Corporate Information - MalaysiaStock.Biz business address: plot 127, ... bank of china (malaysia)...

02 Corporate Information

03 Financial Highlights

04 Directors’ Profile

05 Key Management Profile

06 Corporate Structure

07 Chairman’s Statement

09 Management Discussion & Analysis

11 Corporate Governance Statement

14 Statement On Risk Management And Internal Control

16 Audit Committee Report

Directors’ Report 18Directors’ Statement 24Statutory Declaration 24

Independent Auditors’ Report To The Members 25Statements Of Financial Position 30

Statements Of Comprehensive Income 31Consolidated Statement Of Changes In Equity 32

Statement Of Changes In Equity 33Statements Of Cash Flows 34

Notes To The Financial Statements 36Supplementary Information 79

80 Shareholdings & Warrant Holdings Statistics

84 Notice Of Annual General Meeting

87 Statement Accompanying Notice Of Annual General Meeting

88 Additional Compliance Information

89 List Of Material Properties Of The Group

Proxy Form

Contents

Corporate Information

SECRETARY

CH’NG LAY HOON

AUDIT COMMITTEE

ONG KIM NAM (CHAIRMAN)DATO’ ZURAIDI BIN RAHIM (MEMBER)ZAINAL BIN PANDAK (MEMBER)

REGISTERED OFFICE

SUITE 12-A LEVEL 12MENARA NORTHAMNO. 55 JALAN SULTAN AHMAD SHAH10050 PENANGTEL : 04 - 228 0511FAX : 04 - 228 0518

BUSINESS ADDRESS

PLOT 127, JALAN PERINDUSTRIAN BUKIT MINYAK 7TAMAN PERINDUSTRIAN BUKIT MINYAK14100 BUKIT MERTAJAMSEBERANG PERAI TENGAH, PENANG

SHARE REGISTRAR

SYMPHONY SHARE REGISTRARS SDN. BHD. LEVEL 6, SYMPHONY HOUSEBLOCK D13, PUSAT DAGANGAN DANA 1JALAN PJU 1A/4647301 PETALING JAYASELANGORTEL : 603 - 7841 8000FAX : 603 - 7841 8151

AUDITORS

GRANT THORNTON (AF : 0042)CHARTERED ACCOUNTANTS

PRINCIPAL BANKERS

BANGKOK BANK BERHADBANK OF CHINA (MALAYSIA) BERHADBANK PERTANIAN MALAYSIA BERHAD (AGRO BANK)CIMB BANK BERHADMALAYAN BANKING BERHADOCBC BANK (MALAYSIA) BERHAD

SOLICITORS

TEJA SINGH PENESAR & CO.LOH HAN MENG & CO.

STOCK EXCHANGE LISTING

MAIN MARKET OF BURSA MALAYSIA SECURITIES BERHADSTOCK NAME : PWFSTOCK CODE : 7134

DIRECTORS

DATO’ ZURAIDI BIN RAHIM (INDEPENDENT NON-EXECUTIVE CHAIRMAN)

DATO’ SIAH GIM ENG (MANAGING DIRECTOR)

DATIN LAW HOOI LEAN (DEPUTY MANAGING DIRECTOR)

ONG KIM NAM (INDEPENDENT NON-EXECUTIVE DIRECTOR)

ZAINAL BIN PANDAK (INDEPENDENT NON-EXECUTIVE DIRECTOR)

02 03PWF CONSOLIDATED BHD. (420049-H) • Annual Report 2016 Annual Report 2016 • PWF CONSOLIDATED BHD. (420049-H)

Financial Highlights

* For comparison purposes, the comparative figures have been restated to incorporate effect of share split and bonus shares issue.

2012

2013

2014

2015

2016

0 200,000,000 400,000,000

214,423,837

259,141,992

279,745,172

290,938,775

326,444,320

Revenue (RM)

2012

2013

2014

2015

2016

0 100,000,000 200,000,000

205,843,523

208,187,198

216,121,440

223,854,780

234,833,407

Shareholders' fund (RM)

2012

2013

2014

2015

2016

0 20,000,000 40,000,000 60,000,000

15,420,454

24,108,903

31,984,107

27,900,337

44,765,770

EBITDA (RM)

2012

2013

2014

2015

2016

0 10,000,000 20,000,000

349,021

9,191,926

16,413,625

9,364,695

19,833,724

Profit before taxation (RM)

2012

2013

2014

2015

2016

0.0 1.0 2.0

1.45

1.46

1.57

1.51

1.43

Net assets per share (RM) *

2012

2013

2014

2015

2016

0.00 5.00 10.00

0.20

3.74

8.27

4.22

8.43

Earnings per share (Sen) *


Directors’ Profile

Dato’ Zuraidi Bin Rahim

Dato’ Zuraidi Bin Rahim, a Malaysian, male, aged 43, holds a BSc (Hon) in Civil Engineering from Leeds Metropolitan University, United Kingdom and was appointed as an Independent Non-Executive Chairman of the Company on 5 January 2016. He has more than 8 years’ experience in civil and structural engineering works involving in design and construction. He also has vast experience in administrative and management in supply of foreign workers within Malaysia. In 2003, Dato’ Zuraidi successfully set-up Jitra Specialist Centre, a private hospital in Jitra and became the CEO and President of the hospital. Dato’ Zuraidi is currently the Executive Chairman of Balqis Textiles and Manufacturing Sdn Bhd and Chairman of VTelekom Berhad, a Government Linked Company.

He is the Chairman of the Nominating Committee and a member of the Audit Committee of the Company.

He has attended four (4) out of the five (5) Board meeting of the Company held during the financial year ended 31 December 2016.

Dato’ Siah Gim Eng

Dato’ Siah Gim Eng, a Malaysian, male, aged 58, the co-founder of the Company, was appointed as the Executive Chairman and Managing Director of the Company on 12 May 2001 and subsequently re-designated as the Managing Director on 5 January 2016. He is the driving force in the formulation and implementation of the Group’s corporate strategy. With more than 30 years of experience in the feed milling and poultry farming industry, his entrepreneurial skills have steered the Company from a small establishment to become one of the leading feedmill and farming group in the Northern region of Malaysia. He is the husband of Datin Law Hooi Lean, the Deputy Managing Director of the Company.

He has attended all the five (5) Board meeting of the Company held during the financial year ended 31 December 2016.

Datin Law Hooi Lean

Datin Law Hooi Lean, a Malaysian, female, aged 56, holds a Master Degree in Business Administration from University of Ballarat, Australia. She is a member of New Zealand Institute of Management. She is also a Fellow of The Society for Professional Management, UK; Certified Professional Manager from The Society of Business Practitioners (SBP), UK. She was appointed as the Deputy Managing Director of the Company

on 12 May 2001. She is primarily involved in the business development process, strategic planning, providing directions and overseeing the administration of finance function of the Group. With more than 30 years experience in the area of financial accounting and company management, she has been instrumental in ensuring the smooth running of the day to day operation of the Company.

She is a member of the Remuneration Committee of the Company.

She has attended all the five (5) Board meeting of the Company held during the financial year ended 31 December 2016.

Ong Kim Nam

Ong Kim Nam, a Malaysian, male, aged 61, was appointed as an Independent Non-Executive Director on 12 May 2001. A Chartered Accountants by profession, he is a member of Malaysian Institute of Accountants and Association of Chartered Certified Accountants. He has over 30 years of experience in the field of auditing, accounting and taxation. Presently he is the sole practitioner of O.K.Nam Associates, a firm of Chartered Accountants, which is based in Penang. He is the director of Eng Kah Corporation Berhad, a company listed on Bursa Malaysia Securities Berhad.

He is the Chairman of the Audit Committee and the Remuneration Committee and a member of the Nominating Committee of the Company.


Haji Zainal Bin Pandak

Haji Zainal Bin Pandak, a Malaysian, male, age 59 was appointed to the Board on 19 December 2011 as Non-Independent Non-Executive Director and subsequently re-designated as an Independent Non-Executive Director of the Company on 5 January 2016. He graduated from Universiti Teknologi Mara with Diploma in Business Administration and was formerly an Assistant Director in Inland Revenue Board. He was conferred Pingat Pangkuan Mahkota Wilayah (PPW) in 2009.

He is a member of the Audit Committee and the Nominating Committee of the Company.



Key Management Profile

Dato’ Siah Gim EngManaging DirectorAged 58 • Male • Malaysian

The profile of Dato’ Siah Gim Eng is listed in the Directors’ Profile on page 4.

Datin Law Hooi LeanDeputy Managing DirectorAged 56 • Female • Malaysian

The profile of Datin Law Hooi Lean is listed in the Directors’ Profile on page 4.

Christine Ooi Ki WeiDeputy Financial ControllerAged 31 • Female • Malaysian

Ms. Christine Ooi Ki Wei joined the Group in 2012 and was appointed as Deputy Financial Controller in 2015. She holds Bachelor of Science (Hons.) Degree in Applied Accounting from Oxford Brookes University, UK, Master of Science Degree in Finance and Investment from University of Nottingham, UK. She is a Fellow of the Association of Chartered Certified Accountants (FCCA) and a member of the Malaysian Institute of Accountants (MIA). Prior to joining the Group, she has gained experience in audit at KPMG and Tax Accounting at Dell Global Business Centre Sdn. Bhd.. She is currently overseeing the financial planning of the Group.

Lim Li NeePoultry NutritionistAged 41 • Female • Malaysian

Ms. Lim Li Nee holds a Bachelor Degree in Chemical Engineering from University Technology Malaysia. She also holds a Certificate in Food Technology. Upon graduation, she joined the Group in 2000. She is currently holding the position as Poultry Nutritionist since 2012. She is in charge of feed formulation program and quality control of the raw materials and all poultry feeds.

Dr. Nooparizan Binti Mat TaahirSenior Poultry Technical Officer Aged 35 • Female • Malaysian

Dr. Nooparizan holds a professional degree in Doctor of Veterinary Medicine from the University Putra Malaysia. She joined the Group as a veterinarian in 2007 and was promoted to Senior Poultry Technical Officer in 2012. She is technically supporting all parent stock and layer of the Group.

Notes:1. Save as disclosed above, none of the key senior management has any family relationship with any other Directors and/ or substantial

shareholders of the Company.2. None of the key senior management has any conflict of interest with the Company.3. None of the key senior management has been convicted for any offences against the law other than traffic offences (if any) within the past

five (5) years.


Corporate StructureAs At 5 April 2017

PWF TIMBERHILL SDN BHD (1173445-P)

PWF CONSOLIDATED BHD(420049-H)

100%

PWF FARMS SDN BHD(149054-P)

PWF BREEDER SDN BHD (559277-W)

PW NUTRIEGGS SDN BHD (613817-M)

100%PW NUTRIFARM

VENTURE SDN BHD (208636-P)

PINWEE CHICKEN TRADING SDN BHD

(594854-W)

PINWEE FOOD PROCESSING SDN BHD

(541912-X)

PWF FEEDS SDN BHD (37629-M)

PWF CAPITAL LAND SDN BHD (752833-H)


Chairman’s Statement

The financial year 2016 saw another commendable year amidst the challenging economic landscape as the Group recorded a historic high profit before tax of RM19.8mil for the year at the back of 12% growth in revenue. Market capitalization rose by 28.57% from RM92.8mil at the end of FY2015 to RM119.3mil at the end of FY2016. The Company also paid out the highest dividend since our listing in 2002. The management’s initiative in strengthening the operational management at a micro level had a positive impact on the Group’s improved performance. Overall productivity of the farms showed marked progress as demonstrated by the record low feed conversion ratio achieved in the Group’s broiler farms. The growth in revenue and profit was also fueled by capacity expansion undertaken and completed during the year at our broiler farms which registered growth in sales volume of 10% in FY2016.

During the year, the Company completed multiple corporate exercises that included a share split involving the subdivision of one existing ordinary share into two ordinary shares and a bonus issue of warrants on the basis of three warrants to every ten subdivided shares held by entitled shareholders. The rationale for the exercise is to increase the liquidity of the Company’s shares and to increase public equity participation.

We saw in FY2016 an economy of uncertainty and dampened economic growth; and we expect the economic environment to remain challenging in FY2017. The Group is likely to be confronted with the risk of stronger US dollars inflating the imported cost of raw material used in the manufacturing of feed. Nevertheless, we have begun to see more positive signs of improved business sentiments, with exports picking up in the first two months of FY2017. A more optimistic economic environment will be favorable to consumer spending. Hence, despite the forecast of a moderate growth rate, the Group is expected to benefit from the resilient domestic economy and improving consumer sentiments in FY2017.

On behalf of the Board of Directors, it is my utmost pleasure to present to you the Annual Report and the Audited Financial Statements of the Group and of the Company for the financial year ended 31 December 2016.


Chairman’s Statement (Cont’d)

Moving forward, the Group will continue to invest in the organic growth of the business. The Group intends to spend over RM100mil in expanding the farm capacity of our broiler, breeder and layer farms over the next three years. This will involve the development of new farms, and the conversion of existing open-house system broiler farms to close-house system. The Group is also actively looking into business cooperation for its downstream activities.

In FY2016, we continued in our consistent effort to reward our shareholder and increase shareholders’ value. The Company paid out a total of RM10.1mil cash dividend on top of the 6.3mil share dividend issued during the year.

Corporate Social Responsibility

In FY2016, we continue to emphasize on the sustainability of our operating environment. We have laid down plans of upgrading our farm facilities that are environmental friendly and that promote the health of the birds for the next three years. The Group plans to implement close house system in all our broiler farms. The Group is also adopting environmental safe practice as part of its corporate social responsibilities. The Group places high importance in developing the skills and capabilities of our workforce. Various training programs and seminars are attended by our employees in FY2016. The Group also continued its commitments in charity and social welfare activities as part of the social responsibility where we can contribute directly to the community.

Finally, on behalf of the Board, I would like to express my heartfelt gratitude to our shareholders, customers and suppliers, business partners, bankers and government authorities for your continuing support and trust. I also want to extend my gratitude to my colleagues, the management and their team for the hard work, dedication and commitment throughout the financial year of 2016.

Dato’ Zuraidi Bin RahimChairman


Management Discussion & Analysis

Overview of the Group’s Business and Operations

The Group’s core business is integrated poultry farming which consists of broiler, breeder, layer farming and poultry feed manufacturing. The Group ranks as one of the largest poultry player in the country with its customer base mainly located in the northern and central region of Peninsular Malaysia. The main products of the Group are broilers and table eggs. The Group’s vision is to become a top food producer and a trusted brand name in the livestock industry, while its mission is to diligently, actively and effectively pursue excellence in quality and product safety through advanced knowledge and technology.

The feedmill plant located in Bukit Minyak, Penang produces the feeds required by all the farms within the Group. The breeder farms and hatchery facilities located in Kedah, Perak and Malacca produce day-old-chicks, which are then supplied to our own broiler farms located in Penang, Kedah and Perak.

Review of Financial Results and Operating Activities

5 Years Group Financial Highlights

FINANCIAL YEAR ENDEDDecember

2012December

2013December

2014December

2015December

2016

Revenue 214,423,837 259,141,992 279,745,172 290,938,775 326,444,320

Shareholders' fund 205,843,523 208,187,198 216,121,440 223,854,780 234,833,407

Earnings before interest, tax, depreciation and amortisation (EBITDA) 15,420,454 24,108,903 31,984,107 27,900,337 44,765,770

Profit Before Taxation 349,021 9,191,926 16,413,625 9,364,695 19,833,724

* Net assets per share (RM) 1.45 1.46 1.57 1.51 1.43

* Basic Earnings per share (sen) 0.20 3.74 8.27 4.22 8.43

* For comparison purposes, the comparative figures have been restated to incorporate effect of share split and bonus shares issue.

The Group’s revenue increased from RM290.9mil to RM326.4mil during the financial year, an increase of 12% from the previous financial year. The increase in revenue was mainly driven by our broiler farms’ higher production volume and selling price. Improved productivity in broiler farms was attributed to the lower Feed Conversion Ratio (FCR) and the addition of new broiler farms in Perak. Revenue from table eggs also increased as a result of the completion of additional layer houses which started egg production during the year, as well as measures taken to improve productivity in the layer farm.

Net profit for the financial year increased by 115% from RM6.0mil to RM12.9mil compared to the previous financial year. During the year, an additional depreciation of RM5.6mil was charged out due to accelerated depreciation following a plan to convert the existing open-house system broiler farms into close-house system. In addition, the Group had also provided for ESOS expenses of RM2.5mil for ESOS exercisable by eligible employees during the year. Despite these one-off expenses, the Group still boasted an increase in net profit due to rising revenue and improving margin arising from higher sales volume and selling price of our broilers.

With growing profitability and prudent management, the Group managed to achieve a stronger balance sheet with improvement in both liquidity and shareholders’ equity. Shareholders’ equity grew by 5% to RM234.8mil from RM223.9mil recorded in the preceding financial year. The change arose from the Group’s higher profits and the exercise of ESOS by employees of RM6.2mil, net off with cash dividends of RM10.1mil distributed to the shareholders as a token of appreciation of their continuous support. Net working capital liability has reduced significantly from RM24.2mil to RM14.3mil.

At the balance sheet date, the net borrowings were higher at RM95.2mil as compared to the preceding financial year of RM91.8mil. The increase in borrowings reflects the confidence and continual support of our financial institutions, and is in line with the focus of the Group on revenue growth and capacity expansion. However, the Group’s debt-equity ratio remains unchanged at 0.4 times, mainly due to the increase of equity as mentioned above.


Management Discussion & Analysis (Cont’d)

Anticipated or Known Risks

One of the major risks that could potentially affect a poultry business operator is the fluctuating prices of certain commodities. The main ingredients used in the manufacturing of feed such as corn, soya and wheat are mainly imported and therefore are susceptible to global commodities price movement and foreign currency exchange rate fluctuation. The Group enters into foreign currency forward contracts to mitigate any potential impact of the aforementioned risk on the financial performance of the Group.

At the operational level, farm productivity could be impaired by weather condition, mortality rate and disease outbreak. The Group is constantly seeking ways to mitigate such risks, as proven by our continuous effort to modernize our farm houses into close-house system. This system provides a superior bio-security measure that is also more environmental friendly. Furthermore, our farms are scattered throughout the northern and central region, which allows us to spread the risk of a disease outbreak.

Forward-looking Statement

As part of the Group’s continuous effort to expand our production capacity, we plan to invest an amount exceeding RM100mil in the next three years in our broiler, breeder and layer farms. The investment will be directed at our initiatives to convert the existing open-house system into close-house system, develop new farm lands and construct additional chicken houses in our existing layer farm.

The house conversion will be implemented in stages and will be one of the main focuses of our capital expenditure moving forward. The close-house system is expected to increase the broiler farms’ productivity as a result of better FCR and reduced mortality rate.

A new breeder farm in Kedah is currently under development. The purpose of this expansion is to cater for the higher demand of day-old-chicks by our broiler farms, which is in line with the Group’s focus on expanding broiler farming, being its largest revenue source.

The expansion plan for our layer farm will be carried out at the existing farm, with more layer houses to be built to increase the capacity of eggs production.

In view of these ongoing expansion plans, we foresee an increase in the Group’s future revenue, driven by higher productivity and sales volume.

10 PBPWF CONSOLIDATED BHD. (420049-H) • Annual Report 2016 Annual Report 2016 • PWF CONSOLIDATED BHD. (420049-H)

Corporate Governance Statement

The Board of Directors is committed to maintaining high standard of corporate governance throughout the Group. This practice of good corporate governance is fundamental to the performance of duties and responsibilities of the Directors in enhancing shareholders value and safeguarding stakeholders’ interest of the Group.

The corporate governance practiced by the Group is consistent with the principles and recommended practices set out in the Malaysian Code on Corporate Governance 2012 (“Code”). This statement reports on the compliance with the Code by the Company throughout the financial year ended 31 December 2016 and reason thereof if there are inconsistencies.

Board of Directors

The Board is primarily entrusted with the responsibility of reviewing and monitoring implementation of the strategic plan of the Group. The Board oversees the conduct of the Group’s business affairs and ensuring effective system of control and risk management are in place through identifying and appraisal of risk within the Group. The Board also considers the adequacy of the succession plan for the senior management and ensuring effective communication with the shareholders. These functions and responsibilities of the Directors are set out in the Company’s Board Charter. The Executive Directors have the added responsibilities of implementing the strategies and policies approved and adopted by the Board. The Independent Directors provide balanced and independent opinions to matters under the Board’s purview.

The Board has established a standard of ethical conduct for Directors based on the code of ethics issued by the Companies Commission of Malaysia and provisions in the Companies Act, 1965.

Board Composition and Independence

The Board is currently comprised of two Executive Directors and three Independent Non-Executive Directors. Hence, the Board’s composition meets the Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”) (“Listing Requirements”) of having at least one-third (1/3) of the membership of the Board comprising Independent Directors. The Board members have diverse knowledge, expertise and experience in various fields that gives added strength to the leadership that is necessary for the effective stewardship of the Group.

The Board has clear division of responsibility and is balance in terms of power and authority. The Executive Directors are responsible for making and implementing operational decisions whilst Independent Non-Executive Directors are independent of the management and are free from any relationship that could materially interfere with the exercise of their independent judgment. Together, they play an important role in ensuring that the strategies proposed by the management are fully deliberated and examined, and that it is capable of contribute to the sustainability of the organization taking into account the interest of shareholders, employees, customers, suppliers and the many communities in which the Group conducts its business. Currently the Board Chairman is held by an Independent Non-Executive Director. The Board has strong independent element within it to provide check and balance of power in each Board meeting and the Chairman always encourages all the members of the Board to participate actively during Board meetings.

In addition, an Independent Director who has served a cumulative term of more than 9 years in the Board will require shareholders approval at the Annual General Meeting for continuation as Directors of the Board. Evaluation of the Board’s performance including self and peer review is carried out annually to gauge and assess the effectiveness of the Board. The Board member are also encouraged to provide feedback and proposal to further improve the effectiveness of the Board. All assessment and feedback are properly documented and its result will be presented by the Company Secretary to the Nominating Committee for deliberation.

Board Meeting

The Board meets on a quarterly basis and additionally as and when required, with a formal schedule of matters specifically reserved for the Board’s deliberation and decision. During the financial year under review, five (5) Board meetings were held and all the Directors have complied with the requirements in respect of Board meeting attendance as provided in the Articles of Association.

Dato’ Zuraidi Bin Rahim 4/5

Dato’ Siah Gim Eng 5/5

Datin Law Hooi Lean 5/5

Ong Kim Nam 5/5

Zainal Bin Pandak 5/5

PB 11PWF CONSOLIDATED BHD. (420049-H) • Annual Report 2016 Annual Report 2016 • PWF CONSOLIDATED BHD. (420049-H)

Corporate Governance Statement (Cont’d)

Supply and Access to Information

The Directors have full and unrestricted access to all information pertaining to the Group’s business and affairs, whether collectively or in their individual capacity, to enable them to discharge their duties. There are matters specifically reserved for the Board’s decision to ensure that the direction and control of the Group is firmly in its hands. Prior to the Board meetings, the Directors are provided with the agenda together with Board papers containing relevant reports and information.

All Directors have access to the advice and the services of the Company Secretaries and under appropriate circumstances may obtain independent

professional advice at the Company’s expense, in furtherance of their duties.

Appointment to the Board

The Board had established a Nominating Committee which is responsible for the review and assessment of the skills, experience, size and composition of the Board on an ongoing basis to ensure effectiveness of the Board and the contribution of each director. The Nominating Committee is also responsible for assessing the suitability of proposed candidates for directorships and making recommendations to the Board on new appointments including Board Committees.

The Nominating Committee consists wholly of Independent Non-Executive Directors. The Committee is chaired by Dato’ Zuraidi Bin Rahim and the other members are Mr. Ong Kim Nam and En Zainal Bin Pandak. The Committee had one (1) meeting during the financial year.

Re-election

In accordance with the provisions of the Articles of Association of the Company, all Directors are subject to retirement from office at least once in every three (3) years, but shall be eligible for re-election. The Articles also provide that any Director appointed during the year is required to retire and seek re-election at the following Annual General Meeting immediately after such appointment.

Directors Training

All Directors have completed the Mandatory Accreditation Programme (“MAP”) and the Continuing Education Programme (“CEP”) as required

by Bursa Malaysia Securities Berhad. The Company continues to identify suitable training programme for the enhancement of Directors’ skill and

knowledge from time to time.

DIRECTOR’S REMUNERATION

The Level and Make-up of Remuneration

The remuneration framework for Executive Directors has an underlying objective of attracting and retaining directors needed to run the Company successfully. Remuneration packages of Executive Directors are structured to commensurate with corporate and the individual’s performance. In respect of Independent Non-Executive Directors, the level of remuneration reflects the experience and level of responsibilities undertaken by the individual concerned.

Procedure

The Board had established a Remuneration Committee to review and recommend to the Board the remuneration package of the Executive Directors and the determination of remuneration packages of non-executives is a matter for consideration by the Board as a whole. The individuals concerned are required to abstain from discussions pertaining to their own remuneration packages.

The Remuneration Committee is chaired by Mr. Ong Kim Nam with Datin Law Hooi Lean as a member. The Committee met once during the financial year.


Corporate Governance Statement (Cont’d)

Disclosure

Details of the Directors’ remuneration for the financial year ended 31 December 2016 are as follow:

The aggregate remuneration of Directors categorized into appropriate components.

Fees

Salaries, Allowances,

Bonus and EPF Others Total

RM RM RM RM

Executive 99,600 2,775,800 45,400 2,920,800

Non-Executive 151,200 27,400 - 178,600

250,800 2,803,200 45,400 3,099,400

The number of Directors whose total remuneration falls within the following bands.

Range of Remuneration (RM) Executive Non-executive

0 – 200,000 - 3

1,200,001 – 1,400,000 1 -

1,400,001 – 1,600,000 1 -

2 3

SHAREHOLDERS

Dialogue between Company and Investors

The Board recognizes the importance of timely and equal dissemination of information to shareholders on the Group’s performance and direction. Communication with investor is effected through timely release of information on the Group’s corporate proposal, financial results and other material information to the public.

Information and news on the Company’s operation are also made available to investors and shareholders through the Company website at www. pwf.com.my

The Annual General Meeting (“AGM”)

The Company’s AGM serves as a forum for dialogue with shareholders. At each AGM, the Chairman of the Board briefs the shareholders on the progress and performance of the business of the Group. The status of all resolutions proposed at the AGM is submitted to Bursa Malaysia Securities Berhad at the end of the meeting day. Apart from contact at general meetings, there is no formal program or schedule of meetings with investors, shareholders, stakeholders and the public generally. However, the Management has the option of calling for meetings with investors/analysts if deemed necessary. Thus far, the Management is of the opinion that this arrangement has been satisfactory to all parties.

ACCOUNTABILITY AND AUDIT

Financial Reporting

The Board is aware of its responsibilities to shareholders and the requirement to present a balanced and comprehensive assessment of the Group’s financial position by means of the annual and quarterly reports and other published information. In this regard, the Board is responsible for the preparation of financial statements by applying the appropriate accounting policies and prudent estimates that present a fair and balanced report of the financial state of affairs of the Group in accordance with the provisions in the Companies Act, 1965 and applicable approved accounting standard in Malaysia.

Internal Control

The Statement on Risk Management and Internal Control as set out on pages 14 and 15 of this Annual Report provides an overview of the state of internal controls within the Group.

Relationship with the Auditors

The Board through the establishment of an Audit Committee maintains a formal and transparent relationship with the Group’s Auditors. The roles of the Audit Committee in relation to the Auditors are detailed on pages 16 and 17 of the Audit Committee Report in the Annual Report.


Statement On Risk Management And Internal Control

Introduction

The Board acknowledges the importance of maintaining a sound framework of internal control and risk management that is effective in safeguarding shareholders’ investment and the Group’s asset consistent with the requirements of the Malaysian Code of Corporate Governance.

This Statement on Risk Management and Internal Control is made in pursuant with paragraph 15.26(b) of the Listing Requirements of Bursa Malaysia Securities Berhad and with reference to Bursa Malaysia Securities Berhad’s Statement On Risk Management and Internal Control: Guidelines for Directors of Public Listed Companies, which requires Directors of Malaysian public listed companies to make a statement about their state of internal control within the Group in their Annual Report.

Board’s Responsibility

The Board has overall responsibility for the Group’s system of internal control and risk management and for reviewing its effectiveness whilst the role of Management is to implement the Board’s policies on risk and control. The system of internal control and risk management are designed to manage rather than eliminate the risk of failure in achieving business objectives. In pursuing these objectives, internal controls can only provide reasonable and not absolute assurance against material misstatement or loss. The Board has received assurance from the top management that the Group’s risk management and internal control system is operating adequately and effectively, in all material aspects, in accordance with the risk management framework and internal control system of the Group. The Board will continue to review and enhance the process so as to ensure its robustness and sustainability.

Risk Management Framework

The Board maintains continuous commitment in strengthening the Group’s risk management framework and control environment. The Board ensures risk management is embedded in all aspect of the Group’s activities. The Board assesses risk appetite or the amount of risk the Group is willing to take in the pursuit of its objective based on the capabilities of the Group in tolerating risk and the operating environment that it is in. In addition, qualitative and quantitative parameters are set by the Board in assessing specific categories of risk to ensure that the Group undertakes risk that is within their risk appetite. The Board confirms that there is a continuous process for identifying, evaluating and managing the significant risks that may materially affect the achievement of the Group’s corporate objectives. The control environment ensures all level of employee is well informed of the Company’s business objective, policies and his/her authorities and responsibilities and to report on areas of concern to the management team. When significant risk or weakness is found, a delegated task force will be assembled to monitor, study and provide solution to the problem areas. Day-to-day risk management of the individual operating unit is delegated to the Executive Directors and senior management of the respective business units. In this regard, the Executive Directors are responsible for timely identification of the Group’s risks in each business unit and reviewing the effectiveness of the implementation of risk mitigation actions which shall be carried out by the senior management.

The Executive Directors and the senior management constantly review comprehensive operation reports, performance indicators and analysis reports to identify anomalies in all business functions. Budgets and forecasts are prepared and significant variances against actual performance are highlighted for further evaluation and actions. The Executive Directors and senior management through daily communication with different level of the organisation continuously impart the awareness for risk and its impact.

Periodic meetings are held to assess and monitor the Group’s risk as well as discuss, deliberate and appropriately address matters associated with strategic, financial and operational facets of the Group. Any significant weaknesses identified during the review together with the improvement measures to strengthen the internal controls are brought to the attention of the Board for further deliberation and discussion.

Internal Audit Function

Internal audits are undertaken to provide independent assessments on the adequacy, efficiency and effectiveness of the Group’s internal control systems.

The Group’s internal audit function is carried out by an independent audit firm which reports directly to the Audit Committee. The audit firm performs regular audits based on an annual internal audit plan which is approved by the Audit Committee. The primary objective of the internal audit function is to assess the effectiveness of the internal controls and highlight significant potential risks that may affect the Group. The Audit Committee conducts annual review on the adequacy of the internal audit firm’s scope of work and resources. The Audit Committee regularly reviews the internal auditor’s reports and will discuss the issues highlighted with the Management to ensure corrective actions are implemented accordingly.


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

Other Key Elements of Internal Control

The following key elements of a system of internal control are present in the Group:

(a) Control Environment

The Group has an organisational structure for planning, controlling and monitoring business operations in order to achieve the Group’s objective. The organisational structure are constantly updated to meet changing business environment brought about by diversification of the Group’s business activities, market expansion, increase in capacity, complexities and resources.

The Management of each operating unit has clear responsibility for identifying risk affecting their unit and the overall Group’s business as a whole. They are also charged with instituting adequate procedures and internal controls to mitigate and monitor such risks on an ongoing basis. The Human Resources department of the Company has important roles in maintaining the high standard of performance and ethics of the work force through proper and effective recruitment, performance appraisal and remuneration.

(b) Audit Committee

An Audit Committee, comprising a majority of Independent Non-Executive Directors was maintained throughout the financial year. The composition of the Audit Committee brings a wide range of experience, knowledge and expertise. The Audit Committee is entrusted to review the effectiveness of the internal audit function with particular emphasis on the scope and quality of audits, resources as well as the independence of the internal auditor.

They continue to meet regularly and have full and unimpeded access to both the internal and external auditors and all employees of the Group.

(c) Policies and Procedures

Company policies and procedures are established and regularly updated to achieve internal controls objective as well as to adhere to our industry’s standards and regulations. Communications with all relevant parties are frequently held to ensure greater awareness and proper adherence to the Company’s policies and procedures.

Weakness in internal controls that result in material losses

Based on the findings of the internal auditors’ report for the financial year ended 31 December 2016, the Board is of the opinion that the general system of internal control is adequate and working satisfactorily in the current operating environment. There were no significant weaknesses in internal control that result in material losses, contingencies or uncertainties identified during the year.

The Board is committed to put in more appropriate action plans, to ensure that the internal control system could continuously evolve to support the type of business and size of the operations of the Group.

The total costs incurred in managing the internal audit function for the financial year ended 31 December 2016 were RM 14,840.

CONCLUSION

The Board is of the view that the present system of risk management and internal control is adequate for the Group to manage its risks and to achieve its business objectives. The Board is committed in ensuring that the Group continuously reviews the risk management and internal control system so that it is effective in enhancing shareholders’ investments and safeguarding the Group’s assets. The Board of Directors has approved this statement for issuance.

This statement is issued in accordance with a resolution of the Directors dated 6 April 2017.


Audit Committee Report

The Board is pleased to present the Audit Committee Report for the financial year ended 31 December 2016.

MEMBERS AND MEETINGS

During the financial year ended 31 December 2016, the Audit Committee held a total of five (5) meetings.

The Audit Committee members and details of attendance of each member of the Audit Committee meetings during the financial year are as follows:

Name Attendance

Ong Kim Nam 5/5Chairman/Independent Non-Executive Director

Dato’ Zuraidi Bin Rahim 4/5Independent Non-Executive Director

Zainal Bin Pandak 5/5Independent Non-Executive Director

SUMMARY OF ACTIVITIES

The Financial Controller and Accountants were invited to attend the Audit Committee meetings.

During the financial year ended 31 December 2016, the Audit Committee carried out its duties as set out in the terms of reference which includes the following:

• Review and deliberation of the quarterly financial results before recommending to the Board for their approval and announcement;• Review the annual audited financial statements of the Group and of the Company and the significant risk audit areas highlighted by the

external auditors;• Consider the nomination of the external auditors for recommendation to the Board for re-appointment;• Review of the Audit Planning Memorandum and Audit Review Memorandum with the External Auditors; • Meetings with External Auditors without the presence of the management to discuss issues on strengthening internal control;• Review the findings of the External Auditors and follow up on the recommendations and the management’s responses thereto;• Review the Audit Committee Report and Statement on Risk Management and Internal Control for the financial year ended 31 December

2016 and recommend its adoption to the Board;• Review of the internal audit findings and recommendations with the Internal Auditors;• Consider the related party transactions that had arisen within the Company or the Group; and• Verify the allocation of options pursuant to the approved Employees’ Share Options Scheme.

TERMS OF REFERENCE

The Directors have approved and adopted the following Terms of Reference, which set out the roles and responsibilities of the Audit Committee: -

1. OBJECTIVES

The primary objective of the Audit Committee is to assist the Board of Directors of the Company in fulfilling its responsibilities relating to corporate accounting, internal controls, management and financial reporting practices of the Group.

2. COMPOSITION

The members shall be appointed by the Board of Directors and shall consist of not less than three (3) members of whom a majority shall compose of Independent Directors of the Company. No Alternate Directors shall be appointed members of the Committee.

At least one member of the Audit Committee:- (a) Must be a member of the Malaysian Institute of Accountants; or(b) If he is not a member of the Malaysian Institute of Accountants, he must have at least three (3) years working experience; and

i) he must have passed the examination specified in Part I of the First Schedule of the Accountants Act, 1967; orii) he must be a member of one of the associations of accountants specified in Part II of the First Schedule of the Accountants

Act, 1967.


Audit Committee Report (Cont’d)

3. CHAIRMAN

The Chairman shall be an Independent Non-Executive Director.

4. QUORUM

A quorum shall consist of two (2) members and a majority of the members present must be Independent Directors.

5. SECRETARY

The Secretary of the Audit Committee shall be the Company Secretary or any other person so appointed by the Audit Committee from time to time.

6. MEETINGS

The Audit Committee shall regulate its own proceedings. The Committee shall meet at least four (4) times a year. The Committee may, as and when deemed necessary, invite other Board members and senior management members to attend the meeting. The Committee shall meet at least twice a year with the external auditors without the presence of any Executive Director of the Board.

7. AUTHORITY

The Audit Committee is authorised by the Board of Directors to investigate any activity within its terms of reference. The Committee shall have unrestricted access to the external auditors and to all employees of the Group. The Committee may, with the approval of the Board, consult legal or other professionals where they consider it necessary to discharge their duties at the expense of the Company.

8. FUNCTIONS The functions of the Audit Committee shall be: -

a) To consider the appointment of the external auditor, the audit fee and any question of resignation or dismissal;b) To review with the external auditors the nature and scope of the audit plan, the evaluation of the system of internal control, problems

and reservations arising from the audit and any matters which may wish to discuss with the external auditors, the internal auditors or both, in the absence of the Executive Board members and management where necessary;

c) To review the external auditors management letter and management's response;d) To review and report to the Board of Directors on the quarterly results and year end financial statements, prior to the approval by the

Board of Directors, focusing particularly on:-• changes in or implementation of major accounting policies and practices;• significant and unusual events; and• compliance with applicable approved accounting standards and other legal requirements;

e) To review the adequacy of the scope, function, competency and resources of the internal audit function, and that it has the necessary authority to carry out its work;

f) To review the internal audit programme and results of the internal audit process, and, where necessary, ensure that appropriate actions are taken on the recommendations of the internal audit function;

g) To review any appraisal or assessment of the performance of members of the internal audit function including appointment or termination of senior staff members and to provide opportunity for the resigning staff member, if any, to submit his reasons for resigning.

h) To consider any related party transactions and conflict of interest situation that may arise within the Company or the Group;I) To undertake such other responsibilities as may be agreed to by the Audit Committee and the Board of Directors.

9. REPORTING PROCEDURE

The Chairman of the Committee reports to the Board after each Committee meeting the result of the deliberations of the Committee. The Committee shall prepare reports, at least once a year, to the Board summarizing the Committee’s activities during the year in discharging of its duties and responsibilities and the related significant results and findings.

INTERNAL AUDIT FUNCTION

The Group has outsourced its internal audit function to an independent professional firm for the financial year ended 31 December 2016. The internal audit function is to support the Audit Committee in discharging its duties with respect to the adequacy, integrity and effectiveness of the systems of internal control within the Group.

During the financial year under review, the Internal Auditors have conducted assurance review on adequacy and effectiveness of internal control system on certain operating units and presented its findings together with recommendation and management action plan to the Audit Committee for review.

This report is made in accordance with a resolution of the Board of Directors dated 6 April 2017.


Directors’ Report For The Financial Year Ended 31 December 2016

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 2016.

PRINCIPAL ACTIVITIES

The principal activities of the Company consist of investment holding and the provision of management services whilst the subsidiaries are engaged in broiler and layer farming, breeding of day-old-chicks, manufacturing and selling of feeds and investment holdings.

There have been no significant changes in the nature of these activities during the financial year.

RESULTS

GROUP COMPANY

RM RM

Profit after taxation for the year 12,911,664 7,298,019

In the opinion of the directors, the results of the operations of the Group and of the Company for the financial year ended 31 December 2016 have not been substantially affected by any item, transaction or event of a material and unusual nature nor has any such item, transaction or event occurred in the interval between the end of that financial year and the date of this report.

DIVIDENDS

In respect of the financial year ended 31 December 2015, the Company has declared and paid the following dividends:

(i) On 7 January 2016, the Company declared a first interim single tier dividend of 3 sen per ordinary share of RM1.00 each amounting to RM2,228,795, paid on 5 February 2016; and

(ii) On 2 March 2016, the Company declared a second interim single tier dividend of 3 sen per ordinary share of RM1.00 each amounting to RM2,229,095, paid on 1 April 2016.

In respect of the financial year ended 31 December 2016, the Company has declared and paid the following dividends:

(i) On 14 June 2016, the Company declared a first interim single tier dividend of 1.5 sen per ordinary share of RM0.50 each, after completion of Share Split amounting to RM2,340,857, paid on 27 July 2016;

(ii) On 24 October 2016, the Company announced distribution of treasury shares as share dividend on the basis of one (1) treasury share for every twenty-five (25) existing ordinary shares of RM0.50 each after completion of Share Split. A total of 6,312,882 treasury shares was credited on 28 November 2016; and

(iii) On 30 November 2016, the Company declared a second interim single tier dividend of 2.0 sen per ordinary share of RM0.50 each, after completion of Share Split amounting to RM3,290,106, paid on 4 January 2017.

The Directors do not recommend any final dividend for the financial year.

RESERVES AND PROVISIONS

There were no material transfers to or from reserves or provisions during the financial year other than those disclosed in the financial statements.


Directors’ Report For The Financial Year Ended 31 December 2016 (Cont’d)

SHARE CAPITAL AND DEBENTURE

During the financial year, the Company completed the subdivision of its ordinary shares involving one (1) existing ordinary share of RM1.00 each into two (2) ordinary shares of RM0.50 each (“Share Split”). Following the Share Split, the Company increased its authorised share capital from RM100,000,000 to RM200,000,000 comprising of 400,000,000 ordinary shares of RM0.50 each.

The issued and paid-up ordinary share capital was also increased from RM77,712,664 to RM82,892,506 by way of issuance of 10,359,683 new ordinary shares of RM0.50 each pursuant to the following:

(i) 4,346,000 new ordinary shares of RM0.50 each arising from the exercise of options under Employees’ Share Options Scheme I (“ESOS I”) at an exercise price of RM0.575 per ordinary share;

(ii) 6,006,000 new ordinary shares of RM0.50 each arising from the exercise of options under Employees’ Share Options Scheme II (“ESOS II”) at an exercise price of RM0.62 per ordinary share; and

(iii) 7,683 new ordinary shares of RM0.50 each arising from the conversion of warrants at conversion price of RM0.62 per ordinary share.

The new ordinary shares issued rank pari passu with the existing ordinary shares of the Company.

Other than the foregoing, the Company did not issue any other share or debenture and did not grant any option to anyone to take up unissued shares of the Company during the financial year.

TREASURY SHARES

During the financial year, the Company has dealt with its treasury shares as follows:

(i) 1,246,400 of ordinary shares of RM0.50 each were repurchased during the financial year from the open market at an average price of RM0.78 (including transaction costs) per ordinary share;

(ii) 604,800 treasury shares of RM0.50 each were disposed off to the open market during the financial year at an average price of RM0.72 per treasury share; and

(iii) Distribution of 6,312,882 treasury shares as share dividend on the basis of one (1) treasury share for every twenty-five (25) exisiting ordinary shares of RM0.50 each.

As at 31 December 2016, the Company held a total of 1,279,718 treasury shares out of its 165,785,011 issued ordinary shares. The treasury shares are held at a carrying amount of RM999,343 and further relevant details are disclosed in Note 16 to the financial statements.

WARRANTS

During the financial year, the Company issued a total of 46,817,046 free warrants to shareholders pursuant to the bonus issue of three (3) free warrants for every ten (10) existing ordinary shares of RM0.50 each in the Company. The free warrants were granted listing and quotation on the Main Market of Bursa Malaysia Securities Berhad on 25 July 2016.

The movement of the free warrants during the financial year are as follows:

|---------------------------------------- Number of warrants ---------------------------------------|

Warrant

Balanceat

1.1.16 Issued Exercised

Balanceat

31.12.15

2016/2021 - 46,817,046 (7,683) 46,809,363

The salient terms of the warrants are disclosed in Note 39 to the financial statements.



EMPLOYEES’ SHARE OPTIONS SCHEME (“ESOS”)

At an Extraordinary General Meeting held on 4 November 2015, the Company’s shareholders approved the establishment of ESOS for eligible directors and employees of the Group. The ESOS came into effect on 4 December 2015 and will be in force for a period of five (5) years expiring on 5 November 2020.

The details of options over unissued ordinary shares granted to eligible directors and employees of the Group during the financial year are as follows:

|---------------------------------------------- Number of Share Options --------------------------------------------|

ESOSGrant date

Exercise priceRM

Balance at

1.1.16

Granted and

accepted ExercisedEffect of

Share Split LapsedBalance at31.12.16

I 4.12.15 0.575 4,330,000 - (3,836,000) 3,780,000 (128,000) 4,146,000

II 1.6.16 0.620 - 4,316,300 (3,027,000) 1,337,300 - 2,626,600

The salient features of the ESOS are disclosed in Note 38 to the financial statements.

The Company has been granted exemption by the Companies Commission of Malaysia from having to disclose the names of option holders and the number of options granted to them during the financial year pursuant to Section 169(11) of the Companies Act, 1965 except for information on employees who have been granted 20,000 share options and above (before Share Split) during the financial year.

The eligible employees who have been granted 20,000 share options and above are as follows:

Name Number of Share Options (Before Share Split)

Siah Wooi Kong 1,081,100Siah Wooi Yang 1,081,100Siah Wooi Nian 1,081,100Ooi Ki Wei 90,000Quah Chee Ming 80,000Ang Ee Tan 40,000Foo Siew Foon @ Hoo Siew Foon 40,000Loo Kok Wei 26,000Chuah Chin Kok, Phan Sew Leng and Eng Thin Thin 20,000 (each)

Details of options granted to directors are disclosed in the Directors’ Interests In Shares section of this report.

DIRECTORS

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

Dato’ Zuraidi Bin Rahim Dato’ Siah Gim Eng Datin Law Hooi Lean Ong Kim Nam Zainal Bin Pandak



DIRECTORS’ INTERESTS IN SHARES

According to the Register of Directors’ Shareholdings, the interests of directors in office at the end of the financial year in shares in the Company and its related corporations during the financial year are as follows:

|-------------------------------------- Number of ordinary shares ------------------------------------|

Balance at

1.1.16RM1.00 each

Bought/(Sold)

Effect of Share Split

ShareDividend

Balance at

31.12.16RM0.50 each

The CompanyDirect Interest:

Dato’ Siah Gim Eng 13,528,235 - 13,528,235 1,082,257 28,138,727

Datin Law Hooi Lean 11,384,613 - 11,384,613 910,768 23,679,994

Ong Kim Nam 640 - 640 51 1,331

Deemed Interest:Dato’ Siah Gim Eng 25,378,272 2,900,000 28,278,272 2,262,260 58,818,804

Datin Law Hooi Lean 27,521,894 2,900,000 30,421,894 2,433,749 63,277,537

|---------------------------------------- Number of share options --------------------------------------|

Balance at

1.1.16

Granted and

acceptedEffect of

Share Split Exercised

Balance at

31.12.16

Dato’ Zuraidi Bin Rahim - 300,000 300,000 - 600,000

Ong Kim Nam 200,000 - 200,000 - 400,000

Zainal Bin Pandak 200,000 - 200,000 - 400,000

|------------------------------ Number of warrants ------------------------------|

Balance at1.1.16 Bought Sold

Balance at

31.12.16

Direct Interest:

Dato’ Siah Gim Eng - 8,116,940 - 8,116,940

Datin Law Hooi Lean - 6,830,767 - 6,830,767

Ong Kim Nam - 384 - 384

Deemed Interest:

Dato’ Siah Gim Eng - 16,966,962 - 16,966,962

Datin Law Hooi Lean - 18,253,135 - 18,253,135

By virtue of their shareholdings in the Company, Dato’ Siah Gim Eng and Datin Law Hooi Lean are also deemed interested in the shares of all the subsidiaries of the Company, to the extent that the Company has interests.

None of the other directors in office at the end of the financial year had any interest in shares in the Company or its related corporations during the financial year.



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 a benefit included in the aggregate amount of emoluments received or due and receivable by the directors shown in the financial statements) by reason of a contract made by the Company or a related corporation with a 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, other than those related party transactions disclosed in the notes to the financial statements.

During and at the end of the financial year, no arrangements subsisted to which the Company is a party, with the objects of enabling directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate.

OTHER STATUTORY INFORMATION

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

(i) to ascertain that proper action had been taken in relation to the writing off of bad debts and the making of provision for doubtful debts and satisfied themselves that all known bad debts had been written off and that adequate provision had been made for doubtful debts, and

(ii) to ensure that any current assets which were unlikely to realise their value as shown in the accounting records in the ordinary course of business had been written down to an amount which they might be expected so to realise.

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

(i) that would render the amount written off for bad debts, or the amount of the provision for doubtful debts in the Group and in the Company inadequate to any substantial extent, and

(ii) that would render the value attributed to the current assets in the financial statements of the Group and of the Company misleading, and

(iii) that would render any amount stated in the financial statements of the Group and of the Company misleading, and

(iv) which have arisen which render adherence to the existing methods of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.

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

(i) any charge on the assets of the Group and of the Company that 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 and of the Company that has arisen since the end of the financial year.

No contingent liability or other liability of the Group and 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 substantially affect the ability of the Group and of the Company to meet their obligations as and when they fall due.

SIGNFICANT EVENTS DURING AND AFTER THE REPORTING PERIOD

Details of the significant events during and after the reporting period are disclosed in Note 40 to the financial statements.



AUDITORS

The auditors, Grant Thornton, have expressed their willingness to continue in office.

Signed in accordance with a resolution of the directors:

........................................……............. .………...................................….........Dato’ Siah Gim Eng Datin Law Hooi Lean

Penang,

Date: 6 April 2017


Directors’ Statement

In the opinion of the Directors, the financial statements set out on pages 30 to 78 are properly drawn up in accordance with 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 2016 and of their financial performance and cash flows for the financial year then ended.

In the opinion of the Directors, the supplementary information set out on page 79 has been compiled in accordance with the Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants, and presented based on the format prescribed by Bursa Malaysia Securities Berhad.

Signed in accordance with a resolution of the directors:

........................................……............. .………...................................….........Dato’ Siah Gim Eng Datin Law Hooi Lean

Date: 6 April 2017

Statutory DeclarationI, Datin Law Hooi Lean, the Director primarily responsible for the financial management of PWF Consolidated Bhd. do solemnly and sincerely declare that the financial statements set out on pages 30 to 78 and the supplementary information set out on page 79 are to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by )the abovenamed at Penang, this 6th )day of April 2017. ) .............................……...................….... Datin Law Hooi LeanBefore me,

....................................................................Commissioner for Oaths


Independent Auditors‘ Report To The Members Of PWF Consolidated Bhd. Company No. 420049-H (Incorporated In Malaysia)

Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of PWF Consolidated Bhd., which comprise the statements of financial position as at 31 December 2016 of the Group and of the Company, and the statements of 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 30 to 78.

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 2016 and of their financial performance and cash flows for the financial year then ended in accordance with Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.

Basis for Opinion

We conducted our audit in accordance with approved standards on auditing in Malaysia and International Standards on Auditing. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence and Other Ethical Responsibilites

We are independent of the Group and of the Company in accordance with the By-Laws (on Professional Ethics, Conduct and Practice) of the Malaysian Institute of Accountants (“By-Laws”) and the International Ethics Standards Board for Accounts’ Code of Ethics for Professional Accountants (“IESBA Code”), and we have fulfilled our other ethical responsibilities in accordance with the By-Laws and the IESBA Code.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the Group and of the Company for the current year. These matters were addressed in the context of our audit of the financial statements of the Group and of the Company as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key Audit Matter How our audit addressed the Key Audit Matter

Assessment of net current liabilities position

The Group has a net current liabilities position of RM14,265,663 as at 31 December 2016. The net liabilities include committed short-term borrowings that are subject to financial covenants. The covenant requires the Group to ensure its gearing ratio does not exceed 1.00 at all times and requires a subsidiary of the Group to maintain a minimum net tangible asset position of RM50.0 million or more (refer Note 37 to the financial statements).

Any breach of these covenants could result in the lenders recalling or reducing the credit facilities granted. This in turn may negatively impact on the Group’s working capital.

Predicting compliance with the covenant and liquidity position of the Group will require management to prepare profit and cash flow forecasts which are inherently judgemental.

Our audit procedures in relation to assessing the solvency of the Group for the next twelve months include:

• Obtaining and examining the consolidated profit and cash flows forecasts prepared by management.

• Conducted independent sensitivity analysis to understand the impact of changes in key assumptions to the profit and cash flows forecasts prepared by management.

• Assessed the historical reliability of management’s profit and cash flows forecasts and net debt by comparing budgeted results to actual performance over a period of 2 years, which we considered appropriate.

• Independently assess if there were breaches of repayment commitments or loan covenants during the financial year.

• Examined subsequent repayment of borrowings and trade debts due between 31 December 2016 to the date of our report.


Independent Auditors‘ Report To The Members Of PWF Consolidated Bhd. Company No. 420049-H (Incorporated In Malaysia) (Cont’d)

Key Audit Matters (Cont’d)

Key Audit Matter How our audit addressed the Key Audit Matter

Impairment assessment of goodwill (Note 7 to the financial statements)

As at 31 December 2016, the Group has goodwill amounting to RM5,240,569 which has been allocated to its livestocks farming operation as the cash-generating unit (CGU).

The Group performs an annual impairment assessment for its goodwill. This requires management to estimate the recoverable amount for the CGU and this involves significant assumptions which are inherently judgemental.

Our audit procedures in relation to assessment of impairment of the goodwill include:

• Evaluating the model used in determining the value in use of the CGU as well as assessing the discount rate used.

• Challenging the reasonableness of key assumptions based on our knowledge of the business and industry.

• Comparing actual performance per CGU to assumptions applied in prior year models, to assess historical accuracy of management’s estimates.

• Performing sensitivity analysis on the key assumptions inputed to the model and understand the impact on the overall carrying value of goodwill with the alterations to the key assumptions.

• Assessing the adequacy of disclosures in the financial statements.

Capitalisation and useful lives of property, plant and equipment (Note 4 to the financial statements)

The Group’s property, plant and equipment (“PPE”)amounted to RM274,780,013 as at 31 December 2016. There are a number of areas where management judgement impacts the carrying value of the property, plant and equipment. These include:-

- The capitalisation policy adopted;- The method employed by management in the

review of the residual value, useful life and depreciation method; and

- The timeliness of the transfer from constructions in progress to PPE.

Our audit procedures in relation to assessing the capitalisation policy and the useful lives of property, plant and equipment include:

• Walking through the processes in place for fixed asset cycle from quotation requisition to payment processing.

• Performing test of details on costs capitalised including examining source documents of assets purchased, performing asset sightings and examining land titles and motor vehicle registration cards.

• Reviewing the appropriateness of the useful lives of assets applied in the calculation of depreciation.

• Performing depreciation reasonableness testing.

Impairment of trade receivables (Note 9 to the financial statements)

The Group has significant trade receivables as at 31 December 2016 and it is subject to credit risk exposure. The determination of impairment for the past due receivables requires management’s judgement in assessing the collectability of the debts after considering their ageing and historical loss experience for receivables with similar characteristics.

Our audit procedures in relation to impairment of trade receivables included:

• Obtaining an understanding of:(i) the Group’s control over the trade receivables’ collection

process;(ii) how the Group identifies and assess the impairment of trade

receivables; and (iii) how the Group makes the accounting estimates for

impairment. • Reviewing the consistency of the application of management’s

methodology for calculating the impairment from year to year.• Considering the ageing of the trade receivables. • Reviewing collections received after the financial year end.• Reviewing the adequacy of the impairment.



Information Other than the Financial Statements and Auditors’ Report Thereon

The directors of the Company are responsible for the other information. The other information comprises the information included in the annual report, but does not include the financial statements of the Group and of the Company and our auditors report thereon.

Our opinion on the financial statements of the Group and of the Company does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements of the Group and of the Company, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements of the Group and of the Company or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. As at the date of our report, except for the Directors’ Report, the remaining other information has not been made available to us for our reading and accordingly we are unable to report in this regard.

However, if after reading the other information when available and we conclude there is a material misstatement therein, we will communicate same to the directors of the Company.

Directors’ Responsibilities for the Financial Statements

The directors of the Company are responsible for the preparation of financial statements of the Group and of the Company that give a true and fair view in accordance with Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia. The directors are also responsible for such internal control as the directors determine is necessary to enable the preparation of financial statements of the Group and of the Company that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements of the Group and of the Company, the directors are responsible for assessing the Group’s and the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or the Company or to cease operations, or have no realistic alternative but to do so.

Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements of the Group and of the Company as a whole are free from material misstatements, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with approved standards on auditing in Malaysia and International Standards on Auditing will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As part of an audit in accordance with approved standards on auditing in Malaysia and international Standards on Auditing, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatements of the financial statements of the Group and of the Company, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than those for one resulting from error, as fraud may involve collusion forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit 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 Group’s and the Company’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.



Auditors’ Responsibilities for the Audit of the Financial Statements (Cont’d)

• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s and the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the financial statements of the Group and of the Company or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Group or the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial statements of the Group and of the Company, including the disclosures, and whether the financial statements of the Group and of the Company represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial statements of the Group. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

Report on Other Legal and Regulatory Requirements

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

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

(b) We are satisfied that the accounts 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, and

(c) The auditors’ reports on the accounts of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Act.

Other Reporting Responsibilities

The supplementary information set out on page 79 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the financial statements. The directors are responsible for the preparation of the supplementary information 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 (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.



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 content of this report.

Grant Thornton John Lau Tiang HuaNo. AF: 0042 No. 1107/03/18 (J)Chartered Accountants Chartered Accountant Date: 6 April 2017

Penang


Statements Of Financial PositionAs At 31 December 2016

The notes set out on pages 36 to 78 form an integral part of these financial statements.

GROUP COMPANY

2016 2015 2016 2015

NOTE RM RM RM RM

ASSETS

Non-current assets

Property, plant and equipment 4 274,780,013 282,807,285 - -

Investment properties 5 8,745,000 6,333,397 - -

Investment in subsidiaries 6 - - 89,305,541 70,890,365

Intangible assets 7 5,240,569 5,240,569 - -

288,765,582 294,381,251 89,305,541 70,890,365

Current assets

Inventories 8 52,026,873 57,079,223 - -

Trade receivables 9 25,932,792 22,374,894 - -

Other receivables, deposits and prepayments 10 13,965,292 9,508,833 9,764 15,483

Amount due from subsidiaries 11 - - 3,907,661 13,905,308

Tax recoverable 5,162 342,767 - -

Investment securities 12 7,301,073 3,282,509 - -

Derivative financial assets 13 - 26,000 - -

Fixed deposit with a licensed bank 14 20,000 20,000 - -

Cash and bank balances 7,073,127 5,955,218 77,153 58,109

106,324,319 98,589,444 3,994,578 13,978,900

TOTAL ASSETS 395,089,901 392,970,695 93,300,119 84,869,265

EQUITY AND LIABILITIES

Equity attributable to owners of the parent

Share capital 15 82,892,506 77,712,664 82,892,506 77,712,664

Treasury shares 16 (999,343) (4,567,681) (999,343) (4,567,681)

Share premium 750,705 1,571,885 750,705 1,571,885

Revaluation reserve 17 78,081,872 82,872,161 - -

ESOS reserve 18 583,416 354,600 583,416 354,600

Retained profits 19 73,524,251 65,911,151 6,641,438 9,432,272

Total equity 234,833,407 223,854,780 89,868,722 84,503,740

Non-current liabilities

Borrowings 20 24,360,890 28,955,444 - -

Deferred tax liabilities 21 15,305,622 17,333,265 - -

39,666,512 46,288,709 - -

Current liabilities

Trade payables 22 27,803,101 42,685,046 - -

Other payables and accruals 23 9,001,232 9,857,407 138,691 361,156

Borrowings 20 77,898,392 68,792,493 - -

Dividend payable 3,290,106 - 3,290,106 -

Provision for taxation 2,597,151 1,492,260 2,600 4,369

120,589,982 122,827,206 3,431,397 365,525

Total liabilities 160,256,494 169,115,915 3,431,397 365,525

TOTAL EQUITY AND LIABILITIES 395,089,901 392,970,695 93,300,119 84,869,265


Statements Of Comprehensive Income For The Financial Year Ended 31 December 2016


GROUP COMPANY

2016 2015 2016 2015

NOTE RM RM RM RM

Revenue 24 326,444,320 290,938,775 8,264,000 7,782,000

Cost of sales (263,560,130) (248,299,414) - -

Gross profit 62,884,190 42,639,361 8,264,000 7,782,000

Other income 25 2,354,811 3,072,034 - -

Administrative expenses (36,731,587) (27,883,526) (954,205) (1,438,473)

Selling and distribution expenses (2,146,417) (2,036,719) - -

Profit from operations 26,360,997 15,791,150 7,309,795 6,343,527

Finance costs 26 (6,527,273) (6,426,455) - -

Profit before taxation 27 19,833,724 9,364,695 7,309,795 6,343,527

Taxation 28 (6,922,060) (3,358,288) (11,776) (21,281)

Profit for the year 12,911,664 6,006,407 7,298,019 6,322,246

Other comprehensive income, net of tax:

Items that will not be reclassified subsequently

to profit or loss

Realisation of revaluation surplus upon

depreciation 4,790,289 2,663,919 - -

Transfer of capital reserve to retained profits (4,790,289) (2,663,919) - -

Other comprehensive income for the year - - - -

Total comprehensive income for the year 12,911,664 6,006,407 7,298,019 6,322,246

Earnings per share attributable to owners of the parent (Sen) 29

- Basic 8.43 4.22

- Diluted 7.87 4.19



Consolidated Statement Of Changes In Equity For The Financial Year Ended 31 December 2016

|---------------------------------------------------- Attributable to owners of the parent ----------------------------------------------------|

|------------------------------------------ Non-distributable ------------------------------------------| Distributable

Share Treasury Share Revaluation ESOS Retained Total

Capital Shares Premium Reserve Reserve Profits Equity

NOTE RM RM RM RM RM RM RM

2016

Balance at beginning 77,712,664 (4,567,681) 1,571,885 82,872,161 354,600 65,911,151 223,854,780

Total comprehensive income

for the year - - - (4,790,289) - 17,701,953 12,911,664

Transactions with owners:

Issued, at premium pursuant to:

- Exercise of ESOS 15/18 5,176,000 - 3,284,550 - (2,237,880) - 6,222,670

- Conversion to warrants 39 3,842 - 922 - - 4,764

Pursuant to ESOS granted:

- Share-based compensation 18 - - - - 2,466,696 - 2,466,696

Disposal of treasury shares 16 - 226,503 208,500 - - - 435,003

Repurchase of treasury shares 16 - (973,317) - - - - (973,317)

Share dividend 16 - 4,315,152 (4,315,152) - - - -

Dividends 30 - - - - - (10,088,853) (10,088,853)

Total transaction with owners 5,179,842 3,568,338 (821,180) - 228,816 (10,088,853) (1,933,037)

Balance at end 82,892,506 (999,343) 750,705 78,081,872 583,416 73,524,251 234,833,407

2015

Balance at beginning 60,911,250 (4,567,681) 918,539 85,536,080 - 73,323,252 216,121,440


for the year - - - (2,663,919) - 8,670,326 6,006,407


Bonus issue 15 11,487,135 - (918,539) - - (10,568,596) -


- Dividend Reinvestment Plan 15 3,152,079 - 598,895 - - - 3,750,974

- Exercise of ESOS 15/18 2,162,200 - 972,990 - (648,660) - 2,486,530


- Share-based compensation 18 - - - - 1,003,260 - 1,003,260

Dividends 30 - - - - - (5,513,831) (5,513,831)

Total transaction with owners 16,801,414 - 653,346 - 354,600 (16,082,427) 1,726,933

Balance at end 77,712,664 (4,567,681) 1,571,885 82,872,161 354,600 65,911,151 223,854,780


Statement Of Changes In EquityFor The Financial Year Ended 31 December 2016


|--------------------------- Non-distributable ---------------------------| Distributable

Share Treasury Share ESOS Retained Total

Capital Shares Premium Reserve Profits Equity

NOTE RM RM RM RM RM RM

2016

Balance at beginning 77,712,664 (4,567,681) 1,571,885 354,600 9,432,272 84,503,740


for the year - - - - 7,298,019 7,298,019



- Exercise of ESOS 15/18 5,176,000 - 3,284,550 (2,237,880) - 6,222,670

- Coversion of warrants 39 3,842 - 922 - - 4,764


- Share-based compensation 18 - - - 2,466,696 - 2,466,696

Disposal of treasury shares 16 - 226,503 208,500 - - 435,003

Repurchase of treasury shares 16 - (973,317) - - - (973,317)

Share dividend 16 4,315,152 (4,315,152) - - -

Dividends 30 - - - - (10,088,853) (10,088,853)

Total transaction with owners 5,179,842 3,568,338 (821,180) 228,816 (10,088,853) (1,933,037)

Balance at end 82,892,506 (999,343) 750,705 583,416 6,641,438 89,868,722

2015

Balance at beginning 60,911,250 (4,567,681) 918,539 - 19,192,453 76,454,561


for the year - - - - 6,322,246 6,322,246


Bonus issue 15 11,487,135 - (918,539) - (10,568,596) -


- Dividend Reinvestment Plan 15 3,152,079 - 598,895 - - 3,750,974

- Exercise of ESOS 15/18 2,162,200 - 972,990 (648,660) - 2,486,530


- Share-based compensation 18 - - - 1,003,260 - 1,003,260

Dividends 30 - - - - (5,513,831) (5,513,831)

Total transaction with owners 16,801,414 - 653,346 354,600 (16,082,427) 1,726,933

Balance at end 77,712,664 (4,567,681) 1,571,885 354,600 9,432,272 84,503,740



Statements Of Cash FlowsFor The Financial Year Ended 31 December 2016

GROUP COMPANY2016 2015 2016 2015

RM RM RM RM

CASH FLOWS FROM OPERATING ACTIVITIESProfit before taxation 19,833,724 9,364,695 7,309,795 6,343,527

Adjustments for:

Dividend income (217,174) (78,019) (8,000,000) (7,500,000)

Depreciation 18,419,370 12,142,564 - -

(Gain)/Loss on fair value adjustment

- derivative financial instruments - (26,000) - -

- investment properties (1,589,004) (2,377,020) - -

- investment securities 350,457 144,020 - -

Loss/(Gain) on disposal of investment securities 329,435 (24,380) - -

Gain on disposal of property, plant and equipment (71,392) (67,143) - -

Impairment loss on receivables 1,235,076 748,268 - -

Interest expense 6,527,273 6,426,455 - -

Interest income (14,591) (33,377) - -

Loss on disposal of investment properties - 602,365 - -

Property, plant and equipment written off 16,600 - - -

Share-based compensation pursuant to ESOS granted 2,466,696 1,003,260 101,520 768,660

Unrealised loss on foreign exchange 252 2,744 - -

Operating profit/(loss) before working capital changes 47,286,722 27,828,432 (588,685) (387,813)

Decrease/(Increase) in inventories 5,052,350 (7,524,523) - -

(Increase)/Decrease in receivables (9,223,433) (6,893,040) 5,719 (15,483)

(Decrease)/Increase in payables (15,738,372) 24,920,423 (222,465) (105,495)

Cash generated from/(used in) operations 27,377,267 38,331,292 (805,431) (508,791)

Income tax paid (7,510,662) (5,348,038) (17,000) (16,912)

Income tax refunded 3,455 39,665 3,455 -

Interest paid (6,527,273) (6,426,455) - -

Interest received 14,591 205,572 - -

Net cash from/(used in) operating activities 13,357,378 26,802,036 (818,976) (525,703)

CASH FLOWS FROM INVESTING ACTIVITIES* Acquisition of property, plant and equipment (9,557,083) (25,737,722) - -

Acquisition of investment properties (21,403) - - -

Acquisition of investment securities (18,600,560) (5,252,640) - -

Dividend received 217,174 78,019 - -

Investment in subsidiaries - - (3,050,000) -

Movement in fixed deposits - 4,480,000 - -

Proceeds from disposal of property, plant and equipment 143,001 68,353 - -

Proceeds from disposal of non-current assets held for sale - 620,000 - -

Proceeds from disposal of investment properties - 1,294,500 - -

Proceeds from disposal of investment securities 13,902,104 4,558,009 - -

Net cash used in investing activities (13,916,767) (19,891,481) (3,050,000) -

Balance carried forward (559,389) 6,910,555 (3,868,976) (525,703)


Statements Of Cash FlowsFor The Financial Year Ended 31 December 2016 (Cont’d)


GROUP COMPANY

2016 2015 2016 2015

RM RM RM RM

Balance brought forward (559,389) 6,910,555 (3,868,976) (525,703)

CASH FLOWS FROM FINANCING ACTIVITIES

Dividend paid (6,798,747) (1,762,857) (6,798,747) (1,762,857)

Repayment of term loans (1,239,724) (1,211,544) - -

Net change in subsidiaries - - 4,997,647 (197,304)

Payment of finance lease (4,812,258) (3,426,178) - -

Proceeds from issuance of shares 6,227,434 2,486,530 6,227,434 2,486,530

Drawdown/(Repayment) of bankers acceptance 8,645,459 (821,000) - -

Repurchase of treasury shares (538,314) - (538,314) -

Net cash from/(used in) financing activities 1,483,850 (4,735,049) 3,888,020 526,369

NET INCREASE IN CASH AND CASH EQUIVALENTS 924,461 2,175,506 19,044 666

CASH AND CASH EQUIVALENTS AT BEGINNING (6,603,646) (8,779,152) 58,109 57,443

CASH AND CASH EQUIVALENTS AT END (5,679,185) (6,603,646) 77,153 58,109

Represented by:

Cash and bank balances 7,073,127 5,955,218 77,153 58,109

Bank overdrafts (12,752,312) (12,558,864) - -

(5,679,185) (6,603,646) 77,153 58,109

* Acquisition of property, plant and equipment

Total cost 11,281,503 33,208,468 - -

Acquired under finance lease (1,724,420) (7,470,746) - -

Total cash consideration 9,557,083 25,737,722 - -


Notes To The Financial Statements31 December 2016

1. GENERAL 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 activities of the Company consist of investment holding and the provision of management services whilst the subsidiaries are engaged in broiler and layer farming, breeding of day-old-chicks, manufacturing and selling of feeds and investment holdings. There have been no significant changes in the nature of these activities during the financial year.

The registered office of the Company is located at Suite 12-A Level 12, Menara Northam, No. 55 Jalan Sultan Ahmad Shah, 10050, Penang.

The principal place of business of the Company is located at Plot 127, Jalan Perindustrian Bukit Minyak 7, Taman Perindustrian Bukit Minyak, 14100 Bukit Mertajam, Penang.

The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the directors on 6 of April 2017.

2. BASIS OF PREPARATION

2.1 Statement of Compliance

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

2.2 Basis of Measurement

The financial statements of the Group and of the Company are prepared under the historical cost convention unless otherwise indicated in the summary of accounting policies under Note 3.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

Fair value is 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 fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability, or in the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible to by the Group and the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their best economic interest.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Group and the Company use valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to their fair value measurement as a whole:

- Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities.

- Level 2 - Valuation techniques for which the lowest level input that is significant to their fair value measurement is directly or indirectly observable.

- Level 3 - Valuation techniques for which the lowest level input that is significant to their fair value measurement is unobservable.

2.3 Functional and Presentation Currency

The financial statements are presented in Ringgit Malaysia (“RM”) which is also the Company’s functional currency.


Notes To The Financial Statements31 December 2016 (Cont’d)

2. BASIS OF PREPARATION (cont’d)

2.4 Adoption of Amendments/Improvements to FRS

The accounting policies adopted by the Group and by the Company are consistent with those of the previous financial years except for the adoption of the following standards that are mandatory for the current financial year:

Effective for annual periods beginning on or after 1 January 2016 FRS 14 Regulatory Deferral Accounts Amendments to FRS 10, FRS 12 and FRS 128 Investment Entities: Applying the Consolidation Exception Amendments to FRS 11 Accounting for Acquisitions of Interests in Joint Operations Amendments to FRS 101 Disclosure Initiative Amendments to FRS 116 and FRS 138 Clarification of Acceptable Methods of Depreciation and Amortisation Amendments to FRS 116 and FRS 141 Agriculture: Bearer Plants Amendments to FRS 127 Equity Method in Separate Financial Statements Amendments to FRS Annual Improvements to FRS 2012-2014 Cycle

Initial application of the above standards did not have any material impact to the financial statements of the Group and of thhe Company.

2.5 Standards Issued But Not Yet Effective

2.5.1 Malaysian Financial Reporting Standards

On 19 November 2011, the Malaysian Accounting Standards Board (“MASB”) issued a new MASB approved accounting framework, the Malaysian Financial Reporting Standards (“MFRS Framework”).

The MFRS Framework is to be applied by all Entities Other Than Private Entities for annual period beginning on or after 1 January 2012, with the exception of entities that are within the scope of MFRS 141 Agriculture and IC Interpretation 15 Agreements for Construction of Real Estate, including its parent, significant investor and venturer (“Transitioning Entities”).

Transitioning Entities will be allowed to defer adoption of the new MFRS Framework. Consequently, adoption of the MFRS Framework by Transitioning Entities will be mandatory for annual periods beginning on or after 1 January 2018.

The Company and cetain subsidiaries fall within the definition of Transitioning Entities and have opted to defer the adoption of MFRS Framework. However for subsidiaries which financial statements are prepared in accordance with MFRS were converted to FRS for the purposes of the preparation of the Group financial statements.

In presenting its first MFRS financial statements, the Group and the Company will be required to restate the comparative financial statements to amounts reflecting the application of the MFRS Framework. The majority of the adjustments required on transition will be made, retrospectively, against opening retained profits.

The Group and the Company have not completed their quantification of the financial effects of the differences between FRS and accounting standards under the MFRS Framework and are in the process of assessing the financial effects of the differences. Accordingly, the financial performance and financial position as disclosed in these financial statements for the financial year ended 31 December 2016 could be different if prepared under the MFRS Framework.

The Group and the Company expect to be in a position to fully comply with the requirements of the MFRS Framework for the financial year ending 31 December 2018.

2.5.2 FRS and Amendments to FRS Issued But Not Yet Effective

The following are accounting standards that have been issued by the Malaysian Accounting Standards Board (“MASB”) but have not been adopted by the Group and the Company:

Effective for annual periods beginning on or after 1 January 2017 Amendments to FRS 12 Disclosure of Interest in Other Entities (under Annual Improvements to FRS 2014-2016 Cycle) Amendments to FRS 107 Disclosure Initiative Amendments to FRS 112 Recognition of Deferred Tax Assets for Unrealised Losses

Effective for annual periods beginning on or after 1 January 2018 FRS 9 Financial Instruments (IFRS 9 issued by IASB in July 2014)

Effective date yet to be confirmed Amendments to FRS 10 and FRS 128 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture




2.5 Standards Issued But Not Yet Effective (cont’d)

2.5.2 FRS and Amendments to FRS Issued But Not Yet Effective (cont’d)

The new FRS and Amendments to FRS above are expected to have no significant impact on the financial statements of the Group and the Company upon its initial application except for the changes in presentation and disclosures of financial information arising from the adoption of certain FRS and Amendments to FRS above.

The Group’s and the Company’s financial statements for annual period beginning on 1 January 2018 will be prepared in accordance with the MFRS Framework issued by MASB and International Financial Reporting Standards. As a result, the Group and the Company will not be adopting FRS, Interpretations and Amendments that are effective for annual periods beginning on or after 1 January 2018.

2.6 Significant Accounting Estimates and Judgements

The preparation of financial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected.

2.6.1 Judgements made in applying accounting policies

There are no significant area of critical judgements in applying accounting policies that have significant effect on the amounts recognised in the financial statements, other than the following:

Classification of leasehold land

In applying the classification of leases in FRS 117, management considers the leases of leasehold land as finance lease arrangements. The lease transaction is not always conclusive, and management uses judgement in determining whether the lease is a finance lease arrangement that transfers substantially all the risks and rewards incidental to ownership, in accordance with FRS 117 Leases.

2.6.2 Key sources of estimation uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the end of the reporting period that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:

(i) Useful lives of depreciable assets

The depreciable costs of the farm development and plant and machinery are allocated on the straight line basis over their estimated useful lives. Management estimates the useful lives of these assets to be within 4 to 50 years. Changes in the expected level of usage and technological developments could impact the economic useful lives and residual value of these assets. Therefore future depreciation charges could be revised.

At the beginning of the financial year, the management estimates that all farm development under open house structure will need to be upgraded to closed house by the year 2019 in compliance with best practice standards expected to be impletementd by the regulatory authorities. Accordingly, the useful lives of these farm houses have been revised up to the year 2019. The revised depreciation rates for the farm development are as follows:-

New rate Old rate Farm development 2% - 25% 2% - 6.67%

The effect of change in depreciation rates of the Group is an increase of current depreciation charge by RM5,555,362 and the profit for the year is decreased by the same amount.

(ii) Impairment of property, plant and equipment

The Group performs an impairment review as and when there are impairment indicators to ensure that the carrying value of the property, plant and equipment does not exceed its recoverable amount. The recoverable amount represents the present value of the estimated future cash flows expected to arise from continuing operations. Therefore, in arriving at the recoverable amount, management exercises judgement in estimating the future cash flows, growth rate and discount rate.




2.6 Significant Accounting Estimates and Judgements (cont'd)

2.6.2 Key sources of estimation uncertainty (cont’d)

(iii) Investment properties at fair value

The Group’s investment properties are carried at fair value and changes in fair value are recognised in profit or loss. The Group engages external independent professionally qualified valuers to determine the fair value of its investment properties. For the Group’s farm development, the valuers uses a valuation technique based on the depreciated replacement cost approach as there is a lack of comparable market data because of the nature of the property.

The determined fair value of the investment properties is most sensitive to the cost of building materials and labour cost since the technique to arrive at the fair value is derived by estimating the replacement cost of the same structure and capacity based on current labour and building material prices and present construction technique. As such a significant change to the construction cost or construction technique could materially affect the resulting fair value.

(iv) Impairment of goodwill

An impairment loss is recognised for the amount by which the asset’s or cash-generating unit’s carrying amount exceeds its recoverable amount. To determine the recoverable amount, management estimates expected future cash flows from each cash-generating unit and determines a suitable interest rate in order to calculate the present value of those cash flows. In the process of measuring expected future cash flows management makes assumptions about future operating results. These assumptions relate to future events and circumstances. The actual results may vary, and may cause significant adjustments to the Group’s assets within the next financial year.

In most cases, determining the applicable discount rate involves estimating the appropriate adjustment to market risk and the appropriate adjustment to asset-specific risk factors.

Further details of the carrying value, the key assumptions applied in the impairment assessment of goodwill and sensitivity analysis to changes in the assumptions are disclosed in Note 7 to the financial statements.

(v) Inventories Inventories are measured at the lower of cost and net realisable value. In estimating the net realisable values, management

takes into account the most reliable evidence available at the times the estimates are made. The Group’s core business is subject to constant change in selling prices which are determined by supply and demand factors. The rapid changes in selling prices will have an impact in determining the net realisable value of inventories and ultimately the earnings of the Group.

(vi) Impairment of loans and receivables

The Group assesses at the end of each reporting period whether there is any objective evidence that a financial asset is impaired. 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 there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience of assets with similar credit risk characteristics.

(vii) Deferred tax assets

Deferred tax assets are recognised for unused tax losses and other deductible temporary differences to the extent that it is probable that taxable profit will be available against which the tax losses and other deductible temporary differences can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with tax planning strategies.

(viii) Employee share options

The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. Estimating fair value for share-based payment transactions requires determining the most appropriate valuation model, which is dependent on the terms and conditions of the grant. This estimate also require determining the most appropriate inputs to the valuation model including the expected life of the share options, volatility and dividend yield and making assumptions about them.

The assumptions and model used for estimating fair value for share-based payment transactions, sensitivity analysis and the carrying amounts are disclosed in Note 38 to the financial statements.



3. SIGNIFICANT ACCOUNTING POLICIES

The following accounting policies adopted by the Group and the Company are consistent with those adopted in the previous financial years unless otherwise indicated below.

3.1 Basis of Consolidation

(i) Subsidiaries

Subsidiaries are entities, including structured entities, controlled by the Company. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases.

The Group controls an entity when it is exposed, or has rights, to variable returns through its power over the entity. Potential voting rights are considered when assessing control only when such rights are substantive. The Group considers it has de facto power over an investee when, despite not having the majority of voting rights, it has the current ability to direct the activities of the investee that significantly affect the investee’s return.

Investment in subsidiaries is measured in the Company’s statement of financial position at cost less any impairment losses, unless the investment is classified as held for sale or distribution. The cost of investments includes transaction costs.

Upon disposal of investment in subsidiaries, the difference between the net disposal proceeds and their carrying amount is included in profit or loss.

(ii) Business combination

Business combinations are accounted for using the acquisition method from the acquisition date which is the date on which control is transferred to the Group.

For new acquisitions, the Group measures the cost of goodwill at the acquisition date as:

• the fair value of the consideration transferred, plus• the recognised amount of any non-controlling interest in the acquiree, plus• if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree, less• the net recognised amount at fair value of the identifiable assets acquired and liabilities assumed

When the excess is negative, a bargain purchase gain is recognised in profit or loss.

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

Transaction costs, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination are expensed as incurred.

(iii) Acquisitions of non-controlling interests

The Group treats all changes in its ownership interest in a subsidiary that do not result in a loss of control as equity transactions between the Group and its non-controlling interest holders. Any difference between the Group’s share of net assets before and after the change, and any consideration received or paid, is adjusted to or against Group reserve.

(iv) Loss of control

Upon the loss of control of a subsidiary, the Group derecognises the assets and liabilities of the subsidiary, any non-controlling interests and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently it is accounted for as an equity accounted investee or as an available-for -sale financial asset depending on the level of influence retained.

(v) Non-controlling interests Non-controlling interests at the end of the reporting period, being the equity in a subsidiary not attributable directly or indirectly

to the equity holders of the Company, are presented in the consolidated statement of financial position and statement of changes in equity within equity, separately from equity attributable to the owners of the Company. Non-controlling interests in the results of the Group is presented in the consolidated statement of comprehensive income as an allocation of the profit or loss and the comprehensive income for the year between non-controlling interests and the owners of the Company.

Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling interests even if doing so causes the non-controlling interests to have a deficit balance.



3. SIGNIFICANT ACCOUNTING POLICIES (cont’d)

3.1 Basis of Consolidation (cont’d)

(vi) Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are eliminated in preparing the consolidated financial statements.

Unrealised gains arising from transactions with associate are eliminated against the investment to the extent of the Group’s interest in the associate. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

3.2 Property, Plant and Equipment Property, plant and equipment are initially stated at cost. Subsequent costs are included in the asset’s carrying amount or recognised

as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. Subsequent to initial recognition, property, plant and equipment except land, buildings and farm development are stated at cost less accumulated depreciation and accumulated impairment losses.

Land, buildings and farm development are stated at revalued amount, which is the fair value at the date of revaluation less accumulated depreciation and accumulated impairment losses. Fair value is determined by market-based evidence appraisal and depreciated replacement cost approach that are undertaken by external independent professionally qualified valuers. Subsequent additions are shown at cost while disposals are at valuation or cost as appropriate. Revaluations are performed with sufficient regularity to ensure that the fair value of a revalued asset does not differ materially from that which would be determined using fair values at the end of each reporting period.

Surpluses arising on revaluation are credited to revaluation reserve. Surpluses are only recognised in profit or loss to the extent that it reverses a revaluation deficit of the same asset previously recognised in profit or loss. Any deficit arising from revaluation is charged against the revaluation reserve to the extent of a previous surplus held in the revaluation reserve for the same asset. In all other cases, a decrease in carrying amount is included in profit or loss.

Property, plant and equipment are depreciated on the straight line method to write off the cost of each asset to its residual value over its estimated useful life, at the following annual rates:

Leasehold land Amortised over lease period between 15 to 86 years Buildings 2% Farm development 2% - 25% Plant and machinery 7% - 10% Equipment, furniture and fittings 5% - 20% Motor vehicles 20% Freehold land is not depreciated as it has an infinite life.

Capital work-in-progress represents assets under construction, and which are not ready for commercial use at the end of the reporting period. Capital work-in-progress is stated at cost and is transferred to the relevant category of assets and depreciated accordingly when the assets are completed and ready for commercial use.

The residual value, useful life and depreciation method are reviewed at each reporting period 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.

Upon disposal of an item of property, plant and equipment, the difference between the net disposal proceeds and its carrying amount is charged or credited to the profit or loss and the attributable portion of the revaluation surplus is taken into other comprehensive income.



3.3 Leases

The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at the inception date, whether fulfilment of the arrangement is dependent on the use of a specific asset or asset or the arrangement conveys a right to use the asset, even if that right is not explicitly specific in an arrangement.

Finance lease

A finance lease which includes hire purchase arrangement, is a lease that transfers substantially all the risks and rewards incidental to ownership of an asset to the lessee. Title may or may not eventually be transferred.

Minimum lease payments made under finance leases are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability.

Finance charges are recognised in finance costs in the profit or loss. Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confirmed.

A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term.

Leasehold land which in substance is a finance lease is classified as property, plant and equipment.

Operating leases

Leases where the Group does not assume substantially all the risks and rewards of ownership are classified as operating leases and, except for property interest held under operating lease, the leased assets are not recognised on the statement of financial position. Property interest held under an operating lease, which is held to earn rental income or for capital appreciation or both, is classified as investment property.

Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognised in profit or loss as an integral part of the total lease expense, over the term of the lease. Contingent rentals are charged to profit or loss in the reporting period in which they are incurred.

Leasehold land which in substance is an operating lease is classified as prepaid land lease payments.

3.4 Investment Properties

Investment properties which comprise of freehold land, farm development and residential apartment are properties which are held either to earn rental income or for capital appreciation or for both. Such properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment properties are stated at fair value.

Fair value of the residential apartment is arrived at by reference to market evidence of transaction prices for similar properties. Fair value of the freehold land and farm development are arrived at using market-based approach and depreciated replacement cost approach respectively undertaken by external independent qualified valuers.

Gains or losses arising from changes in the fair values of investment properties are recognised in profit or loss in the year in which they arise.

Investment properties are derecognised when either they have been disposed of or when the investment property is permanently withdrawn from use and no future economic benefit is expected from its disposal. Any gains or losses on the retirement or disposal of an investment property are recognised in profit or loss in the year in which they arise.

3.5 Intangible Assets

Goodwill

Goodwill acquired in a business combination is initially measured at cost being the excess of the cost of business combination over the Group’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities.

Goodwill is stated at cost less accumulated impairment losses. Goodwill is not amortised but instead, it is reviewed for impairment, annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired.




3.6 Impairment of Non-Financial Assets

The Group and the Company assess at the end of each reporting period whether there is an indication that an asset may be impaired.

For the purpose of impairment testing, recoverable amount (i.e. the higher of the fair value less cost to sell and value-in-use) 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, the recoverable amount is determined for the cash-generating units (“CGU”) to which the asset belongs.

If the recoverable amount of the asset (or CGU) is estimated to be less than its carrying amount, the carrying amount of the asset (or CGU) is reduced to its recoverable amount.

The difference between the carrying amount and recoverable amount is recognised as an impairment loss in the profit or loss except for assets that were previously revalued where the revaluation surplus was taken to other comprehensive income. In this case the impairment loss is also recognised in other comprehensive income up to the amount of any previous revaluation surplus.

An impairment loss for an asset is reversed if, and only if, there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. The carrying amount of this asset is increased to its revised recoverable amount, provided that this amount does not exceed the carrying amount that would have been determined (net of any accumulated amortisation or depreciation) had no impairment loss been recognised for the asset in prior years. A reversal of impairment loss for an asset is recognised in profit or loss unless the asset is measured at revalued amount, in which case the reversal is treated as a revaluation increase. Impairment of goodwill is not reversed in a subsequent period.

3.7 Financial Instruments

3.7.1 Initial recognition and measurement

A financial asset or a financial liability is 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 instrument.

A financial instrument is recognised initially, at its fair value plus, in the case of a financial instrument not at fair value through profit or loss, transactions costs that are directly attributable to the acquisition or issue of the financial instrument.

An embedded derivative is recognised separately from the host contract and accounted for as a derivative if, and only if, it is not closely related to the economic characteristics and risks of the host contract and the host contract is not categorised at fair value through profit or loss. The host contract, in the event an embedded derivative is recognised separately, is accounted for in accordance with policy applicable to the nature of the host contract.

3.7.2 Financial instrument categories and subsequent measurement The Group and the Company categorise financial instruments as follows:

Financial assets

(i) Loans and receivables Loans and receivables category comprises debt instruments that are not quoted in an active market.

Financial assets categorised as loans and receivables are recognised initially at their fair value and subsequently remeasured at amortised cost using the effective interest method.

Loans and receivables are classified as current assets, except for those having maturity dates later than 12 months after the

end of the reporting period which are classified as non-current.

All financial assets are subject to review for impairment.




3.7 Financial Instruments (cont'd)

3.7.2 Financial instrument categories and subsequent measurement (cont’d)

(ii) Fair value through profit or loss Fair value through profit or loss category comprises financial assets that are held for trading, including derivatives (except

for derivatives that is a financial guarantee contract or a designated and effective hedging instrument) or financial assets that are specifically designated into this category upon initial recognition.

Derivatives that are linked to and must be settled by delivery of unquoted equity intruments whose fair values cannot be reliably measured are measured at cost.

Other financial assets categorised as fair value through profit or loss are subsequently measured at their fair values with the gains or losses recognised in profit or loss.

Financial liabilities

All financial liabilities are recognised initially at their fair value and subsequently remeasured at amortised cost. Financial liabilities are classified as current liabilities, except for those having maturity dates later than 12 months after the end

of the reporting period which are classified as non-current.

3.7.3 Regular way purchase or sale of financial assets

A regular way purchase or sale is a purchase or sale of a financial asset under a contract whose terms require delivery of the asset within the time frame established generally by regulation or convention in the market place concerned.

A regular way purchase or sale of financial assets is recognised and derecognised, as applicable, using trade date accounting. Trade date accounting refers to:

(a) the recognition of an asset to be received and the liability to pay for it on the trade date, and

(b) derecognition of an asset that is sold, recognition of any gain or loss on disposal and the recognition of a receivable from the buyer for payment on the trade date.

3.7.4 Derivative financial instruments

The Group enters into derivative financial instruments such as foreign currency forward contracts to manage its exposure to foreign currency risks.

A derivative with a positive fair value is recognised as a financial asset whereas a derivative with a negative fair value is recognised as a financial liability. A derivative is presented as a non-current asset or a non-current liability if the remaining maturity of the instrument is more than 12 months and it is not expected to be realised or settled within 12 months. Other derivatives are presented as current assets or current liabilities.

The Group has not designated any derivatives as hedging instruments.

3.7.5 Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount reported in the statement of financial position if, and only if, there is currently a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.

3.7.6 Derecognition

A financial asset or part of it is derecognised, when and only when the contractual rights to the cash flows from the financial asset expire or the financial asset is transferred to another party without retaining control or substantially all risks and rewards of the asset. On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration received (including any new asset obtained less any new liability assumed) and any cumulative gain or loss that had been recognised in equity is recognised in the profit or loss.

A financial liability or a part of it is derecognised when, and only when, the obligation specified in the contract is discharged or cancelled or expired. On derecognition of a financial liability, the difference between the carrying amount of the financial liability extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed, is recognised in profit or loss.




3.8 Impairment of Financial Assets

All financial assets (except for financial assets categorised as fair value through profit or loss) are assessed at the end of each reporting period whether there is any objective evidence of impairment as a result of one or more events having an impact on the estimated future cash flows of the asset. Losses expected as a result of future events, no matter how likely, are not recognised. For an investment in an equity instrument, a significant or prolonged decline in the fair value below its cost is an objective evidence of impairment.

An impairment loss in respect of loans and receivables and held-to-maturity investments is recognised in profit or loss and is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows discounted at the asset’s original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account.

An impairment loss in respect of available-for-sale financial assets is recognised in profit or loss and is measured as the difference between the asset’s acquisition cost (net of any principal repayment and amortisation) and the asset’s current fair value, less any impairment loss previously recognised. Where a decline in the fair value of an available-for-sale financial asset has been recognised in other comprehensive income, the cumulative loss in other comprehensive income is reclassified from equity to profit or loss.

An impairment loss in respect of unquoted equity instrument that is carried at cost is recognised in profit or loss and is measured as the difference between the financial asset’s carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset.

Impairment losses recognised in profit or loss for an investment in an equity instrument classified as available-for-sale is not reversed through profit or loss.

If, in a subsequent period, the fair value of a debt instrument increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in profit or loss, the impairment loss is reversed, to the extent that the asset’s carrying amount does not exceed what the carrying amount would have been had the impairment not been recognised at the date the impairment is reversed. The amount of the reversal is recognised in profit or loss.

3.9 Inventories

Inventories are stated at the lower of cost and net realisable value. Net realisable value is the estimated selling price less the estimated cost necessary to make the sale.

Cost of raw materials and consumables is determined on the first-in, first-out basis.

Cost of broiler consists of purchase price of day-old-chicks plus growing costs which include feeds and vaccines, direct labour, subcontract wages and attributable farming overheads. Cost is determined on the first-in, first-out basis.

Cost of parent stock and layers consists of purchase price of parent/pullet stock and attributable costs including relevant overheads in rearing the parent/pullet stock up to the point of commencement of its egg-laying life and is amortised over its estimated economic egg-laying life. Cost is determined on the first-in, first-out basis.

Cost of broiler eggs consist of cost of parent stocks, direct labor and a proportion of overhead absorbed based on hatching period of the eggs. Cost is determined based on the first-in, first-out basis.

Cost of eggs include direct production costs and appropriate production overheads. Cost of finished goods includes materials, direct labour and attributable production overheads.

Goods-in-transit is recognised when the risk and reward of ownership are transferred to the Group and is recognised at cost.

3.10 Cash and Cash Equivalents

Cash comprises cash in hand, cash at bank and demand deposits. Cash equivalents are short term and highly liquid investments that are readily convertible to known amount of cash and which are subject to an insignificant risk of changes in value against which bank overdraft balances, if any, are deducted.

3.11 Non-current Assets Held for Sale

Non-current assets are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset is available for immediate sale in its present condition subject only to terms that are usual and customary.

Immediately before classification as held for sale, the measurement of the non-current assets is brought up-to-date in accordance with applicable FRS. Then, on initial classification as held for sale, non-current assets are measured at the lower of carrying amount and fair value less costs to sell. Any differences are recognised in profit or loss.




3.12 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 the end of each reporting period 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.

3.13 Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during the period of time that is necessary to complete and prepare the asset for its intended use or sale. Capitalisation of borrowing costs commences when the activities to prepare the asset 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.

Other borrowing costs are recognised as expenses in the period in which they are incurred.

3.14 Income Recognition

Sale of goods

Revenue from sale of goods is recognised when the significant risks and rewards of ownership have been transferred to the buyer.

Dividend income

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

Interest income

Interest income is recognised on a time proportion basis using the applicable effective interest rate.

Rental income

Rental income is recognised on a time proportion basis over the lease term.

Management fees

Management fees are recognised when services are rendered.

3.15 Employee Benefits

3.15.1 Short term benefits

Wages, salaries, bonuses and social security contributions are recognised as an expense in the 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.

3.15.2 Defined contribution plans

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

3.15.3 Employees’ share options scheme

Eligible employees of the Group received remuneration in the form of share options as consideration for services rendered. The cost of these equity-settled transactions with employees is measured by reference to the fair value of the options at the date on which the options are granted. This cost is recognised in profit or loss, with a corresponding increase in the employee share options reserve over the vesting period. The cumulative expense recognised at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of options that will ultimately vest. The charge or credit to profit or loss for a period represents the movement in cumulative expense recognised at the beginning and end of the period.

No expense is recognised for options that do not ultimately vest, except for options where vesting is conditional upon market or non-vesting condition, which are tested as vested irrespective of whether or not the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied. The employee share options reserve is transferred to retained profits/accumulated losses upon expiry of the share options.

The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium when the options are exercised.




3.16 Income tax

Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognised in profit or loss except to the extent that it relates to a business combination or items recognised directly in equity or other comprehensive income.

Current tax is the expected tax payable or receivable on the taxable income or loss for the financial year, using tax rates enacted or substantively enacted by the end of the reporting period, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognised using the liability method, providing for temporary differences between the carrying amounts of assets and liabilities in the statement of financial position and their tax bases. Deferred tax is not recognised arising from the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the end of the reporting period.

Where investment properties are carried at their fair value in accordance with the accounting policy set out in Note 3.4, the amount of deferred tax recognised is measured using tax rates that would apply on sale of those assets at their carrying value at the reporting date unless the property is depreciable and is held with the objective to consume substantially all the economic benefits embodied in the property over time, rather than through sale. In all other cases, the amount of deferred tax recognised is measured based on the expected manner of realisation or settlement of the carrying amount of the assets and liabilities, using tax rates enacted or substantively enacted at the reporting date. Deferred tax assets and liabilities are not discounted.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred tax assets are reviewed at the end of each reporting period and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

Unutilised reinvestment allowance and investment tax allowance, being tax incentives that is not a tax base of an asset, is recognised as a deferred tax asset to the extent that it is probable that the future taxable profits will be available to set off against the unutilised tax incentive.

3.17 Goods and Services Tax

Goods and Services Tax (“GST”) is a consumption tax based on the value-added concept. GST is imposed on goods and services at every production and distribution stage in the supply chain including importation of goods and services, at the applicable tax rate of 6%. Input tax that a company pays on business purchases is offset against output tax.

Revenue, expenses and assets are recognised net of GST except:

- where the GST incurred in a purchase of asset or service is not recoverable from the authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and

- receivables and payables that are stated with GST inclusive.

The net GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statements of

financial position.

3.18 Foreign Currency Transactions

Transactions in foreign currencies are translated to the functional currency of the Group at exchange rates at the dates of the transactions.

Monetary assets and liabilities denominated in foreign currencies at the end of the reporting period are translated to the functional currency at the exchange rate at that date.

Non-monetary assets and liabilities measured at historical cost in a foreign currency at the end of the reporting period are translated to the functional currency at the exchange rate at the date of the transaction except for those measured at fair value shall be translated at the exchange rate at the date when the fair value was determined.

Exchange differences arising from the settlement of foreign currency transactions and from the translation of foreign currency monetary assets and liabilities are recognised in profit or loss.

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 or losses are recognised directly in other comprehensive income.




3.19 Segment Reporting

An operating segment is a component of the Group that engages in business activities from which it may earn revenue and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. An operating segment’s operating results are reviewed regularly by the chief operating decision maker, which in this case are the Executive Directors of the Group, to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

3.20 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 events not wholly within the control of the Group and of the Company.

Contingent liabilities and assets are not recognised in the statements of financial position of the Group and of the Company.

3.21 Share Capital and Share Premium

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.

Share capital represents the nominal value of shares that have been issued. Dividends on ordinary shares are accounted for in

shareholder’s equity as an appropriation of unappropriated profits and recognised as a liability in the period in which they are declared.

Share premium includes any premiums received on issue of share capital. Costs directly attributable to the issuance of instruments classified as equity are recognised as a deduction from equity.

3.22 Warrants

The issuance of the ordinary shares upon exercise of warrants is treated as new subscription of ordinary shares for the consideration equivalent to the exercise price of the warrants. Upon exercise of warrants, the proceeds are credited to share capital and share premium.

3.23 Treasury Shares

When share capital recognised as equity is repurchased, the amount of the consideration paid including directly attributable costs, net of any tax effects, is recognised as a deduction from equity. Repurchased shares that are not subsequently cancelled are classified as treasury shares in the statement of changes in equity.

When treasury shares are sold or reissued subsequently, the difference between the sales consideration net of directly attributable costs and the carrying amount of the treasury shares is recognised in equity.

3.24 Earnings Per Ordinary Share

The Group presents basic and diluted earnings per share data for its ordinary shares (“EPS”).

Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by weighted average number of ordinary shares outstanding during the period, adjusted for own shares held.

Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding, adjusted for own shares held and for the effects of all dilutive potential ordinary shares, which comprise convertible notes and share options granted to employees.

3.25 Related Parties

A related party is a person or entity that is related to the Group. A related party transaction is a transfer of resources, services or obligations between the Group and its related party, regardless of whether a price is charged.

(a) A person or a close member of that person’s family is related to the Group if that person : (i) Has control or joint control over the Group;(ii) Has significant influence over the Group; or(iii) Is a member of the key management personnel of the Group.

(b) An entity is related to the Group if any of the following conditions applies :(i) The entity and the Group are members of the same group.(ii) One entity is an associate or joint venture of the other entity.(iii) Both entities are joint ventures of the same third party.(iv) One entity is a joint venture of a third entity and the other entity is an associate of the third entity.(v) The entity is a post-employment benefit plan for the benefits of employees of either the Group or an entity related to the

Group.(vi) The entity is controlled or jointly-controlled by a person identified in (a) above.(vii) A person identified in (a)(i) above has significant influence over the Group or is a member of the key management

personnel of the Group.(viii) The entity, or any member of a group when it is a part, provides key management personnel services to the Group or to

the parent of the Group.



4. PROPERTY, PLANT AND EQUIPMENT

GROUP

2016

---------------------------------------------------------------------------------------- At Valuation/Cost ---------------------------------------------------------------------------------------

Balance atbeginning

RMAdditions

RMDisposals

RM

WrittenoffRM

Reclassifiedto investment

propertiesRM

ReclassificationRM

Balance atendRM

At valuation:Freehold land 105,094,500 - - - - - 105,094,500 Long-term leasehold land 5,160,000 - - - - - 5,160,000 Short-term leasehold land 10,677,000 - - - - - 10,677,000 Buildings 18,340,000 - - - - - 18,340,000 Farm development 67,461,000 - - - - - 67,461,000

At cost:Freehold land 9,877,526 1,604,172 - - - - 11,481,698 Long-term leasehold land - 333,814 - - - - 333,814 Short-term leasehold land 555,400 2,073,271 - - - - 2,628,671 Buildings 840,251 17,026 - - - 73,438 930,715 Farm development 20,569,107 14,130 - (16,600) - 801,973 21,368,610 Plant and machinery 34,453,225 266,201 - - - - 34,719,426 Equipment, furniture and fittings 53,141,235 211,323 (3,299) - - 4,131,407 57,480,666 Motor vehicles 21,256,599 1,299,771 (386,728) - - - 22,169,642 Capital work in progress 22,207,601 5,461,795 - - (801,196) (5,006,818) 21,861,382

369,633,444 11,281,503 (390,027) (16,600) (801,196) - 379,707,124

----------------------------------------------------------------------------- Accumulated depreciation -----------------------------------------------------------------------------------

Balance atbeginning

RM

Currentcharge

RMDisposals

RM

WrittenoffRM


propertiesRM

ReclassificationRM

Balance atendRM

At valuation:Freehold land - - - - - - - Long-term leasehold land 296,157 93,527 - - - - 389,684 Short-term leasehold land 618,375 110,866 - - - - 729,241 Buildings 920,835 106,800 - - - - 1,027,635 Farm development 15,260,499 9,553,231 - - - - 24,813,730

At cost:Freehold land - - - - - - - Long-term leasehold land - 3,548 - - - - 3,548 Short-term leasehold land - 125,618 - - - - 125,618 Buildings 25,185 217,781 - - - - 242,966 Farm development 1,511,129 2,229,373 - - - - 3,740,502 Plant and machinery 23,942,004 1,296,786 - - - - 25,238,790 Equipment, furniture and fittings 28,116,303 2,364,345 (110) - - - 30,480,538 Motor vehicles 16,135,672 2,317,495 (318,308) - - - 18,134,859

86,826,159 18,419,370 (318,418) - - - 104,927,111

Carryingamount at

endRM

At valuation:Freehold land 105,094,500 Long-term leasehold land 4,770,316 Short-term leasehold land 9,947,759 Buildings 17,312,365 Farm development 42,647,270

At cost:Freehold land 11,481,698 Long-term leasehold land 330,266 Short-term leasehold land 2,503,053 Buildings 687,749 Farm development 17,628,108 Plant and machinery 9,480,636 Equipment, furniture and fittings 27,000,128 Motor vehicles 4,034,783 Capital work in progress 21,861,382

274,780,013



4. PROPERTY, PLANT AND EQUIPMENT (cont'd)

GROUP

2015

------------------------------------------------------------------------------------ At Valuation/Cost ------------------------------------------------------------------------------------

Balance atbeginning

RMAdditions

RMDisposals

RM


propertiesRM

ReclassificationRM

Balance atendRM

At valuation:Freehold land 105,550,500 - - (456,000) - 105,094,500 Long-term leasehold land 5,160,000 - - - - 5,160,000 Short-term leasehold land 10,677,000 - - - - 10,677,000 Buildings 18,340,000 - - - - 18,340,000 Farm development 67,721,000 - - (260,000) - 67,461,000

At cost:Freehold land 4,542,309 5,335,217 - - - 9,877,526 Short-term leasehold land 555,400 - - - - 555,400 Buildings 729,078 - - - 111,173 840,251 Farm development 13,475,680 1,301,541 - - 5,791,886 20,569,107 Plant and machinery 32,074,676 128,880 (13,500) (3,111) 2,266,280 34,453,225 Equipment, furniture and fittings 49,728,325 413,515 - (27,717) 3,027,112 53,141,235 Motor vehicles 18,571,791 3,024,761 (339,953) - - 21,256,599 Capital work in progress 10,399,498 23,004,554 - - (11,196,451) 22,207,601

337,525,257 33,208,468 (353,453) (746,828) - 369,633,444

--------------------------------------------------------------------------- Accumulated depreciation -------------------------------------------------------------------------------

Balance atbeginning

RM

Currentcharge

RMDisposals

RM


propertiesRM

ReclassificationRM

Balance atendRM

At valuation:Freehold land - - - - - - Long-term leasehold land 197,438 98,719 - - - 296,157 Short-term leasehold land 412,250 206,125 - - - 618,375 Buildings 613,890 306,945 - - - 920,835 Farm development 10,287,185 5,012,333 - (39,019) - 15,260,499

At cost:Freehold land - - - - - - Short-term leasehold land - - - - - - Buildings 9,727 15,458 - - - 25,185 Farm development 644,482 866,647 - - - 1,511,129 Plant and machinery 22,675,268 1,283,129 (13,500) (2,893) - 23,942,004 Equipment, furniture and fittings 26,210,220 1,930,207 - (24,124) - 28,116,303 Motor vehicles 14,051,414 2,423,001 (338,743) - - 16,135,672

75,101,874 12,142,564 (352,243) (66,036) - 86,826,159

Carryingamount at

endRM

At valuation:Freehold land 105,094,500 Long-term leasehold land 4,863,843 Short-term leasehold land 10,058,625 Buildings 17,419,165 Farm development 52,200,501

At cost:Freehold land 9,877,526 Short-term leasehold land 555,400 Buildings 815,066 Farm development 19,057,978 Plant and machinery 10,511,221 Equipment, furniture and fittings 25,024,932 Motor vehicles 5,120,927 Capital work in progress 22,207,601

282,807,285




(i) The valuation of the freehold land, leasehold land, buildings and farm development was updated on 1 December 2012 by Azmi & Co., an independent professional valuer. The land were valued based on market-based appraisal while the building and farm development were valued based on the depreciated replacement cost approach. The updated valuation figures were approved by the directors and incorporated into the books.

The historical cost and net carrying amount of properties stated at valuation are as follows:

Long-term Short-term

Freehold leasehold leasehold Farm

land land land Buildings development Total

RM RM RM RM RM RM

GROUP

2016

Cost 45,755,661 2,077,712 4,624,404 14,401,917 76,083,415 142,943,109

Accumulated

depreciation - (318,631) (2,254,733) (3,368,004) (72,440,299) (78,381,667)

Carrying amount 45,755,661 1,759,081 2,369,671 11,033,913 3,643,116 64,561,442

2015

Cost 45,755,661 2,077,712 4,624,404 14,401,917 76,083,415 142,943,109

Accumulated

depreciation - (283,008) (2,117,086) (3,180,662) (67,066,859) (72,647,615)

Carrying amount 45,755,661 1,794,704 2,507,318 11,221,255 9,016,556 70,295,494

(ii) The carrying amount of properties charged to licensed banks as securities for banking facilities granted to certain subsidiaries are as follows:

GROUP

2016 2015

RM RM

At valuation :

Freehold land 13,363,800 13,363,800

At cost :

Freehold land 6,139,605 6,009,800

(iii) The carrying amount of property, plant and equipment being acquired under finance lease are as follows:

GROUP

2016 2015

RM RM

Farm development 1,713,491 1,827,175

Plant and machinery 2,220,767 2,386,917

Equipment, furniture and fittings 8,434,014 8,844,716

Capital work in progress 1,345,000 -

Motor vehicles 2,167,853 3,852,992

15,881,125 16,911,800




(iv) A subsidiary has entered into a sale and purchase agreement with a third party to purchase a few pieces of freehold land in 2014 for a total cash consideration of RM7,148,087. As at the end of the reporting period, the ownership of the said land is still in the process of being transferred to the said subsidiary as the vendor has not fulfilled certain conditions precedent. The amount is currently being capitalised under capital work in progress.

5. INVESTMENT PROPERTIES

Freehold Farm Residential Commercial

land development apartment lot Total

RM RM RM RM RM

GROUP

2016

At fair value

Balance at beginning 5,014,000 1,069,397 250,000 - 6,333,397

Addition - - - 21,403 21,403

Reclassified from property, plant and equipment - - - 801,196 801,196

Fair value adjustment 1,886,000 (274,397) - (22,599) 1,589,004

Balance at end 6,900,000 795,000 250,000 800,000 8,745,000

2015

At fair value

Balance at beginning 2,587,500 2,334,950 250,000 - 5,172,450

Disposal (367,500) (1,529,365) - - (1,896,865)

Reclassified from property, plant and equipment 456,000 224,792 - - 680,792

Fair value adjustment 2,338,000 39,020 - - 2,377,020

Balance at end 5,014,000 1,069,397 250,000 - 6,333,397

(i) The investment properties are held to earn rental income and for capital appreciation.

The following are the operating income and expenses in respect of the investment properties:

GROUP

2016 2015

RM RM

Rental income from investment properties 50,850 92,685

Direct operating expenses arising from investment properties that generated rental income during the year (1,521) (1,545)



5. INVESTMENT PROPERTIES (cont’d)

(ii) Fair value of investment properties for disclosure purpose are categorised as follows:

Level 1 Level 2 Level 3 TotalRM RM RM RM

2016Freehold land - 6,900,000 - 6,900,000

Farm development - - 795,000 795,000

Residential apartment - 250,000 - 250,000

Commercial lot - 800,000 - 800,000

- 7,950,000 795,000 8,745,000

2015Freehold land - 5,014,000 - 5,014,000

Farm development - - 1,069,397 1,069,397

Residential apartment - 250,000 - 250,000

- 5,264,000 1,069,397 6,333,397

It is the Group’s policy to carry out a full appraisal on its investment properties at least once every five years. The latest full appraisal was performed on 22 December 2015 by Azmi & Co., a firm of accredited independent professional valuers with recent experience in the location and category of properties being valued. In the absence of a full appraisal, the Group will engage the said valuation company to perform a desktop valuation on an annual basis to ascertain the value of the investment properties.

Level 2 fair value

Derived using the sales comparison approach. Sales price of comparable properties in close proximity are adjusted for differences in key attributes such as property size. The most significant input into this valuation approach is price per square foot of comparable properties.

Level 3 fair value

Estimated using unobservable inputs for the investment properties.

The following table shows the valuation techniques used in the determination of fair value within Level 3, as well as the significant unobservable inputs used in the valuation model.

Valuation TechniqueSignificant unobservableinputs

Inter-relationship between significant unobservable inputs and fair value measurement

The estimated fair value would increase/(decrease) if:

Replacement cost approach(i) • Construction cost per square foot (ii)

• Depreciation rate

• Expected labour cost and material prices were to increase/(decrease)

• Depreciation rate were to (decrease)/increase

(i) The replacement cost approach is a fair value technique that is derived by estimating the replacement cost to construct a similar building/farm house, based on today’s labour and material prices and using present construction technique. From this total, depreciation is then deducted using an appropriate rate to reflect the age of the building/farm house.

(ii) The construction cost per square foot varies according to the rates where the investment properties is situated.

Valuation process for Level 3 fair value

The Group’s level 3 investment properties comprise of farm development. As the fair value is determined using the replacement cost approach, significant changes to construction cost per square foot will ultimately influence the fair value of the investment property. The management will assess annually whether there are significant changes to the construction cost for farm development by reference to its own recent capital expenditure on construction of new farm houses. If construction cost fluctuated by more than 8% during the year, the directors will engage external independent professional valuers having appropriate professional qualifications and experience to carry out a valuation on its farm development carried at fair value or else a formal valuation will only be carried out once every five years.



6. INVESTMENT IN SUBSIDIARIES

COMPANY

2016 2015

RM RM

Unquoted shares, at cost

Balance at beginning 70,890,365 70,655,765

Addition* 16,050,000 -

Allocation of ESOS charge in respect of share options granted to the employees of subsidiaries 2,365,176 234,600

Balance at end 89,305,541 70,890,365

* Included herein is an amount of RM13,000,000 due from a subsidiary which was converted into additional investment in the said subsidiary.

Details of the subsidiaries which were all incorporated in Malaysia are as follows:

Name of CompanyEffective Equity

Interest Principal Activities

2016 2015Direct

PWF Farms Sdn. Bhd. 100% 100% Broiler farming, layer farming and investment holding.

PWF Feeds Sdn. Bhd. 100% 100% Manufacturing and selling of broiler feeds.

PWF Breeder Sdn. Bhd. 100% 100% Breeding of day-old chicks.

PW NutriEggs Sdn. Bhd. 100% 100% Inactive.

PWF Timberhill Sdn. Bhd. 100% Nil Wood shaving, sawn timber, wood veneer and forest plantation. However, the company has yet to commence operation during the year.

PWF Capital Land Sdn. Bhd. 100% Nil Investment holding.

Indirect - held through PWF Farms Sdn. Bhd.

PinWee Chicken Trading Sdn. Bhd. 100% 100% Inactive. PW Nutrifarm Venture Sdn. Bhd. 100% 100% Inactive.

PinWee Food Processing Sdn. Bhd. 100% 100% Inactive.

PW Nutri Processing Sdn. Bhd.* 100% 100% Inactive.

Indirect - held through PWF Feeds Sdn. Bhd.

PWF Capital Land Sdn. Bhd. Nil 100% Investment holding.

* The subsidiary is in the process of members’ voluntary winding-up pursuant to Section 254(1)(b) of the Companies Act, 1965 in Malaysia.

Acquisition of subsidiaries

(i) On 18 February 2016, the Company acquired 2 ordinary shares of RM1 each in PWF Timberhill Sdn. Bhd. (“PWF Timberhill”) representing 100% equity interest in PWF Timberhill for a cash consideration of RM2. On even date, the Company subscribed to an additional 2,999,998 ordinary shares of RM1 each in PWF Timberhill for a cash consideration of RM2,999,998.

(ii) On 17 May 2016, the Company acquired 10 ordinary shares of RM1 each in PWF Capital Land Sdn. Bhd. (“PWF Capital Land”) representing 100% equity interest in PWF Capital Land from its subsidiary for a cash consideration of RM10. On even date, the Company subscribed to an additional 49,990 ordinary shares of RM1 each in PWF Capital Land for a cash consideration of RM49,990.



7. INTANGIBLE ASSETS

GROUP

2016 2015

RM RM

Goodwill 5,240,569 5,240,569

The goodwill on consolidation arose from the acquisition of certain subsidiaries and have been allocated to its livestock farming operation as the cash-generating unit (CGU).

For annual impairment testing purposes, the recoverable amount of the CGU is determined based on its value-in-use, which applies a discounted cash flow model using cash flow projections based on financial budget and projections approved by management.

No impairment loss was required for the goodwill as its recoverable amount is in excess of its carrying amount.

The key assumptions on which the management has based on for the computation of value-in-use are as follows:

(i) Cash flow projections and growth rate

The five-year cash flow projections are based on the most recent budget approved by the management and extrapolated using a steady growth rate of 2 to 4% (2015: 4 to 6%) per annum for the subsequent years. A terminal value is assigned at the end of the five (5) year cash flow projections based on assumed growth rate of 2% (2015: 2%) in perpetuity.

(ii) Discount rate

The discount rate of 7.30% (2015: 6.21%) is applied to the cash flow projections. The discount rate is estimated based on the Group’s weighted average cost of capital for the year.

The values assigned to the key assumptions represent management’s assessment of future trends in the industry. The management believes that no reasonably possible changes in any key assumptions would cause the recoverable amount of the CGU to differ materially from its carrying amount except for changes in prevailing operating environment which is not ascertainable.

8. INVENTORIES

GROUP

2016 2015

RM RM

At cost:

Raw materials 14,551,105 18,376,860

Broiler 13,116,725 15,917,911

Parent stock 6,702,903 5,848,480

Layers 8,066,389 4,756,433

Broiler eggs 2,603,630 2,066,201

Eggs 119,759 199,582

Finished goods 1,389,817 1,613,347

Consumables 2,054,290 1,866,650

Goods-in-transit * 3,422,255 6,433,759

52,026,873 57,079,223 * This comprises raw material for the production of animal feeds.

Inventories recognised as cost of sales 263,560,130 248,299,414



9. TRADE RECEIVABLES

GROUP

2016 2015

RM RM

Trade receivables 34,044,786 29,281,312

Less : Allowance for impairment

Balance at beginning (6,906,418) (7,028,489)

Current year (1,235,076) (748,268)

Doubtful debts recovered 29,500 154,852

Written off - 715,487

Balance at end (8,111,994) (6,906,418)

25,932,792 22,374,894

Trade receivables amounting to RM184,254 (2015: RM202,086) have pledged their properties to a subsidiary as security for their outstanding balance.

The trade receivables are extended credit terms of 1 to 60 days (2015: 1 to 60 days). They are recognised at their original invoice amounts

which represent their fair values on initial recognition.

10. OTHER RECEIVABLES, DEPOSITS AND PREPAYMENTS

GROUP COMPANY

2016 2015 2016 2015

RM RM RM RM

Other receivables 242,934 1,475,018 4,764 -

Less: Allowance for impairment

Balance at beginning (29,617) (31,667) - -

Written off - 2,050 - -

Balance at end (29,617) (29,617) - -

213,317 1,445,401 4,764 -

Deposits

- Refundable 1,122,057 1,105,224 - -

- Non-refundable 10,000 10,000 - -

GST refundable 7,773,568 4,315,328 - 5,246

Prepayments 4,846,350 2,632,880 5,000 10,237

13,965,292 9,508,833 9,764 15,483

Included herein are the following:

(i) an amount of RM3,395,024 (2015: RM85,000) paid to suppliers for purchase of property, plant and equipment.

(ii) an amount of RM377,799 (2015: RM166,589) paid to suppliers for purchase of raw materials.

As at the end of the reporting period, there was no indication that the other receivables and deposits are not recoverable except as specifically highlighted above.



11. AMOUNT DUE FROM SUBSIDIARIES

COMPANY The amount due from subsidiaries is non-trade related, unsecured, non-interest bearing and is repayable on demand.

12. INVESTMENT SECURITIES

GROUP

2016 2015

RM RM

Investment held for trading:

Shares quoted in Malaysia

Balance at beginning 559,300 1,090,000

Additions 14,649,224 408,091

Disposals (9,212,577) (984,492)

Fair value adjustment (548,274) 45,701

Balance at end 5,447,673 559,300

Shares quoted outside Malaysia


Additions 3,951,336 4,844,549

Disposals (5,018,962) (3,549,137)

Fair value adjustment 197,817 (189,721)

Balance at end 1,853,400 2,723,209

7,301,073 3,282,509

Market value of shares quoted:

In Malaysia 5,447,673 559,300

Outside Malaysia 1,853,400 2,723,209

Analysis by currencies:

Ringgit Malaysia 5,447,673 559,300

Hong Kong Dollar 1,853,400 2,723,209

7,301,073 3,282,509

13. DERIVATIVE FINANCIAL ASSETS

GROUP

2016 2015

RM RM

Derivatives at fair value through profit or loss

- Forward exchange contracts

Notional value of contracts - 5,868,085

Assets - 26,000

Forward exchange contracts are used to manage the foreign currency exposure arising from the Group’s purchases denominated in currencies other than the functional currency of the Group. The forward contracts have maturity period of less than one year as at the end of the reporting period. The forward exchange contracts are not designated as cash flow or fair value hedges and are entered into for periods consistent with currency transaction exposure. Such derivatives do not qualify for hedge accounting.



14. FIXED DEPOSIT WITH A LICENSED BANK

GROUP

The fixed deposit was pledged to a licensed bank for bank guarantee facilitiy granted to a subsidiary in last financial year and was discharged during the year.

The effective interest rate and maturity of the fixed deposit as at the end of the reporting period is 3.30% (2015: 3.30%) per annum and 12 months (2015: 12 months) respectively.

15. SHARE CAPITAL

Number of ordinary

shares of RM0.50/1.00 each Amount

2016 2015 2016 2015

RM RM

Authorised:

Balance at beginning 100,000,000 100,000,000 100,000,000 100,000,000

Creation during the financial year 100,000,000 - 100,000,000 -

Share Split 200,000,000 - - -

Balance at end 400,000,000 100,000,000 200,000,000 100,000,000

Issued and fully paid:

Balance at beginning 77,712,664 60,911,250 77,712,664 60,911,250

Bonus issue - 11,487,135 - 11,487,135


- Dividend Reinvestment Plan - 3,152,079 - 3,152,079

- Exercise of ESOS 6,863,000 2,162,200 5,176,000 2,162,200

- Conversion of warrants 7,683 - 3,842 -

- Share Split 81,201,664 - - -

Balance at end 165,785,011 77,712,664 82,892,506 77,712,664

2016 During the financial year, the Company completed the subdivision of its ordinary shares involving one (1) existing ordinary share of RM1.00

each into two (2) ordinary shares of RM0.50 each (“Share Split”). Following the Share Split, the Company increased its authorised share capital from RM100,000,000 to RM200,000,000 comprising 400,000,000 ordinary share of RM0.50 each.

The issued and paid-up ordinary share capital was increased from RM77,712,664 to RM82,892,506 by way of issuance of 10,359,683 new ordinary shares of RM0.50 each pursuant to the following:

(i) 4,346,000 new ordinary shares of RM0.50 each arising from the exercise of options under Employees’ Share Options Scheme I (“ESOS I”) at an exercise price of RM0.575 per ordinary share,

(ii) 6,006,000 new ordinary shares of RM0.50 each arising from the exercise of options under Employees’ Share Options Scheme II (“ESOS II”) at an exercise price of RM0.62 per ordinary share, and

(iii) 7,683 new ordinary shares of RM0.50 each arising from the conversion of warrants.



15. SHARE CAPITAL (cont’d)

2015

During the financial year, the issued and paid-up ordinary share capital was increased from RM60,911,250 to RM77,712,664 by way of issuance of 16,801,414 new ordinary shares of RM1 each pursuant to the following:

(i) Bonus issue of 11,487,135 new ordinary shares of RM1 each credited as fully paid up on the basis of 1 bonus share for every 5 existing ordinary shares held through the capitalisation of RM918,539 from share premium and RM10,568,596 from retained profits;

(ii) 3,152,079 new ordinary shares of RM1 each at an issue price of RM1.19 per share pursuant to the DRP; and

(iii) 2,162,200 new ordinary shares of RM1 each arising from the exercise of options under ESOS at an exercise price of RM1.15 per share.

Dividend Reinvestment Plan (“DRP”)

The DRP was established upon approval by the shareholders at an Extraordinary General Meeting held on 8 January 2015. The DRP provide shareholders an option to elect to reinvest their dividend into new ordinary share of RM1.00 each of the Company.

The rationale of the DRP are as follows:

(i) dividends that are reinvested are utilised to fund the continuing business growth and expansion plan, and for working capital of the Group;

(ii) improve liquidity of the Company’s shares traded on the Main Market of Bursa Malaysia Securities Berhad; and

(iii) enhance and maximise shareholders’ value via the subscription of new shares where the issue price of a new share shall be at discount and the subscription shall be free from any brokerage fee and other related transaction cost.

16. TREASURY SHARES This amount represents the acquisition cost of treasury shares.

The shareholders of the Company, by a resolution passed at the Annual General Meeting held on 27 May 2016, approved the Company’s plan and mandate to authorise the Directors of the Company to buy back its own shares up to 10% of the existing total issued and paid-up share capital.

During the financial year, the Company has dealt with its treasury shares as follows:

(i) 1,246,400 of ordinary shares of RM0.50 each were repurchased during the financial year from the open market at an average price of RM0.78 (including transaction costs) per ordinary share;

(ii) 604,800 treasury shares of RM0.50 each were disposed off in the open market during the financial year at an average price of RM0.72 per treasury share; and

(iii) Distribution of 6,312,882 treasury shares as share dividend on the basis of one (1) treasury share for every twenty-five (25) existing ordinary shares of RM0.50 each.

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 2016, the Company held a total of 1,279,718 treasury shares out of its 165,785,011 issued ordinary shares. The treasury shares are held at a carrying amount of RM999,343.

Treasury shares have no rights to voting, dividends and participation in other distribution.

17. REVALUATION RESERVE GROUP

This is in respect of revaluation surplus net of deferred tax arising from the revaluation of the Group’s freehold land, leasehold land, buildings and farm development and is non distributable.



18. ESOS RESERVE

GROUP AND COMPANY

2016 2015

RM RM

Balance at beginning 354,600 -

Share based compensation pursuant to ESOS granted 2,466,696 1,003,260

Transfer to share premium upon exercise of ESOS (2,237,880) (648,660)

Balance at end 583,416 354,600

The ESOS reserve represents the equity-settled share options granted to eligible employees of the Group. The share options reserve is made up of the cumulative value of services received from employees recorded over the vesting period commencing from the grant date of the share options and is reduced by the expiry or exercise of the share options. The salient terms and key assumptions used in deriving the fair value of the ESOS are disclosed in Note 38 to the financial statements.

19. RETAINED PROFITS COMPANY

The franking of dividends of the Company is under the single tier system and therefore there is no restriction on the Company to distribute dividends subject to the availability of retained profits.

20. BORROWINGS

GROUP2016 2015

RM RMNon-current liabilities SecuredFinance lease liabilities 4,292,715 7,478,914Term loans 20,068,175 21,476,530

24,360,890 28,955,444

Current liabilities SecuredBank overdrafts 815,759 5,090,594Finance lease liabilities 4,198,424 4,100,063Term loans 3,117,197 2,948,566

8,131,380 12,139,223UnsecuredBank overdrafts 11,936,553 7,468,270Bankers acceptance 57,830,459 49,185,000

69,767,012 56,653,270

77,898,392 68,792,493

The secured borrowings (except for certain finance lease liabilities) of the subsidiaries are secured by way of:

(i) Legal charges over certain landed properties of certain subsidiaries, and(ii) Corporate guarantee of the Company.



20. BORROWINGS (cont’d)

A summary of the effective interest rates and the maturities of the borrowings are as follows:

Average More than More than

effective one year and two years

interest rate Within less than and less than More than

per annum Total one year two years five years five years

(%) RM RM RM RM RM

2016

Bank overdrafts 7.25 to 8.55 12,752,312 12,752,312 - - -

Bankers acceptance 3.96 to 5.48 57,830,459 57,830,459 - - -

Finance lease liabilities:

Minimum lease payments 0.51 to 4.15 9,282,442 4,639,400 2,443,070 2,199,972 -

Finance charges (791,303)

8,491,139

Term loans 5.75 to 7.72 23,185,372 3,117,197 3,532,824 10,061,889 6,473,462

2015

Bank overdrafts 7.35 to 8.60 12,558,864 12,558,864 - - -

Bankers acceptance 4.33 to 6.02 49,185,000 49,185,000 - - -

Finance lease liabilities:

Minimum lease payments 0.51 to 4.15 12,842,844 4,735,175 4,381,604 3,726,065 -

Finance charges (1,263,867)

11,578,977

Term loans 5.85 to 7.35 24,425,096 2,948,566 3,148,826 10,621,614 7,706,090



21. DEFERRED TAX LIABILITIES

GROUP

2016 2015

RM RM

Deferred tax liabilities:

Revaluation surplus


Recognised in profit or loss (1,568,477) (724,363)

Balance at end 10,845,046 12,413,521

Others


Recognised in profit or loss (1,468,847) (1,094,159)

3,450,897 4,918,144

Under provision in prior year 1,009,679 1,600

Balance at end 4,460,576 4,919,744

15,305,622 17,333,265

Deferred tax assets and liabilities are attributable to the following:

GROUP

2016 2015

RM RM

Assets

Unabsorbed capital allowances 1,974,749 1,094,483

Unrealised profit on inventories 481,182 621,908

Tax assets 2,455,931 1,716,391

Set-off of tax (2,455,931) (1,716,391)

Net deferred tax assets - -

Liabilities

Investment properties (294,584) (215,134)

Property, plant and equipment (6,621,923) (6,421,001)

Revaluation surplus (10,845,046) (12,413,521)

Tax liabilities (17,761,553) (19,049,656)

Set-off of tax 2,455,931 1,716,391

Net deferred tax liabilities (15,305,622) (17,333,265)



22. TRADE PAYABLES

The currency profile of trade payables are as follows:

GROUP

2016 2015

RM RM

Ringgit Malaysia 24,733,557 38,009,830

US Dollar 2,717,315 4,621,196

Renminbi 352,229 54,020

27,803,101 42,685,046

Trade payables are non-interest bearing and are normally settled on 30 to 120 days (2015: 30 to 120 days) credit terms.

23. OTHER PAYABLES AND ACCRUALS

GROUP COMPANY

2016 2015 2016 2015

RM RM RM RM

Other payables 4,803,112 6,634,495 15,265 22,656

Accruals 4,168,022 3,217,351 121,000 338,500

Deposit received 6,761 5,561 - -

GST payable 23,337 - 2,426 -

9,001,232 9,857,407 138,691 361,156

24. REVENUE

GROUP COMPANY

2016 2015 2016 2015

RM RM RM RM

Sales of goods 326,444,320 290,938,775 - -

Dividend income from subsidiaries - - 8,000,000 7,500,000

Management fee - - 264,000 282,000

326,444,320 290,938,775 8,264,000 7,782,000



25. OTHER INCOME

GROUP COMPANY

2016 2015 2016 2015

RM RM RM RM

Dividend income from shares quoted:

- In Malaysia 47,935 20,330 - -

- Outside Malaysia 169,239 57,689 - -

Doubtful debts recovered 29,500 154,852 - -

Gain on fair value adjustment

- derivative financial instruments - 26,000 - -

- investment properties 1,589,004 2,377,020 - -

Gain on disposal of property, plant and equipment 71,392 67,143 - -

Gain on disposal of investment securities - 24,380 - -

Interest income 14,591 33,377 - -

Realised gain on foreign exchange 31,453 6,905 - -

Rental income 98,216 107,682 - -

Others 303,481 196,656 - -

2,354,811 3,072,034 - -

26. FINANCE COSTS

GROUP

2016 2015

RM RM

Bank overdrafts 658,108 1,035,185

Bankers acceptance 3,498,468 3,268,735

Finance lease liabilities 759,459 632,712

Term loans 1,611,238 1,489,823

6,527,273 6,426,455

27. PROFIT BEFORE TAXATION

This is arrived at:

GROUP COMPANY

2016 2015 2016 2015

RM RM RM RM

After charging:

Audit fee

- statutory audit 154,000 145,000 33,000 28,000

- other services 34,400 9,000 6,180 9,000

Depreciation 18,419,370 12,142,564 -

Directors’ fee of non-executive directors 151,200 108,000 151,200 108,000



27. PROFIT BEFORE TAXATION (cont'd)

GROUP COMPANY

2016 2015 2016 2015

RM RM RM RM

Directors’ emoluments of non-executive directors

- current year 27,400 29,500 27,400 29,500

- under provision in prior year - 8,000 - 8,000

Loss on fair value adjustment on investment securities 350,457 144,020 - -

Impairment loss on receivables 1,235,076 748,268 - -

Interest expense 6,527,273 6,426,455 - -

Loss on disposal of

- investment properties - 602,365 - -

- investment securities 329,435 - - -

Loss on foreign exchange

- realised - 115,695 - -

- unrealised 252 2,744 - -

Property, plant and equipment written off 16,600 - - -

Rental of hostel 17,120 9,760 - -

Rental of land and building - 275 - -

Rental of office 2,750 9,760 - -

Share-based compensation pursuant to ESOS granted 2,466,696 1,003,260 101,520 768,660

* Staff costs 21,657,936 18,936,888 106,600 85,000

And crediting:

Dividend income from

- shares quoted outside Malaysia 169,239 57,689 - -

- shares quoted in Malaysia 47,935 20,330 - -

- unquoted subsidiaries - - 8,000,000 7,500,000

Gain on fair value adjustment on

- derivative financial instruments - 26,000 - -

- investment properties 1,589,004 2,377,020 - -

Gain on disposal of

- investment securities - 24,380 - -

- property, plant and equipment 71,392 67,143 - -

Interest income 14,591 33,377 - -

Realised gain on foreign exchange 31,453 6,905 - -

Reversal of impairment loss on receivables 29,500 154,852 - -

Rental income 98,216 107,682 - -

* Staff costs

- Salaries, allowances and bonus 19,748,330 17,347,005 106,600 85,000

- EPF 1,752,760 1,523,490 - -

- SOCSO 156,846 66,393 - -

21,657,936 18,936,888 106,600 85,000



27. PROFIT BEFORE TAXATION (cont'd)

Included in the staff costs of the Group and of the Company are the aggregate amount of remuneration received and receivable by directors of the Company and its subsidiaries as shown below:

GROUP COMPANY2016 2015 2016 2015

RM RM RM RM

Directors’ emoluments Executive directors of the Company- Salaries, allowances and bonus 2,459,000 2,459,000 7,000 7,000- EPF 316,800 316,800 - -

Directors’ fee Executive directors of the Company 99,600 78,000 99,600 78,000

2,875,400 2,853,800 106,600 85,000

Benefits-in-kindExecutive directors of the Company 45,400 45,400 - -

28. TAXATION

GROUP COMPANY

2016 2015 2016 2015

RM RM RM RM

Malaysian income tax:

Based on results for the financial year

- Current tax (8,609,602) (5,150,581) (15,600) (16,000)

- Deferred tax relating to origination and reversal of temporary differences 3,037,324 1,818,522 - -

(5,572,278) (3,332,059) (15,600) (16,000)

Real property gains tax (92,427) - - -

Under provision in prior years

- Current tax (247,676) (24,629) 3,824 (5,281)

- Deferred tax (1,009,679) (1,600) - -

(1,257,355) (26,229) 3,824 (5,281)

(6,922,060) (3,358,288) (11,776) (21,281)



28. TAXATION (cont'd) The reconciliation of income tax expense of the Group and of the Company is as follows:

GROUP COMPANY

2016 2015 2016 2015

RM RM RM RM

Profit before taxation 19,833,724 9,364,695 7,309,795 6,343,527

Income tax at Malaysian statutory tax rate of 24% (2015: 25%) (4,760,094) (2,341,174) (1,754,351) (1,585,882)

Effects of:

- Income not subject to tax 2,479,421 662,769 1,920,000 1,875,000

- Expenses not deductible for tax purposes (5,078,324) (3,638,619) (181,249) (305,118)

- Utilisation of previously unrecognised deferred tax assets - 737,483 - -

- Movement of deferred tax assets not recognised 218,242 523,119 - -

- Annual crystallisation of deferred tax on revaluation 1,568,477 724,363 - -

(5,572,278) (3,332,059) (15,600) (16,000)

Real property gains tax (92,427) - - -

Under provision in prior years (1,257,355) (26,229) 3,824 (5,281)

(6,922,060) (3,358,288) (11,776) (21,281)

The deferred tax assets not recognised as at the end of the reporting period prior to set off are in respect of the following:

GROUP COMPANY

2016 2015 2016 2015

RM RM RM RM

Unabsorbed tax losses (1,707,758) (1,926,000) - -

Unabsorbed capital allowances (2,139,000) (2,139,000) - -

(3,846,758) (4,065,000) - -

The potential deferred tax assets are not recognised in the financial statements as it is anticipated that the tax effects of such deferral will not reverse in the foreseeable future.

The unabsorbed tax losses and capital allowances available to be carried forward for set-off against future assessable income of an amount sufficient for the tax losses and capital allowances to be utilised are estimated at RM7,115,513 (2015: RM8,015,500) and RM8,912,500 (2015: RM8,912,500) respectively.



29. EARNINGS PER SHARE

29.1 Basic

Basic earnings per share is calculated by dividing the net profit attributable to owners of the parent for the year by the weighted average number of ordinary shares in issue during the financial year excluding treasury shares as follow:

GROUP

(Restated) #

2016 2015

Profit attributable to owners of the parent (RM) 12,911,664 6,006,407

Weighted average number of ordinary shares in issue

Issued shares at 1 January 148,474,328 137,845,810

Effects of conversion of warrants 2,435 -

Effects of shares issued pertaining to exercise of ESOS and DRP 4,621,452 4,587,414

Weighted average number of shares at 31 December 153,098,215 142,433,224

Basic earnings per share (Sen) 8.43 4.22

29.2 Diluted

The calculation of diluted earnings per share is calculated by dividing the profit attributable to owners of the parent to the weighted average number of shares outstanding after adjusting for the effects of all dilutive potential ordinary shares as follows:

GROUP

(Restated) #

2016 2015

Profit attributable to owners of the parent (RM) 12,911,664 6,006,407

Weighted average number of shares as above 153,098,215 142,433,224

Adjustment for dilutive effect of warrants 8,901,035 -

Adjustment for dilutive effect of ESOS 1,964,794 854,324

Weighted average number of shares assumed to be in issued at 31 December 163,964,044 143,287,548

Diluted earnings per share (Sen) 7.87 4.19

# The basic and diluted earnings per ordinary shares for the financial year ended 31 December 2015 have been restated to reflect the Share Split exercise as disclosed in Note 15 to the financial statements.



30. DIVIDENDS

2016 2015

RM RM

In respect of the financial year ended 31 December 2014:

- Interim single tier dividend of 8 sen per share - 5,513,831


- First interim single tier dividend of 3 sen per share 2,228,795 -

- Second interim single tier dividend of 3 sen per share 2,229,095 -


- First interim single tier dividend of 1.5 sen per share 2,340,857 -

- Second interim single tier dividend of 2 sen per share 3,290,106 -

10,088,853 5,513,831

31. SEGMENTAL INFORMATION

The Group has only one reportable segment i.e. integrated livestock farming. This business segment is involved in the manufacture and sale of animal feeds, breeding of day-old chicks, layer and broiler farming and sale of broilers and eggs. Since the Group has only one business segment, no operating segmental information is prepared.

No geographical segment information is presented as the Group’s activities and customers are all based in Malaysia. As at the end of the reporting period, the Group does not have any major customer with revenue of 10 percent or more of the Group’s total revenue.

The management determines business segments based on the reports reviewed and used by the directors for strategic decision making and resources allocation.

32. RELATED PARTY DISCLOSURES

(i) Related party transactions

GROUP COMPANY

2016 2015 2016 2015

RM RM RM RM

Dividend received from subsidiaries - - 8,000,000 7,500,000

Management fees from subsidiaries - - 264,000 282,000

(ii) Compensation of key management personnel The remuneration of directors and other members of key management during the financial year are as follows:

GROUP COMPANY

2016 2015 2016 2015

RM RM RM RM

Salaries and other short-term employee benefits 3,099,400 3,044,700 285,200 230,500

Key management personnel are those persons including directors having authority and responsibility for planning, directing and controlling the activities of the Group and of the Company, directly or indirectly.



33. CAPITAL COMMITMENT

GROUP

2016 2015

RM RM

Property, plant and equipment

- Authorised but not contracted for 61,115,963 26,353,095

- Contracted but not provided for 2,015,303 1,065,837

63,131,266 27,418,932

Analysis of capital commitment:

Freehold land 854,391 715,000

Shoplot - 39,940

Farm development 61,115,963 12,587,095

Plant and machinery - 400,000

Equipment, furniture and fittings 571,978 13,306,000

Motor vehicles 588,934 370,897

63,131,266 27,418,932

A major part of the capital commitment authorised is for the construction of farm houses which construction is expected to complete within two to three financial years from the date construction commences.

34. CATEGORIES OF FINANCIAL INSTRUMENTS

The table below provides an analysis of financial instruments categorised as loans and receivables (“L&R”), other liabilities measured at amortised cost (“FL”) and fair value through profit or loss (“FVTPL”).

Carryingamount

RM

L&RRM

FLRM

FVTPLRM

2016

GROUP

Financial assets

Trade receivables 25,932,792 25,932,792 - -

Other receivables and deposits 1,335,374 1,335,374 - -

Investment securities 7,301,073 - - 7,301,073

Fixed deposit with a licensed bank 20,000 20,000 - -

Cash and bank balances 7,073,127 7,073,127 - -

41,662,366 34,361,293 - 7,301,073


Borrowings 102,259,282 - 102,259,282 -

Trade payables 27,803,101 - 27,803,101 -

Other payable and accruals 8,977,895 - 8,977,895 -

139,040,278 - 139,040,278 -



34. CATEGORIES OF FINANCIAL INSTRUMENTS (cont'd)

Carryingamount

RM

L&RRM

FLRM

FVTPLRM

2016

COMPANY

Financial assets

Other receivables and deposits 4,764 4,764 - -

Amount due from subsidiaries 3,907,661 3,907,661 - -

Cash and bank balances 77,153 77,153 - -

3,989,578 3,989,578 - -


Other payable and accruals 136,265 - 136,265 -

2015

GROUP

Financial assets

Trade receivables 22,374,894 22,374,894 - -

Other receivables and refundable deposits 2,550,625 2,550,625 - -


Derivative financial assets 26,000 - - 26,000

Fixed deposit with a licensed bank 20,000 20,000 - -

Cash and bank balances 5,955,218 5,955,218 - -

34,209,246 30,900,737 - 3,308,509


Borrowings 97,747,937 - - 97,747,937

Trade payables 42,685,046 - - 42,685,046

Other payables and accruals 9,857,407 - - 9,857,407

150,290,390 - - 150,290,390

COMPANY

Financial assets

Amount due from subsidiaries 13,905,308 13,905,308 - -

Cash and bank balances 58,109 58,109 - -

13,963,417 13,963,417 - -


Other payables and accruals 361,156 - - 361,156



35. FINANCIAL RISK MANAGEMENT

The Group and the Company are exposed to a variety of financial risks arising from their operations and the use of financial instruments. The key financial risks include credit risk, liquidity risk, interest rate risk and foreign exchange risk. The Group operates within clearly defined guidelines that are approved by the Board and the Group’s policy is not to engage in speculative activities.

35.1 Credit risk Credit risk refers to the risk that the counterparty will default on its contractual obligations resulting in financial loss to the Group and

the Company. The Group’s exposure to credit risk arises principally from its trade receivables. The Company’s exposure to credit risk arises principally from advances to its subsidiaries and financial guarantees given.

35.1.1 Trade receivables

The Group extends credit terms to its customers that range between 1 to 60 days. In deciding whether credit shall be extended, the Group will take into consideration factors such as the relationship with the customer, its payment history and credit worthiness. If deemed necessary, the Group will request for collaterals from its customers to minimise its exposure to credit risk. New customers are subject to credit verification procedures before deciding whether credit shall be extended to them.

The Group uses ageing analysis to monitor the credit quality of its receivables. Any receivables having significant balances past due more than its stipulated credit terms are monitored individually.

The maximum exposure to credit risk arising from trade receivables is represented by the carrying amounts in the statement of financial position.

GROUP

The ageing of trade receivables and accumulated impairment loss of the Group is as follows:

IndividualGross Impairment loss Net

RM RM RM2016

Not past due 18,292,393 - 18,292,393

1 to 30 days past due 4,870,200 - 4,870,200

31 to 60 days past due 1,785,645 (76,248) 1,709,397

Past due more than 60 days 9,096,548 (8,035,746) 1,060,802

15,752,393 (8,111,994) 7,640,399

34,044,786 (8,111,994) 25,932,792

2015

Not past due 15,879,718 - 15,879,718

1 to 30 days past due 2,876,513 - 2,876,513

31 to 60 days past due 2,251,761 - 2,251,761

Past due more than 60 days 8,273,320 (6,906,418) 1,366,902

13,401,594 (6,906,418) 6,495,176

29,281,312 (6,906,418) 22,374,894



35. FINANCIAL RISK MANAGEMENT (cont'd)

35.1 Credit risk (cont'd) 35.1.1 Trade receivables (cont'd)

Trade receivables that are neither past due nor impaired are creditworthy customers with good payment record with the Group.

Total impairment loss relates to customers that have financial difficulties and have defaulted in repayment.

Certain trade receivables have exceeded the credit terms allowed. However no impairment loss is required as these customers have no recent history of default.

The Group has significant concentration of credit risks in the form of outstanding balance due from 1 (2015: 1) customer representing 35% (2015: 18%) of total receivables.

35.1.2 Intercompany advances

The Company provides advances to its subsidiaries. The Company monitors the results of the subsidiaries regularly.

The maximum exposure to credit risk is represented by their carrying amount in the statement of financial position.

As at the end of the reporting period, there was no indication that the advances to its subsidiaries are not recoverable. The Company does not specifically monitor the ageing of the advances to its subsidiaries since its terms are repayable on demand.

35.1.3 Financial guarantees

The Company provides unsecured financial guarantees to banks in respect of banking facilities granted to certain subsidiaries up to a limit of RM152,343,791 (2015: RM141,214,974). The maximum exposure to credit risk is RM99,693,782 (2015: RM89,819,136), representing the outstanding facilities utilised by the said subsidiaries as at the end of the reporting period.

The Company monitors on an ongoing basis the results of the subsidiaries and repayments made by the subsidiaries. As at the end of the reporting period, there was no indication that the subsidiaries would default on repayment.

Financial guarantees have not been recognised since the fair value on initial recognition was not material.

35.2 Liquidity risk

Liquidity risk is the risk the Group will encounter difficulty in meeting financial obligations due to shortage of funds. In managing its exposure to liquidity risk, the Group maintains a level of cash and cash equivalents and banking facilities deemed adequate by the management to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities as and when they fall due.

The table below summarises the maturity profile of the Group’s and the Company’s financial liabilities as at the end of the reporting period based on the undiscounted contractual payments:

Carryingamount

RM

Contractualcash flows

RM

Withinone year

RM

More thanone year and less

thantwo years

RM

More than two years

and less than five

yearsRM

More thanfive years

RM

2016

GROUP

Interest bearing borrowings 102,259,282 108,305,461 79,728,875 7,146,014 14,359,742 7,070,830

Trade payables 27,803,101 27,803,101 27,803,101 - - -

Other payables and accruals 8,977,895 8,977,895 8,977,895 - - -

139,040,278 145,086,457 116,509,871 7,146,014 14,359,742 7,070,830

COMPANY

Other payables and accruals 136,265 136,265 136,265 - - -

Financial guarantee - 99,693,782* 99,693,782* - - -

136,265 99,830,047 99,830,047 - - -




35.2 Liquidity risk

Carryingamount

RM

Contractualcash flows

RM

Withinone year

RM

More thanone year and less

thantwo years

RM

More than two years and less than five

yearsRM

More thanfive years

RM

2015

GROUP

Interest bearing borrowings 97,747,937 105,103,177 70,906,683 8,808,248 16,837,127 8,551,119

Trade payables 42,685,046 42,685,046 42,685,046 - - -

Other payables and accruals 9,857,407 9,857,407 9,857,407 - - -

150,290,390 157,645,630 123,449,136 8,808,248 16,837,127 8,551,119

COMPANY

Other payables and accruals 361,156 361,156 361,156 - - -

Financial guarantee - 89,819,136* 89,819,136* - - -

361,156 90,180,292 90,180,292 - - -

* This has been included for illustration purpose only as the related financial guarantees have not crystallised as at the end of the reporting period.

35.3 Interest rate risk

The Group’s fixed rate borrowings are exposed to a risk of change in their fair value due to changes in interest rates. The Group’s floating rate borrowings are exposed to a risk of change in cash flows due to changes in interest rates.

The interest rate profile of the Group’s interest-bearing financial instruments based on the carrying amount as at the end of the reporting period is as follows:

GROUP

2016 2015

RM RM

Fixed rate instruments

Financial assets 20,000 20,000

Financial liabilities 8,491,139 11,578,977

Floating rate instruments

Financial liabilities 93,768,143 86,168,960 Fair value sensitivity analysis for fixed rate instruments

The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss, and the Group does not designate derivatives as hedging instruments under a fair value hedge accounting model. Therefore, a change in interest rates at the end of the reporting period would not affect profit or loss.




35.3 Interest rate risk (cont'd)

Cash flow sensitivity analysis for variable rate instruments

An increase of 25 (2015: 25) basis point would have decreased profit before taxation by the amount shown below and a corresponding decrease would have an equal but opposite effect. This analysis assumes that all other variables remain constant.

GROUP

2016 2015

RM RM

Reduce in profit before taxation 271,023 (250,098)

35.4 Foreign currency risk

The objectives of the Group’s foreign exchange policy are to allow the Group to manage exposures that arise from trading activities effectively within a framework of controls that does not expose the Group to unnecessary foreign exchange risks.

The Group is exposed to foreign currency risk on its investment in quoted shares and purchases of raw materials which are denominated in currencies other than the functional currency of the Group. The currencies giving rise to this risk is primarily the Hong Kong Dollar (“HKD”) and US Dollar (“USD”). The Group mitigates its foreign currency risk arising from purchases of raw materials by entering into foreign currency forward contracts to minimise its exposure against the USD. The fair value of the foreign currency forward contract have not been recognised in the current financial year due to its immateriality as the end of the reporting period.

The Group’s exposure to foreign currency risk based on carrying amounts as at the end of the reporting period is as follows:

2016 2015

RM RM

Denominated in HKD:

- Investment securities 1,853,400 2,723,209

Denominated in USD:

- Trade payables (2,717,315) (4,621,196)

Net exposure (863,915) (1,897,987)

Sensitivity analysis for foreign currency risk

The following table demonstrates the sensitivity to a reasonably possible change in the foreign currencies exchange rates against Ringgit Malaysia, with all other variables held constant, on the Group’s profit before taxation. A 10% (2015: 10%) strengthening of the RM against the following currencies at the end of the reporting period would have the following effects to the profit before taxation by the amount shown below and a corresponding weakening would have an equal but opposite effect.

2016 2015

RM RM

HKD (185,340) (272,321)

USD 271,731 462,120

Increase in profit before taxation 86,391 189,799



36. FAIR VALUE OF FINANCIAL INSTRUMENTS

The carrying amounts of financial assets and financial liabilities of the Group and of the Company (other than those disclosed below) as at the end of the reporting period approximate their fair values, either due to their short-term nature or that they are floating rate instruments that are re-priced to market interest rates on or near the end of the reporting period. The carrying amounts of the non-current portion of finance lease liabilities are reasonable approximation of fair values due to the insignificant impact of discounting.

36.1 Fair value hierarchy

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable (refer to Note 2.2 to the financial statements for definition of Level 1 to 3 fair value hierarchy).

Level 1 Level 2 Level 3 Total

RM RM RM RM

GROUP

2016


2015


Derivative financial assets - 26,000 - 26,000

The investment securities which are quoted in an active market are carried at fair value by reference to their quoted closing bid price at the end of the reporting period. Fair value of the derivative financial assets is estimated by discounting the difference between the contractual forward price and the current forward price for the residual maturity of the current contract using a risk-free interest rate.

37. CAPITAL MANAGEMENT

The primary objective of the Group’s capital management policy is to maintain a strong capital base support its business and to maximise shareholders’ value. The Directors monitor and determine to maintain an optimal gearing ratio that complies with debt covenants and regulatory requirements.

The licensed banks in which subsidiaries of the Group obtains credit facilities has imposed debt covenants that require the Group to ensure its gearing ratio does not exceed 1.0 at all times and require one of the subsidiaries to maintain a minimum net tangible asset position of RM50,000,000 or more. As at the end of the reporting period, these debt covenants have been met by the Group and by the said subsidiaries.

As at the end of the financial period, the gearing ratio of the Group are as follows:

GROUP

2016 2015

RM RM

Total borrowings 102,259,282 97,747,937

Less : Fixed deposit with a licensed bank (20,000) (20,000)

Cash and bank balances (7,073,127) (5,955,218)

Net debt 95,166,155 91,772,719

Total equity 234,833,407 223,854,780

Gearing ratio 0.41 0.41



38. EMPLOYEES’ SHARE OPTIONS SCHEME (“ESOS”)

At an Extraordinary General Meeting held on 4 November 2015, the Company’s shareholders approved the establishment of ESOS for the eligible Directors and employees of the Group. The ESOS came into effect on 4 December 2015 and will be in force for a period of five (5) years expiring on 5 November 2020.

The salient features of the ESOS are as follows:

(a) The total number of new ordinary shares which are available to be issued under the ESOS shall not exceed fifteen percent (15%) of the total issued and fully paid-up share capital of the Company at any time throughout the duration of the ESOS.

(b) Any employee or Director of any company comprised in the Group shall be eligible to participate in the ESOS if, as at the date of offer, the employee is at least eighteen (18) years of age or above; and is employed on a continuous full-time basis and must be a confirmed employee.

(c) The option price shall be determined at a discount of not more than 10% from the weighted average market quotation of the Company’s shares as quoted on Bursa Malaysia Securities Berhad for the five (5) market days immediately preceding the date of the offer or at par, whichever is higher.

(d) The shares under options shall remain unissued until the options are exercised and shall, on allotment, rank pari passu in all respects with the existing shares of the Company at the time of allotment save that they will not entitle the holders thereof to receive any rights and bonus issues announced or to any dividend or other distribution declared to the shareholders of the Company as at a date which precedes the date of the exercise of the options.

(e) The Board of Directors has the absolute discretion, without the approval of the Company’s shareholders in the general meeting to extend the duration of the ESOS for up to further five (5) years.

During the financial year ended 31 December 2016, the respective exercise prices and number of options over ordinary shares have been adjusted in accordance with the provisions of the By-Laws as a result of the Share Split exercise undertaken by the Company.

The adjustment to the exercise prices of ESOS are as follows:

Exercise price per share option

Offer dateBefore Share

SplitAfter

Share Split

RM RM

4.12.15 1.15 0.575

1.6.16 1.24 0.620

The details of the outstanding share options for ordinary shares of RM0.50 each granted to the Group’s employees and directors and its related exercise price are as follows:

|----------------------------------------------------- Number of Share Option -----------------------------------------------------|

Exercise Balance Granted Balance

Grant price at and Share at

ESOS date RM 1.1.16 accepted Exercised Split Lapsed 31.12.16

I 4.12.15 0.575 4,330,000 - (3,836,000) 3,780,000 (128,000) 4,146,000

II 1.6.16 0.620 - 4,316,300 (3,027,000) 1,337,300 - 2,626,600



38. EMPLOYEES’ SHARE OPTIONS SCHEME (“ESOS”) (cont’d)

The fair value of the share options granted was estimated at the grant date using Trinomial Tree model, taking into account the terms and conditions upon which the instruments were granted with the following inputs:

ESOS I ESOS II

Weighted average share price (RM) 1.27 1.38

Weighted average exercise price (RM) 1.15/0.575 1.24/0.620

Expected volatility (%) 30.00 30.00

Risk-free interest rate (% p.a.) 3.66 3.62

Dividend yield (%) 6.30 3.82

Expected life of option (years) 4.92 4.43

The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may not necessarily be the actual outcome.

39. WARRANTS

On 13 April 2016, the Company completed its bonus issue of 46,817,046 free warrants on the basis of three (3) warrants for every ten (10) ordinary shares held.

The main features of the warrants are as follows:

The warrants may be exercised at any time during the tenure of the warrants of five (5) years including and commencing from 25 July 2016 and ending on 20 July 2021. Each warrant carries the entitlement to subscribe for one (1) new ordinary share of RM0.50 each in the Company at an exercise prices RM0.62 per ordinary shares and shall be satisfied fully in cash and shall be subject to adjustments in accordance with the respective Deed Polls.

Subject to the provision in the respective Deed Polls, the exercise price and the number of warrants held by each warrant holder shall be adjusted by the Board of Directors of the Company in consultation with the adviser and certification of the external auditors, in the event of alteration to the share capital of the Company.

The warrants are not entitled to any dividend, right, allotment or other distribution in the Company until and unless such warrant holders exercised their entitlement.

The movement of the warrants during the financial year are as follows:

---------------------------------------------- Number of warrants --------------------------------------------

Warrant

Balanceat

1.1.16 Issued Exercised

Balanceat

31.12.16

2016/2021 - 46,817,046 (7,683) 46,809,363

40. SIGNFICANT EVENTS DURING AND AFTER THE REPORTING PERIOD

40.1 Significant events during the reporting period

During the financial year, the Company had undertaken the following exercise:-

(i) Share split involving the subdivision of 81,201,664 ordinary shares of RM1.00 each in the Company into 162,403,328 ordinary shares of RM0.50 each. The subsivided shares of 81,201,664 ordinary shares of RM0.50 were listed and quoted on the Main Market of Bursa Malaysia Securities Berhad on 14 July 2016; and

(ii) Bonus issue involving the issuance of 46,817,046 warrants on the basis of three (3) warrants for every ten (10) ordinary shares after the subdivision. The warrants were listed and quoted on the Main Market of Bursa Malaysia Securities Berhad on 25 July 2016.

40.2 Significant event after the reporting period

The Minister of Domestic Trade, Co-operatives and Consumerism has appointed 31 January 2017 as the date on which Companies Act 2016 comes into operation except Section 241 and Division 8 of Part III.

The financial statements disclosure requirements under the Companies Act 2016 are different from those requirements set out in the Companies Act, 1965. Consequently, the items to be disclosed in the Company’s financial statements for the financial year ending 31 December 2017 may be different from those disclosed in the financial statements for current financial year.



Supplementary Information

DISCLOSURE OF REALISED AND UNREALISED PROFITS

Bursa Malaysia Securities Berhad has, on 25 March 2010 and 20 December 2010, issued directives requiring all listed corporations to disclose the breakdown of retained profits or accumulated losses into realised and unrealised on group and company basis, as the case may be, in quarterly reports and annual audited financial statements.

The breakdown of retained profits as at the end of the reporting period has been prepared by the Directors in accordance with the directives from Bursa Malaysia Securities Berhad stated above and Guidance on Special Matter No. 1 issued on 20 December 2010 by the Malaysian Institute of Accountants are as follows:

GROUP COMPANY

2016 2015 2016 2015

RM RM RM RM

Total retained profits of the Company and its subsidiaries:

- Realised 91,314,795 97,539,775 6,641,438 9,432,272

- Unrealised (9,457,763) (13,050,902) - -

81,857,032 84,488,873 6,641,438 9,432,272

Less : Consolidation adjustments (8,332,781) (18,577,722) - -

Total retained profits as per statements of financial position 73,524,251 65,911,151 6,641,438 9,432,272


Shareholdings & Warrant Holdings Statisticsas at 5 April 2017

Issued and fully paid-up Share Capital : 167,024,551 ordinary shares (including 4,135,018 treasury shares)

Class of Shares : Ordinary shares

Voting Rights : One vote per share

LIST OF SUBSTANTIAL SHAREHOLDERS OF THE COMPANY

Name Direct % Deemed %

Dato’ Siah Gim Eng 28,138,727 17.27 58,818,804 (i) 36.11

Datin Law Hooi Lean 23,679,994 14.54 63,277,537 (ii) 38.85

SL Gold Sdn Bhd 30,146,810 18.51 - -

Tropical Consolidated Corporation Sdn. Bhd. 12,772,113 7.84 - -

Tropical TC Boy Sdn.Bhd. - - 12,772,113 (iii) 7.84

Dato’ Seri Tan Ah Bah @ Tan Boon Pin - - 12,772,113 (iv) 7.84

Notes: -

(i) Deemed interested by virtue of the shareholdings held by his wife, children and his major shareholdings in SL Gold Sdn Bhd

(ii) Deemed interested by virtue of the shareholdings held by her husband, children and her major shareholdings in SL Gold Sdn Bhd

(iii) Deemed interested by virtue of its major shareholdings in Tropical Consolidated Corporation Sdn Bhd (“TCC”)

(iv) Deemed interested by virtue of his major shareholdings in Tropical TC Boy Sdn. Bhd., a major shareholder in TCC and the shareholdings of

his son and siblings in TCC

DIRECTORS’ SHAREHOLDINGS IN THE COMPANY

Name Direct % Indirect %

Dato’ Zuraidi Bin Rahim - - - -



Zainal Bin Pandak - - - -

Ong Kim Nam 61,331 0.04 - -

Notes: -

(i) Deemed interested by virtue of the shareholdings held by his wife, children and his major shareholdings in SL Gold Sdn Bhd (ii) Deemed interested by virtue of the shareholdings held by her husband, children and her major shareholdings in SL Gold Sdn Bhd

DISTRIBUTION SCHEDULE OF SHAREHOLDINGS

No. of Holders Size of Holdings Total Holdings %

101 Less than 100 3,664 0.00

285 100 to 1,000 shares 75,604 0.05

807 1,001 to 10,000 shares 3,969,999 2.44

683 10,001 to 100,000 shares 19,414,223 11.92

118 100,001 to less than 5% of issued shares 44,688,399 27.43

6 5% and above of issued shares 94,737,644 58.16

2,000 TOTAL 162,889,533 100.00


Shareholdings & Warrant Holdings Statisticsas at 5 April 2017 (Cont’d)

LIST OF THIRTY (30) LARGEST SHAREHOLDERS

NameNo. of

Shares Held %

1. SL Gold Sdn. Bhd. 30,146,810 18.51

2. Siah Gim Eng 17,713,512 10.87

3. Tropical Consolidated Corporation Sdn. Bhd. 12,772,113 7.84

4. Law Hooi Lean 12,476,025 7.66

5. Law Hooi Lean 11,203,969 6.88

6. Siah Gim Eng 10,425,215 6.40

7. Perbadanan Pembangunan Pertanian Negeri Perak 3,259,081 2.00

8. Lim Pei Tiam @ Lim Ahat Kiat 1,875,012 1.15

9. Nam Heng Oil Mill Company Sdn Berhad 1,863,888 1.14

10. Ng Ah Boon 1,766,000 1.08

11. Siah Wooi Kong 1,664,000 1.02

12. Siah Wooi Yang 1,664,000 1.02

13. Siah Wooi Nian 1,664,000 1.02

14. Seah Mok Khoon 1,650,000 1.01

15. Tan Teck Peng 1,469,500 0.90

16. Lim Kian Huat 1,388,117 0.85

17. Ang Ee Tan 1,306,811 0.80

18. Maybank Nominees (Tempatan) Sdn. Bhd. Pledged Securitites Account For Lee Chong Gee

1,165,145 0.72

19. Lee Siew Hoon 937,331 0.58

20. Public Nominees (Tempatan) Sdn. Bhd. Pledged Securities Account For Koh Chow Hoong (E-BPJ)

730,200 0.45

21. Tan Moh Kim 703,640 0.43

22. Kee Pui Wun 701,066 0.43

23. Tan Jin Tuan 693,000 0.43

24. Lim Pay Kaon 624,000 0.38

25. Liow Meng Kiong 534,800 0.33

26. Ang Kiam Chai 436,800 0.27

27. B. M. Lean Huat Chan Sdn. Bhd. 425,568 0.26

28. Chew Lim Cheong @ Hong Thiam Soon 420,000 0.26

29. Alliancegroup Nominees (Tempatan) Sdn. Bhd. Pledged Securities Account For Goh Juai Hian (100378)

399,370 0.25

30. Low Teong Keong 374,400 0.23



LIST OF SUBSTANTIAL WARRANT HOLDERS OF THE COMPANY

Name Direct % Deemed %



SL Gold Sdn Bhd 8,696,195 18.58 - -

Tropical Consolidated Corporation Sdn. Bhd. 3,684,263 7.87 - -

Tropical TC Boy Sdn.Bhd. - - 3,684,263 (iii) 7.87

Dato’ Seri Tan Ah Bah @ Tan Boon Pin - - 3,684,263 (iv) 7.87

Notes: -

(i) Deemed interested by virtue of the warrant holdings held by his wife, children and his major shareholdings in SL Gold Sdn Bhd

(ii) Deemed interested by virtue of the warrant holdings held by her husband, children and her major shareholdings in SL Gold Sdn Bhd

(iii) Deemed interested by virtue of its major shareholdings in Tropical Consolidated Corporation Sdn Bhd (“TCC”)

(iv) Deemed interested by virtue of his major shareholdings in Tropical TC Boy Sdn. Bhd., a major shareholder in TCC and the shareholdings of

his son and siblings in TCC

DIRECTORS’ WARRANT HOLDINGS IN THE COMPANY

Name Direct % Indirect %

Dato’ Zuraidi Bin Rahim - - - -



Zainal Bin Pandak - - - -

Ong Kim Nam 384 0.00 - -

Notes: -

(i) Deemed interested by virtue of the shareholdings held by his wife, children and his major shareholdings in SL Gold Sdn Bhd (ii) Deemed interested by virtue of the shareholdings held by her husband, children and her major shareholdings in SL Gold Sdn Bhd

DISTRIBUTION SCHEDULE OF WARRANT HOLDINGS

No. of Holders Size of Holdings Total Holdings %

305 Less than 100 10,649 0.02

358 100 to 1,000 shares 265,139 0.57

576 1,001 to 10,000 shares 2,217,051 4.74

225 10,001 to 100,000 shares 7,345,425 15.69

34 100,001 to less than 5% of issued shares 9,642,394 20.60

6 5% and above of issued shares 27,328,165 58.38

1,504 TOTAL 46,808,823 100.00



LIST OF THIRTY (30) LARGEST WARRANT HOLDERS

NameNo. of

Warrants Held %

1. SL Gold Sdn. Bhd. 8,696,195 18.58

2. Siah Gim Eng 5,109,667 10.92

3. Tropical Consolidated Corporation Sdn. Bhd. 3,684,263 7.87

4. Law Hooi Lean 3,598,853 7.69

5. Law Hooi Lean 3,231,914 6.90

6. Siah Gim Eng 3,007,273 6.42

7. Perbadanan Pembangunan Pertanian Negeri Perak 940,119 2.01

8. Lim Kian Huat 825,884 1.76

9. Yap Sook Chin 600,000 1.28

10. Teh Bee Gaik 591,800 1.26

11. Siah Wooi Kong 480,000 1.03

12. Siah Wooi Yang 480,000 1.03

13. Siah Wooi Nian 480,000 1.03

14. Tan Swee Lian 447,000 0.95

15. Alliancegroup Nominees (Tempatan) Sdn. Bhd. Pledged Securities Account For Ooi Chin Hock (8058312)

412,500 0.88

16. Chong Teck Lim 377,700 0.81

17. Cimsec Nominees (Tempatan) Sdn. Bhd. Pledged Securities Account For Lee Cheong Keat & Lee Chong Keat (Penang-CL)

338,840 0.72

18. Maybank Nominees (Tempatan) Sdn. Bhd. Pledged Securities Account For Lee Chong Gee

336,099 0.72

19. Malacca Equity Nominees (Tempatan) Sdn. Bhd. Pledged Securities Account For Lee Kai Tong

333,000 0.71

20. Maybank Nominees (Tempatan) Sdn. Bhd. Pledged Securities Account For Fong Peng Meng

296,800 0.63

21. Tan Moh Kim 199,800 0.43

22. Tan Jin Tuan 186,000 0.40

23. Lim Pay Kaon 180,000 0.38

24. Ng Sai Man 172,800 0.37

25. Ooi Chin Hock 155,300 0.33

26. Cimsec Nominees (Tempatan) Sdn. Bhd. CIMB Bank For Law Cheng Phoe (MP0307)

152,000 0.32

27. Ng Sook Kin 142,000 0.30

28. Public Nominees (Tempatan) Sdn. Bhd. Pledged Securities Account For Koh Chow Hoong (E-BPJ)

139,000 0.30

29. Lim Hoi Sin 130,000 0.28

30. B. M. Lean Huat Chan Sdn. Bhd. 122,760 0.26


Notice Of Annual General Meeting

NOTICE IS HEREBY GIVEN that the 20th Annual General Meeting (“AGM”) of the Company will be held at Impiana Room, Penang Golf Resort, No. 1687, Jalan Bertam, 13200 Kepala Batas, Seberang Prai Utara, Penang on 24 May 2017 at 11.00 a.m. for the following purposes:

ORDINARY BUSINESS

1. To receive the Audited Financial Statements for the financial year ended 31 December 2016.

2. To re-elect the following Directors who retire in accordance with the Company’s Articles of Association, and being eligible have offered themselves for re-election: -

Article 95

(a) Dato’ Siah Gim Eng (Resolution 1)(b) Haji Zainal Bin Pandak (Resolution 2)

3. To approve the Directors’ Fees and benefits up to RM287,300 for the financial year ending 31 December 2017. (Resolution 3) 4. To re-appoint Messrs. Grant Thornton as Auditors of the Company to hold office until the conclusion of the next annual general meeting

and to authorise the Directors to fix their remuneration. (Resolution 4) SPECIAL BUSINESS

To consider and if thought fit, to pass the following Ordinary Resolutions: -

5. AUTHORITY TO ISSUE SHARES AND ALLOT SHARES PURSUANT TO SECTION 75 AND 76 OF THE COMPANIES ACT 2016 (“the Act”)

“THAT, subject always to the Act, the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”), the Company’s Articles of Association and approvals of any relevant governmental and/or regulatory authorities, where such approval is required, the Directors be and are hereby empowered pursuant to Section 75 and 76 of the Act, to issue and allot shares in the capital of the Company, at any time upon such terms and conditions and for such purposes and to such person(s) whomsoever as the Directors may in their absolute discretion deem fit and expedient in the interest of the Company, provided that the aggregate number of the shares issued pursuant to this resolution does not exceed ten (10) per centum of the total issued share capital of the Company for the time being and THAT the Directors be and are also empowered to obtain the approval from Bursa Securities for the listing of and quotation for the additional shares so issued and THAT such authority shall continue in force until the conclusion of the next AGM of the Company.” (Resolution 5)

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

“THAT, subject always to the provisions of the Act, rules, regulations and orders made pursuant to the Act, provisions of the Company’s Memorandum and Articles of Association of the Company, Bursa Securities’ Main Market Listing Requirements and approvals of any relevant governmental and/or regulatory authorities, where such approval is required, the Directors be and are hereby authorised to utilise an amount not exceeding the Company’s aggregate retained profits and/or share premium account, to purchase such number of ordinary shares of the Company provided the ordinary shares so purchased shall [in aggregate with the treasury shares as defined under the Act (“Treasury Shares”) then still held by the Company] not exceed ten per centum (10%) of the total issued and paid-up share capital of the Company for the time being AND THAT such authority shall commence upon the passing of this resolution until the conclusion of the next AGM of the Company unless earlier revoked or varied by an ordinary resolution of the shareholders of the Company in general meeting AND THAT the Directors may cancel the ordinary shares so purchased or to retain same as Treasury Shares and may distribute the Treasury Shares as share dividend or may resell same in a manner they deem fit and expedient as prescribed by the Act and the applicable regulations and guidelines of Bursa Securities and any other relevant authorities for the time being in force AND THAT authority be and is hereby given to the Directors to take such steps as are necessary or expedient to implement, finalise and to give effect to the aforesaid transactions with full power to assent to any conditions, modifications, variations and/or amendments as may be required or imposed by the relevant authorities and to do all such acts and things and upon such terms and conditions as the Directors may in their discretion deem fit and expedient in the best interest of the Company in accordance with the Act, regulations and guidelines.” (Resolution 6)

7. CONTINUING IN OFFICE AS INDEPENDENT NON-EXECUTIVE DIRECTORS

“THAT to retain Mr. Ong Kim Nam, who has served for more than nine (9) years as Independent Non-Executive Director of the Company, pursuant to Recommendation 3.3 of the Malaysian Code on Corporate Governance 2012. (Resolution 7)


Notice Of Annual General Meeting (Cont’d)

8. PROPOSED RENEWAL OF THE DIVIDEND REINVESTMENT PLAN

“THAT pursuant to the Dividend Reinvestment Plan (“DRP”) as approved by the shareholders of the Company at the Extraordinary General Meeting held on 8 January 2015 and renewed in subsequent annual general meetings, approval be and is hereby given to the Company to allot and issue such number of new ordinary shares in the Company (“PWF Shares”) for the DRP from time to time as may be required to be allotted and issued pursuant to the DRP until the conclusion of the next AGM, upon such terms and conditions and to such persons as the Directors may, in their absolute discretion, deem fit and in the best interest of the Company PROVIDED THAT the issue price of the said new PWF Shares shall be fixed by the Directors at a discount of not more than ten percent (10%) to the five (5) market day volume weighted average market price (“VWAP”) of PWF Shares immediately prior to the price-fixing date, of which the VWAP shall be adjusted ex-dividend before applying the aforementioned discount in fixing the issue price.

AND THAT the Directors of the Company be and are hereby authorized to do all such acts and enter into all such transactions, arrangements, deeds, undertakings and documents as may be necessary or expedient in order to give full effect to the DRP with full power to assent to any conditions, modifications, variations and/or amendments to the terms of the DRP as may be imposed or agreed to by any relevant authorities or consequent upon the implementation of the said conditions, modifications, variations and/or amendments by the Directors as they may in their absolute discretion deem fit, necessary and/or expedient in the best interest of the Company.” (Resolution 8)

9. To transact any other ordinary business for which due notice has been given.

NOTICE IS HEREBY GIVEN that for purpose of determining a member who shall be entitled to attend this 20th AGM, the Company shall be requesting Bursa Malaysia Depository Sdn Bhd, in accordance with the Article 62(3) of the Company’s Articles of Association and Section 34(1) of the Securities Industry (Central Depositories) Act 1991, to issue a General Meeting Record of Depositors as at 17 May 2017. Only a depositor whose name appears on the Record of Depositors as at 17 May 2017 shall be entitled to the said meeting or appoint proxies to attend and/or vote on his/her behalf.

By Order of the Board

Ch’ng Lay Hoon (MAICSA No.: 0818580)Company Secretary

Penang

Date: 28 April 2017

NOTES:

1. Only a depositor whose name appear s in the Record of Depositors of the Company as at 17 May 2017 shall be regarded as a member entitled to attend, speak and vote, and appoint a proxy to attend, speak and vote on his/her behalf, at the 20th AGM.

2. A member entitled to attend, speak and vote at this meeting is entitled to appoint a proxy to attend and vote in his/her stead. Where a member of the Company is an exempt authorized nominee which holds ordinary shares in the Company for multiple beneficial owners in one (1) securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorized nominee may appoint in respect of each omnibus account it holds. A proxy may not be a member of the Company.

3. Where a member appoints more than one (1) proxy to attend the meeting, the appointment shall be invalid unless he/she specifies the proportions of his holdings to be represented by each proxy.

4. The instrument appointing a proxy shall be in writing under the hand of the appointor or his/her attorney duly authorised in writing, or if the appointor is a corporation, either under its common seal or under the hand of its officer or attorney of the corporation.

5. The Form of Proxy must be deposited at the Company’s registered office at Suite 12A, Level 12, Menara Northam, No. 55, Jalan Sultan Ahmad Shah, 10050 Penang, not less than forty-eight (48) hours before the time stipulated for holding the meeting or adjournment thereof.


Notice Of Annual General Meeting (Cont’d)

Explanatory Notes

1) To receive the audited financial statements together with the reports of the Directors and Auditors thereon for the financial year ended 31 December 2016

This agenda item is meant for discussion only as under the provision of Section 340(1) of the Act, the audited financial statements do not require a formal approval of the members and hence, this item will not be put forward for voting.

2) Authority to Issue Shares (Resolution 5) The proposed resolution is in relation to authority to allot shares pursuant to Section 75 & 76 of the Act, and if passed, will give a renewed

mandate to the Directors of the Company, from the date of above AGM, authority to issue and allot shares in the Company up to and not exceeding in total ten per centum (10%) of the issued share capital of the Company for the time being, for such purposes as the Directors consider would be in the interest of the Company (“General Mandate”). This General Mandate, unless revoked or varied at a general meeting of the Company, will expire at the conclusion of the next AGM of the Company or the period within which the next AGM of the Company is required by law to be held whichever is the earlier.

As at the date of this Notice, no new shares in the Company were issued pursuant to the mandate granted to the Directors of the Company at the 19th AGM held on 27 May 2016 and which will lapse at the conclusion of the 20th AGM.

At this juncture, there is no decision to issue new shares. However, should the need arise to issue new shares the General Mandate would avoid any delay and costs in convening a general meeting of the Company to specifically approve such issue of share. If there should be a decision to issue new shares after the General Mandate is obtained, the Company would make an announcement in respect of the purpose and utilization of the proceeds arising from such issue.

3) Proposed Renewal of Share Buy-Back (Resolution 6) The proposed resolution, if passed, will provide the mandate for the Company to buy back its own shares up to a limit 10% of the total

issued and paid-up share capital of the Company. The explanatory notes on Resolution 6 are set out in Statement dated 28 April 2017 accompanying the Annual Report.

4) Continuing in office as Independent Non-Executive Director (Resolution 7) The Board of Directors via the Nominating Committee assessed the independence of Mr. Ong Kim Nam, who has served on the Board as

Independent Non-Executive Director of the Company for a cumulative of more than nine (9) years and the Board has recommended that the approval of the shareholders be sought to re-appoint Mr. Ong Kim Nam, based on the following justifications: -(a) He has met the criteria the independence guidelines set out in Chapter 1 of the Main Market Listing Requirements of Bursa Securities

and therefore able to give independent opinion to the Board;(b) Being director for more than nine (9) years have enabled him to contribute positively during deliberations/discussions at meetings as

he is familiar with the operations of the Company and possess tremendous knowledge of the Company’s operations;(c) He has the caliber, qualifications, experiences and personal qualities to challenge management in an effective and constructive

manner; and(d) He has contributed sufficient time and exercised due care during his tenure as Independent Non-Executive Director and carried out

his fiduciary duties in the interest of the Company and minority shareholders.

5) Proposed Renewal in relation to the Dividend Reinvestment Plan (Resolution 8) The proposed Resolution 8 will give authority to the Directors to allot and issue ordinary shares of the Company in respect of dividends to

be declared, if any, under the Dividend Reinvestment Plan, until the conclusion of the next AGM. A renewal of this authority will be sought at the subsequent AGM.


Statement Accompanying Notice Of Annual General MeetingPursuant to Paragraph 8.27(2) of the Listing Requirements of the Bursa Malaysia Securities Berhad

Name of Directors standing for re-election pursuant to Article 95 of the Articles of Association of the Company: -

• Dato’ Siah Gim Eng • Haji Zainal Bin Pandak

The details of the abovenamed Directors who are standing for re-election are set out in the Directors’ Profile (page 4 of the Annual Report); while their securities holdings (where applicable) are set out in the Analysis of Shareholdings – Directors’ Interests in the Company and Related Corporation (page 80 and page 82 of the Annual Report).


Additional Compliance InformationAs At 31 December 2016

The information disclosed below is in compliance with the Main Market Listing Requirements (“MMLR”) of Bursa Malaysia Securities Berhad (“Bursa Securities”).

1. Material Contracts

The Company and its subsidiaries do not have any material contracts involving Directors and major shareholders.

2. Audit and Non-Audit Services

During the financial year, the audit fees and non-audit fees paid/payable to the Company’s external auditors by the Company and by the Group incurred for services rendered are as follows: -

Type of Fees Group (RM) Company (RM)

Audit Fees 154,000 33,000

Non-Audit Fees 34,400 6,180


Property Description / Existing Use TenureDate of

Valuation Land Area

Build-up Area / Age of Building

Carrying Amount

Geran Mukim No. 53, 54, 55, 70, 71, 93, 59, 258, 227 Lot 78, 79, 80, 315, 316, 279, 274, 272, 278 Geran No 51891 Lot 271 Mukim 6, Daerah SPS, Penang

Land with poultry farm Freehold 1-Dec-2012 36.153 acres 18,280 sq.m. 17,250,000

HS (D) 694 PT67 Mukim 13, SPT Penang.

Industrial land Leasehold Expiring on 11.6.2055 (60 years)

1-Dec-2012 5.874 acres 3,679,175

Plot 31 Lorong Perindustrian Bukit Minyak 9, Taman Perindustrian Bukit Minyak, 14100 Penang

1 Block 3-storey Office Building, 1 Feed Milling Plant and Warehouse

18,284 sq.m. / 20 years

8,791,869

Lot 4544, Mukim 13, SPT Penang

Industrial land Leasehold Expiring on 14.4.2063 (60 years)

1-Dec-2012 3.529 acres 4,564,911

Plot 127 Jalan Perindustrian Bukit Minyak 7, Taman Perindustrian Bukit Minyak, SPS 14100 Penang

1 Block 3-storey Office Building

3,813 sq.m. / 11 years

4,881,340

Lot 60 & 61 Geran Mukim No GM3944, 4293 Mukim Ayer Puteh, Daerah Pendang, Kedah

Land with layer farm Freehold 1-Dec-2012 70.287 acres 39,821 sq.m. 9,200,000

GM519 Lot 571, Geran 16962 Lot 572, Geran 43767 Lot 573 Mukim 16, SPT Penang


Lot 824, 825, 871, 873 & 877 GM264, 265, 59, 1 & 60 Mukim8, SPS Penang

Vacant land for future development

Freehold 1-Dec-2012 23.672 acres 6,200,000

Lot 2628, 2647 HSD 28259, 28275 Mukim 11, SPS Penang


Lot 1770, 1771, 1772 Geran No 763, 764, 765 Mukim Sungai Batu, Daerah Bandar Baharu, Kedah


Freehold 1-Dec-2012 38.58 acres 5,040,000

GM841 Lot 407, GM842 Lot 408 Mukim 20 SPT Penang


Lot 861, 862, 863, 868, 869, 870, 871, 879, 880, 881, 882, 1907, Mukim Beriah, District Of Kerian, Perak


Freehold 1-Dec-2016 37.442 acres

4,129,805

List Of Material Properties Of The GroupAs At 31 December 2016


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Proxy FormCDS ACCOUNT NO. NO. OF SHARES HELD

I/We,Full name of a member in BLOCK LETTERS as per Identity Card(“MYKAD”)/Passport/Certificate of Incorporation)

MYKAD/PassportNo./CompanyNo. of

(Address in full)

telephone no. , being a member of PWF CONSOLIDATED BHD (“the Company”)

hereby appoint (Full name of proxy in BLOCK LETTERS as per MYKAD/Passport)

MYKAD/Passport No. of

(Address in full)

And/or failing him (Full name of proxy in BLOCK LETTERS as per MYKAD/Passport)

MYKAD/Passport No. of

(Address in full)

or failing the abovenamed proxies, the Chairman of the Meeting, as my/our proxy to vote for me/us on my/our behalf at the 20th Annual General Meeting of the Company, to be held at Impiana Room, Penang Golf Resort, No. 1687, Jalan Bertam, 13200 Kepala Batas, Seberang Prai Utara, Penang on 24 May 2017 at 11.00 a.m. and at any adjournment thereof. My/our proxy/proxies is to be vote as indicated below:

Resolution For Against

1. Re-election of Dato’ Siah Gim Eng as Director

2. Re-election of Haji Zainal Bin Pandak as Director

3. Approval of Directors’ Fees and other benefits payables for the financial year ending 31 December 2017

4. Re-appointment of Auditors

5. Approval to issue and allot shares pursuant to Section 75 of the Companies Act 2016

6. Approval on the renewal on share buy-back by the Company

7. Continuing in Office as Independent Non-Executive Director for Mr. Ong Kim Nam

8. Authority In Relation to Dividend Reinvestment Plan

(Please indicate with “X” in the spaces on how you wish your votes to be cast for or against the resolutions. In the absence of specific directions, your proxy will vote or abstain from voting at his discretion.)

Dated this _______ day of ____________ 2017The proportions of my/our holding to be represented by my/our proxies are as follows: -

No. of Shares Percentage

First Proxy

Second Proxy

Total 100%

Signature(s)/Common Seal of Member(s)

NOTES:

1. Only a depositor whose name appear s in the Record of Depositors of the Company as at 17 May 2017 shall be regarded as a member entitled to attend, speak and vote, and appoint a proxy to attend, speak and vote on his/her behalf, at the 20th AGM.

2. A member entitled to attend, speak and vote at this meeting is entitled to appoint a proxy to attend and vote in his/her stead. Where a member of the Company is an exempt authorized nominee which holds ordinary shares in the Company for multiple beneficial owners in one (1) securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorized nominee may appoint in respect of each omnibus account it holds. A proxy may not be a member of the Company.

3. Where a member appoints more than one (1) proxy to attend the meeting, the appointment shall be invalid unless he/she specifies the proportions of his holdings to be represented by each proxy.

4. The instrument appointing a proxy shall be in writing under the hand of the appointor or his/her attorney duly authorised in writing, or if the appointor is a corporation, either under its common seal or under the hand of its officer or attorney of the corporation.

5. The Form of Proxy must be deposited at the Company’s registered office at Suite 12A, Level 12, Menara Northam, No. 55, Jalan Sultan Ahmad Shah, 10050 Penang, not less than forty-eight (48) hours before the time stipulated for holding the meeting or adjournment thereof.


The Company Secretary

PWF CONSOLIDATED BHD. (420049-H)

SUITE 12-A LEVEL 12, MENARA NORTHAM

NO. 55 JALAN SULTAN AHMAD SHAH

10050 PENANG

stamp

Please fold across the line and close

Please fold across the line and close

PWF CONSOLIDATED BHD (420049-H)

Head Office

Plot 127, Jalan Perindustrian Bukit Minyak 7,Taman Perindustrian Bukit Minyak,14100 Bukit Mertajam, S.P.T. Penang, Malaysia.

T 604 508 1088 (General line)F 604 502 3099

Manufacturing Plant

Plot 31, Lorong Perindustrian Bukit Minyak 9,Taman Perindustrian Bukit Minyak,14100 Bukit Mertajam, S.P.T. Penang, Malaysia.

T 604 508 1099 (General line)F 604 508 1200 & 508 8109

www.pwf.com.my

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