camres.com.my · CONTENTS 2 Notice of Annual General Meeting 6 Statement Accompanying Notice of...

ANNUAL REPORT

2015

CONTENTS

2Notice of Annual General Meeting

6Statement Accompanying Notice of Annual General Meeting

7Corporate Information

8Group Structure

9Chairman’s Statement

10Directors’ Profile

13Statement onCorporate Governance

28Audit Committee Report

32Statement of Directors’ Responsibility

33Statement on Risk Management and Internal Control

35Directors’ Report

39Statement by Directors

39Statutory Declaration

40Independent Auditors’ Report

42Statements of Profit or Loss and Other Comprehensive Income

43Statements of Financial Position

45Consolidated Statement of Changes in Equity

46Statement of Changes in Equity

47Statements of Cash Flows

49Notes to the Financial Statements

99Supplementary Information on the Disclosure

100Analysis of Shareholdings

102List of Properties

Proxy Form

CAM RESOURCES BERHADANNUAL REPORT 2015


2

NOTICE IS HEREBY GIVEN that the Fifteenth Annual General Meeting of the Company will be held at Function Room, Level 2, Hotel Sri Petaling, 30, Jalan Radin Anum, Bandar Baru Sri Petaling, 57000 Kuala Lumpur on Friday, 24 June 2016 at 11.00 a.m. for the following purposes:-

AGENDA

Ordinary Business

1. To table the Audited Financial Statements for the year ended 31 December 2015 together with the Reports of the Directors and Auditors thereon.

2. To approve the Directors’ Fees for the financial year ended 31 December 2015.

3. To re-elect the following Directors, who retire by rotation in accordance with Article 91 of the Company’s Articles of Association:-

(i) Mr Lee Chin Yen (ii) Mr Tan Hong Cheng (iii) Mr Chan Kee Loin 4. To re-appoint Messrs Baker Tilly AC as Auditors of the Company and to authorise the Directors

to fix their remuneration.

Special Business

To consider and if thought fit, to pass the following Ordinary Resolutions with or without modifications:-

5. Authority to Issue Shares Pursuant to Section 132D of the Companies Act, 1965 (“Authority to Issue Shares”)

“THAT subject always to the Companies Act, 1965, Articles of Association of the Company and approvals from Bursa Malaysia Securities Berhad and any other governmental/regulatory bodies, where such approval is necessary, authority be and is hereby given to the Directors pursuant to Section 132D of the Companies Act, 1965 to issue and allot not more than ten percent (10%) of the issued capital of the Company at any time upon any such terms and conditions and for such purposes as the Directors may in their absolute discretion deem fit or in pursuance of offers, agreements or options to be made or granted by the Directors while this approval is in force until the conclusion of the next Annual General Meeting of the Company and that the Directors be and are hereby further authorised to make or grant offers, agreements or options which would or might require shares to be issued after the expiration of the approval hereof.”

6. PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE

“THAT approval be and is hereby given to the Company and its subsidiary companies to enter into and give effect to specified recurrent transactions of a revenue or trading nature and with specified class of the related parties as stated in Section 1.4 of Part A of the Circular to Shareholders dated 29 April 2016 which is necessary for the Group’s day to day operations subject further to the following:-

i) the transactions are in the ordinary course of business, on arm’s length basis, on normal commercial terms which are not more favourable to the related parties than those generally available to the public and are not detrimental to the minority shareholders;

ii) disclosure is made in the annual report of the aggregate value of transactions conducted pursuant to the shareholders’ mandate during the financial year; and

NOTICE OFANNUAL GENERAL MEETING

(Please refer to Note A)

(Resolution 1)

(Resolution 2)(Resolution 3)(Resolution 4)

(Resolution 5)

(Resolution 6)



3

iii) that such approval shall continue to be in force until the earlier of :-

(a) the conclusion of the next Annual General Meeting (“AGM”) of the Company at which time it will lapse unless the authority is renewed by a resolution passed at the next Annual General Meeting;

(b) the expiration of the period within which the next AGM is to be held pursuant to section 143(1) of the Companies Act, 1965 (“the Act”) (but shall not extend to such extension as may be allowed pursuant to section 143(2) of the Act); or

(c) such approval is revoked or varied by resolution passed by shareholders in a general meeting before the next Annual General Meeting.

AND THAT the Directors of the Company and its subsidiary companies be and are hereby authorised to complete and do all such acts and things (including executing all such documents as may be required) as they may consider expedient or necessary to give effect to the transactions contemplated and/or authorised by this Ordinary Resolution.”

7. PROPOSED RENEWAL OF AUTHORITY FOR THE COMPANY TO PURCHASE ITS OWN SHARES

“That, subject always to the Companies Act, 1965 (“Act”), rules, regulations and orders made pursuant to the Act, provisions of the Company’s Memorandum and Articles of Association, the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Exchange”) and the requirements of any other relevant authority, the Directors of the Company be and are hereby authorised to purchase such number of ordinary shares of RM0.25 each in the Company (“CAM Shares”) through the Exchange and to take all such steps as are necessary (including the opening and maintaining of a central depositories account under the Securities Industry (Central Depositories) Act, 1991) and enter into any agreements, arrangements and guarantees with any party or parties to implement, finalise and give full effect to the aforesaid purchase with full powers to assent to any conditions, modifications, revaluations, variations and/or amendments (if any) as may be imposed by the relevant authorities from time to time and to do all such acts and things in the best interests of the Company, subject further to the following:-

1. the maximum number of ordinary shares which may be purchased and held by the Company shall be equivalent to ten per centum (10%) of the issued and paid-up share capital of the Company;

2. the maximum funds to be allocated by the Company for the purpose of purchasing the ordinary shares shall not exceed the total retained profits or share premium reserve of the Company or both;

3. the authority shall commence immediately upon passing of this ordinary resolution until:-

a) the conclusion of the next Annual General Meeting (“AGM”) of the Company following the AGM at which such resolution was passed at which time it will lapse unless by ordinary resolution passed at that general meeting, the authority is renewed, either unconditionally or subject to conditions; or

(b) the expiration of the period within which the next AGM after that date it is required by law to be held; or

(c) revoked or varied by ordinary resolution passed by the shareholders of the Company in a general meeting;

whichever occurs first;

AND THAT upon completion of the purchase(s) of CAM Shares or any part thereof by the Company, the Directors of the Company be and are hereby authorised to deal with any CAM Shares so purchased by the Company in the following manner:-

(a) cancel all the CAM Shares so purchased; or

NOTICE OF ANNUAL GENERAL MEETING

(Cont’d)

(Resolution 7)



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(b) retain all the CAM Shares as treasury shares for future re-sale or for distribution as dividend to the shareholders of the Company; or

(c) retain part thereof as treasury shares and subsequently cancelling the balance; or

(d) in any other manner as prescribed by the Act, rules, regulations and orders made pursuant to the Act and the requirements of the Exchange and any other relevant authority for the time being in force.”

8. Retention of Independent Non-Executive Directors

“THAT approval be and is hereby given to the following directors who have served as Independent Non-Executive Directors of the Company for a cumulative term of more than nine (9) years to continue to act as Independent Non-Executive Directors of the Company until the conclusion of the next Annual General Meeting in accordance with the Malaysian Code on Corporate Governance 2012:-

(i) Mr Chai Moi Kim (ii) Mr Chia Kay Joo (iii) Tuan Haji Azizul Bin Mohd Othman 9. To transact any other business for which due notice has been given in accordance with the

Companies Act 1965.

By Order of the Board

LIM MING TOONGANNA LEE AI LENGCompany Secretaries

Kuala Lumpur29 April 2016

NOTES:

A This item is meant for discussion only as the provision of Section 169(1) of the Companies Act, 1965 does not require a formal approval of the shareholders and hence, is not put forward for voting.

(1) A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company.

(2) To be valid, the duly completed proxy form must be deposited at the Company’s Registrar, Tricor Investor & Issuing House Services Sdn Bhd, Unit 32-01, level 32, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi,59200 Kuala Lumpur not less than forty-eight (48) hours before the time for holding the meeting.

(3) A member shall be entitled to appoint more than one (1) proxy to attend and vote at the same meeting provided that the provisions of Section 149(1)(c) of the Companies Act, 1965 are complied with.

(4) Whereamember is anauthorisednomineeasdefinedunder theSecurities Industry (CentralDepositories)Act, 1991, itmayappoint at least one (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.

(5) Where a member of the Company is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (“omnibusaccount”), there is no limit to thenumber of proxieswhich theexemptauthorised nominee may appoint in respect of each omnibus account it holds.

(6) Whereamemberappointsmore thanone (1)proxy theappointmentshall be invalidunlesshespecifies theproportionofhisholdings to be represented by each proxy.

(7) If the appointor is a corporation, this form must be executed under its Common Seal or under the hand of its attorney.

NOTICE OF ANNUAL GENERAL MEETING(Cont’d)

(Resolution 8)

(Resolution 9)(Resolution 10)(Resolution 11)



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NOTICE OF ANNUAL GENERAL MEETING

(Cont’d)

(8) GENERAL MEETING RECORD OF DEPOSITORS

For the purposes of determining a member who shall be entitled to attend this 15th AGM, the Company shall be requesting BursaMalaysiaDepositorySdnBhdinaccordancewithArticle49oftheCompany’sArticlesofAssociationandSection34(1)oftheSecurities Industry (CentralDepositories)Act1991, to issueaGeneralMeetingRecordofDepositorsasat16June2016.OnlyadepositorwhosenameappearsonsuchRecordofDepositorsshallbeentitledtoattendthismeetingorappointproxiesto attend and/or vote on his/her behalf.

EXPLANATORY NOTE ON SPECIAL BUSINESS:

(9) Resolution 6 - Authority to Issue Shares

OrdinaryResolution6,ifpassed,willgiveflexibilitytotheDirectorsoftheCompanytoissuesharesuptoamaximumoftenpercentum (10%) of the issued share capital of the Company at the time of such issuance of shares and for such purposes as they consider would be in the best interest of the Company without having to convene separate general meetings. This authority, unless revoked or varied at a general meeting, will expire at the conclusion of the next Annual General Meeting of the Company.

The purpose of this generalmandate soughtwill provide flexibility to theCompany for any possible fund raising activities,including but not limited to further placement of shares, for purpose of funding current and/or future investment projects, working capital, repayment of borrowings and/or acquisitions.

As at the date of this notice of Annual General Meeting, the Company has not issued any new shares pursuant to the existing Section132Dauthorityobtainedduringthelastannualgeneralmeetingheldon22June2015,whichauthorityshalllapseattheconclusion of this Annual General Meeting.

(10) Resolution 7 - Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of revenue or trading nature.

Ordinary Resolution 7, if passed, will allow the Company and its subsidiaries to enter into Recurrent Related Party Transactions in accordance with Paragraph 10.09 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad. Please refer to Part A of the Circular to Shareholders dated 29 April 2016 for further information.

(11) Resolution 8 - Proposed Renewal of Share Buy-Back Authority Ordinary Resolution 8, if passed, will provide the mandate for the Company to buy back its own shares up to a limit of ten per

centum (10%) of the issued and paid-up share capital of the Company. Please refer to Part B of the Statement to Shareholders dated 29 April 2016 for further information.

(12) Resolutions9–11-ContinuinginOfficeasIndependentNon-ExecutiveDirectors

The proposed Ordinary Resolutions 9 to 11, if passed, will allow the named directors to remain as independent directors notwithstanding that they have served a cumulative term of over nine years as independent directors.

TheBoard after the annual assessment of the independence of the three independentDirectors namely,MrChaiMoiKim,MrChiaKay Joo andTuanHajiAzizulBinMohdOthman,whohave servedas IndependentNon-ExecutiveDirectors of theCompanyforacumulativetermofmorethannine(9)years,andrecommendedthemtoremainasIndependentNon-ExecutiveDirectorsoftheCompanydespitetheirtenureintheBoardbasedonthefollowingjustifications:-

(a) theyfulfilledthecriteriaunderthedefinitionofIndependentDirectorasstatedintheMainMarketListingRequirementsofBursa Securities, and thus, they would able to provide check and balance and bring an element of objectivity to the Board;

(b) they have cumulative knowledge of the Group’s business and operations, and have made and continue to make valuable contributions through their role in the Audit Committee;

(c) theyhavedevotedsufficienttimeandattentiontotheirprofessionalobligationsforinformedandbalanceddecisionmaking

by actively participated in board discussion and provided an independent voice to the Board through their vast experience in various industries; and

(d) they have exercised their due care during their tenure as IndependentNon-ExecutiveDirectors of theCompany and

carried out their professional duties in the best interest of the Company and shareholders.



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Pursuant to Paragraph 8.27(2) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad

• Details of individuals who are standing for election as Directors

No individual is seeking election as a Director at the forthcoming Fifteenth Annual General Meeting of the Company.

STATEMENT ACCOMPANYINGNOTICE OF ANNUAL GENERAL MEETING



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CORPORATEINFORMATION

DIRECTORS

LEE CHIN YENExecutiveChairman

TAN HONG CHENGManagingDirector

HIA WAN KIGAExecutiveDirector

LEE POH CHOO ExecutiveDirector

TAN KIM HONGExecutiveDirector

CHAI MOI KIMIndependentNon-ExecutiveDirector

CHIA KAY JOOIndependentNon-ExecutiveDirector

AZIZUL BIN MOHD OTHMANIndependentNon-ExecutiveDirector

CHAN KEE LOINIndependentNon-ExecutiveDirector

AUDIT COMMITTEE

CHAI MOI KIMChairmanIndependentNon-ExecutiveDirector

CHIA KAY JOOMemberIndependentNon-ExecutiveDirector

AZIZUL BIN MOHD OTHMANMemberIndependentNon-ExecutiveDirector

REMUNERATION COMMITTEE

CHAI MOI KIMChairmanIndependentNon-ExecutiveDirector


AZIZUL BIN MOHD OTHMANMemberIndependentNon-ExecutiveDirector

NOMINATION COMMITTEE

AZIZUL BIN MOHD OTHMANChairmanIndependentNon-ExecutiveDirector


CHAI MOI KIMMemberIndependentNon-ExecutiveDirector

COMPANY SECRETARIES

LiM MiNg TOONg(MAICSA 7000281)

ANNA Lee Ai LeNg(LS 0009729)

REGISTERED OFFICE

10th Floor, Menara Hap SengNo. 1 & 3 Jalan P. Ramlee50250 Kuala Lumpur, MalaysiaTel : +603-2382 4288Fax : +603-2382 4170

MANAGEMENT OFFICE

Batu 12, Jalan Hutan MelintangHutan Melintang34600 Teluk IntanPerak, MalaysiaTel : +605-641 1046Fax : +605-641 1115

SHARE REGISTRAR

Tricor investor & issuing House Services Sdn. Bhd.Unit 30-01, Level 30, Tower AVertical Business SuiteAvenue 3, Bangsar SouthNo. 8, Jalan Kerinchi59200 Kuala LumpurTel : +603-2783 9299Fax : +603-2783 9222

AUDITORS

Messrs. Baker Tilly ACChartered AccountantsAF 001826Baker Tilly Mh TowerLevel 10, Tower 1, Avenue 5Bangsar South City59200 Kuala LumpurTel : +603-2297 1000Fax : +603-2282 9980

BANKERS

Malayan Banking BerhadHSBC Bank Malaysia Berhad Ambank Berhad

STOCK EXCHANGE LISTING

Main Market of Bursa MalaysiaSecurities BerhadStock Name : CAMRESStock Code : 7128



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Prestile Industries Sdn. Bhd.

Kitchenally Sdn. Bhd.

Central Palm Oil

Mill Sdn. Bhd.

CentralMelamineware

Sdn. Bhd.

CentralAluminium

ManufactorySdn. Bhd.

CAM Plastic Industry

Sdn. Bhd.

100%

100%Advance

EagleMarketingSdn. Bhd.

100%

100%

100%

100%

100%

GROUPSTRUCTURE(as at 31 December 2015)



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On behalf of the Board of Directors, I am pleased to present to you the Company’s Annual Report and Audited Consolidated Financial Statements for the financial year ended 31 December 2015

FINANCIAL PERFORMANCE

The Malaysian market condition in the year 2015 was much tougher and more challenging than anticipated. The implementation of the Goods and Services Tax (“GST”) and the resultant ballooning cost of living as well as the weakening of the Ringgit translated into a weakened overall demand and pessimistic consumer sentiment.

For the financial year under review, the group’s revenue declined by RM2.1 million to RM212.2 million compared to a revenue of RM214.3 million in the preceding financial year, mainly due to the drop in average selling price of palm products. The average CPO price per metric tonne was down by 9.6% to RM2,153.50 compared to RM2,383.50 in 2014 while the average price of palm kernel (PK) in 2015 declined by RM 143.00 or 8.6% to RM1,527.50 compared with RM1,670.50 last year.

The profit before tax also recorded slowdown to RM6.8 million from RM8.8 million previously. This is mainly due to higher operational cost in the manufacturing segment as well as marginal profit contribution from the plasticware household production line that has commenced operation since April 2015.

However, our group will resort to more innovative approaches to derive better shareholder values, including the restructuring of our subsidiaries for a more coordinated operation to minimize redundancies and increase productivity in this increasingly challenging environment. We would also be looking to grow new market segments from existing operations as well as making inroads into other unexplored markets.

OUTLOOK AND PROSPECTS

We foresee it to be another challenging year ahead of us in light of the current economic outlook. Nonetheless, with our established brand as well as continuing efforts in developing and improving our operational capabilities, we expect the financial year ending 31st December 2016 to be a positive year barring any unforeseen circumstances.

To this end the board is conserving cash to weather any potential downturn and to reserve for future investments as well as other potential merger and acquisition activities.

On behalf of the Board of Directors, i would like to express my sincere appreciation to the management and employees of the Group for their dedication, enthusiasm and commitment in performing their duties throughout the year.

I also wish to thank all our shareholders, banks, customers and business associates for their continuous support and confidence in the group.

Last but not least, i wish to extend my gratitude to my fellow Board members for their unwavering commitment and invaluable counsel and contribution in steering the Group to greater heights. Thank you.

Lee Chin YenExecutive Chairman29 April 2016

CHAIRMAN’SSTATEMENT



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LEE CHIN YEN–ExecutiveChairmanMalaysian, aged 66

Lee Chin Yen was appointed as the executive Chairman/Director of CAM Resources Berhad (CAM) on 29 December 2000.

He was appointed the Managing Director of Central Aluminium Manufactory Sdn Bhd (CAluminium) in 1979, a Director of Central Melamineware Sdn Bhd (CMelamine) in 1988 and Advance eagle Marketing Sdn Bhd (AeMkt) in 1989. A founding member and the driving force in the Group, he commenced his career in 1972 as an apprentice in Choo Chin Wah Company, a company principally involved in the manufacturing of aluminium in Thailand. After acquiring all the technical expertise, he returned to Malaysia in 1975 and formed a partnership with Tan Hong Cheng and others to manufacture aluminium household products in 1975. In 1979, this partnership was incorporated into a private limited company under the name of CAluminium and he was appointed the Managing Director. At present, he is also a committee member of a few associations in Teluk Intan, Perak.

He does not hold directorship in any other public companies. During the financial year ended 31 December 2015, he attended all the Board meetings held.

TAN HONG CHENG–ManagingDirectorMalaysian, aged 66

Mr Tan Hong Cheng was appointed as the Managing Director/Director of CAM on 29 December 2000.

He was appointed the Managing Director of CMelamine in 1988, a Director of CAluminium in 1979 and AeMkt in 1989. He began his career in Loke Hup Porcelain as a shop assistant. in 1975, he formed a partnership with Lee Chin Yen and others to manufacture aluminium household products. This partnership was subsequently incorporated as CAluminium. He has more than 31 years of experience in the manufacturing of aluminium and stainless steel products. At present, he is the Chairman of Board of Directors for San Min Private School and Chong Ming Primary School in Teluk intan. He also serves as the Vice President of the Chinese Chamber of Commerce of Lower Perak District and a Director of Anson Bay Medical Centre.


HIA WAN KIGA –ExecutiveDirector Malaysian, aged 61

Mr Hia Wan Kiga was appointed as Non-executive Director of CAM on 29 December 2000 and a Non-executive Director of CAluminium since 1999. Subsequently, he was re-designated as Executive Director on 22 February 2010.

He began his career as an apprentice in Sungai Besar engineering Sdn Bhd, a company involved in the engineering works. In 1975, he set up his own partnership company which was incorporated into a private limited company under the name of Hia Union engineering Sdn Bhd in year, a company principally involved in agriculture engineering. He is presently a committee member of a few local associations.

He does not hold directorship in any other public companies. During the financial year ended 31 December 2015, he attended three (3) out of five (5) Board meetings held.

TAN KIM HONG–ExecutiveDirectorMalaysian, aged 42

Ms Tan Kim Hong was appointed as the executive Director of CAM on 15 January 2002 and a Factory Manager of CMelamine. She joined the group in 1993 as a clerk and subsequently promoted to her current position since 2000. She is responsible for overseeing the overall production processes and maintenance of product quality in CMelamine.

She does not hold directorship in any other public companies. During the financial year ended 31 December 2015, she attended five (5) out of six (6) Board meetings held.

DIRECTORS’PROFILE



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LEE POH CHOO–ExecutiveDirector Malaysian, aged 40

Ms Lee Poh Choo was appointed as the executive Director of CAM on 15 January 2002.

She graduated from the Campbell University, USA in 1998 with a Bachelor degree in Business Administration. She joined CAluminium in 1998 and was responsible for the area of MiS and Marketing. She was promoted to Factory Manager of CAluminium in December 1998. She is responsible for overseeing the overall processes and maintenance of product quality in CAluminium.

She does not hold directorship in any other public companies. During the financial year ended 31 December 2015, she attended four (4) out of six (6) Board meetings held.

CHAI MOI KIM–IndependentNon-ExecutiveDirectorMalaysian, aged 58

Mr Chai Moi Kim was appointed as an independent Non-executive Director of CAM on 15 January 2002. He sits on the Audit Committee and the Remuneration Committee as Chairman and also serves as a member of the Nomination Committee of the Company.

He is a member of the Malaysia institute of Certified Public Accountants, the Malaysia institute of Accountants and the Chartered Tax institute of Malaysia. He started his career in 1980 as an Article clerk with an established local audit firm, and subsequently worked with several other established audit firms including an international audit firm until 1988. He left for FACB group of Companies as the group Accountant in 1989. in 1992, he joined MBF Holdings Berhad as a Senior Manager of the corporate department where he served until 1994. in 1995, he set up his own audit practice, Kim & Co.

He also sits in the Board of grand Hoover Berhad as independent Non-executive Director. During the financial year ended 31 December 2015, he attended five (5) out of six (6) Board meetings held.

TUAN HAJI AZIZUL BIN MOHD OTHMAN –IndependentNon-ExecutiveDirectorMalaysian, aged 54

Tuan Haji Azizul bin Mohd Othman was appointed as an independent Non-executive Director of CAM on 15 January 2002. He serves as the Chairman of the Nomination Committee and a member of the Audit Committee and the Remuneration Committee of the Company.

Presently, he is the executive Chairman of Redhill Point Sdn Bhd and Managing Director of Noble institute of Advanced Technical Skills (NiATS). He is also the Vice President of the Organisation of Petroleum Training institutes of Malaysia (OPTiMA) and Chairman of Pertubuhan Kebajikan Anak-Anak Yatim Darussalam.

He does not hold directorship in any other public companies. During the financial year ended 31 December 2015, he attended five (5) out of six (6) Board meetings held.

CHIA KAY JOO –IndependentNon-ExecutiveDirectorMalaysian, aged 69

Mr Chia Kay Joo was appointed as an independent Non-executive Director of CAM on 15 January 2002. He serves as a member of the Audit, Remuneration and Nomination Committees of the Company.

He obtained a Bachelor degree in Law from University of London in 1981 and was called to english Bar in 1982 and admitted as an advocate and solicitor in Malaysia in 1985. He has been practicing in the legal profession for approximately 31 years. He was a High Court interpreter from 1971 to 1981 and a judicial officer serving as the Magistrate at the Teluk intan Magistrate Court from 1982-1984. He left the judicial service to set up his own legal practice in 1985. Presently, he serves as the legal adviser to a number of Associations and Chinese Guilds.


DIRECTORS’PROFILE

(Cont’d)



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CHAN KEE LOIN –IndependentNon-ExecutiveDirectorMalaysian, aged 54

Mr Chan Kee Loin was appointed as an independent Non-executive Director of CAM on 1 July 2009.

He was educated in the Tuanku Abdul Rahman College where he completed a three years extra-mural course in Financial Accounting in 1987 and a finalist in professional examination of the Chartered Association of Certified Accountants, United Kingdom. His career began in early 1988 as an audit assistant in a small firm of Public Accountants in Johor Bahru. in early 1989, he left for a medium size public accounting firm in Kuala Lumpur where he was promoted as a Director in year 2000. His experience in these firms includes statutory audits, due diligence audits, share and business valuation and rendering professional services as adviser, coordinator and Reporting Accountants for corporate exercises. He left the latter in mid-2009 and ceased working full time.

He also sits in the Board of Leon Fuat Berhad as independent Non-executive Director. During the financial year ended 31 December 2015, he attended all the Board meetings.

ADDITIONAL INFORMATION ON THE BOARD OF DIRECTORS

Family Relationship

Noneof theDirectors ofCAMhaveany family relationshipswith anyother directors and/or substantial shareholdersexceptasfollows:

(i) MrLeeChinYen,theExecutiveChairmanisthefatherofMsLeePohChoo,theExecutiveDirectorofCAM(ii) MrTanHongCheng,theManagingDirectoristhefatherofMsTanKimHong,theExecutiveDirectorofCAM

Conflict of Interest

Save as disclosed in the related party transactions on pages 85 to 86 ofthisAnnualReport,noneoftheotherDirectorshaveanyconflictofinterestwiththeCompanyduringthefinancialyear.

Convictions for Offences

NoneoftheDirectorsofCAMhavebeenconvictedofanyoffence(excludingtrafficoffence)withinthepast10years.

DIRECTORS’PROFILE(Cont’d)



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The Board of Directors (the Board) of CAM Resources Berhad (CAM or the Company) remains steadfast in its commitment in ensuring that the high standards of corporate governance are consistently observed and practised throughout CAM and its subsidiaries (collectively the Group) to ensure the sustainability of the Group’s business and operations.

The Board is cognisant of the principles and recommendations of corporate governance as stipulated in the Malaysian Code on Corporate governance (MCCg) 2012 and the Corporate governance guide issued by Bursa Malaysia Securities Berhad (Bursa Securities). The Board is mindful of its responsibilities to the shareholders and the other stakeholders and shall continue to uphold good corporate governance and support these principles and recommendations, where applicable and appropriate, in building a sustainable business.

This Statement outlines the key aspects of how the Company has applied and taken into account the Principles enumerated under the Malaysian Code of Corporate governance 2012 (“MCCg 2012”) during the financial year ended 2015. Where there are gaps in the Company’s observation of any of the Recommendations of MCCG 2012, these are disclosed herein with explanations.

PRINCIPLE 1 - ESTABLISH CLEAR ROLES AND RESPONSIBILITIES OF THE BOARD AND MANAGEMENT

1.1 Clear Functions Of The Board And Those Delegated To Management

The Board is constantly mindful of safeguarding the interest of the group’s customers, investors and all other stakeholders in discharging its stewardship.

The Board’s role is to lead and control the group’s business and affairs on behalf of the shareholders. The Board takes into consideration the interest of shareholders under their decision ensuring that the group’s objectives and shareholders value are met. The Board oversees the group’s performance and operation progress towards the corporate objectives.

The group is controlled and led by a dynamic and experienced Board, with high personal integrity, business acumen and management skills, which is primarily entrusted with the responsibility of charting the direction of the Group.

There is a schedule of key matters reserved specifically for the Board deliberation and decision to ensure the direction and control of the Group are in its hands. The key matters are as follows:-

l Appointment of Directors and Chairman

l establishment of Board Committees, their membership and delegated authorities

l Appointment of key management positions including Managing Director

l Business strategy formulation and planning

l Decision on emerging business issues

l Challenges arising from emerging business issues

l Decision on material transactions/major investment and matters that have significant impact to the group

l Major capital expenditure, acquisitions or disposal of a business or assets in excess of authority levels delegated to the Management Team

l Changes to management and control structure of the Group, including key policies and authority limits

1.2 Clear Roles And Responsibilities

The Board has the overall responsibility in leading and determining the group’s strategic decision. it provides an effective oversight of the conduct of the Group’s business, ensuring an appropriate risk management and internal control system in place as well as regular reviewing of such control system to ensure its adequacy and integrity.

STATEMENT ONCORPORATE GOVERNANCE



14

PRINCIPLE 1 - ESTABLISH CLEAR ROLES AND RESPONSIBILITIES OF THE BOARD AND MANAGEMENT (cont'd)

1.2 Clear Roles And Responsibilities (cont'd)

The principal roles and responsibilities of the Board include the following:

l Review and adopt strategic plans and objectives for the group;

l Promote ethical and responsible decision-making;

l Monitor compliance with all relevant laws, tax obligations, regulations, applicable accounting standards and significant corporate policies (including the Code of Conduct);

l Review and approve the annual budget and monitor the operating and financial performance of the group;

l Approve and monitor the capital expenditure strategy, including acquisition of capital equipment;

l Oversee the conduct of the Group’s business, including its control and accountability systems to evaluate whether the business is being properly managed;

l Succession planning, inlcuding appointing, training, fixing of compensation and where appropriate, replacing Senior Management;

l Identify principal risks and ensure the implementation of appropriate internal controls with appropriate control systems to manage these risks;

l Review the adequacy and the integrity of the management information and internal controls system;

l Ensure that the market and shareholders are fully informed of material developments; and

l Promote better investor relations and shareholder communications.

The roles and responsibilities of the Chairman, the Managing Director and Executive Directors are established and there are clear and defined division of responsibilities between the Chairman, the Managing Director and executive Directors of the Company.

The Chairman and the Managing Director are primarily responsible for the effective functioning of the Board and related corporate affairs and for formulating general company policies and making strategic business decisions sanctioned by the Board of Directors. They are supported by three executive Directors who are responsible for the execution of these decisions and policies and the day-to-day operations of the Group.

The role of the independent directors is to provide independent and objective views, constructively challenge and contribute to the development of the business objectives and strategies of the group, ensure effective check and balance in the proceedings of the board and that no individual has unrestricted power or influence over any board decision.

Mr Lee Chin Yen is currently the executive Chairman of the Board. given the scope and nature of business activities of the group, the Board is of the view that with Mr Lee’s extensive knowledge and experience, and him being actively involved in the business, it is more effective for him to continue to guide the Board on discussions on issues and challenges faced by the group. The Board also believes that the interests of shareholders are best served by the Executive Chairman who is sanctioned by shareholders and who will act in the best interests of shareholders as a whole. As the executive Chairman has a significant wide-ranging interest in the Company, he is well placed to act on behalf of shareholders and in their best interest.

The Board is mindful that it comprises less than a majority of independent directors. However, the Board is able to exercise objective judgment on business and corporate affairs in the presence of the current independent Directors on the Board. All independent Directors act independently of Management and are not involved in any other relationship with the group that may impair their independent judgements and decision making.

in respect of potential conflict of interest, the Board is comfortable that there is no undue risk involved as all related party transactions are disclosed and strictly dealt with in accordance with the Listing Requirements and the mechanism in place in the Company.

The Board is confident that its current composition fairly reflects the interests of minority shareholders in the Company.

STATEMENT ONCORPORATE GOVERNANCE(Cont’d)



15


1.3 Code of Conduct

The group has in place a Code of Conduct which governs the conduct of all the group employees including the Boards members with the aim to cultivate good ethical conduct, amongst others.

Under the Code of Conduct of the group clearly defined the guidelines on maintaining confidentiality and disclosure of information, disclosure conflict of interest, internal control, duty to protect the group’s assets and whistle blowing where there is a breach of Group’s policies and procedures.

The Company has in place a Board Charter that sets out, among others, the responsibilities, authorities, procedures, evaluations and structures of the Board and Board Committees, as well as the relationship between the Board and its management and shareholders.

The group’s Board Charter clearly defined the Code of Conduct and to be observed by all Directors of the group. The Board Charter further defines the specific responsibilities of the Board, in order to enhance coordination and communication between the management and the Board and more specifically, to clarify the accountability of both the Board and the management for the benefit of the Company and its shareholders. in addition, it will assist the Board in the assessment of its own performance and of its individual Directors.

In the performance of Directors duties, a Director should at all time observe the following:-

l Should devote reasonable time and effort to attend the Company’s duties required of him;

l Should at all times exercise his power for the purpose they were conferred, for the benefit and productivity of the Group;

l Should avoid any conflict of interest especially to disclose immediately all contractual interests whether directly or indirectly within the Group;

l Should be conscious in the process of value creation of the interest of shareholders, employers, creditors and customers of the Group;

l Should be aware of the Company’s policy on corporate social responsibility; and

l Should ensure adequate safety measures and provide protection to workers and employees at work places.

1.4 Sustainability of Business

The Board regularly reviews the strategic direction of the Company and the progress of the Company’s operations, taking into account changes in the business and political environment and risk factors such as level of competition.

The Board promotes good corporate governance in the application of sustainability practices throughout the Company, the benefits of which are believed to translate into better corporate performance. Accordingly, the Company takes cognisance of the global environmental, social, governance and sustainability agenda.

The Company’s activities on corporate social responsibilities for the year under review are disclosed on pages 25 to 26 of this Annual Report.

1.5 Access To Information And Professional Advice

The Board recognizes the importance of providing timely, relevant and updated information in ensuring an effective decision making process by the Board. Hence, the Board is provided with quantitative and qualitative information which is pertinent to enable the board to discharge their duties effectively. each Board Member receives regular periodic reports, including a comprehensive review and analysis of the Group’s performance.

Where necessary, member of the Management Team will be invited to attend Board/Board Committee meetings to report and updates on areas of the business within their responsibility to provide Board members with insights into the business, and clarify any issues raised by the Directors in relation to the Group operations. Directors are encouraged to share their views and insights in the course of deliberation and to partake in discussions.


(Cont’d)



16


1.5 Access To Information And Professional Advice (cont'd)

Apart from the above, the Board members are updated on the Company’s activities and its operations on a regular basis. The Board is reminded quarterly of the closed periods for dealings in the securities of the Company based on the targeted date of announcement of the group’s interim financial results. All Directors whether as a full board or in their individual capacity have access to all information of the Company on a timely basis in an appropriate form and quality necessary to enable them to discharge their duties and responsibilities. If required, the Directors may seek independent external professional advice at the Group’s expense, in the furtherance of their duties.

All proceedings from the Board meetings are recorded by way of minutes. The minutes are then confirmed by the Board and signed as correct records of the proceedings thereat by the Chairman of the meeting.

1.6 Qualified and Competent Company Secretary

All the directors have ready and unrestricted access to the advice and the services of the Company Secretary in ensuring the effective functioning of the Board. The Company Secretary ensure that Board policies and procedures are both followed and reviewed regularly and have the responsibility in law to ensure that each Director is made aware of and provided with guidance as to their duties, responsibilities and powers. The Company Secretary advises the Board on any new statutory and regulatory requirements relating to corporate governance.

The Company Secretary, who is qualified, experienced and competent, organizes and attends all Board and board Committees meetings and ensures meetings are properly convened; accurate and proper record of the proceedings and resolutions passed are maintained accordingly. The removal of Company Secretary, if any, is a matter for the Board to decide collectively.

The Board is satisfied with the performances and support rendered by the Company Secretary to the Board in the discharge of its functions.

1.7 Board Charter

The Board has also adopted a Board Charter which sets out the Board’s strategic intent and outlines the Board’s roles and functions, amongst others. The Board Charter is a source reference and primary induction literature, providing insights to prospective Board members and Senior Management.

The Board Charter will be periodically reviewed and updated in accordance with the needs of the Company and any new regulations that may have an impact on the discharge of the Board’s responsibilities. The details of the Board Charter are available for reference in the Company’s website at www.camres.com.my.

The latest Board Charter is reviewed and approved in 5 April 2016.

PRINCIPLE 2 - STRENGTHEN COMPOSITION OF THE BOARD

The Board comprises of nine (9) members, five (5) executive Directors and four (4) independent Non-executive Directors, which is in compliance with the requirements as set out in the Listing Requirements of Bursa Malaysia Securities Berhad. The profile of each Director is set out on pages 10 to 12 of this Annual Report.

The Board has complied with paragraph 15.02(1) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, which requires that at least two (2) Directors or one-third (1/3) of the Board Members of the Company, whichever is higher, are independent.

The concept of independence adopted by the Board is in tandem with the definition of an independent Director in the Listing Requirements. The key element in fulfilling the criteria of such a position is the appointment of an independent director who is not a member of management, and is free from any relationship which could interfere in the exercise of independent judgment and the ability to act in the best interest of the group.




17

PRINCIPLE 2 - STRENGTHEN COMPOSITION OF THE BOARD (cont'd)

The Board consists of members of various professional fields and expertise in financial accounting, legal, business management and commercial which are relevant for the effective management of the Group. The provision of various experiences from the Board’s members would effectively discharge its stewardship responsibilities and to achieve the Company’s corporate objective through strategic business initiatives. The composition of the Board not only reflects the broad range of experience, skills and knowledge required to successfully direct and supervise the Group business activities, but also the importance of independence in decision-making at the Board level. The executive Chairman, the Managing Director and three (3) Executive Directors oversee the management of daily operation of the Group, and they are fully supported by a management team.

The Board agrees that the Company should apply the principle in the MCCg 2012 in relation to reinforcing independence. The Board has in place policies and procedures to ensure effectiveness of the independent Directors. The Board has assessed, reviewed and determined that the four (4) independent Non-executive Directors of the Company remain objective and independent. These were based on grounds that they have consistently articulated issues with management in an effective and constructive manner besides actively participated in board discussion and provided an independent voice on the Board.

The MCCg 2012 recommends that the Chairman must be a Non-executive Board member and if he is not an independent director, the Board must comprises a majority of independent directors. Although the executive Chairman of the Company is not an independent Director, the Board currently comprised four (4) independent Directors, which is a good balance out of the total number of nine (9) Board members. The Board also believes that the interests of shareholders are best served by a Chairman who is sanctioned by the shareholders and who will act in the best interests of shareholders as a whole. As the Chairman is representing the shareholder who has substantial interest in the Company, he is well-placed to act on behalf of shareholders and in their best interests.

The roles of these Independent Non-Executive Directors will ensure that any strategies and business plans proposed by the Executive Directors and Executive Management are fully discussed and examined to ensure the long-term interest of the shareholders as well as other stakeholders.

The Board has delegated specific power and responsibilities to three (3) Board Committees namely Audit, Remuneration and Nomination Committees all of which have the authority to deal with particular issues and report to the Board with recommendations. The terms of reference, function and activities undertaken by these Committees are elaborated in their respective report set out in this Annual Report.

The Board is responsible to determine the appropriate size of the Board and their appointment of new director is a matter for consideration and decision by the Board, upon the recommendation from the Nomination Committee (“NC”). The NC will consider the required mix of skills, experience, other qualities and diversity, including gender, where appropriate, which the Director should bring to the Board.

Currently, the Board is of the view that it is not necessary to nominate a Senior independent Non-executive Director to whom concerns may be conveyed through the Company via the dedicated website at www.camres.com.my where the shareholders or other parties may raise queries or concerns pertaining to the Group. As such queries or concerns will be reviewed and addressed by the Board collectively with the assistance of management.

Gender Diversity Policy

The Board is supportive of gender diversity in the boardroom as recommended by the MCCg 2012 as such diversification of gender would enlarge the pool of skills, talents, perspectives and ideas within the Board. Currently, there are two (2) female executive Directors on the Board and the Board shall endeavour to maintain this gender diversity policy at all times in accordance with the MCCG 2012.

Nomination Committee

The Nomination Committee comprising of all Independent Non-Executive Directors, namely:-

1. Tuan Haji Azizul Bin Mohd Othman (Chairman)2. Chai Moi Kim3. Chia Kay Joo

The Nomination Committee meets as and when required, and at least once a year. The Nomination Committee met once during the financial year ended 31 December 2015.


(Cont’d)



18


Nomination Committee (cont'd)

The function of the Nomination Committee, amongst others, is to recommend to the Board candidates for directorships or Board Committee members. in addition, the Committee reviews the profile of the skills and experience of each individual director of the Board of Directors and various Committees and to assess the effectiveness of the Board as a whole.

All members to the Board participate in assessing, identifying, recruiting, nominating, appointing and orienting suitable candidates who can contribute effectively to the growth of the Company. Any board member who has an interest in a matter raised by the Committee shall abstain himself/herself from deliberation and voting.

Annually, the Nomination Committee reviews the overall composition of the Board in terms of appropriate size, required mix of knowledge, skills, experiences and core competencies and adequacy of balance between Executive Directors and Independent Non-Executive Directors. As part of the recruitment process and annual assessment of directors, the Nomination Committee will review the professionalism, integrity, honesty, competency, commitment, contribution and performance and ensure no conflict of interest arises that would impair their ability to represent the interest of the Company’s shareholders and stakeholders and to fulfill the responsibilities of a director. The Nomination Committee will also consider a mix of Board members that represents a diversity of background and experience. No individuals shall be discriminated against on the basis of race, religion, national origin, disability or any other basis, including gender.

The Nomination Committee also evaluated the effectiveness of the Board as a whole, the various Committees and assessing the contribution of each individual Director. Good and effective communications were established among Board members and Board Committee members on official and unofficial basis and major policies and corporate proposals are discussed and scrutinised before putting to a vote. All members of the Board and the Committees have been diligent and exercised due reasonable care in discharging their duties and responsibilities.

in accordance with the Company’s Articles of Association, one third of the Board members are required to retire at every Annual general Meeting (“AgM”) and be subject to re-election by shareholders. Newly appointed Directors shall hold office until the next following AgM and shall then be eligible for re-election by shareholders. All Directors, including the Managing Director shall retire from office at least once in every three years and shall be eligible for re-election.

The Code recommends that all independent directors who have served 9 years or more be put up for re-election annually, with justification from the Board on their continued independence, relevance and contributions to the Company.

The assessment criteria for independence shall not limit to the length of an independent director. Particular emphasis is placed on the role of independent directors to facilitate independent and objective decisions making the Company, free from undue influence and bias. Annual assessment of the independent directors will be undertaken in accordance with prescribed criteria.

Directors’ Training

The Board is aware of the importance of continuous training for Directors to enable them to discharge their duties effectively. The Directors are encouraged to attend various training programmes and seminars to constantly update themselves and keep abreast with industrial sector issues, the current and future developments in the industry and global market, management strategies and regulatory laws, rules as well as guidelines.

All Directors have attended and completed the Mandatory Accreditation Programme as prescribed under the Listing Requirements. The Board, via the Nomination Committee, continues to identify and attend appropriate briefings, seminars, conferences and courses to keep abreast of changes in legislations and regulations affecting the Group.




19


Directors’ Training (cont'd)

The programmes attended by the Directors and participated as speakers during the financial year ended 31 December 2015 are as follows:-

Directors Particulars Date attended 1. Chai Moi Kim ● National gST Conference 2015

● Understanding Company Law: its impending Changes & Implications in Malaysia

● National Tax Conference 2015● MiA international Accountants Conference 2015● 2016 Budget Seminar

20 January 2015 5 February 2015

25 – 26 August 201526 – 27 October 2015

5 November 20152. Chan Kee Loin ● On Your Mark ~ Risk Management Awareness Program

● Cg Breakfast Series with Directors: Future of Auditor Reporting – The game Changer for the Board Room

31 October 20152 November 2015

3. Lee Poh Choo ● Machine Safeguarding ● 18th Conference and exhibition on Occupational Safety &

Health (COSH 2015) ‘Fostering OSH Culture at Workplace’

21 – 22 September 20154 – 7 October 2015

As for the rest of the directors, their trainings were in some forms such as attending conferences and exhibitions which they considered vital in keeping abreast with changes in business environment, and exploring new products related to the Company’s business. The Company Secretaries circulate the relevant guidelines on statutory and regulatory requirements from time to time for the Board’s reference and brief the Board quarterly on any updates at Board meetings. The external Auditors also briefed the Board members on any changes to the Malaysian Financial Reporting Standards that affect the group’s financial statements during the year.

Remuneration Committee

The Remuneration Committee is made up of all Independent Non-Executive Directors.

The members of the Remuneration Committee consist of:-

1. Chai Moi Kim (Chairman)2. Tuan Haji Azizul bin Mohd Othman 3. Chia Kay Joo

The Remuneration Committee reviews the salaries, incentive and other benefits of the executive Directors and recommends the remuneration package to the Board for approval. The Directors concerned shall abstain from participating in decisions regarding their own remuneration package.

The remuneration of Executive Director is linked to the Company and individual performance and the remuneration of Non-Executive Director is related to their experience and level of responsibilities. The recommendation(s) of the Committee shall be subject to the approval of the Board.

The objective of the group is to ensure that the group attracts and retains Directors of the calibre needed to run the Group successfully. The Executive Directors are to be appropriately rewarded giving due regard to the corporate and individual performance. in the case of Non-executive Directors, the level of remuneration reflects the experience and level of responsibilities undertaken by the Non-Executive Directors concerned.

The determination of remuneration packages of Non-executive Directors should be a matter for the Board as a whole.


(Cont’d)



20


Remuneration Committee (cont'd)

For the financial year ended 31 December 2015, the details of Directors’ remuneration are as follows:

FeesRM

Salary & other emoluments*

RMBenefit in kind

RMTotal

RM

Executive Directors 72,500 1,900,944 60,275 2,033,719Non-Executive Directors 60,000 - - 60,000

Total 132,500 1,900,944 60,275 2,093,719

* Other emoluments include contribution to Employees’ Provident Fund and bonus.

The numbers of Directors of the Company whose total remuneration fall within the following bands are shown below:

Range of remuneration Number of Directors

Executive Non-Executive

Below RM50,000 - 4RM150,000 to RM200,000 1 -RM200,000 to RM250,000 2 -RM600,000 to RM650,000 1 -RM650,001 to RM700,000 1 -

PRINCIPLE 3 – REINFORCE INDEPENDENCE OF THE BOARD

The Board recognizes the importance of independence and objectivity in the decision making process. in line with the MCCg 2012, the Board has incorporated additional responsibility into the Nomination Committee’s terms of reference, namely to undertake annual assessment of independence of the Independent Directors. All Independent Directors are required to assess their level of independence annually by completing the form of annual assessment of independence of independent directors for submission to the Nomination Committee for review and assessment. The Chairman of the Nomination Committee shall then report the findings and/or recommendations to the Board.

For the financial year ended 31 December 2015, each of the four (4) independent Non-executive Directors had provided an annual confirmation of his independence to the Board based on its policy on criteria of assessing independence in line with the definition of “independence directors” prescribed by the Listing Requirements. The Board and its Non-executive Directors have upon their annual assessment, concluded that each of the 4 independent Non-Executive Directors continues to demonstrate conduct and behaviour that are essential indicators of independence, and that each of them continues to fulfil the prescribed definition and established criteria of independence.

The independent Non-executive Directors bring to bear objective and independent views, advice and judgment on interests, not only of the Group, but also of shareholders, employees, customers, suppliers and the many communities in which the Group conducts its business. Independent Non-Executive Directors are essential for protecting the interests of shareholders and can make significant contributions to the Company’s decision making by bringing in the quality of detached impartiality.

Considering the recommendation of the MCCG 2012 on the tenure of an independent director should not exceed a cumulative term of nine (9) years, the Board holds the view that the ability of an independent director to exercise independent judgement is not affected by the length of his service as an independent director. The suitability and ability of independent director to carry out his roles and responsibilities effectively are very much a function of his caliber, experience and personal qualities. Restriction on tenure may cause loss of experience and expertise that are important contributors to the efficient working of the Board. Furthermore, their pertinent expertise, skills and detailed knowledge of the group’s businesses and operations enable them to make significant contributions actively and effectively to the Company’s decision making during deliberations or discussions.




21

PRINCIPLE 3 – REINFORCE INDEPENDENCE OF THE BOARD (cont'd)

The Board is fully satisfied that the three independent Directors namely, Mr Chai Moi Kim, Mr Chia Kay Joo and Tuan Haji Azizul bin Mohd Othman, who have served as independent Non-executive Directors for more than nine (9) years, are still independent and continues to bring valuable business expertise, knowledge and professionalism to the Board for its efficient and effective functioning.

PRINCIPLE 4 - FOSTER COMMITMENT OF DIRECTORS

The Board meets at least four (4) times a year, scheduled well in advance before the end of the preceding financial year to facilitate the Directors in planning their meeting schedule for the year. Additional meetings are convened when urgent and important decisions are needed to be made between scheduled meetings. Board and Board Committee papers are prepared by Management which provides the relevant facts and analysis for the convenience of Directors to peruse for effective discussion and decision making during meetings. At the quarterly Board meetings, the Board reviews the business performance of the group and discuss major operational and financial matters.

The Chairman of the Audit Committee informs the Directors at each Board meetings of any salient matters noted by the Audit Committee and which require the Board’s notice or direction. All pertinent matters discussed at Board meetings in arriving at the decisions and conclusions are properly recorded by the Company Secretaries by way of minutes of meetings.

The Board met six (6) times during the financial year ended 31 December 2015 and details of each director’s attendance are as follows:-

Directors Number of meetings attended

Lee Chin Yen (ExecutiveChairman)Tan Hong Cheng (ManagingDirector)Lee Poh Choo (ExecutiveDirector)Tan Kim Hong (ExecutiveDirector)Hia Wan Kiga (ExecutiveDirector)Chai Moi Kim (IndependentNon-ExecutiveDirector)Tuan Haji Azizul Bin Mohd Othman (IndependentNon-ExecutiveDirector)Chia Kay Joo (IndependentNon-ExecutiveDirector)Chan Kee Loin (IndependentNon-ExecutiveDirector)

6/66/64/65/66/65/65/66/66/6

it is the policy of the Company for Directors to devote sufficient time and efforts to carry out their responsibilities. The Board obtains this commitment from Directors at the time of appointment. The Directors will also notify the Chairman before accepting any new directorships notwithstanding that the Listing Requirements allow a Director to sit on the boards of 5 listed issuers. Such notification is expected to include an indication of time that will be spent on the new appointment.

The Board is satisfied with the level of time commitment given by the Directors in fulfilling their roles and responsibilities.

The Board with the assistance of the Management will evaluate the training needs of its directors on a continuous basis and determine the relevant programmes, seminar and briefings that will enhance their knowledge and enable them to discharge their duties effectively.

Any new Director appointed to the Board is required to complete the Mandatory Accreditation Programme (“MAP”) for Directors of Public Listed Companies in compliance with paragraph 15.08 and Practice Note 5 of Bursa Securities’ Main marketing Listing Requirement within four months from the date of appointment. The MAP programme is arranged for newly appointed Directors to enable them to have full understanding of the nature of the business, current issues with within the Group and corporate strategies as well as the structure and management of the Group.


(Cont’d)



22

PRINCIPLE 5 – UPHOLD INTEGRITY IN FINANCIAL REPORTING BY COMPANY

The Board has established an Audit Committee, comprising all independent Non-executive Directors. The composition of the Audit Committee, including its roles and responsibilities are set out on pages 28 to 31 of this Annual Report. One of the key responsibilities of the Audit Committee is to ensure that the financial statements of the group and Company comply with applicable financial reporting standards in Malaysia. Such financial statements comprise the quarterly financial report announced to Bursa and the annual statutory financial statements.

The Board upholds the integrity of financial reporting by the Company. As such, it has established procedures, via the Audit Committee, in assessing the suitability and independence of the external auditors. Such procedures entail the provision of written assurance by the external auditors, confirming that they are, and have been, independent throughout the conduct of the audit engagement with the Company in accordance with the independence criteria set out by the Malaysian Institute of Accountants.

Related Party Transactions (“RRPT”)

The group has in place a Related Party guidelines and established the appropriate procedures for RRPT to ensure that the Company meets its obligation under the Bursa Securities Main Market Listing Requirement relating to the related party transactions. All related party transactions are reviewed by the Audit Committee and the Board on a periodic basis.

Where any Director who has an interest (direct or indirect) in any related party transactions, such Director shall abstain from deliberation and voting the resolution of such transaction at the Audit Committee, all Board meetings and voting in relation to the Proposed Renewal of RRPT mandate.

At the last AgM of the Company held on 24 June 2015, the Company had obtained a mandate from its shareholders (Shareholders Mandate”) to allow the Company and/or its subsidiaries to enter into Recurrent Related Party Transactions of a Revenue or Trading Nature (“Recurrent Transactions”). In accordance with Paragraph 10.09(2)(b) of the Listing Requirements, details of the Recurrent Transactions conducted during the financial year ended 31 December 2015 pursuant to the said Shareholders ‘Mandate are as follows:

Related Party Relationship with the Group Nature of Recurrent TransactionAmount

RM

Hia Union engineering Sdn Bhd (“HUe”)

Mr.Hia Wan Kiga, a director of the Group, has substantial financial interests and is also a director of “HUe’

Purchase of building materials and metal fabrication equipment and products as follows:

- Purchase

911,340

Suitability and Independence of External Auditors

Through the AC, the Company has established a transparent and professional relationship with the auditors. The AC met the external auditors at least twice during the year under review without the presence of the Executive Directors and Management to allow the AC and the external auditors to exchange independent views on matters which require the Committee’s attention, to review the scope and adequacy of the audit process, the annual financial statements and their audit findings. The Audit Committee also meets additionally with the externally auditors whenever it deems necessary.

In addition, the auditors are invited to attend the AGM of the Company and are available to answer shareholders’ questions relating to conduct of the statutory audit and the preparation and contents of their audit report.

The services provided by the external auditors include statutory audit and non-audit services. The terms of engagement for the services rendered by the external auditors are reviewed by the Audit Committee and approved by the Board. The Audit Committee also reviews the proposed fees for non-audit services and subsequently recommends to the Board for approval. in their review, the Audit Committee ensures that the independence and objectivity of the external auditors are not compromised.




23

PRINCIPLE 5 – UPHOLD INTEGRITY IN FINANCIAL REPORTING BY COMPANY (cont'd)

Suitability and Independence of External Auditors (cont'd)

The external auditors have confirmed that there were no circumstances and relationship that create threats to their independence and that the ethical requirements have been complied with. In compliance with the requirements of the Malaysian institute of Accountants, the external auditors rotate their audit partners assigned to the group every five years.

The details of the statutory audit, audit-related and non-audit fees paid/payable in 2015 to the external auditors are set out below:-

Group TotalRM

Fees paid/payable to Baker Tilly AC Audit services 123,200 Non-audit services * 8,000

Total 131,200

* The non-audit services paid/payable to Baker Tilly AC were for review of Statement on Risk Management and Internal Control and other services. The provision of these services by the external auditors to Group were cost effective and efficient due to their knowledge and understanding of the operations of the group, and did not compromise their independence and objectivity.

The suitability and independence of external auditors are also consistently reviewed by the AC.

A summary of the activities of the AC during the year under review is set out in the AC Report on pages 28 and 31.

PRINCIPLE 6 – RECOGNISE AND MANAGE RISKS

The Board oversees, reviews and monitors the adequacy and effectiveness of the group’s system of internal controls.

The Board acknowledges the importance of the internal audit function and has outsourced it to a consultant, as part of its efforts in ensuring that the Group’s systems of internal control are adequate and effective. The internal audit activities of the Group are carried out according to an annual audit plan approved by the Audit Committee.

The internal audit function was performed by an external consultant during the year to identify and assess the principal risks and to review the adequacy and effectiveness of the internal controls of the Group. Areas for improvement were highlighted and the implementation of recommendations was monitored. The results of the internal audit assessment are reported periodically to the Audit Committee.

Details of the Company’s internal control system and its framework including the scope of work during the financial year under review is provided in the Statement on Risk Management and Internal Control of the Group set out on pages 33 to 34 of this Annual Report.

Internal Auditors

The Board acknowledges its overall responsibility for maintaining a sound system of internal controls that provides reasonable assessment of effective and efficient operations, internal financial controls and compliance with laws and regulations as well as with internal procedures and guidelines.

The Group has an established an outsourced Internal Audit service which assist the Audit Committee in discharge of its duties and responsibilities. its role is to provide independent and objective reports on the organisation’s management, records, accounting policies and control to the Board. The internal audits service include evaluation of the processes where significant risks are identified, assessed and managed.

The internal audit service is conducted in a manner that is consistent with and meets the Standards for the Professional Practice of Internal Auditing and Code of Ethics of the Institute of Internal Auditors Malaysia.


(Cont’d)



24

PRINCIPLE 6 – RECOGNISE AND MANAGE RISKS (cont'd)

Internal Auditors (cont'd)

The Internal Audit consultant reports directly to the Audit Committee and findings and recommendations are communicated with the Board.

The effectiveness of the systems of internal controls of the Group is reviewed periodically by the Audit Committee.

Further details of the Group’s system of internal controls are set out on Page 33 to 34 of this Annual Report.

PRINCIPLE 7 – ENSURE TIMELY AND HIGH qUALITY DISCLOSURE

The Board is aware of the need to establish corporate disclosure policies and procedures to enable comprehensive, accurate and timely disclosures relating to the Company and its subsidiaries to the regulators, shareholders and stakeholders. The Company recognises the value of transparent, consistent and coherent communications with investment community consistent with commercial confidentiality and regulatory considerations. The Company aims to build long-term relationships with shareholders and potential investors through appropriate channels for the management and disclosure of information. These investors are provided with sufficient business, operations and financial information on the group to enable them to make informed investment decision. The Company’s website provides all relevant corporate information and it is accessible by the public.

The Company is guided by the Corporate Disclosure guide issued by Bursa Securities with consultation from the Company Secretary, advisers and/or other service providers. However, the Board of Directors will review the necessity for formalising an internal corporate disclosure policies and procedures, if need be.

PRINCIPLE 8 – STRENGTHEN RELATIONSHIP BETWEEN COMPANY AND SHAREHOLDERS

Shareholder participation at general meeting

The Annual General Meeting (“AGM”), which is the principal forum for shareholder dialogue, allows shareholders to review the group’s performance via the Company’s annual report and pose questions to the Board for clarification. At the AGM, shareholders participate in deliberating on resolutions being proposed or on the Group’s operations in general.

The Company despatches its notice of AGM to shareholders at least twenty one (21) days before the date of the meeting to enable shareholders to go through the annual report and papers supporting the resolutions proposed. Shareholders are invited to ask questions regarding the resolutions being proposed before putting a resolution to vote as well as matters relating to the Group’s operations in general.

During the last AGM, a question and answer session was held where the Chairman invited shareholders to raise questions with responses from the Board. All the resolutions as set out in the Notice of the AgM were put to vote by show of hands and were duly passed. The outcome of the AgM was announced to Bursa on the same day.

going forward, the Board shall ensure that poll voting is conducted for any related party transactions that fall under the definition provided in Paragraph 10.08 of the Listing Requirements.

The Board may also consider poll voting for other substantive resolutions, being resolutions for which circulars have been issued to shareholders as well as disclosing detailed results showing the number of votes cast for and against each resolution.

Communication and engagement with shareholders and prospective investors

The Board recognises the importance of being transparent and accountable to the Company’s shareholders and prospective investors. The various channels of communications are through meetings with institutional shareholders and investment communities, quarterly announcements on financial results to Bursa Securities, relevant announcements and circulars, when necessary, the Annual and Extraordinary General Meetings and through the Group’s website at www.camres.com.my where shareholders and prospective investors can access corporate information, annual reports, press releases, financial information and company announcements.




25

CORPORATE SOCIAL RESPONSIBILITIES

The Board and Management acknowledged the significance of CSR in promoting good corporate governance practices. A good blend of CSR would mutually ensure the sustainability and success of a business in its inspiration on the corporate strategies which drawn on the elements of accountability, honesty, transparency and sustainability. We conduct our business in an ethical and responsible manner that aligns with the aspiration of the society, local community, staff, suppliers, customers as well as other stakeholders.

Our CSR initiatives are based on three core values:-

(i) Employees; (ii) Community; and(iii) Environment.

(i) FOR EMPLOYEES

The Company believe that human capital is importance. Hence, the Company held in its utmost regards to the safety of the employees and committed to maintaining staff morale at present high level as a happy staff is more productive staff.

There are gathering occasions such as lunches and dinners held for employees to foster relationship among employees.

(ii) FOR COMMUNITY

We are always inspired when we perform our corporate social responsibility activities. We are blissful to bring comfort and cheer support to the needy. As part of the community, we contribute to the society with our caring and support for others in various ways such as monetary, material contributions and jobs opportunities:-

a. Bethany Home – A training centre for disable children and adult which provides services such as:-

l Early intervention; l Training center; l Training programs; l Group homes; l Therapy; l Camps; l Professional support; and l Sunday fellowship

Being one of the sponsor through its subsidiary for donation on the maintaining and services of the charity home; and

Donation of monetary and material contributions on occasion basis by the Company

b. Blood Donation Campaign

The Company organised blood donation campaign in support of the blood requirement of the local hospital.

(iii) FOR ENVIRONMENT

The Company has begun in creating the awareness and importance of environmental sustainability.

a. Waste Management

The Company has engaged the service of DOE approved waste management company to handle the industrial waste as well as proactively procuring up-to-date requirements and knowhow to ensure the preservation of the environment.


(Cont’d)



26

CORPORATE SOCIAL RESPONSIBILITIES (cont'd)

(iii) FOR ENVIRONMENT (cont'd)

b. Usage of papers

The Company aware that the importance of papers and the volume of usage. As such, conservative of environmental awareness are communicated among the employees. The Company’s initiatives in undertaken the following actions with the aim of preserving the environment through:

l Communication via emails to reduce usage of papers on letter or memos;

l Only necessary documents or email required is printed;

l Staff are encourage to print on double-sided to reduce usage of papers and reuse recycled paper if possible;

l Purchase of the Company printing papers is selected from manufacturer that are sourcing and practicing in sustainable forestry. A sustainable forestry is a valuable tool and management posture to ensure for future forest resource opportunities we have today;

l Unused papers, recycle papers and boxes are send for recycling instead of discard to rubbish bin.

COMPLIANCE STATEMENT

The Board has taken steps to ensure that the group has complied as far as possible all material aspects of the Principles and Recommendations as outlined in the MCCG 2012.

This statement is issued in accordance with a resolution of the Board dated 5 April 2016.

OTHER INFORMATION

During the financial year ended 31 December 2015, there were no:-

(a) options, warrants or convertible securities issued by the Company or its subsidiaries;

(b) Depository Receipt programme sponsored by the Company;

(c) sanctions and/or penalties imposed on the Company or its subsidiary companies;

(d) variance of results which differs by 10% or more from any profit estimate/ forecast/ projection/unaudited results announced;

(e) profit guarantee given by the Company;

(f) material contracts or contracts relating to loan of the Company and its subsidiary companies involving directors and major shareholders’ interests;

(g) revaluation policy on landed property;

(h) proceeds were raised by the Company from any corporate proposals.




27

OTHER INFORMATION (cont'd)

Share Buyback

During the financial year ended 31 December 2015, the Company bought back a total of 1,162,900 of its own shares for a total consideration of RM378,165. These shares are, presently held as treasury shares. None of the shares purchased has been resold or cancelled during the financial year.

The details of the shares purchased during the financial year are as follows:

Price Per Shares

MonthNo. of shares repurchased Highest Lowest Average

Total Consideration

RM RM RM RM

August 20,000 0.26 0.26 0.26 5,150September 1,142,900 0.26 0.33 0.32 373,015

1,162,900 378,165


(Cont’d)



28

COMPOSITION

The members of the Audit Committee are as follows:-

Chai Moi Kim Chia Kay Joo Tuan Haji Azizul Bin Mohd Othman

Chairman (IndependentNon-ExecutiveDirector)Member (IndependentNon-ExecutiveDirector)Member (IndependentNon-ExecutiveDirector)

TERM OF REFERENCE

Objective

The primary objectives of the Committee are:-

a) To safeguard the interests of the minority shareholders;

b) To assist the Board in discharging their responsibilities in the areas of management of internal control, accounting policies and financial reporting; and

c) To provide a line of communication between the Board and the internal and external auditors through regular meetings.

Authority

The Committee shall, whenever necessary and reasonable for the performance of its duties, authorised to:-

a) investigate any activity within its term of reference.

b) have the resources which are required to perform its duties.

c) access to any information pertaining to the Company.

d) have direct communication with the external auditors and person(s) carrying out the internal audit function.

e) obtain external legal or other independent professional advice.

f) convene meetings with external auditors, excluding the attendance of the executive members of the Committee, whenever deemed necessary

Members

a) The members of the Committee shall be appointed by the Board of Director from amongst the Directors of the Company.

b) The Committee shall comprise not less than three members, a majority of whom shall be independent Non-Executive Directors.

c) At least one of the Committee members:-

i) must be a member of the Malaysian Institute of Accountants; or ii) if he is not a member of the Malaysian Institute of Accountants, he must have at least three years working

experience and:-

1. he must have passed the examinations specified in Part i of the 1st Schedule of the Accountants Act 1967; or

2. he must be a member of one of the associations of accountants specified in Part ii of the 1st Schedule

of the Accountants Act 1967.

AUDIT COMMITTEEREPORT



29

TERM OF REFERENCE (cont'd)

Members (cont'd)

d) No Alternate Director shall be appointed as a member of the Committee.

e) The Committee shall elect a Chairman from among their members who shall be an Independent Non-Executive Director.

f) The Board of Directors shall review the term of office and performance of the Committee and each of its members at least once every three years to evaluate whether such members have carried out their duties in accordance with their terms of reference.

Duties and Responsibilities

The duties of the Committee shall be:-

a) To review the audit plan, evaluation of the system of internal controls and audit report with the external auditors.

b) To recommend to the Board the nomination and appointment of external auditors, their audit fees and any question of resignation or dismissal of them.

c) To review the assistance given by the Company’s employees to the external auditors.

d) To review the adequacy of the scope, functions, programmes and the results of the internal audit procedures and that it has the necessary authority to carry out its work.

e) To review the quarterly results, year end consolidated financial statements of the group, before submission to the Board’s approval.

f) To review any related party transaction and conflict of interest situation that may arise within the group including any transaction, procedure or course of conduct that raises questions of management integrity.

g) To review any significant transactions which are not ordinary business of the Company.

h) To review any procedure established by the management for complying with Bursa Malaysia Securities Berhad (“Bursa Securities”) and other statutory authorities’ requirements.

i) To carry out other duties as may be agreed to by the Committee and the Board of Directors.

Meeting

a) The quorum for any meeting of the Committee shall be two and the majority of members present shall be Independent Directors.

b) Apart from the members of the Committee who will be present at the meetings, the Committee may invite any member of the executive directors, the head of finance, the head of internal audit function and representatives of the external auditors to present at meetings of the Committee.

c) The Committee shall meet at least four times a year and such additional meetings as the Chairman shall decide in order to fulfill its duties.

d) Upon request by the external auditors, the Chairman may call for meetings of the Committee to consider any matters that external auditors believe should be brought to the attention of the directors or shareholders of the Company.

e) If at any meeting the Chairman is not present at the time appointed for holding meeting, or is unwilling to act, the members present may choose one of their members to chair the meeting.


(Cont’d)



30

TERM OF REFERENCE (cont'd)

Meeting (cont'd)

A summary of attendance of Audit Committee meetings during the financial year ended 31 December 2015 are as follows:-

Members of Audit CommitteeNumber of

meeting held Attended

Chai Moi Kim 5 5

Chia Kay Joo 5 5

Tuan Haji Azizul Bin Mohd Othman 5 4

The Finance Manager, and representatives from external auditors and internal auditors were also invited to attend these meetings.

Secretary and Minutes

The Company Secretary acts as Secretary to the Committee meeting and minutes of the proceedings for each Committee meeting are prepared and circulated to all Committee members and the Company’s directors who are non-members of the Committee.

SUMMARY OF ACTIVITIES

The summary of activities carried out by the Audit Committee during the financial year ended 31 December 2015 are as follows:

a) Reviewed the quarterly financial results before submission for the Board’s approval and announcement to Bursa Securities.

b) Reviewed the audit plan of the external auditors

c) Reviewed with the external auditors the annual audited financial statements.

d) Reviewed the scope of work and audit plan with the internal auditors.

e) Reviewed the internal audit reports and assess the recommendations on the audit issues.

f) Reviewed the adequacy of provision for doubtful debts and bad debts written off.

g) Reviewed the recurrent related party transactions within the Company and the Group.

h) Reviewed Audit Committee Report and Statement on Risk Management and Internal Control prior to submission to the Board’s for consideration and approval for inclusion into the annual report.

i) Reviewed the re-appointment and remuneration of the External Auditors.

j) Conducted meetings with the external Auditors without the presence of the executive Directors and employees of the Group.

AUDIT COMMITTEEREPORT(Cont’d)



31

INTERNAL AUDIT SERVICE

The Audit Committee is supported by internal Audit in discharging its duties and responsibilities. During the financial year ended 31 December 2015, the outsourced internal audit service carried out audits in accordance with the approved audit plan, the results of which were tabled to the Audit Committee periodically.

The outsourced internal Auditors report to the Audit Committee on their audit findings, their recommendations of the corrective actions to be taken by Management together with Management’s responses in relation thereto. The Internal Auditors will follow up on the implementation of their recommendations by Management.

The Audit Committee ensure that the internal auditors are given full access to all documents relating to the Company’s governance, financial statements and operational assessments, and direct access to the Audit Committee. The audit plan covers review of the adequacy of operational control, risk management, compliance with established policies and procedures, laws and regulations.

The outsourced internal Auditors had during the financial year carried out internal audit review with the relevant audit report prepared and submitted for Audit Committee’s review as follows:-

i) Review of Recurrence Related Party Transactions;

ii) Review of Sales cycle; and

iii) Review of Purchase cycle.

The internal audits conducted had not revealed any weaknesses which would result in material losses, contingencies or uncertainties that would require a separate disclosure in the group’s annual report.

The cost incurred for the internal audit service in respect of the financial year ended 31 December 2015 was RM45,660 (2014: RM38,500).

This Report is made in accordance with the resolution passed at the Board of Directors’ Meeting held on 5 April 2016.


(Cont’d)



32

The Directors are required to prepare the financial statements which give a true and fair view of the state of affairs of the Company and group as at end of the financial year and of their results and cash flows for the financial year.

in preparing the financial statements for the year ended 31 December 2015, the Directors have:

● considered the applicable approved Malaysian Accounting Standards

● adopted and consistently applied appropriate accounting policies

● made judgements and estimates that are prudent and reasonable

● prepared financial statements on the going concern basis as the Directors have a reasonable expectation, having made enquiries that the Company and the Group have adequate resources to continue in operational existence for the foreseeable future.

The Directors have responsibility to ensure that proper and adequate accounting records are kept which disclose with reasonable accuracy the financial position of the Company and group, and which enable them to ensure that the financial statements comply with the provisions of the Companies Act, 1965.

The Directors have general responsibility for taking such reasonable steps to safeguard the assets of the Company and Group so as to prevent and detect fraud and other irregularities.

STATEMENT OFDIRECTORS’ RESPONSIBILITY



33

INTRODUCTION

in compliance with paragraph 15.26 (b) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”), the Board of Directors acknowledges its responsibility on the group’s internal control and for reviewing its effectiveness, adequacy and integrity. Hence, the Board continues with its commitment to maintain a sound system of internal control and risk management system practices to good governance.

BOARD RESPONSIBILITY

Following the publication of the Statement on Risk Management and Internal Control: Guidelines for Directors of Listed issuers, the Board has established an ongoing process for identifying, evaluating and managing significant risks faced by the group in its achievement of objectives and strategies. This ongoing process which includes updating the system of internal controls due to change in business environment or regulatory guidelines, is reviewed by the Board. The Board has received assurance from the executive Chairman and the Finance Manager that the group’s risk management and internal control system is operating adequately and effectively in all material aspects, based on the risk management and internal control system of the group. The Board is of the view that the risk management and the system of internal control is in place for the year under review and up to the date of issuance of the financial statements are sound and sufficient to safeguard the shareholders’ interest and assets within the group.

In view of the limitations inherent in any system of internal control, the control system is designed to manage and control the principal business and operation risks rather than to eliminate the risk of failure in achieving the business objective, and it can only provide reasonable and not absolute assurance against material misstatement, fraud or loss.

RISK MANAGEMENT

The Board recognises the importance of risk management. As such, the control processes are reviewed by the Board on an ongoing basis for identification and mitigation of the major risks within the group. The ongoing review process was facilitated with the well defined line of responsibilities, policies and procedures laid down by the Board. Besides this, the participation of the Executive Chairman and Managing Director in the daily activities has also reduced the business and operational risks of the Group. The Executive Chairman, Managing Director and senior management organised quarterly meeting to discuss operational matters for the purpose of identifying and managing the business risks of the Group.

KEY ELEMENTS OF INTERNAL CONTROL

The following are the key elements of the Group’s internal control system:-

l A well defined organisational structure with proper lines of responsibilities and delegation of authority for major transactions;

l The information systems capable of reporting financial and operational performance are available for monitoring and decision making;

l The control procedures are also in place to ensure the group’s assets are subject to proper physical controls and periodic maintenance;

l The Audit Committee and the Board review and monitor the performance and results of the group at quarterly meeting, deliberating on significant internal control and performance issues;

l A proper documentation of internal policies and procedures set out which relates to human resources, safety and health, environment, operating and insurance are subject to review, as and when required and improvement which helped to identify and close gap as well as compliance with Group’s policies, regulatory requirement and standards;

l Visits of plant by Executive Directors;

l The Group has obtained ISO certification for stainless steel and melamineware divisions. The system documentation and control procedures are audited annually for continuous compliance and enhancement of quality management system.

STATEMENT ON RISK MANAGEMENT ANDINTERNAL CONTROL



34

KEY ELEMENTS OF INTERNAL CONTROL (cont'd)

l Internal control requirements are embedded in computerised system as well.

l The Credit Control assessment is conducted at subsidiary level by Marketing department on monthly basis with the objective of maximising the account receivables into cash flow and minimising impaired debts written off.

INTERNAL AUDIT

in accordance with the Best Practice as set out in the Malaysian Code on Corporate governance, the Board had also engaged the internal audit service which was outsourced to external professional to provide independent assessment of the adequacy, efficiency and integrity of the group’s system of internal control.

The Internal audit service (“Internal Audit”) is to assist the Audit Committee of the Group to discharge its functions effectively. The Internal Audit performs checking on compliance with policies and procedures and effectiveness of the internal control systems and highlight significant findings in respect of non compliances. Audits are carried out on subsidiaries in the Group, the frequency of audit is determined by the level of risk assessed, to provide an independent objective report on operational and management activities within the group. The audit findings on internal control weaknesses and improvement are tabled at the Audit Committee meeting for deliberation and the Audit Committee’s expectation on the corrective measures will be communicated to the Management.

The Audit Committee of the group reviews any internal control issues identified by the internal Audit, the external auditors, regulator and Management, and evaluate the adequacy of the risk management and internal control systems. The Audit Committee also reviews the internal audit service and quality of internal audits. The minutes of the Audit Committee meetings are tabled to the Board.

The Board has also adopted a Board Charter recommended by the Audit Committee. The primary purpose of the Board of Directors’ Charter is to formally define the structure, responsibilities, rights and procedures of the Board.

The costs incurred in maintaining internal audit service for the financial year ended 31 December 2015 amounted to RM45,660 (2014: RM38,500).

REVIEW OF THE STATEMENT ON INTERNAL CONTROL

The External Auditors have reviewed this Statement on Risk Management and Internal Control for the inclusion in the annual report of the group for the financial year ended 31 December 2015 pursuant to the scope set out in Recommended Practice Guide (“RPG”) 5 revised by Malaysian Institute of Accountants (“MIA”) on 11th December 2013 and reported to the Board that nothing has come to their attention that causes them to believe that the Statement on Risk Management and Internal Controls intended to be included in the annual report is not prepared, in all material respects, in accordance with the disclosures required by paragraphs 41 and 42 of the Statement on Risk Management and internal Controls: guidelines for Directors of Listed issuers to be set out, nor is factually inaccurate.

RPG5 does not require the external auditors to consider whether the Directors’ Statement on Risk Management and Internal Control covers all risks and controls, or to form an opinion on the adequacy and effectiveness of the Group’s risk management and internal control system including the assessment and opinion by the Directors and Management thereon.

After due and careful assessment and based on the information and assurance provided, the Board is satisfied that there were no material losses, contingencies or uncertainties as a result of weakness in the system of internal control save for the finding’s highlighted by the auditors. The risks are considered to be at an acceptable level within the context of the Group’s business environment.

Nevertheless, the Board and Management will continue to take proactive measures to strengthen the control environment and the internal control system of the Group.

This statement ismade in accordancewith a resolution of theBoard ofDirectors dated5April 2016andhas beenduly reviewed by the external auditors, pursuant to paragraph 15.23 of the Main Market Listing Requirements of Bursa Securities.

STATEMENT ON RISK MANAGEMENT ANDINTERNAL CONTROL(Cont’d)



35

The directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the financial year ended 31 December 2015.

PRINCIPAL ACTIVITIES

The principal activity of the Company is investment holding. The principal activities of the subsidiaries are set out in Note 11 to the financial statements. There have been no significant changes in the nature of these activities during the financial year.

RESULTS

Group Company RM RM

Profit for the financial year 7,190,784 3,632,949

Attributable to:-Owners of the Company 7,190,784 3,632,949

7,190,784 3,632,949

DIVIDEND

Since the end of the previous financial year, the Company declared an interim share dividend at the ratio of 1 treasury share for every 10 existing ordinary shares of RM0.25 each amounting to RM4,019,044 in respect of the financial year ended 31 December 2015 and distributed on 13 April 2015.

The directors do not recommend the payment of any other dividend in respect of the current 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.

BAD AND DOUBTFUL DEBTS

Before the statement of profit or loss and other comprehensive income and statement of financial position of the Company were made out, the directors took reasonable steps to ascertain that action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and have satisfied themselves that there were no known bad debts and that adequate provision had been made for doubtful debts.

At the date of this report, the directors are not aware of any circumstances which would render it necessary to write off any bad debts or render the amount of provision for doubtful debts in the financial statements of the Company inadequate to any substantial extent.

CURRENT ASSETS

Before the statements of profit or loss and other comprehensive income and statements of financial position of the group and of the Company were made out, the directors took reasonable steps to ensure that any current assets which were unlikely to realise in the ordinary course of business including their values as shown in the accounting records of the Group and of the Company had been written down to an amount which they might be expected so to realise.

DIRECTORS’ REPORT



36

DIRECTORS’ REPORT(Cont’d)

CURRENT ASSETS (cont'd)

At the date of this report, the directors are not aware of any circumstances which would render the values attributed to the current assets in the financial statements of the Group and of the Company misleading.

VALUATION METHODS

At the date of this report, the directors are not aware of any circumstances which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.

CONTINGENT AND OTHER LIABILITIES

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

(i) any charge on the assets of the Group or of the Company which has arisen since the end of the financial year which secures the liabilities of any other person; or

(ii) any contingent liability in respect of the Group or of the Company which has arisen since the end of the financial year.

No contingent liability or other liability of the Group or of the Company has become enforceable, or is likely to become enforceable within the period of twelve months after the end of the financial year which, in the opinion of the directors, will or may affect the ability of the Group or of the Company to meet their obligations as and when they fall due.

CHANGE OF CIRCUMSTANCES

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 of the Group and of the Company which would render any amount stated in the financial statements misleading.

ITEMS OF AN UNUSUAL NATURE

In the opinion of the directors:-

(i) the results of the operations of the Group and of the Company for the financial year were not substantially affected by any item, transaction or event of a material and unusual nature; and

(ii) 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 Group and of the Company for the financial year in which this report is made.

ISSUE OF SHARES OR DEBENTURES

During the financial year, no new issue of shares or debentures was made by the Company.

TREASURY SHARES

Treasury shares relate to ordinary shares of the Company that are held by the Company. The amount consists of the acquisition costs of treasury shares net of the proceeds received on their subsequent sale or issuance. The repurchase transactions were financed by internally generated funds. The shares repurchased are being held as treasury shares in accordance with Section 67A of the Companies Act, 1965.

On 13 April 2015, the Company distributed a total of 17,712,744 unit shares with carrying amount of RM4,019,044 in the treasury shares account and credited as share dividend to the shareholders of the Company on a basis of (1) one treasury share for every (10) ten existing ordinary shares held by the shareholders of the Company. Such dividend had been accounted for in the equity as a distribution of treasury shares in the current financial year.



37

DIRECTORS’ REPORT

(Cont’d)

TREASURY SHARES (cont'd)

During the financial year, the Company repurchased 1,162,900 of its ordinary shares from the open market at an average price of RM0.325 per ordinary share. The total consideration paid for the shares repurchased including transaction costs was RM378,165.

As at 31 December 2015, the Company held a total of 3,122,656 ordinary shares of its 196,800,000 issued ordinary shares as treasury shares. Such treasury shares are held at a carrying amount of RM822,836. Further details are disclosed in Note 19 to the financial statements.

DIRECTORS OF THE COMPANY

The directors in office since the date of the last report are:-

Lee CHiN YeN TAN HONg CHeNg HiA WAN KigA Lee POH CHOO TAN KiM HONgCHAi MOi KiMCHiA KAY JOOCHAN Kee LOiNAZiZUL MOHD OTHMAN

DIRECTORS’ INTERESTS

The interests of the directors in office as at the end of the financial year in the shares of the Company during the financial year according to the registers required to be kept under Section 134 of the Companies Act, 1965, are as follows:-

Number of Ordinary Shares of RM0.25 Each At

1.1.2015 Bought Sold At

31.12.2015

Direct InterestLee Chin Yen 15,815,106 20,479,635 - 36,294,741 Tan Hong Cheng 25,718,710 4,394,371 - 30,113,081 Hia Wan Kiga 31,952,791 3,195,277 (8,198,425) 26,949,643 Lee Poh Choo 2,996,000 1,415,093 - 4,411,093 Tan Kim Hong 507,000 50,700 - 557,700

Indirect InterestLee Chin Yen # 3,409,200 1,440,920 - 4,850,120 Tan Hong Cheng # 1,266,050 126,605 - 1,392,655

# Shares held by his children who herself/himself is not director of the Company

By virtue of their substantial interests in the shares of the Company, Mr. Lee Chin Yen, Mr. Tan Hong Cheng and Mr. Hia Wan Kiga are also deemed to have an interest in the shares of the subsidiaries and its related corporation to the extent of the shareholdings by the Company.

The other directors in office at the end of the financial year had no interests in the shares of the Company or of its related corporations.



38

DIRECTORS’ REPORT(Cont’d)

DIRECTORS’ BENEFITS

Since the end of the previous financial year, no director of the Company has received or become entitled to receive any benefit (other than those as disclosed in Note 5(a) to the financial statements) by reason of a contract made by the Company or a related corporation with any 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 except for any deemed benefits which may arise from transactions as disclosed in Note 29 to the financial statements.

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

SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

Details of significant events during the financial year are disclosed in Note 34 to the financial statements.

SIGNIFICANT EVENT SUBSEqUENT TO THE END OF THE FINANCIAL YEAR

Details of significant event subsequent to the end of the financial year is disclosed in Note 35 to the financial statements.

AUDITORS

The auditors, Messrs. Baker Tilly AC, have expressed their willingness to continue in office.

Signed on behalf of the Board in accordance with a resolution of the directors dated 5 April 2016.

LEE CHIN YEN TAN HONG CHENG



39

i, Lee Chin Yen, being the director primarily responsible for the financial management of the Company, do solemnly and sincerely declare that, to the best of my knowledge and belief, the financial statements as set out on pages 42 to 98 and the supplementary information as set out on page 99 are 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 at )Kuala Lumpur in the Federal Territory ) LEE CHIN YENon 5 April 2016 )

Before me

ZULKIFLA MOHD DAHLIM (W541)Commissioner of Oaths

We, the undersigned, being two of the directors of the Company, do hereby state that, in the opinion of the directors, the accompanying financial statements as set out on pages 42 to 98 are drawn up in accordance with the Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as at 31 December 2015 and of their financial performance and cash flows for the financial year then ended.

The supplementary information set out on page 99 has been prepared in accordance with the Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian institute of Accountants and presented based on the format as prescribed by Bursa Malaysia Securities Berhad.

Signed on behalf of the Board in accordance with a resolution of the directors dated 5 April 2016.

LEE CHIN YEN TAN HONG CHENG



STATEMENT BY DIRECTORS

PURSUANT TO SECTION 169(15) OF THE COMPANIES ACT, 1965

STATUTORY DECLARATION

PURSUANT TO SECTION 169(16) OF THE COMPANIES ACT, 1965



40

INDEPENDENT AUDITORS’ REPORTTO THE MEMBERS OF CAM RESOURCES BERHAD (Incorporated in Malaysia)

REPORT ON THE FINANCIAL STATEMENTS

We have audited the financial statements of CAM Resources Berhad, which comprise the statements of financial position as at 31 December 2015 of the Group and of the Company, and the 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 financial year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 42 to 98.

Directors’ Responsibility for the Financial Statements

The directors of the Company are responsible for the preparation of the financial statements so as to give a true and fair view in accordance with 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 controls 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.

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 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 controls 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 controls. 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 at 31 December 2015 and of their financial performance and cash flows for the financial year then ended in accordance with the 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 Companies Act, 1965 in Malaysia to be kept by the Company and its subsidiaries have been properly kept in accordance with the provisions of the Companies Act, 1965 in Malaysia.

b) We are satisfied that the financial statements of the subsidiaries that have been consolidated with the Company’s financial statements are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group and we have received satisfactory information and explanations required by us for those purposes.

c) Our audit reports on the financial statements of the subsidiaries did not contain any qualification or any adverse comment required to be made under Section 174(3) of the Companies Act, 1965 in Malaysia.



41

INDEPENDENT AUDITORS’ REPORT

(Cont’d)

OTHER REPORTING RESPONSIBILITIES

The supplementary information set out on page 99 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad (“Bursa Malaysia”) and is not part of the financial statements. The directors are responsible for the preparation of the supplementary information in accordance with the Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian institute of Accountants (“MiA guidance”) and the directive of Bursa Malaysia. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia.

OTHER MATTERS

This report is made solely to the members 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 contents of this report.

BAKER TILLY AC LEE KONG WENGAF 001826 2967/07/17(J)Chartered Accountants Chartered Accountant

Kuala Lumpur5 April 2016



42

STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMEFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015

The annexed notes form an integral part of, and should be read in conjunction with, these financial statements.

Group Company2015 2014 2015 2014

Note RM RM RM RM

Operating revenue 4 212,247,413 214,308,249 4,100,000 500,000 Cost of goods sold (190,157,038) (192,974,181) - -

Gross profit 22,090,375 21,334,068 4,100,000 500,000 Other income 2,953,154 4,036,312 - 898

Distribution expenses (8,556,121) (7,541,463) (1,321) - Administrative expenses (6,238,025) (4,871,586) (465,801) (394,767)Other operating expenses (366,173) (1,304,587) - -

(15,160,319) (13,717,636) (467,122) (394,767)

Profit from operations 9,883,210 11,652,744 3,632,878 106,131 Finance costs (3,124,420) (2,810,679) - -

Profit before tax 5 6,758,790 8,842,065 3,632,878 106,131 Tax credit/(expense) 6 431,994 (1,724,752) 71 (14,061)

Profit for the financial year, representing total comprehensive income for the financial year 7,190,784 7,117,313 3,632,949 92,070

Profit for the financial year, representing total comprehensive income for the financial year attributable to:-

Owners of the Company 7,190,784 6,674,104 3,632,949 92,070 Non-controlling interests 11(a) - 443,209 - -

7,190,784 7,117,313 3,632,949 92,070

Earnings per ordinary share attributable to the owners of the Company:

- Basic/Diluted (sen) 7 3.70 3.77



43

STATEMENTS OF FINANCIAL POSITION

AS AT 31 DECEMBER 2015

Group Company2015 2014 2015 2014

Note RM RM RM RM

ASSETS

Non-current assets

Property, plant and equipment 8 91,596,400 86,479,020 - 800 Intangible asset 9 45,617 45,617 - - Goodwill on consolidation 10 6,078,933 6,078,933 - - Investment in subsidiaries 11 - - 77,303,262 70,103,262 Deferred tax assets 12 1,940,900 143,400 - -

99,661,850 92,746,970 77,303,262 70,104,062

Current assets

Inventories 13 33,501,454 39,650,926 - - Trade receivables 14 21,525,738 17,428,176 - - Other receivables, deposits and prepayments 15 4,843,532 14,597,413 19,180 6,977,495 Amounts owing by subsidiaries 16 - - 5,356,770 2,306,748 Tax assets 17 1,068,271 366,452 6,115 32,624 Cash deposits with licensed banks 18 2,728,776 2,593,819 - - Cash and bank balances 3,331,877 5,131,597 10,990 77,229

66,999,648 79,768,383 5,393,055 9,394,096

TOTAL ASSETS 166,661,498 172,515,353 82,696,317 79,498,158



44

STATEMENTS OF FINANCIAL POSITION(Cont’d)


Group Company2015 2014 2015 2014

Note RM RM RM RM

EqUITY AND LIABILITIES

Equity

Share capital 19 49,200,000 49,200,000 49,200,000 49,200,000 Reserves 20 53,730,232 55,410,683 26,801,129 27,187,224 Treasury shares 19 (822,836) (4,463,715) (822,836) (4,463,715)

Total equity attributable to owners of the Company 102,107,396 100,146,968 75,178,293 71,923,509

Non-controlling interests - 2,347,809 - -

Total equity 102,107,396 102,494,777 75,178,293 71,923,509

Liabilities

Non-current liabilities

Finance lease payables 21 287,801 107,370 - - Bank borrowings 22 25,312,680 27,903,218 - - Deferred tax liabilities 12 3,642,852 3,427,513 - 200

29,243,333 31,438,101 - 200

Current liabilities

Trade payables 23 7,098,932 5,311,224 - - Other payables, deposits and accruals 24 5,094,186 5,309,705 149,490 145,928 Amounts owing to subsidiaries 16 - - 7,368,534 7,428,521 Provision 25 509,975 477,035 - - Finance lease payables 21 258,008 95,378 - - Bank borrowings 22 22,349,668 27,389,133 - -

35,310,769 38,582,475 7,518,024 7,574,449

Total liabilities 64,554,102 70,020,576 7,518,024 7,574,649

TOTAL EqUITY AND LIABILITIES 166,661,498 172,515,353 82,696,317 79,498,158



45

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015


Attributable to owners of the Company Non-

Distributable Distributable Non- Controlling

Interests Total

Equity Share

Capital Treasury

Shares Share

Premium Retained Earnings Sub Total

Note RM RM RM RM RM RM RM

At 1 January 2014

49,200,000 (4,463,715) 5,178,474 43,558,105 93,472,864 1,904,600 95,377,464

Comprehensive income

Profit for the financial year - - - 6,674,104 6,674,104 443,209 7,117,313

Total comprehensive income for the financial year - - - 6,674,104 6,674,104 443,209 7,117,313

At 31 December 2014

49,200,000 (4,463,715) 5,178,474 50,232,209 100,146,968 2,347,809 102,494,777


Profit for the financial year - - - 7,190,784 7,190,784 - 7,190,784

Total comprehensive income for the financial year - - - 7,190,784 7,190,784 - 7,190,784

Transactions with owners

Purchase of treasury shares 19 - (378,165) - - (378,165) - (378,165)

Share dividend 36 - 4,019,044 - (4,019,044) - - -

Acquisition of non-controlling interest 11 - - - (4,852,191) (4,852,191) (2,347,809) (7,200,000)

Total transactions with owners - 3,640,879 - (8,871,235) (5,230,356) (2,347,809) (7,578,165)

At 31 December 2015 49,200,000 (822,836) 5,178,474 48,551,758 102,107,396 - 102,107,396



46

STATEMENT OF CHANGES IN EQUITYFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015


Attributable to owners of the Company

Share Capital

Treasury Shares

Non- Distributable

Share Premium

Distributable Retained

Earnings Total

Equity Note RM RM RM RM RM

At 1 January 2014 49,200,000 (4,463,715) 5,178,474 21,916,680 71,831,439


Profit for the financial year - - - 92,070 92,070

Total comprehensive income for the financial year - - - 92,070 92,070

At 31 December 2014 49,200,000 (4,463,715) 5,178,474 22,008,750 71,923,509


Profit for the financial year - - - 3,632,949 3,632,949

Total comprehensive income for the financial year - - - 3,632,949 3,632,949

Transactions with owners

Purchase of treasury shares 19 - (378,165) - - (378,165)Share dividend 36 - 4,019,044 - (4,019,044) -

Total transactions with owners - 3,640,879 - (4,019,044) (378,165)

At 31 December 2015 49,200,000 (822,836) 5,178,474 21,622,655 75,178,293



47

STATEMENTS OF CASH FLOWS

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015

Group Company2015 2014 2015 2014 RM RM RM RM

Cash flows from operating activities

Profit before tax 6,758,790 8,842,065 3,632,878 106,131

Adjustments for:-

Bad debts written off on other receivables - 140 - - Deposits written off 2,900 - - - Depreciation of property, plant and equipment 5,570,241 4,587,980 800 800 Dividend income from subsidiaries - - (4,100,000) (500,000)Interest expense 2,992,179 2,663,556 - - Interest income (60,381) (58,359) - - Impairment loss on trade receivables 13,077 36,449 - - Gain on disposal of property, plant and equipment (18,998) - - - Net provision for employee benefits 32,940 68,723 - - Property, plant and equipment written off 246,939 995,209 - - Reversal of impairment loss on trade receivables (2,279) (30,695) - - Unrealised gain on foreign exchange (108,268) (316,423) - -

Operating profit/(loss) before working capital changes 15,427,140 16,788,645 (466,322) (393,069)Decrease/(increase) in inventories 6,149,472 (2,282,882) - - Decrease/(increase) in receivables 5,881,859 (2,859,056) 6,958,315 (6,314,345)increase/(Decrease) in payables 1,058,685 (1,109,463) 3,562 12,218

Cash generated from/(used in) operations 28,517,156 10,537,244 6,495,555 (6,695,196)Interest paid (2,992,179) (2,663,556) - - Interest received 25,424 25,905 - - Tax refunded 253,053 502,818 26,683 37,147 Tax paid (2,105,039) (1,994,395) (303) (336)

Net cash from/(used in) operating activities carried down 23,698,415 6,408,016 6,521,935 (6,658,385)



48

STATEMENTS OF CASH FLOWS(Cont’d)


Group Company2015 2014 2015 2014

Note RM RM RM RM

Net cash from/(used in) operating activities brought down 23,698,415 6,408,016 6,521,935 (6,658,385)

Cash flows from investing activities

Acquisition of intangible assets - (45,617) - - Additional investment in a subsidiary 11 (7,200,000) - (7,200,000) - (Advances to)/Repayments from subsidiaries - - (3,050,022) 3,415,103 Capital work-in-progress incurred 8 (6,100,072) (10,900,981) - - Dividend income received from a subsidiary - - - 500,000 Proceeds from disposal of property, plant and

equipment 19,000 - - - Purchase of property, plant and equipment 8 (4,252,490) (3,888,957) - -

Net cash (used in)/from investing activities (17,533,562) (14,835,555) (10,250,022) 3,915,103

Cash flows from financing activities

Acquisition of treasury shares 19 (378,165) - (378,165) -Advances from subsidiaries - - 4,040,013 2,782,370 Drawdown of term loans - 11,482,350 - - Net movement of bankers’ acceptance (2,831,414) (721,856) - - Net movement of revolving credits 100,000 (100,000) - - Payments of finance lease payables (238,939) (102,535) - - Repayments of term loans (2,435,152) (8,527,404) - -

Net cash (used in)/from financing activities (5,783,670) 2,030,555 3,661,848 2,782,370

Net increase/(decrease) in cash and cash equivalents 381,183 (6,396,984) (66,239) 39,088

Effects of exchange rate changes on cash and cash equivalents 382,534 37,020 - -

Cash and cash equivalents at beginning of the financial year 76,200 6,436,164 77,229 38,141

Cash and cash equivalents at end of the financial year 26 839,917 76,200 10,990 77,229



49

NOTES TO THE FINANCIAL STATEMENTS

- 31 DECEMBER 2015

1. CORPORATE INFORMATION

The Company is a public limited liability company, incorporated and domiciled in Malaysia, and is listed on the Main Market of Bursa Malaysia Securities Berhad.

The principal place of business is located at Batu 12, Jalan Hutan Melintang, 36400 Hutan Melintang, Perak Darul Ridzuan.

The registered office of the Company is located at 10th Floor, Menara Hap Seng, No. 1 & 3, Jalan P. Ramlee, 50250 Kuala Lumpur.

The principal activity of the Company is investment holding. The principal activities of the subsidiaries are disclosed in Note 11. There have been no significant changes in the nature of these activities during the financial year.

The financial statements were authorised for issue in accordance with a Board of Directors' resolution dated 5 April 2016.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of preparation

The financial statements of the Group and of the Company have been prepared in accordance with the Malaysian Financial Reporting Standards (“MFRSs”), International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.

The financial statements of the Group and of the Company have been prepared under the historical cost basis, except as otherwise disclosed in the summary of significant accounting policies.

The preparation of financial statements in conformity with MFRSs requires the use of certain critical accounting estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, and the reported amounts of the revenue and expenses during the reported period. it also requires directors to exercise their judgement in the process of applying the group’s and 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.

2.2 New MFRSs and Amendments/Improvements to MFRSs

(a) Adoption of Amendments/Improvements to MFRSs

The group and the Company had adopted the following amendments/improvements to MFRSs that are mandatory for the current financial year:-

Amendments/improvements to MFRSs

MFRS 2 Share-base Payment

MFRS 3 Business Combinations

MFRS 8 Operating Segments

MFRS 13 Fair Value Measurement

MFRS 116 Property, Plant and Equipment

MFRS 119 employee Benefits

MFRS 124 Related Party Disclosures

MFRS 138 Intangible Assets

MFRS 140 Investment Property

The adoption of the above amendments/improvements to MFRSs did not have any significant effect on the financial statements of the Group and of the Company.



50

NOTES TO THE FINANCIAL STATEMENTS(Cont’d)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont’d)

2.2 New MFRSs and Amendments/Improvements to MFRSs (cont’d)

(b) New MFRSs and Amendments/Improvements to MFRSs that have been issued, but yet to be effective

The group and the Company have not adopted the following new MFRSs and amendments/improvements to MFRSs that have been issued by the Malaysian Accounting Standard Board (“MASB”) as at the date of authorisation of these financial statements but are not yet to be effective for the Group and the Company:-

Effective forfinancial periods

beginning onor after

New MFRSsMFRS 9 Financial Instruments 1 January 2018MFRS 15 Revenue from Contracts with Customers 1 January 2018

Amendments/improvements to MFRSsMFRS 5 Non-current Asset Held for Sale and Discontinued

Operations1 January 2016

MFRS 7 Financial Instruments: Disclosures 1 January 2016MFRS 10 Consolidated Financial Statements Deferred/1 January 2016MFRS 11 Joint Arrangements 1 January 2016MFRS 12 Disclosure of Interest in Other Entities 1 January 2016MFRS 101 Presentation of Financial Statements 1 January 2016MFRS 116 Property, Plant and Equipment 1 January 2016MFRS 119 employee Benefits 1 January 2016MFRS 127 Separate Financial Statements 1 January 2016MFRS 128 investments in Associates and Joint Ventures Deferred/1 January 2016MFRS 138 Intangible Assets 1 January 2016MFRS 141 Agriculture 1 January 2016

A brief discussion on the above significant new MFRSs and amendments/improvements to MFRSs are summarised below. Due to the complexity of these new standards, the financial effects of their adoption are currently still being assessed by the Group and the Company.

MFRS 9 Financial Instruments

Key requirements of MFRS 9:-

MFRS 9 introduces an approach for classification of financial assets which is driven by cash flow characteristics and the business model in which an asset is held. The new model also results in a single impairment model being applied to all financial instruments.

in essence, if a financial asset is a simple debt instrument and the objective of the entity’s business model within which it is held is to collect its contractual cash flows, the financial asset is measured at amortised cost. in contrast, if that asset is held in a business model the objective of which is achieved by both collecting contractual cash flows and selling financial assets, then the financial asset is measured at fair value in the statements of financial position, and amortised cost information is provided through profit or loss. If the business model is neither of these, then fair value information is increasingly important, so it is provided both in the profit or loss and in the statements of financial position.



51


(Cont’d)



(b) New MFRSs and Amendments/Improvements to MFRSs that have been issued, but yet to be effective (cont’d)

MFRS 9 Financial Instruments (cont’d)

Key requirements of MFRS 9:- (cont’d)

MFRS 9 introduces a new, expected-loss impairment model that will require more timely recognition of expected credit losses. Specifically, this Standard requires entities to account for expected credit losses from when financial instruments are first recognised and to recognise full lifetime expected losses on a more timely basis. The model requires an entity to recognise expected credit losses at all times and to update the amount of expected credit losses recognised at each reporting date to reflect changes in the credit risk of financial instruments. This model eliminates the threshold for the recognition of expected credit losses, so that it is no longer necessary for a trigger event to have occurred before credit losses are recognised.

MFRS 9 introduces a substantially-reformed model for hedge accounting, with enhanced disclosures about risk management activity. The new model represents a significant overhaul of hedge accounting that aligns the accounting treatment with risk management activities, enabling entities to better reflect these activities in their financial statements. In addition, as a result of these changes, users of the financial statements will be provided with better information about risk management and the effect of hedge accounting on the financial statements.

MFRS 15 Revenue from Contracts with Customers

The core principle of MFRS 15 is that an entity recognises revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. An entity recognises revenue in accordance with the core principle by applying the following steps:-

(i) identify the contracts with a customer;(ii) identify the performance obligation in the contract; (iii) determine the transaction price;(iv) allocate the transaction price to the performance obligations in the contract;(v) recognise revenue when (or as) the entity satisfies a performance obligation.

MFRS 15 also includes new disclosures that would result in an entity providing users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows from contracts with customers.

The following MFRSs and IC Interpretations will be withdrawn on the application of MFRS 15:-

MFRS 111 Construction ContractsMFRS 118 RevenueiC interpretation 13 Customer Loyalty ProgrammesIC Interpretation 15 Agreements for the Construction of Real EstateIC Interpretation 18 Transfers of Assets from CustomersiC interpretation 131 Revenue – Barter Transactions involving Advertising Services

Amendments to MFRS 7 Financial Instruments: Disclosures

Amendments to MFRS 7 provide additional guidance to clarify whether servicing contracts constitute continuing involvement for the purposes of applying the disclosure requirements of MFRS 7.

The Amendments also clarify the applicability of Disclosure – Offsetting Financial Assets and Financial Liabilities (Amendments to MFRS 7) to condensed interim financial statements.



52




(b) New MFRSs and Amendments/Improvements to MFRSs that have been issued, but yet to be effective (cont’d)

Amendments to MFRS 101 Presentation of Financial Statements

Amendments to MFRS 101 improve the effectiveness of disclosures. The Amendments clarify guidance on materiality and aggregation, the presentation of subtotals, the structure of financial statements and the disclosure of accounting policies.

Amendments to MFRS 116 Property, Plant and Equipment

Amendments to MFRS 116 prohibit revenue-based depreciation because revenue does not reflect the way in which an item of property, plant and equipment is used or consumed.

Amendments to MFRS 127 Separate Financial Statements

Amendments to MFRS 127 allow a parent and investors to use the equity method in its separate financial statements to account for investments in subsidiaries, joint ventures and associates, in addition to the existing options.

Amendments to MFRS 138 Intangible Assets

Amendments to MFRS 138 introduce a rebuttable presumption that the revenue-based amortisation method is inappropriate. This presumption can be overcome only in the following limited circumstances:-

• when the intangible asset is expressed as a measure of revenue, i.e. in the circumstance in which the predominant limiting factor that is inherent in an intangible asset is the achievement of a revenue threshold; or

• when it can be demonstrated that revenue and the consumption of the economic benefits of the intangible asset are highly correlated.

2.3 Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and all its subsidiaries which are disclosed in Note 11 made up to the end of the financial year. The financial statements of the Company and its subsidiaries are all drawn up to the same reporting date.

Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is exposed to or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Specifically, the Group controls an investee if and only if the Group has:-

(a) power over the investee;(b) exposure, or rights, to variable returns from its involvement with the investee; and(c) the ability to use its power over the investee to affect its returns.

if the group has less than a majority of the voting or similar rights of an investee, the group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:-

(a) the contractual arrangement with the other vote holders of the investee;(b) rights arising from other contractual agreements; and(c) the voting rights of the Group and potential voting rights.

Subsidiaries are consolidated using acquisition method from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. The assets, liabilities and contingent liabilities assumed from a subsidiary are measured at their fair values at the date of acquisition and these values are reflected in the consolidated financial statements. Uniform accounting policies are adopted in the consolidated financial statements for like transactions and events in similar circumstances.



53


(Cont’d)


2.3 Basis of consolidation (cont’d)

In the Company’s separate financial statements, investments in subsidiaries are accounted for at cost less impairment losses, unless the investments are classified as held for sale (or included in a disposal group that is classified as held for sale). Acquisition related costs are recognised as expenses in the period in which the costs are incurred. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is recognised in profit or loss.

All intra group balances, transactions and resulting unrealised profits and losses (unless cost cannot be recovered) are eliminated on consolidation and the consolidated financial statements reflect external transactions only.

For each business combination, the Group elects whether to measure the non-controlling interests in the acquiree at the acquisition date either at fair value or at the proportionate share of the acquiree’s identifiable net assets.

Any excess of the cost of the acquisition over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities represents goodwill.

Any excess of the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition is recognised immediately in profit or loss.

Changes in the parent’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. In such circumstances, the carrying amounts of the controlling and non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interest is adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the Company.

The group has applied the revised MFRS 127 prospectively on 1 January 2011 in accordance with the transitional provisions. Accordingly, transactions with non-controlling interests prior to the respective effective date have not been restated to comply with the Standard.

2.4 Transactions with non-controlling interests

Non-controlling interests represents the equity in subsidiaries not attributable, directly or indirectly, to owners of the parent, and is presented separately in the consolidated statement of profit or loss and other comprehensive income and within equity in the consolidated statement of financial position, separately from equity attributable to owners of the parent. Profit or loss and each component of other comprehensive income are attributable to the owners of the parent and to the non-controlling interests. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance.

2.5 Functional and presentation currency

The individual financial statements of each entity in the Group are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”).

The consolidated financial statements are presented in Ringgit Malaysia (“RM”) which is also the Company’s functional currency. All financial information presented in RM has been rounded to the nearest RM, unless otherwise stated.

2.6 Foreign currencies transactions

In preparing the financial statements of the individual entities, transactions in currencies other than the Company’s functional currency (foreign currencies) are recorded in Ringgit Malaysia using the exchange rates prevailing at the dates of the transactions. At each reporting date, monetary items denominated in foreign currencies are translated to the functional currencies at the exchange rates on the reporting date. Non-monetary items denominated in foreign currencies are not retranslated at the reporting date except for those that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined.



54



2.6 Foreign currencies transactions (cont’d)

Exchange differences arising on the settlement of monetary items and on the translation of monetary items are included in profit or loss for the period in which they arise. Exchange differences arising on the translation of non-monetary items carried at fair value are included in profit or loss for the period except for the differences arising on the translation of non-monetary items in respect of which gains and losses are recognised directly in equity. Exchange differences arising from such non-monetary items are also recognised directly in equity.

2.7 Revenue recognition

(i) Goods sold

Revenue from the sale of goods is measured at fair value of the consideration received or receivable, net of returns and allowances, trade discounts and volume rebates. Revenue is recognised upon delivery of goods when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, and there is no continuing management involvement with the goods.

(ii) Interest income

Interest income is recognised on an accrual basis using the effective interest method.

(iii) Dividend income

Dividend income from subsidiaries is recognised when the right to receive payment is established.

(iv) Rental income

Rental income is recognised in profit or loss on the straight-line basis over the term of the lease. Lease incentives granted are recognised as an integral part of the total rental income, over the term of lease.

2.8 Employee benefits

(i) Short term employee benefits

Wages, salaries, social security contributions and bonuses are recognised as expenses in the financial year in which the associated services are rendered by employees of the Group. Short term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensated absences, and short term non-accumulating compensated absences such as sick leave are recognised when the absences occur.

(ii) Defined contribution plans

As required by law, companies in Malaysia make contributions to the state pension scheme, the Employees Provident Fund (“EPF”). Such contributions are recognised as expenses in the profit or loss as incurred.

2.9 Borrowing costs

Borrowing costs are capitalised as part of a qualifying assets if they are directly attributable to the acquisition, construction or production of that asset. Capitalisation of borrowing costs commences when the activities to prepare the assets for its intended use or sale are in progress and the expenditures and borrowing costs are incurred. Borrowing costs are capitalised until the assets are substantially completed for their intended use or sale.

All other borrowing costs are recognised in profit or loss in the period in which they are incurred. Borrowing costs consist of interest and other costs that the Group incurred in connection with the borrowing of funds.



55


(Cont’d)


2.10 Leases

(i) Finance lease - the Group as lessee

Assets acquired by way of finance leases where the Group assumes substantially all the benefits and risks of ownership are classified as property, plant and equipment.

Finance leases are capitalised at the inception of the lease at the lower of the fair value of the leased property and the present value of the minimum lease payments. Each lease payment is allocated between the liability and finance charges. The corresponding rental obligations, net of finance charges, are included in borrowings. The interest element of the finance charge is charged to the profit or loss over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Property, plant and equipment acquired under finance lease is depreciated in accordance with the depreciation policy for property, plant and equipment.

(ii) Operating leases - the Group as lessee

Operating lease payments are recognised as an expense on a straight-line basis over the term of the relevant lease. The aggregate benefit of incentives provided by the lessor is recognised as a reduction of rental expense over the lease term on a straight-line basis.

2.11 Tax expense

Tax expense in profit or loss represents the aggregate amount of current and deferred tax. Current tax is the expected amount payable in respect of taxable income for the financial year, using tax rates enacted or substantially enacted by the reporting date, and any adjustments recognised for prior years’ tax. When an item is recognised outside profit or loss, the related tax effect is recognised either in other comprehensive income or directly in equity.

Deferred tax is recognised using the liability method, on all temporary differences between the tax base of assets and liabilities and their carrying amounts in the financial statements. Deferred tax is not recognised if the temporary difference arises from goodwill or from the initial recognition of an asset or liability in a transaction, which is not a business combination and at the time of the transaction, affects neither accounting nor taxable profit or loss. Deferred tax is measured at the tax rates that are expected to apply in the period in which the assets are realised or the liabilities are settled, based on tax rates and tax laws that have been enacted or substantially enacted by the reporting date.

Deferred tax assets are recognised only to the extent that there are sufficient taxable temporary differences relating to the same taxable entity and the same taxation authority to offset or when it is probable that future taxable profits will be available against which the assets can be utilised.

Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefits will be realised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has become probable that future taxable profit will be available against which the assets can be utilised.

Deferred tax assets relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transactions either in other comprehensive income or directly in equity and deferred tax arising from business combination is adjusted against goodwill on acquisition or the amount of any excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over the acquisition cost.



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2.12 Earnings per share

(i) Basic

Basic earnings per ordinary share for the financial year is calculated by dividing the profit for the financial year attributable to equity holders of the parent by the weighted average number of ordinary shares outstanding during the financial year.

(ii) Diluted

Diluted earnings per ordinary share for the financial year is calculated by dividing the profit for the financial year attributable to equity holders of the parent by the weighted average number of ordinary shares outstanding during the financial year adjusted for the effects of dilutive potential ordinary shares.

2.13 Property, plant and equipment and depreciation

Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any, except for freehold land which is not depreciated. Cost includes expenditure that are directly attributable to the acquisition of the asset. Subsequent costs are included in the assets’ carrying amount or recognised as separate asset as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit or loss as incurred.

Freehold land is stated at cost less accumulated impairment losses, if any.

Capital work-in-progress consists of expenditure incurred on construction of property, plant and equipment which take a substantial period of time to be ready for their intended use. This expenditure is stated at cost less accumulated impairment losses, if any, and no depreciation is provided. Upon completion of construction, the cost will be reclassified to the respective property, plant and equipment and depreciated according to the depreciation policy of the Group.

Property, plant and equipment, except for freehold land and capital work-in-progress are depreciated on the straight line basis to write off the cost of the property, plant and equipment over their estimated useful lives.

The principal annual rates used for this purpose are:-

Leasehold land 43 to 95 yearsBuildings and warehouse 2% - 20%Plant, machinery and tools 5% - 20%Furniture, fittings and renovation 5% - 10%Office equipment and computers 5% - 20%Motor vehicles 20%

The residual values, useful lives and depreciation method are reviewed at each financial year end to ensure that the amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumption of the future economic benefits embodied in the items of property, plant and equipment. These are adjusted prospectively, if appropriate.

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. The difference between the net disposal proceeds, if any, and the net carrying amount is recognised in profit or loss.

Fully depreciated property, plant and equipment are retained in the financial statements until they are no longer in use and no further charge for depreciation is made in respect of these property, plant and equipment.



57


(Cont’d)


2.14 Goodwill on consolidation

Goodwill acquired in a business combination represents the difference between the purchase consideration and the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities in the subsidiaries at the date of acquisition.

Goodwill is allocated to cash generating units and is stated at cost less accumulated impairment losses, if any. Impairment test is performed annually. Goodwill is also tested for impairment when indication of impairment exists. Impairment losses recognised are not reversed in subsequent periods.

Upon the disposal of investment in the subsidiary, the related goodwill will be included in the computation of gain or loss on disposal of investment in the subsidiary in profit or loss.

2.15 Intangible asset

(i) Trademarks

Trademarks acquired are measured on initial recognition at cost. The useful lives of the trademarks are assessed to be indefinite and are not amortised but tested for impairment annually or more frequently if the events or changes in circumstances indicate that the carrying value may be impaired either individually or at the cash-generating unit level. The useful lives of trademarks are reviewed annually to determine whether the useful lives assessment continues to be supportable.

Gain or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in profit or loss when the assets is derecognised.

2.16 Impairment of non-financial assets

The carrying amounts of non-financial assets other than deferred tax assets and inventories are reviewed at each reporting date to determine whether there is any indication of impairment. If such an indication exists, the asset's recoverable amount is estimated. The recoverable amount is the higher of fair value less cost of disposal and the value in use, which is measured by reference to discounted future cash flows and is determined on an individual asset basis, unless the asset does not generate cash flows that are largely independent of those from other assets. If this is the case, recoverable amount is determined for the cash-generating unit to which the asset belongs to.

An impairment loss is recognised whenever the carrying amount of an item of asset exceeds its recoverable amount. An impairment loss is recognised in profit or loss.

Any subsequent increase in recoverable amount of an asset, other than goodwill, due to a reversal of impairment loss is restricted to the carrying amount that would have been determined (net of accumulated depreciation, where applicable) had no impairment loss been recognised in prior years. The reversal of impairment loss is recognised in profit or loss.

2.17 Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined on the weighted average basis. Cost includes the actual cost of purchases and incidentals in bringing the inventories into store and for finished goods and work-in-progress, it includes costs of raw materials, direct labour, other direct costs and appropriate proportions of manufacturing overheads based on normal operating capacity.

Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale.



58



2.18 Financial assets

Financial assets are recognised in the statements of financial position when, and only when, the Group and the Company become a party to the contractual provisions of the financial instrument.

When financial assets are recognised initially, they are measured at fair value, plus, in the case of financial assets not at fair value through profit or loss, directly attributable transaction costs.

The Group and the Company determine the classification of their financial assets at initial recognition, and have categorised the financial assets in loans and receivables.

(i) Loans and receivables

Financial assets with fixed or determinable payments that are not quoted in an active market are classified as loans and receivables.

Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, and through the amortisation process.

Loans and receivables are classified as current assets, except for those having maturity dates later than 12 months after the reporting date which are classified as non-current.

A financial asset is derecognised where the contractual right to receive cash flows from the asset has expired. On derecognition of a financial asset in its entirety, the difference between the carrying amount and the sum of the consideration received and any cumulative gain or loss that had been recognised in other comprehensive income is recognised in profit or loss.

Regular way purchases or sales are purchases and sales of financial assets that require delivery of assets within the period generally established by regulation or convention in the marketplace concerned. All regular way purchases and sales of financial assets are recognised or derecognised on the trade date i.e. the date that the Company commits to purchase or sell the asset.

The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts through the expected life of the debt instrument, or where appropriate, a shorter period to the net carrying amount on initial recognition.

2.19 Impairment of financial assets

The group and the Company assess at each reporting date whether there is any objective evidence that a financial asset is impaired.

(i) Trade and other receivables and other financial assets carried at amortised cost

To determine whether there is objective evidence that an impairment loss on financial assets has been incurred, the Group and the Company consider factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments. For certain categories of financial assets, such as trade receivables that are assessed not to be impaired individually are subsequently assessed for impairment on a collective basis based on similar risk characteristics. Objective evidence of impairment for a portfolio of receivables could include the Group’s and the Company’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period and observable changes in national or local economic conditions that correlate with default on receivables.

If any such evidence exists, the amount of impairment loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the financial asset’s original effective interest rate. The impairment loss is recognised in profit or loss.



59


(Cont’d)


2.19 Impairment of financial assets (cont’d)

(i) Trade and other receivables and other financial assets carried at amortised cost (cont’d)

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable becomes uncollectible, it is written off against the allowance account.

If in a subsequent period, the amount of the impairment loss decreases 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 profit or loss.

2.20 Cash and cash equivalents

Cash and cash equivalents comprise cash at banks and on hand and demand deposits, which are subject to an insignificant risk of changes in value. For the purpose of the statements of cash flows, cash and cash equivalents are presented net of bank overdraft.

2.21 Share capital

An equity instrument is any contract that evidences a residual interest in the assets of the Group and the Company after deducting all of its liabilities. Ordinary shares are equity instruments. Ordinary shares are recorded at the proceeds received, net of directly attributable incremental transaction costs. Ordinary shares are classified as equity. Dividends on ordinary shares are recognised in equity in the period in which they are declared.

2.22 Treasury shares

When issued shares of the Company are repurchased, the consideration paid, including any attributable transaction costs is presented as a change in equity. Repurchased shares that have not been cancelled are classified as treasury shares and presented as a deduction from equity. No gain or loss is recognised in the profit or loss on the sale, re-issuance or cancellation of treasury shares. When treasury shares are re-issued by resale, the difference between the sales consideration and the carrying amount of the treasury shares is shown as movement in equity.

2.23 Provisions

Provisions are recognised when the Group has a present obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate of the amount can be made. Provisions are reviewed at each reporting date and adjusted to reflect the current best estimate. Where the effect of the time value of money is material, the amount of a provision is the present value of the expenditure expected to be required to settle the obligation. The increase in the provision due to the passage of time is recognised as finance costs.

2.24 Financial liabilities

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, are recognised in the statement of financial position when, and only when, the Group and the Company become a 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.

Trade and other payables are recognised initially at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method.



60



2.24 Financial liabilities (cont’d)

Borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently measured at amortised cost using the effective interest method. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

For these financial liabilities, gains and losses are recognised in profit or loss when the liabilities are derecognised, and through the amortisation process.

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 lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a new liability, and the difference in the respective carrying amounts is recognised in profit or loss.

2.25 Financial guarantee contracts

A financial guarantee contract is a contract that requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due.

Financial guarantee contracts are recognised initially as a liability at fair value, net of transaction costs. Subsequent to initial recognition, financial guarantee contracts are recognised as income in profit or loss over the period of the guarantee. If the debtor fails to make payment relating to financial guarantee contract when it is due and the Group, as the issuer, is required to reimburse the holder for the associated loss, the liability is measured at the higher of the best estimate of the expenditure required to settle the present obligation at the reporting date and the amount initially recognised less cumulative amortisation.

2.26 Contingencies

A contingent liability or asset is a possible obligation or asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of uncertain future event(s) not wholly within the control of the Group. Contingent liabilities and assets are not recognised in the statements of financial position of the Group.

2.27 Segment reporting

For management purposes, the Group is organised into operating segments based on their products and services which are independently managed by their respective segment managers responsible for the performance of the respective segments under their charge. The segment manager reports directly to the management of the Company who regularly review the segment results in order to allocate resources to the segments and to assess the segment performance. Additional disclosures on each of these segments are disclosed in Note 31, including the factors used to identify the reportable segments and the measurement basis of segment information.

2.28 Fair value measurement

The Group and the Company adopted MFRS 13, Fair Value Measurement which prescribed that fair value of an asset or a liability, is determined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The measurement assumes that the transaction to sell the asset or transfer the liability takes place either in the principal market or in the absence of a principal market, in the most advantageous market.



61


(Cont’d)

3. SIGNIFICANT ACCOUNTING JUDGEMENTS AND ESTIMATES

Significant areas of estimation, uncertainty and critical judgements used in applying accounting principles that have significant effect on the amount recognised in the financial statements are as follows:-

(i) Tax expense (Note 6)

Significant judgement is required in determining the capital allowances and deductibility of certain expenses when estimating the provision for taxation. There were transactions during the ordinary course of business for which the ultimate tax determination of whether additional taxes will be due is uncertain. The Group recognises liabilities for tax based on estimates of assessment of the tax liability due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax and deferred tax in the periods in which the outcome is known.

(ii) Useful lives of property, plant and equipment (Note 8)

The cost of property, plant and equipment is depreciated on a straight line method over the assets’ useful lives. Management estimates the useful lives of these property, plant and equipment to be within 5 to 50 years. Changes in the expected level of usage and technological developments could impact the economic useful lives and the residual values of these assets, resulting in revision for future depreciation charges.

(iii) Classification between investment properties and property, plant and equipment (Note 8)

The group has developed certain criteria based on MFRS 140 in making judgement whether a property qualifies as an investment property. Investment property is a property held to earn rentals or for capital appreciation or both.

Some properties comprise a portion that is held to earn rentals or for capital appreciation and another portion that is held for use in the production or supply of goods or services or for administrative purposes. If these portions could be sold separately (or leased out separately under a finance lease), the Group would account for the portions separately. If the portions could not be sold separately, the property is an investment property only if an insignificant portion is held for use in the production or supply of goods or services or for administrative purposes. Judgement is made on an individual property basis to determine whether ancillary services are so significant that a property does not qualify as investment property.

Due to the factory buildings rented out could not be sold separately, the Group has treated the whole property as property, plant and equipment.

(iv) Impairment of goodwill (Note 10)

Goodwill is tested for impairment annually and at other times when such indicator exist. This requires an estimation of the value in use of the cash-generating units to which goodwill is allocated. When the value in use calculation is undertaken, management must estimate the expected future cash flows from the cash-generating unit and choose a suitable discount rate in order to calculate the present value of those cash flows.

(v) Deferred tax assets (Note 12)

Deferred tax assets are recognised for deductible temporary differences in respect of expenses, unabsorbed capital allowances and unutilised tax losses to the extent that it is probable that taxable profit will be available against which the temporary differences can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based on the future financial performance of the Group.

(vi) Impairment loss on trade and other receivables (Note 14 and 15)

The group assesses at each reporting date whether there is any objective evidence that a receivable is impaired. Allowances are applied where events or changes in circumstances indicate that the balances may not be collectable. To determine whether there is objective evidence of impairment, the group considers factors such as the probability of insolvency or significant financial difficulties of the debtor and default or significant delay in payments. Where the expectation is different from the original estimate, such difference will impact the carrying amount of receivables at the reporting date.



62


4. OPERATING REVENUE


Dividend income from subsidiaries - - 4,100,000 500,000 Sale of goods 212,247,413 214,308,249 - -

212,247,413 214,308,249 4,100,000 500,000

5. PROFIT BEFORE TAX

Profit before tax is arrived at after charging/(crediting):-


Auditors’ remuneration:- audit services:

- current financial year 123,200 105,800 32,000 27,500 - under provision in prior financial year - 4,500 - -

- other services 8,000 8,000 8,000 8,000 Bad debts written off on other receivables - 140 - - Deposits written off 2,900 - - - Depreciation of property, plant and equipment 5,570,241 4,587,980 800 800 Impairment loss on trade receivables 13,077 36,449 - - Interest expense:- bank overdrafts 249,213 176,392 - - - bankers’ acceptance 789,626 729,799 - - - finance lease 28,653 11,548 - - - term loans 1,794,540 1,623,951 - - - revolving credits 130,147 121,866 - - Personnel expenses (including key management

personnel (Note 5(a)):- contribution to defined contribution plan 1,501,100 1,344,324 - - - net provision for employee benefits 32,940 68,723 - - - wages, salaries and others 20,338,822 19,496,828 132,500 132,500 Property, plant and equipment written off 246,939 995,209 - - Rental of equipment 85,726 23,205 - - Rental of premises 192,000 174,860 - - Dividend income from subsidiaries - - (4,100,000) (500,000)Gain on disposal of property, plant and equipment (18,998) - - - Gain on foreign exchange:- realised (701,468) (2,164,978) - - - unrealised (108,268) (316,423) - - Interest income (60,381) (58,359) - - Rental income on land and buildings (176,011) (236,800) - - Reversal of impairment loss on trade receivables (2,279) (30,695) - -



63


(Cont’d)

5. PROFIT BEFORE TAX (cont’d)

Profit before tax is arrived at after charging/(crediting):- (cont’d)

(a) Included in personnel expenses are the aggregate amount of remunerations received and receivable by the directors of the Group and of the Company during the financial year as follows:-

Group Company

2015 2014 2015 2014 RM RM RM RM

Executive Directors- Fees 72,500 72,500 72,500 72,500 - Other emoluments 1,900,944 1,418,284 - -

1,973,444 1,490,784 72,500 72,500

Non-Executive Directors- Fees 60,000 60,000 60,000 60,000

The estimated monetary value of benefits-in-kind (which were not included in the above directors’ remunerations)

of the Group received by the directors of the Company amounted to RM60,275 (2014: RM53,175).

6. TAX (CREDIT)/EXPENSE


Current tax:-Malaysian income tax

- Current financial year 1,172,900 1,344,000 - - - (Over)/Under provision in prior financial year (185,931) 105,663 129 14,261 Real property gain tax 163,198 - - -

1,150,167 1,449,663 129 14,261

Deferred tax (Note 12):-

Origination and reversal of temporary differences 1,090,411 1,295,229 (200) (200)Benefits recognised from previously unrecognised

tax losses and temporary differences of prior periods (2,625,672) (771,100) - -

Over provision in prior financial year (46,900) (249,040) - -

(1,582,161) 275,089 (200) (200)

Tax (credit)/expense (431,994) 1,724,752 (71) 14,061

Domestic income tax is calculated at the Malaysian statutory income tax rate of 25% (2014: 25%) of the estimated assessable profit for the financial year. The domestic statutory tax rate will be reduced to 24% from the current year’s rate of 25% with effect from the year of assessment 2016. The computation of deferred tax as at 31 December 2015 and 31 December 2014 have reflected these changes.



64


6. TAX (CREDIT)/EXPENSE (cont’d)

The reconciliation of the tax amount at statutory income tax rate to the group’s and the Company’s tax (credit)/expense are as follows:-

Group Company

2015 2014 2015 2014 RM RM RM RM

Profit before tax 6,758,790 8,842,065 3,632,878 106,131

Tax at the Malaysian statutory income tax rate of 25% 1,689,700 2,210,500 908,200 26,500 Deferred tax recognised at different tax rates (36,151) (57,100) - - Real property gain tax 163,198 - - - Tax effect arising from:- non-deductible expenses 626,562 475,629 116,600 98,300 - non-taxable income - - (1,025,000) (125,000)- double deduction incentives (16,800) (7,400) - - Benefits recognised from previously unrecognised tax

losses and temporary differences of prior periods (2,625,672) (771,100) - - Deferred tax assets not recognised during the

financial year - 17,600 - - (Over)/Under provision in prior financial year:- current tax (185,931) 105,663 129 14,261 - deferred tax (46,900) (249,040) - -

Tax (credit)/expense (431,994) 1,724,752 (71) 14,061

7. EARNINGS PER SHARE

(a) Basic

Basic earnings per ordinary share for the financial year is calculated by dividing the profit for the financial year attributable to owners of the Company by the weighted average number of ordinary shares in issue during the financial year as follows:-

Group

2015 2014 RM RM

Profit for the financial year attributable to owners of the Company 7,190,784 6,674,104

Weighted average number of ordinary shares outstanding during the financial year (adjusted for treasury shares) 194,505,439 177,127,500

Basic earnings per ordinary share (sen) 3.70 3.77

(b) Diluted

The diluted earnings per ordinary share of the Group for the financial years ended 31 December 2015 and 31 December 2014 are same as the basic earnings per ordinary share of the Group as the Company has no dilutive potential ordinary shares.



65


(Cont’d)

8.

PRO

PER

TY, P

LAN

T A

ND

Eq

UIP

MEN

T

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9,1

26,7

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66,

253,

277

665

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2

,319

,196

5

,715

,117

11

,375

,019

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4,29

5,21

3 A

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1,5

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1,9

24,5

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9

12,5

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4,9

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- D

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- -

(613

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(1,0

31,2

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1.12

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5 2

4,68

8,07

6 9

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3

0,58

5,00

1 7

2,90

1,50

9 5

88,0

99

2,5

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6,4

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Acc

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162

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1

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4

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-

57,

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193

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5,55

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5,5

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- -

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- (3

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At 3

1.12

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5 -

560

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7

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7,81

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524

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66


8.

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6

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1,26

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210

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5

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- W

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(764

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)

At 3

1.12

.201

4 -

438

,139

6

,685

,512

4

3,84

5,16

2 3

59,4

74

1,7

98,7

08

4,6

89,1

98

- 5

7,81

6,19

3

Net

Car

ryin

g A

mou

nt

At 3

1.12

.201

4 2

3,15

8,07

6 8

,688

,604

1

8,99

6,77

2 2

2,40

8,11

5 3

06,0

27

520

,488

1

,025

,919

11

,375

,019

8

6,47

9,02

0



67


(Cont’d)

8. PROPERTY, PLANT AND EqUIPMENT (cont’d)

Office Equipment2015 2014 RM RM

CompanyCostAt beginning/end of the financial year 4,000 4,000

Accumulated Depreciation At beginning of the financial year 3,200 2,400 Charge for the financial year 800 800

At end of the financial year 4,000 3,200

Net Carrying AmountAt end of the financial year - 800

(a) Property, plant and equipment pledged to licensed banks for banking facilities granted to the Group as disclosed in Note 22 are as follows:-

Group

2015 2014 RM RM

Net carrying amount

Freehold land 20,001,538 20,001,538 Leasehold land 8,566,676 8,688,604 Buildings and warehouse 14,686,085 10,111,839 Plant, machinery and tools 735,479 - Motor vehicles 40,404 - Capital work-in-progress - 5,329,982

44,030,182 44,131,963

(b) During the financial year, the Group acquired property, plant and equipment with an aggregate cost of RM10,934,262 (2014: RM14,789,938) which are satisfied by the following:-

Group 2015 2014 RM RM

Cash payments 4,252,490 3,888,957 Capital work-in-progress 6,100,072 10,900,981 Finance lease arrangement 582,000 -

10,934,562 14,789,938



68


8. PROPERTY, PLANT AND EqUIPMENT (cont’d)

(c) Included in property, plant and equipment are motor vehicles acquired under finance lease instalment plans as follows:-

Group

2015 2014 RM RM

Cost 1,331,678 572,947

Net carrying amount 793,370 285,030

(d) The capital work-in-progress is in respect of cost incurred on construction and restoration of factory, office building, renovation of shoplot, extension of factory building and restoration, upgrading and fabrication of plant and machineries of the subsidiaries.

(e) Included in buildings and warehouse of the Group are factory buildings and warehouse of a subsidiary with net carrying amount of RM11,567 (2014: RM155,779) which are erected on a land leased from a third party landlord on a short tenure.

(f) Included in the total carrying amount of leasehold land are:-


Leasehold land with unexpired lease period of more than 50 years 7,706,293 7,807,736 Leasehold land with unexpired lease period of less than 50 years 860,383 880,868

8,566,676 8,688,604

9. INTANGIBLE ASSETS

Trademarks 2015 2014 RM RM

GroupCostAt beginning of the financial year 45,617 - Addition - 45,617


Trademarks relate to “Kiwi”, “Kiwiware”, “goldenware” and “Ji Seng Hong goldenware” brand names with logo for the

Group. As disclosed in Note 2.15(i), the useful lives of these brands are estimated to be indefinite.



69


(Cont’d)

10. GOODWILL ON BUSINESS CONSOLIDATION


CostAt beginning of the financial year 6,078,933 6,082,848 Struck-off - (3,915)

At end of the financial year 6,078,933 6,078,933

Less: Accumulated Impairment Loss

At beginning of the financial year - 3,915 Written off - (3,915)

At end of the financial year - -

Net Carrying Amount 6,078,933 6,078,933

goodwill arising from the acquisition of Central Palm Oil Mill Sdn. Bhd. (“CPOM”) was identified as a single CgU. Goodwill is tested for impairment on annual basis by comparing the carrying amount with the recoverable amount of the CGU based on value-in-use. Value-in-use is determined by discounting the future cash flows to be generated from the continuing use of the CGU based on the following key assumptions:-

(i) Cash flows are projected based on the management’s most recent three-year business plan for CPOM.(ii) Discount rate of 14.61% used for cash flows discounting purpose is the industry’s weighted average cost of

capital.(iii) Growth rate is determined based on the management’s estimate of industry trend for the next three financial

years and assuming no growth for the subsequent years.(iv) Profit margins are projected based on historical profit margin.

Based on the sensitivity analysis performed, the management does not foresee any reasonably possible change in the above key assumptions that would cause the carrying amount of the CGU to materially exceed its recoverable amount.



70


11. INVESTMENT IN SUBSIDIARIES

Company2015 2014 RM RM

Unquoted Shares, at costAt beginning of the financial year 70,103,262 70,103,362 Additions 7,200,000 - Struck-off - (100)

At end of the financial year 77,303,262 70,103,262

Less: Accumulated Impairment Loss

At beginning of the financial year - 100 Written off - (100)

At end of the financial year - -

77,303,262 70,103,262

The particulars of subsidiaries are as follows:-

Name of Company

Principal Place of Business/ Country of

Incorporation Principal Activities

Effective Equity Interest/

Voting Rights2015 2014

Advance Eagle Marketing Sdn. Bhd.

Malaysia Trading of household products 100% 100%

CAM Plastic industry Sdn. Bhd. Malaysia Manufacturing and trading in plastic household products

100% 100%

Central Aluminium Manufactory Sdn. Bhd.

Malaysia Manufacturing and trading in aluminium and stainless steel household products

100% 100%

Central Melamineware Sdn. Bhd. Malaysia Manufacturing and trading in melamineware products

100% 100%

Central Palm Oil Mill Sdn. Bhd. Malaysia Processing and sale of crude palm oil, palm kernel and related products

100% 84%

Kitchenally Sdn. Bhd. Malaysia Trading of household products 100% 100%

Prestile industries Sdn. Bhd. Malaysia Manufacturing and trading of palm fibre 100% 100%

(a) Acquisition of non-controlling interest

On 5 January 2015, the Company had acquired the remaining 2,000,000 ordinary shares of RM1 each in Central Palm Oil Mill Sdn. Bhd. (“CPOM”), representing 16.37% of the total issued and paid-up share capital of CPOM from Mega Western Resources Sdn. Bhd. for a total consideration of RM7,200,000. Consequently, CPOM became a wholly-owned subsidiary of the Company.

The impact of the acquisition on the Group is as shown in the consolidated statement of changes in equity.



71


(Cont’d)

11. INVESTMENT IN SUBSIDIARIES (cont’d)

(b) In the previous financial year, the subsidiary of the Group that has material non-controlling interests (“NCI”) is as follows:-

2014 RM

Central Palm Oil Mill Sdn. Bhd.NCI percentage of ownership interest and voting interest at 31 December 16%Carrying amount of NCI 2,347,809

Profit allocated to NCI 443,209

(c) In the previous financial year, the summarised financial information before intra-group elimination of the

subsidiary that has material NCI as at the end of the reporting period is as follows:-

2014 RM

Central Palm Oil Mill Sdn. Bhd.Assets and liabilitiesNon-current assets 20,985,697 Current assets 6,243,707 Non-current liabilities (6,447,020)Current liabilities (9,222,279)

Net Assets 11,560,105

Add: Fair value adjustments 3,113,707

14,673,812



72


11. INVESTMENT IN SUBSIDIARIES (cont’d)

(c) In the previous financial year, the summarised financial information before intra-group elimination of the subsidiary that has material NCI as at the end of the reporting period is as follows:- (cont’d)

2014 RM

Central Palm Oil Mill Sdn. Bhd.ResultsOperating revenue 121,410,480 Profit for the financial year, representing total comprehensive income for the

financial year 3,015,714

Cash flows from operating activities 5,602,460 Cash flows used in investing activities (6,603,903)Cash flows used in financing activities (3,618,498)

Net decrease in cash and cash equivalents (4,619,941)

Dividends paid to NCI -

12. DEFERRED TAX ASSETS/(LIABILITIES)


Deferred tax assetsAt beginning of the financial year 143,400 422,600 - - Recognised in profit or loss (Note 6) 1,797,500 (279,200) - -

At end of the financial year 1,940,900 143,400 - -


Deferred tax liabilitiesAt beginning of the financial year 3,427,513 3,431,624 200 400 Recognised in profit or loss (Note 6) 215,339 (4,111) (200) (200)

At end of the financial year 3,642,852 3,427,513 - 200



73


(Cont’d)

12. DEFERRED TAX ASSETS/(LIABILITIES) (cont’d)

This is in respect of deferred tax assets/(liabilities) arising from the following temporary differences:-


Deferred tax assetsDeductible temporary differences in respect of expenses 173,300 164,400 Unabsorbed capital allowances 1,620,600 1,349,340 Unutilised tax losses 1,483,800 172,200 Unrealised profit on inventories 23,043 354,422

3,300,743 2,040,362

Deferred tax liabilitiesDifferences between the carrying amount of property, plant and equipment and its

tax base (2,776,400) (2,939,440)Fair value adjustment in respect of subsidiaries acquired (2,200,295) (2,309,135)Taxable temporary differences in respect of income (26,000) (75,900)

(5,002,695) (5,324,475)

(1,701,952) (3,284,113)

Company

2015 2014 RM RM

Deferred tax liabilitiesDifferences between the carrying amount of property, plant and equipment and

their tax base - 200

Group

2015 2014 RM RM

Presented after appropriate offsetting as follows:-Deferred tax assets 1,940,900 143,400 Deferred tax liabilities (3,642,852) (3,427,513)

(1,701,952) (3,284,113)

The deferred tax assets recognised in the financial statements are attributable to deductible temporary differences in

respect of expenses and tax credits which can be utilised to set-off against probable future taxable income based on profit projection for the next three financial years of the subsidiaries.



74


12. DEFERRED TAX ASSETS/(LIABILITIES) (cont’d)

The estimated amount of temporary differences for which no deferred tax assets are recognised in the financial statements is as follows:-

Group

2015 2014 RM RM

Deductible temporary differences in respect of expenses - 46,200 Unabsorbed capital allowances - 5,913,700 Unutilised tax losses 109,300 5,089,700

109,300 11,049,600

13. INVENTORIES


At cost:

Raw materials 12,464,168 13,125,314 Work-in-progress 4,374,865 7,902,992 Finished goods 16,662,421 18,622,620

33,501,454 39,650,926

During the financial year, inventories of the Group recognised as cost of sales amounted to RM190,157,038 (2014:

RM192,974,181).

14. TRADE RECEIVABLES


External parties 22,244,389 18,136,029 Less: Allowance for impairment loss (718,651) (707,853)

Trade receivables, net 21,525,738 17,428,176



75


(Cont’d)

14. TRADE RECEIVABLES (cont’d)

The foreign currency exposure profile of trade receivables of the Group are as follows:-


Brunei Dollar 118,318 199,865 Singapore Dollar 491,625 309,004 United States Dollar 686,324 1,353,769

1,296,267 1,862,638

(a) Credit term of trade receivables

The Group’s normal trade credit term extended to customers ranges from 30 to 120 days (2014: 30 to 120 days).

(b) Ageing analysis of trade receivables

The ageing analysis of the trade receivables is as follows:-


Neither past due nor impaired 18,165,996 14,348,825

1 to 90 days past due not impaired 2,100,697 2,000,367 91 to 120 days past due not impaired 101,840 102,341 More than 121 days past due not impaired 1,157,205 976,643

3,359,742 3,079,351 Impaired 718,651 707,853

22,244,389 18,136,029

Receivables that are neither past due nor impaired Trade receivables that are neither past due nor impaired are creditworthy debtors with good payment records

with the Group.

Receivables that are past due but not impaired Trade receivables that are past due but not impaired are creditworthy debtors who, by past trade practices,

have paid after the expiry of the trade credit terms and the Group is currently still in active trading with the debtors. The Group does not anticipate recovery problem in respect of these debtors.



76


14. TRADE RECEIVABLES (cont’d)

(b) Ageing analysis of trade receivables (cont’d)

Receivables that are impaired The trade receivables that are impaired at the reporting date and the movement of allowance accounts used to

record the impairment are as follows:-

Group Individually impaired

2015 2014 RM RM

Trade receivables (nominal amounts) 718,651 707,853 Less: Allowance for impairment loss (718,651) (707,853)

- -

The Group has determined that there are no trade receivables which require collective impairment as full

allowance for impairment have always been made for specific debtors that are in significant financial difficulties.

Movement in allowance accounts:-


At beginning of the financial year 707,853 799,274 Charge for the financial year (Note 5) 13,077 36,449 Written off - (97,175)Reversal (Note 5) (2,279) (30,695)


Trade receivables that are individually determined to be impaired at the reporting date relate to debtors that are in significant financial difficulties and have defaulted on payments. These receivables are not secured by any collateral or credit enhancements.

15. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS

Group Company2015 2014 2015 2014

Note RM RM RM RM

Other receivables (a) 908,607 2,870,365 3,802 160,000 Deposits (b) 743,763 9,484,198 1,150 6,801,150 Advances to suppliers 2,640,021 1,648,301 - - Prepayments 253,714 371,939 14,228 16,345 Staff advances 297,427 222,610 - -

4,843,532 14,597,413 19,180 6,977,495



77


(Cont’d)

15. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS (cont’d)

(a) In the previous financial year, included in other receivables of the Group is an amount of RM237,000 being advances paid to a contractor for the construction of a new warehouse and office building and an amount of RM2,271,832 receivable from a licensed bank in respect of the excess repayment sum received by the licensed bank.

(b) Included in deposits of the Group is an amount of RM413,235 (2014: RM437,367) being deposit to offset against future purchase of raw materials.

In the previous financial year, included in deposits of the Group is an amount of RM1,725,600 being deposits paid for the acquisition of property, plant and equipment and an amount of RM6,800,000 paid for the acquisition of the remaining equity interest of 16.37% in Central Palm Oil Mill Sdn. Bhd. as further disclosed in Note 34(a).

16. AMOUNTS OWING BY/(TO) SUBSIDIARIES

These amounts are non-trade in nature, unsecured, interest free and repayable on demand in cash.

17. TAX ASSETS

This is in respect of tax recoverable from the inland Revenue Board.

18. CASH DEPOSITS WITH LICENSED BANKS

The cash deposit with a licensed bank of a subsidiary amounting to RM1,128,776 (2014: RM1,093,819) has been pledged for banking facilities granted to the subsidiary as disclosed in Note 22.

The cash deposits bear effective interest at rates ranging from 2.00% to 3.15% (2014: 2.10% to 3.00%) per annum.

19. SHARE CAPITAL AND TREASURY SHARES

Group/CompanyNumber of ordinary

shares of RM0.25 each Amount Issued and

fully paid (Treasury

shares) Issued and

fully paid (Treasury

shares) Unit Unit RM RM

At 1 January 2014/31 December 2014 196,800,000 (19,672,500) 49,200,000 (4,463,715)Repurchase of shares - (1,162,900) - (378,165)Distribution of share dividend - 17,712,744 - 4,019,044

At 31 December 2015 196,800,000 (3,122,656) 49,200,000 (822,836)

Share capital

The Company had a total of 400,000,000 units (2014: 400,000,000 units) of authorised ordinary shares of RM0.25 each, amounting to RM100,000,000 (2014: RM100,000,000).

The holders of ordinary shares (except treasury shares) are entitled to receive dividends as and when declared by the Company. All ordinary shares carry one vote per share without restrictions and rank equally with regard to the Company’s residual interests.



78


19. SHARE CAPITAL AND TREASURY SHARES (cont’d)

Treasury shares

Treasury shares relate to ordinary shares of the Company that are held by the Company. The amount consists of the acquisition costs of treasury shares net of the proceeds received on their subsequent sale or issuance.

The shareholders of the Company, by way of resolution passed at the Annual general Meeting held on 22 June 2015 renewed the authority given to the Company to repurchase up to 10% of the issued and paid-up ordinary share capital of the Company (“Share Buy-Back”). The directors of the Company are committed to enhancing the value of the Company to its shareholders and believe that the repurchase plan can be applied in the best interests of the Company and its shareholders.

During the financial year, the Company repurchased 1,162,900 ordinary shares of RM0.25 each of its issued share capital from the open market. The average price paid for the shares repurchased was approximately RM0.325 per ordinary share. The total consideration paid for the share repurchased including transaction costs was RM378,165. The repurchase transactions were financed by internally generated funds. The shares repurchased are being held as treasury shares in accordance with Section 67A of the Companies Act, 1965.

As at 31 December 2015, the Company had a total of 3,122,656 (2014: 19,672,500) ordinary shares of its 196,800,000 (2014: 196,800,000) ordinary shares as treasury shares.

20. RESERVES


GroupDistributable Retained earnings 48,551,758 50,232,209 21,622,655 22,008,750

Non-distributableShare premium 5,178,474 5,178,474 5,178,474 5,178,474

53,730,232 55,410,683 26,801,129 27,187,224

Retained earnings

The entire retained earnings of the Company as at 31 December 2015 can be distributed as dividend under the single tier system.

Share premium

Share premium comprises the premium paid on subscription of shares in the Company over and above the par value of the shares. The share premium is not distributable by way of dividends and may be utilised in the manner set out in Section 60(3) of the Companies Act, 1965 in Malaysia.



79


(Cont’d)

21. FINANCE LEASE PAYABLES

Group2015 2014 RM RM

Gross instalment payments 581,423 212,932 Less: Future finance charges (35,614) (10,184)

Total present value of finance lease payables 545,809 202,748

Current liabilities

Payable within 1 year


Present value of finance lease payables 258,008 95,378

Non-current liabilities

Payable after 1 year but not later than 2 years



Payable after 2 years but not later than 5 years

Gross instalment payments 131,755 32,580 Less: Future finance charges (5,699) (337)


Total present value of finance lease payables 545,809 202,748

Analysed as:-

Payable within 1 year 258,008 95,378 Payable after 1 year 287,801 107,370

545,809 202,748

The finance lease payables of the Group bear effective interest at rates ranging from 4.46% to 5.35% (2014: 4.46% to 5.82%) per annum.



80


22. BANK BORROWINGS


Non-current:-SecuredTerm loans 25,312,680 27,903,218

Current:-SecuredTerm loans 2,680,319 2,524,933 Bank overdrafts 1,682,365 4,106,105 Bankers’ acceptance 4,561,389 1,397,000 Revolving credits 1,000,000 1,000,000

UnsecuredBank overdrafts 2,409,595 2,449,292 Bankers’ acceptance 7,416,000 13,411,803 Revolving credits 2,600,000 2,500,000

22,349,668 27,389,133

Total borrowings 47,662,348 55,292,351

Term loans - secured

The term loans of the Group bear interest at rates ranging from 4.75% to 8.35% (2014: 4.25% to 8.35%) per annum and are secured and supported as follows:-

(a) fixed legal charge over certain freehold and leasehold land and buildings, plant, machinery and tools and motor vehicles and capital work-in-progress of subsidiaries as mentioned in Note 8; and

(b) corporate guarantee of the Company.

Bank overdrafts - secured

The bank overdraft facilities of the Group bear interest at a rate of 8.10% (2014: 6.35% to 8.10%) per annum and are secured and supported as follow:-

(a) fixed legal charge over certain freehold land and buildings of subsidiaries as mentioned in Note 8;(b) negative pledge of cash deposit of a subsidiary as mentioned in Note 18; and(c) corporate guarantee of the Company.

Bank overdrafts - unsecured

The bank overdraft facilities of the Group bear interest at rates ranging from 7.85% to 8.10% (2014: 7.85% to 10.85%) per annum and are supported by the corporate guarantee of the Company.



81


(Cont’d)

22. BANK BORROWINGS (cont’d)

Bankers’ acceptance and revolving credits - secured

The bankers’ acceptance and revolving credits of the Group bear interest at rates ranging from 3.70% to 5.00% (2014: 4.50% to 4.80%) per annum and are secured and supported as follow:-

(a) fixed legal charge over certain freehold land and buildings and capital work-in-progress of subsidiaries as mentioned in Note 8; and

(b) corporate guarantee of the Company.

Bankers’ acceptance and revolving credits - unsecured

The bankers’ acceptance and revolving credits of the Group bear interest at rates ranging from 3.18% to 5.00% (2014: 3.31% to 4.84%) per annum and are supported by the corporate guarantee of the Company.



82


22.

BA

NK

BO

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With

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83


(Cont’d)

23. TRADE PAYABLES


External parties 7,098,932 4,820,868 Related party - 490,356

7,098,932 5,311,224

The normal trade credit term granted by trade creditors to the Group ranges from 14 to 120 days (2014: 14 to 120

days).

24. OTHER PAYABLES, DEPOSITS AND ACCRUALS


GroupAdvances from customers 379,123 137,287 - - Other payables 1,875,221 1,149,944 - - Deposits received 6,000 81,089 - - Accruals 2,833,842 3,941,385 149,490 145,928

5,094,186 5,309,705 149,490 145,928

The foreign currency exposure profile of other payables are as follows:-


United States Dollar 276,206 -

25. PROVISION


At beginning of the financial year 477,035 408,312 Additions 509,975 477,035 Reversal (477,035) (408,312)


This is in respect of provision for employee benefits on short term accumulating compensated absences for the employees of the Group. The provision is made based on the number of days of outstanding compensated absences of each employee multiplied by their respective salary/wages as at the financial year end.



84


26. CASH AND CASH EqUIVALENTS


Cash and bank balances 3,331,877 5,131,597 10,990 77,229 Cash deposits with licensed banks 2,728,776 2,593,819 - - Bank overdrafts (Note 22) (4,091,960) (6,555,397) - -

1,968,693 1,170,019 10,990 77,229 Less: Pledged cash deposit (Note 18) (1,128,776) (1,093,819) - -

839,917 76,200 10,990 77,229

The foreign currency exposure profile of cash and bank balances are as follows:-


Renminbi 2,305 1,955 Singapore Dollar 49,795 46,868 United States Dollar 1,337,906 174,651

1,390,006 223,474

27. CORPORATE GUARANTEE

Company2015 2014 RM RM

The Company provides corporate guarantee given to financial institutions for credit and banking facilities granted to subsidiaries:- outstanding as at financial year end 47,662,348 55,292,351

28. CAPITAL COMMITMENT


Approved and contracted for:- acquisition of property, plant and equipment 3,450,000 2,767,180



85


(Cont’d)

29. RELATED PARTY DISCLOSURES

(a) Identity of related parties

For the purposes of these financial statements, parties are considered to be related to the Group or to the Company if the Group or the Company has the ability to directly or indirectly control the party or exercise significant influence over the party in making financial and operating decision, or vice versa, or where the Group or the Company and the party are subject to common control or common significant influence. Related parties may be individuals or other entities.

The Group and the Company have a related party relationship with its subsidiaries, related parties and key management personnel. Related parties refer to companies/enterprise in which certain directors of the Company or persons connected to them have substantial financial interests.

(b) Compensation of key management personnel

Key management personnel include personnel having authority and responsibility for planning, directing and controlling the activities of the entities, directly or indirectly, including any director of the Group or of the Company.

The remunerations of the key management personnel are as follows:-


Directors of the Company- Fees 132,500 132,500 132,500 132,500 - Other emoluments 1,705,150 1,266,200 - - - Estimated monetary value of benefits-in-

kind 60,275 53,175 - -

Total short-term employee benefits 1,897,925 1,451,875 132,500 132,500 Post-employment benefits 195,794 152,084 - -

2,093,719 1,603,959 132,500 132,500



86


29. RELATED PARTY DISCLOSURES (cont’d)

(c) Related party transactions

2015 2014 RM RM

(i) Related partiesGroupAn enterprise in which the son and son-in-law of a director of the

Company are the owners- sales 67,261 -

A company in which a director of the Company have substantial financial interest and is also a director- purchases 911,340 1,732,701

A close family member of a director of the Company- deposit paid for the acquisition of freehold land - 1,530,000

(ii) SubsidiariesCompanyDividend income 4,100,000 500,000

(d) Related party balances

Information on the outstanding balances with related companies and related parties are disclosed in Notes 16 and 23 respectively.

30. SEGMENT INFORMATION

For management purposes, the Group is organised into business units based on their products and services, and has four reportable operating segments as follows:-

Investment holding Investment holdingManufacturing Manufacturing of aluminium, stainless steel, melamine and plastic household products and palm fibre Trading Trading of household productsPalm oil mill Processing and sale of crude palm oil, palm kernel and other related products

Except as indicated above, no operating segments have been aggregated to form the above reportable operating segments.

Management monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss which, in certain respects as explained in the table below, is measured differently from operating profit or loss in the consolidated financial statements. Inter-segment transactions are entered in the ordinary course of business based on terms mutually agreed upon by the parties concerned.



87


(Cont’d)

30. SEGMENT INFORMATION (cont’d)

(i) Operating segment

Investment Holding Manufacturing Trading

Palm Oil Mill

Adjustments and

Eliminations

Consolidated Note RM RM RM RM RM RM

2015

Segment Revenue

External revenue - 82,422,427 11,218,733

118,606,253 - 212,247,413

Inter segment revenue a 4,100,000 2,591,820 1,897,369 - (8,589,189) -

Total revenue 4,100,000 85,014,247 13,116,102 118,606,253 (8,589,189) 212,247,413

Segment Result

Interest expense - (2,081,700) (247,416) (663,063) - (2,992,179)

Interest income - 4,437 36,071 19,873 - 60,381 Depreciation

of property, plant and equipment (800) (3,487,757) (43,717) (2,037,967) - (5,570,241)

Other non-cash items b - 23,814 40,586 (249,709) - (185,309)

Segment profit before tax c 3,632,878 2,724,423 2,671,314 3,001,433 (5,271,258) 6,758,790

Segment Assets

Additions to non-current assets excluding deferred tax assets and financial instruments d - 4,725,917 284,520 5,924,125 - 10,934,562

Total segment assets e 82,696,317 131,340,813 15,631,104 41,313,268 (104,320,004) 166,661,498

Segment Liabilities

Total segment liabilities f 7,518,024 58,118,562 3,424,130 24,977,201 (29,483,815) 64,554,102



88



(i) Operating segment (cont’d)

Investment Holding Manufacturing Trading

Palm Oil Mill

Adjustments and

Eliminations

Consolidated Note RM RM RM RM RM RM

2014

Segment Revenue

External revenue - 52,899,248

39,998,521 121,410,480 - 214,308,249

Inter segment revenue a 500,000 22,881,086 132,155 - (23,513,241) -

Total revenue 500,000 75,780,334 40,130,676 121,410,480 (23,513,241) 214,308,249

Segment Result

Interest expense - (1,975,399) (233,700) (454,457) - (2,663,556)

Interest income - 13,390 36,310 8,659 - 58,359 Depreciation

of property, plant and equipment (800) (2,599,642) (70,485) (1,917,053) - (4,587,980)

Other non-cash items b - 25,024 31,754 (810,181) - (753,403)

Segment profit before tax c 106,131 5,071,830 1,491,389 3,018,146 (845,431) 8,842,065

Segment Assets

Additions to non-current assets excluding deferred tax assets and financial instruments d - 7,906,294 316,699 6,612,562 - 14,835,555

Total segment assets e 79,498,158 119,870,491

28,438,991 27,229,404 (82,521,691) 172,515,353

Segment Liabilities

Total segment liabilities f 8,074,649 47,931,753

14,624,174 15,669,299 (16,279,299) 70,020,576



89


(Cont’d)



(a) Inter-segment revenues are eliminated on consolidation.

(b) Other non-cash items consist of the following items as presented in the respective notes:-

2015 2014 RM RM

Bad debts written off on other receivables - 140 Deposits written off 2,900 - Impairment loss on trade receivables 13,077 36,449 Net provision for employee benefits 32,940 68,723 Property, plant and equipment written off 246,939 995,209 Reversal of impairment loss on trade receivables (2,279) (30,695)Unrealised gain on foreign exchange (108,268) (316,423)

185,309 753,403

(c) The following item is deducted from segment profit to arrive at profit before tax presented in the consolidated statement of profit or loss and other comprehensive income:-

2015 2014 RM RM

Profit from inter-segment revenue (5,271,258) (845,431)

(d) Addition to non-current assets excluding deferred tax assets and financial instruments consist of:-

2015 2014 RM RM

Property, plant and equipment 10,934,562 14,789,938 Intangible asset - 45,617

10,934,562 14,835,555

(e) The following items are deducted from segment assets to arrive at total assets reported in the consolidated

statement of financial position:-

2015 2014 RM RM

Investment in subsidiaries (77,303,262) (70,103,262)Inter-segment assets (27,016,742) (12,418,429)

(104,320,004) (82,521,691)



90




(f) The following items are deducted from segment liabilities to arrive at total liabilities reported in the consolidated statement of financial position:-

2015 2014 RM RM

Deferred tax liabilities 2,177,252 1,954,713 Inter-segment liabilities 31,661,067 (18,234,012)

29,483,815 (16,279,299)

(ii) Geographical information

Segment revenue based on geographical location of the Group’s customers are as follows:-

2015 2014 RM RM

Asia - Malaysia 180,057,872 187,931,879 - Others 4,871,177 4,373,458

Middle East & Africa 444,184 511,654 North America 26,874,180 21,491,258

212,247,413 214,308,249

The Group operates predominantly in Malaysia and accordingly, the non-current assets of the Group are located in Malaysia.

(iii) Major customer information

Revenue from (1) one (2014: (1) one) major customer in manufacturing segment and (2) two (2014: (2) two) major customers in palm oil mill segment contributes 54.41% (2014: 55.75%) of the group’s revenue.

31. FINANCIAL INSTRUMENTS

(a) Capital management

The primary objective of the group’s capital management is to ensure that it maintains a healthy capital ratio in order to support its business and maximise shareholders’ value.

The group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust capital structure, the group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies and processes during the financial years ended 31 December 2015 and 31 December 2014.

The group is not subject to any externally imposed capital requirements.



91


(Cont’d)

31. FINANCIAL INSTRUMENTS (cont’d)

(a) Capital management (cont’d)

The Group monitors capital using a gearing ratio, which is total external borrowings divided by total equity. The gearing ratio as at 31 December 2015 and 31 December 2014, which are within the group’s objectives of capital management are as follows:-

Group

2015 2014 RM RM

Total external borrowings 48,208,157 55,495,099

Total equity 102,107,396 102,494,777

Gearing ratio 0.47 0.54

(b) Categories of financial instruments

Group Company

2015 2014 2015 2014 RM RM RM RM

Financial assetsLoan and receivables- Trade and other receivables, net of

non-refundable deposits, advances to suppliers/contractors and prepayments 23,062,300 20,805,382 4,952 161,150

- Amounts owing by subsidiaries - - 5,356,770 2,306,748 - Cash deposits with licensed banks 2,728,776 2,593,819 - - - Cash and bank balances 3,331,877 5,131,597 10,990 77,229

29,122,953 28,530,798 5,372,712 2,545,127

Financial liabilitiesOther financial liabilities- Trade and other payables, deposits and

accruals, net of advances from customers 11,813,995 10,483,642 149,490 145,928 - Amounts owing to subsidiaries - - 7,368,534 7,428,521 - Finance lease payables 545,809 202,748 - - - Bank borrowings 47,662,348 55,292,351 - -

60,022,152 65,978,741 7,518,024 7,574,449



92


31. FINANCIAL INSTRUMENTS (cont’d)

(c) Fair values of financial instruments

The carrying amounts of financial instruments of the Group and of the Company as at the end of the financial year are reasonable approximation of their fair values, except as follows:-

Group Carrying Amount

Fair Value

RM RM

2015

Financial LiabilitiesFinance lease payables 545,809 535,588

2014

Financial LiabilitiesFinance lease payables 202,748 208,997 Term loans 3,726,216 3,849,987

(d) Methods and assumptions used to estimate fair values

The fair values of financial assets and financial liabilities are determined as follows:-

(i) Cash and cash equivalents, trade and other receivables and payables

The carrying amounts of cash and cash equivalents, trade and other receivables and payables are reasonable approximation of fair values due to relatively short term nature of these financial instruments.

(ii) Borrowings

The carrying amounts of bank overdraft, bankers’ acceptance and revolving credits are reasonable approximation of fair values due to the insignificant impact of discounting.

The carrying amounts of floating rate term loan are reasonable approximation of fair values as the loans will be re-priced to market interest rate on or near reporting date. The fair value of fixed rate term loans are estimated by discounting expected future cash flows at market incremental lending rate for similar types of lending or borrowing arrangements at the reporting date.

(iii) Finance lease payables

The fair value of finance lease payables is estimated using discounted cash flow analysis, based on current lending rate for similar type of lease arrangements.



93


(Cont’d)

32. FAIR VALUE HIERARCHY

(a) Policy on transfer between levels

The fair value of the asset/liability to be transferred between levels is determined as at the date of the event or change in circumstances that caused the transfer.

(b) The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, within the fair value hierarchy, grouped into Levels 1 to 3 based on the degree to which the fair value is observable:-

(i) Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;

(ii) Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

(iii) Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

As at 31 December 2015 and 31 December 2014, the Group held the following financial instruments not carried at fair values on the statements of financial position:-

Fair value of financial instruments not carried at fair value Carrying amount Level 1 Level 2 Level 3 Total

RM RM RM RM RM

Group2015Financial liabilities- financial lease payables - 535,588 - 535,588 545,809

2014Financial liabilities- financial lease payables - 208,997 - 208,997 202,748 - term loans - 3,849,987 - 3,849,987 3,726,216

- 4,058,984 - 4,058,984 3,928,964

During the financial years ended 31 December 2015 and 31 December 2014, there was no transfer between fair value measurement hierarchy.

33. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group and the Company are exposed to financial risks arising from their operations and the use of financial instruments. The key financial risks include credit risk, foreign currency risk, interest rate risk and liquidity risk.

The Group’s financial risk management policy seeks to ensure that adequate financial resources are available for the development of the Group’s businesses whilst managing its risks. The Group operates within clearly defined guidelines that are approved by the Board of Directors. it is, and has been throughout the current and previous financial year, the Group’s policy that no derivatives shall be undertaken. The Group and the Company do not apply hedge accounting.



94


33. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont’d)

The group’s and the Company’s exposure to the financial risks and the objectives, policies and processes put in place to manage these risks are discussed below.

(i) Credit risk

Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. The Group’s exposure to credit risk arises primarily from trade and other receivables. The Company’s exposure to credit risk arises principally from the financial guarantees given. For other financial assets, the Group and the Company minimise credit risk by dealing with high credit rating counterparties.

The group’s objective is to seek continual revenue growth while minimising losses incurred due to increased credit risk exposure. The Group trades only with recognised and creditworthy third parties. It is the Group’s policy that all customers who wish to trade on credit terms are subject to credit verification procedures. in addition, receivables balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant.

Exposure to credit risk At the reporting date, the Group’s and the Company’s maximum exposure to credit risk is represented by the

carrying amount of each class of financial assets recognised in the statements of financial position and the financial guarantee provided by the Company for the credit facilities granted to its subsidiaries.

Credit risk concentration profile The Group has no significant concentration of credit risk arising from exposure to a single or group of debtors

as at the reporting date.

Financial guarantee

The Company provides corporate guarantee to banks in respect of credit and banking facilities granted to certain subsidiaries.

The Company monitors on an ongoing basis the repayments made by the subsidiaries and their financial performance.

The maximum exposure to credit risk amounts to RM47,662,348 (2014: RM55,292,351) representing the outstanding banking facilities of the subsidiaries at the end of the financial year.

At the reporting date, there was no indication that any subsidiaries would default on repayment.

The financial guarantees have not been recognised as the fair value on initial recognition was immaterial since the financial guarantees provided by the Company did not contribute towards credit enhancement of the subsidiaries’ borrowings in view of the securities pledged by the subsidiaries and it is unlikely the subsidiaries will default within the guarantee period.

(ii) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

The Group has transactional currency exposures arising from sales and purchases that are denominated in currencies other than the functional currency of the Group entities, primarily in United States Dollar (“USD”), Singapore Dollar (“SgD”), Brunei Dollar (“BND”) and Renminbi (“RMB”).

The Group also holds bank balances denominated in foreign currencies for working capital purposes.

Sensitivity analysis for foreign currency risk The following table demonstrates the sensitivity of the Group’s profit for the financial year to a reasonably

possible change in the USD, SgD, BND and RMB exchange rates against the respective functional currency of the Group entities, with all other variables held constant.



95


(Cont’d)


(ii) Foreign currency risk (cont’d)


USD/RM - strengthened 10% (2014: 5%) 131,102 57,316 - weakened 10% (2014: 5%) (131,102) (57,316)

SgD/RM - strengthened 7% (2014: 2%) 28,425 5,338 - weakened 7% (2014: 2%) (28,425) (5,338)

BND/RM - strengthened 7% (2014: 2%) 6,212 2,998 - weakened 7% (2014: 2%) (6,212) (2,998)

RMB/RM - strengthened 7% (2014: 2%) 121 - - weakened 7% (2014: 2%) (121) -

(iii) Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Group’s and the Company’s financial instruments will fluctuate because of changes in market interest rates.

The Group’s exposure to interest rate risk relates to interest bearing financial liabilities and financial asset. Interest bearing financial liabilities includes bankers’ acceptance, bank overdrafts, finance lease payables, revolving credits and term loans. Interest bearing financial assets includes cash deposits with licensed banks at fixed rate expose the Group to fair value interest rate risk.

The bank overdrafts, bankers’ acceptance, revolving credits and term loans totalling RM47,662,348 (2014: RM51,566,135) at floating rates expose the Group to cash flow interest rate risk whilst term loans and finance lease payables of RM545,809 (2014: RM3,928,964) at fixed rates expose the Group to fair value interest rate risk.

The Group adopts a strategy of mixing fixed and floating rate borrowing to minimise exposure to interest rate risk. The Group also reviews its debt portfolio to ensure favourable rates are obtained.

Sensitivity analysis for interest rate risk if the interest rate had been 50 basis point higher/lower and all other variables held constant, the group’s profit

net of tax for the financial year ended 31 December 2015 would decrease/increase by RM178,734 (2014: RM193,373) as a result of exposure to floating rate borrowings.

(iv) Liquidity risk

Liquidity risk is the risk that the group and the Company will encounter difficulty in meeting financial obligations due to shortage of funds. The Group’s and the Company’s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The group’s and the Company’s objective is to maintain a balance between continuity of funding and flexibility through use of stand-by credit facilities.

The Group and the Company actively manage their operating cash flows and the availability of funding so as to ensure that all repayment and funding needs are met. As part of its overall prudent liquidity management, the Group and the Company maintain sufficient levels of cash to meet their working capital requirements.



96



(iv) Liquidity risk (cont’d)

Analysis of financial instruments by remaining contractual maturities The table below summarises the maturity profile of the Group’s and the Company’s financial liabilities at the

reporting date based on contractual undiscounted repayment obligations.

Carrying amount

Total Contractual cash flows

On demand

or within 1 year

1 to 2 years

2 to 5 years

Over 5 years

RM RM RM RM RM RM

2015GroupFinancial liabilities:-

Trade payables 7,098,932 7,098,932 7,098,932 - - - Other payables, deposits

and accruals, net of advances from customers 4,715,063 4,715,063 4,715,063 - - -

Finance lease payables 545,809 581,423 278,484 171,184 131,755 - Term loans 27,992,999 36,222,062 4,285,668 4,285,668 12,865,371 14,785,355 Revolving credits 3,600,000 3,600,000 3,600,000 - - - Bankers’ acceptance 11,977,389 11,977,389 11,977,389 - - - Bank overdrafts 4,091,960 4,091,960 4,091,960 - - -

60,022,152 68,286,829 36,047,496 4,456,852 12,997,126 14,785,355

2014GroupFinancial liabilities:-

Trade payables 5,311,224 5,311,224 5,311,224 - - - Other payables, deposits

and accruals, net of advances from customers 5,172,418 5,172,418 5,172,418 - - -

Finance lease payables 202,748 212,932 102,124 78,228 32,580 - Term loans 30,428,151 40,361,857 4,285,668 4,285,668 12,857,004 18,933,517 Revolving credits 3,500,000 3,500,000 3,500,000 - - - Bankers’ acceptance 14,808,803 14,808,803 14,808,803 - - - Bank overdrafts 6,555,397 6,555,397 6,555,397 - - -

65,978,741 75,922,631 39,735,634 4,363,896 12,889,584 18,933,517



97


(Cont’d)


(iv) Liquidity risk (cont’d)

Analysis of financial instruments by remaining contractual maturities (cont’d) The table below summarises the maturity profile of the Group’s and the Company’s financial liabilities at the

reporting date based on contractual undiscounted repayment obligations. (cont’d)

Carrying amount

Total Contractual cash flows

On demand

or within 1 year

1 to 2 years

2 to 5 years

Over 5 years

RM RM RM RM RM RM

2015CompanyFinancial liabilities:-

Accruals 149,490 149,490 149,490 - - - Amounts owing to

subsidiaries 7,368,534 7,368,534 7,368,534 - - - Financial guarantee

contracts* - 47,662,348 47,662,348 - - -

7,518,024 55,180,372 55,180,372 - - -

2014CompanyFinancial liabilities:-

Accruals 145,928 145,928 145,928 - - - Amounts owing to

subsidiaries 7,428,521 7,428,521 7,428,521 - - - Financial guarantee

contracts* - 55,292,351 55,292,351 - - -

7,574,449 62,866,800 62,866,800 - - -

* The Company has given corporate guarantee to banks on behalf of certain subsidiaries for banking facilities. The

potential exposure of the financial guarantee contract is equivalent to the amount of the banking facilities being utilised by the said subsidiaries.





98


34. SIGNIFICANT EVENTS DURING THE FINANCIAL YEAR

(a) On 5 January 2015, the Company had acquired the remaining 2,000,000 ordinary shares of RM1 each in Central Palm Oil Mill Sdn. Bhd. (“CPOM”), representing 16.37% of the total issued and paid-up share capital of CPOM from Mega Western Resources Sdn. Bhd. for a total consideration of RM7,200,000. Consequently, CPOM became a wholly-owned subsidiary of the Company.

(b) On 10 February 2015, the group had acquired a piece of freehold land held under geran Mukim 2641, Lot No.6991 Mukim Durian Sebatang, District of Hilir Perak, State of Perak for a total consideration of RM1,530,000.

35. SIGNIFICANT EVENT SUBSEqUENT TO THE END OF THE FINANCIAL YEAR

On 4 January 2016, the Company acquired 2 ordinary shares of RM1 each in Saluran Suriamas Sdn. Bhd. (“SSSB”) for a total cash consideration of RM2.00. Consequently, SSSB became a wholly-owned subsidiary of the Company.

36. SHARE DIVIDEND

On 13 April 2015, the Company distributed a total of 17,712,744 unit shares with carrying amount of RM4,019,044 in the treasury shares account and credited as share dividend to the shareholders of the Company on a basis of (1) one treasury share for every (10) ten existing ordinary shares held by the shareholders of the Company. Such dividend had been accounted for in the equity as a distribution of treasury shares in the current financial year.



99CAM RESOURCES BERHADANNUAL REPORT 2015


SUPPLEMENTARY INFORMATION ON THE DISCLOSURE

OF REALISED AND UNREALISED PROFITS OR LOSSES

The following analysis of realised and unrealised retained earnings of the Group and of the Company at 31 December 2015 and 31 December 2014 are presented in accordance with the directive issued by Bursa Malaysia Securities Berhad (“Bursa Securities”) dated 25 March 2010 and prepared in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian institute of Accountants.

The retained earnings of the Group and of the Company as at 31 December 2015 and 31 December 2014 are analysed as follows:-


Total retained earnings of the Company and its subsidiaries

- realised 91,152,773 88,687,581 21,622,655 22,008,750 - unrealised 583,568 (1,012,977) - -

91,740,141 87,674,604 21,622,655 22,008,750 Less: Consolidation adjustments (43,188,383) (37,442,395) - -

Total retained earnings 48,551,758 50,232,209 21,622,655 22,008,750

The disclosure of realised and unrealised profits above is solely for complying with the disclosure requirements stipulated in the directive of Bursa Securities and should not be applied for any other purpose.



100

ANALYSIS OF SHAREHOLDINGSAS AT 31 MARCH 2016

Authorised Capital : RM100,000,000.00 divided into 400,000,000 Ordinary Shares of RM0.25 eachIssued and Paid-up : RM49,200,000 divided into 196,800,000 Ordinary Shares of RM0.25 eachClass of Shares : Ordinary Shares of RM0.25 eachVoting Rights : 1 vote per ordinary shareTreasury Shares : 3,172,656 Ordinary Shares of RM0.25 each

SUBSTANTIAL SHAREHOLDERS

The following are the substantial shareholders of the Company according to the Register of Substantial Shareholders.

Direct Interest Indirect InterestName of Shareholders No. of Shares % No. of Shares %

Lee Chin Yen 36,294,741 18.74 9,261,213* 4.78Tan Hong Cheng 30,113,081 15.55 1,950,355* 1.00Hia Wan Kiga 26,949,643 13.92 - -

* DeemedInterestthroughinterestsheldbytheirsonanddaughter(s)

DIRECTORS’ SHAREHOLDINGS

Direct Interest Indirect InterestName of Directors No. of Shares % No. of Shares %

Lee Chin Yen 32,294,741 18.74 9,261,213* 4.78Tan Hong Cheng 30,113,081 15.55 1,950,355* 1.00Hia Wan Kiga 26,949,643 13.92 - -Lee Poh Choo 4,411,093 2.28 - -Tan Kim Hong 557,700 0.29 - -Chai Moi Kim - - - -Chia Kay Joo - - - -Azizul Bin Mohd Othman - - - -

* DeemedInterestthroughinterestheldbytheirsonanddaughter(s)

DISTRIBUTION OF SHAREHOLDINGS

Size of ShareholdingsNo. of

Shareholders %No. of

Shares %

1 – 99 38 3.177 1,763 0.000100 – 1,000 65 5.434 26,497 0.0131,001 – 10,000 390 32.608 1,903,657 0.98310,001 – 100,000 570 47.658 15,800,946 8.160100,001 – 9,681,366 (less than 5% of issued shares) 130 10.869 133,590,796 68.9939,681,367 (5% of issued shares) and above 3 0.250 42,303,685 21.847

TOTAL 1,196 100.0 193,627,344# 100.0

# Adjusted capital after netting treasury shares of 3,172,656 ordinary shares of RM0.25 each



101

ANALYSIS OF SHAREHOLDINGS

(Cont’d)

THIRTY LARGEST SHAREHOLDERS AS AT 31 MARCH 2016

Name of Shareholders No of Shares %

1. Lee Chin Yee 11,794,911 6.0912. Affin Hwang Nominees (Asing) Sdn. Bhd.

ExemptanforPhillipSecurities(HongKong)Ltd(Clients’ Account)

9,752,340 5.036

3. HLiB Nominees (Tempatan) Sdn. Bhd.EONBankBerhadforTanHongCheng(KLG)

8,448,000 4.363

4. HLiB Nominees (Tempatan) Sdn. Bhd.EONBankBerhadforLeeChinYen(KLG)

8,448,000 4.363

5. HLB Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account for Hia Wan Kiga

8,273,839 4.273

6. Hia Wan Kiga 7,413,372 3.8287. Maybank Nominees (Tempatan) Sdn. Bhd.

Pledged Securities Account for Tan Hong Cheng (508382011853)

7,370,000 3.806

8. Maybank Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account for Lee Chin Yen (508382011883)

7,370,000 3.806

9. HLiB Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account for Lee Chin Yee (M)

6,500,000 3.356

10. HLiB Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account for Tan Hong Cheng (M)

5,870,500 3.031

11. RHB Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account for Tan Hong Cheng

5,291,022 2.732

12. Hia Wan Kiga 3,984,208 2.05713. Hia Wan Kiga 3,826,680 1.97614. Chan Eng Thye 3,710,090 1.91615. RHB Nominees (Tempatan) Sdn. Bhd.

Pledged Securities Account for Chia Guan Seng3,706,810 1.914

16. Hia Wan Kiga 3,350,344 1.73017. CiMSeC Nominees (Tempatan) Sdn. Bhd.

CIMB Bank for Tan Hong Cheng (MM1103)3,133,504 1.618

18. Chew Pay Chiam 2,753,850 1.42219. Maybank Nominees (Tempatan) Sdn. Bhd.

Pledged Securities Account for Lee Poh Choo2,715,493 1.402

20. Maybank Nominees (Tempatan) Sdn. Bhd.Pledged Securities Account for Lee Poh Hong

2,700,000 1.394

21. Kong Foon Hay 2,693,350 1.39022. Kong Foon Hay 2,684,000 1.38623. Loo Hooi Chen 2,640,000 1.36324. Koo Fong Ling 2,627,460 1.35625. Lee Chin Yen 2,181,830 1.12626. Chew Beng Huat 2,041,710 1.05427. goh Yok Tek 2,000,000 1.03228. Mooi Soon Ying 1,904,939 0.98329. Lee Poh Choo 1,695,600 0.87530. Lee Weng Kean 1,658,800 0.856

Total 138,540,652 71.550



102

LIST OF PROPERTIESAS AT 31 DEC 2015

Title Location

Description Existing use

Tenure Age of

building

Land area Built-up

area sq.ft.

Year of acquisition / revaluation*/completion#

Net book value RM

Central Aluminium Manufactory Sdn Bhd

gM 612 Lot 48 Mukim Hutan Melintang (3/4 share)

Vacant land Freehold 143,748 2000* 198,000

gM 624 Lot 3516 Mukim Hutan Melintang (1/10 share)

Vacant landQuarter

Freehold20 years

281,506 11,664

2000*1996#

55,000 32,706

gM 550 Lot 889 Mukim Changkat Jong

Vacant land Freehold 72,658 2000* 70,000

gM 544 Lot 51Mukim Hutan Melintang

Factory landFactory

Freehold18 years

155,455 70,152

2000*2000*

643,000 2,859,293

gM 846 Lot 49gM 875 Lot 2486Mukim Hutan Melintang

Factory landFactoryOffice

Freehold32 years13 years

278,784 141,165 6,400

2000*2000*2003#

1,075,000 4,969,508

371,861

geran 3843 Lot 5298Mukim Hutan Melintang

Factory land Freehold 224,062 2000* 547,025

geran 3844 Lot 5299 Mukim Hutan Melintang

Factory landFactory

Freehold6 years

324,250 34,880

2000*2011

786,393 1,349,279

geran 3843 Lot 5298 and geran 3844 Lot 5299Mukim Hutan Melintang

Factory QuarterFactory cum warehouse

13 years13 years11 years

64,000 10,384 48,000

2003#

2003#

2005#

1,863,984 97,220

1,048,800

geran 27879 Lot 12208Mukim Durian Sebatang

Factory landFactory

Freehold6 years

281,261 44,496

20102010

3,014,517 3,263,413

PN 104453 Lot 17094 Mukim Durian Sebatang

Factory land Leasehold expiring

12/5/2087

320,549 2010 2,572,545

PN 104454 Lot 17095 Mukim Durian Sebatang

Vacant land Leasehold expiring

12/5/2087

870,800 2010 2,971,625

Quarter 5 years 3,000 2011 21,127

geran HS(D) 6152 Lot 3945Mukim Tebrau, Johor Bahru

Vacant landWarehouse

Freehold1 year

34,05716,355

20082015

858,976 2,110,357

geran HS(D) 6153 Lot 3946Mukim Tebrau, Johor Bahru

Vacant land Freehold 36,317 2008 916,378

geran 38304 Lot 13209S Bandar ipoh (S)

3 Storey Shophouse

Freehold 1,938 2010 525,384

32,221,391



103

LIST OF PROPERTIES

AS AT 31 DEC 2015(Cont’d)

Title Location

Description Existing use

Tenure Age of

building

Land area Built-up

area sq.ft.

Year of acquisition / revaluation*/completion#

Net book value RM

Central Melamineware Sdn Bhd

LP 15142 PT 20041Mukim Durien Sebatang

Vacant land Freehold 1,308,020 2000* 1,509,740

Railway Wharf Jalan Maharaja Lela Teluk Intan

Factory building cum warehouse

20 years 16,000 1996# 3

Factory building cum warehouse

7 years 7,670 2008 11,564

geran HS(D) 17662 PT19518 Mukim Durian Sebatang

Vacant land Leasehold expiring

12/9/2104

99,943 2010 2,162,123

g.M. No.304 Lot 1078 Mukim Changkat Jong

Vacant land Freehold 155,721 2013 1,001,000

geran Mukim 2641 Lot 6991 Mukim Durian Sebatang


6,214,430

Central Palm Oil Mill Sdn Bhd

geran 48789 Lot 1108 Mukim Jebong Larut & Matang Perak


geran Mukim 1445 Lot 1109 Mukim Jebong, Larut & Matang, Perak




gM721 Lot 1125 Mukim Jebong, Larut & Matang, Perak




gM720 Lot 1129 Mukim Jebong, Larut & Matang, Perak

Factory landFactory

Freehold3 Years

178,055101,923

20122012

1,780,0002,276,497

14,759,544

CAM Plastic Industry Sdn Bhd

PT 134916, HSD57885, Mukim Hulu Kinta, Kinta, Perak

Factory land Leasehold expiring 5/3/2057

131,069 2014 860,383

Factory 1 year 56,855 2015 2,655,411

3,515,794

This page has been intentionally left blankCAM RESOURCES BERHADANNUAL REPORT 2015


104

PROxY FORM

*i / We NRIC No. (Full Name in Capital Letters)

of (Address)

being a member(s) of CAM RESOURCES BERHAD, hereby appoint

NRIC No. (Full Name in Capital Letters)of (Address)

*and/or failing him/her, NRIC No. (Full Name in Capital Letters)

of (Address)

as *my/our proxy to vote for* me/us on *my/our behalf at the Fifteenth Annual General Meeting of CAM Resources Berhad to be held at Function Room , Level 2, Hotel Sri Petaling, 30, Jalan Radin Anum, Bandar Baru Sri Petaling, 57000 Kuala Lumpur, on Friday, 24 June 2016 at 11.00 a.m. or at any adjournment thereof.

The proportion of *my/our holding to be represented by *my/our proxies are as follows :-(The next paragraph should be completed only when two proxies are appointed)

* First Proxy (1) % * Second Proxy (2) % Number of Shares Held:

NO. RESOLUTIONS FOR AGAINST1. To approve the Directors’ fees for the financial year ended 31 December 20152. To re-elect Mr Lee Chin Yen as Director3. To re-elect Mr Tan Hong Cheng as Director4. To re-elect Mr Chan Kee Loin as Director5. To re-appoint Messrs Baker Tilly AC as Auditors and to authorise the Directors to fix

their remunerationSPECIAL BUSINESS6. To approve the Authority to Issue Shares7. To approve the Proposed Renewal of Shareholders’ Mandate for Recurrent Related

Party Transactions8. To approve the Proposed Renewal of Share Buy-Back Authority9. To approve Mr Chai Moi Kim to remain as independent Director of the Company10. To approve Mr Chia Kay Joo to remain as independent Director of the Company11. To approve Tuan Haji Azizul Bin Mohd Othman to remain as independent Director of the

Company

Pleaseindicatewith(X)howyouwishyourvotetobecast.Ifnospecificdirectionastovotingisgiven,theproxywillvoteorabstainathis/her discretion.

Dated this day of 2016 *Signature(s)/Common Seal of Shareholder(s)*Deletewhereinapplicable Notes:-(1) A proxy may but need not be a member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply to

the Company.(2) To be valid, the duly completed proxy form must be deposited at the Company’s Registrar, Tricor Investor & Issuing House Services Sdn Bhd,

Unit 32-01, level 32, Tower A, Vertical Business Suite, Avenue 3, Bangsar South, No. 8, Jalan Kerinchi,59200 Kuala Lumpur not less than forty-eight (48) hours before the time for holding the meeting.

(3) A member shall be entitled to appoint more than one (1) proxy to attend and vote at the same meeting provided that the provisions of Section 149(1)(c) of the Companies Act, 1965 are complied with.

(4) WhereamemberisanauthorisednomineeasdefinedundertheSecuritiesIndustry(CentralDepositories)Act,1991,itmayappointatleastone (1) proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.

(5) WhereamemberoftheCompanyisanexemptauthorisednomineewhichholdsordinarysharesintheCompanyformultiplebeneficialownersinonesecuritiesaccount(“omnibusaccount”),thereisnolimittothenumberofproxieswhichtheexemptauthorisednomineemayappointinrespect of each omnibus account it holds.

(6) Whereamemberappointsmorethanone(1)proxytheappointmentshallbeinvalidunlesshespecifiestheproportionofhisholdingstoberepresented by each proxy.

(7) If the appointor is a corporation, this form must be executed under its Common Seal or under the hand of its attorney.(8) Forthepurposeofdeterminingwhoshallbeentitledtoattendthismeeting,theCompanyshallberequestingtheBursaMalaysiaDepository

Sdn.Bhd.tomakeavailabletotheCompanypursuanttoArticle49(b)oftheArticlesofAssociationoftheCompany,aRecordofDepositorsasat16June2016andonlyaDepositorwhosenameappearonsuchRecordofDepositorsshallbeentitledtoattendthismeeting.

AFFIXSTAMP

1st Fold Here

Then Fold Here

The Share RegistrarTricor Investor & Issuing House Services Sdn Bhd (118401-V)

Unit 32-01, Level 32, Tower A, Vertical Business Suite,Avenue 3, Bangsar SouthNo. 8, Jalan Kerinchi59200 Kuala Lumpur.

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