BHD

PROPERTY DEVELOPMENT

GIIB DEVELOPMENT SDN BHD

Note: The above structure does not include dormant/non-operating subsidiaries

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GROUP FINANCIAL HIGHLIGHTS

2014 2013 2012 2011Description RM'000 RM'000 RM'000 RM'000

Revenue 207,475 265,771 285,069 277,941 (Loss) / Profit before tax (15,239) 6,869 8,937 7,827 (Loss) / Profit for the year (12,810) 6,045 5,415 4,016 (Loss) / Profit attributable to shareholders (12,403) 5,767 5,294 3,916

Share capital 55,259 55,259 55,259 55,259 Reserves 23,105 35,268 35,471 31,471

Net Equity funds 78,364 90,527 90,730 86,730 Non-controlling interests 290 1,057 779 658

TOTAL EQUITY 78,654 91,584 91,509 87,388

Long term liabilities 56,385 63,254 55,203 55,539 Current liabilities 130,443 116,255 103,603 104,566

TOTAL EQUITY AND LIABILITIES 265,482 271,093 250,315 247,493

Property, plant and equipment 85,578 79,535 102,421 101,242 Land held for development 7,411 7,411 - - Goodwill 6,648 6,673 6,706 6,586 Other non-current assets - 75 1,225 1,485 Current assets 165,845 177,398 139,963 138,180

TOTAL ASSETS 265,482 271,092 250,315 247,493

Net assets per share (RM) 0.71 0.82 0.82 0.78 Net (loss) / earnings per share (sen) (11.22) 5.22 4.79 3.54

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GROUP FINANCIAL HIGHLIGHTS (CONTINUED)

2014 2013 2012 2011

Revenue 207,475 265,771 285,069 277,941

2014 2013 2012 2011

Profit before tax(15,239) 6,869 8,937 7,827

2014 2013 2012 2011TOTAL ASSETS265,482 271,092 250,315 ######

207,475

265,771 285,069 277,941

0

50000

100000

150000

200000

250000

300000

2014 2013 2012 2011

Revenue (RM'000)

(15,239)

6,869 8,937 7,827

-20000

-15000

-10000

-5000

0

5000

10000

15000

2014 2013 2012 2011

Profit Before Tax (RM'000)

265,482

271,092

250,315 247,493

235,000

240,000

245,000

250,000

255,000

260,000

265,000

270,000

275,000

2014 2013 2012 2011

Total Assets (RM'000)

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GROUP FINANCIAL HIGHLIGHTS (CONTINUED)

2014 2013 2012 2011Shareholders' funds78,364 90,527 90,730 86,730

2014 2013 2012 2011Net Earning Per Share (sen)(11.22) 5.22 4.79 3.54

78,364

90,527 90,730

86,730

72,00074,00076,00078,00080,00082,00084,00086,00088,00090,00092,000

2014 2013 2012 2011

Shareholders' Funds (RM'000)

(11.22)

5.22 4.79 3.54

-14.00-12.00-10.00

-8.00-6.00-4.00-2.000.002.004.006.008.00

2014 2013 2012 2011

Net Earnings Per Share (sen)

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CHAIRMAN’S STATEMENT Dear Shareholders, On behalf of the Board of Directors, I am pleased to present to you the Annual Report and Audited Financial Statements of the Company and the Group for the financial year ended 31 December 2014. BUSINESS OVERVIEW 2014 was a challenging year for the Group with the constantly uncertain global economic conditions attributed by fluctuating commodity prices and currencies. This has affected many industries around the world but we are expecting a more positive outlook in medium to long term. FINANCIAL PERFORMANCE In the financial year ended 31 December 2014, the Group recorded revenues of RM207.47million, and losses after tax of RM12.81million as compared to the preceding year’s revenues of RM265.77million and profit after tax of RM6.05million. Within our business segments, the Rubber Compound business recorded revenues of RM159.50million as compared to the preceding year’s revenues of RM191.38million. The Retreading Services recorded revenues of RM54.75million as compared to RM70.75million achieved in the previous financial year. The receding revenues are mainly attributed to lower sales (both sales volume and unit selling price) as a result of lower commodity prices and poorer global demand. DIVIDEND The Board of Directors do not recommend any dividend payment for the financial year ended 31 December 2014. PROSPECTS FOR THE YEAR AHEAD Despite the challenging operating condition for the Group in year 2014, the Board and the Management teams are continuously moving ahead to implement various measures in the adaptation of our business model to current conditions. Our outlook for 2015 remains cautiously optimistic. The development of Bigwheel Industrial Park in Kota Kinabalu, Sabah commenced in year 2014. We expect the development to positively contribute to the Group’s results in year 2015.

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CHAIRMAN’S STATEMENT (CONTINUED) NOTES OF APPRECIATION On behalf of the Board of Directors, I would like to thank the management team and all staff for their commitment and dedication in our united efforts to drive the company forward and improve stakeholder value. Our gratitude and appreciation is also extended to our valued clients, staff, business associates and other stakeholders for their continued trust and support. Mok Yuen Lok Chairman

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PROFILE OF THE BOARD OF DIRECTORS MOK YUEN LOK Chairman, Independent Non-Executive Director Malaysian, aged 55 Mok Yuen Lok was appointed as an Independent Non-Executive Director on 20 May 2004 and subsequently was appointed as Chairman of the Company on 22 August 2006. He is also the Chairman of the Audit and Risk Management Committee (formerly known as Audit Committee) and a member of the Joint Nomination and Remuneration Committee of the Company. After graduating in 1981 with a Bachelor of Science from Heriot Watt University, Edinburgh, UK, he received an articleship at Messrs Ernst & Whinney (now known as Messrs Ernst & Young) where he qualified 5 years later as a member of the Malaysian Institute of Certified Public Accountants. With more than 20 years in the accountancy profession covering audit, corporate finance, advisory, receiverships and liquidations, he is now the Regional Executive Director of Crowe Horwath International for Asia Pacific (overseeing 25 countries), and is a co-founder of Crowe Horwath in Malaysia in 1990 (where there are presently 950 staff in 12 locations). His previous positions include:

1. Independent Director and Chairman of the Audit & Risk Management Committee of Scomi Energy Services Berhad;

2. President of the Young Presidents Organization, Malaysia Chapter and Entrepreneurs’ Organization, Malaysia Chapter;

3. Council Member of Hospis Malaysia;

4. Board Member of Crowe Horwath International.

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PROFILE OF THE BOARD OF DIRECTORS (CONTINUED) TAI BOON WEE Chief Executive Officer Malaysian, aged 55 Tai Boon Wee was appointed Chief Executive Officer and Group Managing Director of the Company on 20 May 2004. He joined Goodway Rubber Industries Sdn Bhd in 1989 as the Marketing Manager overseeing the international market. With his visionary leadership and outstanding performance, he was later appointed as the Operations Director in 1991 and subsequently assumed the position of Managing Director in 1994. He has contributed immensely to the Group’s expansion from 1993 to 2003 by successfully leading a 10 years joint venture project with Gummiwerk Kraiburg Produktions GmbH (“GK”), a German rubber compound entity, involving the transfer of technology know-how for the manufacturing of technical rubber and rubber compounds by GK to the Group. Tai Boon Wee was the chief strategist for the overall market expansion of the Group globally. He was also instrumental in orchestrating the listing of Goodway Integrated Industries Berhad on Bursa Malaysia Securities Berhad in 2004. WONG PING KIONG Chief Operating Officer Malaysian, aged 52 Wong Ping Kiong was appointed as an Executive Director of the Company on 20 May 2004. She begins her career with Goodway group of companies since 1989. Throughout her employment with Goodway, Wong Ping Kiong had demonstrated great leadership and entrepreneurial skill that earned her several senior posts including Managing Director and in early 2008, Chief Operating Officer of the Group. Her immense contribution to the Group was shown through her dedication and sheer commitment in leading the sales and marketing team to greater heights in 2007. She graduated from Oklahoma State University, United States of America with a degree in Bachelor of Science in Business Administration majoring in Accounting and minor in Management Information System.

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PROFILE OF THE BOARD OF DIRECTORS (CONTINUED) ISMAIL BIN MAHAYUDIN Independent Non-Executive Director Malaysian, aged 72 Ismail Bin Mahayudin was appointed as an Independent Non-Executive Director of the Company on 20 May 2004. He is also the Chairman of the Joint Nomination and Remuneration Committee and a member of the Audit and Risk Management Committee (formerly known as Audit Committee) of the Company. Prior to his retirement from BIMB Holdings Berhad, he was a Management Member of BIMB Holdings Berhad and Senior General Manager, Treasury and International Banking Division of Bank Islam Malaysia Berhad (“BIMB”). He started his career as a teacher in Sekolah Menengah Dato’ Seri Amar Diraja, Muar, Johor, in 1971. He joined Bank Bumiputra Malaysia Berhad in 1975 as Officer in the Trade Finance Department. In 1980, he joined Bank of Commerce Malaysia Berhad as Manager of the Bills Department. He joined BIMB in 1983 as General Manager, Trade Finance and Treasury Division and assumed position as Senior General Manager of the Retail Banking Division in 1994 until 1998. He retired from BIMB in 2002. He graduated from University Malaya and Malayan Teachers College, Kuala Lumpur. He was the Chairman of BIMB Foreign Currency Clearing Agency Sdn Bhd, Al-Wakalah Nominees (Tempatan) Sdn Bhd and BIMB International Islamic Trust (Labuan) Sdn Bhd. He was also a Director of Syarikat Takaful Malaysia Bhd and Bank Islam (L) Ltd. He was Adviser to CIMB Islamic Bank Berhad from 2004 until 2012 and a Senior Fellow of Accounting Research Institute (ARI), University Technology Mara, Malaysia from December 2011 until November 2013.

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PROFILE OF THE BOARD OF DIRECTORS (CONTINUED) LT JEN (B) DATUK HJ ADENAN BIN HAJI MOHAMAD ZAIN Non-Independent Non-Executive Director Malaysian, aged 67 Lt Jen (B) Datuk Hj Adenan Bin Haji Mohamad Zain was appointed as a Non-Independent Non-Executive Director of the Company on 28 October 2005. He received his early education in Penang and graduated from the University of Kent at Canterbury, UK with a Diploma in Politics and International Relations in 1987 and with a Master of Arts Degree in International Relations in 1988. He was awarded a Diploma (PSc) by the Malaysian Armed Forces Staff College (“MAFSC”) and Defence Services Staff College (DSSC) Wellington, India. He was also awarded a Master of Science Degree (MSc) in Defence Studies by University of Madras, India. Lt Jen (B) Datuk Hj Adenan Bin Haji Mohamad Zain served in the Malaysian Armed Forces for 38 years before retiring on 10 November 2004. During his early service in the Armed Forces, he held many important positions such as Directing Staff at the MAFSC and Chief of Staff of an Infantry Division. In the rank of Brigadier General, he was the Director of Training Management at the Training and Doctrine Command (TRADOC) and later as the Commandant of the Malaysian Armed Forces Academy (ATMA). He spent the last five years of his service at the Ministry of Defence in the rank of Major General and Lt General. He held the appointment of Assistant Chief of Staff Defence Planning for four years and finally as the Chief of Staff at the Malaysian Armed Forces Headquarters. For his services to the King and Country, Lt Jen (B) Datuk Hj Adenan was conferred with several awards and Datukship. His other positions include:

1. Non-Executive Chairman of Gamat Emas Sendirian Berhad;

2. Vice President of Rotary Club of Kuala Lumpur DiRaja 2014-2015 (R.I District 3300), a Non-Governmental Organization.

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FURTHER INFORMATION ON BOARD OF DIRECTORS Shareholdings Details of Directors’ Shareholdings in the Company are disclosed in page 143 of this Annual Report. Conviction of offences None of the Directors have any convictions of offences within the past 10 years. Conflict of interest None of the Directors have conflict of interest within the Company. None of the Directors have any family relationship with any director and/or major shareholders of the Company save and except for Mr. Tai Boon Wee (“Mr. Tai”), who is related to Massive Structure Sdn Bhd and Sierra Growth Sdn Bhd, the major shareholders of the Company. Massive Structure Sdn Bhd is a company incorporated in Malaysia and its directors and shareholders are Madam Goh Gee Thien and Mr. Tai Qi Sheng. Both Madam Goh Gee Thien and Mr. Tai Qi Sheng are related to Mr. Tai as wife and son respectively. Sierra Growth Sdn Bhd is a company incorporated in Malaysia and its directors and shareholders are Mr. Tai and Madam Goh Gee Thien. Madam Goh Gee Thien is related to Mr. Tai as wife. Attendance at Board Meetings The numbers of board meetings attended by the Board of Directors of the Company are disclosed in the Corporate Governance Statement in page 19 of the Annual Report.

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AUDIT AND RISK MANAGEMENT COMMITTEE REPORT The Board of Directors of Goodway Integrated Industries Berhad (“the Company”) is pleased to present the Report of the Audit and Risk Management Committee (“ARMC”) for the financial year ended 31 December 2014. The Audit Committee of the Company was established on 20 May 2004. Subsequently on 25 February 2010, the Audit Committee has changed its name to Audit and Risk Management Committee (“ARMC”) and the members remain unchanged. In view of the said change, the ARMC have varied its Terms of Reference to reflect its overall roles and responsibilities. The ARMC comprises the following members:-

Chairman Mok Yuen Lok (Independent Non-Executive Director, a member of MIA) Members Ismail Bin Mahayudin (Independent Non-Executive Director) Lt Jen (B) Datuk Hj Adenan Bin Hj Mohamad Zain (Non-Independent Non-Executive Director)

1. TERMS OF REFERENCE

1.1 Membership

(a) The Board, pursuant to a Board Resolution, shall appoint the Committee.

(b) It shall comprise at least three (3) members of whom all must be non-executive directors with a majority of them being independent directors.

(c) At least one member of the Committee:

i) must be a member of the Malaysian Institute of Accountants (MIA); or

ii) if he/she is not a member of the MIA, he/she must have at least three (3)

years’ working experience and ; he/she must have passed the examination specified in Part 1 of the 1st

Schedule of the Accountants Act 1967; or he/she must be a member of one of the associations of accountants

specified in part II of the Schedule of the Accountants Act 1967

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AUDIT AND RISK MANAGEMENT COMMITTEE REPORT (CONTINUED)

iii) Fulfills such other requirements as prescribed or approved by Bursa

Malaysia Securities Berhad (“Bursa Securities”)

(d) The Chairman of the Committee shall be an independent non-executive director nominated by the Board and shall be appointed amongst the members.

1.2 Objectives

(a) To provide the Board with an objective and independent review of the financial

performance and the effectiveness of the operational and administrative controls and procedures.

(b) To assist the Board in establishing and maintaining internal controls for areas of risk as well as safeguarding of assets.

(c) To assess and supervise the quality of audit work conducted by the internal and

external auditors.

(d) To reinforce the independence of the company’s external auditor and to ensure that the auditor will have a free reign in the audit process.

(e) To provide a forum for regular, informal and private discussions between the

external auditor, the internal auditors or both excluding the attendance of the other directors and employees of the Company whenever deemed necessary.

(f) To reinforce the objectivity of the internal audit department.

(g) To oversee the Company’s proposed risk programme so that the risk management

framework is consistently adopted throughout the Company and the group.

1.3 Authority

The Board authorizes the Committee: (a) To investigate any activity within the Committee’s term of reference and shall have

unlimited access to both the internal and external auditors, as well as employees of the Group;

(b) To obtain an independent legal or other professional advice as and when it considers necessary;

(c) To establish a Sub-Audit Committee (s) to carry on certain investigations on behalf

of the Committee in such manner, as the Committee shall deem fit and necessary.

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(d) To review the implementation efforts that encompass all risk management activities within the Company. The Committee shall report to the Board and make presentations on the Company’s key risk profile to the Board at least once a year or as and when necessary.

1.4 Functions, Duties and Responsibilities

The functions of the Committee shall be as follows and report the same to the Board: (a) To review with the internal and external auditors their audit plans and reports.

(b) To review the scope of the internal audit programmes and procedures and to

consider the results of the internal audit findings.

(c) To evaluate the adequacy of the scope, functions, competency and resources of the internal audit functions and that it has the necessary authority to carry out its work.

(d) To evaluate the adequacy and effectiveness of the internal audit control systems

and accounting policies.

(e) The Enterprise Risk Management Department shall report directly to the Committee with regard to their internal audit function.

(f) To review the assistance given by the officers of the Group to the external auditors.

(g) To review the quarterly, annual and consolidated financial statements of the

Company and thereafter to submit the same for Board’s approval, focusing particularly on any changes in accounting policies and practices; significant adjustments arising from the audit; the going concern assumption; compliance with the accounting standards and other legal requirements.

(h) To review any related party transactions within the Company or Group.

(i) To identify and direct any special projects or investigations deemed necessary.

(j) To nominate a person or persons as the Company’s external auditors.

(k) To carry out such other functions and to consider other topics, as may agreed upon

with the Board.

(l) To recommend the structure and contents of the induction programme for the newly appointed Directors.

(m) To review, evaluate and/or assess the effectiveness of the Company’s plans,

assumptions, forecasts, projections, including any contingency plan and its strategies implemented within the Group’s overall risk profile.

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(n) To advise the Board concerning risk policy matters including but not limited to

oversight of compliance with the group’s risk management policy, review and/or recommend changes to risk policies for Board approval as well as taking corrective action where applicable.

(o) To delegate risk management authorities to the Company’s Enterprise Risk

Management department.

(p) To review and confirm that the applicable policies, procedures or manuals for individual subsidiaries that set forth the operational processes are aligned with the Group’s policy and risk management policy.

(q) To keep the Shareholders, Board and all employees informed of the risk

management plan including its strategy, policy and procedures, and responsibilities.

(r) To report to the Board from time to time on the Group’s risk appetite and capacity as well as other criteria, which exceeded or triggered the risk tolerance limit.

(s) To keep abreast with current risk management techniques and theories, and any

possible or actual changes in regulatory environment that affects the Group; and

(t) To ensure resources (including but not limited to budget, training, human resources and professional advice), if required, are adequate and has been allocated to support the group’s risk management activities.

1.5 Meetings

The Committee shall meet at least four (4) times a year. The Company’s Head of Finance is usually invited to attend all the meetings. A representative of the external auditors will also be invited to attend the meetings occasionally to consider the final audited financial statements and such other matters determined by the Committee. The Company Secretary shall be the secretary of the Committee. During the financial year, the Audit Committee had met five (5) times and details of the attendance of each member in respect of the Audit Committee meetings held are as tabulated below:-

Name Attendance

1. Mok Yuen Lok 5/5 2. Ismail Bin Mahayudin 5/5 3. Lt Jen (B) Datuk Hj Adenan Bin Hj Mohamad Zain 5/5

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2. SUMMARY OF ACTIVITIES CARRIED OUT BY THE AUDIT COMMITTEE

DURING THE FINANCIAL YEAR ENDED 31 DECEMBER 2014

The Audit Committee, in accordance with its Terms of Reference, carried out the following activities during the year under review:-

a. Review of the unaudited quarterly financial results and making suitable

recommendations thereon to the Board for adoption prior to their release to Bursa Securities.

b. Reviewing the external auditor’s report on audit findings and accounting issues thereon

to the Board for adoption prior to their release to Bursa Securities. c. Discussion with external auditors on the impact of new accounting standards issued by

the Malaysian Accounting Standards Board on the Group’s financial statements. d. Discussion with external auditors on the Group Audit Plan which sets out the auditor’s

responsibilities and scope of audit work in respect of the Group’s financial statements. e. Reviewing letters of engagement presented by the external auditors, which outlines the

terms governing the re-appointment as statutory auditors, reviewing of the Directors’ statement on internal control as well as audit fees before the same is recommended to the Board for approval.

f. Reviewing the internal audit report prepared by the Enterprise Risk Management

(“ERM”) Department and addressed the issues arising from the said report. 3. INTERNAL AUDIT FUNCTION

The internal audit function is carried out by the ERM Department, which shall assist the Audit Committee in discharging its duties and responsibilities. During the financial year under review, the ERM Department had reviewed the adequacy and effectiveness of the policy as well as the standard operating procedure within the Group’s local subsidiaries based on the key risk areas selected from the risk profiles. A summary of the internal audit activities carried out by the ERM department during the financial year under review as follow: 1. Prepared and presented an audit plan, scope of work to the ARMC and the Board for

approval; 2. Carried out investigations and special reviews request by management; 3. Ascertained the level of operational and business compliance with established policies

and procedures. As at 31 December 2014, the ERM department managed to perform its responsibilities with independence, proficiency so as to give assurance to the Board on the integrity of its internal control and the reliability of the systems as a whole. The approximate cost incurred by the Group for the internal audit function during the financial year was RM25,000.

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STATEMENT ON CORPORATE GOVERNANCE The Board of Directors (“the Board”) is committed in ensuring a high standards of corporate governance are being practiced by the Company and its controlled entities (referred to collectively as the “Group”), as the Board recognizes that by practicing high standards of corporate governance in conducting its business and corporate affairs, the Group would protect and enhance its shareholders’ value and the financial performance of the Group. This Statement on Corporate Governance is made in compliance with Chapter 15, Part E, Paragraph 15.25 of the Main Market Listing Requirements and the Malaysian Code on Corporate Governance 2012 (“the Code”), which sets out the principles and best practices that companies may use in their operations towards achieving the optimal governance framework. The Board is pleased to present the Statement of Corporate Governance for the year ended 31 December 2014 outlining the application of the principal and the best practices of the Code. 1. THE BOARD OF DIRECTORS

1.1 Board Composition and Balance

The Board of Directors presently comprises five (5) members, in particular, the Chairman who is an Independent Non-Executive Director, two (2) Non-Independent Executive Directors, one (1) Non-Independent Non-Executive Director and one (1) Independent Non-Executive Director. This composition of the Board is in compliance with the provisions of the Main Market Listing Requirements to maintain the requisite number of Independent Non-Executive Directors of at least one third of the Board. The diverse entrepreneurial and financial expertise among the Board of Directors will enhance their stewardship in spearheading the Group’s direction towards achieving its goals and objectives.

A brief profile of each Director is presented in the “Board of Directors Profile” section in pages 8 to 12 of this Annual Report

1.2 Duties and Responsibilities of the Board

The Chairman is responsible for running the Board and acts as a facilitator at all Board Meetings and ensure effectiveness of the Board and the Chief Executive Officer will assist the Chairman in monitoring the day-to-day running of the business. The Executive Directors are responsible for making and implementing operational and corporate decisions. The Non-Executive Directors’ pivotal role is ensuring corporate accountability by providing unbiased and independent views as well as sharing their knowledge and experience towards the corporate decision-making process. In the event that there is a potential conflict of interest, it is a mandatory practice for the director concerned to declare his interest and abstain from any board decisions.

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STATEMENT ON CORPORATE GOVERNANCE (CONTINUED)

The Board Charter is published at the Company’s website at www.giibworld.com which sets out the roles, responsibilities, functions, composition and Board balance, procedures and operations of the Board as well as those functions delegated to be Board Committees. The Board Charter which provides guidance for the Board members in carrying out their roles and discharging their duties shall be reviewed and updated from time to time by the Board.

1.3 Code Of Conduct The Board observes the Code of Ethics of the Malaysian Companies Act, 1965 and the Code of Ethic for the Company Director issued by the Companies Commission of Malaysia (“Regulatory Code of Ethics”). The Regulatory Code of Ethics provides the ground rules and guidance for proper standard of conduct and ethical behaviour for the Board, based on the principles of sincerity, integrity, responsibility and corporate social responsibility. In this regard, the Board will be formalising the above principles of expected conduct into the Directors’ Code of Conduct in the Board Charter to govern the standards of ethics and good conduct expected of Directors. For employees, the acceptable conducts expected of them will be stated clearly in the Employee Handbook.

1.4 Board Meetings

The Board meets at least every quarter to review its quarterly performances and discuss on matters specifically reserved to it and also to deliberate on decisions that ensure the direction and control of the Company is well managed. Additional meetings will be called as and when necessary. During the financial year under review, five (5) Board meetings were held and the attendance of the Board members is as follows:

Name Attendance

1. Mok Yuen Lok (Chairman) 5/5 2. Tai Boon Wee 5/5 3. Wong Ping Kiong 5/5 4. Ismail Bin Mahayudin 5/5 5. Lt Jen (B) Datuk Hj Adenan Bin Hj Mohamad Zain 5/5

1.5 Supply of Information to the Board

All Directors are provided with an agenda of the meeting and board papers, which contain updates on operational, financial and corporate developments, prior to the Board meeting. The Board papers were circulated to the Directors in advance to facilitate informed decision making.

20 21

STATEMENT ON CORPORATE GOVERNANCE (CONTINUED) The Directors are also notified of any corporate announcement released to Bursa Malaysia Securities Berhad (“Bursa Securities”). All Directors have access to all information within the Group as well as advice and services of the Company Secretary who are responsible to the Board for ensuring that all Board procedures are followed and that applicable regulations are complied with. In addition, the Directors may engage external and independent professional advisors, whenever required, at the Company’s expense in order to discharge their duties and responsibilities more effectively.

1.6 Appointment and Re-election of Directors

The appointment of directors is conducted through a formal and transparent process, which was approved and adopted by the Board. The potential candidate will be assessed and reviewed by the Joint Nomination and Remuneration Committee (“JNRC”) prior to the recommendation to the Board for approval and appointment. The Company Secretary ensures that all appointments are properly made for the purposes of meeting statutory obligations, as well as obligations arising from the Listing Requirements of Bursa Securities or other regulatory requirements. Both Mok Yuen Lok and Ismail Bin Mahayudin who have served as Independent Non-Executive Directors for more than a cumulative term of 9 years, have decided not to seek for re-election at the forthcoming Annual General Meeting of the Company. Hence, they will retain office until the conclusion of the 12th Annual General Meeting. The JNRC will identify suitable candidates in replacement of them. The Company’s Articles of Association governs that one third (1/3) of the Board for the time being, shall retire from office and be eligible for re-election provided at all times that all Directors shall retire from office once at least in each three (3) years, but shall be eligible for re-election. This provides the opportunity for shareholders to renew their mandate. The Article of Association further governs that the Managing Director or Deputy Managing Director shall, while he continues to hold office, be subject to retirement by rotation. The election of each Director is voted separately. To assist the shareholders in their decision making, sufficient information such as the personal profile, attendance of Board meetings and shareholdings in the Group held by each Director standing for re-election will be furnished in a separate Statement Accompanying the Notice of Annual General Meeting.

Directors who are over seventy years of age are required to submit themselves for re-appointment annually in accordance with Section 129(6) of the Companies Act, 1965. The Board, through the JNRC, annually appraises its composition to ensure it has the required mix of skills, experience and other qualities, including core competencies which are required for them to discharge their duties and responsibilities effectively and efficiently.

20 21

STATEMENT ON CORPORATE GOVERNANCE (CONTINUED) 1.7 Directors’ Training

All Directors have attended the Mandatory Accreditation Programme as required under the Listing Requirements of Bursa Securities. All Directors are mindful that they shall receive appropriate training, which may be required from time to time to keep abreast with current developments of the industry as well as new statutory and regulatory requirements. Descriptions of the type of training attended by the Directors for the financial year ended 31 December 2014 are as follows:-

Director Training Mode of

Training No. of hours / day(s) spent

Mok Yuen Lok 1. Briefing Session On Corporate Governance Guide: Towards Boardroom Excellence (2nd Edition) – An Update

Presentation ½ day

Tai Boon Wee 1. Briefing Session On Corporate Governance Guide: Towards Boardroom Excellence (2nd Edition) – An Update

2. MSWG’s Appreciation & Application of ASEAN Corporate Governance Scorecard

Presentation

Workshop

½ day

½ day

Wong Ping Kiong 1. Briefing Session On Corporate Governance Guide: Towards Boardroom Excellence (2nd Edition) – An Update


Presentation

Workshop

½ day

½ day

22 23


Director Training Mode of Training

No. of hours / day(s) spent

Ismail Bin Mahayudin

1. Briefing Session On Corporate Governance Guide: Towards Boardroom Excellence (2nd Edition) – An Update

Presentation ½ day

Lt Jen (B) Datuk Hj Adenan Bin Haji Mohamad Zain

1. Briefing Session On Corporate Governance Guide: Towards Boardroom Excellence (2nd Edition) – An Update


3. Risk Management & Internal Control – Workshop For Audit Committee Members

Presentation

Workshop

Workshop

½ day

½ day

1 day

The Directors will continue to participate in relevant training programmes to further enhance their skills and knowledge and to keep abreast with the relevant changes and development of laws and regulation as well as the business environment.

1.8 Board Committees

The Board had established several Board Committees to assist the Board in carrying out specific responsibilities for the Company, which operate within a clearly defined terms of reference. Notwithstanding the aforesaid, the ultimate responsibility for the final decision lies with the full Board. The various Committees are as below: a. Audit and Risk Management Committee (“ARMC”)

The key responsibilities of the ARMC is to assist the Board in assessing the risks and control environment, overseeing financial reporting, evaluating the internal and external audit process as well as reviewing situations caused by conflict of interest and related party transactions of the Group. Presently, the ARMC members consist of two (2) Independent Non-Executive Directors and one (1) Non-Independent Non-Executive Director. The ARMC Report detailing the objective, term of reference, summary of the ARMC including the summary of activities during the financial year ended 31 December 2014 is as set out on pages 13 to 17 of the ARMC Report in this Annual Report.

22 23

STATEMENT ON CORPORATE GOVERNANCE (CONTINUED) b. Joint Nomination and Remuneration Committee

On 12 August 2004, the Board established a Nomination Committee as well as a Remuneration Committee. On 28 February 2009, the Board had decided and approved that both committees be combined and known as Joint Nomination and Remuneration Committee (“JNRC” or “the Committee”) for the purpose of expediency and its members are entrusted with the function of both committees. The members of the JNRC are as follows:

i. Ismail Bin Mahayudin (Chairman) ii. Mok Yuen Lok iii. Lt Jen (B) Datuk Hj Adenan Bin Hj Mohamad Zain

The role of the JNRC is to assess and recommend to the Board, suitable candidates to act as directors of the Company. The Committee carries out annual evaluations on the Board as a whole including individual contribution to ensure that it has the optimal mix of qualifications, skills, experience and other qualities, including core competencies, which they should possess in order to serve the Board effectively and efficiently. In respect of remuneration matters, the JNRC recommends to the Board the remuneration framework for Directors as well as the remuneration packages of Executive Directors, CEO and key management positions such as Chief Financial Officer, Chief Operating Officer and Senior General Manager for approval. This is to ensure that the components of the remuneration is linked to performance, responsibility levels and is comparable with market norm. The Committee also formulates and reviews the said remuneration packages with the aim of attracting, retaining and motivating individuals of the highest caliber which are required to manage the business of the Company and uphold shareholders’ interest. During the course of the Board’s deliberation in determining the remuneration packages for the Executive Directors, none of the Executive Directors have participated in the aforesaid deliberation. Further, each Director will abstain from participating in the decision-making of their respective remuneration packages. The JNRC meets at least once a year and whenever required. During the financial year, the Committee met and the activities undertaken were as follows:- Reviewed the present size and composition of the Board, the ARMC and the

JNRC respectively; Carried and reviewed the outcome of the evaluation of performance of Board,

Board Committees, self and peer assessment of individual directors and/or members of the respective Board Committees;

24 25

STATEMENT ON CORPORATE GOVERNANCE (CONTINUED) Reviewed the adequacy of the Board in terms of its mix skills, experience and

other qualities, including core competencies; Discussed the Directors’ retirement by rotation; Assessed the independence of independent directors based on the guidelines

set out in the MMLR of Bursa Securities; Reviewed, assessed and recommended, with or without other independent

professional advice, the remuneration package of the Executive Directors.

2. DIRECTORS’ REMUNERATION

Details of the Directors’ remuneration for the financial year ended 31 December 2014 are as follows:

a. The aggregate remuneration of the Directors, distinguishing between executive and

non-executive directors is categorised below:-

Category of Directors

Fees

RM’000

Remuneration

RM’000

Other emoluments*

RM’000

Total

RM’000 Executive 40 1,154 268 1,462 Non-Executive 64 - 127 191 104 1,154 395 1,653

* Other emoluments includes E.P.F

b. The number of Directors remuneration that fall within the following brackets/range are as set out below:-

Bracket / Range (RM) Number of Directors Executive Non-Executive

Below 50,000

-

-

50,001 – 100,000 100,001 – 300,000 300,001 - 600,000 600,000 – 1,000,000

- - - 2

--------- 2

=====

3 - - -

--------- 3

=====

24 25

STATEMENT ON CORPORATE GOVERNANCE (CONTINUED) 3. RELATIONSHIP AND COMMUNICATION WITH SHAREHOLDERS /

INVESTORS

The Group values the importance of an effective communication channel between the Board, shareholders and general public. Press releases and announcements on quarterly financial results and corporate exercises are the primary modes of disseminating information on the Group’s business activities and financial performance to the shareholders and general public. Other corporate information available to shareholders is in the form of Annual Reports and Circulars to Shareholders. The policy of the Board is to maintain an active communication channel with its shareholders with the intention of providing shareholders a clear and complete view of the Group’s performance and direction. The Annual General Meeting (“AGM”) represents the principal forum for dialogue and interaction between the Board and shareholders. During the AGM, shareholders are informed of the current developments of the Company and they will be given an opportunity to seek clarifications or provide feedback and comments to the Directors and Management for consideration.

Bursa Securities allows the Company to electronically publish all its announcements, including quarterly financial result, Circulars to Shareholders and Annual Reports. These can be accessed any time through Bursa Securities’ website, http://www.bursamalaysia.com. The Company also endeavours to provide as much information as possible to its shareholders in compliance with the statutory and legal framework governing the release of material and price-sensitive information. As such, corporate disclosures will take into account the prevailing legislative restrictions and requirements as well as the investors’ need for timely release of price-sensitive information, such as financial performance results and statements, material acquisitions, significant corporate proposals as well as other significant corporate events.

To further enhance the transparency and communication with the shareholders and all interested parties, the Company has set up its website, http://www.giibworld.com for timely dissemination of business related information.

4. ACCOUNTABILITY AND AUDIT

4.1 Financial Reporting

The Directors are responsible to ensure that financial statements are drawn up in accordance with Section 169(15) of the Companies Act, 1965 and applicable approved accounting standards in Malaysia. The Directors are also accountable to ensure that the financial statements reflect true and fair view of the state of affairs of the Company, and the Group.

26 27


The Board is assisted by the Audit and Risk Management Committee to oversee the Group’s financial reporting processes to ensure accuracy, adequacy of all relevant information for disclosure and that necessary steps have been taken to ensure that the Group had used all the applicable accounting policies consistently, and that the policies are supported by reasonable prudent judgments and estimates.

4.2 Risk Management and Internal Control

The Board of Directors has always placed significant emphasis on sound risk management and internal control, which provide reasonable assessment of effective and efficient operations, internal financial controls, and compliance with laws and regulations. The Statement on Internal Control is set out on pages 32 to 34 of the Annual Report.

4.3 Relationship with Auditors

The Board, through the Audit and Risk Management Committee (“ARMC”) has established a formal and transparent relationship with the external auditors, which are maintained on a professional basis. Key features underlying the relationship of the ARMC with the external auditors are included in the ARMC’s term of reference as set out on pages 13 to 17 of the Annual Report.

4.5 Compliance Statement

The Company has complied with all the best practices of corporate governance set out in Part 2 of the Code, except for Best Practice AAVII (Nomination of Senior Independent Non-Executive Director) throughout the financial year. Given the current composition of the Board, which reflects the element of independence, the Board does not consider it necessary at this juncture to nominate a Senior Independent Non-Executive Director.

26 27

ADDITIONAL COMPLIANCE INFORMATION MATERIAL CONTRACTS

There are no material contracts entered into by the Company and its subsidiaries which involved Directors’ and major shareholders’ interests either still subsisting at the end of the financial year or entered into since the end of the previous financial year.

NON-AUDIT FEE

There was no non-audit fee paid out or payable to Kreston, John & Gan, the Company’s auditors, during the financial year.

SHARE BUY-BACK

The Company did not enter into any share buy-back transactions during the financial year.

AMERICAN DEPOSITORY RECEIPT (“ADR”) OR GLOBAL DEPOSITORY RECEIPT (“GDR”) PROGRAMME.

The Company has not sponsored any ADR or GDR programmes during the financial year.

VARIATION IN RESULTS

There were no significant variance between the reported results for the financial year and the unaudited results previously announced by the Company for the financial year ended 31 December 2014.

PROFIT GUARANTEE

There was no profit guarantee given by the Company during the financial year.

IMPOSITIONS OF SANCTIONS AND PENALTIES

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

RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE Details of the recurrent related party transactions of a revenue or trading nature undertaken by the Group during the financial year under review are disclosed in Note 40 of the audited financial statements.

UTILISATION OF PROCEEDS There was no issuance of new shares, rights issues, issuance of bonds or any exercise of options to raise any cash proceeds during the financial year.

OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES

There was no exercise of options, warrants or convertible securities exercised/issued during the financial year.

28 29

CORPORATE SOCIAL RESPONSIBILITY (“CSR”) STATEMENT GIIB’s corporate responsibility charter was created to better express our goals and aspirations as a socially responsible corporate entity.

ACTIVITIES PHOTO

GIIB UNITE FOR TYRE SAFETY CAMPAIGN - GIIB saw the value of unity being put into practice at the first Johor Safe & Responsible Drivers Day held in Johor Bahru. The whole-day event on 2 November 2014 was launched by Y.Bhg. Tan Seri Dr. Syed Hamid Syed Jaafar Albar and involved the close co-operation of several parties such as Asian Truckers Club, worked with JPJ, JKJR, SPAD and the traffic police in Johor. Truck Nation Malaysia played hosted together with the Johor Sand & Granite Lorry Operators Association. As the event’s tyre safety specialist, GIIB’s objective was to create awareness among truck drivers on the importance of tyre safety management as well as to inform fleet owners on how GIIB Tyre Management Solutions (GTMS) can help them to more efficiently operate their business on a daily basis. Six groups of drivers learnt from us what to look for in quality retreads and the technology procedures involved in the retreading process also how GIIB Tyre Managemet system can add value to their fleet operation.

An Interactive Tyre Safety Management briefing by GIIB sales team.

28 29

CORPORATE SOCIAL RESPONSIBILITY (“CSR”) STATEMENT (CONTINUED)

ACTIVITIES PHOTO

TEAMBUILDING ACTIVITY – As part of GIIB’s initiative to unite and strengthen the bond among the employees, the Human Resource team has organized a 2 days 1 night teambuilding activity at Eagle Ranch Resort, Port Dickson. Some of the activities include raft building, wall climbing, rope course challenge and many other high powered activities which have foster leadership and high teamwork among the employees.

30 31


ACTIVITIES PHOTO

AILING CHILDREN GETS THEIR WISH - Big Wheel Green Tyres Sdn Bhd (“BWGT”) being the corporate partner of The Children Wish List Society of Malaysia (“CWS”) has carried out the following activities in year 2014:- a. BWGT drummed up the beat at CWS’s

annual JOM Durian VII charity festival which has raise RM130,000 for CWS.

b. Seven years old ailing Leukemia boy gets his wish to fly in a plane and visit Kota Kinabalu with his family.

c. Ten years old ailing heart boy get his wish watching his favorite programs on television at his coastal home in Kudat when CWS’s team placed a surprised visit with a brand new 24-inch flat screen television set, a DVD player and DVDs for him.

30 31


ACTIVITIES PHOTO

d. Three siblings who are left “stranded” in

their dilapidated home in Kota Belud because of muscular disease that has left them almost immobilized got their wish for an iPad fulfil by CWS and BWGT.

“The smile on this children’s face made our journey over worth its weight in gold. Nothing compares to the happiness we have managed to share with them” said CWS’s Vice President, Teoh Teik Hoong

32 33

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL INTRODUCTION The Board of Directors (“the Board”) of Goodway Integrated Industries Berhad maintains a sound system of risk management and internal control to safeguard shareholders’ investment and the Group’s assets. In compliance with Paragraph 15.26 (b) of the Main Market Listing Requirements and Practice Note 9 of Bursa Malaysia Securities Berhad (“Bursa Securities”), the Board is pleased to set out below the Statement of Risk Management and Internal Control for the Group for financial year ended 31 December 2014. BOARD RESPONSIBILITY The Board recognises the importance of a sound system of internal control and risk management practices and as such affirms its overall responsibility for the Group’s system of internal control by periodically reviewing and evaluating its adequacy and integrity of the systems. Notwithstanding the above, it should be noted that such systems have inherent limitations and these are designed to manage and control rather than eliminate entirely the risks that may impede the Group from achieving its business objectives. As such, the systems of Risk Management and Internal Control can only provide a reasonable but not an absolute assurance against the occurrence of any material misstatements and/or losses. Whilst the Board has overall responsibility for the Group’s system of internal control and risk management, it has delegated the implementation of the system to the Management who regularly report on risks identified and steps taken to mitigate and minimize the risks. These internal control systems are subject to the Board’s regular review so that the Board can monitor the effectiveness of these systems. RISK MANAGEMENT Risk management is set in the Group’s management system. The Board with the assistance of an internal enterprise risk management executive, have established ongoing processes for identifying, evaluating and managing the significant risks faced by the Group. This Enterprise Risk Management process includes conducting risk profiling and determining key risk areas and its impact including developing an internal audit plan, updating the system of internal controls when there are changes to business environment or regulatory guidelines. The Board also relies on the close involvement of the CEO, COO and few of the top key management staff in its daily operations. There are periodic reviews of operational and financial performance at Audit and Risk Management Committee Meeting and Board Meetings at least on a quarterly basis. The Board and Management ensure that appropriate measures are taken to address any significant risks.

32 33

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL (CONTINUED) KEY INTERNAL CONTROL PROCESSES The Group’s system of internal control comprises various policies, procedures and, frameworks, amongst which are: 1. Clear and Structured Organisation Structure

The Group has a well-defined structure that sets out clearly the segregation of roles and responsibilities, lines of accountability and levels of authorities to ensure effective control at various levels of the Group.

2. Policies and Procedures

Clear, formalized and documented internal control policies, procedures (including standard operating procedures) are in place to ensure compliance with internal controls and relevant rules and regulations. Regular reviews are carried out to ensure that documentation is current and relevant.

3. Quality Health Safety and Environment

The Company and its subsidiaries have adopted an integrated management system that has been certified by SIRIM and TUV as compliant with ISO 9001:2000 (quality management), ISO 14001:2004 (environmental management), OHSAS 18001:2007 (safety management) and MS224 (quality management). The system is subjected to ongoing internal audit programs, as well as annual audit by SIRIM and TUV. Managers who oversee quality, health, safety and environmental issues are to achieve “Zero” accident and an incident free environment where progress is monitored against key performance indicators. Monthly reports on progress are provided to the Head of Operating Units.

ASSURANCE The Board will continue to be vigilant and committed in ensuring that the system of internal controls as well as risk management practices is effective and efficient for the Group’s operations. Therefore, the Board will implement appropriate action plans to rectify any material weaknesses identified or further enhance the system of internal controls as and when necessary. There has been an affirmation by the Chief Executive Officer, Chief Operating Officer and Financial Officer as regard to this Statement.

34 35

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL (CONTINUED) REVIEW OF THE STATEMENT As required by Paragraph 15.23 of the Bursa Malaysia Securities Berhad Main Market Listing Requirements, the external auditors have reviewed this Statement on Risk Management and Internal Control. Based on their review, for the financial year under review, the external auditors have reported to the Board that nothing has come to their attention that causes them to believe that this Statement is inconsistent with their understanding of the process the Board has adopted in the review of the adequacy and integrity of internal control of the Group.

34 35

STATEMENT OF DIRECTORS’ RESPONSIBILITIES The directors are required by the Companies Act, 1965 to prepare financial statement which give a true and fair view of the state of affairs of the Group and of the Company as at the end of each financial year and of the results and cash flows of the Group and of the Company for the financial year then ended. The directors ensure that suitable accounting policies have been used and applied consistently, and that reasonable and prudent judgments and estimates have been made, in the preparation of the financial statements. The directors also ensure that applicable approved accounting standards have been followed. The directors are responsible for keeping proper accounting records, which disclose with reasonable accuracy the financial position of the Group and of the Company and to enable them to ensure that the financial statements comply with the Companies Act, 1965.

STATEMENT OF DIRECTORS’ RESPONSIBILITIES

36 37

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014

36 37

Goodway Integrated Industries Berhad

3

Directors' Report for the year ended 31st December 2014

38 39


4


38 39


5


40 41

7

Audit I Tax I Advisory

Independent Auditors' Report to members of Goodway Integrated Industries Berhad (Company No. 618972 - T)

Report on the Financial Statements

We have audited the financial statements of Goodway Integrated Industries Berhad, which comprise statements of financial position as at 31st December 2014 of the Group and of the Company, and statements of profit or loss and other comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the year then ended, and a summary of significant accounting policies and other explanatory information, as set out on notes 1 to 42.

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

Auditors’ Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, 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.

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

Opinion

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

Report on other legal and Regulatory Requirements

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

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

b) We have considered the financial statements and the auditors’ reports of all the subsidiaries of which we have not acted as auditors, which are indicated in Note 7 to the financial statements.

42 43


9

Consolidated Statement of Financial Position 31st December 2014

44


10

Consolidated Statement of Profit or Loss and Other Comprehensive Income for the year ended 31st December 2014

44

45

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Inte

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46

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46

47


13

Consolidated Statement of Cash Flows for the year ended 31st December 2014

48 49


14

Consolidated Statement of Cash Flows for the year ended 31st December 2014

48 49


15

Statement of Financial Position 31st December 2014

50 51


16

Statement of Profit or Loss and Other Comprehensive Income for the year ended 31st December 2014

50 51


17

Statement of Changes in Equity for the year ended 31st December 2014

52 53


18

Statement of Cash Flows for the year ended 31st December 2014

52 53


19

Notes to the Financial Statements 31st December 2014

•

• •

•

54 55


20


•

•

•

•

• •

•

•

•

•

•

• • •

•

• •

•

•

54 55


21


•

•

56 57


22


56 57


23


58 59


24


•

•

•

• • •

•

58 59


25


60 61


26


60 61


27


62 63


28


62 63


29


64 65


30


64 65


31


66 67


32


66 67


33


68 69


34


68 69


35


•

70 71


36


goodway integrated industries bhd

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