RESOLUTION 1 RESOLUTION 2 RESOLUTION 3 ... - Sungei Bagan€¦ · sungei bagan rubber company...

SUNGEI BAGAN RUBBER COMPANY (MALAYA) BERHAD (3327-U)(INCORPORATED IN MALAYSIA)

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C O N T E N T S Page

NOTICE OF ANNUAL GENERAL MEETING 2 - 7

APPENDIX A 8

STATEMENT ACCOMPANYING THE NOTICE OF ANNUAL GENERAL MEETING 9

CORPORATE INFORMATION 10 - 11

CHAIRMAN’S STATEMENT 12

MANAGEMENT DISCUSSION & ANALYSIS (“MD&A”) 13 - 16

CORPORATE GOVERNANCE OVERVIEW STATEMENT 17 - 32

SUSTAINABILITY STATEMENT 33 - 42

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL 43 - 45

AUDIT COMMITTEE REPORT 46 - 49

PROFILE OF DIRECTORS 50 - 56

DIRECTORS’ REPORT 57 - 60

STATEMENT BY DIRECTORS 61

STATUTORY DECLARATION 561

INDEPENDENT AUDITORS’ REPORT 62 - 65

STATEMENTS OF COMPREHENSIVE INCOME 66 - 67

STATEMENTS OF FINANCIAL POSITION 68 - 69

STATEMENTS OF CHANGES IN EQUITY 70 - 73

STATEMENTS OF CASH FLOWS 74 - 75

NOTES TO THE FINANCIAL STATEMENTS 76 - 131

THREE YEARS COMPARATIVE FIGURES 132

STATEMENT OF SHAREHOLDINGS 133 - 134

LIST OF SUBSTANTIAL SHAREHOLDERS 135

DIRECTORS’ INTEREST IN SHARES 135

LIST OF PROPERTIES 136

PLANTED AREA AGE PROFILE 136

FORM OF PROXY Enclosed


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NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT the Sixty-First (61st) Annual General Meeting of SUNGEI BAGAN RUBBER COMPANY (MALAYA) BERHAD will be held at Penang Langkawi Meeting Room, Block 1, Level 3A, Hotel Jen Puteri Harbour Johor, Persiaran Puteri Selatan, Puteri Harbour, 79000 Iskandar Puteri, Johor Darul Takzim, Malaysia on Thursday, 28 November 2019 at 10:30 a.m. to transact the following businesses:

Agenda

ORDINARY BUSINESS

1. To receive theAudited Financial Statements for the financial year ended 30 June 2019together with the Directors’ and Auditors’ Reports thereon.

2. To declare and approve the payment of a Single Tier First and Final Dividend of 2 sen

per share for thefinancial year ended30 June2019.

3. To approve the payment of Directors’ fees and benefits of up to RM 500,000 for thefinancial year ending30 June2020.

4. To re-elect the following Directors who retire during the year in accordance with the Company’s Constitution and being eligible, offer themselves for re-election.

a) Mr. Chew Khat Khiam Albert - Clause 22.4 of the Constitution b) Mr. Lee Chung-Shih Justin - Clause 22.4 of the Constitution 5. To re-appoint Messrs Ernst & Young as Auditors of the Company and authorise the

Directors tofix their remuneration.

SPECIAL BUSINESSTo consider and, if thought fit, to pass the following Ordinary Resolutions with or withoutmodifications:

6. ORDINARY RESOLUTION: CONTINUATION OF MR. LEE SOO HOON AS INDEPENDENT NON-EXECUTIVE

DIRECTOR “THAT Mr. Lee Soo Hoon who has served as an Independent Non-Executive Director

of the Company for a cumulative term of more than nine (9) years to continue to act as an Independent Non-Executive Director of the Company”.

7. ORDINARY RESOLUTION: AUTHORITY TO DIRECTORS TO ALLOT SHARES PURSUANT TO SECTION

75 AND 76 OF THE COMPANIES ACT 2016 “THAT pursuant to Section 75 and 76 of the Companies Act, 2016 and subject to the

approval of the relevant governmental/regulatory authorities (if any), the Directors be and are hereby authorised to allot shares in the Company, from time to time, at such price, upon such terms and conditions and for such purposes and to such person or person whomsoeveras theDirectorsmay, in their absolutediscretiondeemfitprovided that theaggregate number of shares to be allotted does not exceed ten percent (10%) of the total number of issued shares of the Company for the time being AND THAT the Directors be and hereby also empowered to obtain approval for the listing of and quotation for the additional shares to be allotted on the Bursa Malaysia Securities Berhad AND THAT authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company after the approval was given or at the expiry of the period within which the next Annual General Meeting is required to be held after the approval was given, whichever is earlier, unless such approval is revoked or varied by a resolution of the Company at a general meeting.”

RESOLUTION 1

RESOLUTION 2

RESOLUTION 3RESOLUTION 4

RESOLUTION 5

Please refer to ExplanatoryNote 8(a)(i)

RESOLUTION 6

RESOLUTION 7

Please refer to ExplanatoryNote 8(b)(i)


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NOTICE OF ANNUAL GENERAL MEETING (cont’d)

8. ORDINARY RESOLUTION: PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR SHARE BUY-BACK

AUTHORITY “THAT subject always to the Companies Act 2016 (“Act”), the provisions of the Constitution of

the Company, Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Listing Requirements”) and all other applicable laws, guidelines, rules and regulations, the Company be and is hereby authorised, to the fullest extent permitted by law, to purchase such amount of ordinary shares in the Company as may be determined by the Directors of the Company from time to time through Bursa Malaysia Securities Berhad (“Bursa Malaysia”) upon such terms and conditionsastheDirectorsmaydeemfitandexpedientintheinterestoftheCompanyprovidedthat :

(i) the aggregate number of shares purchased and/or held does not exceed ten percent (10%) of the total number of issued shares of the Company as quoted on Bursa Malaysia as at the point of purchase;

(ii) anamountoffundsnotexceedingtheretainedprofitsoftheCompanybasedonthelatestauditedfinancialstatementsand/orthelatestmanagementaccounts(whereapplicable)at the time of purchase(s) will be allocated by the Company for the purchase of its own shares; and

(iii) the Directors of the Company may decide either to retain the shares purchased as treasury shares or cancel the shares or retain part of the shares so purchased as treasury shares and cancel the remainder or to resell the shares or distribute the shares as dividends or to deal with the treasury shares in the manner allowed by the Act.

AND THAT the authority conferred by this resolution will commence immediately upon the passing of this Ordinary Resolution and will continue to be in force until :-

(i) the conclusion of the next Annual General Meeting (“AGM”) of the Company following at which time the authority shall lapse unless by ordinary resolution passed at the meeting, the authority is renewed, either unconditionally or subject to conditions;

(ii) the expiration of the period within which the next AGM of the Company is required by law to be held; or

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

whicheveroccursfirstbutshallnotprejudicethecompletionofpurchase(s)bytheCompanybefore the aforesaid expiry date and, in any event, in accordance with the provisions of the Listing Requirements and any other relevant authorities.

AND THAT authority be and is hereby given to the Directors of the Company to take all such steps as necessary or expedient to implement, finalise and give full effect tothe Proposed Share Buy-Back Authority with full power to assent to any conditions, modifications, variations and/or amendments (if any) asmaybe requiredby the relevantauthorities in accordance with the Act, the provisions of the Constitution of the Company and the requirements and/or guidelines of Bursa Malaysia for the Main Market and all other relevant governmental and/or regulatory authorities.”

RESOLUTION 8


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9. ORDINARY RESOLUTION: PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR RECURRENT

RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE ENTERED INTO WITH THE NYALAS RUBBER ESTATES LIMITED (“PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE”)

“THAT pursuant to Paragraph 10.09 of the Bursa Malaysia Main Market Listing Requirements, approval be and is hereby given to the Company to enter into and give effect to recurrent related party transactions of a revenue or trading nature The Nyalas Rubber Estates Limited, as set out in Sections 2.4 and 2.5 of Part B of the Circular to Shareholders dated 30 October 2019, which are necessary for their day-to-day operations, in the ordinary course of business made on arm’s length basis and on normal commercial terms which are not more favourable to the related party than those generally available to the public and are not detrimental to the minority shareholders of the Company; AND THAT the authority conferred by this Mandate shall commence immediately upon the passing of this Resolution and is subject to annual renewal. In this respect, the authority shall continue to be in force until:

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

(ii) the expiration of the period within which the next AGM after that date, is required to be held pursuant to Section 340(2) of the Companies Act, 2016 (but shall not extend to such extension as may be allowed pursuant to Section 340(4) of the Companies Act, 2016); or

(iii) revoked or varied by resolution passed by the shareholders in a general meeting;

whichever is earlier,

AND FURTHER THAT the Directors of the Company be authorised to complete and do all such acts and things (including executing all such documents as may be required) as they may consider expedient or necessary to give effect to the Proposed Renewal of Shareholders’ Mandate.”

10. ORDINARY RESOLUTION: PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE FOR RECURRENT

RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE ENTERED INTO WITH KUALA PERGAU RUBBER PLANTATIONS PLC (“PROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE”)

“THAT pursuant to Paragraph 10.09 of the Bursa Malaysia Main Market Listing Requirements, approval be and is hereby given to the Company to enter into and give effect to recurrent related party transactions of a revenue and trading nature with Kuala Pergau Rubber Plantations Plc, as set out in Sections 2.4 and 2.5 of Part B of the Circular to Shareholders dated 30 October 2019, which are necessary for their day-to-day operations, in the ordinary course of business made on arm’s length basis and on normal commercial terms which are not more favourable to the related party than those generally available to the public and are not detrimental to the minority shareholders of the Company; AND THAT the authority conferred by this Mandate shall commence immediately upon the passing of this Resolution and is subject to annual renewal. In this respect, the authority shall continue to be in force until:

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

(ii) the expiration of the period within which the next AGM after that date, is required to be held pursuant to Section 340(2) of the Companies Act, 2016 (but shall not extend to such extension as may be allowed pursuant to Section 340(4) of the Companies Act, 2016); or

RESOLUTION 9

RESOLUTION 10


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(iii) revoked or varied by resolution passed by the shareholders in a general meeting;

whichever is earlier,

AND FURTHER THAT the Directors of the Company be and hereby authorised to do all such acts and things (including executing all such documents as may be required) as they may consider expedient or necessary to give full effect to the Proposed Renewal of Shareholders’ Mandate.”

11. To transact any other ordinary business of which due notice shall have been given.

NOTICE OF DIVIDEND ENTITLEMENT AND PAYMENT DATES

NOTICE IS ALSO HEREBY GIVEN THAT the Single Tier First and Final Dividend of 2 sen per share in respect of the financial year ended 30 June 2019, if approved at the forthcoming 61stAnnual GeneralMeeting ofthe Company, will be paid on 6 January 2020 to depositors registered in the Record of Depositors at the close of business on 12 December 2019.

A depositor shall qualify for entitlement only in respect of: -

(a) Shares transferred into the Depositors Securities Account before 4.00 p.m. on 12 December 2019 in respect of ordinary transfers; and

(b) Shares bought on the Bursa Malaysia Securities Berhad on a cum entitled basis according to the Rules of the Bursa Malaysia Securities Berhad.

BY ORDER OF THE BOARDSUNGEI BAGAN RUBBER COMPANY (MALAYA) BERHAD

SANTHI A/P SAMINATHAN (MAICSA NO.7069709)CHEN YEW TING (MAICSA NO.0869733)Company SecretariesJohor Bahru30 October 2019


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Notes :

1. For the purpose of determining members’ eligibility to attend this meeting, the Company shall be requesting Bursa Malaysia Depository Sdn. Bhd, in accordance with Clause 19.6 of the Company’s Constitution and Section 34(1) of the Securities Industry (Central Depositories) Act, 1991 to issue a General Meeting Record of Depositors as at 20 November 2019. Only members whose names appear therein shall be entitled to attend this meeting or appoint proxy(ies) to attend and vote on his/her behalf.

2. A member entitled to attend and vote at the meeting may appoint not more than two (2) proxies to attend and vote in his/her stead. A proxy need not be a Member of the Company and there shall be no restriction as to the qualification of the proxy. Where a member appoints more than 1 proxy, the appointments shall be invalid unless he/she specifies the proportions of his/her holdings to be represented by each proxy.

3. In the case of a corporation, the proxy should be executed under its Common Seal or under the hand of the officer of attorney of the corporation duly authorised in writing on its behalf.

4. Where a member is an authorized nominee as defined under the Securities Industry (Central Depositories) Act, 1991, it may appoint at least one proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.

5. Where a member is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (‘omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account its holds.

6. The proxy form and the Power of Attorney or other authority (if any) under which it is signed, or notary certified copy thereof must be lodged at the Share Registrar’s Office of the Company at 11th Floor, Menara Symphony, No. 5, Jalan Professor Khoo Kay Kim, Seksyen 13, 46200 Petaling Jaya, Selangor Darul Ehsan, Malaysia not less than 24 hours before the time of the meeting.

7. Pursuant to Paragraph 8.29(1) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, all the resolutions set out in the Notice of AGM shall be put to vote by poll.

8. Explanatory Note:

(a) Ordinary Business (i) Item 1 of the Agenda This item is meant for discussion only as the provision of Section 340(1)(a) of the Companies Act 2016 does not require

a formal approval of the shareholders for the Audited Financial Statements. Hence, this Agenda is not put forward for voting.

(b) Special Business (i) Item 6 of the Agenda Resolution No. 6 - Continuation of Mr. Lee Soo Hoon as Independent Non-Executive Director Mr Lee Soo Hoon has served as Independent Non-Executive Directors (“INED”) of the Company for a cumulative

term of more than nine (9) years. He has met the independence guidelines as set out in Chapter 1 of the Main Market Listing Requirements. Therefore, the Board of Directors consider him to be independent and believes that he should be retained as Independent Non-Executive Director based on the justifications as set out in Appendix A on page 8 of the Annual Report 2019.

(ii) Item 7 of the Agenda Resolution No. 7 - Authority to Directors to Allot Shares Pursuant to Sections 75 and 76 of the Companies Act 2016 This is the renewal of the mandate obtained from the members at the last Annual General Meeting held on 29 November

2018 (“the previous Mandate”). There were no shares issued under the previous Mandate and hence no proceeds raised.

The proposed Resolution 7, if passed, would provide flexibility to the Company to undertake fund raising exercise including but not limited to further placement of shares for purpose of funding current and/or future investment projects, working capital, repayment of bank borrowings, acquisitions and/or for allotment of shares as settlement of purchase consideration by the issuance of shares in the Company to such persons at any time as the Directors may deem fit provided that the aggregate number of shares to be issued pursuant to the mandate does not exceed ten percent (10%) of the total number of issued shares of the Company for the time being, without having to convene a general meeting. This authority, unless revoked or varied by the Company in a general meeting will expire at the conclusion on the next Annual General Meeting of the Company or at the expiry of the period within which the next Annual general meeting is required to be held after the approval was given, whichever is earlieri.


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(iii) Item 8 of the Agenda Resolution No. 8 - Proposed Renewal of Shareholders’ Mandate for Share Buy-Back Authority The proposed Resolution 8, if passed, will empower the Company to purchase and /or hold up to ten percent (10%)

of the total number of issued shares of the Company. The mandate shall continue to be in force until the date of the next Annual General Meeting of the Company unless earlier revoked or varied by an ordinary resolution passed by the shareholders of the Company in general meeting and is subject to annual renewal. Further information on this resolution is set out in Part A of the Circular to shareholders dated 30 October 2019, which is dispatched together with the Annual Report 2019 of the Company.

(iv) Item 9 and 10 of the Agenda Resolution No. 9 and 10 - Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of a Revenue or Trading

Nature The proposed Resolution 9 and 10, if passed, will renew the mandate for the Company to enter into recurrent related

party transactions of a revenue or trading in nature with the related parties as specified in Section 2.4 and 2.5 of Part B of the Circular to shareholders dated 30 October 2019, which is dispatched together with the Annual Report 2019 of the Company. The mandate shall continue to be in force until the conclusion of the next Annual General Meeting of the Company unless earlier revoked or varied by resolution passed by the shareholders in general meeting and is subject to annual renewal.

PERSONAL DATA PRIVACY

By submitting an instrument appointing a proxy(ies) and/or representative(s) to attend, speak and vote at the Annual General Meeting and/or any adjournment thereof, a member of the Company (i) consents to the collection, use and disclosure of the member’s personal data by the Company (or its agents) for the purpose of the processing and administration by the Company (or its agents) of proxies and representatives appointed for the Annual General Meeting (including any adjournment thereof) and the preparation and compilation of the attendance lists, minutes and other documents relating to the Annual General Meeting (including any adjournment thereof) and in order for the Company (or its agents) to comply with any applicable laws, listing rules, regulations and/or guidelines (collectively, the “Purposes”), (ii) warrants that where the member discloses the personal data of the member’s proxy(ies) and/or representative(s) to the Company (or its agents), the member has obtained the prior consent of such proxy(ies) and/or representatives for the collection, use and disclosure by the Company (or its agents) of the personal data of such proxy(ies) and/or representative(s) for the Purposes, and (iii) agrees that the member will indemnify the Company in respect of any penalties, liabilities, claims, demands, losses and damages as a result of the member’s breach of warranty.


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APPENDIX A

ORDINARY RESOLUTION NO. 6 – CONTINUATION OF MR. LEE SOO HOON AS INDEPENDENT NON-EXECUTIVE DIRECTOR

Justifications

a. Mr.LeeSooHoonfulfilledthecriteriaunderthedefinitiononIndependentDirectorasstatedintheMainMarketListingRequirements of Bursa Malaysia Securities Berhad, and therefore is able to bring independent and objective judgment to the Board.

b. He has been with the Company for more than nine (9) years and therefore understands the Company’s business operations, which enables him to participate actively and contribute during deliberations or discussions at Audit Committee, Remuneration Committee, Nominating Committee, Risk Management Committee and Board meetings without compromising his independence and objective judgement.

c. HehascontributedsufficienttimeandeffortsandattendedalltheAuditCommittee,RemunerationCommittee,NominatingCommittee, Risk Management Committee and Board meetings as well as having meetings with the Internal and External Auditors without the presence of the management and Executive Directors for informed and balanced decision making.

d. He has exercised due care during his tenure as Independent Non-Executive Director of the Company and carried out his professional duties in the interest of the Company and shareholders.

e. The current Independent Directors are strong individuals demonstrating independence. Independence is a result of a director’s state of mind and integrity and not dependent on years of service. The experience of the Independent Directors in the Company is valuable for continued stability and growth.


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STATEMENT ACCOMPANYING THE NOTICE OF ANNUAL GENERAL MEETING(PURSUANT TO PARAGRAPH 8.27(2) OF THE MAIN MARKET LISTING

REQUIREMENTS OF BURSA MALAYSIA SECURITIES BERHAD)

1. DETAILS OF INDIVIDUALS STANDING FOR ELECTION AS DIRECTORS (EXCLUDING DIRECTORS STANDING FOR A RE-ELECTION)

There is no individual standing for election as Director of the Company at this Annual General Meeting.

2. GENERAL MANDATE FOR ISSUE OF SECURITIES PURSUANT TO PARAGRAPH 6.03(3) OF THE MAIN MARKET LISTING REQUIREMENTS OF BURSA MALAYSIA SECURITIES BERHAD

The general mandate for issuance of shares by the Company under Sections 75 and 76 of the Companies Act 2016 is for the purpose of granting renewal of the mandate obtained from its shareholders at the 60th Annual General Meeting held on 29 November 2018.

The Company did not issue any shares pursuant to this mandate obtained.

The purpose of this general mandate is for possible fund-raising exercise, including but not limited to further placement of shares for the purpose of funding current and/or future investments projects, working capital, repayment of bank borrowings, acquisitions and/or for issuance of shares as settlement of purchase consideration.


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CORPORATE INFORMATION

DIRECTORSLEE SOO HOON

Independent Non-Executive Chairman

LEE CHUNG-SHIH JUSTINExecutive Deputy Chairman

TAY BENG CHAIIndependent Non-Executive Director

CHEW KHAT KHIAM ALBERTIndependent Non-Executive Director

CHEONG MUN HONGExecutive Director

BALARAMAN A/L ANNAMALYExecutive Director

MUGANA KERISNAN A/L KARPIAHAlternate Director

SECRETARIESSANTHI A/P SAMINATHAN

CHEN YEW TING

AUDIT COMMITTEE MEMBERSCHEW KHAT KHIAM ALBERT

Chairman

LEE SOO HOON

TAY BENG CHAI

NOMINATING COMMITTEE MEMBERSCHEW KHAT KHIAM ALBERT

Chairman

LEE SOO HOON

TAY BENG CHAI

REMUNERATION COMMITTEE MEMBERSTAY BENG CHAI

Chairman

LEE SOO HOON

CHEW KHAT KHIAM ALBERT


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CORPORATE INFORMATION (cont’d)

RISK MANAGEMENT COMMITTEE MEMBERSLEE SOO HOON

Chairman

TAY BENG CHAI


AUDITORSERNST & YOUNG

Chartered Accountants

REGISTERED OFFICESUITE 9D, LEVEL 9, MENARA ANSAR,

65 JALAN TRUS,80000 JOHOR BAHRU, JOHOR

TEL: 607-224 1035 FAX: 607-221 0891

SHARE REGISTRARSYMPHONY SHARE REGISTRARS SDN BHD (Company No. 378993-D)

11TH FLOOR, MENARA SYMPHONY,NO. 5, JALAN PROFESSOR KHOO KAY KIM, SEKSYEN 13,

46200 PETALING JAYA, SELANGOR DARUL EHSAN

TEL: 603-7890 4700 FAX: 603-7890 4670

BANKEROCBC BANK (MALAYSIA) BERHAD

STOCK EXCHANGEMAIN MARKET OF BURSA MALAYSIA SECURITIES BERHAD (“Bursa Malaysia”)

WEBSITEwww.sungeibagan.com


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CHAIRMAN’S STATEMENT

Dear Shareholders,

The Group reported revenue of RM12.24 million for the year ended 30 June 2019. The 14% decrease in revenue was primarily due to the reduced contribution from our plantation segment. The Group’s revenue was made up of sales of fresh fruit bunches (“FFB”), dividend income, rental income and interest income.

A combination of lower FFB production with lower FFB average sales prices, resulted in a 40% drop in revenue from our plantation operations. Even with higher contribution from dividend income and interest income, the Group reported lower revenueforthefinancialyearended30June2019.

Forthefinancialyearended30June2019,theGroupreportedanoperatingprofitofRM2.27million.TheoperatingprofitforthefinancialyearwasalsoimpactedbyKualaPergauEstatecomingintomaturity.

Forthefinancialyearended30June2019,theGroupreportedalossnetoftaxofRM6.66million.Ourshareofassociatesreported a loss of RM5.01 million.

The net other comprehensive loss for the year ended 30 June 2019 was RM12.42 million. The key items which made up ourothercomprehensivelossforthefinancialyearincludedthefairvaluelossoninvestmentsofRM18.93millionandforeign currency translation gain of RM6.51 million.

HarvestingatKualaPergauEstatecommencedatHomedivisioninFebruary2019.Forthecurrentfinancialyear,theentire planted area at Kuala Pergau Estate is expected be ready for harvesting. Upon prime maturity, Kuala Pergau Estate isexpectedtobeasignificantcontributortowardstheGroup’splantationsegment.

The Group’s investment property in London maintained its occupancy rate of 100%. For the year ended 30 June 2019, this investment property contributed a rental revenue of RM0.67 million.

Dividends

Torewardshareholders,theBoardisproposingafirstandfinalsingletierdividendof2senpershareforthefinancialyear ended 30 June 2019. This is subjected to the approval of shareholders at the forthcoming Annual General Meeting.

Prospects

Although faced with challenges of unpredictable weather conditions and labour concerns, the Group continues to remain positiveonthelong-termfundamentalsoftheoilpalmindustry.TheGroup’sresultswillbeaffectedbyfluctuationsinmarket valuation and foreign exchange differences.

Appreciation

On behalf of the Board of Directors, I would like to take this opportunity to thank the directors, the management and staff at all levels for their continuous efforts and contributions during the year.

Inparticular,theBoardthankourcustomers,suppliersandvaluedshareholdersfortheircontinuedtrustandconfidenceinus.

On behalf of the Board of Directors

LEE SOO HOONChairman


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MANAGEMENT DISCUSSION & ANALYSIS (“MD&A”)

Plantation Operations

As of 30 June 2019, the Group’s two estates - Sungei Bagan Estate and Kuala Pergau Estate had a total planted area of 4,928 acres.

• SungeiBaganEstate:2,615acres• KualaPergauEstate:2,313acres

In 2019, both Sungei Bagan Estate and Kuala Pergau Estate were awarded the Malaysian Sustainable Palm Oil (“MSPO”) certification.

Sungei Bagan Estate

As a result of lower Fresh Fruit Bunches (“FFB”) production and lower FFB average sales prices, revenue from plantation operations was down 42% to RM4.52 million. For Sungei Bagan Estate, FFB production of 11,275 MT was 20% lower than the previous year’s production of 14,072 MT.

Forthefinancialyearunderreview(July2018–June2019),monthlyaverageCrudePalmOil(“CPO”)pricewasintherangeofRM1,800to2,200/MT,relativelylowerthantherangeforthefinancialyearended30June2018(July2017-June2018). As FFB price is function of CPO price, this led to a 27% decrease in Sungei Bagan Estate’s FFB average selling price.

Forthefinancialyearended30June2019,SungeiBaganEstatereportedFFByieldof11.00MT/ha.Byanymeasure,thiswas a poor showing. Sungei Bagan Estate reported an FFB yield lower than the MPOB’s Kelantan average of 11.74 MT/ha. This was unsatisfactory, and management will improve on this performance.

Tothatend,managementembarkedoninitiativestoimprovetheFFBproduction.Sincethefinancialyearended30June2019, actions management has taken included the:

• Restructureofharvesterremuneration• Diversificationofforeignlaboursource• Intensificationofmechanizationinitiatives• Accelerationofreplantingschedule

KeyimprovementsatSungeiBaganEstateforthefinancialyearended30June2019includedthe:

• Upgradeoffertilizerandchemicalstores• ImplementationofmotorisedFFBcutter(“cantas”)• Upgradeoflabourquarters• Restorationofofficebuilding


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MANAGEMENT DISCUSSION & ANALYSIS (“MD&A”) (cont’d)

Plantation Operations (cont’d)

As of 30 June 2019, the weighted average age of Sungei Bagan Estate’s oil palms was 13 years. The estate’s oil palms age profileasapercentageofplantedareaisasfollows:

1) Immature (0 - 3): 3%2) Mature–Young(4-7):30%3) Mature–Prime(8-17):33%4) Mature–Tall(≥18):24%

Adetailedbreakdownoftheestates’plantedareaisincludedinthesectiontitled“PlantedAreaAgeProfile”.

Kuala Pergau Estate

As at 30 June 2019, Kuala Pergau Estate was fully planted with an immature acreage of 2,313 acres. Harvesting at Home divisioncommencedinFebruary2019,withFFBproductionforthefinancialyearended30June2019at547MTovera5-monthperiod.Forthecurrentfinancialyearending30June2020,theentireplantedareaatKualaPergauEstateisexpected be ready for harvesting.

Sungei Bagan Estate (Restoration of Office)


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Plantation Operations (cont’d)

Kuala Pergau Estate (cont’d)

As the plantings commenced in 2016, as at 30 June 2019, the weighted average age of Kuala Pergau Estate’s oil palms was 3 years.

Uponprimematurity,KualaPergauEstateisexpectedtobeasignificantcontributortowardstheGroup’splantationsegment.InfrastructuredevelopmentsatSydneydivisionisexpectedtocommenceinthefirsthalfofthefinancialyearending30June 2020. We expect the tight labour conditions to be improved once these facilities are operational.

KeyimprovementsatKualasPergauEstateforthefinancialyearended30June2019includedthe:

• Upgradeofchemicalstore• ImplementationofmotorisedFFBcutter(“cantas”)• Upgradeoflabourquarters• Installationofsolarpowersystem

Investments

OurinvestmentpropertyinLondoncontinuedits100%occupancyrateforthefinancialyearended30June2019.Thisinvestment property is situated in Down Street, within walking distance of Buckingham Palace and Hyde Park. The current leaseisexpectedtocontinueforthecurrentfinancialyearending30June2020.

Kuala Pergau Estate (Home & Sydney Division)


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Investments (cont’d)

The bulk of the Group’s investments are held in companies listed in the Mainboard of both Bursa Malaysia and Singapore Exchange. The Company’s has positions in Kuchai Development Berhad, Great Eastern Holdings Limited and Singapore Press Holdings Limited.

Inadditiontoquotedequityinvestments,theGrouphasholdingsininvestmentfundsandpreciousmetals.Forfinancialyearending30June2020,tostrengthenourtreasuryoperations,wehavestartedbuildingourfixedincomeportfolio.

Financial Position

TheGroup continued tomaintain a healthyfinancial positionwithnobankborrowings and sufficient cash and cashequivalents to cover total liabilities. The planting of Kuala Pergau Estate was fully funded without external borrowings. Both the Board and management are committed towards maintaining its philosophy of having a strong balance sheet and a healthy cash position to ensure the Company’s ability to fund our operations and capital requirements.

With that said, the Company recognizes the need to achieve a balance between providing reasonable returns to shareholders whileconservingfundsrequiredfornewinvestmentopportunities,andthiswasevidentinthepreviousfinancialyearended 30 June 2018.

To commemorate the Company’s 60th Annual General Meeting in 2018, a special cash dividend bringing the total cash dividendforthefinancialyearended30June2018toatotalof6senpershare,waspaidin2019.Forthepreviousfinancialyearended30June2018,thisfinalcashdividendcoupledwiththedividendin-specieexerciseaddedvalueforshareholders.

Kuala Pergau Estate (Home Division HQ)


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CORPORATE GOVERNANCE OVERVIEW STATEMENT

The Board of Directors (“Board”) of Sungei Bagan Rubber Company (Malaya) Berhad (“the Company”) is fully committed to ensure that good corporate governance practices are adopted throughout the Company and its subsidiaries (“Group”). The Board supports the Principles and Practices of good corporate governance (including the intended outcome) as promulgated by the Malaysian Code of Corporate Governance 2017 (“MCCG”) to direct and manage the business and affairs of the Group towards promoting business and corporate governance with ultimate objective of realising long-term shareholder value while taking into account the interest of other stakeholders. The Board presents this statement to shareholders and investors with an overview of the corporate governance (“CG”) practicesoftheCompanyundertheleadershipoftheBoardduringthefinancialyearended30June2019.Thisoverviewtakes guidance from the key CG principles as set out in the MCCG issued by Securities Commission Malaysia in April 2017 and prepared in compliance to paragraph 15.25 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad. The Board further acknowledges the importance of achieving best practices in its standard of business performance and corporate accountability and is committed to subscribe to the recommendations of the Code. The CG Report will be available on the Company’s website at www.sungeibagan.com.

PRINCIPLE A – BOARD LEADERSHIP AND EFFECTIVENESS

Group Governance Model

Shareholders

Company Secretary Board of Directors Board Committees

Management

I. BOARD RESPONSIBILITIES

Principle Responsibilities of the Board

The Board is responsible for setting the strategic direction, establishing goals for the management and continuously improving its performance to protect and enhance shareholders' value. The Board is responsible for the overall standards of conduct, risk management, succession planning, strategic planning, financial matters, corporate governance andsustainability and effective communication with shareholders and investors and the system of internal controls.

The Board plays an active role in developing the Group’s strategy. The Board will then review and deliberate upon both management’s and its own perspectives to deliver the best outcomes. The Board comprises of a mix of directors whosecombinedskillsandknowledgeenabletheBoardtofunctioneffectivelyindischargingitsfiduciaryandleadershipfunction. The Board understands that in governing, the directors must always act honestly, fairly, diligently and in accordance with the law, in the best interest of the Group.

In discharging the Board’s duties and responsibilities, the Board has delegated certain duties and responsibilities to four other Board Committees namely the Nominating Committee, Remuneration Committee, Audit Committee and Risk Management Committee to assist the Board in overseeing the Group’s affairs and in deliberation of issues within their respective functions and terms of reference which outline clearly their objectives, duties and powers. The terms of reference of the Board Committees are included in the Board Charter of the Company which is available on the Company’s website.


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CORPORATE GOVERNANCE OVERVIEW STATEMENT (cont’d)

The Board keeps itself abreast of the responsibilities delegated to each Board Committee, and resolutions or key matters deliberated at each Board Committee meeting through the minutes and reports from the respective Board Committees’ Chairman which are presented to the Board during the Board meeting at the appropriate regular intervals.

The Board has also established clear functions reserved for the Board and those delegated to the management. The respective roles and responsibilities of the Board and management are clearly set out to ensure accountability of both parties.

ToenabletheBoardtodischargeitsresponsibilitiesinmeetingthegoalsandobjectivesoftheGroupduringthefinancialyearended30June2019,theBoardapartfromfulfillingitsstatutoryresponsibilities,collectively:-

• reviewedanddecidedonmanagement’sproposalsandmonitoredtheimplementationbymanagement;• promotedgoodgovernanceculturewithintheGroupwhichreinforcesethical,prudentandprofessionalconduct;• reviewedanddeterminedtheCompany’soveralldirection,development,controlandensuredthattheCompany’s

businesses practices are designed to deliver sustainable value to its shareholders and other stakeholders. The Company’s economic, environment and social activities are set out on pages 33-42 of this Annual Report;

• ensuredtheintegrityoftheCompany’sfinancialandnon-financialreporting;• ensuredthattheCompanyhasinplaceprocedurestoenableeffectivecommunicationwithstakeholders;• monitoredthefinancialpositionandevaluatedtheoverallperformanceoftheCompanythroughquarterlyreviews;• supervisedandassessedmanagementperformanceregularly;and• ensured that a sound and adequate framework of reporting on riskmanagement and internal control and legal

compliance are in place;

Asidefromthecoreresponsibilitieslistedabove,significantmattersrequireddeliberationandapprovalfromtheBoardareclearlydefinedbytheBoardintheBoardCharterasmattersreservedfortheBoardforconsiderationandapprovalduring the Board’s meeting.

The Independent Non-Executive Directors play a crucial role in ensuring that the strategies proposed by the management are properly deliberated and reviewed, and to ensure that the interest of shareholders, including minority shareholders are given due consideration in the decision making process. They are also actively involved in the various Board Committees.

Chairman of the Board

The Chairman, Mr. Lee Soo Hoon, an Independent Non-Executive Chairman is able to provide effective and strategic direction and necessary governance to the Company. The Chairman is responsible for overseeing the proper functioning of the Board with good corporate governance practices and procedures. The Chairman with the assistance of the Company Secretary, schedules Board meetings to ensure that the Board receives accurate, timely and clear information, enabling the Board to perform its duties reasonably. During the meeting, the Chairman encourages constructive relations between Boardmembersandensuresthatopen,healthyandeffectivedebatesareheldbyallowingsufficienttimetobegivenonthe deliberation of issues.

TheNominatingCommitteeissatisfiedthattheChairmanhasdischargedhisdutieseffectivelyandcontinuestoplayavital role in leading the Board.

Separation of Chairman and Management

The roles of the Chairman of the Board and management are held by two (2) different persons and each has a clear accepted division of responsibilities to ensure a balance of power and authority, such that no one individual has unfettered powers of decision making. The Chairman of the Board is primarily responsible for the achievement of the Group’s strategic vision and leads the board in its collective oversight of management, while the Executive Directors and management are responsible for the day-to-day management of the operations of the Company and the implementation of the Board’s policies and decisions. The Chairman of the Board and management fully appreciate their respective roles and responsibilities and are supportive of the development of a healthy corporate governance culture.


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Company Secretary

TheBoardissupportedbytwo(2)suitablyqualifiedandcompetentCompanySecretaries.TheCompanySecretarieswhoaremembersoftheMalaysianInstituteofCharteredSecretariesandAdministrators(MAICSA)arequalifiedCompanySecretaries as per Section 235(2) of the Companies Act 2016. They are external Company Secretaries with vast knowledge and experience from being in public practice and are supported by a dedicated team of company secretarial personnel.

The Company Secretaries play an important advisory role to the Board, on administrative, regulatory requirements and governance matters. The Company Secretaries are also responsible to ensure that accurate and proper recording of proceedings and resolutions at the Board, Board Committees meetings and general meetings.

The Board has unrestricted access to the advice and services of the Company Secretaries for Board’s affairs. The Company Secretaries attend all Board and Board Committee Meetings and all proceedings and conclusions from the Board meetings are minuted and signed by the Chairman. The Company’s statutory records are maintained accordingly at the Company’s registeredoffice.

Access to Information and Advice

The Board will receive the notice of agenda together with the meeting materials (including the minutes of the previous meeting)atleastfive(5)businessdayspriortothedateofthemeetingtoensurethatthedirectorshavesufficienttimetoreviewandsolicitfurtherclarificationand/orinformation,wherenecessary,soastoenablethemtodulydischargetheirduties and ensure that deliberations at the meeting are constructive and focused.

The Board has unrestricted access to all information and the advice of the Company Secretaries and external auditors whether as the Board, or in their individual capacity, in the furtherance of their duties. Directors may interact directly with, or request further explanation, information or updates on any aspect of the business from management. They may obtain independent professional advice at their discretion to assist them in Board decisions.

Board Charter

The Board is guided by its Board Charter which clearly sets out the roles and responsibilities of the Board and Board Committeesindischargingitsfiduciaryandleadershipfunctionandtheprocessesandproceduresfortheirmeetings.TheBoard Charter sets out the role, functions, composition, operation and processes of the Board as to ensure that the members of the Board practice good corporate governance in their business conducts and dealings in respect of and on behalf of the Company and comply with the various laws and regulations governing them.

The Board Charter acts as a source of reference to provide insights on the responsibilities of the Board and senior management. It also serves as guide to the Board in assessing its own performance and of individual directors.

The Board Charter is reviewed and updated periodically in accordance with the needs of the Company to ensure its effectiveness and consistency with the Board’s objectives and corporate vision.

A copy of the Board Charter is available for reference on the Company’s website.

Code of Conduct and Ethics

The Board is committed in maintaining good corporate integrity and recognises the importance of a Code of Conduct which sets out the principles and standards of business ethics and conduct applicable to all directors and employees of the Company. In line with good corporate governance practices, the Board, management and employees shall act honestly, objectively and diligently while carrying out their duties and they shall not act in a manner which could discredit the Company in any manner. These standards are formalised through the Company’s Code of Conduct and Business Ethics.

The Code of Conduct and Business Ethics is reviewed periodically in accordance with the needs of the Company. A copy of the Code of Conduct and Business Ethics is available for reference on the Company’s website.


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Whistle Blowing Policy

Whistleblowing isaspecificmeansbywhichanemployeeorstakeholdercanreportordisclose throughestablishedchannels, concerns about:

• Unethicalbehaviour;• Illegalacts;• Failuretocomplywithregulatoryrequirements;or• Anypossibleseriousviolationsofinternalpolicies,proceduresorexternallawsbytheperpetrators.

This includes events which are taking place, has taken place or may take place in the future.

The Whistle Blowing Policy is published and available for reference on the Company’s website. The Board has concluded that the current policy is still valid and relevant.

II. BOARD COMPOSITION

Independent Directors

The Board comprises of six (6) members, of whom three (3) are Independent Non-Executive Directors and three (3) are Executive Directors. There is one (1) Alternate Director. The Board composition complies with the Listing Requirements of Bursa Malaysia that requires a minimum of 2 or 1/3 of the Board to be Independent Directors.

Name DesignationLee Soo Hoon Independent Non-Executive ChairmanTay Beng Chai Independent Non-Executive DirectorChew Khat Khiam Albert Independent Non-Executive DirectorLee Chung-Shih Justin Executive Deputy ChairmanCheong Mun Hong Executive DirectorBalaraman A/L Annamaly Executive DirectorMugana Kerisnan A/L Karpiah Alternate Director (appointed w.e.f. 2 May 2019)

The presence of three (3) Independent Non-Executive Directors, which represent 50% of the Board, facilitates the unbiasedexerciseofindependentevaluationinBoarddeliberationsanddecisionmaking.Theirpresencefulfilsacentralrole in corporate accountability and serves to provide a check and balance on the Board. In the event of any vacancy on theBoard,resultinginanon-compliance,thevacancywillbefilledwithinthree(3)months.TheNominatingCommitteeshall on an annual basis assess the independence of the Independent Directors.

Abriefprofileofeachdirectorispresentedonpages50to56oftheAnnualReport.

Tenure of Independent Directors

The Board is aware that the MCCG recommends that the tenure of an Independent Director does not exceed a cumulative period of nine (9) years and upon completion of the nine (9) years, an Independent Director may serve as a Non-Independent Director.

The MCCG also recommends that if the Board intends to retain an Independent Director beyond nine (9) years, it should justify and seek annual shareholders’ approval and if the Board continues to retain the Independent Director after the twelfth (12th) year, the Board should seek annual shareholders’ approval through a two-tier voting process.

As of the date of this Annual Report, the Independent Non-Executive Chairman, Mr Lee Soo Hoon has exceeded the cumulative term of twelve (12) years. The Nominating Committee carried out an assessment on Mr Lee Soo Hoon and the Nominating Committee is of the view that Mr Lee Soo Hoon continues to be independent as:


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• HehasmetthecriteriaunderthedefinitionofIndependentDirectorassetoutintheMainMarketListingRequirementsof Bursa Malaysia Securities Berhad, and therefore is able to bring independent and objective judgement to the Board;

• HehasbeenwiththeCompanyformorethantwelve(12)yearsandthereforeunderstandstheCompany’sbusinessoperations which enables him to participate actively and contribute during deliberations or discussions at Audit Committee, Remuneration Committee, Nominating Committee, Risk Management Committee and Board meetings without compromising his independence and objective judgement;

• He has contributed sufficient time and efforts and attended all Audit Committee, Remuneration Committee,Nominating Committee, Risk Management Committee and Board meetings as well as meetings with the Internal and External Auditors without the presence of management and Executive Directors for informed and balanced decision making; and

• HehasexercisedhisduecareduringhistenureasIndependentNon-ExecutiveDirectoroftheCompanyandcarriedout his professional duties in the interest of the Company and shareholders.

In this respect, the Board, based on his exemplary leadership and dedication to his responsibilities, recommends that Mr Lee Soo Hoon, continues to serve as an Independent Non-Executive Chairman subject to the annual shareholders’ approval through a two-tier voting process.

The current Independent Directors are strong individuals demonstrating independence. The Board believes that independence is a result of a director’s state of mind and integrity and not dependent on the years of service. The experience of the Independent Directors is valuable for continued stability and growth.

The Board believes that the Nominating Committee is in the best position to evaluate and determine whether any Independent Director can continue to provide independent and objective judgement during board deliberations and act in the best interests of the Company. The Independent Non-Executive Directors who are also in the Nominating Committee will be excused from the meeting during discussion of their independent status.

The Nominating Committee will continue, on an annual basis to assess the independence of the Independent Non-Executive Directors.

Appointment of Board and Senior Management

The Nominating Committee is responsible to oversee the selection process and assess the performance of the directors with the objective of securing the best composition to meet the objectives of the Company. Therefore, the Committee adopts a non-discriminatorypolicytowardsidentifying,assessingandappointingsuitablyqualifieddirectorstoitsBoard,andwillregularly evaluate the composition and performance of the Board to ensure that these objectives are adopted in the process of board recruitment, board performance evaluation and succession planning.

The Board is made up of experienced professionals from varied backgrounds with expertise in areas comprising of business, finance,management,lawandthepalmoilindustry.TheBoardhasagoodbalanceofmemberssuchthatnooneindividualor a small group of individuals can dominate the Board's decision-making process. With their diverse backgrounds and specializations, the directors bring along a wide range of experience, expertise and perspective in discharging their responsibilitiesanddutiesasstewardsoftheCompany.TheBoardrecognizesandembracesthebenefitsofhavingadiverseBoard to enhance the quality of its performance.

The Company views increasing diversity at the Board level as an essential element in supporting the attainment of its strategic objectives. Appointment of Board members are based on objective criteria, merit and with due regard for diversity in skill, experience, age, cultural background and gender.

A copy of the Board Diversity Policy is available for reference on the Company’s website.


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Gender Diversity

The Board recognizes the importance of fostering the development of women in decision-making positions in the corporate sector.WhilsttheBoardhasnotimplementedanydefinitivepolicyontheproportionoffemaledirectors,suitablefemalecandidates are, and were considered for Board participation.

For the year ended 30 June 2019, there were no female directors on the Board.

Identifying Candidates for Appointment of Directors

TheNominatingCommitteeisresponsibleinidentifyingcandidatestotheBoardtofillthevacancyarisingfromresignation,retirement or any other reasons, and if there is a need to appoint additional directors with the required skill or expertise.

In identifying candidates, the Board is not limited to recommendations from existing Board members, management or majorshareholders.TheBoardalsoconsidersutilizingindependentsourcestoidentifysuitablyqualifiedcandidatesandwill conduct Board appointment processes in a manner as recommended by the MCCG 2017.

Once identified, the Nominating Committee is responsible for assessing and making recommendations on newappointmentstotheBoard,ensuringthatallcandidatesareofsufficientcalibre.Besidesevaluatingthecandidate’sskillsand experience, the Nominating Committee considers the following factors:

a) The candidate’s understanding of the Group and market;b) The candidate’s professional expertise, experience and background; andc) Other factors including requirements for independence and the promotion of diversity of views For the appointment of new directors, the Nominating Committee will generally identify suitable candidates skilled in core competenciessuchasaccounting,finance,business,management,industryexpertiseorknowledge.IftheNominatingCommittee decides that the candidate is suitable, the Nominating Committee will arrange to meet and conduct interviews withthecandidatepriortomakingarecommendationtotheBoard.Theseinterviewsconductedmaybeofficialaswellasunofficial.Besidesreviewingthecandidate’scurriculumvitaeandotherbiographicalinformation,theassessmentprocessmay include, at the Nominating Committee’s discretion, conducting legal and other background searches of the candidate.

Upon completion of the assessment and evaluation of the proposed candidate, the Nominating Committee will make itsrecommendationtotheBoardforassessmentandendorsement.ThefinaldecisiononanyappointmentrestswiththeBoard.

Forthefinancialyearended30June2019,MrMuganaKerisnanA/LKarpiahwasappointedasanAlternateDirectortoMr Balaraman A/L Annamaly.

In accordance with the Company's Constitution, the newly appointed directors will retire at the subsequent Annual General Meeting and are eligible for re-election by shareholders. The clauses of Constitution also provide that at least one third (1/3) of the Board including Executive Directors is subject to re-election annually and each director shall stand for re-election at least once every three (3) years.

The Nomination Committee

The Nominating Committee set up by the Board comprises exclusively of three (3) Independent Non-Executive Directors as follows:-

Chairman : Chew Khat Khiam Albert Independent Non-Executive DirectorMembers : Lee Soo Hoon Independent Non-Executive Director Tay Beng Chai Independent Non-Executive Director

The Chairman of the Nominating Committee is an Independent Non-Executive Director. The terms of reference of the Nominating Committee is available on the Board Charter which is published and available on the Company’s website.


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Evaluation of the Board

The Board, through the Nominating Committee annually reviews its required mix of skills and experience and other qualities, including core competencies which Non-Executive Directors bring to the Board. This process is to be carried out by the Nominating Committee annually, for assessing the effectiveness of the Board, Board Committees, and the contribution of each individual member.

The Company Secretary shall distribute the evaluation form to the Board and Board Committees for completion on an annual basis. All assessments and evaluations carried out by the Nominating Committee in the discharge of all its functions are properly documented.

For financial year ended 30 June 2019, the Nominating Committee reviewed and updated the annual performanceevaluation for directors. The overall Board and its Committees’ performance and effectiveness was assessed, and the Chairman of the Nominating Committee presented the outcome of the annual performance evaluation for directors during a Board meeting.

As part of the annual performance evaluation of the effectiveness of the Board, Board Committees and individual directors, the Nominating Committee considers the balance of skills, experience, expertise and independence on the Board and the diversity representation on the Board.

The assessment covered the following areas:

• Attendance• Boardcomposition• Characterandattitude• Competenciesandskills• Effectivenessofboardcommittees• Participationandcontribution

TheNominatingCommittee is satisfiedwith theBoard’scomposition,wellbalancedwith the requiredmixof skills,experience, knowledge and competencies, which is required for an effective Board.

Forthefinancialyear,theNominatingCommittee:

• ReviewedthecompositionoftheBoardandBoardCommittees,nominatingthedirectorswhoaredueforretirementand re-appointment, and are eligible to stand for re-election and re-appointment respectively;

• ReviewedthecompositionoftheBoardbasedontherequiredmixofskills,experienceandotherqualities;• ReviewedthecompositionoftheBoardCommitteesbasedontheircomplianceswiththeprovisionsoftheregulations;• AssessedtheindependenceoftheIndependentNon-ExecutiveDirectors;• Reviewedandupdatedtheannualperformanceevaluationfordirectors;• AssessedtheoverallBoardanditsCommittees’performanceandeffectiveness;and• PresentedtheoutcomeoftheannualperformanceevaluationfordirectorsduringaBoardmeeting.

TheNominatingCommitteeissatisfiedthatsufficienttimeandattentionwasgivenbyeachofthedirectorstotheaffairsof the Company, notwithstanding some of the directors with multiple board representations.

The Board meets not less than four (4) times a year to review and approve the quarterly results for announcements. Board meetingsfortheensuingyeararefixedinadvance.Noticeofmeetingsandtheagendaaregiveninatimelymanner.

All directors attended at least 50%of allBoardmeetingsheld in thefinancial year ended30 June2019, complyingwith the minimum 50% attendance as required by Paragraph 15.05 of the Bursa Malaysia Securities Berhad’s Listing Requirements. The quorum of Board meetings was met with attendance of not less than three (3) out of six (6) directors who participated in decision-making at each Board meeting. This is evidenced by the attendance record set out in the annual report.


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The Audit Committee shall meet not less than four (4) times a year. The Nominating Committee, the Remuneration Committee and the Risk Management Committee shall meet at least once a year, and when necessary.

Board meetings are a fundamental component of governance processes as they provide the opportunity for directors to:

• Obtainandexchangeinformationwithmanagement;• Obtainandexchangeinformationwithfellowdirectors;and• Deliberateandarriveatdecisions.

Management and/or external advisors may be invited to attend Board meetings to advise the Board and to furnish the Boardwith informationandclarificationneededon relevant itemson theagenda toenable theBoard toarriveat aninformed decision.

To facilitate planning, an annual meeting calendar is prepared and circulated in advance. This provides directors with scheduled dates for Board meetings and the Annual General Meeting.

Any director accepting new directorship in other companies will be required to make known to the Board prior to his/her new appointment and give commitment to the Board that his/her time for attending board meetings will not be compromised in any manner.

The directors recognise the importance of continuous development to update themselves and to further enhance their skills,knowledgeandbetterequipthemselvestoeffectivelydischargetheirfiduciaryduties.Alldirectorshavecompletedthe Mandatory Accreditation Programme as required by Bursa Malaysia’s listing requirements. Mr Mugana Kerisnan A/L Karpiah (appointed as an Alternate Director to Mr Balaraman A/L Annamaly) completed the Mandatory Accreditation Programme on 20 August 2019.

Directors Training

All directors are encouraged to attend external professional programmes which are relevant and useful in contributing towards the effective discharge of their duties as directors.

All directors are expected to attend at least one (1) training session a year.

Duringthefinancialyearended30June2019,thedirectorsattendedthefollowingrelevanttrainingprogrammes:

Date Seminar/Workshop Conducted by Attended by

17 Sep 2018 Bonds and Fixed Income Workshop Series CFA Society Cheong Mun Hong 27 Nov 2018 Director Financial Reporting Fundamentals Singapore Institute of Cheong Mun Hong Directors

5Dec2018 BreakfastSeries:Non-Financials– BursaMalaysia TayBengChai Does it Matter

28May2019 SustainabilityTraining–WhatDirectors BoardroomCorporate Alldirectors Need to Know Services Sdn Bhd

Thedirectors received regular briefings fromexternal auditors onupdates infinancial reporting andnewaccountingstandards.


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III. REMUNERATION

Remuneration Policy

The Company’s remuneration policy for directors is tailored to provide a remuneration package needed to recruit, retain and motivate individuals of the necessary calibre and quality needed.

The Board will review for approval, recommendations from the Remuneration Committee on the remuneration packages of Executive Directors, key Senior Management, and fees of Non-Executive Directors for shareholders’ approval at the Annual General Meeting of the Company. Information prepared by independent consultants and survey data on the remuneration practices of comparable companies may be taken into consideration in determining these remunerations.

For Executive Directors, the Remuneration Committee considers corporate and individual performance, as well as performance on a range of other factors including the accomplishment of strategic goals. The Remuneration Committee ascertains and recommends the remuneration packages of Executive Directors to the Board for its approval.

Non-Executive Directors are paid fixed annual director fees asmembers of the Board and Board Committees. TheRemuneration Committee recommends the directors’ fees payable to the Board and are deliberated at the Board before being presented at the Annual General Meeting for shareholders’ approval. The amount of remuneration for each Non-Executive Director varies with the level of responsibilities undertaken by the individual.

In addition to fixed annual director fees, all Non-Executive Directors are paid a meeting attendance allowance. Inrecognition of the additional time and commitment required, the Chairman of the respective Board Committees also receives an annualfixed fee for their chairmanshipof the respectiveBoardCommittees. Individualdirectors arenotpermitted to participate in the discussion and decision of their own remuneration.

Remuneration Committee

The Remuneration Committee comprises three (3) directors, all of whom are Independent Non-Executive Directors. The Chairman is Mr Tay Beng Chai, and members are Mr Lee Soo Hoon and Mr Chew Khat Khiam Albert.

The Terms of Reference for the Remuneration Committee is included in the Board Charter, which is available for reference on the Company’s website.

Forthefinancialyear,theRemunerationCommittee:

• ReviewedandrecommendedtheremunerationforthemembersoftheBoard

Remuneration of Directors

The Board is of the view that the transparency and accountability aspects of corporate governance as applicable to directors' remuneration are appropriately served by the band disclosure made.

Detailsoftheremunerationofthedirectorsforthefinancialyearareasfollows:

(i) Aggregate remuneration of the directors of the Company (including Alternate Director) are categorised into appropriate components.

Directors’ Remuneration (RM) Salaries, Bonuses and Allowances Fees Total Executive Directors 789,507 0 789,507 Non-Executive Directors 0 314,760 314,760 Total 789,507 314,760 1,104,267


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(ii) Aggregate remuneration of the directors of the Company on a Group basis (including Alternate Director) are categorised into appropriate components.

Directors’ Remuneration (RM) Salaries, Bonuses and Allowances Fees Total Executive Directors 789,507 0 789,507 Non-Executive Directors 0 314,760 314,760 Total 789,507 314,760 1,104,267

(iii) In accordance with the MCCG 2017, the directors of the Company whose total remuneration falls within bands of RM50,000 on a named basis, on a Group and Company basis (including Alternate Director) are as follows:

Directors’ Remuneration (RM) Designation Group Basis Company Basis LeeChung-ShihJustin Executive 400,001–450,000 400,001–450,000 BalaramanA/LAnnamaly Executive 200,001–250,000 200,001–250,000 CheongMunHong Executive 100,001–150,000 100,001–150,000 LeeSooHoon Non-Executive 100,001–150,000 100,001–150,000

Tay Beng Chai Non-Executive 50,001-100,000 50,001-100,000

ChewKhatKhiamAlbert Non-Executive 100,001–150,000 100,001–150,000

Mugana Kerisnan A/L Karpiah Alternate < 50,000 < 50,000

The remuneration breakdown of individual directors of the Company includes fees, salaries, bonuses and allowances.

The fees paid to all directors were approved in advance by the shareholders at the Annual General Meeting.

Detailsofthedirectors'remunerationaresetoutinNote7tothefinancialstatementsbyapplicablebandsofRM50,000which complies with the disclosure requirements under the Bursa Malaysia's Listing Requirements.

PRINCIPLE B – EFFECTIVE AUDIT AND RISK MANAGEMENT

I. AUDIT COMMITTEE

Composition of Audit Committee

The Audit Committee set up by the Board comprises exclusively of three (3) Independent Non-Executive Directors as follows:-

Chairman : Chew Khat Khiam Albert Independent Non-Executive DirectorMembers : Lee Soo Hoon Independent Non-Executive Director Tay Beng Chai Independent Non-Executive Director

The Chairman of the Audit Committee is not the Chairman of the Board. The members of the Audit Committee are financiallyliteratewithonememberofAuditCommitteebeingamemberoftheMalaysiaInstituteofAccountants.TheAudit Committee members collectively process a mix of skills, knowledge and experience to discharge their duties and responsibilitiestooverseethefinancialreportingprocess,internalcontrols,riskmanagementandgovernanceeffectivelyand independently.

Under the Audit Committee’s Terms of Reference, a former key audit partner is to observe a cooling-off period of at least two (2) years before being appointed as a member of the Audit Committee.

The Terms of Reference for the Audit Committee is included in the Board Charter, which is available for reference on the Company’s website.


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Compliance with Applicable Financial Reporting Standards

TheBoardisassistedbytheAuditCommitteeinoverseeingthefinancialreportingprocessesandensuringthequalityofitsfinancialreporting.TheBoardstrivestoprovideshareholderswithabalancedandmeaningfulevaluationoftheCompany’s financial performance, financial position and prospects through the annual audited financial statements,interimfinancialreports,annualreportandannouncementstoBursaMalaysia.

External Auditors

The Audit Committee maintains a transparent relationship with the External Auditors. Under the Audit Committee’s Terms of Reference, the Audit Committee is to review the suitability, objectivity and independence of the external auditor annually.

The Board strives to establish a transparent and professional relationship with the External Auditors with the assistance of the Audit Committee. Participation of the Executive Directors and/or Senior Management in the Audit Committee meeting is strictly by invitation only, so that the External Auditors can highlight any issues or concerns on the Company’s operations and management practices.

TheAuditCommittee obtainswritten assurance from the external auditors confirming that they are, and have been,independent throughout the conduct of the audit engagement in accordance with the terms of all relevant professional and regulatory requirements.

Upon completion of assessment and if found suitable by the Audit Committee, the External Auditors would then be recommended to the Board for their re-appointment, and thereafter for tabling to the shareholders of the Company for approval at the Annual General Meeting.


Trainings

Details of the trainings attended by the Audit Committee members are found under the Directors Training section of this Annual Report.

Detailsof theAuditCommitteemembers’biographyaresetoutunder theProfileofDirectorssectionof thisAnnualReport.

Further details of Audit Committee are presented under the Audit Committee’s Report on pages 46 to 49.


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II. RISK MANAGEMENT AND INTERNAL CONTROL FRAMEWORK

Effective Risk Management and Internal Control Framework

The Board acknowledges its responsibility in maintaining a sound system of internal controls and risk management practices to safeguard shareholders' investment and the assets of the Company, and for reviewing the adequacy and integrity of the system. However, the Board recognizes this is a concerted and on-going process, whereby such system is designed to manage rather than eliminate the risk of failure.

In pursuing these objectives, the system of internal controls can only provide reasonable and not absolute assurance against any material misstatement or loss.

The Board regards risk management as an integral part of the business operations, and the directors acknowledge their responsibility to maintain a sound system of internal controls. The Board recognises its overall responsibility for continuous review and maintenance of the system of internal controls with the assistance of the Audit Committee together with the outsourced Internal Auditors, and the Risk Management Committee.

The external auditors are appointed by the Board to review the Statement on Risk Management and Internal Control and to report thereon.

The Statement on Risk Management and Internal Control in this Annual Report herein details the state of internal controls within the Company.

Establishment of A Risk Management Committee

The Risk Management Committee comprises three (3) directors, all of whom are Independent Non-Executive Directors. The Chairman is Mr Lee Soo Hoon, and members are Mr Tay Beng Chai and Mr Chew Khat Khiam Albert.

The Terms of Reference for the Risk Management Committee is included in the Board Charter, which is available for reference on the Company’s website.

Forthefinancialyear,theRiskManagementCommittee:

• Reviewedandupdateditsriskmanagementprofile

Effective Internal Audit Function

The Board is aware that an independent and adequately resourced internal audit function is essential to assist in obtaining the assurance it requires regarding the effectiveness of the system of internal control.

The main role of the internal audit function is to review the effectiveness of the system of internal control and this is performedwithimpartiality,proficiencyanddueprofessionalcare.

An independentprofessionalfirm–EcovisAHLAdvisorySdnBhdwasengaged tohandle this functionand reportsdirectlytotheAuditCommittee.Thisindependentprofessionalfirmprovidesanindependentassessmentoftheadequacy,efficiencyandeffectivenessoftheCompany’sinternalcontrolsystem.Theinternalauditor’sauditplan,natureandscopeof the internal audit were approved by the Audit Committee prior to the commencement of their audit based on the Company’s requirements.

None of the Internal Audit members have any family relationship with any director and/or major shareholder of the listed issuerandanyconflictofinterestwiththelistedissuer,whichcouldimpairtheirobjectivityandindependence.

Further details can be found under the Statement on Risk Management and Internal Control, and the Audit Committee Report.


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PRINCIPLE C – INTEGRITY IN CORPORATE REPORTING AND MEANINGFUL RELATIONSHIP WITH STAKEHOLDERS

I. COMMUNICATION WITH STAKEHOLDERS

Directors’ Responsibility Statement in respect of the Audited Financial Statements

TheCompaniesAct2016requiresthedirectorstopreparethefinancialstatementswhichgiveatrueandfairviewofthestateofaffairsoftheCompanyasattheendoftheaccountingperiodandoftheresultsoftheoperationsandcashflowsfortheperiodthenended.TheBoardisresponsiblefortakingreasonablestepstoensurethefinancialstatementsreflectatrueandfairviewoftheGroupandtheCompany’sstateofaffairs,andoftheirresultsandcashflowsforthefinancialyear under review.

In preparing the financial statements for the year ended 30 June 2019, the Board adopted and applied appropriateaccounting policies on a consistent basis, made judgements and estimates where applicable which were reasonable and prudent and ensured that applicable accounting standards were followed.

The directors ensured that the Company keeps proper accounting and other records which will disclose with reasonable accuracyatanytimethefinancialpositionoftheCompany,andwhichenablethemtoensurethatthefinancialstatementscomply with the Act and the applicable approved accounting standards.

Ensure Timely and High Quality Disclosures

The Board recognizes the importance of accurate and timely dissemination of information to shareholders. The Company makesquarterlyannouncementsofthefinancialresultswithinthetimeframeprescribedintheListingRequirementsofBursa Malaysia, accompanied by a balanced and comprehensive assessment of its performance.

TheCompany'sAnnualReport,containingtheFinancialStatementsforthefinancialyear,alsocontainsotherpertinentinformation and disclosures to enable shareholders and investors to have a better understanding of the Group's business and performance.

Inpresentingtheannualfinancialstatementsandquarterlyfinancialresultsannouncementstoshareholders,theBoardaimstopresentabalancedandfairassessmentoftheGroup'sfinancialpositionandprospectsandensuresthefinancialresultsarereleasedtoBursaMalaysiawellwithinthestipulatedtimeframeandthefinancialstatementscomplywithregulatoryreportingrequirements.ThesequarterlyfinancialresultsandtheannualreportsareaccessibleviaBursaMalaysiaandtheCompany’s website. In this regard, the Board is assisted by the Audit Committee.

TheAuditCommittee assists theBoard in its responsibility to oversee and scrutinise thefinancial reporting and theeffectiveness of the internal control. The Audit Committee comprises three (3) directors, all of whom are Independent Non-Executive Directors. The term of references and activities of the Audit Committee are detailed in the Audit Committee Report on pages 46 to 49 of this Annual Report.

The Company maintains a website www.sungeibagan.com, which provides shareholders and the public in general access to information about theCompanywhich includes, corporate information,financial information, announcements andinvestor relations.

To address any concern which the shareholder may have, shareholders may contact the Company through electronic mail at [email protected].

Any queries or concern may be conveyed through the Company Secretaries who would then refer the matter to the attention of the Board. Shareholders may also directly approach the Independent Non-Executive Directors on these issues.


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II. COMMUNICATION WITH STAKEHOLDERS

Conduct of General Meetings

TheAnnualGeneralMeetingistheprincipalforumofdialoguewithshareholders.Shareholdersarenotifiedofthemeetingat least 28 days before the date of the Annual General Meeting. Shareholders are encouraged to attend and participate in the Annual General Meeting. Besides the normal agenda for the Annual General Meeting, shareholders are given the opportunitytoseekclarificationonanymatterspertainingtotheGroup’saffairsandperformanceasthedirectorsandtherepresentatives of the external auditors are present to answer any questions they may have.

Directors Attendance at General Meetings

At the 60th Annual General Meeting, directors were present in person to engage directly with shareholders and be accountable for their stewardship of the Group. The 60th Annual General Meeting included the presentation of the Group’soperatingandfinancialperformancefortheyearended30June2018,theexternalauditors’unqualifiedreportto the shareholders and a Question & Answer session during which the Chairman invited shareholders to raise questions pertaining to the accounts and other items for adoption at the meeting, before putting a resolution to vote. The directors, management and external auditors were in attendance to respond to shareholders’ queries.

Poll Voting

The Board is mindful of the poll voting requirements under Paragraph 8.29A of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad. All resolutions tabled at the Annual General Meeting will be voted by way of poll. An independent scrutineer is appointed to validate the votes cast at the Annual General Meeting. The outcome of all resolutions tabled at the Annual General Meeting shall be announced to Bursa Malaysia on the same day after the meeting.

Leveraging on Technology

The Company’s Annual General Meetings are held at easily accessible venues and not in remote locations.

Shareholders if unable to attend, may appoint their proxies to attend and vote on their behalf.

The Corporate Governance Overview Statement was approved by the Board on 7 October 2019.

ADDITIONAL COMPLIANCE INFORMATION

Disclosure of recurrent related party transactions (RRPT)

Thedetailsoftheshareholders'mandatearereflectedintheCirculartoShareholdersdated30October2019.

Utilisation of Proceeds

Noissuanceofnewsharesandrightsissuewerecarriedoutduringthefinancialyearended30June2019.

Share Buy-Backs

Nosharebuy-backswerecarriedoutbytheCompanyduringthefinancialyearended30June2019.

Exercise of Options, Warrants or Convertible Securities

Nootheroptions,warrantsorconvertiblesecuritieswereexercisedduringthefinancialyearended30June2019.


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Depository Receipt Programme

TherewerenoDepositoryReceiptProgrammesforthefinancialyearended30June2019.

Sanctions and/or Penalties

The Company and its subsidiaries’ directors and management have not been imposed with any sanctions and/or penalties duringthefinancialyearended30June2019.

Audit and Non-Audit Fees

The amount of audit and non-audit fees for services provided by the external auditors to the Group and Company for the financialyearended30June2019areasfollows:

Audit and Non-Audit Fees Group (RM) Company (RM) Audit Fees 75,000 75,000 Non-Audit Fees 25,979 25,979

Variation in Results

Therewasnomaterialvariancebetweentheresultsforthefinancialyearended30June2019andtheunauditedresultspreviously announced by the Company.

Profit Guarantee, Profit Estimate, Forecast or Projection

NoProfitGuarantee,ProfitEstimate,ForecastorProjectionwasgivenbytheCompanyforthefinancialyearended30June 2019.

Material Contracts

None of the directors and major shareholders have any material contract with the Company and/or its subsidiary either stillsubsistingattheendofthefinancialyearended30June2019orenteredintosincetheendofthatfinancialyear.

Contract Relating to Loan

TherewerenocontractsrelatingtoloanbytheCompanyanditssubsidiariesduringthefinancialyearended30June2019.

ATTENDANCE AND ACTIVITIES

Board Meetings

Board meetings are scheduled for every quarter with at least four (4) scheduled meetings annually. Additional meetings aretobeconvenedasandwhenrequired.Forfinancialyearended30June2019,theBoardmetatotaloffive(5)times.

TheattendancerecordofeachDirectorsincethelastfinancialyearisasfollows:

Board Members Designation Meetings Attended Lee Soo Hoon Chairman 5/5 Lee Chung-Shih Justin Deputy Chairman 5/5 Tay Beng Chai Member 5/5 Chew Khat Khiam Albert Member 5/5 Balaraman A/L Annamaly Member 4/5 Cheong Mun Hong Member 5/5

As required by Paragraph 15.05 of the Bursa Malaysia Securities Berhad’s Listing Requirements, all directors have compliedwiththeminimum50%attendanceforthefinancialyearended30June2019.


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Audit Committee Meetings

Audit Committee Designation Meetings Attended Chew Khat Khiam Albert Chairman 5/5 Lee Soo Hoon Member 5/5 Tay Beng Chai Member 5/5

The Audit Committee comprises three (3) directors, all of whom are Independent Non-Executive Directors. The Chairman is Mr Chew Khat Khiam Albert, and members are Mr Lee Soo Hoon and Mr Tay Beng Chai.


Nominating Committee Meeting

Nominating Committee Designation Meetings Attended Chew Khat Khiam Albert Chairman 1/1 Lee Soo Hoon Member 1/1 Tay Beng Chai Member 1/1

The Nominating Committee comprises three (3) directors, all of whom are Independent Non-Executive Directors. The Chairman is Mr Chew Khat Khiam Albert, and members are Mr Lee Soo Hoon and Mr Tay Beng Chai.

The Terms of Reference for the Nominating Committee is included in the Board Charter, which is available for reference on the Company’s website.

Remuneration Committee Meeting

Remuneration Committee Designation Meetings Attended Tay Beng Chai Chairman 1/1 Lee Soo Hoon Member 1/1 Chew Khat Khiam Albert Member 1/1

The Remuneration Committee comprises three (3) directors, all of whom are Independent Non-Executive Directors. The Chairman is Mr Tay Beng Chai, and members are Mr Lee Soo Hoon and Mr Chew Khat Khiam Albert.

The Terms of Reference for the Remuneration Committee is included in the Board Charter, which is available for reference on the Company’s website.

Risk Management Committee Meeting

Risk Management Committee Designation Meetings Attended Lee Soo Hoon Chairman 1/1 Tay Beng Chai Member 1/1 Chew Khat Khiam Albert Member 1/1

The Risk Management Committee comprises three (3) directors, all of whom are Independent Non-Executive Directors. The Chairman is Mr Lee Soo Hoon, and members are Mr Tay Beng Chai and Mr Chew Khat Khiam Albert.

The Terms of Reference for the Risk Management Committee is included in the Board Charter, which is available for reference on the Company’s website.


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SUSTAINABILITY STATEMENT

Creating Sustainable Value

Sungei Bagan Rubber Company (Malaya) Berhad (“Sungei Bagan”) aspires to create sustainable value through our business activities, for our employees, stakeholders and the community. Sungei Bagan appreciates that sustainability motivates and inspires our employees to positively impact our environment and society. Sungei Bagan is committed to sustainability by integrating it into the way we run our business - with a commitment to enhance shareholder value and at the same time, contribute positively to our employees, stakeholders and the community. We believe that operating in a sustainable manner will bring about positive social, environmental and economic impacts while minimising negative impacts on people and the environment.

Sungei Bagan recognizes its obligations as a responsible corporate citizen and endeavours to incorporate sustainable practices and activities into its corporate culture by focusing on the environment, health and safety and well-being of the community it serves to the best of its efforts. To demonstrate our commitment to sustainability, we fully support the initiatives on the sustainable cultivation of oil palm and are 100% committed towards the principles and criteria of the Malaysian Sustainable Palm Oil (“MSPO”) Scheme.

In2019,SungeiBaganEstateandKualaPergauEstatewereawardedtheMSPOcertification.

This isourfirstyearof reportingon sustainability,basedonBursaMalaysiaSecuritiesBerhad’s (“BursaMalaysia”)Sustainability Reporting Guide (Second Edition, updated in 2018) sustainability framework.

This statement covers the Company and our plantation operation in Malaysia.

Access and Availability

ThisSustainabilityStatementforthefinancialyearended30June2019,includedinourAnnualReport,willbeavailableto all stakeholders at www.sungeibagan.com.

Sustainability Governance

Sungei Bagan is guided by the Executive Directors who provide overall direction and strategic matters related to sustainability. The Board of Directors with an oversight role of our sustainability practices, is updated and informed on anysignificantissuesandtheprogressofoursustainabilityefforts.

For our plantation operations, our estate manager is responsible in spearheading all sustainability initiatives, implementing codes of practice, and embedding the culture and values related to sustainability within their operating units. Sustainability objectives, action plans and tasks are communicated, with risks reported and appropriate actions taken if required, to mitigate or prevent recurrences accordingly.


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SUSTAINABILITY STATEMENT (cont’d)

Key Stakeholders

Wedefinedstakeholders“asanyindividuals,communityandentitiesthatmaybeimpactedbySungeiBagan’sbusinessoperation”.Fromthisdefinition,managementhelddiscussions,andtheBoardwasengagedtoconfirmourstakeholders.

The following table describes our stakeholders and our corresponding engagements:

No. Stakeholders Description Engagement 1 Shareholders Entities and individuals who invest in •Annual General Meeting the Company. •Bursa Malaysia announcements •Media releases •Company website

2 Customers Customers are palm oil mills. •Meetings •Correspondence

3 Employees Executives, staff and workers. •Annual review •Performance management •Internal trainings

4 Local The setting of communities where we •Meetings Authorities– operate. •Correspondence Municipalities

5 Regulators / Regulators and the Government set the •Meetings Government legal framework on our operation. •Correspondence Ministries

6 Local We work together with the local •Meetings Community / community and industry associations for •Correspondence Industry / positive relationships and mutual Associations benefits.

7 Suppliers Suppliers of products and services •Meetings committed to sustainable FFB production. •Correspondence


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Malaysian Sustainable Palm Oil (“MSPO”) Scheme

TheMSPOCertificationSchemeisaNationalPalmOilCertificationschemeinMalaysiaandisoperatedbytheMalaysianPalmOilCertificationCouncil(“MPOCC”)astheschemeowner.Itisanindependentbodyformedwiththefollowingobjectives:

• Toestablishandoperateasustainablepalmoilcertificationscheme• Toengagewithnon-governmentalorganisations,institutesofhigherlearning,tradeassociationsandaccreditation

andcertificationbodies• Toestablishamechanismforthecertificationofentitiescomplyingwiththerequirementsofauditablesustainability

standards.

MSPOwasfirstimplementedin2015basedontheMSPOstandardswhichstipulatesgeneralprinciplesfortheproductionof sustainable palm oil that covers People (Alleviation of poverty and protect from exploitation), Planet (Protect the environmentandreducenegativehumanimpact),andProfit(Ensurecontinuityofbusiness).

Under MSPO, a total of seven (7) principles cover key issues faced by the palm oil industry such as environment, biodiversity, best practice and social responsibilities: 1. Management commitment and responsibility2. Transparency3. Compliance to legal requirements4. Social responsibility, health, safety and employment conditions5. Environment, natural resources, biodiversity and ecosystem6. Best practice7. Development of new planting

With the establishment of the MSPO Policy, Sungei Bagan Estate and Kuala Pergau Estate formalised its commitment towards maintaining and improving the sustainable production of palm oil.

In2019,SungeiBaganEstateandKualaPergauEstatewereawardedtheMSPOcertification.

Materiality Assessment and Key Sustainability Matters

The determination of material sustainability matters was from management discussions. This was facilitated by a desktop review on business operation and risk areas, input from the Board of Directors and management. Through our materiality assessment,wehaveidentifiedthekeysustainabilitymattersasoutlinedinthetablebelow:

Main topics Key Sustainability Matters

Economic 1. Profitability 2. Management diversity 3. Anti-bribery and corruption

Environmental 4. Emissions 5. Pollution 6. Waste management 7. Conservation

Social 8. Diversity and equal opportunities 9. Employee well-being 10. Safety and health 11. Community well-being


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1. Economic

The economic pillar of sustainability focuses on Sungei Bagan’s impact on the economic condition of its stakeholders, and on economic systems at the local and national level. It focuses on the economic value generated and distributed by Sungei Bagan.

Economic Performance

Sungei Bagan believes that our economic performance is dependent on the health of our stakeholders, and we strive to worktogetherwiththecommunitytocreatevalue.AdetailedexplanationofourfinancialperformanceisprovidedintheManagement Discussion & Analysis and Financial Statements sections of this Annual Report.

Proportion of Senior Management from the Local Community

For our plantation operations, 100% of our senior management team is from our local community.

Board Diversity Policy

The purpose of the Board Diversity Policy is to set out the approach to achieve the objective of the Board having the diversity of perspectives, experiences and skills necessary for effective governance. The Company views increasing diversity at the Board level as an essential element in supporting the attainment of its strategic objectives. Appointment of Board members are based on objective criteria, merit and with due regard for diversity in skills, experience, age, cultural background and gender.

A copy of the Board Diversity Policy is available for reference at www.sungeibagan.com.

Proportion of Spending on Local Suppliers

Asignificantportionofprocurementforourplantationoperationsarefromlocalsuppliers.

Anti-Bribery and Corruption

The Company has yet to establish a standalone policy on anti-bribery and corruption. A section on “Bribery and Corruption” is highlighted within the Company’s Code of Conduct and Business Ethics. The Code of Conduct and Business Ethics is available at www.sungeibagan.com.

In view of the revised Anti-bribery provision introduced by Malaysia Anti-Corruption Commission (“MACC”), we are looking towards formalising our anti-bribery and corruption practices and procedures.

Whistle-blowing Policy



This includes events which are taking place, has taken place or may take place in the future. A copy of the Whistle Blowing Policy is available for reference at www.sungeibagan.com.


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2. Environmental

Compliance with Environmental Laws and Regulations

From an environmental aspect, the Company is aware and complies with the applicable Malaysian laws and regulation. Under theEnvironmentalQualityAct1974 (Act127), scheduledwaste isorderlyclassifiedandstored indesignatedlocations, and later disposed by the proper waste collector.

UnderthePesticidesAct1974(Act149),allchemicals&fertilizersareproperlylabelled,storedandusedinthefieldaccording to its CHRA recommendation and precautions. Only trained sprayers are allowed to handle and use the chemicals. All necessary safety measures and emergency response plans have been established to tackle potential accidents.

We are aware of the importance of conserving and preserving our natural environment and we embrace good agronomic practices. In plantation management, due care has been taken to safeguard the environment. All chemicals used are allowed by the Government, with the dosage applied within recommendations.

In addition, disposal of chemical containers and cleaning of chemical spraying equipment are done in an environmentally and socially responsible manner. Herbicides are not sprayed within 20 metres on either side of the stream. Precautions havealsobeentakentoavoiddissolublefertilizersfromflowingintothestream.Thepresencewildlifeintheplantationis evidence of good environmental management.

Zero Burning Policy

We enforce our zero-burning policy in line with best practices. This includes disposals, felled palms, and during the replanting process. Felled trees and other biodegradable materials are used as a form of organic fertiliser. To maintain soil fertility and to mitigate erosion, management encourages the use of cover crops and empty fruit bunch mulching.

Illegal Hunting

Illegal or inappropriate hunting, fishing or collecting activities are strictly forbidden in our plantation. Signboardsforbiddingillegalhuntingandfishingareadequatelydisplayedintheestatepremises.

Land Conservation

For our road construction and repairs, replanting and construction of terraces and drains, care was taken to avoid soil erosioninaffectedareas.Riverswerede-siltedtomitigatefloodingduringthemonsoonseason.AnEnvironmentalImpactAssessment (“EIA”) detailing the impact and likelihood of various occurrences was conducted to assess the impact of estate operations.

With the establishment of the Environmental Policy, Sungei Bagan Estate and Kuala Pergau Estate formalised its commitment towards protecting and conserving the environment.

Full Traceability

To ensure sustainable production, our customers and their consumers want to be able to trace the origin of raw materials. As such, we have to provide adequate reassurance to our relevant stakeholders that the Fresh Fruit Bunches (“FFB”) sold by Sungei Bagan meets these standards.

ThroughtheMSPOcertificationprocess,wehaveestablished“Traceability and Supply Chain” processes to document the flowofFFBfromharvestingtodispatch.

To reinforce its relevance and our commitment towards best practices, these processes will be audited and reviewed regularly. Focusing on traceability also improves our business operations.


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Energy Consumption Efficiency

Werecognisetheuseofdieselinourequipmentandmachinery.Wemonitorourefficiencythroughdieselconsumptionon the basis of litre per metric tonne of FFB. Subject to the availability and feasibility of technology, we identify areas for improvement. Whenever possible, we will consider the use of solar energy to increase our renewable energy efforts.

Sungei Bagan monitors its diesel and electrical consumption per FFB on a monthly basis.

Sungei Bagan’s energy usage reduction plan for FY2020 includes the following:

• UseofLEDbulbswithlowervoltage• Equipmentandmachinerywithlowfuelefficiencytobereplaced(Tractors)• Increasedretentionofrainwaterforestateusage,especiallyforwashingandcleaning• Awarenessprogrammetoconserveelectricityandwater• Regularchecksonpipes,taps,watertanksandtoensurepromptrepairs/replacements To ensure optimal performance, preventive and scheduled maintenance on our equipment and machinery is consistently done.

Good Agronomy Practices

Significantinitiativeswereundertakentoensurethatoureffortsareinlinewithbestpractices.Effortssuchascontrollingplanting density, managing diseases and pests, planting method and fertiliser application controls are part of our conservation efforts in sustaining the land for future generations.

ThroughourEIA,desktopevaluationsandfieldassessmentswereconducted.Inadditiontoensuringthathighvaluelandandforestsareasareidentifiedandprotected,ourassessmentprocessincludedabiodiversityassessmentandengagementwith local communities. Members of the local community are able to provide feedback.

As a member of the Malaysian Palm Oil Association (“MPOA”), we are committed to the MPOA Environmental Charter Version 12/2003. By implementing the best agro-management practices, Sungei Bagan consistently strives to ensure that business growth will not be at the expense of the environment, the local community and the wider public.

We strictly review and track the latest environmental regulations through news releases, subscription for legislation amendmentstrackedbypublications–InternationalLawBookServicesandcircularsfromrelevantassociations(MPOA,MPOB and MAPA).

WearehappytoreportNil(2018:Nil)finesorpenaltiesfromviolationsonenvironmentallawsandregulationforthefinancialyearended30June2019.

Protecting Biodiversity

Sungei Bagan continues intensifying our conservation activities through the involvement of local communities and other stakeholders. To ensure their survivability and protection, our staff are trained to identify wildlife within the estate. If assessed as a threat, assistance from the Wildlife Department will be sought.

SungeiBaganEstatehasalistofthewildlifespeciesidentifiedandmonitorsthemmonthly.Inaddition,aBiodiversityManagement Plan which included the following was established:

• Trainingandawarenessonwildlifeconservation• TalkbyPerhilitan(WildlifeDepartment)onwildlifeprotection• Legalimpactofillegalhunting• Monthlycensusofwildlife• Monitorandpreventhuntingofwildanimals


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3. Social

We are committed to the principles of Malaysia’s local labour regulation and human rights. Sungei Bagan’s aim is for employees to work in an environment free of discrimination and harassment, and for our employees and stakeholders to be treated fairly regardless of nationality, gender, age, ethnicity, religion or family status.

At the plantation operation level, a Social Impact Analysis was conducted to assess the impact and implement corresponding measurestomitigatetheidentifiedareaofimpact.

With the establishment of the Good Social Practices Policy, Sungei Bagan Estate and Kuala Pergau Estate formalised its commitment towards maintaining the practice of no discrimination, and the provision of equal opportunity and treatment to all.

Thriving Employees

Employees are our most important assets and we strive to provide the best working conditions to all employees regardless oftheirnationality,race,orgender.Weencouragediversityandequalityatwork.Thesebenefitswillflowthroughtosociety, as we believe greater equality promotes social stability and supports further economic development.

Attheworkplace,wecontinuetofocusonthesafetyandhealthofouremployeesbyconductingregularbriefings.TheEmployment Act is strictly implemented to ensure that our employees’ welfare is well taken care of.

Diversity and Equal Opportunity

Ouremployeeprofilebynationality,gender,agegroupcategoryandbyethnicityaredetailedbelow.

Malaysians represent 53% of our workforce. The plantation industry is facing a challenging labour environment. The process of engaging Indonesian workers is getting more challenging with a key factor being the increased opportunities in Indonesia. We strive to provide a conducive environment for our workers, and where possible, to adopt the use of machinery and equipment.

Due to the nature of plantation work, male employees make up 81% of our workforce. Female employees represent 19% of our workforce.

With the establishment of the Sexual Harassment and Violence Policy, Sungei Bagan Estate and Kuala Pergau Estate formalised its commitment towards protecting its employees from all forms of sexual harassment and violence at the workplace.

43% of our employees are between the ages of 30 to 49. Working in plantations requires workers able to withstand the challenging working conditions. Personal protective equipment is provided to ensure the safety of our employees.

Our workforce ethnic composition comprises primarily the Bumiputra community, followed by the Indian and the Chinese community (excluding others). Ethnic diversity is encouraged through engagement with the local community.


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Employee Engagement

We recognise the importance of good communication. Critical importance is placed on matters concerning changes in working practices and procedures.

On matters arising at the workplace, consultation involves all employees as far as reasonably practicable. Managers are responsible for ensuring that consultation and communication is a fundamental element. With that said, effective communication is a collective responsibility, with everyone having a responsibility towards achieving effective engagement. The estates have established procedures for employees to engage in this process. This is in the form of employee engagement, similar to other stakeholders’ engagement, where the following steps are established for effective communication:

• RequestandResponse-uponwrittenrequest,managementtoprovidenon-confidentialinformationintheappropriatelanguage.

• ConsultationandCommunication–periodicalmeetings/consultationsheldtoresolvecomplaintsandtodisseminateinformation.

• Complaints andGrievances Procedure – a grievance procedurewas established for employees to channel theircomplaints/grievances to management which, in turn will resolve these complaints or grievances in an appropriate manner(withdueconsultations)andshallcommunicateitsfindings/solutionstotheaggrievedemployee,apartfromappropriate action.

Employee Benefits

SungeiBaganplacessignificant importance inprovidingouremployeesand their families inourestateswithqualityfacilities and amenities to live and work comfortably. Over the years, the estate’s infrastructure has been upgraded, inclusive of the living quarters for our staff and workers, with all upgrades complying with the relevant regulations. The Company is also sensitive to the needs of employees and provides places of worship and recreational facilities.

WearrangeforaMedicalOfficertovisittheestateonamonthlybasis.

The Company values the importance of education, and encourages continual learning among our employees and their children.

Benefitsforfull-timeemployeesinclude:

• Childallowance• AnnualleaveandpaidholidaysasstipulatedundertheEmploymentAct1955• EPF,SOCSO,EIS• Accommodation,water&electricitysupply• Retirementgratuity


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Employee Training

The Company is committed to ensure our employees continue to develop their competencies and skills. All employees will have access to training and development enabling them to acquire the knowledge, skills and attitudes necessary to develop their needs and potential on the job and contribute towards the Company’s future growth.

Employees are provided training on the handling of new equipment and are constantly given guidance on safety and the useofsafetyequipmentaccordingtoOSHrequirements.Employeesarealsobriefedontheidentificationandmitigationof potential operational risks and hazards. Our trainings are focused on practical aspects of safety and health components.

These trainings include:

Emergency response plan• Fireextinguishertraining• Emergencydrills• Firstaidtraining• Fireextinguisherinspection• Firstaidboxinspection

Building and structure inspection• Linesideinspection• Chemicalstoreinspection• Emergencylightningcircuitbreakerinspection

Estate training programmes• Inductionfornewworkers• Personalprotectiveequipmenttraining• Sprayingpumpmaintenancetraining• Healthprogramme• Safeoperatingprocedure–variousworkunits

With the establishment of the Occupational Safety and Health Policy, Sungei Bagan Estate and Kuala Pergau Estate formalised its commitment towards employee health, safety and welfare. We value workplace safety and health, and the safety of our employees are of paramount importance.

Occupational Safety and Health

• OSHmanagement• OSHcommitteeandmeetings• Emergencyrespondplanandemergencyresponseteam• OSHyearlyprogramme• Workerstrainingneedsanalysis• Monthlysprayerhealthscreening• Yearlysprayermedicalsurveillance• Yearlyforeignworkermedicalcheck-up(FOMEMA)• Hazardidentification,riskassessmentandincidentinvestigation• HIRARC• OSHtraining-variousworkunits


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Community Engagement (Community Social Responsibility)

The Company has committed itself towards involvement in the local community. Below are our efforts over the year to support the community:

Donations – Malaysianflagsdonatedtothepolicestation,contributionstowardstheKelantanFlood Relief Fund, temples and schools.

FruitGarden – AtKualaPergauEstate,afruitgardenismaintained,providinganeconomicalandhealthy food source for our employees.

CoconutPlantings – AtSungeiBaganEstate,coconutpalmswereplanted,providinganeconomicalandhealthy food source for our employees.

HariRayaGathering – ForHariRayaPuasa,a lunchwasorganised toappreciate thehardworkofouremployees over the past year.

AnnualRite – ForbothSungeiBaganEstate&KualaPergauEstate,anImam(MuslimSpiritualleader) was invited from the neighbouring mosque together with the villagers to perform prayers in the estates, after which lunch was served for all.

EstateFootballField – Availableforsocialactivitiesorganisedbythecommunity.

WaterSupply – Providedtoneighbouringvillagesduringthedryseasonandforcertainfunctionsorganised by Social and Welfare bodies


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STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL

Introduction

The Board of Directors is pleased to present the Statement on Risk Management and Internal Control pursuant to Paragraph 15.26 (b) of the Bursa Malaysia Securities Berhad ("Bursa Malaysia") Listing Requirements, which outlines Sungei Bagan RubberCompany(Malaya)Berhad'skeyelementsofinternalcontrolsystemforthefinancialyearended30June2019.

Board Responsibility

The Board acknowledges its responsibility in maintaining a sound system of internal controls and risk management practices to safeguard shareholders' investment and Sungei Bagan Rubber Company (Malaya) Berhad's assets, and for reviewing the adequacy and integrity of the system. However, the Board recognizes that this is a concerted and on-going process whereby such system is designed to manage rather than eliminate the risk of failure.

In pursuing these objectives, the system of internal controls can only provide reasonable and not absolute assurance against any material misstatement or loss.

Risk Management Framework

TheBoardregardsriskmanagementasanintegralpartofthebusinessoperations.TheBoardconfirmsthatthereisacontinuousprocessforidentifying,evaluating,monitoringandmanagingthesignificantrisksaffectingtheachievementof Sungei Bagan Rubber Company (Malaya) Berhad's business objectives on an informal basis via its Board, the Audit Committee with the assistance of the outsourced Internal Auditors, and the Risk Management Committee.

In 2018, the Risk Management Committee was established, comprising exclusively of Independent Non-Executive Directors, committed to oversee Sungei Bagan Rubber Company (Malaya) Berhad’s risk management framework and policies.TheRiskManagementCommitteemetonce(1)duringthefinancialyearended30June2019.

The principal risks and uncertainties (not intended to be exhaustive) included the following:

• Adverseweatherconditions• Fluctuationsinforeignexchange• Fluctuationsinthemarketvaluationofinvestments• Fluctuatingcommodityprices• Increasinglabourcosts• Insufficientandinexperiencedlabourforce• Increasingregulatorycompliancerequirements• Successionplanning

A review on the adequacy and effectiveness of risk management and internal control system is undertaken on a continuous basis.Sincefinancialyearended30June2018,theRiskManagementCommitteehasreviewedSungeiBaganRubberCompany(Malaya)Berhad’sriskmanagementprofileonanannualbasis.Forfinancialyearended30June2019, theBoardissatisfiedthattheriskmanagementandinternalcontrolsysteminplaceisadequateandeffective.

Nomajorinternalcontrolsweaknesseswereidentifiedduringthefinancialyearunderreviewthatrequiresdisclosureinthe Annual Report.

Internal Audit

Considering the nature and size of Sungei Bagan Rubber Company (Malaya) Berhad's assets and operations, the internal auditfunctionissupportedbyanindependentprofessionalfirm,whichprovidesassurancetotheAuditCommitteeontheadequacy and integrity of internal control system in the discharge of the Audit Committee’s duties and responsibilities. This external service provider reports directly to the Audit Committee.

The internal audit reviews the internal audit control systems on the basis of a rolling internal audit strategy with an annual internal audit plan presented to the Audit Committee for approval.


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STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL (cont’d)

AsummaryofthemainactivitiesundertakenbytheInternalAuditorsduringthefinancialyearareasfollows:

• PreparedanddevelopedtheannualriskbasedinternalauditplanfortheAuditCommittee’sapproval• Conducted the internal audit project in accordancewith the approved internal audit plan, including follow-up of

matters from previous internal audits. This internal audit project covered the plantation operations with particular focus on the following:

- Review on revenue, billings and collections - Monitoring/Employment of foreign workers - Head Count at the estate• IssuedinternalauditreporttotheAuditCommittee,withcopiesextendedtomanagement,identifyingweaknessesand

issues, and also highlighting opportunities for improvement InternalauditfeesofRM12,000werepaidtotheoutsourcedinternalauditorsforthefinancialyearended30June2019.

The Audit Committee with the assistance of the outsourced Internal Auditors annually reviews Sungei Bagan Rubber Company (Malaya) Berhad's system of internal controls to address the related internal control weaknesses. The outsourcedInternalAuditorsindependentlyreviewstheriskidentificationproceduresandcontrolprocessesimplementedbythemanagement.Anysignificantweaknessesidentifiedduringthereviewstogetherwiththeimprovementmeasuresto strengthen the internal controls were reported to the Audit Committee. To the extent practicable, management will act towards resolving the issues raised by the Internal Auditors.

Whistle Blowing Policy



This includes events which are taking place, has taken place or may take place in the future.

A copy of the Whistle Blowing Policy is available for reference on the Company’s website.

Other Key Elements of Internal Control

Other key elements of Sungei Bagan Rubber Company (Malaya) Berhad's system of internal control are as follows:

• Anappropriateorganizationalstructure,whichenablesadequatemonitoringof theactivitiesandensureseffectiveflowofinformation.

• ResponsibilitiesareclearlydefinedanddelegatedtothecommitteesoftheBoard.• Keyprocessesaregovernedbypoliciesandprocedures.• Varioussupportfunctionscomprisingadministration,corporateaffairs,finance,andtreasuryarecentralizedtoensure

uniform policies and procedures.• TheestatepreparesestimatesforthecomingyearwhicharereviewedbytheBoard.• InformationcoveringthefinancialperformanceagainsttheestimatesoftheestateisprovidedtotheBoardonquarterly

basis together with key operational performance indicators.• QuarterlyandannualfinancialstatementsarereviewedbytheAuditCommitteewhothenrecommendstotheBoard

for approval prior to submission to Bursa Malaysia.


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STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL (cont’d)

Board’s Conclusion

Overall, based on the Board's assessment of risk management and internal control system of Sungei Bagan Rubber Company(Malaya)Berhad,theBoardissatisfiedthattheprocessofidentifying,evaluatingandmanagingsignificantrisks that may affect achievement of business objectives is in place to provide reasonable assurance. The Board and the Audit Committee have undertaken an assessment of the adequacy and effectiveness the internal control system. Sungei Bagan Rubber Company (Malaya) Berhad will strive to ensure that the system of internal controls will be continuously enhanced and will seek regular assurance on the effectiveness and soundness of the internal control systems through appraisals by the internal and external auditors.

The level of risk tolerance and risk management policies are determined by the Board. The Board and management are responsible for overseeing the risk management framework and policies, including reviewing business and operational activitiestoidentifyareasofsignificantrisk.TheBoardalsolooksintothesystemofinternalcontrolsandmeasurestakento mitigate such risks.

Inconsiderationof the InternalAuditors' report, theBoard ispleased to report that therewerenosignificant internalcontroldeficienciesforareasthatwerereviewed.

After considering Sungei Bagan Rubber Company (Malaya) Berhad’s assets and operations, and based on the internal controls established and maintained, work performed by the internal and external auditors, the review of the key risks performed by management, the Audit Committee, the Risk Management Committee and the Board, the Board with the concurrence of the Audit Committee, is of the opinion that Sungei Bagan Rubber Company (Malaya) Berhad’s internal controls are adequate as at 30 June 2019.

The Board received assurance from the Executive Director and the Senior Finance Manager that Sungei Bagan Rubber Company (Malaya) Berhad’s internal control and risk management system is operating adequately and effectively, in all material aspects, based on the adopted framework.

The Statement on Risk Management and Internal Control was reviewed and approved by the Board.

Review by the External Auditors

In addition, in accordance with the paragraph 15.23 of the Listing Requirements of Bursa Malaysia, the external auditors have reviewed this Statement on Risk Management and Internal Control and reported that nothing has come to their attention that causes them to believe that the contents of this Statement is inconsistent with their understanding of the actual processes carried out.


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AUDIT COMMITTEE REPORT

Functions

The functions of the audit committee shall be:

a) To review the following and report the same to the Board: i. with the external auditors, the audit plan, the scope of work and ascertain that it will meet the needs of

the Board, the shareholders and the regulatory authorities;ii. with the external auditors, their evaluation of the quality and effectiveness of the entire accounting system,

theadequacyand the integrityof the internal control systemand theefficiencyof theGroup’soperationsand efforts and processes taken to reduce the Group’s operational risks;

iii. with the external auditors, their audit report;iv. the assistancegivenby theGroup’s officers to the external auditors;v. the suitability, objectivity and independence of the external auditor annually;vi. the adequacy of the scope, function and resources of the internal audit functions and that it has the necessary

authority to carry out its work including inter-alia the appointment of the internal auditors;vii. the internal audit programme, processes, the results of the internal audit programme, process or investigation

undertaken and whether or not appropriate action was taken on the recommendations of the internal audit function;

viii. the quarterly results and the year-end financial statements, prior to the approval by the Board, focusingparticularly on:

• changes in or the implementationofmajor accountingpolicy changes; • significant andunusual events; • theaccuracyandadequacyof thedisclosure informationessential toafairandfullpresentationof the

financial affairs of theGroup; and • compliancewith accounting standards andother legal requirements.ix. anyrelatedpartyand inter-companytransactionsandconflictof interestsituation thatmayarise including

any transactions, procedure or course of conduct that raises questions of management integrity;x. the propriety of accounting policies, principles and practices adopted by the management and accepted by

the external auditors, where alternatives are also acceptable;xi. any letter of resignation from the external auditors of the Company;xii. whether there is reason (supported by grounds) to believe that the Company’s external auditors are not

suitable for re-appointment; andxiii. anysignificantauditfindings, reservation,difficultiesencountered,ormaterialweaknessesreportedbythe

external and internal auditors.

b) To recommend the nomination of a person or persons as external auditors and internal auditors, and their audit fee;

c) To promptly report to Bursa Malaysia on any matter reported by it to the Board which has not been satisfactorily resolved resulting in a breach in the Bursa Malaysia’s Listing Requirements;

d) To submit to the Board on a periodic basis a report on the summary of activities of the Committee in the discharge of its function andduties in respect of eachfinancial quarter and thefinancial year;

e) To carry out other function that may be mutually agreed upon by the Committee and the Board which would be beneficial to theCompanyandensure theeffectivedischargeof theCommittee’sdutiesand responsibilities;and

f) To verify the criteria for allocation of options pursuant to a share scheme for employee.


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AUDIT COMMITTEE REPORT (cont’d)

Composition and Attendance

Audit Committee Designation Meetings Attended Chew Khat Khiam Albert Chairman 5/5 Lee Soo Hoon Member 5/5 Tay Beng Chai Member 5/5

The Audit Committee comprised solely of Independent Non-Executive Directors. The Chairman of the Audit Committee is not the Chairman of the Board.

The Audit Committee comprises three (3) directors, all of whom are Independent Non-Executive Directors. The Chairman is Mr Chew Khat Khiam Albert, and members are Mr Lee Soo Hoon and Mr Tay Beng Chai.

A meeting may be convened using telephone and/or the contemporaneous linking together by telephone or such other electronic communication media of a number of the Committee members being not less than the quorum shall be deemed to constitute a meeting of the Committee wherever in the world they are.

Further details are included in the Terms of Reference of the Audit Committee Report in the Board Charter, which is available for reference on the Company’s website.

Under the Audit Committee’s Terms of Reference, a former key audit partner is to observe a cooling-off period of at least two (2) years before being appointed as a member of the Audit Committee.

TheAuditCommitteeheldatotaloffive(5)meetingsduringthefinancialyearended30June2019.

The Committee met with External Auditor twice (2) during the year without the presence of the Executive Directors.

The Chairman engages on a continuous basis with senior management of the Company on all matters affecting the Company.

The details of training attended by the Audit Committee who are also Board members are found under the Directors Training section of this Annual Report.


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Summary of Activities for the Financial Year

Duringthefinancialyearended30June2019,themainactivitiescarriedoutbytheCommitteewereasfollows:

1. Reviewedanddiscussed theunauditedquarterlyfinancial reportsprior topresentation to theBoard for approvaland subsequent announcements.

2. Reviewed the external auditors’ scope of work and their audit plan and discussed results of their examination and recommendations.

3. Reviewedwith the external auditors the audited financial statements for the financial year ended 30 June 2019,the results of the audit, audit report and recommendation prior to the approval of the Board and subsequent announcements.

4. Reviewed and discussed the new developments on accounting standards issued by the Malaysian Accounting StandardsBoard and its adoption and impact to thefinancial statements.

5. Reviewed the internal audit plan andprogramme for thefinancial year under review.

6. Reviewed the reports prepared by the outsourced internal auditors on the state of internal controls of the Company.

7. ReviewedtherelatedpartytransactionsandconflictofinterestsituationsthataroseforcompliancewiththeListingRequirements of Bursa Malaysia.

8. Reviewed the extent of compliance with the relevant provisions set out under the MCCG 2017 for the purpose of preparing the Corporate Governance Statement and Statement on Risk Management and Internal Control pursuant to the Listing Requirements of Bursa Malaysia.

9. Reviewedtheinformationcoveringthefinancialperformanceagainst theestimateof theestate togetherwithkeyoperational performance indicators on quarterly basis.

10. Reviewed the proposed audit fees for the external auditors.

11. Considered the re-appointment of the external auditors and the outsourced internal auditors.

External Auditors

The Board established a formal and transparent arrangement with the external auditors of the Company through the Audit Committee. The external auditors and representatives of the management are present to answer questions and provide explanations to the Audit Committee.

The Audit Committee communicated directly and independently with the external auditors quarterly where necessary, and without the presence of the management twice (2) a year.

The Company’s independent external auditor, Messrs Ernst & Young, play an essential role by enhancing the reliability of theCompany’sfinancialstatementsandbygivingassuranceofthatreliabilitytousersofthefinancialstatements.

EY Audit & Non-Audit Fees Group (RM) Company (RM) Audit Fees 75,000 75,000 Non-Audit Fees 25,979 25,979

Basedontheabove,theAuditCommitteewassatisfiedwithboththeexternalauditors’competencyandindependencetofurtherrecommendtotheBoardthere-appointmentforthecomingfinancialyear.


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At present, there are no former key audit partners with a cooling-off period of less than two (2) years present on the Audit Committee.

The role of the Audit Committee in relation to the external auditors is stated on pages 46 to 49.

This Statement is made in compliance with Paragraphs 15.25 of the Bursa Malaysia Securities Berhad’s Listing Requirements and approved by the Board on 7 October 2019.

Internal Audit Function

The Committee is aware that an independent and adequately resourced internal audit function is essential to assist in obtaining the assurance it requires regarding the effectiveness of the system of internal control.

The main role of the internal audit function is to review the effectiveness of the system of internal control and this is performedwithimpartiality,proficiencyanddueprofessionalcare.

An independentprofessionalfirm–EcovisAHLAdvisorySdnBhdwasengaged tohandle this functionand reportsdirectlytotheAuditCommittee.Thisindependentprofessionalfirmprovidesanindependentassessmentoftheadequacy,efficiencyandeffectivenessoftheCompany’sinternalcontrolsystem.Theinternalauditor’sauditplan,natureandscopeof the internal audit were approved by the Audit Committee prior to the commencement of their audit based on the Company’srequirementsaimedatoptimising theeffectivenessandefficiencyof theCompany’s internalcontrol.Theinternal auditor’s report was received by the Committee, discussed and recommendations were implemented, where necessary and appropriate, to tighten the Company’s internal control procedures.

Theinternalauditfeeforservicesprovidedbytheoutsourcedinternalauditorsforthefinancialyearended30June2019amounted to RM12,000.

Forthefinancialyearended30June2019,consideringthenatureandsizeofSungeiBaganRubberCompany(Malaya)Berhad’s assets and operations, the Audit Committee was of the view that it was adequate to focus the scope of the Internal Audit towardsourplantationoperations.Itemshighlightedbytheindependentprofessionalfirmweredeliberatedandrectified(whenfeasible)overthefinancialyear.

The scope of the Internal Audit Report 2019 focused on the:

• Reviewonrevenue,billingsandcollections• Monitoring/Employmentofforeignworkers• HeadCountattheestate

The Internal Audit Report 2019 was presented to the Audit Committee and actionable steps were taken to ensure that the issues highlighted were addressed to the extent practicable.


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PROFILE OF DIRECTORS

LEE SOO HOON

Position Independent Non-Executive Chairman

Gender Male

Age 77

Nationality Malaysian

Work Experience/Occupation a) Partner of Ernst & Young, Singapore (1978 - 1997) b) Independent Director of Singapore Public Companies c) Providesmanagement andfinancial consultancy services

Qualification/Professional body a) F.C.A. Institute of Chartered Accountants in England and Wales b) Fellow of Singapore Institute of Chartered Accountants (ISCA) c) MemberofMalaysian Institute ofCertifiedPublicAccountants d) Member of Malaysian Institute of Accountants e) Member of the Singapore Institute of Directors

Date of Appointment 19 October 2001

Details of any board committee to a) Member of Audit Committee which Director belongs b) Member of Nominating Committee c) Member of Remuneration Committee d) Chairman of Risk Management Committee

Directorship in other Bursa listed a) Kluang Rubber Company (Malaya) Berhad companies b) Kuchai Development Berhad Securities holding in the Company Nil(as at 1 October 2019)

Relationship with other Directors No family relationship with other Directors and/or substantial shareholdersand/or substantial shareholders of the Company

Conflict of interest with the Company Nil

List of convictions for offences Nil(other than trafficoffences)withinthe past 5 years and particulars of any public sanction or penalty imposed by the relevant regulatory bodies, if any


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PROFILE OF DIRECTORS (cont’d)

LEE CHUNG-SHIH JUSTIN

Position Executive Deputy Chairman

Gender Male

Age 57

Nationality Singaporean

Work Experience/Occupation a) Executive Director, Malaysia Public Companies b) Executive Director, Public Unlisted Real Estate Investment Company c) Director, Public Unlisted Licenced Trust Company

Qualification/Professional body B. Sc., International Business

Date of Appointment 19 February 1990

Details of any board committee to Nilwhich Director belongs

Directorship in other Bursa listed a) Kluang Rubber Company (Malaya) Berhadcompanies b) Kuchai Development Berhad

Securities holding in the Company Direct interest of 35,438 shares and deemed interest of 38,949,833 shares (as at 1 October 2019) in the Company equivalent to 0.05% and 58.72% respectively

Relationship with other Directors Son of Lee Thor Seng and brother of Lee Yung-Shih Colinand/or substantial shareholders




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TAY BENG CHAI

Position Independent Non-Executive Director

Gender Male

Age 58


Work Experience/Occupation a) In professional legal practice since 1986 b) Managing Partner of Tay & Partners, Malaysia c) Partner of Bird & Bird ATMD LLP d) A lawyer of over 30 years with extensive corporate and commercial

experience in Malaysia and Singapore.

Qualification/Professional body a) LL.B (Hons) Second Upper, National University of Singapore in 1985 b) Admitted as an Advocate & Solicitor, High Court of Singapore in 1986 c) Admitted as an Advocate & Solicitor, High Court of Malaya in 1989 d) Fellow of the Singapore Institute of Arbitrators

Date of Appointment 4 December 2014

Details of any board committee to a) Member of Audit Committee which Director belongs b) Member of Nominating Committee c) Chairman of Remuneration Committee d) Member of Risk Management Committee

Directorship in other Bursa listed a) Kluang Rubber Company (Malaya) Berhadcompanies b) Kuchai Development Berhad c) Malaysian Bulk Carriers Berhad

Securities holding in the Company Nil(as at 1 October 2019)





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Position Independent Non-Executive Director

Gender Male

Age 62

Nationality Australian

WorkExperience/Occupation a) GroupCFOofSinwaLimited (2010–2013) b) GroupCFOofBoardroomLimited (2007–2010) c) FinanceDirector ofGennonGroup (2001–2007)

Qualification/Professional body a) Fellowof theCharteredAccountantsAustralia andNewZealand b) Fellowof theHongKong Institute ofCertifiedPublicAccountants c) Fellow of the Financial Services Institute of Australasia d) Chartered Accountant of The Singapore Institute of Chartered Accountants e) Member of the Australian Institute of Managers and Leaders f) Member of the Singapore Institute of Directors g) Bachelor of Commerce, University of New South Wales (1980) Date of Appointment 10 October 2016

Details of any board committee to a) Chairman of Audit Committee which Director belongs b) Chairman of Nomination Committee c) Member of Remuneration Committee d) Member of Risk Management Committee

Directorship in other Bursa listed a) Kluang Rubber Company (Malaya) Berhadcompanies b) Kuchai Development Berhad






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CHEONG MUN HONG

Position Executive Director

Gender Male

Age 33

Nationality Singaporean

Work Experience/Occupation a) Executive Director, Malaysia Public Companies b) Investment Analyst, Public Unlisted Licensed Trust Company

Qualification/Professional body a) Bachelor of Engineering (BEng) Nanyang Technological University b) Holder of the right to use the CFA® designation c) Member of the Singapore Institute of Directors

Date of Appointment 1 March 2015

Details of any board committee to Nilwhich Director belongs Directorship in other Bursa listed a) Kluang Rubber Company (Malaya) Berhadcompanies b) Kuchai Development Berhad Securities holding in the Company Nil(as at 1 October 2019)





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BALARAMAN A/L ANNAMALY Position Executive Director

Gender Male

Age 71


Work Experience/Occupation a) Executive Director, Malaysia Public Companies b) Former Consultant – Sg. Sustainable Oil Ghana Ltd.,Accra, Ghana,

West Africa

Qualification/Professional body a) Member of Malaysian Institute of Management, Incoporated Society b) Member of Malaysian Palm Oil Association (Johor Branch) c) Committee Member of Malaysian Estate Owners Association Date of Appointment 28 August 2014


Directorship in other Bursa listed Kluang Rubber Company (Malaya) Berhadcompanies

Securities holding in the Company Direct interest of 3,322 shares equivalent to 0.01%(as at 1 October 2019)





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MUGANA KERISNAN A/L KARPIAH Position Alternate Director (To Balaraman A/L Annamaly)

Gender Male

Age 60


Work Experience/Occupation Manager, Sungei Bagan Estate

Qualification/Professional body a) Chairman of Malaysia Palm Oil Association (Kelantan) b) Deputy Chairman of Incorporated Society of Planters (2015 - 2017) c) Bachelor of Agricultural Science, University Pertanian Malaysia Date of Appointment 2 May 2019


Directorship in other Bursa listed Kluang Rubber Company (Malaya) Berhad (Alternate Director)companies






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DIRECTORS’ REPORT

ThedirectorshavepleasureinpresentingtheirreporttogetherwiththeauditedfinancialstatementsoftheGroupandoftheCompanyforthefinancialyearended30June2019.

PRINCIPAL ACTIVITIES The principal activities of the Company consist of the production and sale of fresh oil palm fruit bunches. The Company is also a long term portfolio investor in securities.

TheprincipalactivitiesandotherinformationonthesubsidiariesaredescribedinNote13tothefinancialstatements.

RESULTS Group Company RM RM Loss net of tax 6,661,518 3,386,292

Attributable to:Owners of the parent 6,661,518 3,386,292

Therewerenomaterialtransferstoorfromreservesorprovisionsduringthefinancialyear,otherthanasdisclosedinthefinancialstatements.

Intheopinionofthedirectors,theresultsoftheoperationsoftheGroupandoftheCompanyduringthefinancialyearwere not substantially affected by any item, transaction or event of a material and unusual nature, other than as disclosed inthefinancialstatements.

DIVIDENDS The amounts of dividends paid by the Company since 30 June 2018 were as follows:

Net dividend Amount per share RM Sen Inrespectofthefinancialyearended30June2018 as reported in the directors' report of that year:

Dividend in specie (single-tier) on 66,332,645 ordinary shares, declared on 30 October 2018 and paid on 7 January 2019* 15,041,749 23.00

Special tax exempt (single-tier) dividend on 66,332,645 ordinary shares, declared on 16 October 2018 and paid on 7 January 2019 2,653,306 4.00

Firstandfinaltaxexempt(single-tier)dividendon66,332,645ordinaryshares, declared on 16 October 2018 and paid on 7 January 2019 1,326,653 2.00

3,979,959 6.00

* Represents 3,837,181 ordinary shares in Kluang Rubber Company (Malaya) Berhad with a fair value of RM15,041,749 on 7 January 2019.


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DIRECTORS’ REPORT (cont’d)

DIVIDENDS (cont’d) AttheforthcomingAnnualGeneralMeeting,thefollowingdividendinrespectofthefinancialyearended30June2019on 66,332,645 ordinary shares, will be proposed for shareholders' approval:

Net dividend Amount per share RM Sen

First andfinal tax exempt (single-tier) dividend 1,326,653 2.00

Thefinancialstatementsforthecurrentfinancialyeardonotreflecttheseproposeddividends.Suchdividends,ifapprovedbytheshareholders,willbeaccountedforinequityasanappropriationofretainedearningsinthefinancialyearending30 June 2020.

DIRECTORS

ThenamesofthedirectorsoftheCompanyinofficesincethebeginningofthefinancialyeartothedateofthisreportare:

Lee Soo HoonLee Chung-Shih Justin Balaraman A/L Annamaly Tay Beng ChaiCheong Mun HongChew Khat Khiam AlbertMugana Kerisnan A/L Karpiah (appointed on 2 May 2019) (alternate to Balaraman A/L Annamaly)

ThenameofthecorporatedirectoroftheCompany’ssubsidiariesinofficesincethebeginningofthefinancialyeartothedate of this report is:

Jackaroo Limited

DIRECTORS’ BENEFITS

Neitherattheendofthefinancialyear,noratanytimeduringthatyear,didtheresubsistanyarrangementtowhichtheCompanywasaparty,wherebythedirectorsmightacquirebenefitsbymeansoftheacquisitionofsharesinordebenturesof the Company or any other body corporate.

Sincetheendofthepreviousfinancialyear,nodirectorhasreceivedorbecomeentitledtoreceiveabenefit(otherthanbenefitsincludedintheaggregateamountofemolumentsreceivedordueandreceivablebythedirectorsasshowninNote7tothefinancialstatementsorthefixedsalaryofafull-timeemployeeoftheCompany)byreasonofacontractmadebytheCompanyorarelatedcorporationwithanydirectororwithafirmofwhichheisamember,orwithacompanyinwhichhehasasubstantialfinancialinterest,exceptasdisclosedinNote27tothefinancialstatements.

INDEMNIFYING DIRECTORS OR OFFICERS

Duringthefinancialyear,thedirectorsandofficersofSungeiBaganRubberCompany(Malaya)Berhad,arecoveredundertheDirectors'andOfficers'LiabilityInsurance("D&OInsurance")inrespectofliabilitiesarisingfromactscommittedintheirrespectivecapacityas,interalia,thedirectorsandofficersoftheGroupsubjecttothetermsoftheD&OInsurancepolicy.ThetotalamountofD&OInsuranceeffectedandpremiumpaidforthedirectorsandofficersoftheGroupwasRM10,000,000 and RM21,000 respectively.


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DIRECTORS’ INTERESTS Accordingtotheregisterofdirectors'shareholdings,theinterestsofdirectorsinofficeattheendofthefinancialyearinsharesintheCompanyanditsrelatedcorporationsduringthefinancialyearwereasfollows:

<———Number of ordinary shares———> Dividend Dividend 1 July in-specie in-specie 30 June 2018 received distributed Sold 2019The Company Lee Chung-Shih Justin - Direct interest 35,438 - - - 35,438 - Indirect interest 38,949,833 - - - 38,949,833

Balaraman A/L Annamaly - Direct interest 3,322 - - - 3,322 Holding company Kluang Rubber Company (Malaya) Berhad Lee Chung-Shih Justin - Direct interest 31,984 7,124 - - 39,108 - Indirect interest 31,681,518 914,984 4,599,486 198,126 27,798,890

Balaraman A/L Annamaly - Direct interest 1,066 234 - - 1,300 Fellow subsidiary Kuchai Development Berhad Lee Chung-Shih Justin - Direct interest 237,482 - - - 237,482 - Indirect interest 64,150,641 - - - 64,150,641

Lee Chung-Shih Justin, by virtue of his interest in the Company, is deemed interested in the shares of all the Company's subsidiaries to the extent the Company has an interest.

NoneoftheotherdirectorsinofficeattheendofthefinancialyearhadanyinterestinsharesintheCompanyduringthefinancialyear. OTHER STATUTORY INFORMATION (a) Before the statements of comprehensive income and statements of financial position 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 there were no known bad debts and that noprovision for doubtful debts was necessary; 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.


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OTHER STATUTORY INFORMATION (cont’d) (b) At the date of this report, the directors are not aware of any circumstances which would render: (i) it necessary towrite off any debts or tomake any provision for doubtful debts in respect of the financial

statements of the Group and of the Company; and

(ii) the values attributed to the current assets in the financial statements of the Group and of the Companymisleading.

(c) At the date of this report, the directors are not aware of any circumstances which have arisen which would

render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate.

(d) At the date of this report, the directors are not aware of any circumstances not otherwise dealt with in this report

orfinancialstatementsof theGroupandof theCompanywhichwouldrenderanyamountstatedin thefinancialstatements misleading.

(e) At the date of this report, there does not exist: (i) any charge on the assets of theGroup or of theCompanywhich has arisen since the end of the financial

year which secures the liabilities of any other person; or

(ii) any contingent liability of the Group or of the Company which has arisen since the end of the financialyear.

(f) In the opinion of the directors: (i) no contingent or other liability has become enforceable or is likely to become enforceable within the period

of twelvemonths after the end of the financial yearwhichwill ormay affect the ability of theGroup orof the Company to meet their obligations as and when they fall due; and

(ii) no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which is likely to affect substantially the results of theoperationsof theGroupor of theCompany for thefinancial year inwhich this report ismade.

AUDITORS

Theauditors,Ernst&Young,haveexpressedtheirwillingnesstocontinueinoffice.

Auditors' remuneration of the Group and of the Company are as follow: Group Company RM RM

Ernst & Young- Statutory audit 75,000 75,000- Other services 25,979 25,979 To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young, as part of the terms of itsauditengagementagainstclaimsbythirdpartiesarisingfromtheaudit(foranunspecifiedamount).NopaymenthasbeenmadetoindemnifyErnst&Youngduringorsincetheendofthefinancialyear.

Signed on behalf of the Board in accordance with a resolution of the directors dated 7 October 2019.

Lee Soo Hoon Lee Chung-Shih Justin


A N N U A L R E P O R T 2 0 1 9

61

STATEMENT BY DIRECTORSPURSUANT TO SECTION 251(2) OF THE COMPANIES ACT 2016

We, Lee Soo Hoon and Lee Chung-Shih Justin, being two of the directors of Sungei Bagan Rubber Company (Malaya) Berhad,doherebystatethat,intheopinionofthedirectors,theaccompanyingfinancialstatementssetoutonpages66to 131 are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting StandardsandtherequirementsoftheCompaniesAct2016inMalaysiasoastogiveatrueandfairviewofthefinancialpositionoftheGroupandoftheCompanyasat30June2019andoftheresultsandthecashflowsoftheGroupandofthe Company for the year then ended.

Signed on behalf of the Board in accordance with a resolution of the directors dated 7 October 2019.

Lee Soo Hoon Lee Chung-Shih Justin

STATUTORY DECLARATIONPURSUANT TO SECTION 251(1)(B) OF THE COMPANIES ACT 2016

I,CorinnaFooKimJoke,beingtheofficerprimarilyresponsibleforthefinancialmanagementofSungeiBaganRubberCompany(Malaya)Berhad,dosolemnlyandsincerelydeclare that theaccompanyingfinancialstatementssetoutonpages 66 to 131 are in my opinion correct, and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960.

) ) ) ) Corinna Foo Kim Joke

Before me,

No. J253HjZamaniBinHjAhmadPersuruhjaya SumpahJohor Bahru

Subscribed and solemnly declared by the abovenamed Corinna Foo Kim Joke at Johor Bahru in the State of Johor on7 October 2019.


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62

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OFSUNGEI BAGAN RUBBER COMPANY (MALAYA) BERHAD

(Incorporated in Malaysia)

Report on the audit of the financial statements

Opinion

We have audited the financial statements of Sungei BaganRubber Company (Malaya) Berhad,which comprise thestatementsoffinancialpositionasat30June2019oftheGroupandoftheCompany,andthestatementsofcomprehensiveincome,statementsofchangesinequityandstatementsofcashflowsoftheGroupandoftheCompanyfortheyearthenended,andnotestothefinancialstatements,includingasummaryofsignificantaccountingpoliciesassetoutonpages66 to 131.

Inouropinion,theaccompanyingfinancialstatementsgiveatrueandfairviewofthefinancialpositionoftheGroupandoftheCompanyasat30June2019,andoftheirfinancialperformanceandtheircashflowsfortheyearthenendedin accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 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 statementssectionofourreport.Webelievethattheauditevidencewehaveobtainedissufficientandappropriate to provide a basis for our audit opinion.

Independence and other ethical responsibilities

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 Code of Ethics for Professional Accountants(includingInternationalIndependenceStandards)(“IESBACode”),andwehavefulfilledourotherethicalresponsibilities in accordance with the By-Laws and the IESBA Code.

Key audit matters

Keyauditmattersarethosemattersthat, inourprofessional judgement,wereofmostsignificanceinourauditof thefinancialstatementsoftheGroupandoftheCompanyforthecurrentyear.ThesematterswereaddressedinthecontextofourauditofthefinancialstatementsoftheGroupandoftheCompanyasawhole,andinformingouropinionthereon,andwe do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

WehavefulfilledtheresponsibilitiesdescribedintheAuditors’ responsibilities for the audit of the financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designedtorespondtoourassessmentoftherisksofmaterialmisstatementofthefinancialstatements.Theresultsofouraudit procedures, including the procedures performed to address the matters below, provide the basis of our audit opinion ontheaccompanyingfinancialstatements.

1. Valuation of investments (RefertoNotes2.15,2.16and15tothefinancialstatements)

As at 30 June 2019, the carrying amounts of the Group’s and the Company's investments amounted to approximately RM210,820,000 and RM170,131,000 respectively, representing approximately 34% and 37% of the Group’s and the Company’s total assets respectively. These investments consist of investments in quoted equity instruments, debt instrumentsandpreciousmetalwhicharemeasuredatfairvalue,withfairvaluechangesrecognisedinprofitorlossor other comprehensive income.

Wefocusedonthevaluationoftheseinvestmentsbecausetheyrepresentthemostsignificantelementofthetotalassetsinthefinancialstatements.


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63

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OFSUNGEI BAGAN RUBBER COMPANY (MALAYA) BERHAD (cont’d)


Key audit matter (cont’d)

1. Valuation of investments (cont’d) (RefertoNotes2.15,2.16and15tothefinancialstatements) (cont’d)

Our audit procedures to address this area of focus included amongst others the following procedures:

i. For investments in quoted equity instruments and precious metal, we corroborated the fair values recorded by management by reference to externally available market data; and

ii. For investments in debt instruments:

− Weobtainedanunderstandingofthemethodologyadoptedbymanagementinestimatingthefairvaluesof these debt instruments and assessed whether such methodology is consistent with those commonly used to value debt instruments; and

− Weevaluatedtheinputsusedinestimatingthefairvalueofthesedebtinstrumentsbymakingcomparisonsagainst appropriate benchmarks.

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 directors' report,butdoesnotincludethefinancialstatementsoftheGroupandoftheCompanyandourauditors'reportthereon,which we obtained prior to the date of this auditors’ report, and the Annual Report, which is expected to be made available to us after the date of this auditors’ report.

OuropiniononthefinancialstatementsoftheGroupandoftheCompanydoesnotcovertheotherinformationandwedonot express any form of assurance conclusion thereon.

InconnectionwithourauditofthefinancialstatementsoftheGroupandoftheCompany,ourresponsibilityistoreadtheotherinformationand,indoingso,considerwhethertheotherinformationismateriallyinconsistentwiththefinancialstatements 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 on the other information that we obtained prior to the date of this auditors’ report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

When we read the Annual Report, if we conclude that there is a material misstatement therein, we are required to communicate the matter to the directors of the Company and take appropriate action.

Responsibilities of the directors for the financial statements

ThedirectorsoftheCompanyareresponsibleforthepreparationoffinancialstatementsoftheGroupandoftheCompanythat give a true and fair view in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 2016 in Malaysia. The directors are also responsible for suchinternalcontrolasthedirectorsdetermineisnecessarytoenablethepreparationoffinancialstatementsoftheGroupand of the Company that are free from material misstatement, whether due to fraud or error.

InpreparingthefinancialstatementsoftheGroupandoftheCompany,thedirectorsareresponsibleforassessingtheGroup’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.


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64




Auditor’s responsibilities for the audit of the financial statements

OurobjectivesaretoobtainreasonableassuranceaboutwhetherthefinancialstatementsoftheGroupandoftheCompanyas a whole are free from material misstatement, 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 theaggregate,theycouldreasonablybeexpectedtoinfluencetheeconomicdecisionsofuserstakenonthebasisofthesefinancialstatements.

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:

- IdentifyandassesstherisksofmaterialmisstatementofthefinancialstatementsoftheGroupandoftheCompany,whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidencethatissufficientandappropriatetoprovideabasisforouropinion.Theriskofnotdetectingamaterialmisstatement resulting from fraud is higher than 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.

- 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 significantdoubton theGroup’sor theCompany’sability tocontinueasagoingconcern. Ifweconclude thatamaterial uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in thefinancial statementsof theGroupandof theCompanyor, if suchdisclosures are inadequate, tomodifyouropinion. 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 theCompany, including the disclosures, and whether the financial statements of the Group and of the Companyrepresent the underlying transactions and events in a manner that achieves fair presentation.

- Obtainsufficientappropriateauditevidenceregardingthefinancialinformationoftheentitiesorbusinessactivitieswithin the Group to express an opinion on the financial statements of the Group.We are responsible for thedirection, 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 significantauditfindings,includinganysignificantdeficienciesininternalcontrolthatweidentifyduringouraudit.

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.

(3327-U)SUNGEI BAGAN RUBBER COMPANY (MALAYA) BERHAD (3327-U)(INCORPORATED IN MALAYSIA)

A N N U A L R E P O R T 2 0 1 9

65




Auditor’s responsibilities for the audit of the financial statements (cont’d)

Fromthematterscommunicatedwith thedirectors,wedetermine thosematters thatwereofmostsignificance in theauditofthefinancialstatementsoftheGroupandoftheCompanyforthecurrentyearandarethereforethekeyauditmatters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report becausetheadverseconsequencesofdoingsowouldreasonablybeexpectedtooutweighthepublicinterestbenefitsofsuch communication.

Other matters

1. As stated in Note 2.1 to the financial statements, Sungei Bagan Rubber Company (Malaya) Berhad adoptedMalaysian Financial Reporting Standards and International Financial Reporting Standards on 1 July 2018 with a transition date of 1 July 2017. These standards were applied retrospectively by directors to the comparative information in these financial statements, including the statements of financial position of the Group and ofthe Company as at 30 June 2018 and 1 July 2017, and the statements of comprehensive income, statements of changes in equity and statements of cash flows of theGroup and of the Company for the year ended 30 June2018 and related disclosures. We were not engaged to report on the comparative information and it is unaudited. Our responsibilities as part of our audit of the financial statements of the Group and of the Company for theyear ended 30 June 2019, in these circumstances, included obtaining sufficient appropriate audit evidence thattheopeningbalancesasat1 July2018donotcontainmisstatements thatmateriallyaffect thefinancialpositionas at 30 June2019 andfinancial performance and cashflows for theyear then ended.

2. This report is made solely to the members of the Company, as a body, in accordance with Section 266 of the Companies Act 2016 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

Ernst & Young Tan Jin XiangAF 0039 03348/01/2020 JChartered Accountants Chartered Accountant

Johor Bahru, Malaysia Dated: 7 October 2019


A N N U A L R E P O R T 2 0 1 9

66

STATEMENTS OF COMPREHENSIVE INCOMEFOR THE FINANCIAL YEAR ENDED 30 JUNE 2019

Group Company Note 2019 2018 2019 2018 RM RM RM RM

Revenue 4 12,241,519 14,193,069 9,885,610 12,592,616 Other income 5,600 153,977 5,600 153,977Changes in inventories (7,466) (15,994) (7,466) (15,994)Employee benefits expenses 5 (1,880,937) (1,767,316) (1,880,937) (1,767,316)Depreciation (1,224,797) (329,862) (1,224,797) (329,862)Subcontract labour cost, fertilizer and chemical costs (3,917,761) (2,935,928) (3,917,761) (2,935,928)Foreign exchange differences 106,583 214,693 502,557 (1,039,746)Other expenses (3,304,254) (2,939,168) (2,892,027) (2,548,397)Fair value changes on: - investment property 12 941,226 (212,011) - - - other investments (709,259) 2,998,437 - - - biological assets 18 15,929 (9,654) 15,929 (9,654)

Profit from operations 6 2,266,383 9,350,243 486,708 4,099,696Share of results of associates 14 (5,005,129) (2,120,980) - -

(Loss)/Profit before taxation (2,738,746) 7,229,263 486,708 4,099,696

Income tax expense 8 (3,922,772) (433,075) (3,873,000) (329,617)

(Loss)/Profit net of tax (6,661,518) 6,796,188 (3,386,292) 3,770,079 Other comprehensive income:

Other comprehensive incomethatmaybereclassifiedtoprofitorlossinsubsequent periods (net of tax):Fair value changes on investments 1,819,948 (148,149) 552,231 (212,731) Foreign currency translation 6,508,181 (9,258,044) - -

8,328,129 (9,406,193) 552,231 (212,731)


A N N U A L R E P O R T 2 0 1 9

67

STATEMENTS OF COMPREHENSIVE INCOME (cont’d)FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019

Group Company Note 2019 2018 2019 2018 RM RM RM RM

Other comprehensive income that will not bereclassifiedtoprofitorloss in subsequent periods (net of tax):Fair value changes on investments (20,752,522) 25,093,893 (20,752,523) 25,094,487

Total other comprehensive (loss)/income (12,424,393) 15,687,700 (20,200,292) 24,881,756

Total comprehensive (loss)/income for the year (19,085,911) 22,483,888 (23,586,584) 28,651,835

(Loss)/Profit attributable to: Owners of the parent (6,661,518) 6,796,188 (3,386,292) 3,770,079 Total comprehensive (loss)/income attributable to : Owners of the parent (19,085,911) 22,483,888 (23,586,584) 28,651,835

(Loss)/Profit per share attributable to owners of the parent (sen per share)

Basic 9(a) (10.04) 10.25

Diluted 9(b) (10.04) 10.25

The accompanying accounting policies and explanatory notes form an integral part of the financial statements.


A N N U A L R E P O R T 2 0 1 9

68

STATEMENTS OF FINANCIAL POSITIONAS AT 30 JUNE 2019

Group Note 30.06.2019 30.06.2018 01.07.2017 RM RM RMAssets Non-current assets Property, plant and equipment 10 106,120,525 104,241,038 103,309,065 Bearer plants 11 35,403,362 30,901,595 24,731,281 Investment property 12 36,577,378 35,980,133 38,224,967 Investment in associates 14 79,094,862 84,331,383 85,164,926 Investments 15 210,820,169 244,428,140 218,805,008 468,016,296 499,882,289 470,235,247Current assets Inventories 17 18,185 25,651 41,645 Biological assets 18 134,353 118,424 128,078 Trade and other receivables 19 1,720,000 1,493,069 1,045,947 Prepayments 431,105 336,843 318,357 Tax recoverable 293,813 101,414 474,268 Cash and bank balances 20 141,175,834 143,980,433 150,821,202

143,773,290 146,055,834 152,829,497

Total assets 611,789,586 645,938,123 623,064,744

Equity and liabilitiesCurrent liabilities Trade and other payables 21 2,695,333 2,697,964 1,357,449 Tax payable 56,456 133,236 62,343 2,751,789 2,831,200 1,419,792 Net current assets 141,021,501 143,224,634 151,409,705

Non-current liabilities Other payables 21 460,741 386,784 335,370Retirementbenefits 22 56,855 51,319 41,997Deferred tax liabilities 16 10,667,000 6,708,000 6,464,000 11,184,596 7,146,103 6,841,367 Total liabilities 13,936,385 9,977,303 8,261,159 Net assets 597,853,201 635,960,820 614,803,585 Equity attributable to owners of the parent Share capital 23 74,977,463 66,332,645 66,332,645 Reserves 24 287,834,384 301,992,550 286,304,850Retained earnings 25 235,041,354 267,635,625 262,166,090 Total equity 597,853,201 635,960,820 614,803,585 Total equity and liabilities 611,789,586 645,938,123 623,064,744



A N N U A L R E P O R T 2 0 1 9

69

STATEMENTS OF FINANCIAL POSITION (cont’d)AS AT 30 JUNE 2019

Company Note 30.06.2019 30.06.2018 01.07.2017 RM RM RMAssets Non-current assets Property, plant and equipment 10 106,120,525 104,241,038 103,309,065 Bearer plants 11 35,403,362 30,901,595 24,731,281 Investment in subsidiaries 13 119,226,010 119,226,010 119,226,010 Investment in associates 14 188,753 188,753 188,753 Investments 15 170,131,392 205,266,600 180,384,844 431,070,042 459,823,996 427,839,953Current assets Inventories 17 18,185 25,651 41,645 Biological assets 18 134,353 118,424 128,078 Trade and other receivables 19 2,347,184 2,450,542 2,513,059 Prepayments 351,683 317,062 303,679Tax recoverable 293,814 101,414 474,268 Cash and bank balances 20 22,346,362 32,347,124 34,917,865

25,491,581 35,360,217 38,378,594

Total assets 456,561,623 495,184,213 466,218,547

Equity and liabilitiesCurrent liabilities Trade and other payables 21 2,592,218 2,645,009 1,309,261 Net current assets 22,899,363 32,715,208 37,069,333

Non-current liabilities Other payables 21 460,741 386,784 335,370Retirementbenefits 22 56,855 51,319 41,997Deferred tax liabilities 16 10,667,000 6,708,000 6,464,000 11,184,596 7,146,103 6,841,367 Total liabilities 13,776,814 9,791,112 8,150,628 Net assets 442,784,809 485,393,101 458,067,919 Equity attributable to owners of the parent Share capital 23 74,977,463 66,332,645 66,332,645 Reserves 24 243,739,365 265,673,430 240,791,674Retained earnings 25 124,067,981 153,387,026 150,943,600 Total equity 442,784,809 485,393,101 458,067,919 Total equity and liabilities 456,561,623 495,184,213 466,218,547



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73

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A N N U A L R E P O R T 2 0 1 9

74

STATEMENTS OF CASH FLOWSFOR THE FINANCIAL YEAR ENDED 30 JUNE 2019

Group Company 2019 2018 2019 2018 RM RM RM RM

Operating activities (Loss)/Profitbeforetaxation (2,738,746) 7,229,263 486,708 4,099,696Adjustments for: Depreciation 1,224,797 329,862 1,224,797 329,862 Provisionforretirementbenefits 13,533 9,322 13,533 9,322 Unrealised foreign exchange (gain)/loss (115,288) (215,109) (511,262) 1,039,330 Dividend income (5,074,181) (4,477,948) (5,074,181) (4,477,948) Interest income (1,828,880) (1,271,182) (141,405) (357,135) Fair value (gain)/loss on investment property (941,226) 212,011 - - Fair value (gain)/loss on biological assets (15,929) 9,654 (15,929) 9,654 Fair value loss/(gain) on other investments 709,259 (2,998,437) - - Property, plant and equipment written off - 103,041 - 103,041 Share of loss of associates 5,005,129 2,120,980 - - Operating cash flows before working capital changes (3,761,532) 1,051,457 (4,017,739) 755,822 Receivables 81,721 (39,316) 157,668 (10,065) Prepayments (93,045) (19,404) (34,621) (13,383) Inventories 7,466 15,994 7,466 15,994 Payables 83,470 1,410,768 14,488 1,394,212

Cashflows(usedin)/generated from operations (3,681,920) 2,419,499 (3,872,738) 2,142,580 Retirementbenefitspaid (7,997) - (7,997) - Tax paid (235,703) (195,907) (106,400) (168,000) Tax refunded - 455,237 - 455,237 Netcashflows(usedin)/generated from operating activities (3,925,620) 2,678,829 (3,987,135) 2,429,817


A N N U A L R E P O R T 2 0 1 9

75

STATEMENTS OF CASH FLOWS (cont’d)FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019


Investing activities Interest income reinvested infixeddeposits (92,812) (75,620) (92,812) (75,620)(Placement)/Uplift of short-term deposits with a licensed bank with maturities exceeding 90 days (1,811,788) (74,094,974) 1,045,789 (7,405,598)Dividends received 4,356,789 4,477,948 4,356,789 4,477,948 Dividends received from associate 2,136,483 1,017,159 - -Proceeds from sale of investment 610,558 - 610,558 -Interest received 1,511,058 852,455 120,850 342,502 Purchase of property, plant and equipment (2,135,219) (1,201,133) (2,135,219) (1,201,133) Addition of bearer plants (5,470,832) (6,334,057) (5,470,832) (6,334,057)

Cashflowsininvestingactivities (895,763) (75,358,222) (1,564,877) (10,195,958)

Financing activity Dividends paid, representing net cashusedinfinancingactivity (3,979,959) (1,326,653) (3,979,959) (1,326,653)

Net decrease in cash and cash equivalents (8,801,342) (74,006,046) (9,531,971) (9,092,794) Effects of exchange rate changes 4,092,144 (7,005,317) 484,186 (959,165) Cash and cash equivalents at beginning of year 67,937,461 148,948,824 22,993,527 33,045,486

Cash and cash equivalents at end of year (Note 20) 63,228,263 67,937,461 13,945,742 22,993,527



A N N U A L R E P O R T 2 0 1 9

76

NOTES TO THE FINANCIAL STATEMENTSFOR THE FINANCIAL YEAR ENDED 30 JUNE 2019

1. CORPORATE INFORMATION Sungei Bagan Rubber Company (Malaya) Berhad is a public limited liability company, incorporated and domiciled

inMalaysia,and is listedon theMainMarketofBursaMalaysiaSecuritiesBerhad.The registeredofficeof theCompany is located at Suite 7E, Level 7, Menara Ansar, 65 Jalan Trus, 80000 Johor Bahru, Johor, Malaysia. The principal place of business is located at SungeiBaganEstate, PosOfficeMachang, 18500Machang,Kelantan,Malaysia.

The principal activities of the Company consist of the production and sale of fresh oil palm fruit bunches. The Company is also a long term portfolio investor in securities. The principal activities and other information on the subsidiaries are described in Note 13.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of preparation The financial statements of the Group and of the Company have been prepared in accordance withMalaysian

Financial Reporting Standards ("MFRS"), International Financial Reporting Standards ("IFRS") and the Companies Act 2016 in Malaysia.

For all periods up to and including the year ended 30 June 2018, the Group and the Company prepared their financial statements in accordance with Financial Reporting Standards in Malaysia ("FRS"). These financialstatements for the year ended 30 June 2019 are the first that the Group and the Company have prepared inaccordance with MFRS and MFRS 1: First-Time Adoption of Malaysian Financial Reporting Standards ("MFRS 1") has been applied.

Thefinancialstatementshavebeenpreparedonahistoricalbasis,exceptforinvestmentpropertiesandinvestmentsthathavebeenmeasuredat theirfairvalues.ThefinancialstatementsarepresentedinRinggitMalaysia("RM").

2.2 First-time adoption of Malaysian Financial Reporting Standards ("MFRS")

As disclosed in Note 2.1, the Group and the Company have prepared financial statements that comply withMFRS applicable as at 30 June 2019, together with the comparative period data for the year ended 30 June 2018, as described in the significant accounting policies. In preparing the financial statements, theGroup’s andthe Company's opening statement of financial position was prepared as at 1 July 2017, the Group’s and theCompany's date of transition to MFRS. This note explains the principal adjustments made by the Group and the Company in restating their FRS financial statements, including the statement of financial position as at 1 July2017 and thefinancial statements for theyear ended30 June2018.

As provided in MFRS 1, first-time adopter of MFRS Framework can elect optional exemptions from fullretrospective application of MFRS. The Group and the Company have elected not to apply MFRS 3 Business Combinations and MFRS 10 Consolidated Financial Statements retrospectively, that is not to restate any of its business combinations that occurred before the date of transition to MFRS.


A N N U A L R E P O R T 2 0 1 9

77

NOTES TO THE FINANCIAL STATEMENTS (cont’d)FOR THE FINANCIAL YEAR ENDED 30 JUNE 2019

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

2.2 First-time adoption of Malaysian Financial Reporting Standards ("MFRS") (cont’d)

The impact arising from the adoption is summarised as follows:

Consolidated statement of financial position

Under FRS Effects of Under MFRS Framework transition Framework

Note RM RM RM

30 June 2018

Non-current assets Bearer plants i - 30,901,595 30,901,595 Biological assets i 26,650,039 (26,650,039) -

Current assets Biological assets ii - 118,424 118,424

Non-current liabilities Deferred tax liabilities iii 5,344,000 1,364,000 6,708,000

Equity Reserves iv 404,150,774 (102,158,224) 301,992,550 Retained earnings i,ii,iii,iv 162,471,421 105,164,204 267,635,625

1 July 2017






A N N U A L R E P O R T 2 0 1 9

78




Company statement of financial position


Note RM RM RM

30 June 2018





1 July 2017






A N N U A L R E P O R T 2 0 1 9

79




Consolidated statement of comprehensive income


Note RM RM RM

Depreciation i (166,119) (163,743) (329,862) Subcontract labour cost, fertilizer and chemical costs i (3,182,847) 246,919 (2,935,928) Impairment loss on investments iv (162,608) 162,608 - Fair value changes on investments iv - 2,998,437 2,998,437 Fair value changes on biological assets ii - (9,654) (9,654) Share of results of associates iv 349,579 (2,470,559) (2,120,980) Profitbeforetax 6,465,255 764,008 7,229,263 Income tax expense iii (127,075) (306,000) (433,075) Profitnetoftax 6,338,180 458,008 6,796,188 Other comprehensive income iv 16,378,186 (690,486) 15,687,700 Total comprehensive income iv 22,716,366 (232,478) 22,483,888

Company statement of comprehensive income


Note RM RM RM

Depreciation i (166,119) (163,743) (329,862) Subcontract labour cost, fertilizer and chemical costs i (3,182,847) 246,919 (2,935,928) Fair value changes on biological assets ii - (9,654) (9,654) Profitbeforetax 4,026,174 73,522 4,099,696 Income tax expense (23,617) (306,000) (329,617) Profitnetoftax 4,002,557 (232,478) 3,770,079 Total comprehensive income 28,884,313 (232,478) 28,651,835


A N N U A L R E P O R T 2 0 1 9

80




Consolidated statement of cash flows


Note RM RM RM

Operating activities Profitbeforetaxation 6,465,255 764,008 7,229,263

Depreciation i 166,119 163,743 329,862 Impairment loss on investment iv 162,608 (162,608) - Fair value loss on biological assets ii - 9,654 9,654 Fair value gain on other investments iv - (2,998,437) (2,998,437) Shareof(profit)/lossofassociates iv (349,579) 2,470,559 2,120,980 Investing activities

Addition of bearer plants i (6,087,138) (246,919) (6,334,057)

Company statement of cash flows


Note RM RM RM

Operating activities Profitbeforetaxation 4,026,174 73,522 4,099,696

Depreciation i 166,119 163,743 329,862 Fair value loss on biological assets ii - 9,654 9,654 Investing activities

Addition of bearer plants i (6,087,138) (246,919) (6,334,057)

(i) Bearer plants and subcontract labour cost, fertilizer and chemical costs

The amendments to MFRS 116 and MFRS 141 Agriculture: Bearer Plants change the accounting requirements for biological assets that meet the definition of bearer plants. Under the amendments, biological assetsthat meet the definition of bearer plants will be within the scope ofMFRS 116.After initial recognition,bearer plants will now be measured under MFRS 116 at accumulated cost (before maturity) and cost less accumulated depreciation and impairment (after maturity).

Prior to the adoption of MFRS, new planting expenditure (also termed as biological assets) were capitalized and were not depreciated while replanting expenditure were recognised in profit or loss in the year theexpenditures were incurred. Under MFRS 116, new planting expenditure and replanting expenditures are capitalized as bearer plants. On maturity, these expenditures are amortised over the useful life of the bearer plants.

(ii) Biological assets

Prior to the adoption of MFRS 141 Agriculture, agricultural produce growing on the bearer plants (“biological assets”) were not recognised. With the adoption of the MFRS 141, biological assets within the scope of MFRS 141 are measured at fair value less costs to sell. The changes in fair value less costs to sell of the biological assets are recognised in profit or loss.


A N N U A L R E P O R T 2 0 1 9

81




(iii) Deferred tax liabilities and income tax expenses

The various transitional adjustments lead to temporary differences. According to the accounting policies stated in Note 2.23(b), deferred tax adjustments are recognised for the underlying transactions.

(iv) MFRS 9 Financial instruments

On 1 July 2018, the Group adopted MFRS 9 Financial instruments, which is effective for annual periods beginning on or after 1 January 2018. The changes arising from the adoption of MFRS 9 have been applied retrospectively.

Under FRS 139, the Group’s equity and debt instruments were classified as AFS financial assets. Withthe adoption of MFRS 9, investments in debt instruments are measured at FVTPL and investments in equity instruments which are classified as FVOCI are not subject to an impairment assessment. The fairvalue changes for investments in debt instruments are transferred out from other comprehensive income or fair value reserve to profit or loss or retained earnings.The impairment lossesmade earlier on the equityinstruments are transferred out from profit or loss or retained earnings to other comprehensive income orfair value reserve.

(v) Property, plant and equipment - previous revaluation as deemed cost exemption

AsprovidedinMFRS1,first-timeadopterscanelectoptionalexemptionsfromfullretrospectiveapplicationof MFRS. The Group and the Company have elected to apply the optional exemption to use the revaluation of freehold land as at 1 July 2017 (date of transition to the MFRS) as deemed cost. No adjustments were made for the application of the exemption.

2.3 Standards, Amendments, Annual Improvements and IC interpretation issued but not yet effective

The Standards, Amendments, Annual Improvements and IC interpretation that are issued but not yet effective up to the date of issuance of theGroup's and theCompany's financial statements are disclosed below.TheGroupand the Company intend to adopt these Standards, Amendments, Annual Improvements and IC Interpretations, if applicable, when they become effective.

Effective for annual periods beginning on or after Description MFRS 9 Prepayment Features with Negative Compensation (Amendments to MFRS 9) 1 January 2019 MFRS 16 Leases 1 January 2019 MFRS 128 Long-term Interests in Associates and Joint Ventures (Amendments to MFRS 128) 1 January 2019 Annual Improvements toMFRSStandards2015–2017Cycle 1 January2019 MFRS 119 Plan Amendment, Curtailment or Settlement (Amendments to MFRS 119) 1 January 2019 IC Interpretation 23 Uncertainty over Income Tax Treatments 1 January 2019 Amendments to references to the Conceptual Framework in MFRS Standards 1 January 2020


A N N U A L R E P O R T 2 0 1 9

82



2.3 Standards, Amendments, Annual Improvements and IC interpretation issued but not yet effective (cont’d)

Effective for annual periods beginning on or after Description Definitionof aBusiness (Amendments toMFRS3BusinessCombination) 1 January2020 DefinitionofMaterial (Amendments toMFRS101Presentationof Financial Statements and MFRS 108 Accounting Policies, Changes in Accounting Estimates and Errors) 1 January 2020 MFRS 17 Insurance Contracts 1 January 2021 Amendments to MFRS 10 and MFRS 128 Sale or Contribution of Assets between an Investor and its Associate or Joint Venture Deferred

The directors are of opinion that the Standards, Annual Improvements, IC interpretation and Amendments above would not have any material impact on the financial statements in the year of initial adoption other than asdiscussed below:

MFRS 16 Leases

MFRS 16 will replace MFRS 117 Leases, IC Interpretation 4 Determining whether an arrangement contains a Lease, IC Interpretation 115 Operating Lease-Incentives and IC Interpretation 127 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. MFRS 16 sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for all leases under a single on-balance sheetmodel similar to the accounting forfinance leases underMFRS117.

At the commencement date of a lease, a lessee will recognise a liability to make lease payments and an asset representing the right to use the underlying asset during the lease term. Lessees will be required to recognise interest expense on the lease liability and the depreciation expense on the right-of-use asset.

Lessor accounting under MFRS 16 is substantially the same as the accounting under MFRS 117. Lessors will continue to classify all leases using the same classification principle as inMFRS 117 and distinguish betweentwo typesof leases: operating andfinance leases.

MFRS 16 is effective for annual periods beginning on or after 1 January 2019. A lessee can choose to apply the standardusingeithera full retrospectiveor amodified retrospectiveapproach.TheGroup is currentlyassessingthe impact of MFRS 16 and plans to adopt the new standard on the required effective date.

On the adoption of MFRS 16, the Group expects to choose, on a lease-by-lease basis, to measure the right-of-use asset at either:

(i) its carrying amount as if MFRS 16 had been applied since the commencement date, but discounted using the lessee’s incremental borrowing rate as of 1 July 2019; or

(ii) an amount equal to the lease liability, adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognised in the statement offinancial position immediatelybefore 1 July2019.


A N N U A L R E P O R T 2 0 1 9

83



2.3 Standards, Amendments, Annual Improvements and IC interpretation issued but not yet effective (cont’d)

In addition, the Group plans to elect the following practical expedients:

(i) not to reassess whether a contract is, or contains a lease at the date of initial application and to apply MFRS 16 to all contracts thatwerepreviously identified as leases.

(ii) to apply the exemption not to recognise right-of-use asset and lease liabilities to leases for which the lease term ends within 12 months as of 1 July 2019.

(iii) to apply a single discount rate to a portfolio of leases with reasonably similar characteristics.

The Group plans to adopt MFRS 16 retrospectively with the cumulative effect of initially applying the standard as an adjustment to the opening retained earnings at the date of initial application, 1 July 2019.

2.4 Current versus non- current classification

Assetsandliabilitiesinthestatementsoffinancialpositionarepresentedbasedoncurrent/non-currentclassification.An asset is current when it is:

- Expected to be realised or intended to be sold or consumed in normal operating cycle; - Held primarily for the purpose of trading; - Expected to be realised within twelve months after the reporting period; or - Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve

months after the reporting period.

All other assets are classified as non-current.

A liability is current when:

- It is expected to be settled in normal operating cycle; - It is held primarily for the purpose of trading; - It is due to be settled within twelve months after the reporting period; or - There is no unconditional right to defer the settlement of the liability for at least twelve months after the

reporting period.

All other liabilities are classified as non-current.

Deferred tax assets and liabilities are classified as non-current assets and liabilities.

2.5 Fair value measurement 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 by the Group.

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 economic best interest.


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2.5 Fair value measurement (cont'd)

A fair value measurement of a non-financial asset takes into account a market participant's ability to generateeconomicbenefitsbyusingtheassetinitshighestandbestuseorbysellingittoanothermarketparticipantthatwould use the asset in its highest and best use.

Valuationtechniquesthatareappropriateinthecircumstancesandforwhichsufficientdataareavailable,areusedto measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

Allassetsand liabilities forwhichfairvalue ismeasuredordisclosed in thefinancialstatementsarecategorisedwithinthefairvaluehierarchy,describedasfollows,basedonthelowestlevelinputthatissignificanttothefairvalue measurement as a whole:

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

Level 2 - Valuationtechniquesforwhichthelowestlevelinputthatissignificanttothefairvaluemeasurementis directly or indirectly observable.

Level 3 - Valuationtechniquesforwhichthelowestlevelinputthatissignificanttothefairvaluemeasurementis unobservable.

Forassetsandliabilitiesthatarerecognisedinthefinancialstatementsonarecurringbasis,theGroupdetermineswhether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair valuemeasurement as awhole) at the endof each reportingperiod.

Policies and procedures are determined by senior management for both recurring fair value measurement and for non-recurring measurement.

Externalvaluersareinvolvedforvaluationofsignificantassetsandsignificantliabilities.Involvementofexternalvaluers is decided by senior management. Selection criteria include market knowledge, reputation, independence and whether professional standards are maintained. The senior management decides, after discussions with the external valuers, which valuation techniques and inputs to use for each case.

For the purpose of fair value disclosures, classes of assets and liabilities are determined based on the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

2.6 Basis of consolidation TheconsolidatedfinancialstatementscomprisethefinancialstatementsoftheCompanyanditssubsidiariesasat

thereportingdate.Thefinancialstatementsofthesubsidiariesusedinthepreparationoftheconsolidatedfinancialstatements are prepared for the same reporting date as the Company. Consistent accounting policies are applied for like transactions and events in similar circumstances.

The Company controls an investee if and only if the Company has all the following:

(i) power over the investee (i.e existing rights that give it the current ability to direct the relevant activities of the investee);

(ii) exposure, or rights, to variable returns from its investment with the investee; and

(iii) the ability to use its power over the investee to affect its returns.


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2.6 Basis of consolidation (cont’d)

When the Company has less than a majority of the voting rights of an investee, the Company considers the following inassessingwhetherornot theCompany’svoting rights inan investeeare sufficient togive itpowerover the investee:

(i) the size of the Company’s holding of voting rights relative to the size and dispersion of holdings of the other vote holders;

(ii) potential voting rights held by the Company, other vote holders or other parties;

(iii) rights arising from other contractual arrangements; and

(iv) any additional facts and circumstances that indicate that the Company has, or does not have, the current ability to direct the relevant activities at the time that decisions need to be made, including voting patterns at previous shareholders’ meetings.

Subsidiaries are consolidated when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions are eliminated in full.

Losseswithin a subsidiary are attributed to thenon-controlling interests even if that results in adeficit balance.

Changes in the Group’s ownership interests in subsidiaries that do not result in the Group losing control over the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Theresulting difference is recognised directly in equity and attributed to owners of the Company.

When the Group loses control of a subsidiary, a gain or loss calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets and liabilities of the subsidiary and any non-controlling interest, is recognised in profitorloss.Thesubsidiary’scumulativegainorlosswhichhasbeenrecognisedinothercomprehensiveincomeand accumulated in equity are reclassified to profit or loss or where applicable, transferred directly to retainedearnings. The fair value of any investment retained in the former subsidiary at the date control is lost is regarded as the cost on initial recognition of the investment.

2.7 Foreign currencies (a) Functional and presentation currency TheindividualfinancialstatementsofeachentityintheGrouparemeasuredusingthecurrencyoftheprimary

economic environment inwhich the entity operates (“the functional currency”).The consolidatedfinancialstatements are presented in Ringgit Malaysia ("RM"), which is also the Company’s functional currency.

(b) Foreign currency transactions Transactions in foreign currencies are measured in the respective functional currencies of the Company

and its subsidiaries and are recorded on initial recognition in the functional currencies at exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the reporting date. Non-monetary items denominated in foreign currencies that are measured at historical cost are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items denominated in foreign currencies measured at fair value are translated using the exchange rates at the date when the fair value was determined.


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2.7 Foreign currencies (cont’d)

(b) Foreign currency transactions (cont’d)

Exchange differences arising on the settlement of monetary items or on translating monetary items at the reporting date are recognised in profit or loss except for exchange differences arising on monetary itemsthat form part of the Group’s net investment in foreign operations, which are recognised initially in other comprehensive income and accumulated under foreign currency translation reserve in equity. The foreign currency translation reserve is reclassified from equity to profit or loss of the Group on disposal of theforeign operation.

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 inrespect of which gains and losses are recognised directly in equity. Exchange differences arising from such non-monetary items are also recognised directly in equity.

(c) Foreign operations The assets and liabilities of foreign operations are translated into RM at the rate of exchange ruling at the

reporting date and income and expenses are translated at exchange rates at the dates of the transactions. The exchange differences arising on the translation are taken directly to other comprehensive income. On disposal of a foreign operation, the cumulative amount recognised in other comprehensive income and accumulated in equity under foreign currency translation reserve relating to that particular foreign operation is recognised in theprofit or loss.

Goodwill and fair value adjustments arising on the acquisition of foreign operations are treated as assets and liabilities of the foreign operations and are recorded in the functional currency of the foreign operations and translated at the closing rate at the reporting date.

2.8 Property, plant and equipment and depreciation All items of property, plant and equipment are initially recorded at cost. The cost of an item of property, plant

and equipment is recognised as an asset if, and only if, it is probable that future economic benefits associatedwith the itemwillflow to theGroup and the cost of the itemcanbemeasured reliably.

Subsequent to recognition, property, plant and equipment are measured at cost less accumulated depreciation and accumulatedimpairmentlosses.Whensignificantpartsofproperty,plantandequipmentarerequiredtobereplacedin intervals, the Group recognises such parts as individual assets with specific useful lives and depreciation,respectively. Likewise, when a major inspection is performed, its cost is recognised in the carrying amount of the property, plant and equipment as a replacement if the recognition criteria are satisfied.All other repair andmaintenance costs are recognised in profit or loss as incurred.

Freehold land is stated at deemed cost less impairment losses. The deemed cost was based on a valuation as at 30 June 2015 as permitted under the optional exemptions of MFRS 1.

Freehold land has an unlimited useful life and therefore is not depreciated. Depreciation of other property, plant and equipment is computed on a straight-line basis over the estimated useful lives of the assets as follows:

Buildings 4% - 10% Plant and machinery 10% Furniture, fittings and computers 10% - 50% Vehicles and agricultural equipment 25% - 33.3%


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2.8 Property, plant and equipment and depreciation (cont’d)

Capital in progress included in property, plant and equipment are not depreciated as these assets are not yet available for use.

The residual values, useful life and depreciationmethod are reviewed at each financial year-end to ensure thatthe amount, method and period of depreciation are consistent with previous estimates and the expected pattern of consumptionof the future economicbenefits embodied in the itemsof property, plant and equipment.

Anitemofproperty,plantandequipmentisderecognisedupondisposalorwhennofutureeconomicbenefitsareexpected from its use or disposal. The difference between the net disposal proceeds, if any and the net carrying amount is recognised in the profit or loss and the unutilised portion of the revaluation surplus on that item istaken directly to retained earnings.

2.9 Bearer plants Bearer plants are living plants that are used in the production or supply of agriculture produce for more than

one period and have remote likelihood of being sold as agriculture produce, except for incidental scrap sales. The bearer plants are initially recorded at cost. Subsequent to recognition, the bearer plants are measured at cost less accumulated depreciation and accumulated impairment losses, if any.

Cost of bearer plants include total cost incurred from land clearing to the point of maturity. Bearer plants have an average life cycle of 26 years and are considered mature when the plants attain 4 years old. Depreciation of mature bearer plants are computed on a straight-line basis over the remaining useful lives of 22 years. The immature bearer plants are not depreciated as these assets are not yet available for use.

2.10 Biological assets Agricultural produce growing on bearer plants are measured at fair value less costs to sell. Fair value is determined

based on the estimated future cash flows expected to be generated from the agricultural produce growing onbearer plants. The expected future cash flows are estimated using projected quantity and the estimatedmarketprice of the agricultural produce growing on bearer plants.

The changes in the fair value less costs to sell of agricultural produce growing on bearer plants are recognised in profit or loss.

2.11 Investment properties

Investment properties are initially measured at cost, including transaction costs. Subsequent to initial recognition, investmentpropertiesaremeasuredatfairvaluewhichreflectsmarketconditionsatthereportingdate.Fairvalueis arrived at by reference to market evidence of transaction prices for similar properties and is performed by registeredindependentvaluershavinganappropriaterecognisedprofessionalqualificationandrecentexperienceinthe location and category of the properties being valued. Gains or losses arising from changes in the fair values of investment properties are included in profit or loss in theyear inwhich they arise.

Investment properties are derecognised when either they have been disposed of or when the investment property ispermanentlywithdrawnfromuseandnofutureeconomicbenefitisexpectedfromitsdisposal.Anygainorlosson the retirement or disposal of an investment property is recognised in profit or loss in the year of retirementor disposal.


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2.11 Investment properties (cont’d)

Transfers are made to or from investment property only when there is a change in use. For a transfer from investment property to owner-occupied property, the deemed cost for subsequent accounting is the fair value at the date of change in use. For a transfer from owner-occupied property to investment property, the property is accounted for in accordance with the accounting policy for property, plant and equipment set out in Note 2.8 up to the date of change in use.

2.12 Impairment of non-financial assets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when an annual impairment assessment for an asset is required, the Group makes an estimate of the asset’s recoverable amount.

An asset’s recoverable amount is the higher of an asset’s fair value less costs to sell and its value in use. For the purposeofassessingimpairment,assetsaregroupedatthelowestlevelsforwhichthereareseparatelyidentifiablecashflows (cash-generatingunits (“CGU”)).

In assessing value in use, the estimated future cash flows expected to be generated by the asset are discountedto their present valueusing apre-taxdiscount rate that reflects currentmarket assessmentsof the timevalueofmoneyandtherisksspecifictotheasset.Wherethecarryingamountofanassetexceedsitsrecoverableamount,the asset is written down to its recoverable amount. Impairment losses recognised in respect of a CGU or groups of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to those units or groupsof units and then, to reduce the carrying amount of the other assets in the unit or groups of units on a pro-rata basis.

Impairment losses are recognised in profit or loss.An assessment ismade at each reporting date as towhetherthere is any indication that previously recognised impairment losses may no longer exist or may have decreased. A previously recognised impairment loss is reversed 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. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increase cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised previously. Such reversal is recognised in profit or loss.

2.13 Subsidiaries IntheCompany’sseparatefinancialstatements,investmentsinsubsidiariesareaccountedforatcostlessimpairment

losses. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in profit or loss.


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2.14 Associates Anassociateisdefinedasacompany,notbeingasubsidiaryoraninterestinajointventure,inwhichtheGroup

has significant influence. Significant influence is the power to participate in the financial and operating policydecisions of the investee but not in control or joint control over those policies. Details of the associates are as disclosed in Note 14.

Theconsiderationsmade indeterminingsignificant influenceare similar to thosenecessary todeterminecontrolover subsidiaries.

The Group’s investments in associates are accounted for using the equity method.

Under the equity method, the investment in an associate is initially recognised at cost. The carrying amount of the investment is adjusted to recognise changes in the Group’s share of net assets of the associate since the acquisition date. Goodwill relating to the associate is included in the carrying amount of the investment and is not tested for impairment individually.

TheconsolidatedstatementofprofitorlossreflectstheGroup’sshareoftheresultsofoperationsoftheassociate.Any change in OCI of those investees is presented as part of the Group’s OCI. In addition, when there has been a change recognised directly in the equity of the associate, the Group recognises its share of any changes, when applicable, in the statement of changes in equity. Unrealised gains and losses resulting from transactions between the Group and the associate are eliminated to the extent of the interest in the associate.

The aggregate of the Group’s share of profit or loss of an associate is shown on the face of the statement ofprofit or loss outsideoperatingprofit and represents profit or loss after taxof the associate.

ThefinancialstatementsoftheassociatearepreparedforthesamereportingperiodastheGroup.Whennecessary,adjustments are made to bring the accounting policies in line with those of the Group.

After application of the equity method, the Group determines whether it is necessary to recognise an impairment loss on its investment in its associate. At each reporting date, the Group determines whether there is objective evidence that the investment in the associate is impaired. If there is such evidence, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value, and then recognises the loss as 'Shareof profit of an associate' in the statement of profit or loss.

Uponlossofsignificantinfluenceovertheassociate,theGroupmeasuresandrecognisesanyretainedinvestmentat its fair value.Anydifferencebetween the carrying amount of the associate upon loss of significant influenceand the fair valueof the retained investment andproceeds fromdisposal is recognised in profit or loss.

IntheCompany’sseparatefinancialstatements,investmentsinassociatesareaccountedforatcostlessimpairmentlosses. On disposal of such investments, the difference between net disposal proceeds and their carrying amounts is included in profit or loss.


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2.15 Financial instruments

Afinancial instrument isanycontract thatgives rise toafinancialassetofoneentityandafinancial liabilityorequity investment of another entity.

(a) Financial assets

Initial recognition and measurement Financial assets are classified, at initial recognition, as subsequentlymeasuredat amortisedcost, fairvalue

throughother comprehensive income (OCI), and fair value throughprofit or loss.

Theclassificationoffinancialassetsatinitialrecognitiondependsonthefinancialasset’scontractualcashflowcharacteristics and the Group's and the Company’s business model for managing them. With the exception of trade receivables that do not contain a significant financing component or forwhich theGroup and theCompany have applied the practical expedient, the Group and the Company initially measure a financialassetatitsfairvalueplus,inthecaseofafinancialassetnotatfairvaluethroughprofitorloss,transactioncosts.Trade receivables that do no contain a significant financing component or forwhich theGroup andthe Company have applied the practical expedient are measured at the transaction price determined under MFRS 15.

In order for a financial asset to be classified andmeasured at amortised cost or fair value throughOCI, itneeds togive rise tocashflows that are ‘solelypaymentsofprincipaland interest (SPPI)’on theprincipalamount outstanding. This assessment is referred to as the SPPI test and is performed at an instrument level.

TheGroup'sand theCompany’sbusinessmodel formanagingfinancialassets refers tohow itmanages itsfinancial assets in order to generate cash flows. The business model determines whether cash flows willresult fromcollecting contractual cashflows, selling thefinancial assets, or both.

Purchases or sales of financial assets that require delivery of assets within a time frame established byregulation or convention in the market place (regular way trades) are recognised on the trade date, i.e., the date that the Group and the Company commit to purchase or sell the asset.

Subsequent measurement For purposes of subsequentmeasurementfinancial assets are classified in three categories:

- Financial assets at amortised cost (debt instruments) - Financial assets at fair value throughprofit or loss - Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses

upon derecognition (equity instruments) Financial assets at amortised cost (debt instruments)

TheGroupand theCompanymeasurefinancialassetsatamortisedcost ifbothof the followingconditionsare met:

- Thefinancialasset isheldwithinabusinessmodelwith theobjective toholdfinancialassets inorderto collect contractual cashflows

And

- The contractual terms of the financial asset give rise on specified dates to cash flows that are solelypayments of principal and interest on the principal amount outstanding


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2.15 Financial instruments (cont’d)

(a) Financial assets (cont’d)

Subsequent measurement (cont’d)

Financial assets at amortised cost are subsequently measured using the effective interest (EIR) method and aresubject to impairment.Gainsand lossesare recognised inprofitor losswhen theasset isderecognised,modifiedor impaired.

The Group's and the Company’s financial assets at amortised cost mainly comprise its trade and otherreceivables balances and cash and bank balances.

Financial assets at fair value throughprofit or loss

Financialassetsat fairvalue throughprofitor loss includefinancialassetsheld for trading,financialassetsdesignateduponinitialrecognitionatfairvaluethroughprofitorloss,orfinancialassetsmandatorilyrequiredto bemeasured at fair value. Financial assets are classified as held for trading if they are acquired for thepurpose of selling or repurchasing in the near term. Financial assets with cash flows that are not solelypaymentsofprincipalandinterestareclassifiedandmeasuredatfairvaluethroughprofitorloss,irrespectiveof the businessmodel. Notwithstanding the criteria for debt instruments to be classified at amortised costor at fair value through OCI, as described above, debt instruments may be designated at fair value through profitor lossoninitialrecognitionifdoingsoeliminates,orsignificantlyreduces,anaccountingmismatch.Financialassetsat fairvalue throughprofitor lossarecarried in thestatementsoffinancialpositionat fairvaluewithnet changes in fair value recognised in profit or loss.

This category comprises the Group's investment in debt instruments.

Dividends and interest are recognised as revenue in the statements of comprehensive income when the right of payment has been established.

Financial assets designated at fair value through OCI with no recycling of cumulative gains and losses upon derecognition (equity instruments)

Upon initial recognition, the Group and the Company may elect to classify irrevocably their equity investments as equity instruments designated at fair value throughOCIwhen theymeet the definition of equity underIAS32FinancialInstruments:Presentationandarenotheldfor trading.Theclassificationisdeterminedonan instrument-by-instrument basis.

Gains and losses on these financial assets are never recycled to profit or loss. Dividends are recognisedas revenue in the statements of comprehensive income when the right of payment has been established, exceptwhen theGroup and theCompany benefit from such proceeds as a recovery of part of the cost ofthe financial asset, in which case, such gains are recorded in OCI. Equity instruments designated at fairvalue through OCI are not subject to impairment assessment.

The Group and the Company elected to classify irrevocably their quoted equity investments under this category.


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Derecognition

A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financialassets) isprimarilyderecognised (i.e., removedfromtheGroup'sand theCompany’sstatementoffinancialposition) when:

- The rights to receive cashflows from the asset have expired; or

- The Group and the Company have transferred its rights to receive cash flows from the asset or hasassumedanobligationtopaythereceivedcashflowsinfullwithoutmaterialdelaytoathirdpartyundera‘pass-through’arrangement;andeither(a)theGroupandtheCompanyhavetransferredsubstantiallyall the risks and rewards of the asset, or (b) the Group and the Company have neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

When the Group and the Company have transferred its rights to receive cash flows from an asset or hasentered into a pass-through arrangement, it evaluates if, and to what extent, it has retained the risks and rewards of ownership. When it has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, the Group and the Company continue to recognise the transferred asset to the extent of its continuing involvement. In that case, the Group and the Company also recognise an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights andobligations that theGroup and theCompanyhave retained.

Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group and the Company could be required to repay.

Impairment of financial assets

The Group and the Company recognise an allowance for expected credit losses (ECLs) for all debt instruments notheldat fairvalue throughprofitor loss.ECLsarebasedon thedifferencebetweenthecontractualcashflows due in accordancewith the contract and all the cash flows that theGroup and theCompany expectto receive, discounted at an approximation of the original effective interest rate. The expected cash flowswill includecashflowsfromthesaleofcollateralheldorothercreditenhancements thatare integral to thecontractual terms.

ECLsarerecognisedintwostages.Forcreditexposuresforwhichtherehasnotbeenasignificant increasein credit risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible within the next 12-month (a 12-month ECL). For those credit exposures for which there hasbeenasignificant increase incredit risksince initial recognition,a lossallowance is requiredforcreditlosses expected over the remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).

For trade receivables and contract assets, the Group and the Company apply a simplified approach incalculating ECLs. Therefore, the Group and the Company do not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. The Group and the Company have established a provision matrix that is based on its historical credit loss experience, adjusted for forward-looking factors specific to thedebtors and the economic environment.


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Subsequent measurement (cont’d)

Impairment of financial assets (cont’d)

For other receivables, theGroup and theCompany apply lowcredit risk simplification.At every reportingdate, the Group and the Company evaluate whether the other receivables are considered to have low credit risk using all reasonable and supportable information that is available without undue cost or effort. In addition,theGroupandtheCompanyconsiderthattherehasbeenasignificantincreaseincreditriskwhenthe contractual payments are more than 6 months past due.

TheGroupandtheCompanyconsiderafinancialassetindefaultwhencontractualpaymentsare12monthspastdue.However, in certaincases, theGroupand theCompanymayalsoconsider afinancial asset tobein default when internal or external information indicates that the Group and the Company are unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by theGroupand theCompany.Afinancialasset iswrittenoffwhen there isno reasonableexpectationofrecovering the contractual cashflows.

(b) Financial liabilities

Initial recognition and measurement

Financial liabilitiesareclassified,at initial recognition,asfinancial liabilitiesat fairvalue throughprofitorloss, loans and borrowings, payables, or as derivatives designated as hedging instruments in an effective hedge, as appropriate.

All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings andpayables, net of directly attributable transaction costs.

TheGroup's and theCompany’sfinancial liabilities comprise trade andother payables.

Subsequent measurement

After initial recognition, payables are subsequently measured at amortised cost using the EIR method. Gains and lossesare recognised inprofitor losswhen the liabilities arederecognisedaswell as through theEIRamortisation process.

Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or coststhatareanintegralpartoftheEIR.TheEIRamortisationisincludedasfinancecostsinthestatementof profit or loss.

Derecognition

Afinancialliabilityisderecognisedwhentheobligationundertheliabilityisdischargedorcancelledorexpires.When an existing financial liability is replaced by another from the same lender on substantially differentterms, or the terms of an existing liability are substantiallymodified, such an exchange ormodification istreated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of comprehensive income.


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(c) Offsetting of financial instruments Financialassetsandfinancialliabilitiesareoffsetandthenetamountisreportedinthestatementoffinancial

position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

2.16 Investment in precious metal - gold bullion

Investment in precious metal - gold bullion is initially measured at cost. After initial recognition, gold bullion is measured at fair value. Any gains or losses from changes in fair value of the gold bullion is recognised in other comprehensive income. The cumulative gain or loss previously recognised in other comprehensive income isreclassifiedfromequitytoprofitorlossasareclassificationadjustmentwhentheinvestmentinpreciousmetalis derecognised.

2.17 Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and on hand, demand deposits, and short-term, highly liquid investments thatare readilyconvertible toknownamountsofcashandwhicharesubject toan insignificant riskof changes in value. For the purpose of the statements of cash flows, cash and cash equivalents are presentednet of bank overdrafts, pledged deposits and deposits with maturity exceeding 90 days.

2.18 Inventories

Inventories are stated at the lower of cost and net realisable value. Costs incurred in bringing the inventories to their present location and condition are accounted for as follows:

- spare parts, fertilizers and chemicals: purchase costs on afirst-infirst-out basis. Net realisable value is the estimated selling price in the ordinary course of business less estimated costs of

completion and the estimated costs necessary to make the sale.

2.19 Provisions

Provisions are recognised when the Group has a present obligation as a result of a past event and it is probable thatanoutflowofresourcesembodyingeconomicbenefitswillberequiredtosettletheobligation,andareliableestimate of the amount can bemade. Provisions are reviewed at each reporting date and adjusted to reflect thecurrent best estimate. Where the effect of the time value of money is material, provisions are discounted using a currentpre-tax rate that reflects,whereappropriate, the risks specific to the liability.Wherediscounting isused,the increase in theprovisiondue to thepassageof time is recognised asfinance cost.


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2.20 Employee benefits

(a) 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. 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. Short term non-accumulating compensated absences such as sick leave are recognised when the absences occur.

(b) Defined contribution plans

TheGroupparticipates in thenationalpensionschemesasdefinedby the lawsof thecountries inwhich ithas operations. The Malaysian companies in the Group make contributions to the Employee Provident Fund inMalaysia,adefinedcontributionpensionscheme.Contributions todefinedcontributionpensionschemesare recognised as an expense in the period in which the related service is performed.

(c) Retirement benefits TheGroupandtheCompanyprovideforretirementbenefitsforeligibleemployeesonanunfundeddefined

benefitsbasisinaccordancewiththetermsoftheunions'collectiveagreementand/oremploymentagreement.Full provision has beenmade for retirement benefits payable to all eligible employees based on their lastdrawn salaries, the length of service to-date and the rates set out in the said agreements. Should an employee leave after completing the qualifying period of service but before attaining the retirement age, the provision made for the employee is written back.

2.21 Leases

(a) As lessee Finance leases, which transfer to the Group substantially all the risks and rewards incidental to ownership

of the leased item, are capitalised at the inception of the lease at the fair value of the leased asset or, if lower, at the present value of the minimum lease payments. Any initial direct costs are also added to the amountcapitalised.Leasepaymentsareapportionedbetweenthefinancechargesandreductionof theleaseliability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges arecharged toprofitor loss.Contingent rents, ifany,arechargedasexpenses in theperiods inwhich theyare incurred.

Leased assets are depreciated over the estimated 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 and the lease term.

Operating lease payments are recognised as an expense in profit or loss on a straight-line basis over thelease term.Theaggregatebenefitof incentivesprovidedbythe lessor isrecognisedasareductionofrentalexpense over the lease term on a straight-line basis.

(b) As lessor LeaseswheretheGroupretainssubstantiallyalltherisksandrewardsofownershipoftheassetareclassified

as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same bases as rental income. The accounting policy for rental income is set out in Note 2.22(b)(iii).


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2.22 Revenue recognition

(a) Revenue from contracts with customers

TheGroupandtheCompanyrecogniserevenuefromcontractswithcustomersbasedonthefive-stepmodelas set out below:

(i) Identify contractwith a customer.A contract is defined as an agreement between twoormorepartiesthat creates enforceable rights and obligations and sets out the criteria that must be met.

(ii) Identify performance obligations in the contract. A performance obligation is a promise in a contract with a customer to transfer a good or service to the customer.

(iii) Determine the transaction price. The transaction price is the amount of consideration to which the Group and the Company expect to be entitled in exchange for transfering promised goods or services to a customer, excluding amounts collected on behalf of third parties.

(iv) Allocate the transaction price to the performance obligations in the contract. For a contract that has more than one performance obligation, the Company allocate the transaction price to each performance obligation in an amount that depicts the amount of consideration to which the Group and the Company expect to be entitled in exchange for satisfying each performance obligation.

(v) Recognise revenue when (or as) the Group and the Company satisfy a performance obligation.

The Group and the Company satisfy a performance obligation and recognise revenue over time if the Group's and the Company's performance:

(i) Do not create an asset with an alternative use to the Group and the Company and have an enforceable right to payment for performance completed to-date; or

(ii) Create or enhance an asset that the customer controls as the asset is created or enhanced; or

(iii) ProvidebenefitsthatthecustomersimultaneouslyreceivesandconsumesastheGroupandtheCompanyperform.

For performance obligations where any one of the above conditions is not met, revenue is recognised at the point in time atwhich theperformanceobligation is satisfied.

Sale of goods

The Group and the Company contract with their customers for sales of fresh oil palm fruit bunches. Revenue from sale of goods is recognised at the point in time when control of the asset is transferred to the customer, generally upon the transfer of significant risks and rewards of ownership of the goods to the customer.Payment is generally due up to 30 days from transfer of risks and rewards. Revenue is not recognised to the extentwhere there are significant uncertainties regarding recovery of the consideration due, associatedcosts or the possible return of goods.

(b) Revenue from other sources

(i) Interest income

Interest is recognisedon a timeproportionbasis that reflect the effectiveyieldon the assets.

(ii) Dividend income

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

(iii) Rental income

Rental income from investment properties is recognised on a straight-line basis over the term of the lease.


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2.23 Taxes

(a) Current tax

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date.

Current taxes are recognised in profit or loss except to the extent that the tax relates to items recognisedoutsideprofit or loss, either in other comprehensive incomeor directly in equity.

(b) Deferred tax Deferred tax is provided using the liability method on temporary differences at the reporting date between

the taxbases of assets and liabilities and their carrying amounts forfinancial reportingpurposes.

Deferred tax liabilities are recognised for all temporary differences, except:

- where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accountingprofit nor taxableprofit or loss; and

- in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not be reversed in the foreseeable future.

Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused tax

credits and unused tax losses, to the extent that it is probable that taxable profitwill be available againstwhich the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised except:

- where the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accountingprofit nor taxableprofit or loss; and

- in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are recognised only to the extent that it is probable thatthetemporarydifferenceswillreverseintheforeseeablefutureandtaxableprofitwillbeavailableagainst which the temporary differences can be utilised.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that

itisnolongerprobablethatsufficienttaxableprofitwillbeavailabletoallowallorpartofthedeferredtaxasset to be utilised. Unrecognised deferred tax assets are reassessed at each reporting date and are recognised to the extent that it has becomeprobable that future taxable profitwill allow the deferred tax assets to beutilised.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the reporting date.

Deferredtaxrelatingtoitemsrecognisedoutsideprofitor lossisrecognisedoutsideprofitor loss.Deferredtax items are recognised in correlation to the underlying transaction either in other comprehensive income or directly in equity and deferred tax arising from a business combination is adjusted against goodwill on acquisition.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.


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2.23 Taxes (cont’d)

(c) Goods and service tax ("GST") Revenues, expenses, assets and liabilities are recognised net of the amount of GST except: - Where the GST incurred in a purchase of assets or services is not recoverable from the taxation 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 the amount of GST included. The net amount of GST recoverable from, or payable to, the taxation authority is included as part of

receivables or payables in the statements offinancial position.

(d) Sales and services tax (“SST”) The amount of SST incurred in a purchase of assets or services is not recoverable from the taxation authority

and is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable. 2.24 Segment reporting

For management purposes, the Group is organised into operating segments based on their products and services which are independently managed by the respective segment managers responsible for the performance of the respective segments under their charge. The segment managers report directly to the management of the Group who regularly review the segment results in order to allocate resources to the segments and to assess the segment performance. Additional disclosures on each of these segments are shown in Note 32, including the factors used to identify the reportable segments and the measurement basis of segment information.

2.25 Share capital and share issuance expenses An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting

all of its liabilities. Ordinary shares are equity instruments.

Ordinary shares are recorded at the proceeds received, net of directly attributable incremental transaction costs. Dividends on ordinary shares are recognised in equity in the period in which they are declared.

2.26 Contingencies A contingent liability or asset is a possible obligation or asset that arises from past events and whose existence

will be confirmed only by the occurrence or non-occurrence of uncertain future events not wholly within thecontrol of the Group and of the Company.

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

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3. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

The preparation of the Group’s financial statements requires management to make judgements, estimates andassumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and the disclosure of contingent liabilities at the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that could require a material adjustment to the carrying amount of the asset or liability affected in the future.

3.1 Judgements made in applying accounting policies

There were no significant judgments made by the management in the process of applying the Group's andCompany'saccountingpoliciesthathaveasignificanteffectontheamountsrecognisedinthefinancialstatementsduring the currentfinancial year.

3.2 Key sources of estimation uncertainty The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date,

thathaveasignificantriskofcausingamaterialadjustmenttothecarryingamountsofassetsandliabilitieswithinthenextfinancial year are discussedbelow:

(a) Valuation of investment in debt instruments

TheGroupmeasures its investment in debt instruments at fair value throughprofit or loss.

The management used the net asset value of the investment entity to determine fair value. The assets of the entity mainly consist of quoted shares for which fair values are determined based on publicly available market data.

(b) Revaluation of investment property

The Group carries its investment property at fair value, with changes in fair value being recognised in the profitandloss.TheGroupengagedanindependentvaluationspecialisttoassessfairvalueoftheinvestmentproperty as at 30 June 2019. The key assumptions and the unobservable inputs which are used to determine the fair value of the investment property are disclosed in Note 29 (c).


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4. REVENUE Revenue of the Group and of the Company consists of the following: Group Company 2019 2018 2019 2018 RM RM RM RM

Type of revenue Revenue from contracts with customers: - Sales of fresh oil palm fruit bunches 4,670,024 7,757,533 4,670,024 7,757,533

Revenue from other sources: Dividend income - Quoted shares in Malaysia 1,339,979 151,717 1,339,979 151,717 - Quoted shares outside Malaysia 3,734,202 4,326,231 3,734,202 4,326,231 Rental income 668,434 686,406 - - Interest income 1,828,880 1,271,182 141,405 357,135 12,241,519 14,193,069 9,885,610 12,592,616

5. EMPLOYEE BENEFITS EXPENSES

Group and Company 2019 2018 RM RM

Wages and salaries 1,562,176 1,415,874 Contributions to defined contribution plan 84,859 97,981 Social security contributions 11,519 8,470 Retirement benefits (Note 22) 13,533 9,322 Other benefits 208,850 235,669 1,880,937 1,767,316 IncludedinemployeebenefitsexpensesoftheGroupandCompanyareexecutivedirectors'remunerationamounting

to RM789,507 (2018 : RM704,257) as further disclosed in Note 7.


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6. PROFIT FROM OPERATIONS The following amounts havebeen included in arriving at profit fromoperations:

Group Company 2019 2018 2019 2018 RM RM RM RM Auditors’ remuneration - Current year 66,000 50,000 66,000 50,000 - Of subsidiaries, borne by the Company 9,000 8,000 9,000 8,000 - Other services 25,979 91,722 25,979 91,722 Depreciation - Property, plant and equipment (Note 10) 255,732 166,119 255,732 166,119 - Bearer plants (Note 11) 969,065 163,743 969,065 163,743 Fees of subsidiaries’ directors 5,940 5,882 - - Foreign exchange loss/(gain) - Realised 8,705 416 8,705 416 - Unrealised (115,288) (215,109) (511,262) 1,039,330 Provision for retirement benefits,net(Note22) 13,533 9,322 13,533 9,322 Property, plant and equipment written off - 103,041 - 103,041 Rental expenses 250,000 250,000 250,000 250,000 Direct operating expenses from investment property 124,952 137,302 - -

7. DIRECTORS’ REMUNERATION Group and Company

2019 2018 RM RM

Directors of the Company Executive: - Salaries and allowances 601,057 243,242 - Fees - 148,340 - Bonus 188,450 312,675 789,507 704,257 Non-Executive: - Fees 314,760 344,660 Total 1,104,267 1,048,917


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7. DIRECTORS’ REMUNERATION (cont’d) The number of directors of the Company whose total remuneration during the year fall within the following

bands is as follows: Number of directors

2019 2018 Executive directors Below RM50,000 1 - RM100,001 to RM150,000 1 1 RM150,001 to RM250,000 1 - RM250,001 to RM450,000 1 2 Non-Executive directors RM50,001 to RM100,000 1 - RM100,001 to RM150,000 2 3

8. INCOME TAX EXPENSE Major components of income tax expense The major components of income tax expense for the years ended 30 June 2019 and 2018 are: Group Company 2019 2018 2019 2018 RM RM RM RM

Income tax: Malaysian income tax - 86,000 - 86,000 Foreign income tax 87,180 84,853 - - (Over)/underprovision in prior years (123,408) 18,222 (86,000) (383) (36,228) 189,075 (86,000) 85,617Deferred tax (Note 16): Relating to origination and reversal of temporary differences (1,129,971) 213,261 (1,129,971) 213,261Changes in Malaysian Real Property Gains Tax ("RPGT") rate 5,060,000 - 5,060,000 -Underprovision in prior years 28,971 30,739 28,971 30,739

3,959,000 244,000 3,959,000 244,000

Total income tax expense 3,922,772 433,075 3,873,000 329,617

Domestic income tax is calculated at the Malaysian statutory tax rate of 24% (2018: 24%) of the estimated assessable profit for theyear.


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8. INCOME TAX EXPENSE (cont’d)

Reconciliation between tax expense and accounting (loss)/profit: The reconciliation between tax expense and the product of accounting (loss)/profitmultiplied by the applicable

corporate tax rate for the years ended 30 June 2019 and 2018 is as follows:


(Loss)/Profit before taxation (2,738,746) 7,229,263 486,708 4,099,696

Taxation at Malaysian statutory tax rate of 24% (2018 : 24%) (657,299) 1,735,023 116,810 983,927Effects of income not subject to tax (1,744,848) (2,245,882) (1,330,587) (1,074,708)Effects of expenses not deductible for tax purposes 160,248 390,042 83,806 390,042Effect of change in RPGT rate 5,060,000 - 5,060,000 -Effects of share of results of associates 1,201,231 509,035 - -Different tax rate in foreign country (2,123) (4,104) - -(Over)/underprovision of income tax in prior years (123,408) 18,222 (86,000) (383)Underprovision of deferred tax in prior years 28,971 30,739 28,971 30,739

3,922,772 433,075 3,873,000 329,617

9. (LOSS)/EARNINGS PER SHARE (a) Basic

Basic (loss)/earnings per share is calculatedbydividing the net (loss)/profit for the year by the number ofordinary shares in issueduring thefinancial year.

Group 2019 2018 RM RM (Loss)/Profit attributable to owners of theparent for theyear (RM) (6,661,518) 6,796,188 Number of ordinary shares (Unit) 66,332,645 66,332,645

(Loss)/Earnings per share (sen) (10.04) 10.25 (b) Diluted Diluted (loss)/earnings per share is the same as basic (loss)/earnings per share as there are no dilutive

potential ordinary shares outstanding as at 30 June 2019 and 30 June 2018.


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10. PROPERTY, PLANT AND EQUIPMENT

<––––––––––––––– At Cost ––––––––––––––––> Freehold Plant and *Other land Buildings machinery assets Total

Group and Company RM RM RM RM RM

At 1 July 2017 102,133,596 1,385,324 408,907 638,874 104,566,701 Additions - 757,034 437,854 6,245 1,201,133Written-off - (55,182) (104,926) (204,264) (364,372)

At 30 June 2018 and 1 July 2018 102,133,596 2,087,176 741,835 440,855 105,403,462Additions - 1,450,087 474,606 210,526 2,135,219

At 30 June 2019 102,133,596 3,537,263 1,216,441 651,381 107,538,681 Accumulated depreciation

At 1 July 2017 - 604,003 206,159 447,474 1,257,636 Depreciation charge for the year (Note 6) - 40,051 72,903 53,165 166,119 Written-off - (55,173) (104,886) (101,272) (261,331)

At 30 June 2018 and 1 July 2018 - 588,881 174,176 399,367 1,162,424 Depreciation charge for the year (Note 6) - 76,302 120,364 59,066 255,732 At 30 June 2019 - 665,183 294,540 458,433 1,418,156

Net carrying amount At 1 July 2017 102,133,596 781,321 202,748 191,400 103,309,065

At 30 June 2018 102,133,596 1,498,295 567,659 41,488 104,241,038 At 30 June 2019 102,133,596 2,872,080 921,901 192,948 106,120,525

* Other assets comprise furniture,fittings, computers, vehicles and agriculture equipment.


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10. PROPERTY, PLANT AND EQUIPMENT

(b) Included in property, plant and equipment of the Group and the Company are the cost of the following fully depreciated assets which are still in use:

Group and Company 30.06.2019 30.06.2018 01.07.2017 RM RM RM

Building 485,141 485,141 540,324 Plant and machinery 12,800 12,800 117,726 Other assets 349,817 345,279 375,427 847,758 843,220 1,033,477

11. BEARER PLANTS Group and Company

2019 2018 RM RM At cost

At beginning of year 31,742,060 25,408,003 Additions 5,470,832 6,334,057 At end of year 37,212,892 31,742,060 Accumulated depreciation

At beginning of year 840,465 676,722 Depreciation charge for the year (Note 6) 969,065 163,743 At end of year 1,809,530 840,465

Net carrying amount 35,403,362 30,901,595

Included in the bearer plants are immature bearer plants with carrying amount of RM15,893,489 (30.6.2018: RM28,139,716; 1.7.2017: RM21,921,600).


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12. INVESTMENT PROPERTY Group

2019 2018 RM RM At beginning of year 35,980,133 38,224,967 Fair value gain/(loss) 941,226 (212,011) Exchange difference (343,981) (2,032,823) At end of year 36,577,378 35,980,133

The above investment property relates to a long term leasehold apartment.

The fair value is determined based on valuation conducted by independent professional valuers using the comparison method of valuation. The comparison method involves comparing and adopting recent transactions as a yardstick and sale evidences involving other similar properties in the vicinity. The Group has assessed that the highest and best use of its properties do not differ from their current use.

Detailsofsignificantunobservablevaluationinputsforusingthecomparisonmethodofvaluationaredisclosedin Note 29(c).

Significant increases/(decreases) in estimated price per square feet in isolation would result in significantlyhigher/(lower) fair value of investment property.

13. INVESTMENT IN SUBSIDIARIES 30.06.2019 30.06.2018 01.07.2017 Company RM RM RM

Unquoted shares, at cost 119,226,010 119,226,010 119,226,010

Details of the subsidiaries are as follows:

% of ownership Country of Principal held by theName of subsidiaries incorporation activity Group 2019 2018

Lanstar Assets Limited British Virgin Investment Islands holding 100 100

Springvale International British Virgin Investment Limited Islands holding 100 100


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14. INVESTMENT IN ASSOCIATES 30.06.2019 30.06.2018 01.07.2017 RM RM RM Group

Unquoted shares, at cost Outside Malaysia 69,091,662 69,091,662 69,091,662 Share of post-acquisition reserves and other adjustments 10,003,200 15,239,721 16,073,264

79,094,862 84,331,383 85,164,926 Company

Unquoted shares, at cost Outside Malaysia 188,753 188,753 188,753

During the current financial year, the Group received dividend income amounting to RM2,136,483 (2018:RM1,017,159) from its associates.

(a) Details of the associates are: Equity interest Country of Principal held (%)* Accounting model

Name of associates incorporation activity 2019 2018 applied

Held directly by the Company

Kuala Pergau Rubber England Plantation 25.00 25.00 Equity method Plantations PLC ("KP") owner

Held through the Springvale International Limited

Balland Properties Limited Ireland Investment 49.00 49.00 Equity method ("Balland") holding

Raffles -Asia Investment Mauritius Invest in a 35.17 35.22 Equitymethod Company ("RAIC") portfolio of securities

* equals to the proportion of voting rights held


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14. INVESTMENT IN ASSOCIATES (cont’d)

(b) SummarisedfinancialinformationinrespectofeachoftheGroup’smaterialassociatesissetoutbelow.Thesummarisedfinancialinformationrepresentstheamountsinthefinancialstatementsoftheassociatesand not the Group’s share of those amounts.

(i) Summarised statements offinancial position

KP Balland RAIC TotalAs at 30 June 2019 RM RM RM RM

Current assets 662,207 266,316 213,350,704 214,279,227 Non-current assets 859,697 12,253,166 - 13,112,863Current liabilities (568,277) (3,137,981) (828,950) (4,535,208)Non-current liabilities (300,000) (835,472) - (1,135,472)

Net assets 653,627 8,546,029 212,521,754 221,721,410

Proportion of Group's ownership 25.00% 49.00% 35.17% Equity attributable to the Group, representing carrying amount of investment 163,407 4,187,554 74,743,901 79,094,862

KP Balland RAIC TotalAs at 30 June 2018 RM RM RM RM

Current assets 561,235 352,888 227,158,676 228,072,799 Non-current assets 859,697 12,668,185 - 13,527,882Current liabilities (564,860) (2,846,554) (807,071) (4,218,485)Non-current liabilities (300,000) (1,049,360) - (1,349,360)

Net assets 556,072 9,125,159 226,351,605 236,032,836

Proportion of Group's ownership 25.00% 49.00% 35.22%

Equity attributable to the Group, representing carrying amount of investment 139,019 4,471,329 79,721,035 84,331,383


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(ii) Summarised statements of comprehensive income

KP Balland RAIC TotalFor the year ended RM RM RM RM 30 June 2019

Revenue - - 4,675,649 4,675,649 Other income 250,000 - - 250,000Other expenses (89,339) (26,607) - (115,946)Other operating loss - (608,584) (18,094,399) (18,702,983)Income tax expense (63,106) - (286,734) (349,840)

Profit/(loss)netoftax representing total comprehensive income/(loss) for the year 97,555 (635,191) (13,705,484) (14,243,120)

Proportion of Group's ownership 25.00% 49.00% 35.17% Group's share of total comprehensive income/(loss) for the year 24,389 (311,244) (4,820,219) (5,107,074)Change in proportion of Group's ownership - - 10,874 10,874Adjustments to conform with the accounting policies of the Group - 91,071 - 91,071

Net Group's share of total comprehensive income/(loss) for the year 24,389 (220,173) (4,809,345) (5,005,129)


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(ii) Summarised statements of comprehensive income (cont’d)

KP Balland RAIC TotalFor the year ended RM RM RM RM 30 June 2018

Revenue - - 4,017,620 4,017,620 Other income 262,940 - - 262,940Other expenses (86,889) (18,578) - (105,467)Other operating loss (42,008) (574,761) (8,313,303) (8,930,072)Income tax expense (60,000) - (4,820) (64,820)

Profit/(loss)netoftax representing total comprehensive income/(loss) for the year 74,043 (593,339) (4,300,503) (4,819,799)

Proportion of Group's ownership 25.00% 49.00% 35.22% Group's share of total comprehensive income/(loss) for the year 18,511 (290,736) (1,514,637) (1,786,862)Change in proportion of Group's ownership - - (8,512) (8,512)Adjustments to conform with the accounting policies of the Group - (325,606) - (325,606)

Net Group's share of total comprehensive income/(loss) for the year 18,511 (616,342) (1,523,149) (2,120,980)


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15. INVESTMENTS

30.06.2019 30.06.2018 01.07.2017 RM RM RM Group

Financial assets at fair value through other comprehensive income: Quoted equity instruments- Shares in Malaysia 19,278,819 40,895,436 26,923,737 Shares outside Malaysia 146,730,950 160,801,773 149,678,985

166,009,769 201,697,209 176,602,722 Financial assets at fair value through profit or loss: Debt instruments- Redeemable preference shares outside Malaysia 2,752,707 2,602,669 2,943,075 Other debt instruments outside Malaysia 26,670,115 26,802,371 25,161,377

29,422,822 29,405,040 28,104,452

Investment at fair value through other comprehensive income: Investment in precious metal - gold bullion 15,387,578 13,325,891 14,097,834

Total investments 210,820,169 244,428,140 218,805,008

Company

Financial assets at fair value through other comprehensive income: Quoted equity instruments- Shares in Malaysia 19,278,819 40,895,436 26,923,737 Shares outside Malaysia 146,730,950 160,801,773 149,678,985

166,009,769 201,697,209 176,602,722 Investment at fair value through other comprehensive income: Investment in precious metal - gold bullion 4,121,623 3,569,391 3,782,122

Total investments 170,131,392 205,266,600 180,384,844


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16. DEFERRED TAX LIABILITIES

Group and Company 2019 2018 RM RM

At beginning of year (6,708,000) (6,464,000) Recognised in profit or loss (Note 8) (3,959,000) (244,000)

At end of year (10,667,000) (6,708,000)

Analysed as follows: Deferred tax assets 8,389,000 5,986,000 Deferred tax liabilities (19,056,000) (12,694,000)

(10,667,000) (6,708,000)

Thecomponentsandmovementsofdeferredtaxassets/(liabilities)duringthefinancialyearpriortooffsettingareas follows:

Deferred tax assets of the Group and Company

Unabsorbed Unabsorbed capital business

Provisions allowances losses Total RM RM RM RM

At 1 July 2017 156,000 3,267,000 - 3,423,000 Recognised in profit or loss 25,000 1,376,000 1,162,000 2,563,000

At 30 June 2018/1 July 2018 181,000 4,643,000 1,162,000 5,986,000Recognised in profit or loss (23,000) 1,587,000 839,000 2,403,000

At 30 June 2019 158,000 6,230,000 2,001,000 8,389,000

Deferred tax liabilities of the Group and Company

Property, plant and Bearer Freehold

equipment plants estate land Total RM RM RM RM

At 1 July 2017 (205,000) (4,622,000) (5,060,000) (9,887,000) Recognised in profit or loss (230,000) (2,577,000) - (2,807,000)

At 30 June 2018/1 July 2018 (435,000) (7,199,000) (5,060,000) (12,694,000)Recognised in profit or loss (436,000) (866,000) (5,060,000) (6,362,000)

At 30 June 2019 (871,000) (8,065,000) (10,120,000) (19,056,000)


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17. INVENTORIES


At cost: Spare parts, fertilizers and chemicals 18,185 25,651 41,645

18. BIOLOGICAL ASSETS Group and Company

2019 2018 RM RM At fair value: At 1 July 118,424 128,078 Changes in fair value 15,929 (9,654)

At 30 June 134,353 118,424

The biological assets of the Group and Company comprise fresh fruit bunches ("FFB") prior to harvest. Fair value isdeterminedbasedontheestimatedfuturecashflowsexpectedtobegeneratedfromthesaleofFFB,whichtakesinto consideration the market price of FFB, adjusted for estimated oil content of the unharvested FFB, less harvest-ing cost, transportation fee and other costs to sell.

TheGroupandCompanyhaveassumedthatnetcashflowstobegeneratedfromunripeFFBbeyond14daysfromharvest are negligible. The other key assumptions used to determine the fair value are as follows:


FFB expected to be harvested (MT) 521 320 342 Average FFB selling price (RM/MT) 370 454 549

The fair value measurement of the Group's and the Company's biological assets are categorised within Level 3 of the fair value hierarchy. A reasonable change in the key assumptions would not result in any material impact to the financialstatements.


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19. TRADE AND OTHER RECEIVABLES

30.06.2019 30.06.2018 01.07.2017 RM RM RM Group

Trade receivables - third parties 165,638 97,335 227,360 Sundry receivables 1,554,362 1,395,734 818,587

Total trade and other receivables 1,720,000 1,493,069 1,045,947 Add: Cash and bank balances (Note 20) 141,175,834 143,980,433 150,821,202

Totalfinancial assets at amortised cost 142,895,834 145,473,502 151,867,149 Company

Trade receivables 165,638 97,335 227,360 Sundry receivables 811,884 991,640 818,585 Due from subsidiaries 1,369,662 1,361,567 1,467,114

Total trade and other receivables 2,347,184 2,450,542 2,513,059 Add: Cash and bank balances (Note 20) 22,346,362 32,347,124 34,917,865

Totalfinancial assets at amortised cost 24,693,546 34,797,666 37,430,924

(a) Trade receivables

Trade receivables are non-interest bearing and are generally on 15 to 30 days (30.6.2018:15 to 30 days; 1.7.2017: 15 to 30 days) terms. They are recognised at their original invoice amounts which represent their fair values on initial recognition.

Ageing analysis of trade receivables The ageing analysis of the Group’s and Company's trade receivables is as follows:


Neither past due nor impaired 165,638 97,335 227,360

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

with the Group and Company.

None of the Group’s and Company's trade receivables that are neither past due nor impaired have been renegotiatedduringthefinancialyear.


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19. TRADE AND OTHER RECEIVABLES (cont'd)

(b) Due from subsidiaries

Amounts due from subsidiaries, which arose from non-trade transactions, are unsecured, non-interest bearing and are repayable upon demand.

20. CASH AND BANK BALANCES

30.06.2019 30.06.2018 01.07.2017 RM RM RM Group

Cash on hand and at bank - in Malaysia 9,012,938 9,269,978 5,516,411 - outside Malaysia 54,215,325 54,982,168 129,798,361 Short-term deposits with licensed banks - in Malaysia 674,697 5,629,245 15,506,430 - outside Malaysia 77,272,874 74,099,042 -

Cash and bank balances 141,175,834 143,980,433 150,821,202

Forthepurposesofthestatementsofcashflows,cashandcashequivalentscomprisethefollowingatthereportingdate:

30.06.2019 30.06.2018 01.07.2017 RM RM RM

Cash and bank balances 141,175,834 143,980,433 150,821,202 Less: Short-term deposits with a licensed bank with maturities exceeding 90 days (77,947,571) (76,042,972) (1,872,378)

Cash and cash equivalents 63,228,263 67,937,461 148,948,824


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20. CASH AND BANK BALANCES (cont’d)

30.06.2019 30.06.2018 01.07.2017 RM RM RM Company

Cash on hand and at bank - in Malaysia 9,012,937 9,269,978 5,516,411 - outside Malaysia 4,932,805 10,024,439 13,895,025 Short-term deposits with licensed banks - in Malaysia 674,697 5,629,245 15,506,429 - outside Malaysia 7,725,923 7,423,462 -

Cash and bank balances 22,346,362 32,347,124 34,917,865

Forthepurposesofthestatementsofcashflows,cashandcashequivalentscomprisethefollowingatthereportingdate:

30.06.2019 30.06.2018 01.07.2017 RM RM RM

Cash and bank balances 22,346,362 32,347,124 34,917,865 Less: Short-term deposits with a licensed bank with maturities exceeding 90 days (8,400,620) (9,353,597) (1,872,379)

Cash and cash equivalents 13,945,742 22,993,527 33,045,486 The weighted average interest rates of deposits at the reporting date were as follows:

Interest rate (% per annum) 30.06.2019 30.06.2018 01.07.2017 Group

In Malaysia 3.10 2.93 2.70 Outside Malaysia 1.45 0.84 -

Company

In Malaysia 3.25 2.93 2.70 Outside Malaysia 0.82 0.70 -

The average remaining maturity days of deposits at the reporting date were as follows:

Maturity (days) 30.06.2019 30.06.2018 01.07.2017 Group

In Malaysia 7 44 71 Outside Malaysia 3 3 -

Company

In Malaysia 7 44 71 Outside Malaysia 4 4 -


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21. TRADE AND OTHER PAYABLES 30.06.2019 30.06.2018 01.07.2017 RM RM RM Group

Current Trade payables 1,346,831 1,162,075 171,342

Other payables: Accruals 701,011 1,152,699 676,540 Sundry payables 183,061 87,859 77,684 Due to director's related companies 464,430 295,331 431,883

1,348,502 1,535,889 1,186,107 2,695,333 2,697,964 1,357,449 Non-current Provision for ex-gratia 460,741 386,784 335,370

Total trade and other payables 3,156,074 3,084,748 1,692,819 Less: Provision (460,741) (386,784) (335,370)

Totalfinancial liabilities at amortised cost 2,695,333 2,697,964 1,357,449

30.06.2019 30.06.2018 01.07.2017 RM RM RM Company

Current Trade payables 1,346,831 1,162,075 182,120

Other payables: Accruals 597,896 1,100,619 625,033 Sundry payables 183,061 86,984 70,225 Due to director's related companies 464,430 295,331 431,883

1,245,387 1,482,934 1,127,141 2,592,218 2,645,009 1,309,261 Non-current Provision for ex-gratia 460,741 386,784 335,370

Total trade and other payables 3,052,959 3,031,793 1,644,631 Less: Provision (460,741) (386,784) (335,370)

Totalfinancial liabilities at amortised cost 2,592,218 2,645,009 1,309,261


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21. TRADE AND OTHER PAYABLES (cont’d)

(a) Trade payables Trade payables are non-interest bearing and the normal trade credit terms granted to the Group and the

Company range from one month to three months (30.6.2018: one month to three months; 1.7.2017: one month to three months).

Included in trade payables of the Group and the Company is an amount of RM25,150 (30.6.2018: RM15,743; 1.7.2017: RM20,468) due to Kluang Estate (1977) Sdn. Bhd., a company in which a director of the Company, Lee Chung-Shih Justin has interest. These amounts are unsecured, interest free and repayable based on normal trade credit terms.

(b) Amounts due to director’s related companies Amounts due to directors' related companies of the Group and the Company represent non-trade amounts

due to companies in which a director, Lee Chung-Shih Justin has interest. These amounts are unsecured, interest free and repayable on demand.


The Nyalas Rubber Estates Limited 464,430 290,211 426,739 Estate & Trust Agencies (1927) Limited - 5,120 4,578 Kuchai Development Berhad - - 566

464,430 295,331 431,883

(c) Sundry payables Sundry payables are normally settled on an average term of 3 months (30.6.2018: 3 months; 1.7.2017: 3

months).

(d) Provision for ex-gratia These are payable upon retirement of eligible employees.

22. RETIREMENT BENEFITS Group and Company

30.06.2019 30.06.2018 RM RM At beginning of year 51,319 41,997 Charged to profit or loss (Note 5) 13,533 9,322 Retirement benefits paid (7,997) -

At end of year 56,855 51,319


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23. SHARE CAPITAL

Number of ordinary shares 30.06.2019 30.06.2018 01.07.2017 Group and Company Issued and fully paid 66,332,645 66,332,645 66,332,645 Amount 30.06.2019 30.06.2018 01.07.2017 RM RM RM Group and Company

Issued and fully paid 74,977,463 66,332,645 66,332,645

Themovement in the share capital account represent a reclassification from share premium as shown in thestatements of changes in equity.

24. RESERVES

30.06.2019 30.06.2018 01.07.2017 Note RM RM RM Group Share premium (a) - 8,644,818 8,644,818 Capital reserve (b) 101,191,384 101,191,384 101,191,384 Fair value reserve (c) 141,712,704 153,734,233 128,788,489 Foreign currency translation reserve (d) 44,930,296 38,422,115 47,680,159 287,834,384 301,992,550 286,304,850 Company Share premium (a) - 8,644,818 8,644,818 Capital reserve (b) 101,202,399 101,202,399 101,202,399 Fair value reserve (c) 142,536,966 155,826,213 130,944,457 243,739,365 265,673,430 240,791,674

The components andmovements of reserves are disclosed in the statements of changes in equity.

(a) The share premium represents the premium arising from the issuance of ordinary shares.

(b) Capital reserve was created for the purpose of future acquisition of property and investment. It consists of the gain from the disposal of properties and long term investments. It also includes the difference between deemed cost (based on a valuation as at 30 June 2015) and historical cost of the freehold land which arose from the adoption of deemed cost exemption under MFRS 1.

(c) Fair value reserve represents net gains or losses from the fair value adjustments of investments measured at fair value through other comprehensive income.

(d) The foreign currency translation reserve represents exchange differences arising from the translation of the financialstatementsofentitieswhosefunctionalcurrenciesaredifferentfromthatoftheGroup’spresentationcurrency.


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25. RETAINED EARNINGS

The entire retained earnings of the Company as at 30 June 2019 and 30 June 2018 may be distributed as dividends under the single tier system.

26. DIVIDENDS Amount Net dividend per share

2019 2018 2019 2018 RM RM Sen Sen Dividend in specie* Tax exempt (single-tier), on 66,332,645 ordinary shares, declared on 30 October 2018, paid on 7 January 2019 15,041,749 - 23.00 -

Special dividend Tax exempt (single-tier), on 66,332,645 ordinary shares, declared on 16 October 2018, paid on 7 January 2019 2,653,306 - 4.00 -

First and final Tax exempt (single-tier), on 66,332,645 ordinary shares, declared on 16 October 2018, paid on 7 January 2019 1,326,653 - 2.00 -

Tax exempt (single-tier), on 66,332,645 ordinary shares, declared on 25 October 2017, paid on 19 December 2017 - 1,326,653 - 2.00

3,979,959 1,326,653 6.00 2.00

Total dividends 19,021,708 1,326,653 29.00 2.00

* Represents 3,837,181 ordinary shares in Kluang Rubber Company (Malaya) Berhad with a fair value of RM15,041,749 on 7 January 2019.


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26. DIVIDENDS (cont’d)

AttheforthcomingAnnualGeneralMeeting,thefollowingdividendsinrespectofthefinancialyearended30June2019 on 66,332,645 ordinary shares, will be proposed for shareholders' approval: Net dividend Amount per share RM Sen

First andfinal tax exempt (single-tier) dividend 1,326,653 2.00

Thefinancialstatementsforthecurrentfinancialyeardonotreflecttheseproposeddividends.Suchdividends,ifapprovedbytheshareholders,willbeaccountedforinequityasanappropriationofretainedearningsinthefinancialyear ending 30 June 2020.

27. SIGNIFICANT RELATED PARTY TRANSACTIONS Significant related party transactions during the year are as follows: Group Company

2019 2018 2019 2018 RM RM RM RM Estate agency fee payable to Kluang Estates (1977) Sdn. Bhd. 125,189 169,353 125,189 169,353 Administration and support services payable to The Nyalas Rubber Estates Limited 914,395 758,911 914,395 758,911 Administration and support services payable to Estate & Trust Agencies (1927) Limited 295,000 224,941 239,709 196,465Land lease rental payable to Kuala Pergau Rubber Plantations Plc 250,000 250,000 250,000 250,000

The directors are of the opinion that all the transactions above have been entered into in the normal course of business

and have been established on terms and conditions that are mutually agreed upon.


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28. OPERATING LEASE ARRANGEMENTS The Group and the Company have entered into a non-cancellable operating lease agreement for a parcel of

leasehold land. This lease has a remaining non-cancellable lease term of 19.75 years (30.6.2018: 20.75 years; 1.7.2017: 21.75 years).

The Group has also entered into a non-cancellable operating lease agreement on its investment property. The lease has a remaining non-cancellable lease term of 14 months. The lease includes a clause to enable upward revision of the rental charges on an annual basis based on prevailing market conditions.

The future minimum lease payments payable under the non-cancellable operating lease contracted for as at the reporting date but not recognised as payables, are as follows:

30.06.2019 30.06.2018 01.07.2017 RM RM RM Group Not later than 1 year 905,717 360,347 250,000 Later than 1 year and not later than 5 years 1,109,286 1,000,000 1,000,000 Later than 5 years 3,687,500 3,937,500 4,187,500 5,702,503 5,297,847 5,437,500

Company Not later than 1 year 250,000 250,000 250,000 Later than 1 year and not later than 5 years 1,000,000 1,000,000 1,000,000 Later than 5 years 3,687,500 3,937,500 4,187,500 4,937,500 5,187,500 5,437,500


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29. FAIR VALUE OF ASSETS AND LIABILITIES (a) Fair value measurement hierarchy The following table provides the fair value measurement hierarchy of the Group's and Company's assets and

liabilities:

Quoted price Significant Significant in active observable unobservable markets inputs inputs (Level 1) (Level 2) (Level 3) Total Group RM RM RM RM At 30 June 2019 Assets measured at fair value Quoted equity instruments 166,009,769 - - 166,009,769 Debt instruments - 29,422,822 - 29,422,822 Investment in precious metal - gold bullion 15,387,578 - - 15,387,578 Investment property - - 36,577,378 36,577,378 Biological assets - - 134,353 134,353

181,397,347 29,422,822 36,711,731 247,531,900

At 30 June 2018 Assets measured at fair value Quoted equity instruments 201,697,209 - - 201,697,209 Debt instruments - 29,405,040 - 29,405,040 Investment in precious metal - gold bullion 13,325,891 - - 13,325,891 Investment property - - 35,980,133 35,980,133 Biological assets - - 118,424 118,424

215,023,100 29,405,040 36,098,557 280,526,697


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29. FAIR VALUE OF ASSETS AND LIABILITIES (cont’d)

(a) Fair value measurement hierarchy (cont’d)

The following table provides the fair value measurement hierarchy of the Group's and Company's assets and liabilities: (cont’d)

Quoted price Significant Significant in active observable unobservable markets inputs inputs (Level 1) (Level 2) (Level 3) Total Company RM RM RM RM At 30 June 2019 Assets measured at fair value Quoted equity instruments 166,009,769 - - 166,009,769 Investment in precious metal - gold bullion 4,121,623 - - 4,121,623 Biological assets - - 134,353 134,353

170,131,392 - 134,353 170,265,745

At 30 June 2018 Assets measured at fair value Quoted equity instruments 201,697,209 - - 201,697,209 Investment in precious metal - gold bullion 3,569,391 - - 3,569,391 Biological assets - - 118,424 118,424

205,266,600 - 118,424 205,385,024

Duringthefinancialyearended30June2019and2018,therewerenotransfersbetweenthevariouslevelsof the fair value measurement hierarchy.

(b) Level 2 fair value measurements

The following is a description of the valuation techniques and inputs used in the fair value measurement for assets and liabilities that are categorised within Level 2 of the fair value hierarchy:

Debt instruments The debt instruments have been valued using the net asset value attributable to each share.


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(c) Level 3 fair value measurements

i) Information about significant unobservable inputs used in Level 3 fair value measurements

Thefollowingtableshowstheinformationaboutfairvaluemeasurementsusingsignificantunobservableinputs (Level 3)

Fair value Valuation Unobservable Range

Description RM techniques inputs (adjusted RM/psf)

Recurring fair value measurements

As at 30 June 2019

Investment property - Residential 36,577,378 Market Yield 7,232 to 12,278 comparable adjustments approach based on assumptions* As at 30 June 2018

Investment property - Residential 35,980,133 Market Yield 8,207 to 11,625 comparable adjustments approach based on assumptions*

* Theyieldadjustmentsaremadeforanydifferenceinthenature,locationorconditionofthespecificproperty.

Informationaboutsignificantunobservableinputsusedinfairvaluemeasurementofbiologicalassetsare disclosed in Note 18.

ii) Valuation policies and procedures

Significant increases/(decreases) in estimatedprice per squaremetre in isolationwould result in asignificantlyhigher/(lower)fairvalueonalinearbasis.

Forallsignificantfinancialreportingvaluationsusingvaluationmodelsandsignificantunobservableinputs, it is the Group’s policy to engage external valuation experts who possess the relevant credentials and knowledge on the subject of valuation, valuation methodologies and MFRS 13 fair value measurement guidance to perform the valuation.

For valuations performed by external valuation experts, the appropriateness of the valuation methodologies and assumptions adopted are reviewed along with the appropriateness and reliability of the inputs used in the valuations.

In selecting the appropriate valuation models and inputs to be adopted for each valuation that uses significantnon-observableinputs,externalvaluationexpertsarerequestedtocalibratethevaluationmodels and inputs to actual market transactions that are relevant to the valuation if such information are reasonably available.


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(d) Financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value

The followingareclassesoffinancial instruments thatarenotcarriedat fairvalueandwhosecarryingamounts are reasonable approximation of fair value:

Note

Trade and other receivables 19 Cash and bank balances 20 Trade and other payables 21 Thecarryingamountsofthesefinancialassetsandliabilitiesarereasonableapproximationoffairvalues

due to their short-term nature.

(e) Determination of fair values Quoted equity instruments Fair value is determined directly by reference to their published market bid price at the reporting date.

Precious metal Fair value of precious metal is determined by reference to its average bid spot price at the reporting date.

30. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES TheGroupandtheCompanyareexposedtofinancialrisksarisingfromtheiroperationsandtheuseoffinancial

instruments.Thekeyfinancialrisksincludecreditrisk,liquidityrisk,foreigncurrencyriskandmarketrisk.

The Board of Directors reviews and agrees policies and procedures for the management of these risks, which are executed by the management.

Itis,andhasbeenthroughoutthecurrentandpreviousfinancialyear,theGroup’spolicythatnoderivativesshallbe undertaken. The Group and the Company do not apply hedge accounting.

The following sections provide details regarding the Group's and the Company’s exposure to the above-mentioned financialrisksandtheobjectives,policiesandprocessesforthemanagementoftheserisks.

(a) Credit risk Creditriskistheriskoflossthatmayariseonoutstandingfinancialinstrumentsshouldacounterpartydefault

on its obligations. The Group's and the Company’s exposure to credit risk arises primarily from trade and otherreceivables.Forotherfinancialassets(includinginvestmentsecuritiesandcashandbankbalances),theGroup and the Company minimise credit risk by dealing exclusively with high credit rating counterparties.

The Group’s objective is to seek continual revenue growth while minimising losses incurred due to increased credit risk exposure. The Group and the Company trade only with recognised and creditworthy third parties. In addition, receivable balances are monitored on an ongoing basis to minimise the Group’s exposure to bad debts.


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30. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont’d) (a) Credit risk (cont’d) Exposure to credit risk At the reporting date, the Group's and the Company’s maximum exposure to credit risk is represented by

thecarryingamountofeachclassoffinancialassetsrecognisedinthestatementsoffinancialpositions.

Information regarding credit enhancements for trade and other receivables is disclosed in Note 19.

Creditriskconcentrationprofile

At the reporting date, approximately 58% (30.6.2018: 56%; 1.7.2017: 58%) of the Company's trade and other receivables were due from its subsidiaries.

Financial assets that are neither past due nor impaired

Information regarding trade and other receivables that are neither past due nor impaired is disclosed in Note 19.

(b) Liquidity risk

Liquidityriskis theriskthat theGroupandtheCompanywillencounterdifficulty inmeetingfinancialobligations due to shortage of funds. The Group's and the Company’s exposure to liquidity risk arises primarilyfrommismatchesofthematuritiesoffinancialassetsandliabilities.TheGroup’sandtheCompany'sobjectiveistomaintainabalancebetweencontinuityoffundingandflexibilitythroughdiversesourcesofcommitted and uncommitted credit facilities from various banks.

In the management of liquidity risk, the Group monitors and maintains a level of cash and bank balances deemedadequatebythemanagementtofinancetheGroup’soperationsandmitigatetheeffectsoffluctuationsincashflows.

ThetablebelowsummarisesthematurityprofileoftheGroup’sandtheCompany'sfinancialliabilitiesatthe reporting date based on contractual undiscounted payments.

Group Company

30.06.2019 30.06.2018 30.06.2019 30.06.2018 RM RM RM RM Trade and other payables - On demand or within 1 year 2,695,333 2,697,964 2,592,218 2,645,009 - More than 1 year 460,741 386,784 460,741 386,784

3,156,074 3,084,748 3,052,959 3,031,793


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30. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont’d)

(c) Foreign currency risk Foreigncurrencyriskistheriskthatthefairvalueorfuturecashflowsofafinancialinstrumentwillfluctuate

because of changes in foreign exchange rates.

The Group has transactional currency exposures arising from its investments and short term deposits with licensed banks that are denominated in a currency other than the respective functional currencies of Group entities, which are RM and United States Dollar (“USD”). The foreign currencies in which these transactions are denominated are mainly Singapore Dollar ("SGD") and UK Pound Sterling ("£").

The Group also holds cash and cash equivalents denominated in foreign currencies for working capital purposes. At the reporting date, such foreign currency balances amounted to RM131,555,781 (30.6.2018 : RM133,052,656 ; 1.7.2017 : RM132,588,080).

The Group is also exposed to currency translation risk arising from its net investment in its subsidiaries. The Group’s investment in its subsidiaries is not hedged.

Sensitivity analysis for foreign currency risk ThefollowingtabledemonstratesthesensitivityoftheGroup'sandtheCompany's(loss)/profitbeforetax

to a reasonably possible change in the SGD and £ against exchange rates against the respective functional currencies of the Group entities, with all other variables held constant.

30.06.2019 30.06.2018 RM RM Increase/(decrease) in profit net of tax

SGD/RM - Strengthened 5% 613,000 1,055,000 - Weakened 5% (613,000) (1,055,000) SGD/USD - Strengthened 5% 5,349,000 5,195,000 - Weakened 5% (5,349,000) (5,195,000) £/USD - Strengthened 5% 64,000 48,000 - Weakened 5% (64,000) (48,000)

(d) Market price risk MarketpriceriskistheriskthatthefairvalueorfuturecashflowsoftheGroup'sandtheCompany'sfinancial

instrumentswillfluctuatebecauseofchangesinmarketprice(otherthaninterestorexchangerate).

The Group and the Company are exposed to market price risk arising from its investments in quoted equity instruments quoted on Bursa Malaysia, SGX-ST in Singapore and gold bullion in Australia.


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30. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (cont’d)

(d) Market price risk (cont’d) Sensitivity analysis for equity price risk At the reporting date, if the FTSE Bursa Malaysia KLCI, STI in Singapore and the precious metal price in

Australiaweretofluctuateby5%respectivelywithallothervariablesheldconstant,theeffectsonothercomprehensive income for the Group and the Company would have been as follows:

Increase/(decrease) Group Company

2019 2018 2019 2018 RM RM RM RM Other comprehensive income Quoted shares in Malaysia - increased by 5% 964,000 2,045,000 964,000 2,045,000 - decreased by 5% (964,000) (2,045,000) (964,000) (2,045,000) Quoted shares outside Malaysia - increased by 5% 7,337,000 8,040,000 7,337,000 8,040,000 - decreased by 5% (7,337,000) (8,040,000) (7,337,000) (8,040,000) Precious metal - increased by 5% 769,000 666,000 206,000 178,000 - decreased by 5% (769,000) (666,000) (206,000) (178,000)

31. CAPITAL MANAGEMENT

The primary objective of the Group’s capital management is to ensure that it maintains healthy capital ratios in order to support its business and maximise shareholder value.

The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the years ended 30 June 2019 and 30 June 2018.


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32. SEGMENT INFORMATION

(a) Business segments

For management purposes, the Group is organised into business units based on their sources of income and has two reportable operating segments as follows:

(i) Plantation - cultivation of oil palm (ii) Investments - long term portfolio investment in securities, deposits with banks and investment

properties Management monitors the operating results of its business units separately for the purpose of making decisions

about resource allocation and performance assessment. Segment performance is evaluated based on operating profitorloss.Groupincometaxesaremanagedonagroupbasisandarenotallocatedtooperatingsegments.

Plantation Investments Consolidated 2019 2018 2019 2018 2019 2018 RM RM RM RM RM RM

Revenue

External 4,670,024 7,757,533 7,571,495 6,435,536 12,241,519 14,193,069 Result

Segment results (2,025,987) 3,766,399 8,810,581 8,520,790 6,784,594 12,287,189 Unallocated corporate expenses (4,624,794) (3,151,639) Foreign exchange gain (8,705) (416) 115,288 215,109 106,583 214,693

Profitfromoperations 2,266,383 9,350,243 Share of results of associates - - (5,005,129) (2,120,980) (5,005,129) (2,120,980) Income tax expense (3,922,772) (433,075)

(Loss)/Profitnetoftax (6,661,518) 6,796,188

Assets

Segment assets 165,351,994 169,039,870 367,048,917 392,465,456 532,400,911 561,505,326 Investments in associates - - 79,094,862 84,331,383 79,094,862 84,331,383 Unallocated assets - - - - 293,813 101,414

Consolidated total assets 611,789,586 645,938,123

Liabilities

Segment liabilities 12,189,993 7,957,058 50,980 52,080 12,240,973 8,009,138 Unallocated liabilities - - - - 1,695,412 1,968,165 13,936,385 9,977,303

Other information

Depreciation (1,224,797) (329,862) - - (1,224,797) (329,862) Fair value gain/(loss) on investment property - - 941,226 (212,011) 941,226 (212,011) Property, plant and equipment written off - (103,041) - - - (103,041) Fair value (loss)/gain on investments - - (709,259) 2,998,437 (709,259) 2,998,437 Realised foreign exchange loss (8,705) (416) - - (8,705) (416) Unrealised foreign exchange gain/(loss) 511,261 (1,039,330) (395,973) 1,254,439 115,288 215,109


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32. SEGMENT INFORMATION (cont’d)

(b) Geographical segments The Group's plantation activity is mainly in Malaysia whilst the investments are spread across various

countries. Total revenue Segment assets

2019 2018 2019 2018 RM RM RM RM

Malaysia 6,151,408 8,266,385 184,888,129 210,000,222 Singapore 5,421,677 5,240,278 265,040,490 271,849,513 Hong Kong - - 13,070 10,329 United Kingdom 668,434 686,406 42,227,278 41,559,772 Mauritius - - 82,912,514 79,705,054 Australia - - 23,027,254 28,848,326 Cayman Islands - - 13,680,851 13,964,907 12,241,519 14,193,069 611,789,586 645,938,123

33. AUTHORISATION OF FINANCIAL STATEMENTS FOR ISSUE Thefinancialstatementsfortheyearended30June2019wereauthorisedforissueinaccordancewitharesolution

of the directors on 7 October 2019.


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THREE YEARS COMPARATIVE FIGURES

Year ended 30 June 2017 2018 2019

FFB Production - Sungei Bagan Estate (MT) 11,043 14,072 11,275 - Kuala Pergau Estate (MT) - - 547*

Mature Acreage (Total) (>3Y) at 30 June 1,992 2,280 3,424 - Sungei Bagan Estate (Acre) 1,992 2,280 2,532 - Kuala Pergau Estate (Acre) - - 892

Immature Acreage (Total) (0-3Y) at 30 June 2,941 2,653 1,504 - Sungei Bagan Estate (Acre) 623 335 83 - Kuala Pergau Estate (Acre) 2,318 2,318 1,421

Average yield per mature hectare - Sungei Bagan Estate (MT/hectare) 13 15 11 - Kuala Pergau Estate (MT/Hectare) - - 2*

* Note: 5 Month period (February - June 2019)


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STATEMENT OF SHAREHOLDINGS

ANALYSIS OF SHAREHOLDINGS AS AT 1 OCTOBER 2019

Total number of issued shares : 66,332,645Class of Shares : Ordinary Shares Voting Rights : One vote per ordinary shareNo. of Shareholders : 1,776

DISTRIBUTION OF SHAREHOLDINGS

Range of Shares No. of shareholders Percentage (%) No. of Shares Percentage (%)

Less than 100 83 4.67 2,645 0.00100 to 1,000 318 17.91 222,344 0.341,001 to 10,000 969 54.56 3,896,207 5.8810,001 to 100,000 352 19.82 10,424,688 15.71100,001 to less than 52 2.93 12,836,928 19.35 5% of issued shares5% and above 2 0.11 38,949,833 58.72 of issued shares

Total 1,776 100.00 66,332,645 100.00

THIRTY LARGEST SHAREHOLDERS

No. Name of shareholders Number of shares %

1. KLUANG RUBBER COMPANY (MALAYA) BERHAD 21,365,803 32.21 2. KUCHAI DEVELOPMENT BERHAD 17,584,030 26.51 3. PM NOMINEES (TEMPATAN) SDN BHD 1,029,928 1.55 MALPAC MANAGEMENT SDN BHD 4. UOB KAY HIAN NOMINEES (ASING) SDN BHD 727,383 1.10 EXEMPT AN FOR UOB KAY HIAN PTE LTD (A/C CLIENTS) 5. RHB NOMINEES (TEMPATAN) SDN BHD OSK 581,024 0.88 TRUSTEES BERHAD FOR THE DIVINE VISION TRUST 6. LIM TEH REALTY SDN BERHAD 481,962 0.73

7. NG POH CHENG 473,892 0.71

8. NA CHAING CHING 445,163 0.67 9. KENANGA NOMINEES (TEMPATAN) SDN BHD 429,742 0.65 PLEDGED SECURITIES ACCOUNT FOR CHIN KIAM HSUNG

10. CGS-CIMB NOMINEES (ASING) SDN BHD EXEMPT AN 428,400 0.65 FOR CGS-CIMB SECURITIES (SINGAPORE) PTE. LTD. (RETAIL CLIENTS)


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STATEMENT OF SHAREHOLDINGS (cont’d)

THIRTY LARGEST SHAREHOLDERS (cont’d)

No. Name of shareholders Number of shares Percentage of shares

11. TAN SOON HIAN 400,000 0.60

12. SONG HUAT CHAN HOLDINGS SDN BHD 380,962 0.57 13. OOI CHIENG SIM 371,387 0.56

14. TA NOMINEES (TEMPATAN) SDN BHD 347,483 0.52 PLEDGED SECURITIES ACCOUNT FOR LEE CHIEH YU LYDIA

15. MALACCA EQUITY NOMINEES (TEMPATAN) 311,500 0.47 SDN BHD PLEDGED SECURITIES ACCOUNT FOR HO KOK KIANG

16. CHIN KIAN FONG 275,422 0.42

17. RHB CAPITAL NOMINEES (TEMPATAN) SDN BHD 274,800 0.41 PLEDGED SECURITIES ACOUNT FOR OH KIM SUN (CEB)

18. CHIN KHEE KONG & SONS SENDIRIAN BERHAD 272,572 0.41

19. YEOW TENG TAK 268,002 0.40 20. YEO KHEE HUAT 258,860 0.39

21. NG POH CHENG 250,446 0.38

22. CHONG YEAN FONG 233,755 0.35

23. ONG TECK PEOW 230,172 0.35

24. TEUH CHIN YAP 209,340 0.32

25. NG POH CHENG 199,201 0.30

26. DB (MALAYSIA) NOMINEE (ASING) SDN BHD 192,800 0.29 EXEMPT AN FOR DEUTSCHE BANK AG SINGAPORE (MAYBANK SG PWM)

27. GOLDEN TIMES HOLDINGS SDN BHD 169,000 0.25

28. AFFIN HWANG NOMINEES (ASING) SDN. BHD. 164,145 0.25 DBS VICKERS SECS (S) PTE LTD FOR NG POH CHENG

29. NG KIM GEOK @NG KIM KOK 159,100 0.24

30. AFFIN HWANG NOMINEES (ASING) SDN BHD 158,535 0.24 LIM & TAN SECURITIES PTE LTD FOR CHONG YONG WAH


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LIST OF SUBSTANTIAL SHAREHOLDERS

Interest in SharesName of Substantial Shareholders Direct % Indirect %

The Nyalas Rubber Estates Limited - - 38,949,833 (a) 58.72Kluang Rubber Company (Malaya) Berhad 21,365,803 32.21 17,584,030 (b) 26.51Kuchai Development Berhad 17,584,030 26.51 - -Lee Thor Seng 91,962 0.14 38,949,833 (c) 58.72Lee Chung-Shih Justin 35,438 0.05 38,949,833 (c) 58.72Lee Yung-Shih Colin 35,438 0.05 38,949,833 (c) 58.72

Notes:(a) Deemed interested by virtue of its substantial interest in Kluang Rubber Company (Malaya) Berhad and Kuchai

Development Berhad.(b) Deemed interested by virtue of its substantial interest in Kuchai Development Berhad.(c) Deemed interested by virtue of their substantial interest in Kluang Rubber Company (Malaya) Berhad and Kuchai

Development Berhad.

DIRECTORS’ INTEREST IN SHARES

Interest in SharesNo. Name of Directors Direct % Indirect %

1. Lee Chung-Shih Justin 35,438 0.05 38,949,833 (a) 58.722. Lee Soo Hoon - - - -3. Tay Beng Chai - - - -4. Cheong Mun Hong - - - -5. Balaraman A/L Annamaly 3,322 0.01 - -6. Chew Khat Khiam Albert - - - -

Note:(a) Deemed interested by virtue of his substantial interest in Kluang Rubber Company (Malaya) Berhad and Kuchai

Development Berhad.


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LIST OF PROPERTIES

The details of landed properties owned by the Company as at 30 June 2019 are as follows:

Net Carrying Acquisition(A)/ Amount/ Revaluation(R) Location Description Tenure Land Area Term Fair Value Date (RM)

Lot 517, 524, Oil palm Freehold 2,692 acres* - 102,000,000 15 January 2015 (R) 1069 and 3049 District of Machang, Kelantan

Flat 5, 22 Residential Leasehold 3,740 square 961 Years 36,577,378 April 1997 (A)/ Down Street, feet 30 June 2019 (R) London W1

* As per Quit Rent Notice

PLANTED AREA AGE PROFILE

TheAgeProfileof theCompany’sPlantedArea as at 30 June2019 are as follows:

Sungei Bagan Estate Age Acre % Year Planted

1994 25 288 11% 1995 24 167 6% 1996 23 35 1% 1997 22 130 5% 1999 20 276 11% 2006 13 170 7% 2007 12 169 6% 2009 10 204 8% 2010 9 156 6% 2011 8 163 6% 2013 6 234 9% 2014 5 288 11% 2015 4 252 10% 2017 2 83 3%

TOTAL 13 2,615 100%

Note: Total Age is the Weighted Average Age

Kuala Pergau Estate Age Acre % Year Planted

2016 3 2,313.00 100% TOTAL 3 2,313.00 100%

Note: Total Age is the Weighted Average Age


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FORM OF PROXY

I/We...........................................................................................................................................................................................................................of...............................................................................................................................................................................................................................being a Member/Members of SUNGEI BAGAN RUBBER COMPANY (MALAYA) BERHAD, hereby appoint............................................................................................................................(NRIC/Passport No.).....................................................................of...............................................................................................................................................................................................................................or failing him/her................................................................................................(NRIC/Passport No.)....................................................................of..............................................................................................................................................................................................................................

or failing him/her, the Chairman of the Meeting, as my/our proxy to vote for me/us and on my/our behalf at the Sixty-First (61st) Annual General Meeting of the Company to be held at Penang Langkawi Meeting Room, Block 1, Level 3A, Hotel Jen Puteri Harbour Johor, Persiaran Puteri Selatan, Puteri Harbour, 79000 Iskandar Puteri, Johor Darul Takzim, Malaysia on Thursday, 28 November 2019 at 10:30 a.m. and at any adjournment thereof.

Please indicate with a cross (“X”) in the space whether you wish your votes to be cast for or against the resolution. In the absence of such specificdirections,yourproxywillvoteorabstainashethinksfit.

ITEM AGENDA

ORDINARY BUSINESS RESOLUTION *FOR *AGAINST

SPECIAL BUSINESS

Dated this.....................day of..................................... 2019.

..................................................................

Notes:1. For the purpose of determining members’ eligibility to attend this meeting, the Company shall be requesting Bursa Malaysia Depository Sdn. Bhd, in accordance with Clause

19.6 of the Company’s Constitution and Section 34(1) of the Securities Industry (Central Depositories) Act, 1991 to issue a General Meeting Record of Depositor as at 20 November 2019. Only members whose names appear therein shall be entitled to attend this meeting or appoint proxy(ies) to attend and vote on his/her behalf.

2. A member entitled to attend and vote at the meeting may appoint not more than two (2) proxies to attend and vote in his/her stead. A proxy need not be a Member of the Company and there shall be no restriction as to the qualification of the proxy. Where a member appoints more than 1 proxy, the appointments shall be invalid unless he/she specifies the proportions of his/her holdings to be represented by each proxy.

3. In the case of a corporation, the proxy should be executed under its Common Seal or under the hand of the officer of attorney of the corporation duly authorised in writing on its behalf.

4. Where a member is an authorized nominee as defined under the Securities Industry (Central Depositories) Act, 1991, it may appoint at least one proxy in respect of each securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.

5. Where a member is an exempt authorised nominee which holds ordinary shares in the Company for multiple beneficial owners in one securities account (‘omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account its holds.

6. The proxy form and the Power of Attorney or other authority (if any) under which it is signed, or notary certified copy thereof must be lodged at the Share Registrar’s Office of the Company at 11th Floor, Menara Symphony, No. 5, Jalan Professor Khoo Kay Kim, Seksyen 13, 46200 Petaling Jaya, Selangor Darul Ehsan, Malaysia not less than 24 hours before the time of the meeting.

PERSONAL DATA PRIVACYBy submitting an instrument appointing a proxy(ies) and/or representative(s), the member accepts and agrees to the personal data privacy terms set out in the Notice of the Sixty-First Annual General Meeting dated 30 October 2019.

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To declare and approve the payment of a Single Tier First and Final Dividend of 2 sen per shareforthefinancialyearended30June2019.ToapprovethepaymentofDirectorsFeesandBenefitsforthefinancialyearending30June 2020.To re-elect the following Directors who retire pursuant to Clause 22.4 of the Company’s Constitution:(a) Mr. Chew Khat Khiam Albert(b) Mr. Lee Chung-Shih JustinTo re-appoint Messrs Ernst & Young as Auditors of the Company and authorise the Directorstofixtheirremuneration.

To approve the continuation of Mr Lee Soo Hoon as Independent Non-Executive Director.To authorise the Directors to Allot Shares pursuant to Section 75 and 76 of the Companies Act 2016.Proposed Renewal of Shareholders’ Mandate for Share Buy-Back Authority.Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of Revenue or Trading Nature with The Nyalas Rubber Estates Limited.Proposed Renewal of Shareholders’ Mandate for Recurrent Related Party Transactions of Revenue or Trading Nature with Kuala Pergau Rubber Plantations Plc.

Signature / Common Seal of MemberContact No.

NO. OF SHARES HELD CDS ACCOUNT NO.

NOTE: For appointment of 2 proxies, percentage of shareholdings to be represented by the proxies:-

No. of Shares Percentage (%) Proxy 1 Proxy 2


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The Share RegistrarSUNGEI BAGAN RUBBER COMPANY (MALAYA) BERHAD (3327-U)c/o BOARDROOM SHARE REGISTRARS SDN. BHD. (378993-D)11th Floor, Menara Symphony, No. 5, Jalan Professor Khoo Kay Kim, Seksyen 13,46200 Petaling Jaya, Selangor Darul Ehsan, Malaysia

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