2015 1 2015 1 tradi tion meets triumph the cover celebrates one of the best sellers in eka noodles...

1ANNUAL REPORT 2015

TradiTion MeeTs TriuMph

The cover celebrates one of the best sellers in eka noodles Berhad, the traditional bihun. The cover represents that the traditional bihun can be cooked with anything as it is very versatile. Likewise in eka noodles Berhad, the company is truly versatile and it is able to bring tradition forward to the future era with no obstacles in order for the future generations to enjoy. With that said, the company will grow endlessly.

CONTENTSNotice of Annual General Meeting 2

Statement Accompanying Notice of Annual General Meeting

4

Corporate Information 5

Corporate Structure 6

Chairman’s Statement 8

Directors’ Profiles 9

Corporate Governance Disclosures 12

Statement on Risk Management and Internal Control 20

Audit Committee Report 22

Additional Compliance Information 26

Corporate Social Responsibility Statement 27

Directors’ Responsibility Statement 28

Financial statements

Directors’ Report 29

Statement by Directors 33

Statutory Declaration 33

Independent Auditors’ Report 34

Statements of Profit or Loss and OtherComprehensive Income

36

Statements of Financial Position 36

Statements of Changes in Equity 38

Statements of Cash Flows 41

Notes to the Financial Statements 43

Supplementary Information on the Disclosureof Realised and Unrealised Profits or Losses

76

Analysis of Shareholdings 77

Analysis of Warrant Holdings 79

List of Properties 81

Proxy Form 83

2 EKA NOODLES BERHAD (583565-U)

noTiCe oF annuaL GeneraL MeeTinG

NOTICE IS HEREby GIvEN that the Thirteenth Annual General Meeting of the Company will be held at Lot 208, Phase II, Kuala Ketil Industrial Estate, 09300 Kuala Ketil, Kedah Darul Aman on Thursday, 26 May 2016 at 11.00 a.m. for the following purposes :-

a G e n d aas ordinary Business :

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

please refer to note 6

2. To re-elect the following Directors who retire by rotation in accordance with Article 95 of the Company’s Articles of Association and who, being eligible, offer themselves for re-election :

i) Mr. Khor Wooi Lip resolution 1ii) Dato’ Sohaimi Bin Shahadan resolution 2

3. To re-elect Encik Ahmad Zaffry Bin Sulaiman, a Director who retires in accordance with Article 102 of the Company’s Articles of Association and who, being eligible, offers himself for re-election.

resolution 3

4. To approve the payment of Directors’ fees for the financial period ended 31 December 2015.

resolution 4

5. To re-appoint Messrs. Afrizan Tarmili Khairul Azhar as auditors of the Company to hold

office until the next Annual General Meeting of the Company and to authorise the Directors to fix their remuneration.

resolution 5

as special Business :

To consider and if thought fit, to pass with or without modifications, the following resolution as an Ordinary Resolution :

6. proposed reneWaL oF GeneraL MandaTe For The direCTors To aLLoT and issue shares pursuanT To seCTion 132d oF The CoMpanies aCT, 1965

resolution 6

“That, subject always to provisions of the Companies Act, 1965 (“the Act”), the Articles of Association of the Company and the approvals of the relevant government/regulatory authorities, the Directors be and are hereby authorised, pursuant to Section 132D of the Act, to allot and issue shares in the Company at any time until the conclusion of the next Annual General Meeting and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion deemed fit, provided that the aggregate number of shares to be issued does not exceed 10% of the total issued share capital of the Company for the time being and that the Directors are also empowered to obtain the approval from bursa Malaysia Securities berhad for the listing and quotation of the additional shares to be issued.”

7. To transact any other business of which due notice shall have been given in accordance with the Company’s Articles of Association and the Companies Act, 1965.

FURTHER NOTICE IS HEREby GIvEN THAT for the purpose of determining a member who shall be entitled to attend the Annual General Meeting, the Company shall be requesting bursa Malaysia Depository Sdn. bhd. to issue a General Meeting Record of Depositors as at 18 May 2016. Only a depositor whose name appears on the Record of Depositors as at 18 May 2016 shall be entitled to attend the said meeting or appoint proxies to attend and/or vote on his/her behalf.

3ANNUAL REPORT 2015

noTiCe oF annuaL GeneraL MeeTinG (Cont’d)

by Order of the board,

Tan TonG LanG (MaiCsa 7045482)P’NG CHIEW KEEM (MAICSA 7026443)ChonG Voon Wah (MaiCsa 7055003)Company Secretaries

PenangDate : 29 April 2016

NOTES ON APPOINTMENT OF PROXY :

1. A proxy may but need not be a member of the Company.

2. For a proxy to be valid, the Form of Proxy, duly completed must be deposited at the Registered Office of the Company, 51-21-A Menara BHL Bank, Jalan Sultan Ahmad Shah, 10050 Penang not less than forty-eight (48) hours before the time appointed for holding the meeting.

3. A member shall be entitled to appoint one (1) or more proxies to attend and vote instead of him at the same meeting and where a member appoints more than one (1) proxy to vote at the same meeting, shall appointment shall be invalid unless he specify the proportion of his shareholding to be presented by each proxy provided that in case of a vote on any question by show of hands only one (1) of the proxies so appointed shall be entitled to vote.

4. 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 it holds.

5. In the case of a corporate member, the proxy form must be executed under the corporation’s common seal or under the hand of an officer or attorney duly authorised.

EXPLANATORY NOTE ON ORDINARY BUSINESS

6. The Agenda 1 is meant for discussion only as the provision of Section 169(1) of the Companies Act, 1965 does not require a formal approval of shareholders of the Company. Hence, the Agenda 1 is not put forward for voting.

EXPLANATORY NOTE ON SPECIAL BUSINESS

7. The Resolution 6, is to seek a renewal of the general mandate for the Directors of the Company to allot and issue shares in the Company up to an amount not exceeding 10% of the total issued capital of the Company for the time being for such purposes as the Directors consider will be in the best interest of the Company. This authority, unless revoked or varied by the shareholders of the Company in general meeting will expire at the conclusion of the next Annual General Meeting.

As at the date of notice of meeting, the Directors did not issue any new shares pursuant to the general mandate granted at the last Annual General Meeting of the Company and of which, it will be lapse at the conclusion of the Thirteenth Annual General Meeting of the Company to be held on 26 May 2016.

The general mandate for issue of shares will provide flexibility to the Company for any possible fund raising activities, including but not limited to further placing of shares for the purpose of funding future investment, working capital and/or acquisition.

2015 annual reportThe 2015 Annual Report is in CD-ROM format. Printed copy of the Annual Report shall be provided to the shareholder upon request within four (4) market days from the date of receipt of the verbal or written request. A copy of the Annual Report can also be downloaded at www.ekanoodles.com.my

Shareholders who wish to receive the printed Annual Report and who require assistance in viewing the CD-ROM, kindly contact Puan Nor Azimah Binti Bulat at telephone no. 03-27839299 or email your request to [email protected]


eLeCTion oF direCTors

There are no individuals who are standing for election as Director of the Company (excluding Directors standing for re-election) at the forthcoming Thirteenth Annual General Meeting.

GeneraL MandaTe For issuanCe oF shares

The proposed renewal of general mandate for issuance of shares pursuant to Section 132D of the Companies Act, 1965 will provide flexibility to the Company for any possible fund raising activities. However, the Directors did not issue any new shares pursuant to the general mandate granted at the last Annual General Meeting of the Company.

sTaTeMenT aCCoMpanYinG noTiCe oF annuaL GeneraL MeeTinG (Pursuant to Paragraph 8.27(2) of Bursa Malaysia Securities Berhad Main Market Listing Requirements)

5ANNUAL REPORT 2015

CorporaTe inForMaTion

audiT CoMMiTTeeRaja Nazrin bin Raja Ghazilla (Chairman) Khor Wooi Lipyee yit yang

reMuneraTion CoMMiTeeRaja Nazrin bin Raja Ghazilla (Chairman)Dato’ Sri Chin Seak Huat (JP)yee yit yang

noMinaTinG CoMMiTeeRaja Nazrin bin Raja Ghazilla(Chairman)Khor Wooi Lipyee yit yang

CoMpanY seCreTariesTan Tong Lang (MAICSA 7045482)P’ng Chiew Keem (MAICSA 7026443)Chong voon Wah (MAICSA 7055003)

audiTorsAfrizan Tarmili Khairul Azhar (AF1300)Chartered AccountantsN0. 2, Jalan Rampai Niaga 2Rampai Business Park53300 Kuala LumpurTel : 03-4143 9330Fax : 03-4142 9330

BANKERSPublic Bank Berhadbank Kerjasama Rakyat Malaysia berhadBank Pertanian Malaysia Berhad

soLiCiTorsS. Raman & CoTC Lim & Co

reGisTered oFFiCe51-21-A, Menara bHL bankJalan Sultan Ahmad Shah10050 PenangTel : 04-210 8833Fax : 04-210 8831

reGisTrarsTricor Investor & Issuing House Services Sdn. bhd.Unit 32-01, Level 32, Tower A, vertical business Suite,Avenue 3, bangsar SouthNo. 8, Jalan Kerinchi59200 Kuala LumpurTel : 03-2783 9299 Fax : 03-2783 9222

head oFFiCeLot 208, Phase IIKuala Ketil Industrial Estate09300 Kuala KetilKedah Darul AmanTel : 04-416 2222Fax : 04-416 2022

STOCK EXCHANGE LISTINGMain Market of bursa Malaysia Securities berhadStock Code : 7182Stock Name : EKA

Board oF direCTors

Chairman / Independent Non-Executive Director Dato’ Sohaimi Bin Shahadan

Group Managing Director Dato’ Sri Chin Seak Huat (JP)

Executive Director Ahmad Zaffry Bin Sulaiman

Non-Independent Non-Executive DirectorKhor Wooi LipLow Beng seng

Independent Non-Executive DirectorYee Yit Yangraja nazrin Bin raja Ghazilla


CorporaTe sTruCTure

history and principal activities

EKA Noodles berhad (“EKA”) was incorporated in Malaysia under the Companies Act, 1965 on 20 June 2002 as a public limited company under its present name. EKA is an investment holding company whilst the principal activities of its wholly-owned subsidiary companies, are as follows :-

subsidiary Companydate and place of incorporate

issued and paid-up Capital principal activities

Kilang bihun bersatu Sdn. bhd. 15.09.1988Malaysia RM 17,441,860

Manufacturing and marketing of all types of rice and sago sticks (vermicelli).

Rasayang Food Industries Sdn. bhd.

10.06.1998Malaysia RM 7,915,000 Manufacturing and trading of

“beehoon” and “beehoon laksa”.

bersatu Noodles Industries Sdn. bhd.

29.08.2006Malaysia RM 1,000,000 Manufacturing and trading of

noodles and its related products.

bersatu biotechnology (Johore) Sdn. bhd.

24.10.2007Malaysia RM 500,000

Temporarily ceased operations in manufacturing and marketing of all types of sago starch and related products.

Kilang bihun bersatu (East Malaysia) Sdn. bhd.

18.04.2001Malaysia RM 300,000

Manufacturing and marketing of all types of rice and sago sticks (vermicelli).

bersatu Sago Industries Sdn. bhd. 23.12.2000Malaysia RM 500,000


bersatu Sago Industries (Mukah) Sdn. bhd.

26.06.2007Malaysia RM 500,000


EKA Foodstuff Sdn. Bhd. 28.02.2012Malaysia RM 2 Marketing of all types of rice and

sago sticks (vermicelli).

7ANNUAL REPORT 2015

CorporaTe sTruCTure (Cont’d)

EKA NOODLES BERHAD(583565-U)

Kilang Bihun Bersatu Sdn Bhd

rasayang Food industries sdn Bhd

Bersatu noodles industries sdn Bhd

Bersatu Biotechnology (Johore) sdn Bhd

Kilang Bihun Bersatu (East Malaysia) sdn Bhd

Bersatu sago industries sdn Bhd

Bersatu sago industries (Mukah) sdn Bhd

EKA Foodstuff Sdn Bhd

100%

100%

100%

100%

100%

100%

100%

100%


CHAIRMAN’S STATEMENT

Business enVironMenT

It was a tough financial year for the Group. From the second half of 2014 to 2015, the operating environments were full of challenges coupling with global economic uncertainties namely the rising of US dollars, the falling of oil prices, the slowdown in Chinese economy and so forth. Economically, the Goods and Services Tax was rolled out, making our citizens’ purses ever smaller and tighter.

FinanCiaL perForManCe

The Group had changed its financial year from 30 June 2015 to 31 December 2015. Therefore, the new financial period was 18 months while the preceding financial year was 12 months. The Group registered a revenue of RM97.0 million for the financial period ended 31 December 2015 whilst, the revenue for the preceding financial year ended 30 June 2014 was RM90.3 million. Averagely, the monthly revenue for current financial year had decreased as compared to the preceding year end. This was mainly due to some of our existing customers had moved to other brands in the market.

The Group suffered losses before tax of RM15.5 million for the financial period ended 31 December 2015 as compared with losses before tax of RM37.2 million in the preceding financial year ended 30 June 2014. The lower losses were the result from cost control measures and improvement in production efficiency.

FuTure prospeCTs

Moving forward, we would need to address our weakening financial situation and a corporate exercise might be an appropriate solution to improve our financial situation. Our cost reduction exercise is ongoing and we will improve our operation efficiency through maximization of our resources.

In view of the escalating operational and production costs, a price increase was implemented in December 2015. In view of popularity of our EKA brand and being a household name, a minimal price increase should not deter our customers’ continued commitment to our brands. As such, we are equally committed to maintain our customers’ loyalty to EKA brand which has been a household name for more than a decade. EKA’s loyal customer base has given it a competitive advantage and we will continue to promote our EKA brand to increase the sales of rice vermicelli and laksa noodles in the market.

We are hopefully optimistic that our EKA brand will continue to grow, albeit fierce competition from other brands and towards this end, we will continue to focus in the development of EKA brand through new innovative products, enhanced nutritional and quality improvement to keep abreast with the fast changing market and consumers’ demand.

appreCiaTion

On behalf of the Board, I wish to express our sincere appreciation to our valued shareholders, customers, suppliers, bankers, government agencies and other stakeholders for your continued support, cooperation, trust and confidence in the Group. We will continue to strive hard and uphold your trust in us.

I also wish to convey my gratitude to my fellow directors for their advice and unfailing support, to the management and staff for their dedication and commitment in performing their duties.

Dato’ Sohaimi Bin ShahadanChairman

On behalf of the board of Directors, I am pleased to present the Annual Report and the Annual Audited Consolidated Financial Statements of EKA Noodles berhad Group for the financial period ended 31 December 2015.

9ANNUAL REPORT 2015

DIRECTORS’ PROFILES

Dato’ Sohaimi Bin Shahadan, aged 47, Malaysian.ChairmanIndependent Non-Executive Director

Dato’ Sohaimi Bin Shahadan was appointed as Independent Non-Executive Chairman on 3 October 2013.

He graduated from University Pertanian Malaysia with Masters in Corporate Communication, West Coast Institute Technology and Management, Perth, Australia with Masters in Business Administration, University Kebangsaan Malaysia with Bachelor in Business Administration. He received Honorary Doctorate in Political Science, Geomatica University Collage in October 2015.

While engaging in his business, Dato’ Sohaimi is also passionate in the political arena and holds the UMNO Supreme Council Member. In addition, he also served as Vice President IV of Malays Businessmen and Industrialist Association (PERDASAMA).

He is the Chairman of Pelaburan MARA Berhad (PMB) since 2013, an investment entity for Majlis Amanah Rakyat (MARA). Currently, he is the Chairman of PDZ Holdings Berhad and also BHS Industries Berhad.

He is also the Independent Non-Executive Director of KUB Malaysia Berhad and Damansara Realty Berhad

He does not have any family relationship with any directors and/or major shareholders of the Company, nor any conflict of interest in any business arrangement involving the Company. He has no convictions for any offences within the past ten (10) years other than traffic offences, if any.

Dato’ Sri Chin Seak Huat, SSAP, DIMP, AMP, AMK, JP, aged 50, Malaysian. Group Managing Director

Dato’ Sri Chin Seak Huat was appointed as Chief Executive Officer of the Company on 26 July 2010 and subsequently promoted to Managing Director on 22 June 2011. He is responsible for day-to-day operation of the Group such as finance & control and corporate affairs as well as the formulating of business strategies. He is also a member of the Remuneration Committee.

He started his business career as a sole proprietor and has been involved in the construction and property development business for the past 11 years. He formed a sole proprietor under the name of SH Construction Industries to undertake and execute his construction projects and has successfully completed some main projects over the years.

Except for property development business, he is also extensively involved in sofa and furniture manufacturing, telecommunication business and corrugated cartons and sheetboards industry.

He does not have any family relationship with any directors and/or major shareholders of the Company, nor any conflict of interest in any business arrangement involving the Company. He has no convictions for any offences within the past ten (10) years other than traffic offence, if any.


DIRECTORS’ PROFILES (Cont’d)

Ahmad Zaffry Bin Sulaiman, aged 41, Malaysian.Executive Director

Ahmad Zaffry Bin Sulaiman was appointed as Executive Director on 1 September 2015.

He graduated from University Technology Malaysia (UTM) with Degree in Civil Engineering in 2005. He holds a Diploma in Civil Engineering from Politeknik Ungku Omar in year 1997 and certificate in Civil Engineering (Construction) from Politeknik Port Dickson.

He started his career as Assistant Engineering with Shah Alam City Council (MbSA) in year 1997. He left MbSA and started his own entrepreneurship. Currently, he is the Managing Director of Dynamic Care Resources Sdn bhd and Director of Consolidated Fertilizer Corp. Sdn bhd.

Being committed and multitasking is part of his strength, En. Ahmad Zaffry is also appointed as the Project Director of Sierra Teguh Sdn Bhd. (Class A Contractor/CIDB G7) and the Project Coordinator for Asia Aerospace City- a premier edu-biz park for aerospace industry-related engineering services lead by Pelaburan MARA Berhad, an investment arm of Majlis Amanah Rakyat (MARA). Since July 2013 till 31 July 2015, he was the Special Officer to Chairman of Pelaburan MARA Berhad (PMB).

While engaging in his business, En. Ahmad Zaffy is also passionate in the political arena and holds the UMNO Youth Chief for Section 12 Branch, Shah Alam Division since 2000 and UMNO Exco Division Member of Shah Alam from 2004 to 2013, he was entrusted as the Chairman of the bureau of Enterpreneur UMNO, Shah Alam Division until 2014.


Low Beng seng, Aged 59, Malaysian. Non-Independent Non-Executive Director

Low Beng Seng was appointed as the Executive Director of the company on 02 May 2014 and had been Redesignated as Non-Independent Non-Executive Director on 1 March 2016.

He completed his Form Six and sat for his HSC at St Xavier’s Institution, Penang in 1976. He had attended all modules of Certified Credit Professional (CCP Business) and completed and passed all modules of Credit Skills Assessment conducted by Omega International.

He has 35 years of working experience in the banking industry with wide exposure in branch management, trade finance and commercial as well as corporate credit. He was first appointed as bank branch manager in early 1994 and has served several branches in this capacity. In 2003, he was appointed as Head of business Centre with a leading local bank, a position he maintained until he left the banking industry in April, 2014.

He does not have any family relationship with any directors and/or major shareholder of the Company, nor any conflict of interest in any business arrangement involving the Company. He has no convictions for any offences within the past ten (10) years other than traffic offences, if any.

11ANNUAL REPORT 2015

DIRECTORS’ PROFILES (Cont’d)

raja nazrin Bin raja Ghazilla, aged 44, Malaysian.Independent Non-Executive Director

Raja Nazrin Bin Raja Ghazilla was appointed as Independent Non-Executive Director on 31 March 2014. He is also the Chairman of the Audit Committee, Nominating Committee and Remuneration Committee.

yM Raja Nazrin graduated from International Islamic University in LLb (Hons). He has over 15 years of working experience. YM Raja Nazrin is a senior partner in Messrs. Ariffin Raj De Silva and is well-versed in corporate and conveyance laws and has been advising several public listed companies on take-overs and mergers. yM Raja Nazrin was previously the Director and Shareholder of KUb Tekstil Sdn. bhd., Konsortium Usahawan Tekstil Sdn. bhd. and Isbec Sdn. Bhd. He was also an EXCO member of Young Malay Chambers of Commerce Selangor.

Currently, he is the Independent Non-Executive Director of WWE Berhad.


Khor Wooi Lip, aged 42, Malaysian. Non-Independent Non-Executive Director

Khor Wooi Lip was appointed as Independent Non-Executive Director of the Company on 20 August 2010 and subsequently, on 20 April 2011, he was re-designated to Non-Independent Non-Executive Director of the Company. He is also a member of the Audit Committee and Nominating Committee.

After he finished his Certification in Business Studies he continued in Diploma in Administration in Business executive at Stamford College. Currently, he left Bio Cosmic Sdn Bhd as the project manager on 15 April 2012 and formed a company namely Gumipro Solution as the Executive Director, where his responsibilities included Technical Consultation which is implementation of new technology to metal, rubber gloves industries as well as institutional. He commenced his career as marketing personnel for MbF Finance berhad in year 1995. Thereafter he joined Citibank as marketing executive in year 1996. In September 1996, he joined Bio Cosmic Sdn Bhd as sales executive and was subsequently promoted to the position of product manager in year 2006.


Yee Yit Yang, aged 49, Malaysian. Independent Non-Executive Director

Yee Yit Yang was appointed as Independent Non-Executive Director on 5 March 2014. He is a member of the Audit Committee, Nominating Committee and Remuneration Committee.

He holds a Bachelor of Economics and is a member of the Australian CPA and Malaysian Institute of Accountants. He began his career with an international accounting firm and then moved on to an investment bank in which he was involved with various corporate restructuring exercises. Currently, he is attached with a private consultancy firm.

Currently, he is the Independent and Non-Executive Director of Key Alliance Berhad, Oriental Media Group Berhad and Mlabs Systems berhad.



CorporaTe GoVernanCe disCLosures

The board of Directors of EKA Noodles berhad is pleased to provide this statement which sets out the corporate governance practices of the Company with reference to the Principles and Recommendations of the Malaysian Code of Corporate Governance 2012 (“Code”).

This statement is made in compliance with Paragraph 15.25 of the Main Market Listing Requirements of Bursa Securities.

prinCipLe 1 – CLear roLes and responsiBiLiTies

The Board

There are presently 7 Board members, comprising 3 independent non-executive directors, 2 non-independent non-executive directors and 2 executive directors. The current composition of the Board represents a mix of skills, knowledge, ethnicity and age which assists the board in discharging its stewardship and responsibilities. The profile of each director is set out in the Directors’ Profile section of this Annual Report.

The Board is well balanced with the presence of independent non-executive directors. The roles of the independent non-executive directors are vital for the successful direction of the Group as they provide independent views and added perspectives to the Board’s decision making process.

The board is assisted by 4 board Committees namely, the Audit Committee, Nominating Committee, Remuneration Committee and Risk Management Committee, each with predefined terms of references and responsibilities. The Chairman of the respective board Committees shall then report the outcome of their meetings to the board.

On ad-hoc matters which are to be resolved urgently, the board will set up a task force committee comprising wholly the senior management. The task force committee reports to the Managing Director whose role is to ensure the task are accomplished within the timeframe set by the board.

roles and responsibilities

The Board, in discharging its stewardship role delegates authority and vests accountability in respect of the Group’s day to day operations with a management team led by the Managing Director. The Group’s organisation chart has clear reporting lines and authorities of the board and those applicable to the management.

Key matters reserved for the Board’s approval are inclusive of but not limited to approving of financial statements and quarterly results, new appointments to the Board, material purchases and/or disposals of the Group’s fixed assets, new investments, corporate restructuring, joint ventures set up and related party transactions.

Additionally, the Board also assumed the oversight role in relation to the Group’s business performances, succession planning, risk management and implementation of appropriate systems to manage identified risks, investor relations, systems of internal control as well as compliances of relevant applicable laws and regulations.

There is a clear division of responsibilities between the Chairman and the Managing Director. The Chairman of the Company, Dato’ Sohaimi Shahadan is an independent director. He has no executive function and is responsible for orderly conduct and proceedings of meetings.

The Managing Director of the Company, Dato’ Sri Chin Seak Huat (JP) is responsible for formulating policies and strategies, the corporate affairs of the Company and the overall operation and financial performance of the Group. The Managing Director is assisted by the management team in implementation of policies and running the day-to-day operations of the Group.

Through the outsourced independent service provider and the oversight role of the Audit Committee, the board oversees the overall effectiveness of the Group’s risk management implementations as well as the adequacy of control procedures throughout the Group.


CorporaTe GoVernanCe disCLosures (Cont’d)

PRINCIPLE 1 – CLEAR ROLES AND RESPONSIBILITIES (Cont’d)

Board Charter

The primary objective of the board Charter is to provide guidance to the board in discharging its roles, functions, duties and responsibilities.

The board Charter will be reviewed from time to time to ensure their relevance and compliance. The board, in its recent review in April 2016 had updated various sections in the board Charter to ensure its relevance. The board Charter as updated is available on the Company’s website (www.ekanoodles.com).

Whistle Blowing policy

The Board had established a Whistle-Blowing Policy which sets out a formal communication channel for employees and stakeholders of the Group to communicate matters of concern in good faith and without fear of reprisal.

The Whistle-Blowing Policy is available on the Company’s website (www.ekanoodles.com).

Code of Business Conduct

The board is in the process of formalizing a Code of business Conduct which shall apply to all directors and employees when they conduct business in the name of the Group with stakeholders.

All directors are required to act in good faith in the best interest of the Company and to observe the Directors’ Code of Ethics established by the Companies Commission of Malaysia.

Business sustainability

The Group’s sustainability strategies ideally cover community, marketplace, workplace and environment. The details are set out in Corporate Social Responsibility Statement section of this Annual Report.

supply of information

All directors have unrestricted access to any information pertaining to the Group including direct access to the management, Company Secretaries as well as other advisers, if any, appointed by the Company in facilitating their decision making process and discharging their duties effectively.

The directors may also seek independent professional advice at the Company’s expense. However, the director concerned must seek the approval of the Board before incurring such expenses.

Meeting agendas and relevant board papers are circulated at least 7 days in advance to directors to enable them to participate effectively in the meetings. Senior managements are invited to Board meetings to provide explanations, information or updates on the Group’s business operation matters that may be raised by the Board.

The proceedings of all meetings of the board and board Committees are duly compiled in the minutes and the said minutes are kept at the registered office of the Company. All statutory records and minutes of the Company are accessible by the directors at the registered office during office working hours.

Company secretaries

The Company Secretaries are responsible for the secretarial function of the Company. The Company Secretaries issue notices of meetings after the agendas are firmed by the management and shall attend the meetings of the board, board Committees and shareholders to record the proceedings of such meetings. The Company Secretaries also ensures the statutory registers are properly updated and maintained at the registered office of the Company.

Every member of the Board is provided with the Company’s Corporate Calendar that has details of compliance issues, closed periods, meeting schedules and events. The directors are also regularly updated on circulars received from bursa Securities as well as amendments or changes to the Listing Requirements which are relevant to the Company.

All the Company Secretaries are qualified to act as company secretaries under Section 139A of the Companies Act, 1965 and they regularly attend continuous development programmes conducted by various professional bodies including the programmes in corporate governance organised by bursa Malaysia.



prinCipLe 2 - sTrenGThen CoMposiTion

nominating Committee

The Nominating Committee was established on 14 February 2004, comprising exclusively non-executive directors, a majority of whom are independent and the members are :-

Chairman : Raja Nazrin bin Raja Ghazilla Members : Khor Wooi Lip : yee yit yang

The Nominating Committee was established with defined terms of reference and in particular, the following duties relating to assessment or selection of directors:-

1. new candidates for appointment to the Board or to fill casual vacancies;2. the directors who are seeking re-election or who have reached 70 years of age;3. the directors who are to fill the seats of Board Committees;4. the effectiveness of the Board as a whole & its Board Committees;5. the performance of individual directors;6. the independence of independent directors; and7. boardroom Diversity, Directors Trainings and any other duties as required by the board.

The Nominating Committee had met twice time during the financial period ended (FPE) 31 December 2015 with full members being present.

During the FPE 31 December 2015, the Nominating Committee had carried out the following activities:

1) Assessment of new candidate to be appointed as the Executive Director of the Company2) Assessment of the board and board Committees 3) Assessment of the performance of individual directors4) Assessment of the independence of independent directors 5) Assessment of the directors seeking for re-elections at the forthcoming annual general meeting

annual assessment

The assessment of the Board and Board Committees are carried out by way of questionnaires in regard to mix of skills, knowledge, competency, proceeding of meetings, experiences, timely reporting and so forth. Whilst the assessments of individual directors and independent director are carried out by way of self-assessment questionnaires sent to the directors concerned. The questionnaires cover amongst others the character, integrity, contributions in meetings, quality of input, understanding of role, time commitment and so forth.

The responses to the questionnaires are then sent to the Nominating Committee for evaluations. The Nominating Committee will deliberate based on their ratings and makes its recommendations to the board.

The Nominating Committee, upon its recent annual assessment carried out, is satisfied that the current size and composition of board, board Committees and its directors are adequately appropriate for its purpose with relevant mix of skills, experience, competency, ethnicity and age.

appointment & re-election

The Nominating Committee is also responsible to assess the suitability of new candidates before appointment to the board as well as recommending the directors who are standing for re-election at the annual general meeting of the Company.

The assessment of new candidate is based on his education, relevant skills, experience, professionalism, integrity, sound judgement and independency. The Nominating Committee will assess and table its recommendation to the Board. The Board will then consider the recommendation of the Nominating Committee and make the final decision as to the new appointment of director. The Company Secretary then ensures the relevant procedures relating to the appointment of the new director are properly executed.

On the assessment of existing directors who are seeking re-election at the annual general meeting of the Company, the Nominating Committee will assess amongst others their regular and timely attendance at meetings, performance, contributions and so forth.



PRINCIPLE 2 - STRENGTHEN COMPOSITION (Cont’d)

Boardroom diversity

The board acknowledges the recommendation of the Code to establish a policy formalizing its approach to boardroom diversity and to take steps to ensure that women candidates are sought as part of its recruitment exercise. In this regards, the Nominating Committee will consider woman representative on the Board in its future selection process should need arises.

Apart from gender diversity in boardroom, the board embraces diversity in ethnicity and age as essential combinations to strengthen the composition of the board. Currently, the composition of the board has a diverse blend of ethnicity, age, culture and expertise required in facilitating different insights and perspectives in achieving an effective board stewardship.

The Nominating Committee, upon its recent assessment carried out, is satisfied with the current composition of the Board and is of the view that a fixed policy is not required at this juncture.

remuneration Committee

The Remuneration Committee was established on 14 February 2004, comprising mainly independent non-executive directors and the members are:-

Chairman : Raja Nazrin bin Raja Ghazilla Members : Dato’ Sri Chin Seak Huat (JP) : yee yit yang

The Remuneration Committee is responsible for reviewing and recommending the remuneration package of executive directors to the Board. The Remuneration Committee is objective, fair and transparent in its process to ensure a competitive remuneration are in place to motivate, reward and retain calibre directors to manage the business of the Group. None of the executive directors participate in determining their respective remuneration packages.

The remuneration framework is reflective of the executive directors’ level of responsibilities, experiences, length of services and individual performances. The Remuneration Committee will also consider the similar industry remuneration as a benchmark and the financial performance of the Group when making its recommendations to the board.

The Remuneration Committee also review the remuneration to be paid to non-executive directors based on their level of responsibilities and commitment required. However, the board as a whole determines the remuneration of the non-executive directors, and the individual director concerned shall abstain from deliberation on his own remuneration. The directors’ fees determined by the Board are subject to shareholders’ approval at the annual general meeting.

Details of the directors’ remuneration for FPE 31 December 2015 are as follows:-

CategoryFees

rM

salaries & allowances

rM

statutory Contributions

rM

Benefits-in-kind

rMTotal

rMExecutive Directors - 934,597 103,921 138,078 1,176,596Non-Executive Directors 101,484 64,000 - - 165,484

The number of directors whose total remuneration falls into the following bands comprises:-

range of remuneration (rM)

number of non-executive directors

number of executive directors

Less than RM50,000 6 150,001 to 100,000 1 -300,001 to 350,000 - 1850,001 to 900,000 - 1



prinCipLe 3 - reinForCe independenCe

assessment of independent directors

The board values the importance of the role of independent directors to strengthen the board as a whole. The role of independent directors is to bring independent and objective judgment to the board which mitigates risks arising from conflict of interests or undue influence from interested parties. Where any director has an interest in any matter under deliberation, he is required to declare his interest and abstain from participating in the discussions and voting on the matter.

There are presently 3 independent non-executive directors representing more than 1/3 of the Board memberships. None of the tenure of independent directors exceeds a cumulative term of 9 years. The Nominating Committee is responsible to assess the independent directors who have serves the Company for more than 9 years, in which the directors’ concern are assessed by the ratings of their self-assessment questionnaires. The Board will then consider and recommend the independent directors for re-appointment at the annual general meeting.

The Nominating Committee will assess the independence of the independent directors annually. The assessment is carried out by way of questionnaires sent to the independent directors to self evaluate their “independence” in addition to the criteria of independence set out in the Main Market Listing Requirements. The Nominating Committee will then assess and table its recommendations to the board.

The Nominating Committee, upon its recent annual assessment carried out, is satisfied that the independent directors of the Company have been able to discharge their responsibilities in an independent manner.

prinCipLe 4 – FosTer CoMMiTMenT

Board Commitments

The board meets on a scheduled basis, at least four (4) times a year to review and approve the quarterly and year end financial results. Additional meetings will be convened as necessary when there are urgent and important matters that require the Board’s deliberations. The Board also resolves and approves certain Company’s matters via circular resolution. The Circular resolutions are drawn up with detailed information and must be signed by a majority of the directors.

For governance practices, the existing directors are encouraged to notify the Board before they accept any new directorships and of his time commitment to make positive contributions to the board. Any board members or substantial shareholders is responsible to ensure his recommended candidate is able to commit in fulfilling the role as a director of the Company before sending the candidate’s profile to the Nominating Committee for evaluation.

None of the directors of the Company hold more than 5 directorships in public listed companies.

The Nominating Committee, upon its recent annual assessment carried out, is satisfied with the level of commitment given by the directors towards fulfilling their roles and responsibilities.

During the FPE 31 December 2015, all the current 7 directors had attended at least 87.50% of the total number of board meetings held. Meanwhile, full attendance was recorded for meetings of board Committees held. The board is satisfied that its directors including the non-executive directors holding multiple board representations are able to and have been devoting sufficient time to discharge their responsibilities adequately.

During the FPE 31 December 2015, a total of 8 Board of Directors meetings held. The attendances of the directors at board meetings are set below:-

directors number of meetings attendedDato’ Sohaimi Bin Shahadan 8/8Dato’ Sri Chin Seak Huat (JP) 7/8Khor Wooi Lip 8/8yee yit yang 8/8Raja Nazrin bin Raja Ghazilla 8/8



PRINCIPLE 4 – FOSTER COMMITMENT (Cont’d)

Board Commitments (Cont’d)

directors number of meetings attendedLow beng Seng 8/8Ahmad Zaffry Bin Sulaiman (Appointed on 01 September 2015) 1/1Teo Chee Kok (Resigned on 01 October 2015) 7/7

Directors’ Training

The board acknowledges the importance of continuous development of its directors and encourages them to partake in continuous development or training programmes to further enhance their skills and knowledge. In this respect, the board has not set a training policy and therefore, its directors need to, on continuous basis evaluate and determine their training needs especially on recent developments in corporate governance, regulations and laws.

All the directors had attended the Mandatory Accreditation Programme (MAP) prescribed by Bursa Securities. During the FPE 31 December 2015, trainings or seminars attended by the directors are as follows:

name description of Trainingyee yit yang Technical Briefing on Computation on percentage ratiosTeo Chee Kok Detecting Financial Frauds and Related Party Transaction and Recurrent Related

Party Transaction

Save as disclosed above, the other directors did not participate in any structured trainings during the financial period due to their work commitments.

prinCipLe 5 – uphoLd inTeGriTY in FinanCiaL reporTinG

Financial reporting

The Board aims to provide and present a balance and meaningful assessment of the Group’s financial performance and prospects at the end of the financial period, primarily through the annual financial statements and quarterly announcements of financial results as well as the Chairman’s statement in the annual report. The Board is assisted by the Audit Committee in overseeing the Group’s financial reporting quality and processes.

The Board assumes the responsibilities in ensuring the financial statements of the Group and of Company give a true and fair view of the state of affairs of the Group and of the Company as at the end of the financial year and of their results and cash flows for the financial year then ended.

In preparing the financial statements, the directors have ensured the Malaysian Financial Reporting Standards (“MFRS”) and the Malaysian Companies Act, 1965 have been complied. Further, the directors have selected and applied consistently suitable accounting policies and made reasonable and prudent judgments and estimates where applicable.

During the FPE 31 December 2015, the Audit Committee in overseeing the financial reporting had reviewed the quarterly financial statements and the annual audited financial statements of the Company. In the review of the Company’s annual audited financial statements, the Audit Committee discussed with the Management and the External Auditors regarding the accounting policies and standards that were applied and their judgement of the items that may affect the financial statements.



PRINCIPLE 5 – UPHOLD INTEGRITY IN FINANCIAL REPORTING (Cont’d)

external auditors

The Audit Committee meets with the External Auditors at least twice a year to discuss the conduct and concerns arising from their audit without the presence of the executive directors or management of the Company.

The External Auditors report their audit findings including any other pertinent matters pertaining to the audit of the Group’s financial statements to the Audit Committee. The Audit Committee will then report to the Board on matters that necessitate the Board’s attention.

The Audit Committee is responsible to appraise and assess the performance and independence of the External Auditors by way of questionnaires and discussions with the audit engagement partner to ensure their independence, objectivity and professionalism. The questionnaires cover amongst others the quality of work, competency, manpower resources and so forth.

The existing auditors, Messrs. Afrizan Tarmili Khairul Azhar (“AFTAAS”) had confirmed to the Audit Committee in writing 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.

The provision of non-audit services by AFTAAS to the Company pertaining to utilisation of proceeds from the rights issue, recurring related party transactions and any material misstatements of the Group’s revenue, purchases and trade receivables during the FPE 31 December 2015 did not in any way impair their objectivity and independence in view of their appointment as External Auditors of the Company was approved by shareholders after the completion of their non-audit services.

The Audit Committee, upon its recent annual assessment carried out, is satisfied with the suitability of AFTAAS based on their work done and independence and had recommended to the board for their re-appointment at the forthcoming annual general meeting.

The existing auditors, AFTAAS was appointed at the Company’s extraordinary general meeting held on 31 December 2015.

PRINCIPLE 6 – RECOGNISE AND MANAGE RISK

risk Management

The board acknowledges its responsibility for establishing a sound framework to manage risks and maintaining a sound systems of internal control to safeguard the shareholders’ investment and the Group’s assets.

The Board had established a risk management framework to manage risks affecting its business and operations. The review of the Group’s risk management systems and the effectiveness of the risk management framework are delegated to the Risk Management Committee. The Managing Director is the chairman of the Risk Management Committee. He is assisted by the General Manager, Financial Controller, Finance Manager, Factory Manager and Operation Manager who are members of the Risk Management Committee. The Risk Management Committee reports to the board.

During the FPE 31 December 2015, the Board had received assurance from the Managing Director that the Group’s risk management and internal control is operating adequately.

An overview of risk management and the state of internal control within the Group is set out in the Statement on Risk Management and Internal Control section of this Annual Report.

internal audit Function

The internal audit function of the Group is outsourced to an independent professional firm to audit and monitor the compliance of the Group’s policies, procedures and the effectiveness of the Group’s internal control systems.



PRINCIPLE 6 – RECOGNISE AND MANAGE RISK (Cont’d)

Internal Audit Function (Cont’d)

The Internal Auditors reports directly to the Audit Committee. The Internal Auditors will review the systems of internal control of the Group covering functional areas based on the audit plan approved by the Audit Committee. The Internal Auditors will then report their findings, recommendations for improvements and the management responses to the Audit Committee. The progress in the implementation of the agreed actions is being monitored through follow up reviews by the Internal Auditors. The Audit Committee will report to the board on the progress and findings of the internal audit function.

The internal audit activities during FPE 31 December 2015 are set out in the Audit Committee Report section of this Annual Report.

prinCipLe 7 – ensure TiMeLY and hiGh QuaLiTY disCLosure

Corporate disclosure policies and procedures

The Company has in place an internal corporate disclosure policies and procedures to ensure accurate and timely disclosures to the regulatory authorities, shareholders and stakeholders of the Company. The internal policies sets out the standard operating procedures for the management to observe including but not limited to disclosures of information that conforms with the rules and regulations of bursa Securities, press releases, updating the information published on the Company’s websites and so forth. The executive directors are assigned with the responsibility in ensuring the accuracy of the contents released to the regulatory authorities and/or the public.

To augment the process for effective dissemination of information, the Company had established a website (www.ekanoodles.com) for the shareholders, investment community and stakeholders to have easy and convenient access to information of the Group.

Shareholders, investment community and stakeholders are also kept informed through other communication channels such as press conference and briefings.

prinCipLe 8 – sTrenGThen reLaTionship BeTWeen CoMpanY and sharehoLders

Greater Shareholders’ Participation

The board encourages the participation of shareholders and investors, both individual and institutional, at general meetings and welcomes briefings from press and investment analysts.

The Company’s annual general meeting is a vital forum used to communicate and interact with shareholders. The Company’s Annual Report, together with notice of annual general meeting, is sent to shareholders at least 21 days before the date of each annual general meeting.

Each item of special business included in the notice of annual general meeting will be accompanied by explanatory statement to facilitate a full understanding and evaluation of the proposed resolution.

The Chairman will share with shareholders of their rights to demand a poll vote on any resolutions being proposed according to the Company’s Articles of Association and the executive directors, senior management and the external auditors are in attendance at annual general meeting of the Company to response to the shareholders’ enquiries.

Shareholders are also encouraged to ask questions on any resolutions being proposed and/or to clarify issues that they may have at the forthcoming 13th Annual General Meeting of the Company to be held at Lot 208, Phase II, Kuala Ketil Industrial Estate, 09300 Kuala Ketil, Kedah Darul Aman on Thursday, 26 May 2016 at 11.00 am.

This statement was made in accordance with a Board resolution on 18 april 2016.


STATEMENT ON RISK MANAGEMENT ANDinTernaL ConTroL

The Malaysian Code on Corporate Governance 2012 (“MCCG 2012”) requires public listed companies to maintain a sound system of risk management and internal control to safeguard shareholders’ investments and Group’s assets. Under the provisions of the bursa Malaysia Securities berhad Main Market Listing Requirements (“Main Listing Requirements”), under paragraph 15.26(b), Directors of public listed companies are required to produce a statement on the state of the Group’s internal control in their Annual Report.

The board of Directors (“board”) continues with its commitment to maintain sound systems of risk management and internal control throughout EKA Noodles berhad and its subsidiaries (“Group”) and in compliance with the Main Listing Requirements and the Statement of Risk Management and Internal Control (Guidelines for Directors of Listed Issuers) (“Internal Control Guidelines”), the board is pleased to provide the following statement which outlines the nature and scope of risk management and internal control of the Group during the financial year in review.

Board responsiBiLiTY

The board acknowledges the importance of sound risk management and internal control being embedded into the culture, processes and structures of the Group. The systems of internal control cover risk management and financial, organizational, operational, project and compliance controls. The Board affirms its overall responsibility for the Group’s systems of internal control and for reviewing the effectiveness and efficiency of those systems to ensure its viability and robustness. It should be noted, however, that such systems are designed to manage, rather than eliminate, risks of failure to achieve corporate objectives. Inherently, it can only provide reasonable and not absolute assurance against material misstatement or loss.

The Group has established an ongoing process for identifying, evaluating, monitoring and managing significant risks faced, or potentially exposed to, by the Group in pursuing its corporate objectives. The adequacy and effectiveness of this process have been continually reviewed by the Board and are in accordance with the Internal Control Guidelines.

ConTroL sTruCTure and enVironMenT

In furtherance to the Board’s commitment to maintain sound systems of risk management and internal control, the board continues to maintain and implement a strong structure and environment for the proper conduct of the Group’s business operations as follows:

• The board meets at least quarterly and has set a schedule of matters which is required to be brought to its attention for discussion, thus ensuring that it maintains full and effective supervision over appropriate controls. In addition, the Board is kept updated on the Group’s activities and its operations on a quarterly basis;

• An organization structure with well-defined scopes of responsibility, clear lines of accountability, and appropriate levels of delegated authority;

• A process of hierarchical reporting which provides for a documented and auditable trail of accountability; • A set of documented internal policies and procedures for operational and human resource management, which

is subject to review and improvement. A documented delegation of authority with clear lines of accountability and responsibility serves as a tool of reference in identifying the approving authority for various transactions including matters that require Board’s approval;

• Relevant information provided to management, covering financial and operational performance and key business indicators, for effective monitoring and decision making;

• Regular visits to operating units by members of the board and senior management.

RISK MANAGEMENT

The Group has established sound risk management practices to safeguard the Group’s business interest from risk events that may impede the achievement of business strategy, enable value creation and growth through identification of opportunities and provide assurance to the Groups’ various stakeholders.

Management is accountable to the board for the implementation of the processes in identifying, evaluating, monitoring and reporting of risks and internal control. On an annual basis, the Group Managing Director and the Group Accountant have provided the Board the assurance that the Group’s risk management and internal control systems are operating adequately and effectively, in all material aspects, to ensure achievement of corporate objectives.


STATEMENT ON RISK MANAGEMENT AND inTernaL ConTroL (Cont’d)

inTernaL audiT FunCTion

The board acknowledges the importance of the internal audit function and has engaged the services of an independent professional consulting firm, to provide much of the assurance it requires regarding the effectiveness as well as the adequacy and integrity of the Group’s systems of internal control.

The internal audit adopts a risk-based approach in developing its audit plan which addresses all the core auditable areas of the Group based on their risk profile. Scheduled internal audits are carried out by the internal auditors based on the audit plan presented to and approved by the Audit Committee.

The Audit Committee has full and direct access to the internal auditors and the Audit Committee receives reports on all internal audits performed. The Internal Auditors continue to independently and objectively monitor compliance with regard to policies and procedures, and the effectiveness of the internal controls systems. Significant findings and recommendations for improvement are highlighted to Management and the Audit Committee, with periodic follow-up of the implementation of action plans. The Management is responsible for ensuring that corrective actions were implemented accordingly.

Based on the internal auditors’ reports for the financial period ended 31 December 2015, there is a reasonable assurance that the Group’s systems of internal control are generally adequate and appear to be working satisfactorily. A number of minor internal control weaknesses were identified during the financial year, all of which have been, or are being, addressed. None of the weaknesses have resulted in any material losses, contingencies or uncertainties that would require disclosure in the Group’s annual report.

The board continues to review and implement measures to strengthen the internal control environment of the Group. This statement has been reviewed by the external auditors in compliance with Paragraph 15.23 of the Listing Requirements and pursuant to the scope set out in the Recommended Practice Guide (“RPG”) 5 issued by the Malaysian Institute of Accountants (“MIA”) for inclusion in the annual report of the Group for the financial period ended 31 December 2015, and has reported to the board that nothing has come to their attention that cause them to believe that the statement is inconsistent with their understanding of the process the board has adopted in the review of the adequacy and effectiveness of the risk management and internal control systems within the Group.

This statement is issued in accordance with a resolution of the Directors dated 18 April 2016.


audiT CoMMiTTee reporT

MeMBers oF The audiT CoMMiTTee

The present members of the Audit Committee are as follows:-

Chairman : Raja Nazrin Bin Raja Ghazilla - Independent Non-Executive DirectorMembers : Yee Yit Yang - Independent Non-Executive Director Khor Wooi Lip - Non-Independent Non-Executive Director

TerMs oF reFerenCe

OBJECTIVES

The primary function of the Audit Committee is to assist the Board of Directors in fulfilling its fiduciary duties as well as the following oversight objectives on the activities of the Group:-

• To assist the Board of Directors in discharging their responsibilities as they relate to the Group’s management including risk management, internal controls, financial reporting and compliance with statutory and legal requirements;

• To oversee and review the quality of the auditors conducted by the external and internal auditors;

• To enhance the perceptions of interested parties, such as shareholders, regulators, creditors and employees, of the credibility and objectivity of the financial reports.

CoMposiTion

The Audit Committee shall consist of at least three (3) members appointed by the board from amongst the Directors. All the members of the Audit Committee must be Non-Executive Directors with a majority of them being Independent Directors. The members of the Committee shall elect the Chairman from among their members who shall be an Independent Non-Executive Director. An Alternate Director shall not be appointed as a member of the Audit Committee.

The members of the Committee should be able to read, analyse and interpret financial statements.

At least one member of the Committee:-

• must be a member of the Malaysia Institute of Accountants; or

• if he is not a member of Malaysia Institute of Accountants, he must have at least three years of working experience and :-• he must have passed the examinations specified in Part I of the First Schedule of the Accountants Act,

1967, or• he must be a member of one of the associations of accountants specified in Part II of the Fist Schedule

of the Accountants Act, 1967, or• Fulfils such other requirements as prescribed or approved by the Bursa Malaysia Securities Berhad (“Bursa

Malaysia”).

• If a member of the Committee resigns, dies or for any reason ceases to be a member with the result that the number of members is reduced to below three (3), the board shall within three (3) months of the event appoint such new members as may required to fill the vacancy.

Chairman

The Chairman shall be an Independent Non-Executive Director elected by the members of the Audit Committee.

secretary

The Secretary of the Audit Committee shall be the Company Secretary of the board of Directors.

Quorum

A quorum shall be two (2) members and a majority of the members present must be Independent Directors. In the absence of the Chairman, the members present shall elect a Chairman for the meeting from amongst the members present.


audiT CoMMiTTee reporT (Cont’d)

TERMS OF REFERENCE (Cont’d)

COMPOSITION (Cont’d)

Meetings

The Committee shall regularise its own proceedings. The Committee shall meet not less than four (4) times a year. Additional meetings may be held at the discretion of the Committee or at the request of external auditors.

The presence of senior management external and internal auditors may be requested, if required.

Other board members may attend meetings upon the invitation of the Audit Committee.

Committee should meet with the external auditors without Executive Board Members present at least twice a year.

The Chairman of the Audit Committee should engage on a continuous basis with senior management, such as the chairman, the chief executive officer, the finance director, the internal and external auditors in order to be kept informed of matters affecting the Company.

authority

The Audit Committee is authorised by the board of directors to investigate any matter within its terms of reference. The Committee shall have the resources which are required to perform its duties and have full unrestricted access to any information and personnel pertaining to the Group. The Committee has a direct communication channel with the external and internal auditors and may obtain independent professional advice as and when necessary to discharges their duties.

Functions

The Audit Committee shall, amongst others, discharge the following functions :-

• To consider the appointment and annual re-appointment of external auditors, their audit fees and any question of their resignation or dismissal and to recommend to the board.

• To discuss with the external auditors before the audit commences or plan, the nature and scope of their audit, their evaluation of the system of internal accounting controls and to ensure co-ordination where than one audit firm is involved.

• To review and discuss with the external auditors’ audit report.

• To discuss problems and reservations arising from the interim and final audits, and any matters the external auditors may wish to discuss (in the absence of management where necessary).

• To review with the external auditor’s management letter and management’s response.

• To do the following, in relation to the internal audit function:-• Approval of the internal audit plan;• Review the adequacy of the scope, functions and resources of the internal audit function, and that it has

necessary authority to carry out its work;• Review the internal audit programme and result of the internal audit process and, where necessary,

ensure that appropriate actions are taken on the recommendations of the internal audit function;• Review any appraisal or assessment of the performance of members of the internal audit function; • Effectiveness of the internal audit function; and• Approve any appointment or termination of senior members of the internal audit function.

• To review the quarterly results and financial statements of the Group and of the Company, prior to the approval by the broad, whilst ensuring that they are prepared in a timely and accurate manner, focusing particularly on:-• Changes in accounting policies;• Implementation of major accounting policies and practices;• Going concern assumption;• Significant and unusual events; and• Compliance with accounting standards and other legal requirements.



TERMS OF REFERENCE (Cont’d)

COMPOSITION (Cont’d)

Functions (Cont’d)

• To consider or review any related party transactions and conflict of interest situation that may arise within the Company or Group including any transaction, procedure or course of conduct that raise questions of management integrity.

• To consider the major findings of internal investigations and management’s response.

• To review and verify the allocation of share options granted to employees to the Employee Share Option Scheme.

• To review and approve the draft Annual Reports prior to presentation to the Board of Directors for approval;

• To review with external auditor the assistance given by the employees of the Company.

• To review with the Board of Directors of the Company whether there is reason (supported by grounds) to believe that the listed issuer’ external auditor is not suitable for re-appointment.

• Review any related party transaction and conflict of interest situation that may arise within the Company or Group, including any transaction, procedure or course of conduct that raises question on management integrity.

• To provide a framework that enables future activity to take place in a consistent and controlled manner.

• Improving decision making, planning and prioritization by comprehensive and structured understanding of business activity, volatility and project opportunity or threats.

• Optimizing operational efficiency and minimizing risks.

• To deliberate and make recommendations to the Board the necessary risk management procedures.

• To consider or perform any other topics or functions as authorised by the Board.

The Board must review the terms of office and performance of the Audit Committee and each of its members at least once every three (3) years to determine whether such Audit Committee and members have carried out their duties in accordance with their terms of reference.

suMMarY oF audiT CoMMiTTee aCTiViTies

The Audit Committee met 8 times during the financial period ended (FPE) 31 December 2015 and details of attendance are as follows:-

audit Committee Member designation/directorateno. of meetings

attendanceRaja Nazrin bin Raja Ghazilla Chairman, Independent Non-Executive Director 8/8Khor Wooi Lip Member, Non-Independent Non-Executive Director 8/8yee yit yang Member, Independent Non-Executive Director 8/8


SUMMARY OF AUDIT COMMITTEE ACTIVITIES (Cont’d)

The activities of the Audit Committee during the FPE 31 December 2015 are as follows:-• Reviewed the quarterly financial results and annual audited consolidated financial statements• Approved the internal audit plan and internal audit reports.• Reviewed the special audit report.• Reviewed the external audit findings.• Reported to the Board the findings and progress of the internal audit function.• Reviewed the related party transactions entered into by the Group.• Reviewed the Corporate Governance Disclosures, Statement of Risk Management and Internal Control and

Audit Committee Report. • Appraised the performance of external auditors and recommended their re-appointments to the Board.• Appraised the performance of internal auditors and approved their re-appointment for the ensuing year.

inTernaL audiT FunCTion

The Board recognises that an internal audit function is vital in ensuring the effectiveness of the Group’s systems of internal control and is an integral part of the risk management process. The board has established an internal audit function which is independent of the activities in audits. The Internal Auditors reports directly to the Audit Committee.

The internal audit function is carried out by the outsourced independent professional firm of consultants, GovernanceAdvisory.com Sdn. bhd. to assist the Audit Committee in discharging its duties and responsibilities.

The Audit Committee reviews and approves the internal audit plan and assess the adequacy of the internal audit function. The internal auditors will independently review the systems of internal control of selected auditable or functional areas and present their findings and recommendations for improvements in the internal audit report to the Audit Committee.

The Audit Committee will use its reasonable efforts to carry out its obligations in ensuring appropriate actions are being taken for the Group to maintain a sound systems of internal control. The total cost incurred in managing the internal audit function for the financial year was RM60,000.00.

During the FPE 31 December 2015, the internal auditors had carried out the following activities:-

• Follow up reviews on the findings reported in the previous financial quarters.• Reviewed the Group’s systems of internal control of the following functional areas

i. Sales and Marketing ii. Credit Control Managementiii. Management Information Systems iv. General Safety and Securityv. Procurement and Cash Management – account payables; andvi. Property, Plant and Equipment Management



addiTionaL CoMpLianCe inForMaTion

1. uTiLisaTion oF proCeeds As at 31 December 2015, the total proceeds raised under Private placement of RM10,800,000 had been fully

utilised.

2. SHARE BUY-BACKS During the financial period, the Company does not have a share buy-backs programme in place.

3. opTions or ConVerTiBLe seCuriTies There were no exercise of warrants during the period.

4. deposiTorY reCeipT proGraMMe During the financial period, the Company does not have any depository receipt programme in place.

5. sanCTions and/or penaLTies During the financial period, there were no sanctions and/or penalties imposed on the Company or its

subsidiaries, directors or management by the regulatory bodies.

6. non-audiT Fees During the financial period, there were a non-audit fees incurred for services rendered to the Company by the

Company’s auditors amounting to RM80,000.00.

7. VariaTion in resuLTs There were no profit estimates, forecasts or projections or unaudited results which previously announced

which differs by 10% or more from the audited results for the financial period ended 31 December 2015.

8. proFiT GuaranTee During the financial period, there were no profit guarantees received by the Company.

9. MaTeriaL ConTraCTs There were no material contracts with the Company and its subsidiaries involving directors and major

shareholders, either still subsisting at the end of the financial period or entered into since the date of the previous financial year end.

10. reCurrenT reLaTed parTY TransaCTions oF a reVenue or TradinG naTure There were no recurrent related party transactions of a revenue or trading nature conducted pursuant to the

shareholders’ mandate during the financial period ended 31 December 2015.


CorporaTe soCiaL responsiBiLiTY sTaTeMenT

The board of Directors acknowledges the importance of Corporate Social Responsibility (“CSR”) and the Group has been playing its role in maintaining CSR in its business and operations.

The CSR initiatives undertaken by the Group are as follows:

The CoMMuniTY

• The Group has given giving its support unconditionally to the people in need by sponsoring the Group’s products namely beehoon and/or noodles to various non-profitable organisations, schools and other local authorities. Besides that, the Group also extended its care and concern to the under-privileged groups through monetary contributions.

• The Group supports internship programmes from various local universities and/or colleges. Students from these universities and/or colleges are placed as interns in various positions in the Group’s operations with the aim of giving practical training to these students in their particular job area as well as to let them gain insights into how business organisations operate in general. Such internship programmes also enable the Group to tap into the talents available in local universities and/or colleges upon their graduations.

THE MARKETPLACE

• The Group focuses in ethical procurement practices by adopting standard procedures in vendors’ qualifications and ensures that the raw materials supplied are in accordance to the Group’s materials requirements.

• The Group regularly improves its qualities, technologies, processes, services and innovative in products development for better nutritional values to meet changes in customers’ demand.

THE WORKPLACE

• The Group is committed to ensure fairness in careers’ opportunities and treat all employees equally regardless of their religions, ethnicity, genders, age and nationalities towards harmonious working environment, at the same time creating a healthy lifestyle and working cultures.

• The Group provides a healthy and safe working environment for its employees in the workplace.

• The Group conducts various trainings and safety workshops to ensure awareness of safety requirements at all levels.

• The Group does not have a policy in workplace diversity. Nevertheless, the current workforce has a diverse mix of gendered, ethnicity and age demographics.

The enVironMenT

• The Group acknowledges its responsibility in environmental conservation in the course of carrying out its business activities. The Group has own waste treatment plants that adheres to the waste management requirements provided by Department of Environmental.

• The Group prioritised in recycling and encourages its employees to reduce paper usages and practices the culture of recycling waste materials.


DIRECTORS’ RESPONSIBILITIES STATEMENT

The Directors acknowledge that they are responsible for the Annual Audited Financial Statements so as to give a true and fair view of the state of affairs as at the end of the financial period of the Group and of the Company and of their results and their cash flows.

In preparing the financial statements for the financial period ended 31 December 2015, the Directors had:-

1. applied reasonable and prudent judgement and estimates; and2. followed all applicable approved accounting standards in Malaysia.

The Directors had ensured the Company maintains appropriate accounting policies that disclose with reasonable accuracy of the financial position of the Group and of the Company, and which enable them to ensure that the financial statements comply with the Companies Act, 1965.

The Directors had also taken steps that are reasonably available to them to safeguard the assets of the Group and of the Company, and to prevent and detect fraud, other irregularities and material misstatements.

This statement was made in accordance with a resolution of the Directors dated 18 April 2016.


DIRECTORS’ REPORT

The Directors hereby submit their report together with the audited financial statements of the Group and Company for the financial period ended 31 December 2015.

prinCipaL aCTiViTY

The Company is principally engaged in the business of investment holding. The principal activities of the subsidiaries are set out in Note 8 to the financial statements.

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

FinanCiaL resuLTs

rM rM

Loss for the financial period (14,908,882) (3,499,179)

Attributable to:Owners to the company (14,908,882) (3,499,179)Non-Controlling interests - -

(14,908,882) (3,499,179)

diVidends

There were no dividends proposed, declared or paid by the Company since the end of the previous financial year. The directors also do not recommend any final dividend in respect of the current financial period.

reserVes and proVisions

All material transfers to or from reserves or provisions during the financial period are disclosed in the financial statements.

issue oF shares and deBenTures

During the financial period:-

(a) There were no changes in the authorised share capital of the Company;

(b) The Company increased its issued and paid up share capital from RM36,000,000 comprising 240,000,000 ordinary shares of RM0.15 each to RM46,800,000 comprising 312,000,000 ordinary shares of RM0.15 each; and

(c) There were no issue of debentures by the Company.

opTions GranTed oVer unissued shares

During the financial period, no options were granted by the Company to any person to take up any unissued shares in the Company.


DIRECTORS’ REPORT (Cont’d)

Bad and douBTFuL deBTs

Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps to ascertain that action had been taken in relation to the writing off the bad debts and the making of allowance for impairment losses on receivables, and satisfied themselves that all known bad debts had been written off and that adequate allowance had been made for impairment losses on receivables.

At the date of this report, the directors are not aware of any circumstances that would require the further writing off of bad debts, or the additional allowance for the impairment losses on receivables in the financial statements of the Group and the Company.

CurrenT asseTs

Before the financial statements of the Group and of the Company were made out, the directors took reasonable steps to ascertain that any current assets other than debts, which were unlikely to be realised in the ordinary course of business, including their value as shown in the accounting records of the Group and of the Company, have been written down to an amount which there might be expected so to realise.

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

VaLuaTion MeThods

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

ConTinGenT and oTher LiaBiLiTies

The contingent liabilities are disclosed in Note 31 to the financial statements. At the date of this report, there does exist:-

(a) Any charge on the assets of the Group and of the Company that has arisen since the end of the financial period which secures the liabilities of any other person; or

(b) Any contingent liability of the Group and of the Company which has arisen since the end of the financial period.

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

ChanGe oF CirCuMsTanCes

At the date of this report, the Directors are not aware of any circumstances not otherwise dealt with in this report or the financial statement of the Group and of the Company which would render any amount stated in the financial statement misleading.

iTeMs oF an unusuaL naTure

The results of the operations of the Group and of the Company during the financial period were not, in the opinion of the Directors, substantially affected by any item, transaction or event of a material and unusual nature.

There has not arisen in the interval between the end of the financial period and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors, to affect substantially the results of the operations of the Group and of the Company for the financial period.


direCTors

The Directors in office since the date of the last report:-

Dato’ Sohaimi Bin ShahadanDato’ Sri Chin Seak Huat (JP)Khor Wooi LipRaja Nazrin bin Raja Ghazillayee yit yangAhmad Zaffry Bin Sulaiman (Appointed w.e.f 1 September 2015)Teo Chee Kok (Resigned w.e.f 1 October 2015)Low beng Seng

DIRECTORS’ INTERESTS

According to the register of the Directors’ shareholdings, the interests of Directors holding office at the end of the financial period in shares and options over shares of the company and its related corporations during the financial period are as follows:-

number of ordinary shares of rM0.15 eachat

1.7.2014 Bought soldat

31.12.2015

Direct interests in the CompanyDato’ Sri Chin Seak Huat (JP) 33,300,000 - - 33,300,000

Indirect interest in the Company* Khor Wooi Lip 120,000 - - 120,000

* Indirect interest through his spouse

By virtue of their shareholding in the Company, Dato’ Sri Chin Seak Huat (JP) is deemed to have interest in all the related companies during the financial period to the extent of the Company’s interests, in accordance with Section 6A of the Companies Act, 1965.

The other directors holding office at the end of the financial period had no interest in shares and options over shares of the Company or its related companies during the financial period.

DIRECTORS’ BENEFITS

Since the end of the previous financial period, no director has received or become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by directors as shown in the financial statements, or the fixed salary of a full-time employee of the Company) by reason of a contract made by the Company or a related corporation with the director or with a firm of which the director is a member or with a company in which the director has a substantial financial interest.

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

siGniFiCanT eVenTs durinG The FinanCiaL period

No significant event occurred during the financial period.




audiTors

The auditors, AFRIZAN TARMILI KHAIRUL AZHAR, have expressed their willingness to continue in office.

Signed on behalf of the board in accordance with a resolution of the Directors,

DATO’ SRI CHIN SEAK HUAT (JP)Director

AHMAD ZAFFRy bIN SULAIMANDirector

Kuala Lumpur, Malaysia

Date : 18 April 2016


sTaTeMenT BY direCTorsPursuant to Section 169 (15) of the Companies Act, 1965

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

We, DATO’ SRI CHIN SEAK HUAT (JP) and AHMAD ZAFFRY BIN SULAIMAN, being two of the Directors of EKA NOODLES BERHAD, do hereby state that, in the opinion of the Directors, the accompanying financial statements as set out on pages 36 to 75 are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of Companies Act, 1965 in Malaysia so as to give a true and fair view of the state of affairs of the Group and of the Company as at 31 December 2015 and of the results of the operations and the cash flows for the financial period ended on that date.

Signed on behalf of the board in accordance with a resolution of the Directors,

DATO’ SRI CHIN SEAK HUAT (JP) Director

AHMAD ZAFFRy bIN SULAIMAN Director


Date: 18 April 2016

I, DATO’ SRI CHIN SEAK HUAT (JP), being the director primarily responsible for the financial management of EKA NOODLES BERHAD, do solemnly and sincerely declare that the accompanying financial statements as set out on pages 36 to 75, are to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by the above named at Kuala Lumpur in this Federal Territory on 18 April 2016

}}}

DATO’ SRI CHIN SEAK HUAT (JP)

before me,

Commissioner for Oaths



INDEPENDENT AUDITOR’S REPORT to the Members of Eka Noodles berhad Company No: 583565-U

reporT on The FinanCiaL sTaTeMenTs

We have audited the financial statements of EKA NOODLES BERHAD, which comprise the financial position as at 31 December 2015, and the profit or loss and other comprehensive income, statement of changes in equity and the statements of cash flows of the Group and of the Company for the period then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 36 to 75.

Directors’ Responsibility for the Financial Statements

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

Auditors’ Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity’s preparation of the financial statements that give true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial statements.

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

Opinion

In our opinion, the financial statements give a true and fair view of the financial position of the Company as of 31 December 2015 and of their financial performance and cash flows for the period then ended in accordance with Malaysian Financial Reporting Standards and the requirements of Companies Act, 1965 in Malaysia.

reporT on oTher LeGaL and reGuLaTorY reQuireMenTs

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

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

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

(c) The auditors’ reports on the financial statements of the subsidiary companies did not contain any qualification or any adverse comment made under sub-section (3) of Section 174 of the Act.


INDEPENDENT AUDITOR’S REPORT (Cont’d)to the Members of Eka Noodles berhad Company No: 583565-U

oTher reporTinG responsiBiLiTies

The supplementary information set out on page 76 is disclosed to meet the requirement of bursa Malaysia Securities Berhad and is not part of the financial statements. The Directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure pursuant to Bursa Malaysia Securities Berhad Listing Requirement, as issued by the Malaysian Institute of Accountants (MIA Guidance) and the directive of bursa Malaysia Securities berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of bursa Malaysia Securities berhad.

oTher MaTTers

This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

AFRIZAN TARMILI KHAIRUL AZHAR Mohd aFriZan husainAF: 1300 1805/11/16 (J/PH)Chartered Accountants (Malaysia) Partner


Date: 18 April 2016


sTaTeMenT oF proFiT or Loss and oTher CoMprehensiVe inCoMefor the Financial Period ended 31 December 2015

The Group The Company1.7.2014

to31.12.2015

1.7.2013to

30.6.2014

1.7.2014to

31.12.2015

1.7.2013to

30.6.2014note rM rM rM rM

Revenue 4 97,004,743 90,334,994 - -Cost of sales (87,702,649) (93,571,780) - -Gross loss 9,302,093 (3,236,786) - -

Other income 3,187,627 965,285 2,754,001 1,433,567Administrative expenses (19,357,281) (29,362,640) (4,533,003) (6,193,567)Loss from operations (6,867,561) (31,634,141) (1,779,002) (4,760,000)

Finance cost (8,729,061) (5,520,543) (1,720,177) (227,564)Loss before tax 5 (15,596,622) (37,154,684) (3,499,179) (4,987,564)

Tax credit 6 687,740 22,234 - -Loss for the financial year (14,908,882) (37,032,450) (3,499,179) (4,987,564)

other comprehensive income, net tax

items that are or may be reclassified subsequently to profit or loss- Realisation of foreign

exchange translation reserve - 4,920,543 - -- Foreign curency translation

difference - - - -- Revaluation of property 2,907,409 1,903,531 - -

2,907,409 6,824,074 - -Total comprehensive expense for the year (12,001,473) (30,208,376) (3,499,179) (4,987,564)

Loss for the financial year attributable to:-

Owner of the Company (14,908,882) (37,032,450) (3,499,179) (4,987,564)Non-controlling interests - - - -Loss for the financial year (14,908,882) (37,032,450) (3,499,179) (4,987,564)

Total comprehensive expense attributable to:-

Owner of the Company (12,001,473) (30,208,376) (3,499,179) (4,987,564)Non-controlling interests - - - -

Total comprehensive expense for the year (12,001,473) (30,208,376) (3,499,179) (4,987,564)

Loss per share (sen)basic 7 (4.78) (15.43)Diluted Not applicable Not applicable

The accompanying notes form an integral part of the financial statements


The Group The Company

note

2015rM

(18 months)

2014rM

(12 months)

2015rM

(18 months)

2014rM

(12 months)

assetsInvestment in subsidiaries 8 - 18,640,637 18,640,637Property, plant and equipment 9 68,101,620 63,877,698 129,336 159,745Other investment 10 1 1 1 1Intangible assets 11 97,611 97,611 - -Amount due from subsidiaries 12 - - 42,957,815 35,955,238Total non-current assets 68,199,232 63,975,310 61,727,790 54,755,621

Inventories 13 6,156,740 6,831,962 - -Trade receivables 14 13,700,169 15,447,536 - -Other receivables, deposits and prepayments 15 4,511,556 8,575,666 157,808 327,265Tax recoverable 185,981 182,505 - -Fixed deposit 16 1,100,000 756,313 - -Cash and cash equivalent 907,870 1,999,298 261,973 216,150Total current assets 26,562,316 33,793,280 419,780 543,415

Total assets 94,761,548 97,768,590 62,147,570 55,299,036

EquityShare capital 17 46,800,000 36,000,000 46,800,000 36,000,000Share premium 18 3,600,000 3,600,000 3,600,000 3,600,000Reserve 19 14,041,732 11,134,323 4,837,366 4,837,366Accumulated losses (51,941,536) (37,032,654) (53,487,030) (49,987,851)Total equity 12,500,196 13,701,669 1,750,337 (5,550,484)

LiabilitiesHire purchase 20 551,509 499,095 61,483 98,828bank borrowings 21 60,579,258 55,671,285 56,430,098 51,781,886Deferred taxation 22 529,821 1,271,683 - -Total non-current liabilities 61,660,588 57,442,063 56,491,581 51,880,714

Trade payable 23 10,824,094 9,167,428 - -Other payables and accruals 24 3,558,942 5,261,236 875,653 391,617Hire purchase 20 61,400 54,165 30,000 14,130bank borrowings 21 6,082,186 12,087,979 3,000,000 8,563,059Provision for taxation 74,141 54,050 - -Total current liabilities 20,600,763 26,624,858 3,905,653 8,968,806Total liabilities 82,261,351 84,066,921 60,397,233 60,849,520

Total equity and liabilities 94,761,548 97,768,590 62,147,570 55,299,036

sTaTeMenT oF FinanCiaL posiTion as at 31 December 2015



sTaTeMenT oF ChanGes in eQuiTY for the Financial Period ended 31 December 2015

The

acco

mpa

nyin

g no

tes

form

an

inte

gral

par

t of t

he fi

nanc

ial s

tate

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non

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utab

led

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ibut

able

The

Gro

up

shar

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pita

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are

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valu

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att

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of

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non

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in

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Equi

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rMrM

rMrM

rMrM

rM

bala

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at 1

.7.2

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60,0

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-(4

,920

,343

)4,

393,

426

(36,

770,

204)

22,7

02,8

79-

22,7

02,8

79

Loss

for

the

finan

cial

ye

ar-

--

--

(37,

032,

450)

(37,

032,

450)

-(3

7,03

2,45

0)O

ther

com

preh

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me

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e fin

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ear

- Re

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rren

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tran

slat

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diffe

renc

e-

--

4,92

0,34

3-

-4,

920,

343

-4,

920,

343

- Re

valu

atio

n of

pr

oper

ty, p

lant

an

d eq

uipm

ent

--

--

1,90

3,53

1-

1,90

3,53

1-

1,90

3,53

1

Tota

l com

preh

ensi

ve

expe

nse

for

the

finan

cial

yea

r-

--

4,92

0,34

31,

903,

531

(37,

032,

450)

(30,

208,

576)

-(3

0,20

8,57

6)

Tran

sact

ion

with

ow

ners

Capi

tal r

educ

tion

(42,

000,

000)

-5,

230,

000

--

36,7

70,0

00-

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Righ

t iss

ues

18,0

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003,

600,

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(392

,634

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--

21,2

07,3

66-

21,2

07,3

66

bala

nce

at 3

0.6.

2014

36,0

00,0

003,

600,

000

4,83

7,36

6-

6,29

6,95

7(3

7,03

2,65

4)13

,701

,669

-13

,701

,669


sTaTeMenT oF ChanGes in eQuiTY (Cont’d)for the Financial Period ended 31 December 2015

non

-dis

trib

utab

le

dis

trib

utab

le

shar

eca

pita

l sh

are

prem

ium

Ca

pita

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n re

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valu

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Loss

es

att

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e to

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ners

of

the

com

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non

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in

tere

st

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lEq

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The

Gro

uprM

rMrM

rMrM

rMrM

bala

nce

at 1

.7.2

014

36,0

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600,

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4,83

7,36

6-

6,29

6,95

7(3

7,03

2,65

4)13

,701

,669

-13

,701

,669

Issu

ance

of s

hare

s10

,800

,000

--

--

-10

,800

,000

-10

,800

,000

Loss

for

the

finan

cial

ye

ar-

--

--

(14,

908,

882)

(14,

908,

882)

-(1

4,90

8,88

2)O

ther

com

preh

ensi

ve

inco

me

for

the

finan

cial

yea

r-

Reva

luat

ion

of

prop

erty

, pla

nt

and

equi

pmen

t-

--

-2,

907,

409

-2,

907,

409

-2,

907,

409

Tota

l com

preh

ensi

ve

expe

nse

for

the

finan

cial

yea

r-

--

-2,

907,

409

(14,

908,

882)

(12,

001,

473)

-(1

2,00

1,47

3)

bala

nce

at 3

1.12

.201

546

,800

,000

3,60

0,00

04,

837,

366

-9,

204,

366

(51,

941,

536)

12,5

00,1

96-

12,5

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96

The

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sTaTeMenT oF ChanGes in eQuiTY (Cont’d)for the Financial Period ended 31 December 2015

The

acco

mpa

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g no

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form

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par

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f th

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stTo

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The

Com

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rMrM

rMrM

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nce

at 1

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013

60,0

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-(8

1,77

0,28

6)(2

1,77

0,28

6)-

(21,

770,

286)

Loss

for

the

finan

cial

yea

r-

--

(4,9

87,5

64)

(4,9

87,5

64)

-(4

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)

Tran

sact

ion

with

ow

ners

Capi

tal r

educ

tion

(42,

000,

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230,

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36,7

70,0

0021

,207

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--

Righ

t iss

ues

18,0

00,0

003,

600,

000

(392

,634

)-

-21

,207

,366

bala

nce

at 3

0.6.

2014

/ 1

.7.2

014

36,0

00,0

003,

600,

000

4,83

7,36

6(4

9,98

7,85

0)(5

,550

,484

)-

(5,5

50,4

84)

Issu

ance

of s

hare

s10

,800

,000

--

-10

,800

,000

-10

,800

,000

Loss

for

the

finan

cial

yea

r-

--

(3,4

99,1

79)

(3,4

99,1

79)

-(3

,499

,179

)

bala

nce

at 3

1.12

.201

546

,800

,000

3,60

0,00

04,

837,

366

(53,

487,

029)

1,75

0,33

7-

1,75

0,33

7


sTaTeMenT oF Cash FLoWsfor the Financial Period ended 31 December 2015


note

2015rM

(18 months)

2014rM

(12 months)

2015rM

(18 months)

2014rM

(12 months)

Cash flows from/(used in) operating activities

Loss before taxation (14,908,882) (37,154,684) (3,499,179) (4,987,564)Adjustments for:

Allowance for impairment loss on trade receivables - 5,692,381 - -

Bad debts written off 4,781 3,341,550 - 3,050,235Depreciation 11,312,442 7,330,369 30,409 20,001(Gain)/Loss on disposal

property, plant and equipment (11,639) 15,625 - -

Loss on disposal of subsidiaries - 4,183,881 - -Impairment loss on property,

plant and equipment - 225,195 - -Interest income (7,539) (81,272) - (77,567)Interest expense 8,729,061 5,514,813 1,720,177 5,564Property, plant and equipment

written off - 105,124 - -Reversal of impairment loss on

trade receivables (169,966) (803,746) - -Deposit written off - 9,750 - -Provision for doubtful debt 479,421 - - -Waiver of debts 980,761 - - -

Operating profit before working capital changes 6,408,440 (11,621,014) (1,748,594) (1,989,331)Decrease in inventories 675,222 3,535,926 - -Decrease/(Increase) in trade and

other receivables 4,516,480 (6,104,270) 169,458 (316,645)Decrease in trade and other

payables (45,628) (1,806,890) 484,035 (2,552,007) Cash generated from/(used in)

operation 11,554,514 (15,996,248) (1,095,101) (4,857,983)Interest received 7,539 81,272 - 77,567Interest paid (8,729,061) (5,514,813) - (5,564)Tax paid (725,247) 172,950 (1,720,177) -Net cash from/(used in) operating

activities 2,107,745 (21,256,839) (2,815,277) (4,785,980)



sTaTeMenT oF Cash FLoWs (Cont’d)for the Financial Period ended 31 December 2015


note

2015rM

(18 months)

2014rM

(12 months)

2015rM

(18 months)

2014rM

(12 months)

Cash flows from/(used in) investing activities

Disposal of subsidiaries, net of cash disposed - (79,986) - -

Purchase of property, plant and equipment (12,466,242) (4,360,345) - (4,797)

Proceed from disposal of property, plant and equipment 79,426 50,000 - -

(Withdrawal)/placement of fixed deposits (343,687) 4,462,217 - 5,115,355

Advance to subsidiaries - - (7,002,578) (13,772,334)Net cash (used in)/from investing

activities (12,730,503) 71,886 (7,002,578) (8,661,776)

Cash flows from/(used in) financing activities

Proceed from issuance of share capital 10,800,000 - 10,800,000 -

Proceeds from right issue, net - 21,207,366 - 21,207,366Repayment of other short term

borrowings - - (6,515,828) (3,326,972)Repayment of hire purchases (170,850) (38,358) (21,475) (13,384)Proceed/(Repayment) of term loans (1,097,820) (176,822) 5,600,981 (4,264,349)Net cash from financing activities 9,531,330 20,992,186 9,863,678 13,602,661

net (decrease)/increase in cash and cash equivalents (1,091,428) (192,767) 45,823 154,905

Cash and cash equivalents as at beginning of the financial year 1,999,298 2,192,065 216,150 61,245

Cash and cash equivalents as at end of the financial year 26 907,870 1,999,298 261,973 216,150



noTes To The FinanCiaL sTaTeMenTsfor the Financial Period ended 31 December 2015

1. GeneraL inForMaTion

The Company is a public company limited by share and is incorporated under the Companies Act 1965 in Malaysia. The domicile of the Company is Malaysia.

The registered office of the Company is located at 51-21-A, Menara BHL Bank, Jalan Sultan Ahmad Shah, 10050 Penang. The principal place of business is located at Lot 208 Phase II, Kuala Ketil Industrial Estate 09300 Kuala Ketil, Kedah Darul Aman.

The Company is principally engaged in the business of investment holding. The principal activities of the subsidiaries are set out in Note 8 to the financial statement. There have been no significant changes in the nature of these activities during the financial year.

2. Basis preparaTion oF FinanCiaL sTaTeMenTs

The financial statements of the Company are prepared under the historical cost convention and modified to include other bases of valuation as disclosed in other sections under significant accounting policies, and compliance with Malaysian Financial Reporting Standards (“MFRSs”), International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.

The financial statements are presented in Ringgit Malaysia (RM)

2.1 sTandards issued BuT noT YeT eFFeCTiVe

The following are accounting standards, amendments and interpretations of the MFRSs that have been issued by the Malaysian Accounting Standards board (“MASb”) but have not been adopted by the Group and the Company:

MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2016

• MFRS 14, Regulatory Deferral Accounts• Amendments to MFRS 5, Non-current Assets Held for Sale and Discontinued Operations (Annual

Improvements 2012-2014 Cycle)• Amendments to MFRS 7, Financial Instruments: Disclosures (Annual Improvements 2012-2014

Cycle)• Amendments to MFRS 10, Consolidated Financial Statements and MFRS 128, Investments in

Associates and Joint Ventures – Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

• Amendments to MFRS 10, Consolidated Financial Statements, MFRS 12, Disclosure of Interests in Other Entities and MFRS 128, Investments in Associates and Joint Ventures – Investment Entities: Applying the Consolidation Exception

• Amendments to MFRS 11, Joint Arrangements – Accounting for Acquisitions of Interests in Joint Operations

• Amendments to MFRS 101, Presentation of Financial Statements – Disclosure Initiative• Amendments to MFRS 116, Property, Plant and Equipment and MFRS 138, Intangible Assets –

Clarification of Acceptable Methods of Depreciation and Amortisation

MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January 2016

• Amendments to MFRS 116, Property, Plant and Equipment and MFRS 141, Agriculture – Agriculture: Bearer Plants

• Amendments to MFRS 119, Employee Benefits (Annual Improvements 2012-2014 Cycle)• Amendments to MFRS 127, Separate Financial Statements – Equity Method in Separate Financial

Statements


noTes To The FinanCiaL sTaTeMenTs (Cont’d)for the Financial Period ended 31 December 2015

2. BASIS PREPARATION OF FINANCIAL STATEMENTS (Cont’d)

2.1 STANDARDS ISSUED BUT NOT YET EFFECTIVE (Cont’d) MFRSs, Interpretations and amendments effective for annual periods beginning on or after 1 January

2018

• MFRS 9, Financial Instruments (2014)• MFRS 15, Revenue from Contracts with Customers

The initial application of the abovementioned accounting standards, amendments or interpretations are not expected to have any material impacts to the financial statements of the Group and the Company except as mentioned below:

MFrs 15, revenue from Contracts with Customers

MFRS 15 replaces the guidance in MFRS 111, Construction Contracts, MFRS 118, Revenue, IC Interpretation 13, Customer Loyalty Programmes, IC Interpretation 15, Agreements for Construction of Real Estate, IC Interpretation 18, Transfers of Assets from Customers and IC Interpretation 131, Revenue – Barter Transactions Involving Advertising Services. Upon adoption of MFRS 15, it is expected that the timing of revenue recognition might be different as compared with the current practices.

The adoption of MFRS 15 will result in a change in accounting policy. The Group is currently assessing the financial impact of adopting MFRS 15.

MFrs 9, Financial instruments

MFRS 9 replaces the guidance in MFRS 139, Financial Instruments: Recognition and Measurement on the classification and measurement of financial assets. Upon adoption of MFRS 9, financial assets will be measured at either fair value or amortised cost. It is expected that the Group’s investment in unquoted shares will be measured at fair value through other comprehensive income.

The adoption of MFRS 9 will result in a change in accounting policy. The Group is currently assessing the financial impact of adopting MFRS 9.

3. siGniFiCanT aCCouTinG poLiCies

3.1. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

Estimates and judgements are continually evaluated by the directors and the management and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The estimates and judgements that affect the application of the Company’s accounting policies and disclosure, and have a significant risk of causing a material adjustment to the carrying amount of assets, liabilities, income and expenses are discussed below:

(a) Key sources of estimation uncertainty

(i) Depreciation of Property, Plant and Equipment

The estimates for the residual values, useful lives and related depreciation charges for the property, plant and equipment are based on the commercial factors which could change significantly as a result of technical innovations and competitors’ actions in response to the market conditions. The Company anticipates that the residual values of its property, plant and equipment will be insignificant. As a result residual values are not being taken into consideration for the computation of the depreciation amount. Changes in the expected level of usage and technological development could impact the economic useful lives and the residual values of these assets, therefore future depreciation charges could be revised.


3. SIGNIFICANT ACCOUTING POLICIES (Cont’d)

3.1. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (Cont’d)

(a) Key sources of estimation uncertainty (Cont’d)

(ii) impairment of investments in subsidiaries and amount owing by subsidiaries

The Company reviews the investments in subsidiaries for impairment when there is an indication of impairment and assesses the impairment of receivables on the amount owing by subsidiaries when the receivables are long outstanding.

The recoverable amount of investment in subsidiaries and amount owing by subsidiaries is assessed by reference to the higher of its fair value less cost to sell and its value in use of the respective subsidiaries.

The value in use is the net present value of the projected future cash flows derived from the business operations of the respective subsidiaries discounted at an appropriate discount rate. Such a discounted cash flow method involves the use of estimated future results and a set of assumptions to reflect their income and cash flows. Judgment was also used to determine the discount rate for the cash flows and the future growth of the businesses of the subsidiaries.

(b) income Taxes

There are certain transactions and computations for which the ultimate tax determination may be different from the initial estimate. The Company recognises tax liabilities based on its understanding of the prevailing tax laws and estimates of whether such taxes will be due in the ordinary course of business. Where the final outcome of these matters is different from the amount that were initially recognized, such difference will impact the income tax and deferred tax provisions in the year in which such determination is made.

(c) deferred tax assets and liabilities

Deferred tax implications arising from the changes in corporate income tax rates are measured with reference to the estimated realization and settlement of temporary differences in future periods in which tax rates are expected to apply, based on the tax rates enacted or substantively enacted at the reporting period. While management’s estimates on the realization and settlement of temporary differences are based on the available information at the reporting period, changes in business strategy, future operating performance and other factors could potentially impact on the actual amount and the estimated amount would be recognized in the profit or loss in the period in which actual realization and settlement occurs.

(d) impairment of non-Financial assets

When the recoverable amount of an asset is determined based on the estimate of the value-in-use of the cash-generating unit to which the asset is allocated, the management is required to make an estimate of the expected future cash flows from the cash-generating unit and also to apply a suitable discount rate in order to determine the present value of those cash flows.

(e) Write-down of inventories

Reviews are made periodically by the management on damaged, obsolete and slow-moving inventories. These reviews require judgement and estimates. Possible changes in these estimates could result in revisions to the valuation of inventories.





3.1. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (Cont’d)

(f) impairment of receivables

An impairment loss is recognised when there is objective evidence that a financial asset is impaired. Management specifically reviews its loans and receivables financial assets and analyses historical bad debts, customer concentrations, customer creditworthiness, current economic trends and changes in the customer payment terms when making a judgement to evaluate the adequacy of the allowance for the impairment losses. Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience for assets with similar credit risk characteristics. If the expectation is different from the estimation, such difference will impact the carrying value of receivables.

(g) Revaluation of Property, Plant and Equipment

Certain properties of the Group are reported at valuation which is based on valuations performed by independent professional valuers

The independent professional valuers have exercised judgment in determining discount rates, estimates of the future cash flows, capitalization rate, terminal year value, market freehold rental and other factors used in the valuation process. Also, judgment has been applied in estimating prices for less readily observable external parameters. Other factors such as model assumptions, market dislocations and unexpected correlations can also materially affect these estimates and the resulting valuation estimates.

(h) Classification of Leasehold Land

The classification of leasehold land as a finance lease or an operating lease requires the use of judgment in determining the extent to which risks and rewards incidental to its ownership lie. Despite the fact that there will be no transfer of ownership by the end of the lease term and that the lease term does not constitute the major part of the indefinite economic life of the land, management considered that the present value of the minimum lease payments approximated to the fair value of the land at the inception of the lease. Accordingly, management judged that the Group has acquired substantially all the risks and rewards incidental to the ownership of the land through a finance lease.

(i) Fair Value estimates for Certain Financial assets and Liabilities

The Company carries certain financial assets and liabilities at fair value, which requires extensive use of accounting estimates and judgment. While significant components of fair value measurement were determined using verifiable objective evidence, the amount of changes in fair value would differ if the Company uses different valuation methodologies. Any changes in fair value of these assets and liabilities would affect profits and/or equity.

3.2 Basis oF ConsoLidaTion

The consolidated financial statements include the financial statements of the Company and its subsidiaries made up to 31 December 2015.

Subsidiaries are entities (including structured entities) controlled by Group. The Group controls an entity when the Group is exposed to, or has right to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

Subsidiaries are consolidated from the date on which control is transferred to the Group up to the effective date on which control ceases, as appropriate.



3.2 BASIS OF CONSOLIDATION (Cont’d)

Intergroup transaction, balances, income and expenses are eliminated on consolidation. Where necessary, adjustment is made to the financial statements of subsidiaries to ensure consistency of accounting policies with those of the Group.

(a) Business Combinations

Acquisitions of businesses are accounted for using the acquisition method. Under the acquisition method, the consideration transferred for acquisition of a subsidiary is the fair value of the assets transferred, liabilities incurred and the equity interests issued by the Group at the acquisition date. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs, other than the costs to issue debt or equity securities, are recognized in profit or loss when incurred.

In a business combination achieved in stages, previously held equity interest in the acquiree are remeasured to fair value at the acquisition date and any corresponding gain or loss is recognized in profit or loss.

Non-controlling interest in the acquiree may be initially measured either at fair value or at the non-controlling interests’ proportionate share of the fair value of the acquiree’s identifiable net assets at the date of acquisition. The choice of measurement basis is made on a transaction-by-transaction basis.

(b) non-Controlling interests

Non-Controlling interests are presented within equity in the consolidated statement of financial position, separately from the equity attributable to owners of the Company. Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interests. Total comprehensive income is attributed to non-controlling interests even if these results in the non-controlling interests have a deficit balance.

At the end of each reporting period, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests’ share of subsequent changes in equity.

(c) Change in ownership interests in subsidiaries Without Change of Control

All changes in the parent’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. Any difference between the amount by which the non-controlling interest is adjusted and the fair value of consideration paid or received is recognized directly in equity of the Group.

(d) Loss of Control

Upon the loss of control of a subsidiary, the Group recognizes any gain or loss on disposal in profit or loss which is calculated as the difference between:-

(i) the aggregate of the fair value of the consideration received and the fair value of any retained interest in the former subsidiary; and

(ii) the previous carrying amount of the assets (including goodwill), and liabilities of the former subsidiary and any non-controlling interests.

Amounts previously recognised in other comprehensive income in relation to the former subsidiary are accounted for in the same manner as would be required if the relevant assets or liabilities were disposed of (i.e. reclassified to profit or loss or transferred directly to retained profits). The fair value of any investments retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under MFRS 139 or, when applicable, the cost on initial recognition of an investment in an associate or a joint venture.





3.3 FunCTionaL and presenTaTion CurrenCY

The individual financial statements of each entity in the Group are presented in the currency of the primary economic environment in which the entity operates, which is the functional currency.

The consolidated financial statements are presented in Ringgit Malaysia (“RM”), which is the company’s functional and presentation currency.

3.4 FinanCiaL insTruMenT

Financial instruments are recognised in the statement of the financial position when the Company has become a party to the contractual provisions of the instruments.

Financial instruments are classified as liabilities or equity in accordance with the substance of the contractual arrangement. Interest, dividends, gains and losses relating to a financial instrument classified as a liability, are reported as an expense or income. Distributions to the holders of the financial instruments classified as equity are charged directly to equity.

Financial instruments are offset when the Group has a legally enforceable right to offset and intends to settle either on a net basis or to realize the asset and settle the liability simultaneously.

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

Financial instruments recognised in the statements of financial position are disclosed in the individual policy statement associated with each item.

(a) Financial assets

On initial recognition, financial assets are classified as either financial assets at fair value through profit or loss, held-to-maturity investments. Loans and receivables, or available-for-sale, as appropriate.

(i) Financial assets at Fair Value through Profit or Loss

Financial assets are classified as financial assets at fair value through profit or loss when the financial asset is either held for trading or is designated to eliminate or significantly reduce a measurement or recognition inconsistency that would otherwise arise. Derivatives are also classified as held for trading unless they are designated as hedges.

Financial assets at fair value through profit or loss are stated at fair value, with any gains or losses arising in measurement recognised in profit or loss. Dividend income from this category of financial assets is recognized in profit or loss when the Company’s right to receive payment is established.

As at the end of the reporting period, there were no financial assets classified under this category.

(ii) Held-to-maturity Investments

Held-to-maturity investments are non-derivative financial assets with fixed or determinable payments and fixed maturities that the management has the positive intention and ability to hold to maturity. Held-to-maturity investments are measured at amortised cost using the effective interest method less any impairment loss, with interest income recognised in profit or loss on an effective yield basis.





3.4 FINANCIAL INSTRUMENT (Cont’d)

(a) Financial Assets (Cont’d)

(iii) Loans and Receivables Financial Assets

Trade receivables and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as loans and receivables financial assets. Loans and receivables financial assets are measured at amortised cost using the effective interest method, less any impairment loss. Interest income is recognised by applying the effective interest rate, except for the short-term receivables when the recognition of interest would be immaterial.

(iv) Available-for-sale Financial Assets

Available-for-sale financial assets are non-derivative financial assets that are designated in this category or are not classified in any of the other categories.

After initial recognition, available-for-sale financial assets are remeasured to their fair values at the end of each reporting period. Gains and losses arising from changes in fair value are recognised in other comprehensive income and accumulated in the fair value reserve, with the exception of impairment losses. On derecognition, the cumulative gain or loss previously accumulated in the fair value reserve is reclassified from equity into profit or loss.

Dividends on available-for-sale equity instruments are recognised in profit or loss when the Company’s right to received payments is established.

Investments in equity instruments whose fair value cannot be reliably measured are measured at cost less accumulated impairment losses, if any.


(b) Financial Liabilities

All financial liabilities are initially at fair value plus directly attributable transaction costs and subsequently measured at amortised cost using the effective interest method other than those categorised as fair value through profit or loss.

Fair value through profit of loss category comprises financial liabilities that are either held for trading or are designated to eliminate or significantly reduce a measurement or recognition inconsistency that would otherwise arise. Derivatives are also classified as held for trading unless they are designated as hedges.

(c) Equity Instruments

Ordinary shares classified as equity are measured at cost and are not remeasured subsequently. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from proceeds.

Dividends on ordinary shares are recognised as liabilities when approved for appropriation.

(d) derecognition

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




3.4 FINANCIAL INSTRUMENT (Cont’d)

(d) Derecognition (Cont’d)

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

3.5 inVesTMenTs in suBsidiaries

Investment in subsidiaries are stated at cost in the statement of financial position of the Company, and are reviewed for impairment at the end of reporting period if events or changes in circumstances indicate that the carrying values may not be recoverable. The cost of the investments includes transaction costs.

On the disposal of the investments in subsidiaries, the difference between the net disposal proceeds and the carrying amount of the investments is recognised in profit or loss.

3.6 properTY, pLanT and eQuipMenT

Property, plant and equipment, other than freehold land, leasehold land and building are stated at cost less accumulated depreciation and impairment losses, if any.

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

Leasehold land and building are stated at revalued amount less accumulated depreciation and impairment losses recognised after the date of the revaluation.

Freehold land, leasehold land and building are revalued periodically, at least once in every five (5) periods or earlier if circumstances indicate that the carrying amount may differ significantly from the market value.

Depreciation is charged to profit or loss on the straight-line method to write off the depreciable amount of the assets over their estimated useful lives. Freehold land is not depreciated. Depreciation of an asset begins when it is ready for its intended use. Depreciation of an asset does not cease when the asset becomes idle or is retired from active use unless the asset is fully depreciated. The principle annual rates used for this purpose are:

Leasehold land Over the lease periods of 21 and 54 years

Shop house, factory buildings and improvement 2% to 10%Plant, machinery and equipment 5% to 25%vessel 10%Motor vehicles 10% to 20%Furniture, fitting and office equipment 10%

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

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when the cost is incurred and it is probable that the future economic benefits associated with the asset will flow to the Company and the cost of the asset can be measured reliably. The carrying amount of parts that are replaced is derecognised. The costs of the day-to-day servicing of property, plant and equipment are recognised in profit and loss as incurred. Cost also comprises the initial estimate of dismantling and removing the asset and restoring the site on which it is located for which the Company is obligated to incur when the asset is acquired, if applicable.



3.6 PROPERTY, PLANT AND EQUIPMENT (Cont’d)

An item of property and equipment is derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising from derecognition of the asset is recognized in profit or loss. The revaluation reserve include in equity is transferred directly to retained profits on retirement or disposal of the asset.

3.7 inTanGiBLe asseTs

Trademarks

Trademarks are initially measured at cost. Following the initial recognition, trademarks with definite life are stated at cost less accumulated amortisation and impairment losses while trademarks with indefinite life are stated at cost of less accumulated amortisation and impairment losses. Trademarks with indefinite useful lives are not amortised but tested for impairment annually or more frequently if the events or changes in circumstances indicate that the carrying value may be impaired either individually or at the cash-generation unit level. The useful life of a trademark with an indefinite life is also reviewed annually to determine whether the useful life assessment continues to be supportable.

3.8 iMpairMenT

(a) impairment of Financial assets

All financial assets (other than those categorised at fair value through profit or loss), are assessed at the end of each reporting period whether there is any objective evidence of impairment as a result of one or more events having an impact on the estimated future cash flows of the asset.

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

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the financial asset at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognized.

(b) impairment of non-Financial assets

The carrying values of assets, other than those to which MFRS 136 – Impairment of Assets does not apply, are reviewed at the end of each reporting period for impairment when there is an indication that the assets might be impaired. Impairment is measured by comparing the carrying values of the assets with their recoverable amounts. The recoverable amount of the assets is the higher of the assets’ fair value less costs to sell and their value-in-use, which is measured by reference to discounted future cash flows.

An impairment loss is recognized in profit or loss immediately unless the asset is carried at its revalued amount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of a previous recognised revaluation surplus for the same asset.

When there is a change in the estimates used to determine the recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as a reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the asset that would have been determined (net of amortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in profit or loss immediately.





3.9 asseT under hire purChase

Assets acquired under hire purchase are capitalized in the financial statements at the lower of the fair value of the leased assets and the present value of the minimum lease payments and, are depreciated in accordance with policy set out in Note 3.6 above. Each hire purchase payment is allocated between the liability and finance charges so as to achieve a constant rate on the finance balance outstanding. Finance charges so as to achieve a constant rate on the finance balance outstanding. Finance charges are recognised in profit or loss over the period of respective hire purchase agreements.

3.10 inVenTories

Inventories are stated at the lower of cost and the net realisable value. Cost is determined on the first-in-first-out basis and comprises direct material, direct labour costs and overheads that have been incurred in bringing the inventories to their present location and condition.

Net realisable value represents the estimated selling price less the estimated cost necessary to make the sale.

3.11 INCOME TAXES

Income tax for the year comprises current and deferred tax.

Current tax is the expected amount of income taxes payable in respect of the taxable profit for the reporting year and is measured using the tax rates that have been enacted or substantively enacted at the end of the reporting period.

Deferred tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax liability is recognised for all taxable temporary differences.

Deferred tax assets are recognized for all deductible temporary differences, unused tax loses and unused tax credits to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences, unused tax loses and unused tax credits can be utilized. The carrying amounts of deferred tax assets are reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient future taxable profits will be available to allow all or part of the deferred tax assets to be utilized.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is realized or the liability is settled, based on the tax rates that have been enacted or substantively enacted at the end of the reporting period.

Deferred tax assets and liabilities are offset when there is a legally enforce right to set off current tax assets against current tax liabilities and when the deferred income taxes relate to the same taxation authority.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognized in correlation to the underlying transactions either in other comprehensive income or directly in equity.

3.12 Cash and Cash eQuiVaLenTs

Cash and cash equivalents comprise cash in hand, bank balances, demand deposits, deposits pledged with financial institutions, bank overdrafts and short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value with original maturities period three months or less.



3.13 proVisions

Provision are recognised when the Group has a present obligation as a result of past events, when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and when a reliable estimate of the amount can be made. Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate. Where the effect of the time value of money is material, the provision is the present value of the estimated expenditure required to settle the obligation. The unwinding of the discount is recognised as interest expense in profit or loss.

3.14 eMpLoYee BeneFiTs

(a) Short-term Benefits

Wages, salaries, paid annual leave and sick leave, bonuses and non-monetary benefits are measured on an undiscounted basis and are recognised in profit or loss in the period in which the associated services are rendered by employees of the Group.

(b) Defined Contribution Plans

The Group’s contributions to defined contribution plans are recognised in profit or loss in the period to which they relate. Once the contributions have been paid, the Group has no further liability in respect of the defined contribution plans.

3.15 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 capitalized 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 amount capitalized. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability so as to achieve a constant rate of interest on the remaining balance of the liability.

Finance charges are charged to profit and loss. Contingent rents, if any, are charged as expenses in the period in which they are 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 the lease term. The aggregate benefit of incentives provided by the lessor is recognised as reduction of rental expense over the lease term on a stright line basis.

(b) as Lessor

Leases where the Group retains substantially all risks and rewards of ownership of the asset are classified as operation lease. Initial direct costs incurred in negotiating an operating lease are added to the carrying amount of the leased asset and recognized over the lease term on the same bases as rental income. The accounting policy for rental income is set out in Note 3.19.





3.16 reLaTed parTies

A party is related to an entity (referred to as the “reporting entity”) if:

(a) A person or a close member of that person’s family is related to are porting entity if that person:

(i) Has control or joint control over the reporting entity;(ii) Has significant influence over the reporting entity; or(iii) Is a member of the key management personnel of the reporting entity or of a parent of the

reporting entity

(b) An entity is related to a reporting entity if any of the following conditions applies:

(i) The entity and the reporting entity are members of the same group (which means that each parent, subsidiary and fellow subsidiary is related to the others).

(ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of a member of a group of which the other entity is a member).

(iii) both entities are joint ventures of the same third party.(iv) One entity is a joint venture of a third entity and the other entity is an associate of the third

party.(v) The entity is a post-employment benefit plan for the benefit of the employees of either the

reporting entity or an entity related to the reporting entity. If the reporting entity is itself such a plan, the sponsoring employers are also related to the reporting entity.

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

the key management personnel of the entity (or of a parent of the entity).

Close members of the family of a person are those family members who may be expected to influence, or be influence by, that person in their dealings with the entity.

3.17 ConTinGenT LiaBiLiTies

A contingent liability is a possible obligation that arise from past events and whose existence will only be confirmed by the occurrence of one of more uncertain future events not wholly within the control of the Company. If can also be a present obligation arising from past events that is not recognized because it is not probable that an outflow of economic resources will be required of that the amount of obligation cannot be measured reliably.

A contingent liability is not recognized but is disclosed in the notes to the financial statements. When a charge in the probability of an outflow occurs so that the outflow is probable, it will then recognised as a provision.

3.18 Fair VaLue MeasureMenTs

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, regardless of whether that price is directly observable or estimated using a valuation technique. The measurement assumes that the transaction takes place either in the principal market or in the absence of a principal market, in the most advantageous market. For non-financial asset, the fair value measurement takes into account a market’s participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.



3.18 FAIR VALUE MEASUREMENTS (Cont’d)

For financial reporting purposes, the fair value measurements are analysed into level 1 to level 3 as follows:

Level 1: Inputs are quoted prices (unadjusted) in active markets for identical assets or, liability that the entity can access at the measurement date;

Level 2: Inputs are inputs, other than quoted prices included within level 1, that are observable for the asset or liability, either directly or indirectly; and

Level 3: Inputs are unobservable inputs for the asset or liability.

The transfer of fair value between levels is determined as of the date of the event or change in circumstances that caused the transfer.

3.19 reVenue and oTher inCoMe

(a) sale of goods

Revenue is measured at fair value of the consideration received or receivable and is recognised upon delivery of goods and customers’ acceptance and where applicable, net or returns and trade discounts.

(b) Management fee

Management fee is recognised on an accrual basis when services are rendered.

(c) interest income

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

(d) rental income

Rental income is recognised on an accrual basis.

3.20 operaTinG seGMenTs

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

3.21 BorroWinG CosTs

borrowing costs, directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of the cost of those assets, until such time as assets are ready for their intended use or sale. Capitalization of borrowing costs is suspended during extended periods in which active development is interrupted.

All other borrowing costs are recognized in profit or loss as expenses in the period in which they incurred.

4. reVenue

Revenue represents the gross invoiced value of goods sold less returns and discounts allowed.




5. LOSS BEFORE TAXATION

Loss before taxation is stated after charging/(crediting) the following items:

The Group The Company1.7.2014 to 31.12.2015

1.7.2013 to 30.6.2014

1.7.2014 to 31.12.2015

1.7.2013 to 30.6.2014

rM rM rM rM

Amount due from subsidiaries written off – – – 3,050,235Audit fee

- current financial year 332,400 128,500 94,400 40,000- overprovision in prior year – (2,500) – (2,500)

Bad debt written off 4,781 3,341,550 – –Depreciation 11,312,442 7,330,369 30,409 20,001Director’s remuneration 1,342,080 823,808 1,342,080 823,808Allowance for impairment loss:

- trade receivables 479,421 5,692,381 – –Impairment loss on property, plant and equipment – 225,195 – –Interest expense:

- hire purchase 49,892 9,631 6,947 5,564- term loans 8,004,245 4,513,214 1,713,230 –- revolving credit 619,338 769,467 – –- others 55,586 501 – –

Loss on disposal of property, plant and equipment - 15,625 – –Property, plant and equipment written off – 105,124 – –Realised loss on foreign exchange 14,508 – –Rental of motor vehicles 304,928 26,241 – –Rental of premises 756,800 942,329 – –Staff cost:

- salaries and other benefits 10,774,170 7,950,008 848,258 831,017Deposit written off – 9,750 – –bad debts recovered (169,966) (16,332) – –Interest income (7,539) (81,272) – (77,567)Gain on disposal of property, plant and equipment (11,639) – – –Rental income (1,242,982) (720,000) – –Reversal of impairment loss on trade receivables – (803,746) – –Waiver of debt (980,761) – – –


6. INCOME TAX CREDIT


1.7.2013 to 30.6.2014

1.7.2014 to 31.12.2015

1.7.2013 to 30.6.2014

rM rM rM rM

Taxation based on the result for the financial year:

Malaysian income tax 21,109 42,932 – –Deferred taxation (Note 22) – 68,240 – –

21,109 111,172 – –

Under/(Over) provision in prior yearsMalaysian income tax 33,013 (233,406) – –Deferred taxation (Note 22) (741,862) – – –

(687,740) (122,234) – –

A reconciliation of income tax expense applicable to the (loss)/profit before taxation at the statutory tax rate to income tax expense at the effective rate of the Group and the Company is as follows:


1.7.2013 to 30.6.2014

1.7.2014 to 31.12.2015

1.7.2013 to 30.6.2014

rM rM rM rM

Loss before taxation (15,596,622) (37,154,684) (3,499,179) (4,987,564)

Tax at the statutory tax rate of 25% (2014:25%) (3,899,156) (9,288,671) (874,795) (1,246,891)

Tax effect of:Non-taxable income (38,642)Non-deductable expense 5,238,189 8,050,707 874,795 1,246,891Deferred tax assets not recognised during the financial year – 1,349,136 – –(Over)/Underprovision of income tax in the prior financial year 33,013 (233,406) – –Overprovision of deferred taxation in prior financial year (741,862) – – –Utilisation of tax losses previously not recognised (1,279,282) – – –Income tax expense for the financial year (687,740) (122,234) – –




6. INCOME TAX CREDIT (Cont’d)

Deferred tax assets have not been recognised in respect of the following items:


1.7.2013 to 30.6.2014

1.7.2014 to 31.12.2015

1.7.2013 to 30.6.2014

rM rM rM rM

Unabsorbed capital allowances 19,431,999 20,452,281 – –Unabsorbed reinvestment allowances 15,060,000 13,597,258 – –

Unutilised tax losses 47,041,730 52,601,319 – –

7. Loss per share

The GroupContinuing operations 1.7.2014 to

31.12.20151.7.2013 to

30.6.2014rM rM

Loss attributable to owners of the Company (RM) (14,908,882) (37,032,450)

Weighted average number of ordinary shares at 31 December/30 June (Note 17) 312,000,000 240,000,000

basic loss per share (Sen) (4.78) (15.43)

The diluted loss per share were not presented as there were no dilutive potential ordinary shares outstanding at the end of the reporting period.

8. inVesTMenT in suBsidiaries

The Company2015 2014

rM rM

Unqouted shares, at cost 51,760,348 51,760,348

Accumulated impairment losses (33,119,711) (33,119,711)

18,640,637 18,640,637


8. INVESTMENT IN SUBSIDIARIES (Cont’d)

The details of the subsidiaries are as follows:

names of subsidiariesCountry of

incorporationEffective Equity

interest principal activities 2015 2014

% %

Kilang bihun bersatu Sdn. bhd. Malaysia 100 100 Manufacturing and marketing of all types of rice and sago sticks (vermicelli).

Kilang bihun bersatu (East Malaysia) Sdn. bhd.

Malaysia 100 100 Manufacturing and marketing of all types of rice and sago sticks (vermicelli).

Rasayang Food Industries Sdn. bhd. Malaysia 100 100 Manufacturing and trading of “beehoon” and “beehoon laksa”.

bersatu Noodles Industries Sdn. bhd. Malaysia 100 100 Manufacturing and trading of noodles and its related products.

bersatu Sago Industries Sdn. bhd. Malaysia 100 100 Temporarily ceased operations in manufacturing and marketing of all types of sago starch and related products.

bersatu Sago Industries (Mukah) Sdn. bhd.

Malaysia 100 100 Temporarily ceased operations in manufacturing and marketing of all types of sago starch and related products.

bersatu biotechnology (Johore) Sdn. bhd.

Malaysia 100 100 Temporarily ceased operations in manufacturing and marketing of all types of sago starch and related products.

EKA Foodstuff Sdn. Bhd. Malaysia 100 100 Marketing of all type of rice and sago sticks (vermicelli).




9.

pro

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6,83

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9. PROPERTY, PLANT AND EQUIPMENT (Cont’d)

The CompanyMotor

VehiclesOffice

Equipment TotalrM rM rM

net book valueAs at 1 July 2014 152,750 6,995 159,745Depreciation for the period (29,250) (1,159) (30,409)As at 31 December 2015 123,500 5,836 129,336

as at 31 december 2015Cost 195,000 7,721 202,721Accumulated depreciation (71,500) (1,885) (73,385)Net book value 123,500 5,836 129,336

As at 30 June 2014Cost 195,000 7,721 202,721Accumulated depreciation (42,250) (726) (42,976)Net book value 152,750 6,995 159,745

(a) Included in the assets of the Group at the end of the reporting period were plant, machinery and equipment with a total net book value of RM125,627 (2014: RM614,165) which were acquired under hire purchase terms.

(b) The freehold land, leasehold land and buildings of the Group have been pledged to licensed banks as securities for banking facilities granted to the Group with a total net carrying amount of RM41,940,751 (2014: RM38,114,463).

(c) Freehold land, leasehold land, factory buildings and improvement have been revalued in the financial period 31 December 2015 based on valuations performed by Mark Saw Khay Liang, FRICS, FRISM a valuer from PPC International (Penang) Sdn Bhd. The firms is independent firm of professional valuers, and the valuations were arrived at using the ‘Comparison method’ and ‘Cost method’ of valuation.

(d) Had the revalued freehold land, leasehold land, factory buildings and improvement of the Group been carried at historical cost, the net carrying amount of the freehold land, leasehold land, factory building and improvement that would have been included in the financial statements of the Group as at 31 December 2015 are as follows:

The Group2015 2014

rM rM

Freehold land 1,655,167 1,655,167Leasehold land 851,084 877,332buildings 2,047,626 2,105,771

4,553,877 4,638,270




10. oTher inVesTMenT

The Group/The Company

2015 2014rM rM

Secondary bonds 2,000,000 2,000,000Less: Impairment loss (1,999,999) (1,999,999)

1 1

The secondary bonds with the maturity date on 26 January 2012 have been charged to the Trustee for the benefit of the Bondholders pursuant to primary collateralised loan obligations transactions entered into by the lending bank.

The impairment loss arose from the non-receipt of funds on maturity of the secondary bonds.

11. inTanGiBLe asseTs

The Group2015 2014

rM rM

Cost:At 1 July 97,611 193,411Disposal during the financial year – (95,800)At 31 December/30 June 97,611 97,611

Intangible assets of the Group related to the trademarks.

12. aMounTs due FroM suBsidiaries CoMpanY


rM rM

Non-trade balance 42,957,815 35,955,238Less: Allowance for impairment losses – –

Amortisation – –42,957,815 35,955,238

Allowance for impairment losses:At 1 July – 25,360,137Written-off during the financial period/year – (25,360,137)

At 31 December/30 June – –

Amortisation:At 1 July – 29,933,886Written-off during the financial period/year – (29,933,886)

At 31 December/30 June – –



12. AMOUNTS DUE FROM SUBSIDIARIES COMPANY (Cont’d)

The non-trade balances represent unsecured interest-free advances and payments made on behalf.

The amount owing from a related company is unsecured, non-interest bearing, and have an average maturity of 10 years.

13. inVenTories

The Group2015 2014

rM rM

At cost:Raw materials 1,322,077 3,546,507Work-in-progress 3,496,996 115,842Finished goods 626,084 2,094,748Consumables 711,584 1,074,865

6,156,740 6,831,962

14. Trade reCeiVaBLes

The Group2015 2014

rM rM

Trade receivables 19,702,005 21,139,917Allowance for impairment losses (6,001,836) (5,692,381)

13,700,169 15,447,536

Allowance for impairment losses:At 1 July 5,692,381 803,746Addition during the financial year 479,421 5,692,381Reversal during the financial year (169,966) (803,746)At 31 December/30 June 6,001,836 5,692,381

(a) The Group’s normal trade credit terms range from 30 to 120 (2014: 30 to 120) days.

(b) The allowance for impairment losses is made mainly on those trade receivables in significant financial difficulties and has defaulted on payments.

15. oTher reCeiVaBLes, deposiTs and prepaYMenTs

The Group The Company2015 2014 2015 2014

rM rM rM rM

Other receivables 3,024,632 726,099 5,907 1,000Deposits and prepayments 1,486,925 7,849,567 151,901 326,265

4,511,556 8,575,666 157,808 327,265



16. FIXED DEPOSITS WITH A LICENSED BANK

The Group’s and the Company’s fixed deposits are pledged to licensed banks for bank guarantee granted to a subsidiary and banking facilities granted to the Company as disclosed in Note 21 to the financial statement.

The interest rate for fixed deposits is 3.00% (2014: 3.00%) per annum.

17. share CapiTaL

The movements in the authorised and paid-up share capital of the Company are as follows:

The Company2015 2014 2015 2014

number of shares rM rM

authorisedOrdinary shares of RM0.15/RM0.50 eachAt 1 July 400,000,000 200,000,000 60,000,000 100,000,000Par value reduction – – – (70,000,000)Increase during the year – 200,000,000 – 30,000,000At 31 December/30 June 400,000,000 400,000,000 60,000,000 60,000,000

issued and Fully paid-upOrdinary shares of RM0.15/RM0.50 eachAt 1 July 240,000,000 120,000,000 36,000,000 60,000,000Par value reduction – – – (42,000,000)Issuance of shares 72,000,000 120,000,000 10,800,000 18,000,000At 31 December/30 June 312,000,000 240,000,000 46,800,000 36,000,000

During the financial year, the Company increased its issued and paid up share capital from RM36,000,000 comprising 240,000,000 ordinary shares of RM0.15 each to RM46,800,000 comprising 312,000,000 ordinary shares of RM0.15 each.

18. share preMiuM

The movement in the share premium of the Group and the Company are as follows:


2015 2014rM rM

At 1 July – –Issuance of shares 3,600,000 3,600,000At 31 December/30 June 3,600,000 3,600,000

The share premium is not distributable by way if dividends and may be utilised in the manner set out in Section 60(3) of the Companies Act 1965 in Malaysia.


19. reserVe


rM rM rM rM

Non-distibutableCapital reserve 4,837,366 4,837,366 4,837,366 4,837,366Revaluation reserve 9,204,366 6,296,957 – –

14,041,732 11,134,323 4,837,366 4,837,366

Capital reserve arises from capital reduction exercise took place during the year.

The revaluation reserve relates to the revaluation of freehold land, leasehold land, factory buildings and improvement.

20. hire purChase paYaBLes


rM rM rM rM

Minimum hire purchase payments- not later than one year 71,668 158,471 33,644 18,948- later than one year 662,349 519,728 68,951 112,069

734,017 678,199 102,595 131,017Less: Future finance charges (121,108) (124,939) (11,112) (18,059)Present value of hire purchase 612,909 553,260 91,483 112,958

CurrentNot later than one year 61,400 54,165 30,000 14,130

Non-CurrentLater than one year 551,509 499,095 61,483 98,828

21. BANK BORRROWINGS


rM rM rM rM

CurrentRevolving credit 2,782,186 9,515,784 – 6,515,828Term loans 3,300,000 2,572,195 3,000,000 2,047,231

6,082,186 12,087,979 3,000,000 8,563,059

Non-CurrentTerm loans 60,579,258 55,671,285 56,430,098 51,781,886




21. BANK BORRROWINGS (Cont’d) The revolving credit and term loans bore a weighted average of 8.35% (2014: 8.35%) per annum at the end of

the reporting period/year and are secured by:

(i) Legal charges over the property, plant and equipment as disclosed in Note 9 to the financial statements;(ii) A debenture by way of fixed and floating charge over all present and future assets belonging to the

Group;(iii) A pledge of fixed deposits as disclosed in Note 16 to the financial statements; and(iv) Personal guaranteed by a director of the Company.

22. DEFERRED TAXATION

The Group2015 2014

rM rM

At 1 July 1,271,683 1,203,443Recognised in profit or loss (Note 8) (741,862) 68,240At 31 December/30 June 529,821 1,271,683

The Group2015 2014

rM rM

Property, plant and equipment – 46,991Revaluation reserve 529,821 1,224,692

529,821 1,271,683

The deferred tax liabilities are attributable to the revaluation reserve.

23. Trade paYaBLes

The normal trade credit term granted to the Company is 30 to 90 (2013: 30 to 90) days.

24. oTher paYaBLes, deposiTs and aCCruaLs


rM rM rM rM

Other payables 1,534,787 3,573,109 233,214 168,111Accruals 1,370,213 1,394,585 236,397 169,964Deposits received 247,900 240,000 – –Amount due to directors 406,042 53,542 406,042 53,542

3,558,942 5,261,236 875,653 391,617


25. purChase oF properTY, pLanT and eQuipMenT


rM rM rM rM

Cost of property, plant and equipment purchased 12,696,741 4,725,345 – 4,797Amount financed through hire purchase (230,499) (365,000) – -Cash disbursed for purchase of property, plant and equipment 12,466,242 4,360,345 – 4,797

26. Cash and Cash eQuiVaLenTs

For the purpose of the statement of cash flows, cash and cash equivalents comprise the following:


rM rM rM rM

Cash and cash equivalent 907,870 1,999,298 261,973 216,150

27. DIRECTORS’ REMUNERATION

(a) The aggregate amounts of emoluments received and receivable by directors of the Group and of the Company during the financial period/year are as follows:


2015 2014rM rM

Executive directors:- fee – 48,000- non-fee emoluments 1,176,596 655,808

Non-Executive directors- fee 101,484 120,000- non-fee emoluments 64,000 –

1,342,080 823,808




27. DIRECTORS’ REMUNERATION (Cont’d)

(b) Details of directors’ emoluments of the Company received/receivable for the financial year in bands of RM100,000 are as follows:


rM rM

Executive directors:below RM100,000 1 2RM100,001 to RM200,000 - -RM200,001 to RM300,000 - -Above RM300,001 2 1

Non-Executive director:below RM100,000 7 2RM100,001 to RM200,000 - -

10 5

28. siGniFiCanT reLaTed parTY disCLosures

(a) Identities of related parties

The Company has related party relationship with:

(i) Its holding company as disclosed in Note 12 to the financial statements;(ii) Its related companies which one its follow subsidiaries; and(iii) The directors who are the key management personnel.

(b) Other than those disclosed elsewhere in the financial statements, the Group and the Company also carried out the following significant transactions with the related parties during the financial year:


rM rM rM rM

Management fees received/ receivable from subsidiaries - - 2,754,000 1,356,000Rental paid/payable to a director company in which a Company’s has substantial financial interests - 320,000 - -Key management personnel compensation:

- short-term employee benefits - 403,889 - -


29 operaTinG seGMenTs

The Group operates predominantly in manufacturing and marketing of all type of rice and sago sticks (vermicelli), sago starch and related products in Malaysia. Accordingly, the information by business and geographical segment is not presented.

MAJOR CUSTOMERS

The group client base consists mainly of small wholesalers and retailers and hence disclosure for major customers is not representable and irrelevant.

30. operaTinG Lease CoMMiTMenTs

30.1 Leases as Leasee

The Group leases a number of factory facilities and warehouse under operating leases. The lease period range from 1 to 10 years with an option to renew after that date.

The future minimum lease payments under the non-cancellable operating leases are as follows:

The Group2015 2014

rM rM

Not more than one year 1,543,080 1,543,080Later than one year and not later than five years 3,491,250 3,594,330Later than five years - 1,440,000

30.2 Lease as Lessor

The Group leases out its investment properties. The future minimum lease payments under the non-cancellable operating leases are as follows:

The Group2015 2014

rM rM

Not more than one year 350,000 80,000Later than one year 2,170,000 -

31. ConTinGenT LiaBiLiTies


rM rM rM rM

unsecured

Corporate guarantees given to licensed banks for credit facilities granted to subsidiaries 8,625,000 8,625,000 8,625,000 8,625,000




32. FinanCiaL insTruMenTs

The Group’s activities are exposed to a variety of market risk (including foreign currency risk, interest rate risk and equity price risk), credit risk and liquidity risk. The Group’s overall financial risk management policy focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial performance.

32.1 FINANCIAL RISK MANAGEMENT POLICIES

The Group’s policies in respect of the major areas of treasury activity are as follows:

(a) Market risk

(i) Foreign Currency Risk

The Group does not have any transactions or balances denominated in foreign currencies and hence not exposed to foreign currency risk.

(ii) Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group’s exposures to interest rate risk arise mainly from interest-bearing financial liabilities. The Group’s policy is to obtain the most favourable interest rates available. Any surplus funds of the Company will be placed with licensed financial institutions to generate interest income.

Information relating to the Group’s exposure to the interest rate risk of the financial liabilities is disclosed in Note 32.1 (c) to the financial statements.

Interest rate risk sensitivity analysis

The following table details the sensitivity analysis to a reasonably possible change in the interest rates at the end of the reporting period, with all other variables held constant:


increase/ (decrease)




rM rM rM rM

Effect on Profit after TaxationIncrease of 10 bp 50,546 34,156 44,694 30,229Decrease of 10 bp (50,546) (34,156) (44,694) (30,229)

(iii) Equity Price Risk

The Company does not have any quoted investments and hence is not exposed to equity price risk.


32. FINANCIAL INSTRUMENTS (Cont’d)

32.1 FINANCIAL RISK MANAGEMENT POLICIES (Cont’d)

(b) Credit risk

The Group’s exposure to credit risk, or the risk of counterparties defaulting, arises mainly from trade and other receivables. The Group manages its exposure to credit risk by the application of credit approvals, credit limits and monitoring procedures on an ongoing basis. For other financial assets (including cash and bank balances), the Group minimises credit risk by dealing exclusively with high credit rating counterparties.

The Group establishes an allowance for impairment that represents its estimate of incurred losses in respect of the trade and other receivables as appropriate. The main components of this allowance are a specific loss component that relates to individually significant exposures, and a collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet identified. Impairment is estimated by management based on prior experience and the current economic environment.

(i) Credit risk concentration profile

The Group does not have any major concentration of credit risk related to any individual customer or counterparty.

(ii) Exposure to credit risk

As the Group does not have any major concentration of credit risk related to any individual customer or counterparty.

(iii) Ageing analysis

The ageing analysis of the Group’s trade receivables (including amount owing by related parties) at the end of the reporting period as follows:

Grossamount

individual impairment

Collective impairment

Carrying Value

rM rM rM rM

The Group

2015

Not past due 3,755,594 - - 3,755,594

Past due:1 to 30 days past due date 3,344,285 - - 3,344,28531 to 60 days past due - - -61 to 90 days past due - - -more than 91 days past due 12,602,126 (6,001,836) - 6,600,290

19,702,005 (6,001,836) - 13,700,169






(b) Credit Risk (Cont’d)

(iii) Ageing analysis (Cont’d)

Grossamount

individual impairment

Collective impairment

Carrying Value

rM rM rM rM

The Group

2014

Not past due 9,635,830 - - 9,635,830

Past due:1 to 30 days past due date 2,520,775 - - 2,520,77531 to 60 days past due 660,521 - - 660,52161 to 90 days past due 2,599,041 - - 2,599,041more than 91 days past due 5,723,750 (5,692,381) - 31,369

21,139,917 (5,692,381) - 15,447,536

At the end of reporting period, trade receivables that are individually impaired were those in significant financial difficulties and have defaulted on payments. These receivable are not secured by any collateral or credit enhancement.

The collective impairment allowance is determined based on estimated irrecoverable amounts from the sale of goods, determined by reference to past default experience.

Trade receivables that are past due but not impaired

The Group believes that no impairment allowance is necessary in respect of these trade receivable. They are substantially companies with good collection track record and no recent history of default.

Trade receivables that are neither past due nor impaired

A significant portion of trade receivables that are neither past due nor impaired are regular customers that have been transacting with the Group. The Group uses ageing analysis to monitor the credit quality of the trade receivable. Any receivables having significant balance past due or more than 91 days, which are deemed to have higher credit risk, are monitored individually.

(c) Liquidity Risk

Liquidity risk arises mainly from general funding and business activities. The Company practices prudent risk management by maintaining sufficient cash balances and the availability of funding through certain committed credit facilities.

The following table sets out the maturity profile of the financial liabilities at the end of the reporting period based on contractual undiscounted cash flows (including interest payments computed using contractual rates or, if floating, based on the rates at the end of the reporting period):




(c) Liquidity Risk (Cont’d)

Weightedaverage Effective

rateCarrying amount

Contractual undiscounted

Cash FlowsWithin1 Year

over1 Year

The Group % rM rM rM rM

2015

Hire purchase payables 3.86 612,909 734,017 71,668 662,349Revolving credit 8.35 2,782,186 2,782,186 2,782,186 -Term loans 8.35 63,879,258 63,879,258 3,300,000 60,579,258Trade payables - 10,824,094 10,824,094 10,824,094 -Other payables and accruals - 3,558,942 3,558,942 3,558,942 -

- 81,657,389 81,778,497 20,536,890 61,241,607

2014

Hire purchasepayables 2.58 553,260 678,199 158,471 519,728Revolving credit 8.35 9,515,784 9,515,784 9,515,784Term loans 8.35 58,243,480 58,243,480 2,572,195 55,671,285Trade payables - 9,167,428 9,167,428 9,167,428 -Other payables and accruals - 5,261,236 5,261,236 5,261,236 -

82,741,188 82,866,127 26,675,114 56,191,013


rateCarrying amount



over1 Year

The Company % rM rM rM rM

2015

Hire purchase payables 2.42 91,483 102,595 33,644 68,951Term loans 8.35 59,430,098 59,430,098 3,000,000 56,430,098Other payables and accruals - 875,653 875,653 875,653 -

- 60,397,234 60,408,346 3,909,297 56,499,049






(c) Liquidity Risk (Cont’d)


rateCarrying amount



over1 Year

The Company % rM rM rM rM

2014

Hire purchasepayables 2.42 112,958 131,017 18,948 112,069Revolving credit 8.35 6,515,828 6,515,828 6,515,828 -Term loans 8.35 53,829,117 53,829,117 2,047,231 51,781,886Other payables and accruals - 391,617 391,617 391,617 -

60,849,520 60,867,579 8,973,624 51,893,955

32.2 CAPITAL RISK MANAGEMENT

The Group manages its capital by maintaining an optimal capital structure so as to support their businesses and maximise shareholder(s) value. To achieve this objective, the Company may make adjustments to the capital structure in view of changes in the economic conditions, such as adjusting the amount of dividend payment, returning of capital to shareholders or issuing new shares.

The Group manages its capital based on debt-to-equity ratio that complies with debt covenants and regulatory, if any. The debt-to-equity ratio is calculated as total borrowings from financial institutions divided by total equity.

There was no change in the Group’s approach to capital management during the financial year.

The debt-to-equity ratio of the Group and of the Company at the end of the reporting period was as follow:


rM rM rM rM

Hire purchase payables 612,909 553,260 91,483 112,958bank borrowings 66,661,444 67,759,264 59,430,098 60,344,945

67,274,353 68,312,524 59,521,581 60,457,903

Less: Fixed depositswith licensed banks (1,100,000) (756,313) - -Less: Cash and bank balances (907,870) (1,999,298) (261,973) (216,150)Net debt 65,266,483 65,556,913 59,259,608 60,241,753

Total equity 12,500,196 13,701,669 1,750,337 (5,550,484)

Debt-to-equity ratio 5.22 4.78 33.86 (10.85)



32.3 CLassiFiCaTion oF FinanCiaL insTruMenTs


rM rM rM rM

Financial assets

Available-for-sale financial assetsOther investment 1 1 1 1

Loans and receivables financial assetsAmount owing by subsidiaries 42,957,815 35,955,238Trade receivables 13,700,169 15,447,536Other receivables and deposits 4,511,556 2,027,946 157,808 327,265Fixed deposits with licensed banks 1,100,000 756,313 - -Cash and bank balances 907,870 1,999,298 261,973 216,150

20,219,595 20,231,093 43,377,596 36,498,653

Financial Liabilities

Other financial liabilitiesTrade payables 10,824,094 9,167,428Other payables and accruals 3,558,942 5,261,236 875,653 391,617Hire purchase payables 612,909 553,260 91,483 112,958bank borrowings 66,661,444 67,759,264 59,430,098 60,344,945

81,657,389 82,741,188 60,397,234 60,849,520

32.4 Fair VaLue MeasureMenTs

At the end of the reporting period, there were no financial instruments carried at fair values.

The fair values of the financial assets and financial liabilities approximated their carrying amounts due to the relatively short-term maturity of the financial instruments (maturing within the next 12 months and/or undefined repayment term). The fair values are included in level 2 of the fair value hierarchy.

The fair value of the non-current portion of receivables and payables equal the carrying amounts as the impact of discounting is not material.

33. suBseQuenT eVenT

Subsequent to the financial period, the Group through its subsidiary company has entered into memorandum of understanding (“MOU”) for the transfer of technology for the production of liquid fructose with Anhui Hui Jia biological Science and Technology Co., Ltd., a company incorporated and domiciled in China.

34. approVaL oF FinanCiaL sTaTeMenTs

The financial statements have been approved for issue in accordance with a resolution of the Board of Directors on the date of these financial statements.



suppLeMenTarY inForMaTion– Disclosure of Realised and Unrealised Profits/Losses

The breakdown of the retained profits of the Group and the Company at the end of the reporting period into realized and unrealised profits/(losses) are presented in accordance with the directive issued by Bursa Malaysia Securities berhad and prepared in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants, as follows:


rM rM rM rM

Total accumulated losses of the Company and its subsidiaries:

- realised (16,767,853) (47,497,641) (53,487,029) (49,987,850)- unrealised (529,821) (1,271,683) - -

(17,297,674) (48,769,324) (53,487,029) (49,987,850)

Less: Consolidation adjustments 2,388,792 11,736,670 - -At 31.12.2015/30.6.2014 (14,908,882) (37,032,654) (53,487,029) (49,987,850)


anaLYsis oF sharehoLdinGsAs at 31 March 2016

Authorised Share Capital : RM120,000,000.00 Issued and fully paid-up Share Capital : RM46,800,000.00 Class of Shares : Ordinary shares of RM0.15 eachvoting Rights : On a show of hands, 1 vote

On a poll, 1 vote for 1 ordinary share

anaLYsis BY siZe oF sharehoLdinGs

size of shareholdings

no. of shareholders %

no. of shares%

Less then 100 21 0.773 942 0.000100 to 1,000 118 4.346 74,229 0.0231,001 to 10,000 861 31.712 5,403,950 1.73210,001 to 100,000 1,360 50.092 57,361,246 18.385100,001 to less than 5% of issued shares 354 13.038 215,859,633 69.1855% and above of issued shares 1 0.036 33,300,000 10.673TOTAL : 2,715 100.00 312,000,000 100.00

suBsTanTiaL sharehoLders

substantial shareholders

no. of ordinary shares of rM0.15 each held

directinterest %

indirectinterest %

Dato’ Sri Chin Seak Huat (JP) 33,300,000N1 10.67 - -

Notes :(N1) Held through M&A Nominees (Tempatan) Sdn Bhd, Genting Utama Sdn Bhd

DIRECTORS’ SHAREHOLDINGS

directors

no. of ordinary shares of rM0.15 each held

directinterest %

indirectinterest %

Dato’ Sohaimi Bin Shahadan - - - -Dato’ Sri Chin Seak Huat (JP) 33,300,000N1 10.67 - -Khor Wooi Lip - - 120,000N2 0.04yee yit yang - - - -Raja Nazrin bin Raja Ghazilla - - - -Low beng Seng - - - -Ahmad Zaffry Bin Sulaiman - - - -

Notes :(N1) Held through M&A Nominees (Tempatan) Sdn Bhd, Genting Utama Sdn Bhd(N2) Deemed interested by virtue of spouse direct interest in the Company.


anaLYsis oF sharehoLdinGs (Cont’d)As At 31 March 2016

ThirTY (30) LarGesT sharehoLders as aT 31 MarCh 2016

According to the Record of Depositors, the 30 largest shareholders of the Company as at 31 March 2016 are as follow :-

no. namenumber of

shares % 1 M&A NOMINEE (TEMPATAN) SDN BHD

GENTING UTAMA SDN bHD FOR CHIN SEAK HUAT33,300,000 10.673

2 Db (MALAySIA) NOMINEE (ASING) SDN bHD EXEMPT AN FOR NOMURA PB NOMINEES LTD

10,454,100 3.350

3 JF APEX NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR NG JOO BAY (MARGIN)

10,086,100 3.232

4 KENANGA NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR MAK SIEW WEI

7,000,000 2.243

5 NAvANEETHAKRISHNER A/L KATHIRGAMATAMby 5,900,000 1.8916 SELLACHY A/P KATHIRGAMATAMBY 5,628,300 1.8037 HARUMI TAKIZAWA 5,471,700 1.7538 TAN SEAM KHENG 5,000,000 1.6029 TAN CHENG IM 4,489,700 1.43910 CARTAbAN NOMINEES (ASING) SDN bHD

EXEMPT AN FOR KGI ASIA LTD3,616,000 1.158

11 MAYBANK NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR CHONG WING CHEONG

3,585,200 1.149

12 SJ SEC NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR TAN LI SIN(SJ8)

3,200,000 1.025

13 UOb KAy HIAN NOMINEES (ASING) SDN bHDEXEMPT AN FOR UOB KAY HIAN PTE LTD (A/C CLIENTS)

3,152,000 1.010

14 MALACCA EQUITY NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR QUEK YONG WAH

2,800,000 0.897

15 LEE LEONG HOCK 2,400,000 0.76916 TANG VEE LUEN @ PHILLIP 2,200,000 0.70517 YAP SOO KEONG 2,000,000 0.64118 HERbERT TUCAKOvIC 1,800,000 0.57619 LOH WAI CHUAN 1,700,000 0.54420 CHUA KENG KIONG 1,500,000 0.48021 CIMSEC NOMINEES (TEMPATAN) SDN BHD

PLEDGED SECURITIES ACCOUNT FOR KHOR LEONG KEE (PENANG-CL) 1,500,000 0.48022 KHOR EOW SAM 1,500,000 0.48023 KHOR LEONG KEE 1,500,000 0.48024 LIM CHOON CHERNG 1,499,000 0.48025 NG CHING yEE 1,490,000 0.47726 KHOR WOOI TEIK 1,455,000 0.46627 CHOONG CHIN CHIANG 1,430,700 0.45828 LOW HOCK SENG 1,426,400 0.45729 PANG KIA FATT 1,410,000 0.45130 DATO’ KHOR WOOI CHEN 1,388,000 0.444

129,882,200 41.628


anaLYsis oF WarranT hoLdinGsAs at 31 March 2016

Total Number of Warrant Issued : 120,000,000Total Number of Warrant Outstanding : 120,000,000Exercise period : The exercise period is at any time with a period of 5 years

from the date issued up to expiry date of 22 January 2019.Exercise price : RM0.20 and subject to further adjustments (where applicable)

in accordance with the conditions provided in the Deed Poll.Warrant Entitlement : Each warrant entitles the registered holder during the Exercise

period to subscribe for one ordinary share of RM0.15 each at Exercise Price.

anaLYsis BY siZe oF WarranT hoLdinGs

size of holdingsno. of

holders %no. of

Warrant %Less then 100 2 0.243 50 0.000100 to 1,000 26 3.163 15,050 0.0121,001 to 10,000 159 19.343 982,950 0.81910,001 to 100,000 421 51.216 24,609,450 20.507100,001 to less than 5% of issued shares 212 25.790 81,892,500 68.2435% and above of issued shares 2 0.243 12,500,000 10.416ToTaL : 822 100.00 120,000,000 100.00

DIRECTORS’ WARRANT HOLDINGS

directors

no. of Warrant

directinterest %

indirectinterest %

Dato’ Sohaimi Bin Shahadan - - - -Dato’ Sri Chin Seak Huat (JP) - - - -Khor Wooi Lip - - - -yee yit yang - - - -Raja Nazrin bin Raja Ghazilla - - - -Low beng Seng - - - -Ahmad Zaffry Bin Sulaiman - - - -


anaLYsis oF WarranT hoLdinGsAs at 31 March 2016

Thirty (30) Largest Warrant holders as at 31 March 2016

According to the Record of Depositors, the 30 largest warrant holders of the Company as at 31 March 2016 are as follow :-

no. namenumber of

Warrant %1 GOH LAI WONG 6,500,000 5.4162 LOO CHOR MEI 6,000,000 5.0003 TEO AH SENG 3,467,500 2.8894 TEE KENG JIN 2,236,000 1.8635 LEONG KHOON HUAT 2,000,000 1.6666 CIMSEC NOMINEES (TEMPATAN) SDN BHD

PLEDGED SECURITIES ACCOUNT FOR KHOR KIM HOCK (B B KLANG-CL)1,725,100 1.437

7 MAYBANK SECURITIES NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR MOHAMAD RAFIE BIN BAHARUDIN (MARGIN)

1,640,000 1.366

8 WONG KOOK CHEE 1,500,000 1.2509 RHB CAPITAL NOMINEES (TEMPATAN) SDN BHD

MOHD FALIQ bIN ZAINAL AZMI1,344,000 1.120

10 LyE MING ZH 1,250,000 1.04111 LEE LEONG HOCK 1,050,000 0.87512 TAN PEY ERN 1,009,900 0.84113 MUHAMAD SHUKRI bIN JAAFAR 1,000,100 0.83314 CHAN TAI MENG 1,000,000 0.83315 LAILA bINTI ISMAIL 1,000,000 0.83316 LEE CHEE LEONG 1,000,000 0.83317 LEE ENG HOCK 1,000,000 0.83318 TAN SHIK LING 1,000,000 0.83319 LIU DAXIN 883,000 0.73520 TAN CHIEW SWEE 881,000 0.73421 ONG SENG KEE 835,600 0.69622 WONG CHEE KHEONG 800,000 0.66623 CHAN HUN LIN 790,000 0.65824 LING SING TIONG 750,000 0.62525 yAU yIK LIAN 741,200 0.61726 KHOR SOON KEAT 740,000 0.61627 TAN LyE HWEE 700,000 0.58328 MOHD RADZIAN bIN AbDUL RAHMAN 659,200 0.54929 KHAy MOOI KOON 600,000 0.50030 KOEK HAI CHENG 600,000 0.500

44,702,600 37.252


LisT oF properTies

Location/addressexisting

use

Land/Built-up

area (m2)

approximate age of

Building /Land (year)

Tenure(expiry date)

net Carrying

amount @ 31.12.2015

(RM’000)

date of Valuation / Acquisition

Lot 208, Kawasan Perindustrian Kuala Ketil , Mukim Tawar, District of baling, Kedah Darulaman

Factory & office

premises

25,264/ 10,045

13 Leasehold60 years

with a possibility to

extend for a further 39

years

23,674 19.08.2015 (valuation)

Lot 1178, block 19, Seduan Land District, Sarawak

Factory & office

premises

4,073/ 1,072

19 Leasehold60 years

(16.9.2051)

4,863 30.06.2015 (valuation)

Lot 3162, Retus Land District, Ulu Sungai Danan, batang Igan, Sibu, Sarawak

Factory & office

premises

1,153/ 2,205

9 Freehold 73 30.06.2015 (valuation)

Lot 3161,3164,3319, Retus Land District, Ulu Sungai Danan, batang Igan, Sibu, Sarawak

Agriculture Land

& building

34,945

3,845

Lot 3319 & 3161 – 45

Lot 3164 – 46

LeaseholdLot 3319 &

316199 years

(31.12.2068)

Lot 3164 99 years

(31.12.2067)

2,418 30.06.2015 (valuation)

30.06.2015 (valuation)

Lot 259, block 134, Mukah Land Distict, Sawarak

Factory Land

& building

17,446 8 Leasehold99 years

(31.12.2035)

3,633 30.06.2015 (valuation)

Geran 1713, Lot 1145, Mukim Semeling, Daerah Kuala Muda, KedahGeran 1714, Lot 1146, Mukim Semeling, Daerah Kuala Muda, Kedah

Land & Factory

35,446/ 4,404

24,159

7 Freehold 5,180 30.06.2015 (valuation)

Lot 3875, Mukim Simpang Kanan, Tempat Sungei Simpang Kanan, Daerah Batu Pahat, Johor

Land & Factory

4,502/ 2,378

7 Freehold 1,890 30.06.2015 (valuation)

Lot 59 Parcel 1 Block 136 Mukah Land District

Land & Factory

8,984 / 3,083

7 Leasehold99 years

(15.11.2035)

62 30.06.2015 (valuation)

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PROXY FORM

EKA NOODLES BERHAD (Company no. 583565-u)(Incorporated in Malaysia)

*I/We ........................................................................ (*I/C No. / Passport No. / Company No. ...............................)of............................................................................................................................ being a *member/members of the abovenamed Company, hereby appoint .........................................................................(*I/C No. / Passport No. .........................................................) of ................................................................................................................or failing whom, the Chairman of the meeting as *my/our proxy to vote for *me/us on *my/our behalf at the Thirteenth Annual General Meeting of the Company to be held at Lot 208, Phase II, Kuala Ketil Industrial Estate, 09300 Kuala Ketil, Kedah Darul Aman on Thursday, 26 May 2016 at 11.00 a.m. and at any adjournment thereof.

NO. RESOLUTIONS FOR AGAINST1 To re-elect Mr. Khor Wooi Lip as a director2 To re-elect Dato’ Sohaimi Bin Shahadan as a director3 To re-elect Encik Ahmad Zaffry Bin Sulaiman as a director4 To approve the payment of Directors’ fees5 To re-appoint Messrs. Afrizan Tarmili Khairul Azhar as auditors of the

Company6 To authorise the Directors to issue shares pursuant to Section 132D of

Companies Act, 1965

Please indicate with an “x” in the appropriate spaces provided above on how you wish your vote to be cast. If no specific direction as to voting is given, the proxy may vote as he thinks fit.

Signed this ................ day of ..........................., 2016.

For appointment of two (2) proxies, percentage of shareholdings to be represented by the proxies:

No. of shares held No. of Shares %Proxy 1

Proxy 2

.................................................................................. 100Signature(s)/Common Seal of member(s)

Notes :-1. A proxy may but need not be a member of the Company.2. For a proxy to be valid, this form, duly completed must be deposited at the Registered Office of the Company,

51-21-A Menara BHL Bank, Jalan Sultan Ahmad Shah, 10050 Penang not less than 48 hours before the time appointed for holding the meeting.

3. A member shall be entitled to appoint one (1) or more proxies to attend and vote instead of him at the same meeting and where a member appoints more than one (1) proxy to vote at the same meeting, shall appointment shall be invalid unless he specify the proportion of his shareholding to be presented by each proxy provided that in case of a vote on any question by show of hands only one (1) of the proxies so appointed shall be entitled to vote.

4. 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 it holds.

5. In the case of a corporate member, this form must be executed under the corporation’s common seal or under the hand of an officer or attorney duly authorised.

6. In respect of deposited securities, only a depositor whose name appears on the Record of Depositors as at 18 May 2016 shall be eligible to attend the meeting or appoint proxies to attend and/or vote on his/her behalf.

*strike out whichever is not desired.

Please fold across the line and close

stamp

Please fold across the line and close

The Company SecretariesEKA NOODLES BERHAD

(583565-U)

51-21-A, Menara bHL bankJalan Sultan Ahmad Shah

10050 Penang

2015 1 2015 1 tradi tion meets triumph the cover celebrates one of the best sellers in eka noodles...

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