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ContentsCorporate Information / 1

Chairman’s Statement / 2

Review of Operations / 4

Profile of Directors / 8

Group Senior Management / 10

Five-Year Group Financial Highlights / 11

Statement on Corporate Governance / 12

Statement on Corporate Social Responsibility / 23

Audit Committee Report / 25

Statement on Risk Management & Internal Control / 27

Additional Information / 31

Financial Statements / 33

Shareholders' Information / 136

Statement on Directors’ Interests / 138

List of Properties Held / 139

Notice of Annual General Meeting / 140

Form of Proxy

Johan began its activities in 1920 as Johan Tin Dredging Ltd. It operated a mining lease off the Sungei Johan in the Kinta District of Perak, Malaysia with a paid-up capital of RM136,000 which remained unchanged for 61 years until 1981. In 1979, the Company was renamed Johan Holdings Berhad.

Since 1979, Johan diversified away from its tin mining business and through acquisitions and organic growth, the Johan Group today is a Malaysian grown group with diversified operations.

Johan is listed on the Main Market of Bursa Malaysia Securities Berhad.

Johan Group’s current principal activities are as franchise operator for Diners Club charge and credit cards, travel and tours, manufacture of ceramics wall and floor tiles, property development, resorts and hotels.

Corporate Profile

1Annual Report 2016

BOARD OF DIRECTORS

Tan Sri Dato’ Tan Kay HockChairman & Chief Executive

Puan Sri Datin Tan Swee Bee Group Managing Director

Tan Sri Dato’ Seri Dr Ting Chew Peh Non-Independent Non-Executive Director

Dato’ Ahmad Khairummuzammil Bin Mohd Yusoff Independent Non-Executive Director

Ooi Teng ChewIndependent Non-Executive Director

AUDIT COMMITTEE

Dato’ Ahmad Khairummuzammil Bin Mohd Yusoff (Chairman)Tan Sri Dato’ Seri Dr Ting Chew Peh Ooi Teng Chew

RISK MANAGEMENT COMMITTEE

Tan Sri Dato’ Tan Kay Hock (Chairman)Puan Sri Datin Tan Swee Bee Ng Yew Soon

REMUNERATION COMMITTEE

Tan Sri Dato’ Seri Dr Ting Chew Peh (Chairman)Dato’ Ahmad Khairummuzammil Bin Mohd YusoffPuan Sri Datin Tan Swee Bee

NOMINATING COMMITTEE

Dato’ Ahmad Khairummuzammil Bin Mohd Yusoff (Chairman)Tan Sri Dato’ Seri Dr Ting Chew Peh Ooi Teng Chew

COMPANY SECRETARY

Teh Yong Fah (MACS00400)

AUDITORS

DeloitteChartered Accountants

SHARE REGISTRAR

Johan Management Services Sdn. Bhd. 11th Floor Wisma E&CNo. 2 Lorong Dungun KiriDamansara Heights 50490 Kuala LumpurTel : 603-2092 1858Fax : 603-2092 2812E-mail : [email protected]

REGISTERED OFFICE

11th Floor Wisma E&CNo. 2 Lorong Dungun KiriDamansara Heights 50490 Kuala LumpurTel : 603-2092 1858Fax : 603-2092 2812

BUSINESS OFFICE

11th Floor Wisma E&CNo. 2 Lorong Dungun KiriDamansara Heights 50490 Kuala LumpurTel : 603-2092 1858Fax : 603-2092 2812E-mail : [email protected] : www.johanholdings.com

GROUP PRINCIPAL BANKERS (in alphabetical order)

ANZ Banking Corporation CIMB Bank BerhadDBS Bank LtdMalayan Banking BerhadUnited Overseas Bank (Malaysia) Bhd

STOCK EXCHANGE LISTING

Main Market, Bursa Malaysia Securities Berhad Stock Name : JOHANStock Code : 3441Sector : Finance

CORPORATE WEBSITE

www.johanholdings.com

Corporate Information

Chairman’s Statement

2 Johan Holdings Berhad (314-K)

ECONOMIC AND BUSINESS ENvIROMENT REvIEw

In 2015, global economic activity remained subdued as growth slowed to 3.1% from 3.4% in 2014, the fifth consecutive year of decline. Three key transitions continued to influence the global outlook; (i) the gradual slowdown and rebalancing of economic activity in China away from investment and manufacturing toward consumption and services, (ii) lower prices for energy and other commodities, and (iii) a gradual tightening in monetary policy in the United States in the context of a resilient U.S. recovery.

The year 2015 was an extremely challenging year for Malaysia which saw its GDP growth slowed from 6.0% in 2014 to 5.0%, driven by private consumption and investment. The economy weakened as a result of the plunge in global crude oil prices and the depreciation of the Ringgit. Consumers’ spending patterns remained cautious as they began to adjust to the implementation of GST at 6% on 1 April 2015.

In Singapore, 2015 growth of 2.1% was the most sluggish expansion recorded since 2009, when the economy contracted 0.6%. GDP growth for 2014 was at 2.9%. Manufacturing has dragged Singapore’s economy, contracting 6% on-year in the 4th quarter, with services sector expanded by 3.2% compared to the same period in 2014, and construction grew by 2.2%. Services accounted for about two-thirds of the Singapore economy but performance of this sector going forward will continue to be affected by the existing domestic manpower crunch and drag from the manufacturing sector.

Dear Shareholders,

On behalf of your Board of Directors, I am pleased to present the Annual Report of Johan Holdings Berhad for the financial year ended 31 January 2016

3Annual Report 2016

Chairman’s Statementcont’d

REvIEw OF FINANCIAL RESULTS

Your Group recorded revenue of RM221.862 million for financial year ended 31 January 2016 (FYE2016), up 8.5% (FYE2015 : RM204.491 million). The higher revenue was mainly contributed by the Diners Club Group, Prestige Ceramics Sdn. Bhd. and the property development division under Lumut Park Resort Sdn Bhd.

Overall, for FYE2016, your Group recorded a loss of RM13.277 million compared to a loss of RM16.623 million for FYE2015. Loss after tax and minority interest was RM13.135 million. (FYE2015 : loss after tax and minority interest of RM16.387 million)

DIvIDEND

Your Board does not propose to declare any dividend for the financial year under review.

BUSINESS OUTLOOK AND PROSPECTS

Growth in advanced economies is projected to rise by 0.2 percentage point in 2016 to 2.1 percent. Overall activity remains resilient in the United States, supported by still-easy financial conditions and strengthening housing and labour markets, but with dollar strength weighing on manufacturing activity and lower oil prices curtailing investment in mining structures and equipment. In the Euro area, stronger private consumption supported by lower oil prices and easy financial conditions is outweighing a weakening in net exports.

From the quarterly survey released by MAS in March 2016, growth forecast for Singapore’s economy in 2016 is expected to drop to 1.9% from 2.2% in the previous survey. Growth for Malaysia’s economy in 2016 is forecast to ease to 4.7% supported by domestic demand. To overcome the challenging operating environment, the government had recalibrated the National Budget, focussing on strengthening domestic resilience to benefit from the recovery of the global economy.

During the financial year under review, your Group disposed of its entire investment in Jacks International Limited (“JIL”). The disposal of JIL saw your Group exiting from the retail business in health foods and supplements business, a non-core business with marginal returns and which had started to make losses.

In addition, the continuing losses over the past four financial years incurred by Diners Club (Malaysia) Sdn. Bhd. (“DCM”) had adversely impacted your Group’s performance. To stem the flow of further losses from DCM, your Group in November 2015 rationalised the business of DCM by ceasing all cards issuing business and terminated the usage of all Diners Club cards issued to individual and corporate cardholders with effect from 30 November 2015 and 31 March 2016 respectively. However DCM continues for the time being as a processor to service Diners Club cards issued by foreign franchisees to cardholders visiting Malaysia. The downsizing of DCM which resulted in substantial reduction of its operating expenses had an immediate positive impact as DCM registered a turnaround to register commendable profit for the 4th quarter.

Both these measures have yield positive results and will auger well for the longer term of your Group. Your Board is cautiously optimistic of your Group’s performance in the current financial year.

ACKNOwLEDGEMENT

On behalf of your Board of Directors, I wish to thank the management and staff at all levels for their commitment, dedication and collective contribution to the Group’s performance. I wish also to thank our valued customers, suppliers, business partners and shareholders for their continued support.

TAN SRI DATO’ TAN KAY HOCKChairmanDate: 11 May 2016


CARD SERvICES & HOSPITALITY DIvISION

This Division encompasses the Diners charge & credit cards business and the air ticketing & travel management businesses in both Malaysia & Singapore, the hotel and yacht club operations in Lumut, Malaysia.

Diners Club (Malaysia) Sdn. Bhd. (“DCM”)

On 3 November 2015, we announced the rationalisation of the Diners Club card business of DCM in Malaysia. Under this rationalisation exercise, DCM ceased all cards issuing business and terminated the usage of Diners Club cards issued to individual and corporate cardholders with effect from 30 November 2015 and 31 March 2016 respectively. However it continues for the time being as a processor to service Diners Club cards issued by foreign franchisees to cardholders visiting Malaysia. DCM continues to acquire transactions and make payment to selected Merchant establishments which include hotels & resorts, airlines, travel and entertainment related services and some global retailers predominantly in tourist destinations.

THE JOHAN GROUP’S BUSINESSES

The current principal businesses of the operating companies in the Johan Group are as follows:

Diners Club (Malaysia) Sdn. Bhd. and Diners Club (Singapore) Pte. Ltd.: -Franchise operator for Diners Club charge and credit cards in Malaysia & Singapore respectively.

Diners world Travel (Malaysia) Sdn. Bhd. and Diners world Travel Pte. Ltd.: -Air ticketing & travel management in Malaysia & Singapore respectively.

Prestige Ceramics Sdn Bhd: -Manufacture & marketing of ceramic floor and wall tiles in Malaysia.

Lumut Park Resort Sdn Bhd: -Owner and operator of the hotel known as The Orient Star Resort Lumut. -Property development in Lumut.

Lumut Marine Resort Berhad: -Owner and operator of the Lumut International Yacht Club.

Review of Operations

5Annual Report 2016

The decision to rationalise the business of DCM was one of the measures taken to stem the flow of continuing losses from this subsidiary which had adversely impact the Group’s performance for the past four financial years, despite all efforts taken by the management to improve its performance.

Diners Club (Singapore) Pte. Ltd. (DCS)

During the financial year under review, DCS continued to focus on card acquisition growth through existing cobrand partnerships and new partners. In the 3rd Quarter, DCS successfully acquired and launched a strategic partnership program with the largest transport operator, Vicom Limited under the listed Comfortdelgro Group that also owns the largest fleet of Comfort Taxi in Singapore. The Diners Club “V” card launched jointly with Vicom Limited and with Exxonmobil is the first motoring card in Singapore. Diners “V” cardmembers enjoy discounted inspection fee, free roadside assistance program and petrol rebates of up to 21.27%. The “V" card has gained strong traction in both new card growth and turnover.

Besides card growth, DCS continue to focus on Dcash where cardmembers can obtain loans from their credit card account and repayment over a period of 4 years. The loans sold continue to maintain good growth despite new regulatory curbs on lending requirements.

DCS continue to actively acquire new merchants through organic growth and with focus on large brand names and customised promotion with selected partners. Diners acceptance network remained strong with key sectors and effort has been refocused to ensure more wider acceptance in SME merchants. In the 3rd Quarter, Diners re-launched AXS bill payment with more than 60 Billing Organisations including Telcos, Town Councils, Insurance Agencies and Singapore Power.

Review of Operationscont’d

DCS continue to strengthen infrastructure with the development of Diners online gateway for the purpose of increasing turnover in the online space and exploring the use of automated kiosks for added customer engagement programs and stronger brand presence in the marketplace.

With the deregulation of the electricity market, DCS corporate business has successfully tap new business relationship with tie ups with Sembcorp Energy, Keppel Electric and Pacific Light to introduce the Diners Club auto billing program. These tie ups has led to new corporate sign ups with industrial users of electricity which included large shopping centers and manufacturing plants. There is strong growth opportunity in this sector as electricity usage by 1.2 million domestic households is due to be further deregulated soon.

Diners world Travel (Singapore) Pte. Ltd. (“DwTS”)

During the financial year, DWTS won the Top Agent for Trafalgar tours and also received an award from AIG for being the Top producer for 2014. We also hosted our International Travel Partnership partners from 55 countries at Singapore in Oct 2015.



Diners world Travel (Malaysia) Sdn. Bhd. (“DwTM”)

To enhance its market position as well to create awareness, DWTM have developed a new website (www.dinersworldtravel.com.my) and also published latest promotions and products on Facebook Fan Page. A new wholesale business was developed to

emphasis on air tickets/tour products to travel agents, own wholesale products to cater for Business to Business (B2B) and for direct end users via Business to Consumers (B2C).

Lumut Park Resort Sdn. Bhd. (“LPR”)

Revenue from the hotel operation was lower by 26.5% when compared to FY 2015. Revenue was affected by lower sales from two corporate market segments ie Oil & Gas and Shipping. These two segments impacted accommodation revenue and other supporting services such as Laundry & Valet, Telecommunication and F & B as their projects was either postponed or terminated due to the drop in global crude oil prices and other domestic issues. In addition, domestic traveller, due to reduced spending power, travelled less compared to the previous year, and coupled with wide choice of budget hotels with more than 2,000 rooms within Lumut town and Manjung.

Lumut Marine Resort Berhad (“LMRB”)

LMRB, own and operates a proprietary club, known as the Lumut International Yacht Club (“LIYC") in Lumut. LIYC has a marina complex with boatyard and other support facilities on a parcel of 130,680 sq. ft. of leasehold land near Lumut town.

LIYC started operations in December 1995. A total of 239 memberships were sold. However over the years due

to high attrition of members who resigned or had their membership terminated for non payment of outstanding dues to LIYC, to date only a total of 65 members remained on the Register of Members. This was despite all efforts made over the years to promote and market the membership scheme to recruit new members.

Since inception, due to the low membership base and dwindling number of members, LIYC had been incurring losses and negative cashflow from insufficient subscription fees and other income from use of LIYC facilities. This had resulted in LIYC no longer commercially viable to continue with its operations. Accordingly, a meeting of members on 30 April 2016 was convened by the Trustee for members of LIYC to consider and to pass an Extraordinary Resolution for the winding up of the LIYC Membership Scheme pursuant to Section 95(4) of the Companies Act, 1965. In conjunction with this proposal, a partial refund of membership fees, are to be distributed to each eligible members.

At the meeting of members held on 30 April 2016, the Extraordinary Resolution was duly passed by the requisite majority of members. The Extraordinary Resolution is required to be confirmed by the Court and for an order by the Court for the effective winding up of the LIYC Membership Scheme.

7Annual Report 2016


BUILDING MATERIALS

Prestige Ceramics Sdn. Bhd. (“Prestige”)

Prestige recorded higher revenue by 15.5% when compared to that recorded for FY 2015. The improved results was mainly due to measures taken to rationalise the production processes and parameters to two sizes of tiles ie 30x30cm and 30x60cm. The rationalisation of production processes had lowered the cost of production and also led to the improvement in tiles output and grading. The improvement in the grading of the tiles had resulted in overall improved selling price of the tiles due to higher ratio in the sale of 1st grade tiles.

Prestige will continue to rationalise the production processes and parameters and development of new body formula to enhance the production yield by shorter firing cycle time.


Name TAN SRI DATO’ TAN KAY HOCK PUAN SRI DATIN TAN SwEE BEE

Age 68 69

Nationality Malaysian Permanent Resident (Malaysia)

Qualification Barrister-at-Law Barrister-at-Law

Position on Board Chairman & Chief Executive(Non-Independent Executive Director)

Group Managing Director(Non-Independent Executive Director)

Date of Appointment 5 November 1980 29 January 1983

working Experience A lawyer by training having been called to the Bar by the Honourable Society of Lincoln’s Inn, UK in 1971. In 1972, he was admitted as an advocate and solicitor to the Supreme Court of Malaysia. He is a non-practising lawyer. Since 1982, he is the non-Executive Chairman of George Kent (Malaysia) Berhad (“GKM”), listed on the Main Market of Bursa Malaysia Securities Berhad. GKM is an engineering company involved in brass products manufacturing, trading and investment, development of water infrastructure projects, building and construction works.

A lawyer by training having been called to the Bar by the Honourable Society of Lincoln’s Inn, UK in 1971. In 1972, she was admitted as an advocate and solicitor to the Supreme Court of Malaysia. She is a non-practising lawyer. She was appointed Managing Director of Johan Group since 17 December 1984. Since 1989, she is a Non-Executive Director of George Kent (Malaysia) Berhad (“GKM”), listed on the Main Market of Bursa Malaysia Securities Berhad. GKM is an engineering company involved in brass products manufacturing, trading and investment, development of water infrastructure projects, building and construction works.

Other directorships of public companies

George Kent (Malaysia) Berhad George Kent (Malaysia) Berhad

Family relationship with any director and/or major shareholders of the Company

Husband to Puan Sri Datin Tan Swee Bee, the Group Managing Director

Wife to Tan Sri Dato’ Tan Kay Hock, the Chairman and Chief Executive of the Company

Conflict of interest with the Company

NIL NIL

List of convictions for offences within the past ten (10) years

NIL NIL

Committee Risk Management Committee – Chairman Remuneration Committee – Member Risk Management Committee – Member

Profile of Directors

9Annual Report 2016

TAN SRI DATO’ SERI DR TING CHEw PEH DATO’ AHMAD KHAIRUMMUZAMMIL BIN MOHD YUSOFF

OOI TENG CHEw

73 74 69

Malaysian Malaysian Malaysian

Bachelor of Arts from University of Malaya in 1970, Master of Science from University of London in 1972 and Doctor of Philosophy from University of Warwick in 1976.

Bachelor of Arts (Economics Honours) from University of Malaya

Fellow member of Institute of Chartered Accountants in England and Wales and member of Malaysian Institute of Certified Public Accountants

Director(Non-Independent Non-Executive Director)

Director(Independent Non-Executive Director)

Director(Independent Non-Executive Director)

1 November 2003 4 July 2005 12 March 2009

He was formerly a Lecturer (1974-1980) and Associate Professor (1981-1987) for Faculty of Humanities and Social Science of National University of Malaya. He was also a Parliament Secretary (Ministry of Health) (1988-1989), Deputy Minister (Prime Minister’s Department) (1989-1990) and Minister of Housing and Local Government (1990-1999). He was a Member of Parliament (1987-February 2008) and was the Chairman of Klang Port Authority (2000-2004).

He was a Deputy Chairman of the Urban Development Authority (UDA) Kuala Lumpur from 1978 to 1981. He was subsequently appointed the Director-General, Chief Executive and Board Member of UDA in 1981. From May 1986 to 1994, he held various senior management positions in the Kumpulan Guthrie Berhad Group and also Executive Director of Kumpulan Guthrie Berhad from May 1986 to December 1987. He was a Vice President and a Director of HICOM Holdings Berhad from February 1995 to July 2000 and subsequently held the post of Group Director in the DRB-Hicom Group until March 2006. He was the Chairman of Metrojaya Berhad. He is currently the Independent Non-Executive Director of George Kent (Malaysia) Berhad.

He was in public practice since 1974 in Messrs Ernst & Young and its predecessor firms. He retired in 2001. He is currently a member of the Board of Governors of the Wawasan Open University, a Director of Wawasan Open University Sdn Bhd and its subsidiary, Disted Pulau Pinang Sdn Bhd.

Puncak Niaga Holdings Berhad Hua Yang Bhd UTAR Education Foundation Sycal Ventures Berhad

George Kent (Malaysia) Berhad NIL

NIL NIL NIL

NIL NIL NIL

NIL NIL NIL

Remuneration Committee – Chairman Audit Committee – Member Nominating Committee – Member

Audit Committee – Chairman Nominating Committee – Chairman Remuneration Committee – Member

Audit Committee – Member Nominating Committee – Member

Profile of Directorscont’d


CORPORATE HEAD OFFICE

Tan Sri Dato’ Tan Kay Hock Chairman and Chief Executive

Puan Sri Datin Tan Swee Bee Group Managing Director

Teh Yong Fah Group Secretary

Ng Yew Soon Director-Finance

Sia Chin Yap Senior Manager-Internal Audit

PRINCIPAL OPERATING SUBSIDIARIES

Diners Club (Malaysia) Sdn Bhd } James Koh Chuan LimDiners Club (Singapore) Pte Ltd } Executive Director-Regional Operations

Diners world Travel (Malaysia) Sdn Bhd Catherine wong Tet Fah General Manager

Diners world Travel (Singapore) Pte Ltd Loo Kian wai General Manager

Prestige Ceramics Sdn Bhd Tio Yit Ching General Manager

The Orient Star Resort, Lumut vincent Ee Kim Chuan(owned by Lumut Park Resort Sdn. Bhd.) Hotel Manager

Group Senior Management

11Annual Report 2016

Year Ended 31 January2016 2015 2014 2013 2012

RM’000 RM’000 RM’000 RM’000 RM’000Restated Restated Restated Restated

Income Statement

Revenue 221,862 204,491 221,123 240,741 223,391 Loss Before Tax (47,968) (26,461) (21,138) (27,416) (47,963)Income Tax Credit/(Expense) 4,217 (1,941) (4,372) (4,280) (3,086)Loss for the year from continuing operations (43,751) (28,402) (25,510) (31,696) (51,049)Profit/(Loss) for the year from discontinued

operations 30,474 11,779 (12,646) (279) 2,797 Loss for the year (13,277) (16,623) (38,156) (31,975) (48,252)

Statements of Financial Position

Total non-current assets 344,091 344,085 347,300 320,034 324,708 Total current assets 672,315 683,386 816,999 791,013 744,607 Shareholders' fund 207,133 202,153 207,977 220,819 254,874 Non-controlling Interest 4,910 9,108 9,344 9,024 9,235 Shareholders' Equity 212,043 211,261 217,321 229,843 264,109 Total non-current liabilities 30,767 322,379 52,976 50,734 51,775 Total current liabilities 773,596 493,831 894,002 830,470 753,431

SHARE INFORMATION

Per Ordinary Share

Loss, basic (sen) (2.11) (2.63) (6.18) (5.11) (7.32)Net assets (sen) 34.04 33.91 34.89 36.90 42.40 Share price as at 31 January (RM) 0.12 0.20 0.15 0.15 0.22

FINANCIAL RATIOS

Return on equity (%) (6.34) (8.11) (18.50) (14.42) (7.88)Net Debt-Equity ratio (Note 1) 0.77:1 0.79:1 0.80:1 0.78:1 0.73:1

Note 1 : Net Debt comprise current & non-current loan and borrowings, trade and other payables, funding from non-recourse investors' certificates and senior certificates less cash and bank balances.

.

Five-Year Group Financial Highlights


Statement on Corporate Governance

The Board of Directors (“Board”) of Johan Holdings Berhad (the “Company”) is committed to ensuring high standards of good corporate governance throughout the Company and its subsidiaries (the “Group”) and endeavours to ensure consistency of policies and procedures of the Group in different geographical regions. This statement illustrates the extent of which the Board has embodied the spirit and principles of the Malaysian Code on Corporate Governance 2012 (“MCCG”). The MCCG sets out the broad principles and specific recommendations on structures and processes which companies should adopt in making good corporate governance an integral part of the business dealings and culture. Unless otherwise stated below, the Company is in compliance with the requirements of the MCCG.

PRINCIPLE 1: ESTABLISH CLEAR ROLES AND RESPONSIBILITIES

ROLES AND RESPONSIBILITIES OF THE BOARD AND MANAGEMENT

The Board is responsible for oversight and overall governance of the Group with an ultimate accountability and responsibility for the performance of the Company and promote the legitimate interests of the Company and its Shareholders.

The Board Charter provides guidance to the Directors in discharging their responsibilities. The principal responsibilities of the Board include, inter alia, the following:

• reviewing and adopting a strategic plan including setting performance objectives and approving operating budgets for the Group and ensuring that the strategies promote sustainability;

• overseeing the conduct of the Company’s business and build sustainable value for Shareholders;• reviewing the procedures to identify principal risks and ensuring the implementation of appropriate internal controls

and mitigation measures;• succession planning, including appointing, assessing, training, fixing the compensation of and where appropriate,

replacing senior management;• developing and implementing a Corporate Disclosure Policy (including an investor relations programme or shareholder

communications policy) for the Group;• reviewing the adequacy and the integrity of the Group’s internal control systems and management information

systems, including systems for compliance with applicable laws, regulations, rules, directives and guidelines;• monitoring and reviewing management processes aimed at ensuring the integrity of financial and other reporting;• ensuring that the Company’s financial statements are true and fair and conform with the accounting standards; • monitoring and reviewing policies and procedures relating to occupational health and safety and compliance with

relevant laws and regulations; and• ensuring that the Company adheres to high standards of ethics and corporate behaviour.

The Board has delegated certain responsibilities and duties to the Board Committees namely Audit Committee, Risk Management Committee, Remuneration Committee and Nominating Committee. All the Board Committees discharge their duties and responsibilities within the specific terms and reference approved by the Board. Except for the Remuneration Committee, the Board Committees do not have executive powers but report to the Board on all matters considered and their recommendations thereon. The ultimate responsibility for decision making lies with the Board.

The Board also set out Limits of Authority which outline the relevant matters and applicable limits including those require the Board’s approval and those the Board may delegate to the Management. Key matters reserved for the Board’s approval include the annual budget, business continuity plan, new issue of securities, business restructuring, capital expenditure above certain limit, disposal of significant fixed assets and the acquisition or disposal of companies within the Group. The Management remains accountable to the Board for the authority being delegated.


Statement on Corporate Governancecont’d

PRINCIPLE 1: ESTABLISH CLEAR ROLES AND RESPONSIBILITIES cont'd

CODE OF ETHICS

The Board has adopted a Code of Ethics for Company Directors. This Code of Ethics provides good guidance for a standard of ethical behaviour for Directors based on trustworthiness and values that can be accepted and to uphold the spirit of responsibility and social responsibility in line with the legislation, regulations and guidelines for administrating a company. The Code of Ethics is available on the Company’s website at www.johanholdings.com.

To cultivate an environment where integrity and ethical behaviour is fostered, the Board has formalised a Whistleblower Policy which enables employees to raise concerns and disclose information about any impropriety, corporate fraud, improper conduct or unlawful conduct involving employee, officer or Management of the Company. Generally, all disclosures pursuant to the Whistleblower Policy are to be made to the Group Chairman and Chief Executive who will then refer the disclosure together with a general recommendation to the Audit Committee Chairman.

SUSTAINABILITY

The Board recognises the importance of sustainability and its increasing significance in the business. The Board is committed to understanding and implementing sustainable practices and to exploring the benefits to the business whilst attempting to achieve the right balance between the needs of the wider community, the requirements of shareholders and stakeholders and economic success.

The Group has no immediate plan to implement a diversity policy for its workforce in terms of gender, ethnicity and age as it is of view that employment is dependent on each candidate’s skills, experience, core competencies and other qualities, regardless of gender, ethnicity and age. However, the Group is committed to diversify and apply equal employment opportunity approach in promoting diversity in the Group. There are no barriers in employment or development in the Group because of an individual’s gender, race and age.

ACCESS TO INFORMATION AND ADvICE

All Directors are provided with an agenda and a set of Board papers prior to each Board Meeting to be convened. Board papers are required to be circulated at least seven days prior to the date of each Board Meeting to enable Directors to obtain further explanation, if necessary, in order to be properly briefed before each meeting. Board members are supplied with full and timely information necessary to enable them to discharge their responsibilities. Senior management staffs are also invited to attend Board Meetings when necessary to provide the Board with further explanation and clarification on matters being tabled for consideration by the Board.

The Board convenes at least four (4) Board Meetings a year to consider the quarterly financial results and review operational performance. Additional meetings are convened as and when necessary.

All Directors have access to the advice and services of the Company Secretary and are updated on new statutory or regulations requirements concerning their duties and responsibilities.

If required, the Directors may obtain independent professional advice at the Company’s expense in furtherance of their duties, after consultation with the Chairman and other Board members.

Newly appointed Directors are briefed by the Board, the Company Secretary and the members of the Management on the nature of business and current issues within the Company and the Group.


PRINCIPLE 1: ESTABLISH CLEAR ROLES AND RESPONSIBILITIES cont'd

COMPANY SECRETARY

The Company Secretary plays an advisory role to the Board in relation to the Company’s constitution, the Board’s policies and procedures, and compliance with the relevant regulatory requirements, codes or guidance and legislations. The Company Secretary is suitably qualified, competent and capable of carrying out the duties required and has attended training and seminars conducted by relevant regulatory to keep abreast with the relevant updates on statutory and regulatory requirements and updates on the Main Market Listing Requirements of Bursa Malaysia Securities Berhad ("Lisitng Requirements").

The Company Secretary is responsible for advising the Directors of their obligations and duties to disclose their interest in securities, disclosure of any conflict of interest in a transaction involving the Group, prohibition on dealing in securities and restrictions on disclosure of price-sensitive information as well as to update the Board regularly on amendments to the Listing Requirements.

Deliberations during the Board meetings were properly minuted and documented by the Company Secretary.

BOARD CHARTER

The Board has adopted a Board Charter which provides guidance for Directors and Management regarding the responsibilities of the Board, its Committee and Management. The Board Charter is reviewed regularly to ensure it complies with legislation and best practices, and remains relevant and effective in the light of the Board’s objective.

The Board Charter is available on the Company’s website at www.johanholdings.com.

PRINCIPLE 2: STRENGTHEN COMPOSITION

The Board currently has five (5) members comprises:-

(i) Tan Sri Dato' Tan Kay Hock - Chairman and Chief Executive(ii) Puan Sri Datin Tan Swee Bee - Group Managing Director(iii) Dato’ Ahmad Khairummuzammil bin Mohd Yusoff - Independent Non-Executive Director(iv) Tan Sri Dato' Seri Dr Ting Chew Peh - Non-Independent Non-Executive Director(v) Mr Ooi Teng Chew - Independent Non-Executive Director

This composition fulfils the requirement under the Listing Requirements which stipulates that at least two (2) Directors or one-third of the Board, whichever is higher, must be independent. Collectively, the Directors have a diverse wealth of experience as well as skills and knowledge in law, economics, banking, accounting and general management. The profile of each Director on the current Board is included in Pages 8 to 9 of this Annual Report.

In accordance with the Articles of Association of the Company, at least one-third of the Directors including the Managing Director are required to retire by rotation at each Annual General Meeting but shall be eligible for re-election.



PRINCIPLE 2: STRENGTHEN COMPOSITION cont'd

NOMINATING COMMITTEE

The Nominating Committee was set up by the Board on 27 March 2013 which comprises the following members:-

(i) Dato' Ahmad Khairummuzammil Bin Mohd Yusoff (Independent Non-Executive Director - Chairman)(ii) Tan Sri Dato’ Seri Dr Ting Chew Peh (Non-Independent Non-Executive Director)(iii) Ooi Teng Chew (Independent Non-Executive Director)

The Chairman of the Nominating Committee, Dato' Ahmad Khairummuzammil Bin Mohd Yusoff, is the Senior Independent Director identified by the Board.

The Nominating Committee’s terms of reference include the authority delegated by the Board to oversee the selection and assessment of Directors. The Nominating Committee shall:-

(i) recommend to the Board for the appointment of new Director in accordance to the nomination and selection policies;

(ii) assess the effectiveness of the Board as a whole, the committees of the Board and the contribution of each existing individual Director, in terms of the appropriate size and skills, balance between Executive Directors, Non-Executive and Independent Director, the mixture of skills and other core competencies required;

(iii) assess the independence of Independent Directors to consider whether the Independent Director can continue to bring independent and objective judgement to Board deliberations; and

(iv) to recommend to the Board if an Independent Director who serves the Board for more than 9 years is justifiable to remain as an Independent Director on the Board.

ANNUAL ASSESSMENT OF DIRECTORS

The Nominating Committee reviews annually the required mix of skills and experience of Directors, including core-competencies which Non-Executive Directors should bring to the Board. The Committee also assesses annually the effectiveness of the Board as a whole, the Committees of the Board and contribution of each individual Director based on the criteria set out in Corporate Governance Guide.

The summary of the assessments and comments by each individual Director are tabled to the Nominating Committee and reported to the Board.

During the financial year under review, the Nominating Committee had carried out the annual assessment and satisfied that the Board and Board Committees are effective as a whole, considering the required mix of skills, size and composition, experience, core competencies and other qualities. The Nominating Committee was also satisfied that each of its Directors has the character, experience, integrity, competence and time to effectively discharge their respective role.





RECRUITMENT OR APPOINTMENT OF DIRECTORS

The Nominating Committee is responsible to recommend to the Board for the appointment of new Directors in accordance to the nomination and selection policies.

The Board currently does not have any gender, ethnicity and age policy or target. The criteria to be used by the Nominating Committee in the selection and appointment process is mainly to ensure the Board comprises a good mix of skill and experience of Directors to discharge its responsibilities in an effective and competent manner, as well as the candidates’ competencies and ability to commit sufficient time to the Company’s matters.

Nevertheless, the Board is supportive of gender diversity in the boardroom as recommended by the MCCG to promote the representation of women in the composition of the Board. The Board will endeavour to ensure that gender, ethnicity and age diversity will be taken into account in nominating and selecting new Directors to be appointed on the Board. Presently, Puan Sri Datin Tan Swee Bee is the only female Director comprised in the Board of five (5) Directors.

DIRECTORS’ REMUNERATION

The Remuneration Committee comprises of two (2) Non-Executive Directors and one (1) Executive Director. The members comprises of:-

(i) Tan Sri Dato’ Seri Dr Ting Chew Peh (Non-Independent Non-Executive Director - Chairman)(ii) Dato’ Ahmad Khairummuzammil bin Mohd Yusoff (Independent Non-Executive Director)(iii) Puan Sri Datin Tan Swee Bee (Group Managing Director)

The Remuneration Committee’s primary responsibilities are to recommend to the Board the remuneration package and the terms of employment on each Executive Director. The determination of fees payable to Non-Executive Director will be a matter for the Board as a whole and a Director shall not participate in the decision on their own remuneration packages. A meeting of the Remuneration Committee was held to review and approve remuneration for the Group Senior Management.

The Remuneration Committee is also responsible for developing the Group’s remuneration policy and determining the remuneration packages of senior executive employees of the Group.

The remuneration of Directors is determined at levels which enable the Company to attract and retain Directors with the relevant experience and expertise to manage the Groups effectively.

The Non-Executive Directors are paid on annual basic fee, any increase of which are subject to approval by shareholders at the Annual General Meeting. The Chairman of the Audit Committee is paid an allowance of RM1,500/- per meeting and Audit Committee member is paid RM1,000/- per meeting.



DIRECTORS’ REMUNERATION cont'd

The aggregate and range of remuneration paid to Directors at Company level for financial year ended 31 January 2016 are as follows:-

Fees

Salaries & Other

EmolumentsBenefits-

In-Kind Total(RM'000) (RM'000) (RM'000) (RM'000)

Executive DirectorsTan Sri Dato’ Tan Kay Hock - 857 109 966Puan Sri Datin Tan Swee Bee - 657 28 685

Non-Executive DirectorsDato’ Ahmad Khairummuzammil bin Mohd Yusoff 50 11 - 61Tan Sri Dato’ Seri Dr Ting Chew Peh 50 4 - 54Ooi Teng Chew 50 4 - 54

150 1,533 137 1,820

The number of Directors whose remuneration falls into bands of RM50,000 is as follows:-

DirectorsRange of Remuneration Executive Non-executive

RM50,001 to RM100,000 - 3RM650,001 to RM700,000 1 -RM950,001 to RM1,000,000 1 -

2 3

PRINCIPLE 3: REINFORCE INDEPENDENCE

ANNUAL ASSESSMENT OF INDEPENDENCE

The Nominating Committee annually assesses the independence of Independent Directors based on the criteria set out in Corporate Governance Guide. Based on the assessment carried out in 2016, the Board is of the view that all the Independent Directors fulfil the criteria of independence as defined in the Listing Requirements and are able to continue to bring independent and objective judgement to the board deliberations.




PRINCIPLE 3: REINFORCE INDEPENDENCE cont'd

TENURE OF INDEPENDENT DIRECTOR

The Board takes cognizance of the MCCG’s recommendation that the tenure of an Independent Director should not exceed a cumulative term of nine (9) years. Upon completion of the nine (9) years, an Independent Director may continue to serve on the Board if it is determined that his expertise and experience is relevant to the Company. The Board may wish to retain an Independent Director who has more than nine (9) years tenure of service to continue to serve as an Independent Director. In such an event, and as recommended by the MCCG, the Nominating Committee and the Board must carry out an assessment to justify retaining him as an Independent Director and the Board to make a recommendation and provide strong justification to seek shareholders’ approval in a general meeting.

Dato' Ahmad Khairummuzammil Bin Mohd Yusoff, who was appointed as an Independent Director on 4 July 2005 and had served the Board for more than nine (9) years, had obtained shareholders’ approval at last year’s Annual General Meeting to continue to serve as an Independent Director of the Company. Following assessment by the Nominating Committee and the Board, Dato' Ahmad Khairummuzammil Bin Mohd Yusoff has been recommended to continue to act as an Independent Director, subject to shareholders’ approval at the forthcoming Annual General Meeting of the Company based on the following justifications:

i) He fulfilled the criteria under the definition of “Independent Director” as stated in the Listing Requirements,

ii) He has over time, developed increased insight with the Group’s business operations and therefore can contribute to the effectiveness of the Board as a whole,

iii) He does not have any conflict of interest as throughout his tenure of office as an Independent Director of the Company, he has not entered into and is not expected to enter into any contracts which will give rise to any related party transactions with the Company and its subsidiaries,

iv) He remains to be objective and independent in expressing his views and participated in active deliberations and decision making process of the Board and Board Committees in which he is a member. His length of service on the Board and Board Committees does not in any way interfere with his exercise of independent judgement and ability to act in the best interest of the Company,

v) He had exercised due care during his tenure as an Independent Non-Executive Director and as Chairman of the Audit Committee and Nominating Committee and had carried out his professional duties in the interest of the Company and its shareholders.

SEPARATION OF POSITIONS OF THE CHAIRMAN AND GROUP MANAGING DIRECTOR

Although the Chairman who also acts as the Chief Executive Officer, nevertheless, he is only responsible for long range strategic planning for the Group whilst the Group Managing Director has overall responsibility in managing the Group’s business. As such, there is clear segregation of responsibilities between the Chairman and Group Managing Director to ensure a balance of power and authority. The role of the Independent Non-Executive Directors is particularly important as they provide unbiased and independent view, advice and judgement to fulfil a pivotal role in corporate accountability. The Board is satisified that the current composition fairly reflects the interest of the minority shareholders of the Company.



PRINCIPLE 4: FOSTER COMMITMENT

TIME COMMITMENT

The Board convenes at least four (4) Board Meetings a year to consider the quarterly financial results and review operational performance. Additional meetings are convened as and when necessary.

During the financial year ended 31 January 2016, the number of Board Meetings held and the attendance of each Director are as follows:-

No. of Board MeetingsDirectors Held Attended

Tan Sri Dato’ Tan Kay Hock 4 4Puan Sri Datin Tan Swee Bee 4 4Tan Sri Dato’ Seri Dr Ting Chew Peh 4 4Dato’ Ahmad Khairummuzammil bin Mohd Yusoff 4 4Ooi Teng Chew 4 4

The Board is satisfied with the level of time commitment given by the Directors towards fulfilling their roles and responsibilities which is evidenced by their attendance of all four (4) Board Meetings convened during the financial year ended 31 January 2016.

The Board has fixed the maximum number of five (5) listed company board representations which any Director may hold at any point of time. Directors shall inform the Chairman before accepting any new directorships in other public listed company.

DIRECTORS’ TRAINING

The Board encourages its Directors to attend talks, seminars, workshops and in-house conferences to update and enhance their skills and knowledge and to keep abreast with developments in regulatory and corporate governance issues. During the year the Directors in their individual capacity and as Director of other public listed companies in Malaysia, had attended various courses, briefings and seminars, relating to risk management, corporate governance, investor relations and financial statements reporting under MFRS.

Details of training attended by Directors during the financial year ended 31 January 2016 are as follows:

Name of Director Programme

1. Tan Sri Dato’ Tan Kay Hock - New Auditor Reporting: Why it matters to you2. Puan Sri Datin Tan Swee Bee - New Auditor Reporting: Why it matters to you3. Tan Sri Dato’ Seri Dr Ting Chew Peh - Effective Board Evaluations

- AOB Conversation with Audit Committees - Maximizing Board Effectiveness Through A Strong Risk Oversight Role- New Auditor Reporting: Why it matters to you

4. Dato’ Ahmad Khairummuzammil bin Mohd Yusoff

- New Auditor Reporting: Why it matters to you

5. Ooi Teng Chew - EY 2016 Budget and Tax Conference- New Auditor Reporting: Why it matters to you



PRINCIPLE 5: UPHOLD INTEGRITY IN FINANCIAL REPORTING

COMPLIANCE wITH APPLICABLE FINANCIAL REPORTING STANDARDS

The Board ensures that shareholders are provided with a balanced and clear assessment of the Group’s position and financial performance through the issuance of Annual Audited Financial Statements and quarterly financial reports. The Audit Committee assists the Board in overseeing the financial reporting of the Group by reviewing the quarterly financial reports and Annual Audited Financial Statements to ensure they are drawn up in accordance with the Companies Act, 1965 and applicable accounting standards prior to recommending them for approval by the Board and issuance to shareholders.

DIRECTORS’ RESPONSIBILITY IN FINANCIAL REPORTING

The Board acknowledges their responsibility to ensure that the financial statements of the Company and the Group are prepared in accordance with the provisions of the Companies Act, 1965 and approved accounting standards in Malaysia so as to give a true and fair view of the state of affairs and the result of the Company and of the Group.

In preparing these financial statements, the Directors have:-

- adopted suitable accounting policies and applying them consistently;- made judgement and estimates that are prudent and reasonable;- ensured applicable accounting standards have been followed, subject to any material departures disclosed and

explained in the financial statements; and- prepared the financial statements on a going concern basis.

The Directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the Company and the Group and to enable them to ensure that the financial statements as prepared comply with the Companies Act, 1965. The Directors are also responsible for safeguarding the assets of the Company and the Group and to take reasonable steps for the prevention and detection of fraud and other irregularities.

EXTERNAL AUDITORS

A transparent and professional relationship with the external auditors to enable them to independently report to shareholders in accordance with statutory and professional requirement is established through the Audit Committee. The role of the Audit Committee members in relation to the external auditors is set out in the Audit Committee Report on pages 25 to 26 of this Annual Report.

The Audit Committee had assessed the external auditor’s engagement teams’ calibre, performance, experience, global network resources as well as ability to perform the scope of work within the Company timeline. The Audit Committee took into account the openness in communication and interaction with the lead audit engagement partner and engagement team through discussions at private meetings, which demonstrated their independence, objectivity and professionalism. The Audit Committee was satisfied with the suitability of Deloitte based on the quality of services and sufficiency of resources they provided to the Group, in terms of the firm and the professional staff assigned to the audit. The Audit Committee was also satisfied in its review that the provision of non-audit services by Deloitte to the Company for the financial year ended 31 January 2016 did not in any way impaired their objectivity and independence as external auditors of the Company. The external auditors have confirmed that they are, and have been, independent throughout the conduct of the audit engagement.


PRINCIPLE 5: UPHOLD INTEGRITY IN FINANCIAL REPORTING cont'd

EXTERNAL AUDITORS cont'd

Following the assessment, the Audit Committee had recommended to the Board for Deloitte to be re-appointed by shareholders as external auditors of the Company for the financial year ending 31 January 2017 at the forthcoming Annual General Meeting.

Having regard to the outcome of the evaluations and the annual assessment of external auditors which supported the Audit Committee’s recommendation, the Board had on 3 May 2016 approved the Audit Committee’s recommendation for the shareholders’ approval to be sought at the forthcoming Annual General Meeting for Deloitte to be re-appointed as external auditors of the Company for the financial year ending 31 January 2017.

PRINCIPLE 6: RECOGNISE AND MANAGE RISKS

The Risk Management Committee comprises the following members:-

(i) Tan Sri Dato' Tan Kay Hock (Non-Independent Executive Director - Chairman)(ii) Puan Sri Datin Tan Swee Bee (Group Managing Director)(iii) Ng Yew Soon (Director - Finance)

The Risk Management Committee’s primary responsibility is to oversee the overall risk management of the Group, particularly on the strategic areas of the business. The Risk Management Committee, supported by various sub-RMCs established at respective business units that are responsible for identifying, managing and mitigating risks through a systematic risk evaluation/profiling exercise. The Risk Profile of respective business unit is reviewed and revised on a half yearly basis and submitted to the Risk Management Committee for review. Details of Risk Management Framework can be found in the Statement on Risk Management and Internal Control on pages 27 to 30 of this Annual Report.

The Board acknowledges its overall responsibility for ensuring that a sound system of internal control is maintained throughout the Group and the need to review its effectiveness regularly. The Board recognises that risks cannot be totally eliminated and the system of internal controls instituted can only help minimise and manage risks and provide some assurance that the assets of the Company and of the Group are safeguarded against material loss and unauthorised use and that financial statements are not materially misstated.

The Group has an independent internal audit function, reporting directly to the Audit Committee. Internal audit findings of operating units of the Group and investigations carried out by internal audit department are tabled at the Audit Committee Meeting. The information on the Group’s internal control is presented in the Statement on Risk Management and Internal Control of this Annual Report.

PRINCIPLE 7: ENSURE TIMELY AND HIGH QUALITY DISCLOSURE

The Board acknowledges the need for shareholders to be informed of all material business and developments concerning the Group. In addition to various announcements made during the year, the Board had ensured timely release of financial results on a quarterly basis to provide shareholders with an overview of the Group’s performance and operations. Copies of all the announcements are available to shareholders and members of the public upon request.



PRINCIPLE 7: ENSURE TIMELY AND HIGH QUALITY DISCLOSURE cont'd

The Board has established Corporate Disclosure Policies and Procedures in relation to provision of accurate, timely, consistent and fair disclosure of corporate information to enable informed and orderly market decision by investors.

To ensure comprehensive, accurate and timely disclosures, the Board is also fully aware of and guided by the Corporate Disclosure Guide 2011 issued by Bursa Malaysia Securities Berhad on 22 September 2011. The Guide aimed at providing shareholders and investors with comprehensive, accurate and quality information on a timely and even basis, and not merely meeting the minimum requirements under the Listing Requirements.

PRINCIPLE 8: STRENGTHEN RELATIONSHIP BETwEEN COMPANY AND SHAREHOLDERS

The Annual General Meeting is the principal forum for communicating with shareholders. Shareholders who are unable to attend are allowed to appoint not more than two (2) proxies, who need not be the shareholders, to attend and vote on their behalf. Board members as well as the Director – Finance and the External Auditors of the Company are present to answer questions raised by shareholders. Shareholders are given the opportunity to ask questions during the questions and answers session prior to each resolution being proposed for consideration by shareholders. The Board encourages participation at general meetings and will generally table resolutions to the vote by shareholders on a show of hands, except for Related Party Transaction if any (wherein poll will be conducted) and unless otherwise demanded by shareholders in accordance with the Articles of Association of the Company. However effective from 1 July 2016, pursuant to the amended Listing Requirements, all resolutions to be considered at general meetings of shareholders will be voted on by way of poll.

Corporate information of the Group is also available via the Company’s website, http://www.johanholdings.com.



Statement on Corporate Social Responsibility

The Johan Group recognise Social Corporate Responsibility (“CSR”) as an integral part to our approach in managing our businesses, creating value to our shareholders and enhancing the long term sustainability of our Group. Our Group believe in the concept of CSR in going beyond business to fulfil our responsibilities towards the Environment, Community, Workplace and Marketplace.

THE ENvIRONMENT

We acknowledge our responsibilities for managing and reducing the impact that our businesses has on the environment and supports pollution prevention and environmental protection in its projects and activities. Our commitments are to protect and enhance the environment at large, mitigate any possible adverse impact on the environment, conforming to and satisfying with requirements of all legislation pertaining to environmental issues.

Prestige Ceramics Sdn Bhd‘s plant in Puchong which manufacture ceramic floor and wall tiles, conducts regular occupational safety and awareness programmes for its employees. The management also perform periodic checks and institute controls on environmental care and controls in the plant’s intake and ensure proper treatment and discharge of its effluents. The Company had since 2 December 2014 obtained IQNet and SIRIM QAS certification for implementation and maintaining a Quality Management System which fulfils the requirements of the ISO 9001 : 2008 standard for manufacture of ceramic tiles.

THE COMMUNITY

We believe in adding value to the communities in which we operate our businesses through providing support in diverse areas of social welfare. The Group also supports charitable organisations in their noble efforts to help the needy and the disadvantaged. All employees are encouraged to participate in community projects and undertake voluntary works to help the needy.

Our hotel, The Orient Star Resort Lumut, on 23 June 2015 organised and hosted a “Berbuka Puasa” event for 47 children from the Sekolah Pondok Mahad Tahfiz Al Furqan Seri Manjung. Gifts from sponsors distributed at this event include a carpet for the school surau, 10 sacks of rice, hampers and duit raya for the school children. On 30 June 2015, our hotel organised a Bubur Lambuk event together with Persatuan Kakitangan Awam (KAKEP) wherein 5,000 packets of bubur lambuk cooked by the hotel F & B staff were distributed to residents attending prayers at five (5) mosques in Seri Manjung district. On 12 November 2015, a Community Policing Programme in the hotel was organised with the Seri Manjung Royal Malaysian Police branch. The Seri Manjung police chief was invited to this function to discuss with 60 participants comprising hoteliers and business proprietors in the vicinity on ways and how to work together to prevent crime.

THE wORKPLACE

The Group recognises that our people are our key assets and acknowledges that success and growth of the Group over the years have been built on the foundation of a skilled and talented workforce. We acknowledge that it is crucial to nurture our diverse talent pool in order to meet the needs of our diverse businesses, which calls for varying skills, capabilities and expertise from our employees in the Group. The Group places strong emphasis on talent management and developing human capital and has in place structured development programmes designed to develop leadership skills, technical knowledge and soft skills among different groups of employees. The benefits provided to employees include medical benefits such as treatment at hospitals and clinics; insurance coverage for personal accidents, hospitalisation, surgery and dental treatment. The Group’s human resource policies and procedures are regularly reviewed to keep abreast of industry benchmarks and best practices.


Statement on Corporate Social Responsibilitycont’d

THE MARKETPLACE

The Group recognises the importance of market perception and confidence on the sustainability of our businesses. As such we operate by maintaining high integrity in the market place through high ethical standards in the areas of marketing, advertising and procurement, best practices and procedures on quality, health and safety and good corporate governance. Details of the Group’s corporate governance and investor relations are set out in the Statement on Corporate Governance on Pages 12 to 22 of the Annual Report.


Audit Committee Report

A. MEMBERS

The Audit Committee (“the Committee”) comprises the following members, all of whom are Non-Executive Directors:-

Dato' Ahmad Khairummuzammil bin Mohd Yusoff (Chairman - Independent Non-Executive Director) Tan Sri Dato’ Seri Dr. Ting Chew Peh (Non-Independent Non-Executive Director) Ooi Teng Chew (Independent Non-Executive Director)

The composition of the Audit Committee comply the requirements of Paragraph 15.09(1)(a) and (b) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Listing Requirements”).

B. MEETINGS AND ACTIvITIES

During the year ended 31 January 2016, four (4) Audit Committee Meetings were held. Details of attendance of each Committee member were as follows:-

No. of Meetings Audit Committee Held Attended

Dato’ Ahmad Khairummuzammil bin Mohd Yusoff (Chairman) 4 4Tan Sri Dato’ Seri Dr Ting Chew Peh 4 4Ooi Teng Chew 4 4

At each of these Committee Meetings, the Director-Finance, the Senior Manager-Internal Audit and the representative(s) of the external auditors were invited to review with the Committee members the quarterly reports, half-year and annual financial statements as the case may be.

After each Committee Meeting, the Chairman of the Committee reports to the Board on the proceedings conducted thereat and to convey the recommendations by the Committee on the quarterly reports, half-year and annual financial statements with or without amendments as the case may be to be approved and adopted by the Board for release to the Bursa Malaysia Securities Berhad.

Highlights of Activities

In line with the terms of reference of the Committee, the following activities were carried out by the Committee during the year ended 31 January 2016 in the discharge of its functions and duties:-

i) Reviewed the quarterly financial results of the Group including the draft announcements pertaining thereto, and made recommendations to the Board for approval. The reviews, served to ensure that the Company’s financial reporting and disclosures present a true and fair view of the Company’s financial positions and performance and are in compliance with the Listing Requirements and applicable accounting standards in Malaysia;

ii) Reviewed the results, reported issues arising from the annual statutory audit, Management’s responses to the audit findings for the financial year ended 31 January 2015;


Audit Committee Reportcont’d

B. MEETINGS AND ACTIvITIES cont'd

Highlights of Activities cont'd

iii) Reviewed and made recommendations to the Board for approval, the annual audited financial statements of the Company and the Group for the financial year ended 31 January 2015 to ensure that it presented a true and fair view of the Company’s financial positions and performance for the year and compliance with regulatory requirements;

iv) Reviewed with the external auditors, their audit plan for the financial year ended 31 January 2016, outlining the audit scope, methodology and timetable, audit materiality, areas of focus, fraud risk assessment and proposed fees for the audit and non-audit services rendered by the external auditors for the financial year ended 31 January 2016;

v) Met with the external auditors twice without the presence of Management during the year under review;

vi) Reviewed and approved the 2016 internal audit plan to ensure that adequate scope and comprehensive coverage over the activities of Group and adequate resources within the internal audit team to carry out the audit works;

vii) Reviewed the internal audit reports issued by the internal audit department and monitored the implementation of management action plan on outstanding issues on a quarterly basis to ensure that all key risks and control weaknesses are being properly addressed;

viii) Reviewed the risk profile of the respective business units to ensure the risk being properly managed and mitigated;

ix) Reviewed the related party transactions entered into by the Group to ensure that current procedures for monitoring of related parties transactions have been complied with.

C. INTERNAL AUDIT FUNCTION

Johan has since December 1990 established an Internal Audit department to carry out internal audit function of the Group's key operations in Malaysia and overseas. The scope of internal audit works are conducted on a rotation basis and as and when directed by the management. The internal audit reports generated were reviewed and discussed at each of the Audit Committee Meetings to assist the Committee to discharge its functions more effectively. The Internal Audit team is independent and has no involvement in the operations of Group companies.

The total cost incurred for the internal audit function for the year ended 31 January 2016 was RM492,924 (2015 : RM515,743).


Statement on Risk Management and Internal Control

The Malaysian Code on Corporate Governance 2012 (“MCCG”) requires the board of directors of a listed company to maintain a sound framework of risk management and internal controls to safeguard shareholders’ investments and assets of the Group.

The Board of Directors (“the Board”) of Johan Holdings Berhad is pleased to present its Statement on Risk Management and Internal Control for the financial year ended 31 January 2016 which has been prepared pursuant to paragraph 15.26(b) of Bursa Malaysia Securities Berhad (“Bursa Securities”) Main Market Listing Requirements (“Main LR”) and in accordance with the Principles and Recommendations relating to risk management and internal controls provided in the MCCG.

The statement below outlines the nature and scope of risk management and internal control system of the Company during the financial year ended 31 January 2016.

BOARD’S RESPONSIBILITIES

The Board acknowledges its overall responsibility for the Group’s risk management and internal control environment, which includes the establishment of an appropriate risk and control framework as well as the review of its effectiveness in safeguarding shareholders’ interests and the Group’s assets. The Board believes that the risk management and internal control framework is designed to manage rather than eliminate the risk of failure in achieving its corporate goals and objectives, and therefore only provide reasonable but not absolute assurance against material misstatement of management and financial information and records or against financial losses or fraud.

RISK MANAGEMENT FRAMEwORK

The Board has established an ongoing process for identifying, measuring, evaluating and managing the significant risks faced by the Group in its achievement of objectives and strategies and this process includes enhancing the risk management and internal control system as and when there are changes to the business environment or regulatory guidelines. In order to align with the dynamic changes in the business environment, the system of risk management and internal control instituted throughout the Group is reviewed and updated on a periodic basis to ensure its continued effectiveness, adequacy and integrity. This process has been in place throughout the year under review and carried out in the following perspective:-

• Board of Directors

The Board is fully responsible in determining the Group’s risk appetite and level of risk exposure. In its regular Board Meetings, significant risk and material issues are brought to the attention of Directors which require decision to be made. To safeguard shareholders’ interest and the Group’s assets, the Board ensure that business risks are identified, assessed and managed, in the Group’s strategic planning and decision making process.

• Audit Committee

The Audit Committee (“AC”) is assisted by an in-house Internal Audit Department (“IAD”) which performs regular independent reviews, monitor and ensure compliance with the Group’s policies, procedures and systems of risk management & internal control. The AC, in every AC Meeting, review internal audit reports for the Group prepared by the IAD. It will consider major findings of the internal auditors and management response thereto. Monitoring on the corrective actions of any outstanding audit issues are on going to ensure that all the risks and control lapses have been addressed.


Statement on Risk Management and Internal Controlcont’d

RISK MANAGEMENT FRAMEwORK cont'd

• Risk Management Committee

The Risk Management Committee (“RMC”) was set up by the Board in September 2002. The RMC, assisted by the IAD, identifies, evaluates and manages significant risk faced by the Group.

The Risk Management Policy of the Group is in place to ensure a systematic approach to identify key risks faced by the Group and to monitor them on a regular basis. Key risks to each business unit’s objectives are identified and scored based on a matrix for likelihood of the risks occurring and the magnitude of the impact. The policy helps to determine the appropriate risk appetite or level of exposure for the Group. The risk appetite for the Johan Group may be controllable and uncontrollable and it depends on several factors such as knowledge of the matter, past experience and magnitude of potential gains/losses.

A detailed risk register/scorecard of risks identified with appropriate controls has been created. The risk profiles of the respective business units are updated every six months to reflect the prevailing operating conditions.

Risk Profiles are submitted by the RMC of operating subsidiaries on a half year basis to be reviewed by the Head Office RMC. The Risk Profiles are also presented to the AC periodically. Any major changes to risks or emerging significant risk of the business units in the Group together with the appropriate actions and/or strategies to be taken, will be brought to the attention of the AC.

• All operating business units

Standard operating policies and procedures (SOPP) were formalised to guide the operations of the Group’s operating business units. It documents how transactions are captured and where internal controls are applied. In addition, as part of the performance monitoring process, management information in the form of annual budgets, revised forecasts, quarterly management accounts and monthly management reports are submitted to the Head Office Finance Department for review and onward presentation to the Board for review and approval.

INTERNAL CONTROL FRAMEwORK

The Board acknowledges that a sound system of internal control forms part of the good governance practice and risk management forms part of the internal control. The following key elements constitute a controlled environment which shall encompass the System of Internal Control of the Johan Group:-

• Organisational structures in place for each operating unit with clearly defined levels of authority.• Operational management has clear responsibility for identifying risks affecting their business and for instituting

adequate procedures and internal controls to mitigate and monitor such risks on an ongoing basis. • The SOPP of each business units sets out clear definition of authorisation procedures and clear line of accountability,

with strict authorisation, approval and control within the Group. • The Group has in place a Management Information System in which management and financial reports are generated

regularly to facilitate the Board and the Group’s Management in performing financial and operating reviews of the various operating units.


INTERNAL CONTROL FRAMEwORK cont'd

• The IAD, staffed by a team of professionally qualified personnel who is independent and has no involvement in the operations of Group companies, provides the AC with reasonable independent assurance on the effectiveness and integrity of the Group’s system of internal control. For the year ended 31 January 2016, the major internal audit activities undertaken during the year are as follows:

Developed a risk-based annual audit plan; Reviewed the adequacy and effectiveness of internal control processes; Reviewed compliance with established policies and procedures and statutory requirements; Performed financial and operational audits in major subsidiaries; Carried out ad-hoc assignments requested by Senior Management; and Followed-up on the implementation of Management Action Plan to ensure that necessary actions have been

taken/are being taken to remedy any significant findings and weaknesses.

• The duty of reviewing and monitoring the effectiveness of the Group’s system of internal control was vested to the AC which provides independent views. Periodic reports from the IAD to the AC recommend remedial action to be taken by the Management.

• The existence of the RMC to oversee the overall risk management holds responsibility to identify, assessing, managing and monitoring significant risk within the Group.

The Board, however, recognises that a sound system of internal control will reduce, but cannot eliminate the possibility of poor judgement in decision-making, human error, control processes being deliberately circumvented by employees and others, management overriding controls and the occurrence of unforeseeable circumstances.

REvIEw OF EFFECTIvENESS

The Board is satisfied with the procedures outlined above and believes, with assurance from the Chairman & Chief Executive Officer and Director-Finance that, the risk management and system of internal controls had continued to operate adequately and effectively in the financial year under review.

The Board also relies on the assessment by internal auditors to evaluate the state of internal controls and risk management at each operating unit. The Board is committed to the continuous improvement of internal controls and risk management practices within the Group to meet its business objectives.

REvIEw OF THIS STATEMENT

Pursuant to Paragraph 15.23 of the Main LR, the External Auditors have reviewed this Statement for inclusion in the 2016 Annual Report, and reported to the Board that nothing has come to their attention that causes them to believe that this Statement is inconsistent with their understanding of the process adopted by the Board in reviewing the adequacy and integrity of the system of internal control of the Group.

Statement on Risk Management and Internal Control

cont’d


CONCLUSION

The Board is of the view that the systems of risk management and internal control is in place for the year under review, and up to the date of approval of this Statement, is sound and adequate to safeguard the shareholders’ investment, the interests of customers, regulators, employees and other stakeholders, and the Group’s assets.

There was no significant weakness in the systems of risk management and internal control, contingencies or uncertainties that could result in material loss and adversely effect on the financial results of the Group for the financial year under review and up to the date of issuance of the financial statements. The Group continues to take necessary measures to strengthen its internal control structure and management of risks, taking into consideration the changing and challenging business environment. Therefore, the Board will, when necessary, put in place appropriate action plans to further enhance the system of risk management and internal control.

This statement is made in respect of the financial year ended 31 January 2016 and in accordance with a resolution passed at the Board of Directors’ meeting held on 11 May 2016.

Statement on Risk Management and Internal Controlcont’d


Additional Information

UTILISATION OF PROCEEDS RAISED FROM ANY CORPORATE PROPOSAL

The Company did not implement any fund raising corporate exercise during the financial year ended 31 January 2016.

SHARE BUYBACKS

The Company does not have a scheme to buy back its own shares.

OPTIONS, wARRANTS OR CONvERTIBLE SECURITIES EXERCISED

The Company did not issue any warrants or convertibles securities during the financial year ended 31 January 2016.

DEPOSITORY RECEIPT PROGRAMME

The Company did not sponsor any Depository Receipt Programme during the financial year ended 31 January 2016.

SANCTIONS AND/OR PENALTIES IMPOSED

On 16 May 2016, Bursa Malaysia Securities Berhad (“Bursa Securities”) issued a public reprimand on the Company for breach of Paragraph 9.16(1)(a) of the Main Market Listing Requirements of Bursa Securities (“Listing Requirements”) for failing to ensure that the Company’s fourth quarterly report for the period ended 31 January 2015 (“QR 4/2015) announced on 24 March 2015 took into account the adjustments as stated in the Company’s announcement dated 4 June 2015.

Arising from the adjustment, there was a deviation between the unaudited and audited results of the Company for financial year ended 31 January 2015 as follows:-

Unaudited results announced on 24 March 2015 (RM’000)

Audited results announced on 26 May 2015 (RM’000)

Loss after tax and minority interest 18,633 16,387

Deviation RM2.246 million / 12.05%

The main adjustment was in respect of the reversal of the provision for customer reward points which was over provided in the QR 4/2015 without reasonable justification.

Bursa Securities also directed the Company to carry out the following:-

1) review and ensure the adequacy and effectiveness of its financial reporting function;

2) carry out a limited review on its quarterly report submissions. The limited review must be performed by the Company’s external auditors for four quarterly reports commencing no later from the quarterly report for the financial period ended 31 July 2016; and

3) ensure all its Directors and relevant personnel attend a training programme in relation to compliance with the Listing Requirements pertaining to financial statements.


NON-AUDIT FEES

Non-audit fees paid/payable by the Group and the Company to the external auditors and firm affiliated to the external auditors of the Company during the financial year ended 31 January 2016 amounted to RM101,650 and RM17,500 respectively.

vARIATION IN RESULTS FOR THE FINANCIAL YEAR

There was no deviation of 10% or more between the profit after tax and minority interest stated in the announced unaudited results and the audited financial statements of the Company and the Group for the year ended 31 January 2016.

PROFIT GUARANTEE

The Company has not given any profit guarantee in respect of any corporate exercise to-date.

MATERIAL CONTRACTS AND CONTRACTS

There are no material contracts including contracts relating to any loan entered into by the Company and its subsidiaries involving Directors’ and major shareholders’ interests.

Additional Informationcont’d


Financial StatementsReport of the Directors / 34

Independent Auditors‘ Report / 38

Statements of Profit or Loss andOther Comprehensive Income /40

Statements of Financial Position / 42

Statements of Changes in Equity / 44

Statements of Cash Flows / 46

Notes to the Financial Statements / 50

Supplementary Information / 134

Statement by Directors / 135

Declaration by the Officer Primarily Responsible for the Financial Management of the Company / 135


Report of the Directors

The directors of JOHAN HOLDINGS BERHAD hereby submit their report and the audited financial statements of the Group and of the Company for the financial year ended 31 January 2016.

PRINCIPAL ACTIVITIES

The principal activities of the Company are that of investment holding and provision of management services to its subsidiaries.

The principal activities of the subsidiaries are set out in Note 17 to the Financial Statements.

There have been no significant changes in the nature of the activities of the Company and its subsidiaries during the financial year except as disclosed in Note 17 to the Financial Statements.

RESULTS OF OPERATIONS

The results of operations of the Group and of the Company for the financial year are as follows:

The Group The CompanyRM’000 RM’000

Loss before tax (47,968) (7,965)Income tax credit 4,217 -

Loss for the year from continuing operations (43,751) (7,965)Profit for the year from discontinued operations 30,474 -

(13,277) (7,965)

Loss attributable to:Owners of the Company (13,135) (7,965)Non-controlling interests (142) -

(13,277) (7,965)

In the opinion of the directors, the results of operations of the Group and of the Company during the financial year have not been substantially affected by any item, transaction or event of a material and unusual nature other than the profit from discontinued operations as disclosed in Note 12 to the Financial Statements.

DIVIDENDS

No dividend has been paid or declared by the Company since the end of the previous financial year. The directors also do not recommend any dividend payment in respect of the current financial year.


Report of the Directorscont’d

RESERVES AND PROVISIONS

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

ISSUE OF SHARES AND DEBENTURES

The Company has not issued any new shares or debentures during the financial year.

SHARE OPTIONS

No options have been granted by the Company to any parties during the financial year to take up unissued shares of the Company.

No shares have been issued during the financial year by virtue of the exercise of any option to take up unissued shares of the Company. As at the end of the financial year, there were no unissued shares of the Company under options.

OTHER STATUTORY INFORMATION

Before the statements of profit or loss and other comprehensive income and statements of financial position of the Group and of the Company were made out, the directors took reasonable steps:

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

(b) to ensure that any current assets which were unlikely to realise their book values in the ordinary course of business had been written down to their estimated realisable values.

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

(a) which would render the amount written off for bad debts or the amount of allowance for doubtful debts in the financial statements of the Group and of the Company inadequate to any substantial extent; or

(b) which would render the values attributed to current assets in the financial statements of the Group and of the Company misleading; or

(c) which have arisen which render adherence to the existing method of valuation of assets or liabilities of the Group and of the Company misleading or inappropriate; or

(d) not otherwise dealt with in this report or financial statements which would render any amount stated in the financial statements of the Group and of the Company misleading.


OTHER STATUTORY INFORMATION cont'd

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

(a) any charge on the assets of the Group and of the Company which has arisen since the end of the financial year which secures the liability 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 year.

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

In the opinion of the directors, no item, transaction or event of a material and unusual nature has arisen in the interval between the end of the financial year and the date of this report which is likely to affect substantially the results of operations of the Group and of the Company for the succeeding financial year.

DIRECTORS

The following directors served on the Board of the Company since the date of the last report:

Tan Sri Dato’ Tan Kay HockPuan Sri Datin Tan Swee BeeTan Sri Dato’ Seri Dr Ting Chew PehDato’ Ahmad Khairummuzammil Bin Mohd YusoffOoi Teng Chew

DIRECTORS’ INTERESTS

The shareholdings in the Company of those who were directors at the end of the financial year, as recorded in the Register of Directors’ Shareholdings kept by the Company under Section 134 of the Companies Act, 1965, are as follows:

No. of ordinary shares of RM0.50 eachBalance at

1.2.2015 Addition DisposalBalance at31.1.2016

Direct InterestsTan Sri Dato’ Tan Kay Hock 59,391,100 - - 59,391,100Puan Sri Datin Tan Swee Bee 85,119,367 - - 85,119,367Ooi Teng Chew 200,000 - - 200,000

Indirect InterestsTan Sri Dato’ Tan Kay Hock 213,717,484 - - 213,717,484Puan Sri Datin Tan Swee Bee 187,989,217 - - 187,989,217



DIRECTORS’ INTERESTS cont'd

Tan Sri Dato’ Tan Kay Hock and Puan Sri Datin Tan Swee Bee, by virtue of their interests in the shares in the Company, are also deemed to have interest in the shares of the subsidiaries of the Company to the extent that the Company has an interest.

None of the other directors in office at the end of the financial year held shares or had beneficial interest in the shares of the Company or of its related companies during and at the end of the financial year.

DIRECTORS’ BENEFITS

Since the end of the previous financial year, none of the directors of the Company has received or become entitled to receive any benefit (other than the benefits included in the aggregate amount of emoluments received or due and receivable by the directors or the fixed salary of a full time employee of the Company as disclosed in Note 10 to the Financial Statements) 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 except for any benefit which may be deemed to have arisen by virtue of the transactions between the Company and certain companies in which certain directors of the Company are also directors and/or shareholders as disclosed in Note 31 to the Financial Statements.

During and at the end of the financial year, no arrangement subsisted to which the Company was a party whereby directors of the Company might acquire benefits by means of the acquisition of shares in, or debentures of, the Company or any other body corporate.

AUDITORS

The auditors, Messrs. Deloitte, have indicated their willingness to continue in office.

Signed on behalf of the Boardin accordance with a resolution of the Directors,

PUAN SRI DATIN TAN SWEE BEE DATO’AHMAD KHAIRUMMUZAMMIL BIN MOHD YUSOFF

Kuala Lumpur11 May 2016



REPORT ON THE FINANCIAL STATEMENTS

We have audited the financial statements of JOHAN HOLDINGS BERHAD, which comprise the statements of financial position of the Group and of the Company as of 31 January 2016, and the statements of profit or loss and other comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages from 40 to 133.

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

Auditors’ Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditors consider internal control relevant to the entity’s preparation of financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’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 that we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements give a true and fair view of the financial position of the Group and of the Company as of 31 January 2016 and of their financial performance and cash flows for the year then ended in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act, 1965 in Malaysia.

Independent Auditors' ReportTo the Members of JOHAN HOLDINGS BERHAD(Incorporated 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 subsidiaries of which we have acted as auditors, have been properly kept in accordance with the provisions of the Act;

(b) we have considered the accounts and auditors’ reports of the subsidiaries, of which we have not acted as auditors, which are indicated in Note 17 to the Financial Statements, being financial statements that have been included in the consolidated financial statements;

(c) we are satisfied that the accounts of the subsidiaries that have been consolidated with the financial statements of the Company 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 as required by us for those purposes; and

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

OTHER REPORTING RESPONSIBILITIES

The supplementary information set out in Note 38 on page 134 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the financial statements. The directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1 “Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements” as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

OTHER MATTERS

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

DELOITTE HUANG KHEAN YEONGAF 0080 Partner - 2993/05/18 (J)Chartered Accountants Chartered Accountant


Independent Auditors' ReportTo the Members of JOHAN HOLDINGS BERHAD

(Incorporated in Malaysia)

cont’d


The Group The CompanyNote 2016 2015 2016 2015

RM’000 RM’000 RM’000 RM’000

Continuing operationsRevenue 5 221,862 204,491 122 120Cost of sales 6 (73,803) (63,341) - -

Gross profit 148,059 141,150 122 120Other operating income 23,069 12,108 430 409Distribution expenses (19,681) (15,073) - -Administrative expenses (132,222) (95,768) (3,753) (2,267)Other operating expenses (26,689) (28,104) (4,737) (23,358)Finance costs 7 (40,504) (40,774) (27) (31)

Loss before tax 8 (47,968) (26,461) (7,965) (25,127)Income tax credit/(expense) 11 4,217 (1,941) - -

Loss for the year from continuing operations (43,751) (28,402) (7,965) (25,127)

Discontinued operationsProfit for the year from discontinued operations 12 30,474 11,779 - -

Loss for the year (13,277) (16,623) (7,965) (25,127)

Other comprehensive income/(loss)Items that will not be reclassified subsequently

to profit or loss:Gain on revaluation of properties 23 9,691 3,311 - -

Items that may be reclassified subsequently to profit or loss:Foreign currency translation difference for

foreign operations 23 11,746 4,890 - -Reclassification of exchange reserve to profit or

loss on disposal of foreign subsidiaries 23 (3,383) 2,393 - -Net fair value gain/(loss) on available-for-sale

financial assets 23 61 (31) - -

Other comprehensive income for the year, net of tax 18,115 10,563 - -

Total comprehensive income/(loss) for the year 4,838 (6,060) (7,965) (25,127)

Statements of Profit or Loss AndOther Comprehensive IncomeFor the Year Ended 31 January 2016



RM’000 RM’000 RM’000 RM’000

Loss attributable to:Owners of the Company (13,135) (16,387) (7,965) (25,127)Non-controlling interests (142) (236) - -

(13,277) (16,623) (7,965) (25,127)

Total comprehensive income/(loss) attributable to:Owners of the Company 4,980 (5,824) (7,965) (25,127)Non-controlling interests (142) (236) - -

4,838 (6,060) (7,965) (25,127)

(Loss)/Earnings per share attributable to owners of the Company (sen)

Basic and diluted: 13From continuing operations (7.00) (4.52)

From discontinued operations 4.89 1.89

Continuing and discontinued operations (2.11) (2.63)

Statements of Profit or Loss AndOther Comprehensive Income

For the Year Ended 31 January 2016cont’d

The accompanying Notes form an integral part of the Financial Statements



RM’000 RM’000 RM’000 RM’000

ASSETS

Non-Current AssetsProperty, plant and equipment 14 315,464 310,823 944 535Inventories - non-current 15 6,130 6,056 - -Intangible assets 16 16,933 17,865 - -Investment in subsidiaries 17 - - 146,570 146,755Investment securities 18 90 1,503 - -Refundable deposits 21 - 1,805 - -Deferred tax assets 19 5,474 6,033 - -

Total Non-Current Assets 344,091 344,085 147,514 147,290

Current AssetsInvestment securities 18 20,110 15,465 - -Inventories 15 12,704 34,622 - -Trade receivables 20 555,963 554,576 - -Other receivables and prepaid expenses 21 14,517 29,479 262 265Amount owing by subsidiaries 17 - - 3,365 13,692Tax recoverable - 154 - -Cash and bank balances 30 69,021 49,090 7,342 767

Total Current Assets 672,315 683,386 10,969 14,724

Total Assets 1,016,406 1,027,471 158,483 162,014

Statements of Financial PositionAs of 31 January 2016



RM’000 RM’000 RM’000 RM’000

EqUITY AND LIABILITIESCapital and ReservesShare capital 22 311,474 311,474 311,474 311,474Reserves 23 133,592 115,477 69,415 69,415Accumulated losses (237,933) (224,798) (262,024) (254,059)

207,133 202,153 118,865 126,830Non-controlling interests 4,910 9,108 - -

Total Equity 212,043 211,261 118,865 126,830

Non-Current LiabilitiesLoans and borrowings 24 19,336 6,192 553 113Investor certificates 26 - 266,595 - -Senior certificates 26 - 33,500 - -Deferred tax liabilities 19 11,431 16,092 - -

Total Non-Current Liabilities 30,767 322,379 553 113

Current LiabilitiesTrade payables 27 183,555 129,708 - -Other payables and accrued expenses 28 29,300 64,050 471 711Amount owing to subsidiaries 17 - - 38,415 34,283Loans and borrowings 24 97,974 122,278 179 77Investor certificates 26 450,013 165,241 - -Deferred revenue 29 5,119 7,055 - -Tax liabilities 7,635 5,499 - -

Total Current Liabilities 773,596 493,831 39,065 35,071

Total Liabilities 804,363 816,210 39,618 35,184

TOTAL EqUITY AND LIABILITIES 1,016,406 1,027,471 158,483 162,014


Statements of Financial PositionAs of 31 January 2016

cont’d


Attributable to owners of the Company

Non-distributable reserves

The GroupShare

capitalShare

premiumExchange

reserve

Propertiesrevaluation

reserve

Investmentsrevaluation

reserveAccumulated

losses Total

Non-controlling

interests Total

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Balance as of 1 February 2014 311,474 69,415 10,658 24,871 (30) (208,411) 207,977 9,344 217,321

Total comprehensive income/(loss) for the year - - 7,283 3,311 (31) (16,387) (5,824) (236) (6,060)

Balance as of 31 January 2015 311,474 69,415 17,941 28,182 (61) (224,798) 202,153 9,108 211,261

Balance as of 1 February 2015 311,474 69,415 17,941 26,182 (61) (224,798) 202,153 9,108 211,261

Total comprehensive income/(loss) for the year - - 8,363 9,691 61 (13,135) 4,980 (142) 4,838

Disposal of subsidiaries (Note 17) - - - - - - - (4,056) (4,056)

Balance as of 31 January 2016 311,474 69,415 26,304 37,873 - (237,933) 207,133 4,910 212,043

Statements of Changes in EquityFor the Year Ended 31 January 2016


The CompanyShare

capital

Non-distributable

reserve -Share premium

Accumulated losses Total

RM’000 RM’000 RM’000 RM’000

Balance as of 1 February 2014 311,474 69,415 (228,932) 151,957Total comprehensive loss for the year - - (25,127) (25,127)

Balance as of 31 January 2015 311,474 69,415 (254,059) 126,830

Balance as of 1 February 2015 311,474 69,415 (254,059) 126,830Total comprehensive loss for the year - - (7,965) (7,965)

Balance as of 31 January 2016 311,474 69,415 (262,024) 118,865


Statements of Changes in EquityFor the Year Ended 31 January 2016

cont’d


The Group The Company2016 2015 2016 2015

RM’000 RM’000 RM’000 RM’000

CASH FLOWS FROM/(USED IN) OPERATING ACTIVITIESLoss before tax from continuing operations (47,968) (26,461) (7,965) (25,127)Profit for the year from discontinued operations 30,509 11,956 - -

(17,459) (14,505) (7,965) (25,127) Adjustments for:

Interest expense 40,688 46,483 27 31Allowance for doubtful debts:

Trade receivables 8,899 7,500 - -Other receivables 18 16 - -

Amount owing by subsidiaries - - 2,177 792Depreciation of property, plant and equipment 7,675 8,775 218 180Amortisation of intangible assets 3,017 2,549 - -Unrealised loss on foreign exchange - net 401 594 - -Inventories written down 400 102 - -Property, plant and equipment written off 74 136 - -Loss/(Gain) on disposal of property, plant and equipment 25 (47) (52) -Gain on disposal of subsidiaries (31,454) (16,105) - -Net fair value gain on investment securities (4,655) (4,400) - -Allowance for doubtful debts no longer required:

Trade receivables (2,027) (8,245) - -Other receivables (1,357) (8) - -Amount owing to subsidiaries - - - (3,605)

Interest income (1,561) (1,193) (308) (339)Dividend income from investment securities (859) (953) - -Gain on disposal of investment securities - (24) - -Impairment loss on investment in subsidiaries - - 185 25,105Impairment loss on investment in subsidiaries no longer

required - - - (2,900)

Statements of Cash FlowsFor the Year Ended 31 January 2016



RM’000 RM’000 RM’000 RM’000

Operating Profit/(Loss) Before Working Capital Changes 1,825 20,675 (5,718) (5,863)

(Increase)/Decrease in: Inventories 7,530 (5,172) - - Trade receivables 3,804 15,063 - - Other receivables and prepaid expenses 13,871 (24,972) 3 (45)

Increase/(Decrease) in: Trade payables 43,839 162,132 - - Other payables and accrued expenses (33,469) (9,996) (240) 295 Deferred revenue (2,221) (13,468) - -

Cash Generated From/(Used In) Operations 35,179 144,262 (5,955) (5,613)Income tax (paid)/refunded 1,607 (1,144) - 275

Net Cash From/(Used In) Operating Activities 36,786 143,118 (5,955) (5,338)


cont’d



RM’000 RM’000 RM’000 RM’000

CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIESPurchase of property, plant and equipment (2,039) (2,887) (783) (7)Proceeds from disposal of property, plant and equipment 454 146 208 -Proceeds from disposal of investment securities - 4,274 - -Purchase of intangible assets (1,415) (1,554) - -Decrease in amount owing by subsidiaries - - 8,150 1,113Acquisition of investment securities - (2,566) - -Dividend income from investment securities 859 953 - -Net cashflow on disposal of subsidiaries 40,249 (25,638) - -Interest received 1,561 1,193 308 339

Net Cash From/(Used In) Investing Activities 39,669 (26,079) 7,883 1,445

CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIESInterest paid (40,688) (46,483) (27) (31)Increase in deposits pledged with licensed financial

institutions (246) (79) - -Net (repayments)/proceeds from investor and senior

certificates (15,323) 1,183 - -Proceeds/(Repayment) of loans and borrowings, excluding

bank overdraft 36,592 (125,419) 542 (123)Increase in amount owing to subsidiaries - - 4,132 4,223

Net Cash (Used In)/From Financing Activities (19,665) (170,798) 4,647 4,069

Statements of Cash FlowsFor the Year Ended 31 January 2016cont’d



RM’000 RM’000 RM’000 RM’000

NET INCREASE/(DECREASE) IN CASH AND CASH EqUIVALENTS 56,790 (53,759) 6,575 176

Effect of foreign exchange rate changes 7,952 (2,671) - -

CASH AND CASH EqUIVALENTS AT BEGINNING OF YEAR (38,352) 18,078 767 591

CASH AND CASH EqUIVALENTS AT END OF YEAR 30 26,390 (38,352) 7,342 767


cont’d



1. GENERAL INFORMATION

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

The principal activities of the Company are that of investment holding and provision of management services to its subsidiaries.

The principal activities of the subsidiaries are set out in Note 17.

There have been no significant changes in the nature of the activities of the Company and its subsidiaries during the financial year except as disclosed in Note 17.

The registered office and principal place of business of the Company is located at 11th Floor, Wisma E&C, 2 Lorong Dungun Kiri, Damansara Heights, 50490 Kuala Lumpur, Malaysia.

The financial statements of the Group and of the Company were authorised by the Board of Directors for issuance on 11 May 2016.

2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS

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

Adoption of New and Revised Malaysian Financial Reporting Standards

In the current financial year, the Group and the Company have adopted all the new and revised Standards and Amendments issued by the Malaysian Accounting Standards Board (“MASB”) that are relevant to their operations and effective for annual periods beginning on or after 1 February 2015 as follows:

Amendments to MFRSs Annual Improvements to MFRSs 2010 - 2012 CycleAmendments to MFRSs Annual Improvements to MFRSs 2011 - 2013 Cycle

The adoption of these new and revised Standards and Amendments does not have any material impact on the amounts reported in the financial statements of the Group and of the Company in the current and previous financial year.

Notes to the Financial StatementsFor the Year Ended 31 January 2016



cont’d

2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS cont'd

Standards and Amendments in issue but not yet effective

At the date of authorisation for issue of these financial statements, the new and revised Standards and Amendments which were in issue but not yet effective and not early adopted by the Group and the Company are as listed below:

MFRS 9 Financial Instruments2

MFRS 14 Regulatory Deferral Accounts1

MFRS 15 Revenue from Contracts with Customers2

MFRS 16 Leases5

Amendments to MFRS 10, MFRS 12 and MFRS 128

Investment Entities: Applying the Consolidation Exception1

Amendments to MFRS 10 and MFRS 128

Sale or Contribution of Assets between an Investor and its Associate or Joint Venture3

Amendments to MFRS 11 Accounting for Acquisitions of Interests in Joint Operations1

Amendments to MFRS 101 Disclosure Initiative1

Amendments to MFRS 107 Disclosure Initiative4

Amendments to MFRS 112 Recognition of Deferred Tax Assets for Unrealised Losses4


Clarification of Acceptable Methods of Depreciation and Amortisation1


Agriculture: Bearer Plant1

Amendments to MFRS 127 Equity Method in Separate Financial Statements1

Amendments to MFRSs Annual Improvements to MFRSs 2012 - 2014 Cycle3

1 Effective for annual periods beginning on or after 1 January 2016.2 Effective for annual periods beginning on or after 1 January 2018.3 Effective date of the Amendments which was originally for annual periods beginning on or after 1 January 2016, have been

deferred to a date to be announced by the MASB.4 Effective for annual periods beginning on or after 1 January 2017.5 Effective for annual periods beginning on or after 1 January 2019. Earlier application is permitted provided MFRS 15 is also

applied.

The directors anticipate that the abovementioned Standards and Amendments will be adopted in the annual financial statements of the Group and of the Company when they become effective and that the adoption of these Standards and Amendments will have no material impact on the financial statements of the Group and of the Company in the period of initial application except as disclosed below.


Notes to the Financial StatementsFor the Year Ended 31 January 2016cont’d


Standards and Amendments in issue but not yet effective cont'd

MFRS 9 Financial Instruments

MFRS 9 (IFRS 9 issued by IASB in November 2009) introduces new requirements for the classification and measurement of financial assets. MFRS 9 (IFRS 9 issued by IASB in October 2010) includes the requirements for the classification and measurement of financial liabilities and for derecognition, and in February 2015, the new requirements of general hedge accounting was issued by MASB. Another revised version of MFRS 9 was issued by MASB – MFRS (IFRS 9 issued by IASB in July 2015) mainly to include (a) impairment requirements for financial assets and (b) limited amendments to the classification and measurement requirements by introducing a ‘fair value through other comprehensive income’ (FVTOCI) measurement category for certain simple debt instruments.

Key requirements of MFRS 9:

• all recognised financial assets that are within the scope of MFRS 139 Financial Instruments: Recognition and Measurement are required to be subsequently measured at amortised cost or fair value. Specifically, debt investments that are held within a business model whose objective is to collect the contractual cash flows, and that have contractual cash flows that are solely payments of principal and interest on the principal outstanding are generally measured at amortised cost at the end of subsequent accounting periods. Debts instruments that are held within a business model whose objective is achieved both by collecting contractual cash flows and selling financial assets, and that have contractual terms of the financial assets give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding, are measured at FVTOCI. All other debt investments and equity investments are measured at their fair values at the end of subsequent accounting periods. In addition, under MFRS 9, entities may make an irrevocable election to present subsequent changes in the fair value of equity instrument (that is not held for trading) in other comprehensive income, with only dividend income generally recognised in profit or loss.

• with regard to the measurement of financial liabilities designated as at fair value through profit or loss, MFRS 9 requires that the amount of change in the fair value of the financial liability that is attributable to changes in the credit risk of that liability, is presented in other comprehensive income, unless the recognition of the effects of changes in the liability’s credit risk in other comprehensive income would create or enlarge an accounting mismatch in profit or loss. Changes in fair value attributable to a financial liability’s credit risk are not subsequently reclassified to profit or loss. Under MFRS 139, the entire amount of the change in the fair value of the financial liability designated as at fair value through profit or loss was presented in profit or loss.

• in relation to the impairment of financial assets, MFRS 9 requires an expected credit loss model, as opposed to an incurred credit loss model under MFRS 139. The expected credit loss model requires an entity to account for expected credit losses and changes in those expected credit losses at each reporting date to reflect changes in credit risk since initial recognition. In other words, it is no longer necessary for a credit event to have occurred before credit losses are recognised.

• the new general hedge accounting requirements retain the three types of hedge accounting mechanisms currently available in MFRS 139. Under MFRS 9, greater flexibility has been introduced to the types of transactions eligible for hedge accounting, specifically broadening the types of instruments that qualify for hedging instruments and the types of risk components of non-financial items that are eligible for hedge accounting. In addition, the effectiveness test has been overhauled and replaced with the principal of an ‘economic relationship’. Retrospective assessment of hedge effectiveness is also no longer required. Enhanced disclosure requirements about an entity’s risk management activities have also been introduced.



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Standards and Amendments in issue but not yet effective cont'd

MFRS 9 Financial Instruments cont'd

The directors of the Company anticipate that the application of MFRS 9 in the future may have material impact on amounts reported in respect of the Group’s and the Company’s financial assets and financial liabilities. However, it is not practicable to provide a reasonable estimate of the effect of MFRS 9 until a detailed review.

MFRS 15 Revenue from Contracts with Customers

MFRS 15 establishes a new five-step models that will apply to revenue arising from contracts with customers. MFRS 15 will supersede the current revenue recognition guidance including MFR 118 Revenue, MFRS 111 Construction Contracts and the related interpretations when it becomes effective.

The core principle of MFRS 15 is that an entity should recognise revenue which depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.

Under MFRS 15, an entity recognises revenue when (or as) a performance obligation is satisfied, i.e when “control” of the goods or services underlying the particular performance obligation is transferred to the customer.

Far more prescriptive guidance has been added in MFRS 15 to deal with specific scenarios. Furthermore, extensive disclosures are required by MFRS 15. The directors of the Company anticipate that the application of MFRS 15 in the future may have a material impact on the amounts reported and disclosures made in the Group’s consolidated financial statements. However, it is not practicable to provide a reasonable estimate of the effect of MFRS 15 until the Group performs a detailed review.

3. SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting

The financial statements of the Group and of the Company have been prepared under the historical cost convention unless otherwise stated in the accounting policies mentioned below. Historical cost is generally based on the fair value of the consideration given in exchange for assets.

The financial statements of the Group and of the Company are presented in Ringgit Malaysia (“RM”), and all values are rounded to the nearest thousand (RM’000) except when otherwise indicated.

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 another valuation technique. In estimating the fair value of an asset or a liability, the Group takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these financial statements is determined on such a basis, except for any share-based payment transactions that are within the scope of MFRS 2, leasing transactions that are within the scope of MFRS 117, and measurements that have some similarities to fair value but are not fair value, such as net realisable value in MFRS 102 or value-in-use in MFRS 136.



3. SIGNIFICANT ACCOUNTING POLICIES cont'd

Basis of Consolidation and Subsidiaries

The consolidated financial statements incorporate the financial statements of the Company and entities (including special purpose entities) controlled by the Company (its subsidiaries). Control is achieved when the Company:

• has power over the investee; • is exposed, or has rights, to variable returns from its involvement with the investee; and• has the ability to use its power to affect its returns.

The Company reassesses whether or not it controls and investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.

When the Company has less than a majority of the voting rights of an investee, it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Company considers all relevant facts and circumstances in assessing whether or not the Company’s voting rights in an investee are sufficient to give it power, including:

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

• potential voting rights held by the Company, other vote holders or other parties;• rights arising from other contractual arrangements; and• any additional facts and circumstances that indicate that the Company has, or does not have, the current ability

to direct the relevant activities at the time that decisions need to be made, including voting patterns at previous shareholders’ meetings.

Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated statement of profit or loss and other comprehensive income from the date the Company gains control until the date when the Company ceases to control the subsidiary.

Profit or loss and each component of other comprehensive income are attributed to the owners of the Company and to the non-controlling interest. Total comprehensive income of subsidiary is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interest having a deficit balance.

When necessary, adjustments are made to the financial statements of subsidiary to bring their accounting policies into line with the Group’s accounting policies.

All intra-group assets and liabilities, equity income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

Changes in Group’s ownership interest in existing subsidiaries

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



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Basis of Consolidation and Subsidiaries cont'd

Changes in Group’s ownership interest in existing subsidiaries cont'd

When the Group loses control of a subsidiary, a gain or loss is recognised in profit or loss and 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 and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. When assets of the subsidiary are carried at revalued amounts or fair values and the related cumulative gain or loss has been recognised in other comprehensive income and accumulated in equity, the amounts previously recognised in other comprehensive income are accounted for as if the Group had directly disposed of the relevant assets (i.e. reclassified to profit or loss or transferred directly to retained earnings as specified by applicable MFRSs). The fair value of any investment 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 Financial Instruments: Recognition and Measurement or, when applicable, the cost on initial recognition of an investment in an associate or jointly controlled entity.

Subsidiaries Investment in subsidiaries, which are eliminated on consolidation, are stated at cost less any accumulated impairment

losses, if any, in the Company’s financial statements.

Business Combinations

Acquisitions of subsidiaries and businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value which is calculated as the sum of the acquisition-date fair values of assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and equity instruments issued by the Group in exchange for control of the acquiree. Acquisition-related costs are recognised in profit or loss as incurred.

At acquisition date, the identifiable assets acquired and liabilities assumed are recognised at the fair value, except that:

• deferred tax assets or liabilities and assets or liabilities related to employee benefit arrangements are recognised and measured in accordance with MFRS 112 Income Taxes and MFRS 119 Employee Benefits respectively.

• liabilities or equity instruments related to the replacement by the Group of an acquiree’s share-based payment awards are measured in accordance with MFRS 2 Share-based Payment; and

• assets (or disposal groups) that are classified as held for sale in accordance with MFRS 5 Non-current Assets Held for Sale and Discontinued Operations are measured in accordance with that Standard.

Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after reassessment, the net of the acquisition-date amounts of the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value of the acquirer’s previously held equity interest in the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain purchase gain.




Business Combinations cont'd

Non-controlling interests that are present ownership interests and entitle their holders to a proportionate share of the entity’s net assets in the event of liquidation may be initially measured either at fair value or at the non-controlling interests’ proportionate share of the recognised amounts of the acquiree’s identifiable net assets. The choice of measurement basis is made on a transaction-by-transaction basis. Other types of non-controlling interests are measured at fair value or, when applicable, on the basis specified in another MFRSs.

Where the consideration transferred by the Group in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair value. Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments are adjustments that arise from additional information obtained during the measurement period (which cannot exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date.

The subsequent accounting for changes in the fair value of contingent consideration that do not qualify as measurement period adjustments depends on how the contingent consideration is classified. Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Contingent consideration that is classified as an asset or liability is remeasured at subsequent reporting dates in accordance with MFRS 137 Provisions, Contingent Liabilities and Contingent Assets, as appropriate, with the corresponding gain or loss being recognised in profit or loss.

Where a business combination is achieved in stages, the Group’s previously held equity interests in the acquiree are remeasured to fair value at the acquisition date (i.e. the date when the Group attains control) and the resulting gain or loss, if any, is recognised in profit or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognised in other comprehensive income are reclassified to profit or loss, where such treatment would be appropriate if that interest were disposed of.

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period (see above), or additional assets or liabilities are recognised, to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the amounts recognised at that date.

Revenue Recognition

Revenue is recognised when it is probable that the economic benefits associated with the transaction will flow to the Group and the Company and the amount of revenue can be measured reliably. Revenue is measured at the fair value of consideration received and receivable in the normal course of business.



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Revenue Recognition cont'd

The following specific recognition criteria must also be met before revenue is recognised:

(i) Dividend income

Dividend income from investments is recognised when the right to receive payment has been established.

(ii) Charge and credit card operations

Charge and credit card commissions, cardholders’ subscriptions, renewal fees and service charges are recognised on inception of the respective events.

Provision of charge and credit card services that result in award credits for cardholders are accounted for as multiple element revenue transactions and the fair value of the consideration received or receivable is allocated between the services provided and the reward credits granted. The consideration allocated to the award credits is measured by reference to their fair value. Such transaction is not recognised as revenue at the time of the initial transaction but is deferred and recognised as revenue when the reward credits are redeemed and the Group’s obligations have been fulfilled.

(iii) Ticketing and travel revenue

Revenue from air ticket sales is recognised based on agency fee earned and upon issue and delivery of air tickets. Revenue from travel services is recognised upon departure or arrival dates of the tours and services rendered.

(iv) Sales of goods

Revenue is recognised upon the transfer of significant risk and rewards of ownership of the goods to the customer, which generally coincides with delivery and acceptance of the goods sold. Revenue is not recognised to the extent where there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods.

(v) Revenue from hotel operations

Revenue from rental of hotel rooms, sale of food and beverage and other related income are recognised on an accrual basis.

(vi) Revenue from development properties

Revenue from sale of development properties is recognised in profit or loss when significant risks and rewards of ownership of the properties have been transferred to the buyer on delivery in its entirety at a single time on vacant possession.

(vii) Interest income

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




Revenue Recognition cont'd

(viii) Rental income

Rental income is accounted for on a straight-line basis over the lease terms. The aggregate costs of incentives provided to lessees are recognised as a reduction of rental income over the lease term on a straight-line basis.

Foreign Currency Conversion

The individual financial statements of each group entity are presented in the currency of the primary economic environment in which the entity operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each group entity are expressed in Ringgit Malaysia (“RM”), which is the functional currency of the Company and the presentation currency for the consolidated financial statements.

In preparing the financial statements of the individual entities, transactions in currencies other than the functional currency (foreign currencies) are recorded at the rates of exchange prevailing at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair values were determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

Exchange differences are recognised in profit or loss in the period in which they arise except for:

• Exchange differences arising on the retranslation of non-monetary items carried at fair value in respect of which gain and losses are recognised in other comprehensive income. For such non-monetary items, the exchange component of that gain or loss is also recognised in other comprehensive income;

• Exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings;

• Exchange differences on transactions entered into in order to hedge certain foreign currency risks; and

• Exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur (therefore, forming part of the net investment in the foreign operation), which are recognised initially in other comprehensive income and reclassified from equity to profit or loss on repayment of the monetary items.

For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign operations are translated into RM using exchange rates prevailing at the end of the reporting period. Income and expenses items are translated at the average exchange rates for the period, unless exchange rates fluctuated significantly during that period, in which case the exchange rates at the dates of transactions are used. Exchange differences arising, if any, are recognised in other comprehensive income and accumulated in equity (attributable to non-controlling interests as appropriate).



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Foreign Currency Conversion cont'd

On the disposal of a foreign operation (i.e. a disposal of the Group’s entire interest in a foreign operation, or a disposal involving loss of control over a subsidiary that includes a foreign operation, loss of joint control over a jointly controlled entity that includes a foreign operation, or loss of significant influence over an associate that includes a foreign operation), all of the accumulated exchange differences in respect of that operation attributable to the Group are reclassified to profit or loss. Any exchange differences that have previously been attributed to non-controlling interests are derecognised, but they are not reclassified to profit or loss.

In addition, in relation to a partial disposal of a subsidiary that does not result in the Group losing control over the subsidiary, the proportionate share of accumulated exchange differences are re-attributed to non-controlling interests and are not recognised in profit or loss. For all other partial disposals (i.e. of associates or jointly controlled entities that do not result in the Group losing significant influence or joint control), the proportionate share of the accumulated exchange differences is reclassified to profit or loss.

Goodwill and fair value adjustments on identifiable assets and liabilities arising on the acquisition of a foreign operation are treated as assets and liabilities of the foreign operation and translated at the rate of exchange prevailing at the end of each reporting period. Exchange differences arising are recognised in other comprehensive income and accumulated in equity.

Employee Benefits

Short-term benefits

Wages, salaries, bonuses and non-monetary benefits are accrued in the period in which the associated services are rendered by employees of the Group and the Company. Short-term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensated absences. Short-term non-accumulating compensated absences such as sick leave are recognised when the absences occur.

Defined contribution plans

The Group participates in the national pension schemes as defined by the laws of the countries in which it has operations. The Malaysian companies in the Group make contributions to the Employees Provident Fund (“EPF”) in Malaysia, a defined contribution pension scheme. Contributions to defined contribution pension schemes are recognised as an expense in the period in which the related service is performed.

Leases

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

The Group as lessee

Assets held under finance leases are initially recognised as assets of the Group at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the statement of financial position as a finance lease obligation.




Leases cont'd

The Group as lessee cont'd

Lease payments are apportioned between finance expenses and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance expenses are recognised immediately in profit or loss, unless they are directly attributable to qualifying assets, in which case they are capitalised in accordance with the Group’s general policy on borrowing costs (see below). Contingent rentals are recognised as expenses in the periods in which they are incurred.

Operating lease payments are recognised as an expense on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases are recognised as an expense in the period in which they are incurred.

In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefit of incentives is recognised as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

The Group as lessor

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

Borrowing Costs

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for recognised.

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

Income Tax

Income tax expense for the year comprises currently payable and deferred tax.



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Income Tax cont'd

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the statements of comprehensive income because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period.

Deferred tax

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that taxable profits will be available against which those deductible temporary differences, unused tax losses and unused tax credits can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group and the Company expect, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Group and the Company intend to settle its current tax assets and liabilities on a net basis.

Current and deferred tax for the period

Current and deferred tax are recognised as an expense or income in profit or loss, except when they relate to items that are recognised outside profit or loss (whether in other comprehensive income or directly in equity), in which case the current and deferred tax is also recognised in other comprehensive income or directly in equity respectively. Where current or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.




Impairment of Non-Financial Assets Other Than Goodwill

At the end of each reporting period, the Group reviews the carrying amounts of its non-financial assets other than goodwill to determine whether there is any indication that these assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Recoverable amount is the higher of fair value less costs to sell and value-in-use. In assessing value-in-use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset (or cash-generating unit) for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss.

Property, Plant and Equipment

Land and buildings held for use in the production or supply of goods or services, or for administrative purposes, are stated in the statement of financial position at their revalued amounts, being the fair value at the date of revaluation, less any subsequent accumulated depreciation and subsequent accumulated impairment losses. Revaluations are performed with sufficient regularity such that the carrying amount does not differ materially from that which would be determined using fair values at the end of the reporting period.

Any revaluation increase arising on the revaluation of such land and buildings is recognised in other comprehensive income and accumulated in properties revaluation reserve, except to the extent that it reverses a revaluation decrease for the same asset previously recognised in profit or loss, in which case the increase is credited to profit or loss to the extent of the decrease previously expensed. A decrease in carrying amount arising on the revaluation of such land and buildings is charged to profit or loss to the extent that it exceeds the balance, if any, held in the properties revaluation reserve relating to a previous revaluation of that asset.

Gain or loss arising from the disposal of an asset is determined as the difference between the estimated net disposal proceeds and the carrying amount of the asset, and is recognised in profit or loss.

Freehold land is not depreciated. Long-term leasehold land are depreciated based on the carrying values of the land over the remaining period of the leases.



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Property, Plant and Equipment cont'd

Depreciation of other property, plant and equipment is computed using the straight-line method to write off the cost of the various assets over their estimated useful lives at the following annual rates:

Freehold buildings 2%Long-term leasehold buildings 1.76% - 2%Long-term leasehold hotel properties 2%Plant and machinery, furniture, equipment and motor vehicles 5%- 33.3%

At the end of each reporting period, the residual values, useful lives and depreciation methods of property, plant and equipment are reviewed, and the effects of any change in estimates are recognised prospectively.

Assets held under finance leases are depreciated over their expected useful lives on the same basis as owned assets.

Intangible Assets

Goodwill

Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business less accumulated impairment losses, if any.

For the purposes of impairment testing, goodwill is allocated to each of the Group’s cash-generating units (or groups of cash-generating units) that is expected to benefit from the synergies of the combination.

The cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised directly in profit or loss. An impairment loss recognised for goodwill is not reversed in subsequent periods.

Where goodwill forms part of a cash-generating unit and part of the operation within that cash-generating unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the relative fair values of the operations disposed of and the portion of the cash-generating unit retained.

On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.




Intangible Assets cont'd

Other intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and any accumulated impairment losses. The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are amortised on a straight-line basis over the estimated economic useful lives and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at each reporting date.

Computer software acquired are amortised on a straight-line basis over a period of 7 years (their estimated useful lives).

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired.

Inventories

Inventories are stated at lower of cost and net realisable value. Net realisable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale.

Raw materials, work-in-progress, finished goods and merchandise

Cost of raw materials, finished goods and merchandise is determined on a weighted average or first-in-first-out basis, as appropriate, according to the category of inventories concerned. Cost of materials and merchandise comprises the original purchase price plus the costs incurred in bringing the inventories to their present location and condition. Cost of work-in-progress and finished goods include the costs of raw materials, direct labour, other direct costs and appropriate production overheads.

Contract work-in-progress

Contract work-in-progress include amounts of work completed and estimates of the realisable value of work done but not charged to clients at the end of the reporting period. The statements of profit or loss and other comprehensive income reflect the profits and losses on contracts completed prior to the end of the reporting period and the results of current contracts based on the percentage of completion method.

Land held for property development

Land held for property development consists of land on which no development activities have been undertaken or where development activities are not expected to be completed within the normal operating cycle. Such land is classified as non-current asset and is stated at cost less accumulated impairment losses.

Costs associated with the acquisition of land include the purchase price of the land, professional fees, stamp duties, commissions, conversion fees and other relevant levies.



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Inventories cont'd

Land held for property development cont'd

Land held for property development is transferred to property development costs (under current assets) when development activities have commenced and where the development activities are expected to be completed within the normal operating cycle.

Properties under development

Cost of properties under development not recognised as an expense is recognised as an asset. Properties under development comprise costs associated with the acquisition of land and all costs that are directly attributable to development activities or that can be allocated on a reasonable basis to such activities.

Developed properties held for sale

Cost of developed properties held for sale consists of costs associated with the acquisition of land, direct costs and appropriate proportions of common costs attributable to developing the properties to completion.

Provisions

Provisions are recognised when the Group and the Company have a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of economic resources will be required to settle the obligation, and the amount of the obligation can be estimated reliably.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

Progress Billing in Respect of Property Development

Progress billing in respect of property development refers to progress billings attributable to the sale of properties under development for which the said properties under development have yet to be delivered.

Financial Instruments

Financial assets and financial liabilities are recognised when, and only when, the Group and the Company become a party to the contractual provisions of the instruments.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of the financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs that are directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss.




Financial Assets

Financial assets are classified into the following specified categories: financial assets “at fair value through profit or loss” (FVTPL), “held-to-maturity” investments, “available-for-sale” (AFS) financial assets and, “loans and receivables”. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.

Effective interest method

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

Income is recognised on an effective interest basis for debt instruments other than those financial assets classified as at FVTPL.

Financial assets at FVTPL

Financial assets are classified as at FVTPL when the financial asset is (i) contingent consideration that may be paid by an acquirer as part of a business combination to which MFRS 3 applies, (ii) held for trading, or (iii) it is designated as at FVTPL.

A financial asset is classified as held for trading if:

• it has been acquired principally for the purpose of selling it in the near term; or• on initial recognition it is part of a portfolio of identified financial instruments that the Group manages together

and has a recent actual pattern of short-term profit-taking; or• it is a derivative that is not designated and effective as a hedging instrument.

A financial asset other than a financial asset held for trading or contingent consideration that may be paid by an acquirer as part of a business combination may be designated as at FVTPL upon initial recognition if:

• such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or

• the financial asset forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Group’s documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or

• it forms part of a contract containing one or more embedded derivatives, and MFRS 139 permits the entire combined contract to be designated as at FVTPL.

Financial assets at FVTPL are stated at fair value, with any gains or losses arising on remeasurement recognised in profit or loss.



cont’d


Financial Assets cont'd

AFS financial assets

AFS financial assets are non-derivatives that are either designated as available-for-sale or are not classified as loans and receivables, held-to-maturity investments or financial assets at FVTPL.

All AFS assets are measured at fair value at the end of the reporting period. Fair value is determined in the manner described in Note 32. Gains and losses arising from changes in fair value are recognised in other comprehensive income and accumulated in the investments revaluation reserve, with the exception of impairment losses, interest calculated using the effective interest method, and foreign exchange gains and losses on monetary assets, which are recognised in profit or loss. Where the investment is disposed of or is determined to be impaired, the cumulative gain or loss previously accumulated in the investments revaluation reserve is reclassified to profit or loss.

AFS equity investments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured and derivatives that are linked to and must be settled by delivery of such unquoted equity investments are measured at cost less any identified impairment losses at the end of the reporting period.

Dividends on AFS equity instruments are recognised in profit or loss when the Group’s right to receive the dividends is established.

The fair value of AFS monetary assets denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period. The foreign exchange gains and losses that are recognised in profit or loss are determined based on the amortised cost of the monetary asset. Other foreign exchange gains and losses are recognised in other comprehensive income.

Loans and receivables

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

Impairment of financial assets

Financial assets other than those at FVTPL, are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.

Objective evidence of impairment could include:

• significant financial difficulty of the issuer or counterparty; or• default or delinquency in interest or principal payments; or• it becoming probable that the borrower will enter bankruptcy or financial reorganisation.




Financial Assets cont'd

Impairment of financial assets cont'd

For certain categories of financial asset, such as trade receivables, assets that are assessed not to be impaired individually are, in addition, assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could include the Group’s and the Company’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period, as well as observable changes in national or local economic conditions that correlate with default on receivables.

For financial assets carried at amortised cost, the amount of the impairment loss recognised is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.

When an AFS financial asset is considered to be impaired, cumulative gains or losses previously recognised in other comprehensive income are reclassified to profit or loss in the period.

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

In respect of AFS equity securities, impairment losses previously recognised in profit or loss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is recognised in other comprehensive income and accumulated under the heading of investments revaluation reserve. In respect of AFS debt securities, impairment losses are subsequently reversed through profit or loss if an increase in the fair value of the investment can be objectively related to an event occurring after the recognition of the impairment loss.

Derecognition of financial assets

The Group and the Company derecognises a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group and the Company neither transfer nor retain substantially all the risks and rewards of ownership and continue to control the transferred asset, the Group and the Company recognise their retained interest in the asset and an associated liability for amounts it may have to pay. If the Group and the Company retain substantially all the risks and rewards of ownership of a transferred financial asset, the Group and the Company continue to recognise the financial asset and also recognise a collateralised borrowing for the proceeds received.

On derecognition of a financial asset in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity is recognised in profit or loss.



cont’d


Financial Liabilities and Equity Instruments issued by the Group and the Company

Classification as debt or equity

Debt and equity instruments are classified as either financial liability or as equity in accordance with the substance of the contractual arrangement.

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Group and the Company are recognised at the proceeds received, net of direct issue costs. Ordinary shares are equity instruments.

Financial liabilities

Financial liabilities are classified as either financial liabilities “at FVTPL” or “other financial liabilities”.

Other financial liabilities

Other financial liabilities are initially measured at fair value, net of transaction costs and are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

Derecognition of financial liabilities

The Group and the Company derecognise financial liabilities when, and only when, the Group’s and the Company’s obligations are discharged, cancelled or they expire. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss.

Statements of Cash Flows

The Group and the Company adopt the indirect method in the preparation of the statements of cash flows.

Cash and cash equivalents are short-term, highly liquid investments with maturities of three months or less from the date of acquisition that are readily convertible to a known amount of cash with insignificant risk of changes in value, against which bank overdrafts, if any, are deducted.



4. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY

(i) Critical judgements in applying the Group’s and the Company’s accounting policies

In the process of applying the Group’s and the Company’s accounting policies, which are described in Note 3 above, the directors are of the opinion that there are no instances of application of judgement which are expected to have a significant effect on the amounts recognised in the financial statements except as follows:

(a) Land and buildings

The Group’s land and buildings are accounted for using the revaluation model. The directors are of the opinion that this provides more reliable and relevant information on the value of the land and buildings.

(b) ControlOverSpecialPurposeEntities(“SPE”)

As disclosed in Note 17, SPE are considered subsidiaries of the Group although the Group does not hold any shares in the SPE. The directors of the Company have assessed the factors as described in Note 17 and concluded that the Group has control over these SPE.

(ii) Key sources of estimation uncertainty

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

(a) Impairment of goodwill

The Group determines whether goodwill is impaired at least on an annual basis. This requires the estimation of the value-in-use of the cash-generating units to which goodwill is allocated. Estimating the value-in-use requires the Group to make an estimate of the expected future cash flows from the cash-generating unit and also to choose a suitable discount rate in order to calculate the present value of those cash flows. The carrying amount of the Group’s goodwill at 31 January 2016 was RM4,494,000 (2015: RM4,494,000). Further details are disclosed in Note 16.

(b) Depreciationofplantandequipment

The cost/revalued amount of property, plant and equipment are depreciated on a straight-line basis over the assets’ useful lives. The directors estimate the useful lives of these plant and machinery to be within 3 to 20 years. The carrying amounts of the Group’s property, plant and equipment at 31 January 2016 are disclosed in Note 14. Changes in the expected level of maintenance, usage and technological developments could impact the economic lives and the residual values of these assets, therefore future depreciation charges could be revised.



cont’d

4. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTY cont'd

(ii) Key sources of estimation uncertainty cont'd

(c) Impairmentofproperty,plantandequipment

The Group assesses whether there is any indication of impairment for all non-financial assets other than goodwill at each reporting date. Non-financial assets other than goodwill are tested for impairment when there are indicators that the carrying amounts may not be recoverable. In the current financial year, the Group carried out the impairment test on plant and machinery with indication of impairment based on a variety of estimations including the value-in-use of the cash-generating units (“CGU”) to which the plant and machinery are allocated. Estimating the value-in-use requires the Group to make an estimate of the expected future cash flows from the CGU and also to choose a suitable discount rate in order to calculate the present value of those cash flows. Further details of the impairment testing of plant and machinery performed during the year are disclosed in Note 14.

(d) Deferred revenue

Deferred revenue arising from customer reward points of the Group, as disclosed in Note 29, pertains to the fair value of the award credits awarded to card members based on the spending on their credit and charge cards that could be redeemed for services and merchandise at a later date. There is no expiry date attached to these reward points. The reward points represent costs which are expected to be incurred and is recognised in accordance with IC Int 13 Customer Loyalty Programme.

(e) Deferred tax assets

Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that taxable profits will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies. The total carrying value of deferred tax assets recognised is disclosed in Note 19.

(f) Impairment of trade and other receivables

The Group assesses at the end of each reporting period whether there is any objective evidence that a financial asset is impaired. To determine whether there is objective evidence of impairment, the Group considers factors such as the probability of insolvency or significant difficulties of the debtor and default or significant delay in payments.

Where there is objective evidence of impairment the amount and timing of future cash flows are estimated based on historical loss experience for assets with similar credit risk characteristics. While the estimation process includes historical data and analysis, there is a significant amount of judgement applied in selecting inputs and analysing the results produced to determine the impairment allowances. The carrying amounts of the Group’s loans and receivables at the end of the reporting period are disclosed in Notes 20 and 21.



5. REVENUE


RM’000 RM’000 RM’000 RM’000

Continuing operationsCharge and credit cards operations 126,303 119,153 - -Sale of goods 66,302 57,479 - -Air ticketing and travel 19,471 19,477 - -Hotel operations 5,705 7,444 - -Sales of property 3,208 - - -Management services 52 158 - -Dividend income from investment securities 704 780 - -Management fees 117 - 122 120

221,862 204,491 122 120

Gross billing to charge and credit card customers during the year totaling RM1,815,135,000 (2015: RM1,451,156,000) comprised of the amount spent by the customers using the charge and credit card, which generated the revenue earned, as disclosed above.

Gross billing to air ticketing and travel customers during the year totaling RM172,006,000 (2015: RM196,467,000) comprised of the air tickets and other related charges billed, which generated revenue earned by the Group, as disclosed above.

6. COST OF SALES

The Group2016 2015

RM’000 RM’000

Continuing operationsCost of inventories sold 61,481 52,890Travel service costs 10,557 9,907Hotel operations costs 176 544Costs of completed units sold 1,589 -

73,803 63,341



cont’d

7. FINANCE COSTS


RM’000 RM’000 RM’000 RM’000

Continuing operationsInterest expense on:

Non-recourse investors’ certificates and senior certificates 28,801 30,446 - -

Bank borrowings 10,970 9,766 - -Finance leases 604 534 25 23Others 129 28 2 8

40,504 40,774 27 31

8. LOSS BEFORE TAX

Loss before tax is arrived at after the following (charges)/credits:


RM’000 RM’000 RM’000 RM’000

Continuing operationsEmployee benefits expense (Note 9) (68,674) (64,937) (4,217) (4,392)Raw materials and consumables used (21,149) (16,786) - -Loss on foreign exchange - net:

Realised (16,671) (3,445) (1) (21)Unrealised (462) (594) - -

Allowance for doubtful debts:Trade receivables (Note 20) (8,899) (7,500) - -Other receivables (Note 21) (18) (16) - -Amount owing by subsidiaries (Note 17) - - (2,177) (792)

Depreciation of property, plant and equipment (Note 14) (7,535) (8,382) (218) (180)Rental for:

Office equipment (6,314) (6,386) (5) (11)Land and buildings (4,320) (4,311) (513) (537)

Changes in inventories of finished goods and work-in-progress (5,150) (3,673) - -



8. LOSS BEFORE TAX cont'd

Loss before tax is arrived at after the following (charges)/credits: cont'd


RM’000 RM’000 RM’000 RM’000

Asset securitisation programme expenses (3,790) (5,282) - -Amortisation of intangible asset (Note 16) (3,017) (2,549) - -Inventories written down (400) (102) - -Audit fees:

Auditors of the Company (247) (206) (55) (46)Other auditors (360) (291) - -Underprovision in prior year (1) (3) - -

Property, plant and equipment written off (74) (136) - -(Loss)/Gain on disposal of property, plant and equipment (25) 47 52 -Impairment loss on investment in subsidiaries (Note 17) - - (185) (25,105)Net fair value gain on investment securities 4,655 4,400 - -Allowance for doubtful debts no longer required:

Trade receivables (Note 20) 2,027 8,245 - -Other receivables (Note 21) 1,357 8 - -Amount owing from subsidiaries (Note 17) - - - 3,605

Interest income from:Third parties 1,373 514 4 3Subsidiaries - - 304 336

Dividend income from investment securities 811 840 - -Bad debts recovered 724 1,344 - -Gain on disposal of investment securities - 24 - -Impairment loss on investment in subsidiaries no longer

required (Note 17) - - - 2,900



cont’d

9. EMPLOYEE BENEFITS EXPENSE


RM’000 RM’000 RM’000 RM’000

Continuing operationsSalaries, bonuses and allowance 60,557 56,490 3,670 3,781Contributions to defined contribution plans 5,550 5,895 378 394Other staff related expenses 2,567 2,552 169 217

68,674 64,937 4,217 4,392

Included in employee benefits expense of the Group and of the Company are Executive Directors’ remuneration amounting to RM5,478,000 (2015: RM5,458,000) and RM1,651,000 (2015: RM1,613,000) respectively as further disclosed in Note 10.

10. DIRECTORS’ REMUNERATION

Directors’ remuneration of the Group and of the Company classified into executive and non-executive directors are as follows:


RM’000 RM’000 RM’000 RM’000

Continuing operations

Directors of the CompanyExecutive directors:Salary and other emoluments 2,367 2,312 1,651 1,613

Non-executive directors:

Fees 150 150 150 150Salary and other emoluments 19 19 19 19

169 169 169 169

2,536 2,481 1,820 1,782



10. DIRECTORS’ REMUNERATION cont'd


RM’000 RM’000 RM’000 RM’000

Continuing operations cont'd

Directors of the subsidiariesExecutive directors:

Salary and other emoluments 3,018 3,060 - -Contributions to defined contribution plans 93 86 - -

3,111 3,146 - -Non-executive directors:Fees 12 12 - -

3,123 3,158 - -

Total 5,659 5,639 1,820 1,782

The estimated monetary value of benefits-in-kind received and receivable by the directors otherwise than in cash from the Group and the Company amounted to RM157,000 (2015: RM213,000).

The number of directors of the Company whose total remuneration during the year fell within the following bands is analysed below:

Number of Directors2016 2015

Executive directors:RM800,001 - RM1,000,000 1 1RM1,000,001 - RM1,400,000 1 1

Non-executive directors:RM10,000 - RM100,000 3 3



cont’d

11. INCOME TAX (CREDIT)/EXPENSE


RM’000 RM’000 RM’000 RM’000

Continuing operationsEstimated tax payable:

Current year:Malaysian tax 371 409 - -Foreign tax 167 4 - -

(Over)/Underprovision in prior years (320) 319 - -

218 732 - -Deferred tax (Note 19):

Current year (4,455) 1,217 - -Under/(Over) provision in prior years 20 (8) - -

(4,435) 1,209 - -

Total tax (credit)/expense relating to continuing operations (4,217) 1,941 - -

Total tax expense relating to discontinued operation (Note 12) 35 177 - -

Total tax (credit)/expense (4,182) 2,118 - -

Domestic income tax is calculated at the Malaysian statutory tax rate of 24% (2015: 25%) of the estimated taxable profit for the year. Taxation of other jurisdictions is calculated at the rate prevailing in the respective jurisdictions.

The Finance (No. 2) Act, 2014 gazetted on 30 December 2014 enacts the reduction of corporate income tax rate from 25% to 24% with effect from year of assessment 2016. Accordingly, the applicable tax rates to be used for the measurement of any applicable deferred tax will be the expected rate.

A reconciliation of income tax expense at the applicable statutory income tax rate to income tax expense at the effective income tax rate is as follows:


RM’000 RM’000 RM’000 RM’000

(Loss)/Profit before tax:Continuing operations (47,968) (26,461) (7,965) (25,127)Discontinued operations (Note 12) 30,474 11,779 - -

(17,494) (14,682) (7,965) (25,127)



11. INCOME TAX (CREDIT)/EXPENSE cont'd

A reconciliation of income tax expense at the applicable statutory income tax rate to income tax expense at the effective income tax rate is as follows: cont'd

The Group The Company

2016 2015 2016 2015RM’000 RM’000 RM’000 RM’000

Tax at the applicable statutory tax rate of 24% (2015: 25%) (4,199) (3,671) (1,912) (6,282)Effect of different tax rate of subsidiaries operating in

different jurisdictions (3,300) (2,901) - -Tax effects of:

Expenses that are not tax deductible 19,845 11,692 3,157 5,331Income not subject to tax (14,416) (2,002) - -

Deferred tax assets not recognised - - - 951Utilisation of deferred tax assets previously not

recognised (1,812) (1,311) (1,245) -(Over)/Underprovision in prior years:

Current tax (320) 319 - -Deferred tax 20 (8) - -

(4,182) 2,118 - -

12. DISCONTINUED OPERATIONS

During the current financial year, the Group disposed of its 66.08% stake in a subsidiary, Jacks International Limited, a company incorporated in Singapore for a sale consideration of SGD15,860,000 (RM48,724,000) which was completed on 6 October 2015.

In financial year 2015, the Group disposed of its entire interest in Diners Club (NZ) Limited for sales consideration of NZD3,123,000 (RM8,653,000) which was completed on 11 March 2014.

Details of the assets and liabilities disposed of and the calculation of the gain on disposal are disclosed in Note 17.

The results of the discontinued operations up to the date of disposal included in the loss for the year are set out below. The comparative profit or loss and cash flows from discontinued operations have been restated to include those operations classified as discontinued in the current year.



cont’d

12. DISCONTINUED OPERATIONS cont'd

The Group2016 2015

RM’000 RM’000

Revenue 17,555 41,956Cost of sales (7,092) (16,553)

Gross profit 10,463 25,403Other income 550 1,332Distribution expenses (9,467) (18,456)Administrative expenses (2,307) (6,719)Finance costs (184) (5,709)

Loss before tax (945) (4,149)Income tax expense (35) (177)

Loss after tax (980) (4,326)Gain on disposal of subsidiaries including cumulative exchange gain of RM3,383,000 (2015:

loss of RM2,393,000) reclassified from exchange reserve to profit or loss (Note 17) 31,454 16,105

Profit for the year from discontinued operations 30,474 11,779

The following (charges)/credit have been included in arriving at the profit before tax of the discontinued operations:

The Group2016 2015

RM’000 RM’000

Employee benefits expense (4,419) (9,184)Rental for land and building (3,372) (9,851)Change in inventories of finished goods (1,678) 1,267Raw materials and consumables used (1,038) (915)Directors’ remuneration:

Salary and other emoluments (468) (819)Contributions to defined contribution plan (13) (23)Fees (26) (75)

Interest expense on bank borrowings (184) (5,709)Depreciation of property, plant and equipment (Note 14) (140) (393)Audit fees (191) (262)Interest income 188 679Dividend income 48 113Foreign exchange gain/(loss):

Realised 61 (23)Unrealised 61 -



12. DISCONTINUED OPERATIONS cont'd

The Group2016 2015

RM’000 RM’000

Cash flows from discontinued operationsNet cash inflows from operating activities 1,816 9,358Net cash inflows from investing activities 39,638 1,369Net cash outflows from financing activities (1,205) (36,365)

Net cash inflows/(outflows) 40,249 (25,638)

13. (LOSS)/EARNINGS PER SHARE

Basic and diluted (loss)/earnings per share

Basic and diluted (loss)/earnings per share of the Group is calculated by dividing (loss)/earnings for the year attributable to owners of the Company by the number of ordinary shares in issue during the financial year.

The Group2016 2015

RM’000 RM’000

(Loss)/Profit attributable to owners of the Company (RM’000):Continuing operations (43,609) (28,166)Discontinued operations 30,474 11,779

(13,135) (16,387)

Number of ordinary shares in issue 622,948,000 622,948,000

Basic (loss)/earnings per share (sen):Continuing operations (7.00) (4.52)Discontinued operations 4.89 1.89

Continuing and discontinued operations (2.11) (2.63)

The diluted and basic earnings per share are the same as the Company has no dilutive ordinary shares.



cont’d

14. PROPERTY, PLANT AND EqUIPMENT

The GroupFreehold

landFreeholdbuildings

Long-term leasehold

land

Long-term leasehold land and buildings

Long-term leasehold

hotel properties

Plant and

machinery

Furniture, equipment and motor

vehicles Total

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Cost/ValuationBalance as of 1 February 2014 90,732 22,490 39,159 82,732 38,000 95,691 43,631 412,435Additions - 48 - - - 974 2,586 3,608Disposals - - - (60) - - (2,163) (2,223)Write-offs - - - - - - (880) (880)Assets of subsidiaries disposed - - - - - - (3,384) (3,384)Revaluation - - - 3,992 - - - 3,992Exchange differences - - - 4,998 - - (369) 4,629

Balance as of 31 January 2015/ 1 February 2015 90,732 22,538 39,159 91,662 38,000 96,665 39,421 418,177

Additions - - - - - 224 1,815 2,039Disposals - - - - - - (9,257) (9,257)Write-offs - - - - - - (2,960) (2,960)Assets of subsidiary disposed - - - (4,173) - - (9,240) (13,413)Revaluation - (48) - - 2,000 - - 1,952Exchange differences - - - 3,775 - - 2,320 6,095

Balance as of 31 January 2016 90,732 22,490 39,159 91,264 40,000 96,889 22,099 402,633

Accumulated depreciationBalance as of 1 February 2014 - - 7,073 5,628 3,220 54,609 35,238 105,768Charge for the year (Notes 8

and 12) - 642 406 1,135 1,081 3,500 2,011 8,775Disposals - - - (26) - - (2,098) (2,124)Write-offs - - - - - - (744) (744)Assets of subsidiary disposed - - - - - - (2,603) (2,603)Exchange differences - - - (1,374) - - (587) (1,961)

Balance as of 31 January 2015/ 1 February 2015 - 642 7,479 5,363 4,301 58,109 31,217 107,111

Charge for the year (Notes 8 and 12) - 644 406 158 1,174 3,500 1,793 7,675

Disposals - - - - - - (8,778) (8,778)Write-offs - - - - - - (2,886) (2,886)Assets of subsidiary disposed - - - (423) - - (6,081) (6,504)Revaluation - (1,286) - (4,319) (4,857) - - (10,462)Exchange differences - - - (30) - - 800 770

Balance as of 31 January 2016 - - 7,885 749 618 61,609 16,065 86,926



14. PROPERTY, PLANT AND EqUIPMENT cont'd

The GroupFreehold

landFreeholdbuildings

Long-term leasehold

land

Long-term leasehold land and buildings

Long-term leasehold

hotel properties

Plant and

machinery

Furniture, equipment and motor

vehicles Total

RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000 RM’000

Accumulated impairment losses

Balance as of 1 February 2014 and 31 January 2015/ 1 February 2015 and 31 January 2016 - - - - - 243 - 243

Net Book Value



The Company

Furniture and

equipment Motor

vehicles TotalRM’000 RM’000 RM’000

CostBalance as of 1 February 2014 2,175 1,417 3,592Additions 7 - 7Disposals (16) - (16)

Balance as of 31 January 2015/1 February 2015 2,166 1,417 3,583Additions 10 773 783Disposals - (804) (804)

Balance as of 31 January 2016 2,176 1,386 3,562



cont’d


The Company

Furniture and

equipment Motor

vehicles TotalRM’000 RM’000 RM’000

Accumulated DepreciationBalance as of 1 February 2014 2,020 864 2,884Charge for the year 19 161 180Disposals (16) - (16)

Balance as of 31 January 2015/1 February 2015 2,023 1,025 3,048Charge for the year 24 194 218Disposals - (648) (648)

Balance as of 31 January 2016 2,047 571 2,618

Net Book ValueBalance as of 31 January 2016 129 815 944

Balance as of 31 January 2015 143 392 535

(a) Freehold land and buildings carried at fair value

Independent valuations of the Group’s land and buildings were performed by independent qualified valuers to determine the fair value of the land and buildings as of 31 January 2016. The valuers have the appropriate qualifications and recent experience in the fair value measurement of properties in the relevant locations.

The fair value of the land and buildings was determine based on the market comparable approach that reflects recent transaction prices for similar properties.




(a) Freehold land and buildings carried at fair value cont'd

Details of the Group’s land and buildings and information about the fair value hierarchy as at 31 January 2016 are as follows:

The Group Level 1 Level 2 Level 3 Fair value RM’000 RM’000 RM’000 RM’000

As of 31 January 2016In MalaysiaA manufacturing plant that contains:- Freehold land - - 90,732 90,732- Buildings - - 22,490 22,490Long-term leasehold hotel properties - - 40,047 40,047

In SingaporeLong term leasehold land and buildings - - 82,236 82,236

As of 31 January 2015In MalaysiaA manufacturing plant that contains:- Freehold land - - 90,732 90,732- Buildings - - 21,896 21,896Long-term leasehold hotel properties - - 38,000 38,000

In SingaporeLong term leasehold land and buildings - - 77,952 77,952

The following table shows the significant unobservable input used in the valuation model:

Type Significant unobservable inputsRelationship of unobservable inputs and fair value measurement

Land and buildings Sale price of comparable land and buildings

The higher the sales price of comparable land and buildings, the higher the fair value



cont’d


(a) Freehold land and buildings carried at fair value cont'd

Had the Group’s land and buildings been measured on a historical cost basis, their carrying amounts would have been as follows:

The Group2016 2015

RM’000 RM’000

Freehold land 81,180 81,180Buildings 20,697 21,268Long-term leasehold land and buildings 52,268 54,866Long-term leasehold hotel properties 19,741 20,819

(b) Assets acquired under finance lease

During the financial year, the Group and the Company acquired property, plant and equipment at aggregate cost of RM2,039,000 (2015: RM3,608,000) and RM783,000 (2015: RM7,000), respectively, of which RM971,000 (2015: RM721,000) and RM774,000(2015: RMNil), respectively, were acquired by means of finance lease arrangements. The net book value of property, plant and equipment held under finance lease arrangements were as follows:


RM’000 RM’000 RM’000 RM’000

Furniture, equipment and motor vehicles 2,812 5,121 815 392

(c) Assets pledged as security

Certain property, plant and equipment have been pledged as security for the bank loans under a mortgage. The Group is not allowed to deal with these assets without the prior written consent from the chargees. The net book value of pledged assets are as follows:

The Group2016 2015

RM’000 RM’000

Freehold land and buildings 113,222 112,628Long-term leasehold land and buildings 90,516 86,299Plant and machinery 35,039 38,313Long-term leasehold hotel properties 39,382 -

278,159 237,240




(d) Impairment of plant and machinery

In financial year 2013, Prestige Ceramics Sdn Bhd, a subsidiary, recognised an impairment loss of RM243,000 on an idle machine that required repair. Management did not have any future plan to use the said machine and thus, an impairment loss was recognised.

As of 31 January 2016, the remaining plant and machinery of the said subsidiary, with a net book value of RM35,039,000 (2015: RM38,313,000), have been subjected to impairment assessment.

The recoverable amounts of the plant and machinery were determined based on value-in-use calculations using directors’ best estimates of cash flows projections based on the remaining useful lives of the plant and machinery from the approved financial budget. The cash flows were discounted at a rate of 8% (2015: 8%) per annum.

Keyassumptionsusedinvalueinusecalculations

(i) Budgeted gross margins: Gross margins are based on the average results achieved in the current financial year.

(ii) Discount rate: Discount rate reflects the current market assessment of the risks specific to the industry in which the subsidiary operates. The discount rate was estimated based on the average percentage of a weighted average cost of capital for the industry. This rate was further adjusted to reflect the market assessment of any risk specific to the subsidiary for which future estimates of cash-flows have not been adjusted.

(iii) Average remaining useful life: The average remaining useful life of plant and machinery is used to calculate the value in use for the CGU.

(iv) Growth rates: The forecasted growth rates are based on the management’s approved business plan which ranged between 2% to 3% (2015: 2% to 3%) per annum.

Sensitivitytochangesinassumption

The directors believe that no reasonable possible changes in any of the key assumptions above will cause the carrying amount of the plant and machinery to materially exceed its recoverable amount.



cont’d

15. INVENTORIES

(a) Inventories – non-current

Inventories – non-current consist of land held for property development as follows:

The Group2016 2015

RM’000 RM’000

Leasehold land 4,309 4,328Development expenditure 1,821 1,728

6,130 6,056

As of 31 January 2016, the land held for property development of the Group belonging to a subsidiary company, Lumut Park Resort Sdn Bhd, were charged to a local licensed bank as security for the term loan granted to the said subsidiary company as mentioned in Note 24.

(b) Inventories – current

Inventories – current consist of the following:

The Group2016 2015

RM’000 RM’000

At cost:

Raw materials 7,734 13,216Work-in-progress 315 431Finished goods 1,230 19,462Goods in transit - 275

9,279 33,384At net realisable value:

Finished goods 3,425 1,238

12,704 34,622

During the financial year, the amount of inventories recognised as an expense in profit or loss of the Group amounted to RM61,201,000 (2015: RM69,443,000).



16. INTANGIBLE ASSETS

The Group GoodwillComputer

software TotalRM’000 RM’000 RM’000

CostBalance as of 1 February 2014 5,318 31,538 36,856Additions - 3,839 3,839Assets of subsidiary disposed (824) (15,091) (15,915)Exchange differences - 1,163 1,163

Balance as of 31 January 2015/1 February 2015 4,494 21,449 25,943Additions - 1,543 1,543Assets of subsidiary disposed - (91) (91)Exchange differences - 145 145


Accumulated amortisationBalance as of 1 February 2014 - 12,013 12,013Amortisation for the year - 2,549 2,549Assets of subsidiary disposed - (7,206) (7,206)Exchange differences - (722) (722)

Balance as of 31 January 2015/1 February 2015 - 8,078 8,078Amortisation for the year - 3,017 3,017Assets of subsidiary disposed - (91) (91)Exchange differences - (397) (397)

Balance as of 31 January 2016 - 10,607 10,607

Accumulated impairment lossesBalance as of 1 February 2014 824 - 824Assets of subsidiary disposed (824) - (824)

Balance as of 31 January 2015/1 February 2015 and 31 January 2016 - - -

Net carrying amountBalance as of 31 January 2016 4,494 12,439 16,933




cont’d

16. INTANGIBLE ASSETS cont'd

Assets acquired under finance lease

During the financial year, the hospitality and card services segment of the Group acquired computer software at aggregate costs of RM1,543,000 (2015:RM3,839,000) of which RM128,000 (2015: RM2,285,000) was acquired by means of finance lease arrangements. The net carrying amount of computer software held under finance lease arrangements as at 31 January 2016 amounted to RM7,584,000 (2015: RM8,973,000).

Impairment of goodwill

The net carrying amount of goodwill allocated to the cash generating units (“CGU”) of Diners Club (Singapore) Pte Ltd and its subsidiaries (“DCS Group”), which is under the hospitality and card services segment, is as follows:

The GroupProvision for charge card and credit card

services segment

2016 2015RM’000 RM’000

Net carrying amount of goodwill 4,494 4,494 The recoverable amount of DCS Group is determined based on value-in-use calculation using cash flow projections

based on financial budgets approved by directors covering a period of 5 years. The pre-tax discount rate and the forecasted growth rates applied to the cash flow projections for the five-year period are 10% (2015: 10%) per annum and ranging from 1.4% to 5.3% (2015: 1.4% to 5.3%) per annum, respectively.

Sensitivity to changes in assumptions

The directors believe that no reasonable possible changes in any of the key assumptions above will cause the carrying amount of the goodwill to materially exceed its recoverable amount.

17. INVESTMENT IN SUBSIDIARIES

The Company

2016 2015RM’000 RM’000

Shares, at cost 384,057 384,057Less: Accumulated impairment losses (237,487) (237,302)

146,570 146,755



17. INVESTMENT IN SUBSIDIARIES cont'd

Movements in accumulated impairment losses are as follows:

The Company2016 2015

RM’000 RM’000

At beginning of year 237,302 215,097Impairment during the year (Note 8) 185 25,105Impairment no longer required (Note 8) - (2,900)

At end of year 237,487 237,302

The details of the subsidiaries are as follows:

Name of SubsidiariesProportion of ownership

interest and voting power held Principal Activities2016 2015

% %

Incorporated in Malaysia

Johan Management ServicesSdn Bhd (1)

100 100 Provision of secretarial and management services

Johan Land Sdn Bhd (1) 100 100 Property development and investment holding

Johan Properties Sdn Bhd (2) 100 100 Property holding and investment

Johan Equities Sdn Bhd (1) 100 100 Investment trading

Johan Pasifik Sdn Bhd (2) 100 100 Investment holding

Diners Club (Malaysia) Sdn Bhd (1) 100 100 Provision of charge and credit card services under Diners Club franchise

Diners World Travel (Malaysia)Sdn Bhd (1)

100 100 In-bound and out-bound tour and ticketing agent

Prestige Ceramics Sdn Bhd (1) 100 100 Manufacturing and marketing of ceramic tiles

William Jacks & Company (Malaysia) Sdn Bhd (1)

100 100 Investment holding and trading of engineering and building material

Nature’s Farm (Health Foods)Sdn Bhd (1)

100 100 Trading in health foods and supplements



cont’d





% %

Incorporated in Malaysia cont'd

Vitamin World Sdn Bhd (2) 100 100 Inactive

Wismer Automation Sdn Bhd (2) 96.68 96.68 Inactive

Lumut Marine Resort Bhd (1) 70 70 Operation and management of marine club. The cessation of business of the subsidiary is currently in progress.

Mustika Resort Sdn Bhd (1) 85 85 Operation of hotel and resort related business

Lumut Park Resort Sdn Bhd (1) 80 80 Property development and operation of hotel and resort related business

Johan Capital Sdn Bhd (1) 100 100 Investment holding and management services

JCC Equities Sdn Bhd (1) 100 100 Management services

Jacks Edar Sdn Bhd (2) 100 100 Inactive

Johan Leasing Sdn Bhd (2) 100 100 Inactive

Johan Nominees (Tempatan) Sdn Bhd (2) 100 100 Inactive

Johan Air Services Sdn Bhd (2) 100 100 Inactive

Johan Industries (Malaysia) Sdn Bhd (2) 100 100 Inactive

Strategic Usage Sdn Bhd (1) 100 100 Investment holding

Domayne Asset 2 Corporation Berhad (5) - - Provision of financing arrangement between Diners Club (Malaysia) Sdn Bhd and institutional lenders

Incorporated in Singapore

Johan Investment Private Limited (1) 100 100 Investment holding

Diners Club (Singapore) Private Limited (1) 100 100 Provision of charge card and credit card services under Diners Club franchise







% %

Incorporated in Singapore cont'd

Johan Air Services Pte Ltd (1) 100 100 Inactive

Diners World Travel Pte Ltd (1) 100 100 In-bound and out-bound tour and ticketing agent

Diners World Holdings Pte Ltd (1) 100 100 Investment holding

Diners Publishing Private Limited (1) 100 100 Inactive

Lifestyle Collection (S) Pte Ltd (1) 100 100 Merchandiser

Jacks International Limited (1) (3) - 86.75 Investment holding

William Jacks & Co (Singapore) Pte Ltd (1) - 86.75 Trading in health foods and supplements

Nature’s Farm Pte Ltd (1) - 86.75 Trading in health foods and supplements

Nutra-Source Pte Ltd (1) - 86.75 Trading in health foods and supplements

Wismer Automation (Singapore) Pte Ltd (1) - 77.90 Inactive

DCS Assets Funding Pte Ltd (1) (5) - - Provision of financing arrangement between Diners Club (Singapore) Private Limited and institutional lenders

Incorporated in Hong Kong

AIH Holdings Ltd (2) 100 100 Investment holding and management

Johan International Limited (2) 100 100 Investment holding

Worldwide Victory Limited (2) 100 100 Investment holding

Incorporated in The Netherlands

Abacus Pacific N.V. (4) 100 100 Investment holding



cont’d





% %

Incorporated in Australia

William Jacks (Australia) Pty Ltd (2) - 86.75 Property and investment holding

Incorporated in Bahamas

Jacks Overseas Limited (4) - 86.75 Investment holding and management

Incorporated in People’s Republic of China

Nature’s Farm (Shanghai) Co Ltd (2) - 86.75 Trading in health foods and supplements

Incorporated in British Virgin Islands

Capital Prime Ltd (2) - 100 Investment holding

Incorporated in New Zealand

DCNZ Holdings Limited (1) 100 100 Investment holding

(1) The financial statements of these subsidiaries are audited by member firm of Deloitte. (2) The financial statements of these subsidiaries are audited by auditors other than the auditors of the Company. (3) Quoted on the Singapore Exchange Securities Trading Limited. (4) Not required to present audited financial statements under the laws of its country of incorporation. (5) Although the Group does not hold shares in these special purpose entities (“SPE”), they are considered as subsidiaries as the

activities of the SPE are being conducted on behalf of the Group according to its specific business needs and that the Group retains the majority of the residual or ownership risk related to these companies on their assets. The Group’s consolidated financial statements include the results, assets and liabilities of these SPE.




Disposal of subsidiaries

As mentioned in Note 12, the Group disposed of Jacks International Limited in the current financial year and Diners Club (NZ) Limited in the previous financial year, and the effect of the disposals on the financial position of the Group is as follows:

The Group2016 2015

RM’000 RM’000

ASSETS

Non-Current AssetsProperty, plant and equipment 4,567 781Intangible assets - 7,885Investment securities 1,025 -Refundable deposits 1,338 -Deferred tax assets 157 2,260

Current AssetsInventories 12,656 119Trade receivables 2,164 75,109Other receivables and prepaid expenses 3,004 23,749Cash and cash equivalents 8,475 34,291

Non-current LiabilityDeferred tax liabilities (121) -Borrowings (767) -

Current LiabilitiesTrade payables (779) (154,039)Other payables and accrual expenses (1,281) -Borrowings (5,545) -Tax liabilities (184) -

Net assets/(liabilities) disposed of 24,709 (9,845)



cont’d


Disposal of subsidiaries cont'd

The Group2016 2015

RM’000 RM’000

Consideration:Cash, representing consideration received 48,724 8,653

The Group2016 2015

RM’000 RM’000

Gain on disposal of subsidiary:Total consideration 48,724 8,653Net (assets)/liabilities disposed of (24,709) 9,845Non-controlling interests 4,056 -Cumulative exchange differences reclassified from equity of subsidiaries (Note 23) 3,383 (2,393)

Gain on disposal (Note 12) 31,454 16,105

The gain on disposal of subsidiary is recorded as part of profit for the year from discontinued operations in the consolidated statement of profit or loss and other comprehensive income.

Net cash inflow/(outflow) arising on disposal of subsidiaries is as follows:

The Group2016 2015

RM’000 RM’000

Cash consideration received 48,724 8,653Less: Cash and cash equivalents disposed of (8,475) (34,291)

40,249 (25,638)




Amount owing by/to subsidiaries

Amount owing by subsidiaries consist of the following:


RM’000 RM’000

Amount owing by subsidiaries 12,898 21,048Less: Allowance for doubtful debts (9,533) (7,356)

3,365 13,692

Amount owing by/to subsidiaries, which arose mainly from payments on behalf, is unsecured and repayable on demand. Amount owing by subsidiaries bear interest rate at 2.95% (2015: 2.95%) per annum while amount owing to subsidiaries is interest-free.

Movement in the allowance for doubtful debts:


RM’000 RM’000

At beginning of year 7,356 10,169Allowance for the year (Note 8) 2,177 792Allowance no longer required (Note 8) - (3,605)

At end of year 9,533 7,356



cont’d

18. INVESTMENT SECURITIES

The Group

2016 2015

Carryingamount

Market valueof quoted

investmentsCarryingamount

Market value of quoted

investments

Non-Current:Available-for-sale financial assets: Equity instruments (quoted outside Malaysia) 80 80 1,495 1,495 Equity instruments (unquoted), at cost 10 * 8 *

90 1,503

Current:Fair value through profit or loss:Held for trading investments: - Equity instruments (quoted in Malaysia) 19,978 19,978 15,335 15,335- Equity instruments (quoted outside Malaysia) 132 132 130 130

20,110 15,465

Total investment securities 20,200 16,968

* Unquoted shares are stated at cost after their initial recognition, as they do not have a quoted market price and the fair value cannot be reliably measured.

Investment pledged as security

The Group’s investment in equity instruments amounting to RM11,322,000 (2015: RM11,651,000) are pledged as security for a short-term bank loan as disclosed in Note 24.



19. DEFERRED TAX ASSETS/(LIABILITIES)

Deferred tax assets

The Group2016 2015

RM’000 RM’000

At beginning of year 6,033 8,242(Charge)/Credit to profit or loss for the year:

Property, plant and equipment 1,163 536Inventories 60 (1)Trade receivables 37 7Trade payables (8) -Other payables and accrued expenses (161) (198)Unutilised reinvestment allowances - (376)Unabsorbed capital allowances (603) (797)Unused tax losses (593) 801

(105) (28)Transfer from properties revaluation reserve (Note 23) (297) -Disposal of subsidiaries (Note 17) (157) (2,260)Exchange differences - 79

At end of year 5,474 6,033

The deferred tax assets provided in the financial statements are in respect of the tax effects on the following:

The Group2016 2015

RM’000 RM’000

Deferred tax assets (before offsetting):Temporary differences arising from:

Inventories 307 247Trade receivables 25 25Other payables and accrued expenses - 318

Unabsorbed capital allowances 1,866 2,469Unutilised reinvestment allowances 9,010 9,010Unused tax losses 7,497 8,090

18,705 20,159Offsetting (13,231) (14,126)

Deferred tax assets (after offsetting) 5,474 6,033



cont’d

19. DEFERRED TAX ASSETS/(LIABILITIES) cont'd The deferred tax assets provided in the financial statements are in respect of the tax effects on the following: cont'd

The Group2016 2015

RM’000 RM’000

Deferred tax liabilities (before offsetting):Temporary differences arising from:

Property, plant and equipment (13,223) (14,089)Trade receivables - (37)Trade payables (8) -

(13,231) (14,126) Offsetting 13,231 14,126

Deferred tax liabilities (after offsetting) - -

Deferred tax liabilities

The Group2016 2015

RM’000 RM’000

At beginning of year 16,092 12,402Charge/(Credit) to profit or loss for the year:

Property, plant and equipment (7,423) 757Accrued interest income (2,533) (811)Other payables and accrued expenses (297) 189Deferred revenue 5 475Unabsorbed capital allowance 93 84Unutilised investment tax allowance 4,328 (20)Unused tax losses 2,470 507

(3,357) 1,181Transfer from property revaluation reserve (Note 23) - 681Disposal of subsidiaries (Note 17) (121) -Exchange differences (1,183) 1,828

At end of year 11,431 16,092



19. DEFERRED TAX ASSETS/(LIABILITIES) cont'd

The deferred tax liabilities provided in the financial statements are in respect of the tax effects on the following:

The Group2016 2015

RM’000 RM’000

Deferred tax liabilities (before offsetting):Temporary differences arising from:

Property, plant and equipment 8,065 16,685Accrued interest income 5,411 8,051

13,476 24,736Offsetting (2,045) (8,644)

Deferred tax liabilities (after offsetting) 11,431 16,092

Deferred tax assets (before offsetting):Temporary differences arising from:

Other payables and accrued expenses 1,269 972Deferred revenue 776 781

Unabsorbed capital allowance - 93Unutilised investment tax allowance - 4,328Unused tax losses - 2,470

2,045 8,644Offsetting (2,045) (8,644)

Deferred tax assets (after offsetting) - -



cont’d

19. DEFERRED TAX ASSETS/(LIABILITIES) cont'd

As mentioned in Note 3, the tax effects of deductible temporary differences, unused tax losses and unused tax credits which would give rise to deferred tax assets are recognised to the extent that it is probable that sufficient future taxable profits will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. As of 31 January 2016, the estimated amount of deductible temporary differences, unused tax losses and unused tax credits for which the deferred tax assets have not been recognised in the financial statements due to uncertainty of their realisation are as follows:


RM'000 RM'000 RM'000 RM'000

Temporary differences arising from:Amount owing by subsidiaries - - 3,365 13,692

Unused tax losses 132,492 140,144 22,203 16,999Unabsorbed capital allowances 2,556 2,454 88 153

135,048 142,598 25,656 30,844

The unused tax losses, unabsorbed capital allowances, unutilised reinvestment tax allowances and unutilised investment allowances are subject to the agreement of the tax authorities.

20. TRADE RECEIVABLES

The Group2016 2015

RM’000 RM’000

Securitised trade receivables 412,482 472,713Non-securitised trade receivables 376,932 302,352

789,414 775,065Less: Allowance for doubtful debts

Collective impairment (220,346) (207,387)Individual impairment (13,105) (13,102)

(233,451) (220,489)

555,963 554,576

The Group’s credit period generally ranges from 30 to 90 days (2015: 30 to 90 days). Other credit terms are assessed and approved on a case-by-case basis.



20. TRADE RECEIVABLES cont'd

Trade receivables disclosed above include amounts (see below for aged analysis) that are past due at the end of the reporting period but against which the Group has not recognised an allowance for doubtful debts because there has not been a significant change in credit quality and the amounts are still considered recoverable. The Group does not hold any collateral or other credit enhancements over these balances nor does it have a legal right of offset against any amounts owed by the Group to the counterparty.

Ageing of trade receivables not impaired

The Group2016 2015

RM’000 RM’000

Not past due 378,798 405,367Past due 30 days 41,926 45,866Past due 31 - 60 days 13,028 11,125Past due 61 - 90 days 9,415 5,123Past due more than 90 days 112,796 87,095

555,963 554,576

The Group’s trade receivables that are subject to collective/individual impairment review at the end of the reporting period are as follows:

The Group

Collective Individual TotalRM’000 RM’000 RM’000

As of 31 January 2016Trade receivables - gross amounts 750,899 38,515 789,414Less: Allowance for doubtful debts (220,346) (13,105) (233,451)

530,553 25,410 555,963

As of 31 January 2015Trade receivables - gross amounts 753,960 21,105 775,065Less: Allowance for doubtful debts (207,387) (13,102) (220,489)

546,573 8,003 554,576



cont’d


Movement in the allowance for doubtful debts

Movement in allowance accounts for individual and collective impairment are as follows:

The Group

2016 2015RM’000 RM’000

At beginning of year 220,489 234,082Allowance for the year (Notes 8 and 12) 8,899 7,500Allowance no longer required (Note 8) (2,027) (8,245)Bad debts written off (8,538) (9,588)Exchange differences 14,628 (3,260)

At end of year 233,451 220,489

In determining the recoverability of the trade receivables, the Group considers any change in the credit quality of the trade receivables from the date credit was initially granted up to the reporting date. The directors believe that there is no further credit provision required in excess of the allowance for doubtful debts.

The currency profile of trade receivables is as follows:

The Group2016 2015

RM’000 RM’000

Singapore Dollar 512,421 487,766Ringgit Malaysia 43,542 66,810

555,963 554,576

Securitised trade receivables in Singapore and Malaysia are disclosed as follows:

(a) Singapore

Diners Club (Singapore) Private Limited (“DCS”) elected to exit the original Assets Securitisation Programme with Card Centre Asset Purchase Company Pte Ltd (“CCAPC”), a special purpose entity set up for this purpose in 2012 and migrated to a revised Asset Securitisation Programme (the “SG Programme”) on 5 September 2012 with DCS Asset Funding Pte Ltd (“DCSAF”), a special purpose entity set up for this purpose to raise funds up to SGD223,000,000 over a 30 month period through the securitisation of DCS’ charge card and credit card receivables (“SG Eligible Receivables”). This arrangement has been extended for a further 30 month period with effect from March 2014.




(a) Singapore cont'd

In DCSAF, a trust is declared over the SG Eligible Receivables sold by DCS. The ownership of the trust assets is held through five certificates of beneficial interest, namely Class A certificates, Class B certificates, Class C certificates, Class D certificates and Seller Certificates. Seller Certificates are the certificates representing DCS’ interest in the trust assets. The proceeds from the Notes will be used to repay DCS for the sold receivables on each receivable purchase date (ie. each business day other than seventh of each month).

During the period of the SG Programme, the SG Eligible Receivable outstanding as at the tenth working day before the seventh of each month (“Calculation Date”) will be sold to DCSAF subject to the receivable purchase agreement. The collections from securitised trade receivables, received by DCS in trust for DCSAF, between two settlement dates (sixth calendar day of two consecutive months) will be utilised as follows:

(i) 10% of the collection up to the Target Interest Collection will be used by DCSAF to meet the financing costs, administrative expenses and other costs incurred relating to the SG Programme. Any excess will be paid by DCSAF to DCS on the next settlement date; and

(ii) the balances of the collections will be advanced by DCSAF to DCS on a daily basis for the purchase of new receivables at the next calculation date.

The securitised trade receivables have not been derecognised as DCS is deemed to have retained substantially all of the risks and rewards.

The funding from investors in relation to securitised trade receivables are disclosed as Investor Certificates in Note 26.

(b) Malaysia

On 29 April 2010, Diners Club (Malaysia) Sdn Bhd (“DCM”) redeemed its Asset Securitisation Programme (the “MY Programme”) which was used to raise funds of up to RM132,000,000 with Domayne Asset Corporation Berhad (“DACB”), a special purpose entity setup for the MY Programme and private institution lenders through the securitisation of DCM’s charge card receivables.

On 1 April 2010, DCM entered into new agreements (“Agreements”) with private institution lenders for a new asset securitisation programme (the “New Programme”) to raise funds of up to RM150,000,000 over a 4.25 year period with Domayne Asset 2 Corporation Berhad (“DA2CB”), a special purpose entity set up for this purpose and private institution lenders through the securitisation of DCM’s charge card and credit card receivables which are eligible for the New MY Programme (“Eligible MY Trade Receivables”). On 10 April 2014, the New MY Programme has been renewed for a further 3 year period, expiring on 10 July 2017.

In DA2CB, a trust is declared over the Eligible MY Trade Receivables sold by DCM to DA2CB (“Securitised Trade Receivables”) and all other assets of DA2CB. The ownership of the trust assets is held through two certificates of beneficial interest, namely Senior Certificates issued to private institution investors and Subordinated Certificates, the latter being retained by DCM. Neither DCM nor any other entities in the Group are obliged to support any losses suffered by the investors.



cont’d


(b) Malaysia

DCM receives on behalf of DA2CB collections from the securitised trade receivables sold by DCM. The collections are placed in designated trust accounts in DA2CB and are utilised as follows:

(i) 7% of the collections will be placed in a designated trust account in DA2CB and will be used by DA2CB to meet Programme-related expenses including Senior Certificate interest, administrative expenses and other costs as stated in the Agreements. Any excess will be paid by DA2CB to DCM on the next settlement date as variable interest on the Subordinated Certificates. The settlement dates are on the tenth calendar day of each month; and

(ii) 93% of the collections will be placed in a designated trust account in DA2CB (“Principal Collections Account”) and will be advanced by DA2CB to DCM on a daily basis for the purchase of new Eligible MY Trade Receivables by DA2CB from DCM.

During the period of the MY Programme, the Eligible MY Trade Receivables outstanding as at the fifth business day before the end of each month (referred to as “Collection Date”) will be sold to DA2CB pursuant to terms of the Agreements. Collections from Securitised Trade Receivables sold at the previous Calculation Date will be advanced on a daily basis to DCM for the purchase by DA2CB of new Eligible MY Trade Receivables before they are identified as Securitised Trade Receivables at the next Calculation Date. The amount of Eligible MY Trade Receivables purchased on a daily basis shall be equal to the balance in the Principal Collections Account (“Daily Cash Amount”) on each day divided by 93%. The purchase price is the Daily Cash Amount, which is 93% of the face value of the Eligible MY Trade Receivables purchased. The balance advanced on a daily basis is subject to Eligible MY Trade Receivable balances available.

The Securitised Trade Receivables are secured to obtain the funding from investors disclosed as Senior Certificates in Note 26. Collections from these Securitised Trade Receivables are restricted for utilisation as described in the two preceding paragraphs.

The Securitised Trade Receivables have not been derecognised in DCM as DCM retains certain rights and obligations over the Securitised Trade Receivables sold.

Pursuant to the terms of the Programme, 1% of the proceeds from the issuance of Senior Certificates is retained in a designated trust account in DA2CB and will be returned to DCM upon termination of the MY Programme, subject to the terms of the MY Programme.

On 6 October 2015, DCM redeemed the Senior Certificates and accordingly, there was no securitised receivables in Malaysia as at 31 January 2016.



21. OTHER RECEIVABLES AND PREPAID EXPENSES


RM'000 RM'000 RM'000 RM'000

Non-current Refundable deposits - 1,805 - -

CurrentOther receivables 6,602 24,008 175 177Less: Allowance for doubtful debts (29) (1,261) - -

6,573 22,747 175 177Refundable deposits 2,277 3,299 21 36Prepaid expenses 5,608 3,433 43 52Goods and services tax receivable 59 - 23 -

14,517 29,479 262 265 The Group and the Company have no significant concentration of credit risk for other receivables that may arise from

exposure to a single debtor or to groups of debtors.

In 2015, non-current portion of refundable deposits represents rental deposits paid for retail outlets in Singapore whose lease terms will end between financial years 2017 and 2020.

Movement in the allowance for doubtful debts

The Group2016 2015

RM’000 RM’000

At beginning of year 1,261 1,225Allowance for the year (Note 8) 18 16Allowance no longer required (Note 8) (1,357) (8)Exchange differences 107 28

At end of year 29 1,261



cont’d

22. SHARE CAPITAL

The Group and the Company

2016 2015RM’000 RM’000

Authorised:1,000,000,000 ordinary shares of RM0.50 each 500,000 500,000

Issued and fully paid:622,948,000 ordinary shares of RM0.50 each 311,474 311,474

23. RESERVES


RM'000 RM'000 RM'000 RM'000

Share premium (a) 69,415 69,415 69,415 69,415Exchange reserve (b) 26,304 17,941 - -Properties revaluation reserve (c) 37,873 28,182 - -Investment revaluation reserve (d) - (61) - -

133,592 115,477 69,415 69,415 (a) Share premium

The share premium arose from the issuance of ordinary shares of the Company. (b) Exchange reserve

Exchange reserve represents exchange difference arising from the translation of the financial statements of foreign operations whose functional currencies are different from that of the Group’s presentation currency. It is also used to record the exchange differences arising from monetary items which form part of the Group’s investment in foreign operations.

On disposal of foreign operation, all accumulated exchange differences in respect of that operation attributable to the Group are reclassified to profit or loss.



23. RESERVES cont'd

(b) Exchange reserve cont'd

Movements during the year are as follows:

The Group2016 2015

RM’000 RM’000

At beginning of year 17,941 10,658Foreign currency translation difference for foreign operations 11,746 4,890Reclassification of exchange reserve to profit or loss on disposal of foreign

subsidiaries (Note 17) (3,383) 2,393

At end of year 26,304 17,941

(c) Properties revaluation reserve

The Group2016 2015

RM’000 RM’000

At beginning of year 28,182 24,871Increase arising on revaluation of land and buildings 9,988 3,992Deferred tax liability arising on revaluation surplus (297) (681)

At end of year 37,873 28,182

(d) Investments revaluation reserve

Fair value reserve represents the difference between the cost and the fair value of financial assets that are classified as available-for-sale.



cont’d

24. LOANS AND BORROWINGS


Maturity RM'000 RM'000 RM'000 RM'000

Current Secured:

Bank overdrafts (Note 30) On demand 39,352 83,512 - -Revolving credits and short-term

loans 2016 17,116 16,117 - -Trust receipts and bankers’

acceptance 2016 21,432 5,069 - -Term loans 2016 11,586 6,883 - -Finance lease payables (Note 25) 2016 3,248 3,811 179 77

92,734 115,392 179 77

Unsecured:Short-term loan 2016 5,240 5,989 - -Bank overdrafts (Note 30) On demand - 897 - -

5,240 6,886 - -

Total Current 97,974 122,278 179 77

Non-current Secured:

Term loans 2017 16,516 1,017 - -Finance lease payables (Note 25) 2017 - 2021 2,820 5,175 553 113

Total Non-Current 19,336 6,192 553 113

Total 117,310 128,470 732 190



24. LOANS AND BORROWINGS cont'd

The remaining maturities of borrowings as of 31 January 2016 are as follows:


RM'000 RM'000 RM'000 RM'000

On demand or within one year 97,974 122,278 179 77More than 1 year and less than 2 years 18,945 3,575 162 53More than 2 years and less than 5 years 391 2,151 391 605 years or more - 466 - -

117,310 128,470 732 190

The weighted average interest rates per annum for borrowings as of 31 January 2016 are as follows:


(%) (%) (%) (%)

Bank overdrafts 6.37 6.37 - -Revolving credits and short-term loans 5.81 7.58 - -Trust receipts and bankers’ acceptance 5.22 6.22 - -Term loans 6.25 6.18 - -Obligation under finance lease 3.18 4.28 3.47 3.37

The secured term loans of the Group are secured by charges over certain freehold land and buildings, long-term leasehold land and buildings, plant and machinery, long term leasehold hotel properties, land held for property development, investment securities, and the leasehold lands held as non-current inventories and fixed deposits as disclosed in Notes 14(c), 15(a), 18 and 30, respectively.



cont’d

25. FINANCE LEASE PAYABLES

The Group and the Company have entered into finance lease arrangements for certain items of its furniture, equipment and motor vehicles (Note 14 (b)). These leases do not have terms of renewal, but have purchase options at nominal values at the end of the lease term. The Group’s and the Company’s finance lease payables are secured by the financial institutions’ charge over the assets under finance lease.

Future minimum lease payments under finance leases together with the present value of the net minimum lease payments are as follows:


RM'000 RM'000 RM'000 RM'000

Minimum lease payments:Not later than 1 year 3,460 4,094 206 77Later than 1 year but not later than 5 years 3,251 5,836 634 134

Total minimum lease payments 6,711 9,930 840 211Less: Future finance charges (643) (944) (108) (21)

Present value of minimum lease payables 6,068 8,986 732 190

Present value of payments:Not later than 1 year 3,248 3,811 179 77Later than 1 year but not later than 5 years 2,820 5,175 553 113

Present value of minimum lease payables 6,068 8,986 732 190Less: Amount due within the next 12 months

(current portion) (3,248) (3,811) (179) (77)

Non-current portion 2,820 5,175 553 113

26. INVESTOR AND SENIOR CERTIFICATES

The investor certificates relate to the funding for securitised trade receivables of DCS as disclosed in Note 20. Interest rates payable on the investor certificates range from 4.37% to 15.39% (2015: 3.88% to 14.69%) per annum, respectively.

The senior certificates related to the funding for securitised trade receivables of DCM as disclosed in Note 20. The senior certificates were settled during the current financial year. The interest rate payable on senior certificates in 2015 was 9.20% per annum.



27. TRADE PAYABLES

The normal credit period granted to the Group for trade purchases ranges from 30 to 120 days (2015: 30 to 120 days).

The currency profile of trade payables is as follows:

The Group2016 2015

RM’000 RM’000

Singapore Dollar 173,148 116,360Ringgit Malaysia 9,321 11,310US Dollar 934 1,401Euro 152 637

183,555 129,708

28. OTHER PAYABLES AND ACCRUED EXPENSES


RM'000 RM'000 RM'000 RM'000

Other payables 16,011 46,909 - 15Accrued expenses 12,935 17,141 471 696Goods and services tax payable 354 - - -

29,300 64,050 471 711

The currency profile of other payables is as follows:


RM'000 RM'000 RM'000 RM'000

Singapore Dollar 12,491 41,161 - -Ringgit Malaysia 3,520 5,748 - 15

16,011 46,909 - 15



cont’d

29. DEFERRED REVENUE

The Group2016 2015

RM’000 RM’000

Arising from:Customer reward points (i) 4,680 5,434Interest income (ii) 439 1,621

5,119 7,055

(i) Deferred revenue arising from customer reward points pertains to the amounts awarded to card members based on the spending on their credit and charge cards that could be redeemed for services and merchandise at a later date. There is no expiry date attached to these reward points. The reward point represents costs which are expected to be incurred and are recognised in accordance with IC Int 13 Customer Loyalty Programmes.

(ii) Deferred revenue arising from interest income are in respect of the unearned interest income from cash advances granted to credit card customers.

30. CASH AND CASH EqUIVALENTS

Cash and cash equivalents included in the statements of cash flows represent the following:


RM'000 RM'000 RM'000 RM'000

Deposits with licensed financial institutions 41,163 10,123 - -Cash and bank balances 27,858 38,967 7,342 767

69,021 49,090 7,342 767Less: Bank overdrafts (Note 24) (39,352) (84,409) - -Less: Pledged deposits with licensed financial institutions (3,279) (3,033) - -

26,390 (38,352) 7,342 767

Fixed deposits of the Group amounting to RM3,279,000 (2015: RM3,033,000) are pledged with financial institutions as security for banking facilities extended to the subsidiaries as disclosed in Note 24.

Included in deposits with licensed banks and cash and bank balances of the Group are amounts held in the designated trust accounts of the special purpose entities totalling RM11,968,000 (2015: RM17,479,000) pursuant to the terms of the respective trade receivables securitization programmes. These amounts can only be used for the purposes as disclosed in Note 20.



30. CASH AND CASH EqUIVALENTS cont'd

The effective interest rates and maturities of deposits as at the end of the financial year were as follows:

The Group and the Company2016 2015

Effective interest

ratesMaturities

days

Effective interest

ratesMaturities

days

(%) (%)

Licensed banks 0.05 - 3.90 1 - 365 0.05 - 3.90 1 - 365Licensed financial institutions 2.70 365 2.45 365

The currency profile of cash and bank balances is as follows:


RM'000 RM'000 RM'000 RM'000

Singapore Dollar 52,835 32,724 9 3New Zealand Dollar 41 109 - -Ringgit Malaysia 15,201 7,202 7,330 760US Dollar 360 2,135 - -Australian Dollar 12 6,766 - -Chinese Renminbi - 1 - 1Hong Kong Dollar 337 - - -Euro 66 2 2 2Pound Sterling 1 1 1 1Brunei 168 150 - -

69,021 49,090 7,342 767



cont’d

31. RELATED PARTY TRANSACTIONS

During the financial year, significant related party transactions undertaken between the Group and the Company with related parties, which are determined on a basis as negotiated between the related parties, are as follows:

2016 2015

RM’000 RM’000

The GroupTransactions with corporations in which certain directors of the Company are deemed related through their directorship and/or interest in George Kent (Malaysia) Berhad:

- Sales of air tickets 741 481- Sales of tiles - 2- Recovery of secretarial and share registration fees 107 112- Income from rental of motor vehicles and office equipment 70 49

The CompanyTransactions with subsidiaries:Interest charged on amount owing by subsidiaries 304 336Secretarial fee payable 52 73Management fees receivable 122 120

Compensation of Key Management Personnel

The key management personnel of the Group and of the Company include directors of the Company and subsidiaries and certain members of senior management of the Group and the Company. Their compensation are as follows:


RM'000 RM'000 RM'000 RM'000

Salaries and other short-term employee benefits 10,572 11,356 1,651 1,476Contributions to defined contribution plans 565 552 - -

11,137 11,908 1,651 1,476



32. FINANCIAL INSTRUMENTS AND CAPITAL RISK MANAGEMENT

(a) Capital risk management

The primary objective of the Group’s capital management is to ensure that it maintains a strong credit rating and healthy capital ratios in order to support its business and maximise shareholder value.

The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes during the years ended 31 January 2016 and 31 January 2015.

The Group monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Group includes within net debts, loans and borrowings, trade and other payables, funding from non-recourse investors certificates and senior certificates, less cash and bank balances. Capital includes equity attributable to the owners of the Company.

The Group2016 2015

RM'000 RM'000

Loans and borrowings (Note 24) 117,310 128,470Trade and other payables and accrued expenses (Notes 27 and 28) 212,855 193,758Funding from non-recourse investor certificates and senior certificates (Note 26) 450,013 465,336Less: Cash and bank balances (Note 30) (69,021) (49,090)

Net debt 711,157 738,474

Equity attributable to the owners of the Company 207,133 202,153

Capital and net debt 918,290 940,627

Gearing ratio 77% 79%

(b) Significant accounting policies

Details of significant accounting policies and methods adopted (including the criteria for recognition, the bases of measurement, and the bases for recognition of income and expenses) for each class of financial assets, financial liabilities and equity instruments are disclosed in Note 3.



cont’d

32. FINANCIAL INSTRUMENTS AND CAPITAL RISK MANAGEMENT cont'd

(c) Categories of financial instruments


RM'000 RM'000 RM'000 RM'000

Financial assetsLoans and receivables:

Trade receivables 555,963 554,576 - -Other receivables and refundable deposits

(Note 21)8,850 27,851 196 213

Amount owing by subsidiaries - - 3,365 13,692Cash and bank balances 69,021 49,090 7,342 767Fair value through profit or loss:

Held for trading investments (Note 18) 20,110 15,465 - -Available-for-sale:

Equity investments (Note 18) 90 1,503 - -

Financial liabilitiesOther financial liabilities:

Trade payables 183,555 129,708 - -Other payables and accrued expenses (Note 28) 28,946 64,050 471 711Amount owing to subsidiaries - - 38,415 34,283Senior certificates - 33,500 - -Investor certificates 450,013 431,836 - -Loans and borrowings (Note 24) 117,310 128,470 732 190

d) Financial risk management

The operations of the Group are subject to various financial risks which include credit risk, foreign currency risk, interest rate risk, liquidity risk and market price risk in connection with its use or holding of financial instruments. The Group has adopted a financial risk management framework with the principal objective of effectively managing risks and minimising any potential adverse effects on the financial performance of the Group.

The Board of Directors reviews and agrees policies and procedures for the management of these risks, which are executed by the general managers of the respective operating units. The Audit Committee provides independent oversight to the effectiveness of the risk management process.

It is, and has been throughout the current and previous financial years, the Group’s policy that no derivatives shall be undertaken except for the use as hedging instruments where appropriate and cost-efficient.

The following sections provide details regarding the Group’s and the Company’s exposure to the above-mentioned financial risks and the objectives, policies and processes for the management of these risks.




(e) Credit risk management

Credit risk is the risk of loss that may arise on outstanding financial instruments should a counterparty default on its obligations. The Group’s and the Company’s exposure to credit risk arises primarily from trade and other receivables. The Group’s objective is to seek continual revenue growth while minimising losses incurred due to increased credit risk exposure.

The Group controls its credit risk by the application of credit approval limits and monitoring procedures. Credit evaluations are performed on customers requiring credit over a certain amount. Trade receivables are monitored on an on-going basis.

At the end of the reporting period, the maximum credit exposure of the Group and the Company is represented by the carrying amounts of the trade and other receivables as shown on the statements of financial position.

The Group determines concentration of credit risk by monitoring the country and industry section profile of its trade receivables on an ongoing basis. The credit risk concentration profile of the Group’s trade receivables at the reporting date are as follows:

The Group 2016 2015

RM'000 % RM'000 %

By country:Singapore 512,421 92 487,766 88Malaysia and others 43,542 8 66,810 12

555,963 100 554,576 100

By segment:Building materials 7,587 1 4,339 1General trading 212 - 242 -Credit and charge cards business and hospitality 548,134 99 549,939 99Investment holding and secretarial services 30 - 56 -

555,963 100 554,576 100

(f) Foreign currency risk management

Foreign currency risk is that risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

The Group has transactional currency exposures arising from sales and purchases that are denominated in a currency other than a respective functional currencies of Group entities, primarily Ringgit Malaysia (“RM”) and Singapore Dollar (“SGD”).



cont’d


(f) Foreign currency risk management cont'd

As a result of significant operating activities in Singapore and Hong Kong, the Group’s statement of financial position can be affected significantly by movements in the SGD and United States Dollar (“USD”) against RM exchange rate.

The Group is also exposed to currency translation risk arising from its net investments in foreign operations, including Singapore and Hong Kong.

Foreign exchange exposures in transactional currencies other than functional currencies of the operating entities are kept to an acceptable level.

Sensitivity analysis for foreign currency risk

The following table demonstrates the sensitivity of the Group’s loss after tax to a reasonably possible change in the SGD and USD exchange rates against the respective functional currencies of the Group entities, with all other variables held constant.

The Group2016 2015

RM’000 RM’000Loss after tax Loss after tax

SGD/RM - strengthened 5% +258 +71 - weakened 5% -258 -71

USD/RM - strengthened 5% +134 +31 - weakened 5% -134 -31

The above sensitivity analysis is unrepresentative of the inherent foreign currency risk because the year end exposure does not reflect the exposure during the year.

(g) Interest rate risk management

Interest rate risk is the risk that the fair value or future cash flows of the Group’s and the Company’s financial instruments will fluctuate because of changes in the market interest rates. The Group’s and the Company’s exposure to interest rate risk arise primarily from their loans and borrowings bearing interest at floating rates.




(g) Interest rate risk management cont'd

Sensitivity analysis for interest rate risk

The sensitivity analysis below has been determined based on the exposure to interest rate for deposits with licensed financial institutions and loans and borrowings bearing interest at floating rates at the end of the reporting period. At the reporting date, if interest rates had been 10 basis points lower/higher, with all other variables held constant, the Group’s loss after tax would have been RM126,000 lower/higher (2015: RM152,000), arising mainly as a result of lower/higher interest expense on floating rate loans and borrowings and higher/lower interest income from floating rate deposits. The assumed movement in basis points for interest rate sensitivity analysis is based on management’s assessment on the currently observable market environment.

The above sensitivity analysis is unrepresentative of the inherent interest rate risk because the year end exposure does not reflect the exposure during the year.

(h) Liquidity risk management

Liquidity risk is the risk that the Group and the Company will encounter difficulty in meeting financial obligations due to shortage of funds. The Group’s and the Company’s exposure to liquidity risk arises primarily from mismatches of the maturities of financial assets and liabilities. The Group’s and the Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of stand-by credit facilities.

At the reporting date, approximately 84% (2015: 95%) and 24% (2015: 41%) of the Group’s and the Company’s loans and borrowings (Note 24) respectively will mature in less than one year based on the carrying amounts reflected in the financial statements.



cont’d


(h) Liquidity risk management cont'd

Liquidity tables

The following tables detail the Group’s and the Company’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayments periods. The tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group and the Company can be required to pay. The tables include both interest and principal cash flows. To the extent the interest flows are floating rates, the undiscounted amount is derived from the interest rate at the end of the reporting period. The contractual maturity is based on the earliest date on which the Group and the Company may be required to pay.

The Group Maturity profile

Less than1 year

1 - 5 years

5+ years Total

RM’000 RM’000 RM’000 RM’000

31 January 2016Non-interest bearing:Trade payables 183,555 - - 183,555Other payables and accrued expenses 28,946 - - 28,946

Interest bearing:Senior certificates - - - -Investor certificates 467,699 - - 467,699Loans and borrowings 103,911 25,758 - 129,669

784,111 25,758 - 809,869

31 January 2015Non-interest bearing:Trade payables 129,708 - - 129,708Other payables and accrued expenses 64,050 - - 64,050

Interest bearing:Senior certificates - 36,580 - 36,580Investor certificates 165,241 291,106 - 456,347Loans and borrowings 128,566 6,010 466 135,042

487,565 333,696 466 821,727





Liquidity tables cont'd

The Company Maturity profile

Less than1 year

1 - 5 years

5+ years Total

RM’000 RM’000 RM’000 RM’000

31 January 2016Non-interest bearing:

Other payables and accrued expenses 471 - - 471Amount owing to subsidiaries 38,415 - - 38,415

Interest bearing:Loans and borrowings 206 634 - 840

39,092 634 - 39,726

31 January 2015Non-interest bearing:Other payables and accrued expenses 711 - - 711Amount owing to subsidiaries 34,283 - - 34,283

Interest bearing:Loans and borrowings 80 131 - 211

35,074 131 - 35,205



cont’d




The following table details the Group’s and the Company’s expected maturity for its non-derivative financial assets. The table has been drawn up based on the undiscounted contractual maturities of the financial assets including interest that will be earned on those assets. The inclusion of information on non-derivative financial assets is necessary in order to understand the Group’s liquidity risk management as the liquidity is managed on a net asset and liability basis.

The Group Maturity profile

Less than1 year

1 - 5 years

5+ years Total

RM’000 RM’000 RM’000 RM’000

31 January 2016Non-interest bearing:Investment securities 20,110 90 - 20,200Trade receivables 555,963 - - 555,963Other receivables and refundable deposits 8,850 - - 8,850Cash and bank balances 27,858 - - 27,858

Interest bearing:Cash and bank balances 41,163 - - 41,163

653,944 90 - 654,034

31 January 2015Non-interest bearing:Investment securities 15,465 1,503 - 16,968Trade receivables 554,576 - - 554,576Other receivables and refundable deposits 27,851 - - 27,851Cash and bank balances 38,967 - - 38,967

Interest bearing:Cash and bank balances 10,123 - - 10,123

646,982 1,503 - 648,485






The Company Maturity profile

Less than1 year

1 - 5 years

5+ years Total

RM’000 RM’000 RM’000 RM’000

31 January 2016Non-interest bearing:Other receivables and refundable deposits 196 - - 196Cash and bank balances 342 - - 342

Interest bearing:Cash and bank balances 7,000 - - 7,000Amount owing by subsidiaries 3,365 - - 3,365

10,903 - - 10,903

31 January 2015Non-interest bearing:Other receivables and refundable deposits 213 - - 213Cash and bank balances 767 - - 767

Interest bearing:Amount owing by subsidiaries 13,692 - - 13,692

14,672 - - 14,672



cont’d


(i) Fair values

The fair values of financial instruments refer to the amounts at which the instruments could be exchanged or settled between knowledgeable and willing parties in an arm’s length transaction. Fair values have been arrived at based on prices quoted in an active, liquid market or estimated using certain valuation techniques such as discounted future cash flows based upon certain assumptions. Amounts derived from such methods and valuation techniques are inherently subjective and therefore do not necessarily reflect the amounts that would be received or paid in the event of immediate settlement of the instruments concerned.

On the basis of the amounts estimated from the methods and techniques as mentioned in the preceding paragraph, the carrying amounts of the various financial assets and financial liabilities reflected on the statement of financial position approximate their fair values.

The following methods and assumptions were used to estimate the fair values of the principal financial assets and liabilities of the Group and of the Company:

• Cash and cash equivalents, trade and other receivables, refundable deposits, amount owing by/to subsidiaries, trade and other payables and accrued expenses: The carrying amounts are considered to approximate the fair values as they are either within the normal credit terms or they have a short-term maturity period.

• Investment securities: Investment securities are carried at market value. • Loans and borrowings: As the loans and borrowings were obtained from licensed financial institutions at

the prevailing market rate, the carrying value of these financial liabilities approximates its fair value. • Senior and investor certificates: The fair values of senior certificates and investor certificates are

determined by estimating future cash flows on a borrowing-by-borrowing basis, and discounting these future cash flows using an interest rate which takes into consideration the Group’s incremental borrowing rate at year end for similar types of debt arrangements.

Fair value measurements recognised in the statements of financial position

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is observable.

• Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities;

• Level 2 fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

• Level 3 fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).




(i) Fair values cont'd

Fair value measurements recognised in the statements of financial position cont'd

Financial assets Fair value of 31 January Fair value

hierarchy

Valuationtechnique and

key input2016 2015

1) Available-for-sale non-derivative financial assets-Investment securities

quoted outside Malaysia

-RM90,000

Quoted outside Malaysia

-RM1,495,000

Level 1 Quotedbid prices in an

active market

2) Held-for trading non-derivative financial assets-Investment securities

quoted inMalaysia

-RM19,978,000

quoted outside Malaysia

-RM132,000

Quoted inMalaysia

-RM15,335,000

Quoted outside Malaysia

-RM130,000

Level 1 Quotedbid prices in an

active market

There were no transfers between Levels 1 and 2 during the financial year.

(j) Market price risk management

Market price risk is the risk that fair value or future cash flows of the Group’s financial instruments will fluctuate because of changes in market prices (other than interest or exchange rates).

The Group is exposed to equity price risk arising from its investments is quoted equity instruments in Malaysia and Singapore stock exchanges. These instruments are mainly classified as fair value through profit or loss. The Group does not have exposure to commodity price risk.

Sensitivity analysis for equity price risk

At the reporting date, if the share price had been 5% (2015: 5%) higher/lower with all other variables held constant, the Group’s loss net of tax would have been RM1,010,000 higher/lower (2015: RM848,000), arising as result of higher/lower fair value gains on its investments in quoted equity instruments.

The above sensitivity analysis is unrepresentative of the inherent equity price risk because the year end exposure does not reflect the exposure during the year.



cont’d

33. SEGMENT INFORMATION

For the Group’s chief operating decision maker (“CODM”) purposes, the Group is organised into business units based on their products and services, and has five reportable operating segments as follows:

(i) Building materials

(ii) General trading

(iii) Property

(iv) Hospitality and card services

(v) Investment holding and secretarial services

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

CODM monitors the operating results of its business units separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit or loss which, in certain respects as explained in the table below, is measured differently from operating profit or loss in the consolidated financial statements.



33.

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cont’d

33. SEGMENT INFORMATION cont'd

Note : Nature of adjustments and eliminations to arrive at amounts reported in the consolidated financial statements

A Inter-segment revenues and expenses eliminations.

B Other material non-cash expenses and income consist of the following items as presented in the respective notes to the financial statements.

2016 2015RM'000 RM'000

Net fair value gain on investment securities (4,655) (4,400)Allowance for doubtful debt no longer required

- trade and other receivables (3,384) (8,253)Bad debts recovered (724) (1,344)Gain on disposal of investment securities - (24)Allowance for doubtful receivables - trade and other receivables 8,917 7,516Net unrealised foreign exchange loss/(gain) 462 594Inventories written down 400 102Property, plant and equipment written off 74 136(Loss)/Gain on disposal of property, plant and equipment 25 (47)

1,115 (5,720)

C Additions to non-current assets consist of:

2016 2015RM’000 RM’000

Property, plant and equipment 2,039 3,608Intangible assets 1,543 3,839

3,582 7,447

D The following items are deducted from segment assets to arrive at total assets reported in the consolidated statement of financial position:

2016 2015RM’000 RM’000

Inter-segment assets 22,497 (233,501)



33. SEGMENT INFORMATION cont'd

E The following items are deducted from segment liabilities to arrive at total liabilities reported in the consolidated statement of financial position:

2016 2015RM’000 RM’000

Inter-segment liabilities (139) (9,549)

Geographical information

Revenue and non-current assets information based on the geographical location of customers and assets respectively are as follows:

Revenue Non-current assets2016 2015 2016 2015

RM’000 RM’000 RM’000 RM’000

Singapore 127,349 119,451 97,348 102,017Malaysia and others 94,513 85,040 246,743 242,068

221,862 204,491 344,091 344,085

Non-current assets information presented above consists of the following items as presented in the consolidated statement of financial position:

The Group2016 2015

RM’000 RM’000

Property, plant and equipment 315,464 310,823Land held for property development 6,130 6,056Intangible assets 16,933 17,865Investment securities 90 1,503Prepaid lease payment - 1,805Deferred tax assets 5,474 6,033

344,091 344,085



cont’d

34. COMMITMENTS

(i) Capital commitments

Capital expenditure as at the reporting date is as follows:

The Group2016 2015

RM’000 RM’000

Capital expenditureApproved and contracted for:

property, plant and equipment 154 2,706

(ii) Operating lease commitments

The Group has entered into commercial property leases for the use of land and buildings and office equipment. These leases have an average tenure of between one to five years with no renewal option or contingent rent provision included in the contracts. Lease terms do not contain restrictions on the Group’s activities concerning dividends, additional debt or further leasing.

As at the end of the reporting period, the Group has non-cancellable operating lease commitments in respect of the rental of premises as follows:

The Group Future minimum lease payments

2016 2015RM’000 RM’000

Within one year 1,873 12,772In the second to fifth years 211 9,553

2,084 22,325



35. CONTINGENT ASSETS

A wholly-owned subsidiary, Johan Properties Sdn Bhd (“JPSB”) had on 25 July 1996 filed a suit against five (5) Defendants for wrongful repudiation or breach of a contract in relation to a land held under Lot 289, Section 57, Bandar Kuala Lumpur. JPSB’s statement of claim was for (i) return of the deposit sum of RM1,700,000; (ii) special damages amounting to RM4,300,000; (iii) general damages; and (iv) interest and costs.

On 2 June 2003, the High Court dismissed JPSB’s suit and the Defendants’ counter claim. JPSB succeeded on appeal in the Court of Appeal on 21 July 2010, wherein JPSB’s claim against the Defendants for return of the deposit sum of RM1,700,000 and interest at rate of 8% per annum from 19 October 2000 to the date of full settlement was allowed, setting aside the High Court’s decision of 2 June 2003, with costs of RM30,000 awarded to JPSB.

On 4 April 2011, the Defendants’ application for leave to appeal to the Federal Court was dismissed with costs of RM15,000 awarded to JPSB.

On 11 September 2013, the Senior Asst. Registrar (“SAR”) of the High Court, after the assessment trial, allowed a sum of RM1,121,000 as special damages in favour of JPSB. Both JPSB and the Defendants had filed an appeal against the decision of the SAR in respect of the amount of special damages allowed. Both the Defendants’ appeal and JPSB’s appeal against the SAR’s decision were dismissed by the High Court on 27 June 2014 and 11 July 2014, respectively.

At the Court of Appeal hearing on 23 April 2015, the Defendants’ appeal against the SAR’s and Judge’s decisions on the amounts granted to JPSB was dismissed with costs. JPSB’s appeal against the refusal of certain items as special damages was allowed in part by the Court of Appeal, resulting in JPSB being awarded additional special damages of RM3,920,000. Costs of RM20,000 was awarded to JPSB. The total sum plus interest and costs awarded to JPSB is estimated to be approximately RM10,500,000 as of the date of hearing on 23 April 2015.

On 2 March 2016, a fresh Prohibitory Order (“PO”) prohibiting any transfer , pledge or charge over the said land for a period of six months was obtained from the High Court. The PO is pending registration with the Land Office. On 29 April 2016, a fresh private caveat lodged by JPSB on this land was registered with the Land Office.

On 3 May 2016 the Federal Court refused the Defendants’ application for leave to appeal, citing no merits in the

application. Costs of RM20,000.00 was awarded to JPSB. With this decision, the litigation concludes. Up to 31 January 2016, the judgement sum, special damages, costs and accrued interest awarded to JPSB to be

recovered from the Defendants amounted to RM12,571,794 of which the deposit sum of RM1,700,000 was reflected in the financial statements.

36. EVENTS AFTER REPORTING PERIOD (i) On 7 April 2016, the Company announced that DCNZ Holdings Limited, a dormant wholly-owned subsidiary of the

Company, has been dissolved and removed from the New Zealand Register of Companies on 30 March 2016.

(ii) On 8 April 2016, Lumut Marine Resort Berhad sent out a Circular together with a notice to convene a meeting of the eligible members of Lumut International Yacht Club to be held on 30 April 2016. The purpose of the meeting is to seek the members’ approval to pass an Extraordinary Resolution for the proposed winding up of the Lumut International Yacht Club Membership Scheme. At the meeting of eligible members held on 30 April 2016, the members present in person or represented by proxies, unanimously approved an Extraordinary Resolution for the winding up of the Lumut International Yacht Club membership scheme. The Extraordinary Resolution is subject to confirmation by the High Court and for an order for the effective winding up of the scheme pursuant to Section 95(5) of the Companies Act, 1965.



cont’d

37. COMPARATIVE FIGURES

Due to the discontinued operations of the Group during the year as disclosed in Note 12, comparative figures of the Group have been reclassified to conform with their presentation in the current year as follows:

The GroupAs previously

reported Reclassifications As reclassifiedRM’000 RM’000 RM’000

Statement of Financial Position

Statement of Profit or Loss and Other Comprehensive IncomeRevenue 245,064 (40,573) 204,491Cost of sales (79,894) 16,553 (63,341)Other operating income 13,383 (1,275) 12,108Distribution expenses (33,382) 18,309 (15,073)Administrative expenses (101,083) 5,315 (95,768)Finance costs (41,142) 368 (40,774)Income tax expense (2,118) 177 (1,941)Profit for the year from discontinued operations 10,653 1,126 11,779



38. SUPPLEMENTARY INFORMATION - DISCLOSURE ON REALISED AND UNREALISED PROFITS OR LOSSES

On 25 March 2012, Bursa Malaysia Securities Berhad (“Bursa Malaysia”) issued a directive to all listed issuers pursuant to Paragraphs 2.06 and 2.23 of the Bursa Securities Main Market Listing Requirements. The directive requires all listed issuers to disclose the breakdown of the retained earnings or accumulated losses as of the end of the reporting period, into realised and unrealised profits or losses.

On 20 December 2011, Bursa Malaysia further issued guidance on the disclosure and the prescribed format of disclosure.

The breakdown of the accumulated losses of the Group and of the realised and unrealised profits or losses, pursuant to the directive, is as follows:


RM'000 RM'000 RM'000 RM'000

Total (accumulated losses)/ retained earnings of the Company and its subsidiaries:- Realised (642,979) (614,262) (262,023) (254,059)- Unrealised 116,996 97,963 - -

(525,983) (516,299) (262,023) (254,059)Less: Consolidation adjustments 288,050 291,501 - -

Accumulated losses as per financial statements (237,933) (224,798) (262,023) (254,059)

The determination of realised and unrealised profits or losses is based on Guidance of Special Matter No. 1 “Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Securities Listing Requirements” as issued by the Malaysian Institute of Accountants on 20 December 2011. A charge or a credit to the profit or loss of a legal entity is deemed realised when it is resulted from the consumption of resources of all types and form, regardless of whether it is consumed in the ordinary course of business or otherwise. A resource may be consumed through sale or use. Where a credit or a charge to the profit or loss upon initial recognition or subsequent measurement of an asset or a liability is not attributed to consumption of resource, such credit or charge should not be deemed as realised until the consumption of resource could be demonstrated.

This supplementary information have been made solely for complying with the disclosure requirements as stipulated in the directives of Bursa Malaysia Securities Berhad and is not made for any other purposes.


Statement by Directors

Declaration by the OfficerPrimarily Responsible for the Financial Management of the Company

The directors of JOHAN HOLDINGS BERHAD state that, in their opinion, the accompanying financial statements are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the provisions of the Companies Act, 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as of 31 January 2016 and of the financial performance and the cash flows of the Group and of the Company for the year ended on that date.

The supplementary information set out in Note 38 on page 134, which is not part of the financial statements, is prepared in all material respects, 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 and the directive of Bursa Malaysia Securities Berhad.

Signed in accordance witha resolution of the Directors,

PUAN SRI DATIN TAN SWEE BEE DATO’ AHMAD KHAIRUMMUZAMMIL BIN MOHD YUSOFF


I, NG YEW SOON, the officer primarily responsible for the financial management of JOHAN HOLDINGS BERHAD, do solemnly and sincerely declare that the accompanying financial statements are, in my opinion, correct and I make this solemn declaration conscientiously believing the same to be true, and by virtue of the provisions of the Statutory Declarations Act, 1960.

Subscribed and solemnly declared by theabovenamed NG YEW SOON atKUALA LUMPUR this 11th day of May , 2016. NG YEW SOON Before me,

KAPT. (B) JASNI BIN YUSOFFNO. W465COMMISSIONER FOR OATHSLOT 1.08, TINGKAT 1BANGUNAN KWSPJALAN RAJA LAUT50350 KUALA LUMPUR


Shareholders’ InformationAs at 29 April 2016

SHARE CAPITAL INFORMATION

Authorised Share Capital : RM500,000,000.00Issued and Fully Paid-up Capital : RM311,474,263.50Total Number of Shares Issued : 622,948,527Class of Securities : Ordinary Shares of 50 sen eachVoting Rights : One (1) vote per Ordinary Share

DISTRIBUTION OF SHAREHOLDINGS

No. of Holders % Size of Holdings Total Holdings %

97 1.12 Less than 100 shares 2,959 0.002,411 27.77 100 to 1,000 shares 2,236,214 0.364,236 48.80 1,001 to 10,000 shares 18,677,409 3.001,641 18.90 10,001 to 100,000 shares 57,844,777 9.29

293 3.38 100,001 to less than 5% of issued shares 413,159,951 66.323 0.03 5% and above of issued shares 131,027,217 21.03

8,681 100.00 Total 622,948,527 100.00

LIST OF THIRTY LARGEST REGISTERED SHAREHOLDERS (as shown in the Record of Depositors)

No. Name of ShareholdersNo. of

Shares Held %

1 STAR WEALTH INVESTMENT LIMITED 47,306,117 7.592 TAN KAY HOCK 42,915,100 6.893 TAN SWEE BEE 40,806,000 6.554 HECTOMIC LIMITED 30,912,200 4.965 UOBM NOMINEES (ASING) SDN BHD

- FOR SUNCROWN HOLDINGS LIMITED30,675,000 4.92

6 ASIAN RIM LIMITED 29,479,418 4.737 DB (MALAYSIA) NOMINEE (ASING) SDN BHD

- FOR TRINITY STAR DEVELOPMENTS LIMITED26,500,500 4.25

8 PRIME CHAMPION INVESTMENTS LIMITED 26,500,500 4.259 DB (MALAYSIA) NOMINEE (ASING) SDN BHD

- FOR KIN FAI INTERNATIONAL LIMITED25,423,000 4.08

10 CIMB GROUP NOMINEES (ASING) SDN. BHD.- FOR KWOK HENG HOLDINGS LIMITED

25,194,000 4.04


Shareholders’ InformationAs at 29 April 2016

cont’d

LIST OF THIRTY LARGEST REGISTERED SHAREHOLDERS cont’d (as shown in the Record of Depositors)

No. Name of ShareholdersNo. of

Shares Held %

11 UOBM NOMINEES (ASING) SDN BHD- FOR TAN SWEE BEE

23,970,900 3.85

12 RHB NOMINEES (ASING) SDN BHD- EXEMPT AN FOR RHB SECURITIES SINGAPORE PTE. LTD. (A/C CLIENTS)

18,637,800 2.99

13 CIMB GROUP NOMINEES (TEMPATAN) SDN BHD- PLEDGED SECURITIES ACCOUNT FOR TAN SWEE BEE (TAN KAY HOCK)

14,753,467 2.37

14 AFFIN HWANG NOMINEES (ASING) SDN BHD- PLEDGED SECURITIES ACCOUNT FOR AIMUP CONSULTANTS LIMITED

13,000,000 2.09

15 CIMB GROUP NOMINEES (TEMPATAN) SDN BHD- PLEDGED SECURITIES ACCOUNT FOR TAN KAY HOCK (49545 JPLE)

11,355,000 1.82

16 AFFIN HWANG NOMINEES (ASING) SDN BHD - PLEDGED SECURITIES ACCOUNT FOR PROMOTO COMPANY LIMITED

10,950,000 1.76

17 HSBC NOMINEES (ASING) SDN BHD - EXEMPT AN FOR CREDIT SUISSE (SG BR-TST-ASING)

10,073,900 1.62

18 KENANGA NOMINEES (ASING) SDN BHD - RHB SECURITIES PTE LTD FOR KEEN CAPITAL INVESTMENTS LTD

6,750,400 1.08

19 RCI VENTURES SDN BHD 5,550,000 0.8920 CIMSEC NOMINEES (TEMPATAN) SDN BHD

- CIMB BANK FOR TAN KAY HOCK (MY0041)5,121,000 0.82

21 CIMSEC NOMINEES (ASING) SDN BHD - CIMB BANK FOR TAN SWEE BEE (MY0022)

5,100,000 0.82

22 BEKALSAMA SILKSCREENING & SERVICES SDN BHD 3,083,700 0.5023 MEGA FIRST HOUSING DEVELOPMENT SDN BHD 2,834,200 0.4524 CHENG HON SANG 2,800,000 0.4525 CHOONG KEAN LEANG 2,048,700 0.3326 NORELLA BINTI TALIB 1,593,000 0.2627 UOB KAY HIAN NOMINEES (ASING) SDN BHD

- EXEMPT AN FOR UOB KAY HIAN PTE LTD (A/C CLIENTS)1,578,684 0.25

28 LIM ANSYN 1,500,000 0.2429 YAP FU FAH 1,363,000 0.2230 MAYBANK SECURITIES NOMINEES (ASING) SDN BHD

- PLEDGED SECURITIES ACCOUNT FOR JAGINDER SINGH PASRICHA1,320,000 0.21

469,095,586 75.30


Shareholders’ InformationAs at 29 April 2016cont’d

Statement on Directors’ InterestsIn the Company and Related CorporationAs at 29 April 2016

SUBSTANTIAL SHAREHOLDERS (EXCLUDING BARE TRUSTEES) AS AT 29 APRIL 2016(as per Register of Substantial Shareholders)

No. of Shares Held

Name of Substantial ShareholderDirect

Interest %Deemed Interest %

Tan Sri Dato’ Tan Kay Hock 59,391,100 9.53 213,717,484* 34.31Puan Sri Datin Tan Swee Bee 85,119,367 13.66 187,989,217* 30.18 Star Wealth Investment Limited 47,306,117 7.59 - -

Notes:-

* Deemed interested by virtue of their equity interest in Kin Fai International Limited, Kwok Heng Holdings Limited, Suncrown Holdings Limited and Star Wealth Investment Limited, shares beneficially held under various nominee companies and shares held in each other’s name.

DIRECTORS’ INTEREST IN SHARES (as shown in the Register of Directors’ Holdings)

In Johan Holdings Berhad No. of Ordinary Shares of RM0.50 each

Name of DirectorDirect

Interest %DeemedInterest %

Tan Sri Dato’ Tan Kay Hock 59,391,100 9.53 213,717,484* 34.31Puan Sri Datin Tan Swee Bee 85,119,367 13.66 187,989,217* 30.18 Tan Sri Dato’ Seri Dr Ting Chew Peh - - - -Dato’ Ahmad Khairummuzammil Bin Mohd Yusoff - - - -Ooi Teng Chew 200,000 0.03 - -

* Deemed interested by virtue of their equity interest in Kin Fai International Limited, Kwok Heng Holdings Limited, Suncrown Holdings Limited and Star Wealth Investment Limited, shares beneficially held under various nominee companies and shares held in each other’s name.


Location DescriptionArea

Sq. metre Tenure

Net Book Value

RM’000

Age of Building(Years)

Year of Revaluation

Year of Acquisition

1) MALAYSIA

PT 6280 HS(D) 2595Mukim Dengkil Daerah SepangSelangor Darul Ehsan

Offices, factory and warehouse

112,390 Freehold 113,222 20 2015 1996

Lot 4182 Jalan Titi Panjang32200 Lumut, Perak

Marine Club 12,141 Leasehold - Expiring

29.4.2093

8,280 20 2015 1996

PT 4106Mukim LumutDaerah ManjungPerak Darul Ridzuan

Hotel 16,137 Leasehold - Expiring

14.1.2092

39,382 24 2015 1992

P.T. 3005 H.S. (D)DGS6374 & PT3014H.S(D) DGS6362Pulau PangkorMukim LumutDaerah Manjung

Leasehold land 58.43 acres

Leasehold -Expiring 4.5.2094

31,274 - 2015 1995

2) SINGAPORE

7500E Beach Road#02-201, #03-201,#04-201, The Plaza

Offices 1,435 Leasehold - Expiring 2.9.2067

82,650 38 2014 1978

List of Properties HeldAs at 31 January 2016


Notice of Annual General Meeting

NOTICE IS HEREBY GIVEN that the Ninety-First Annual General Meeting of the Company will be held at George Kent Technology Centre, 1115 Jalan Puchong, Taman Meranti Jaya, 47120 Puchong, Selangor Darul Ehsan on Tuesday, 28th June 2016 at 12:00 noon for the following purposes:-

ORDINARY BUSINESS 1. To receive the Audited Financial Statements for the year ended 31 January 2016 and the Directors'

and Auditors' Reports thereon.

2. To re-elect Tan Sri Dato' Tan Kay Hock who retires by rotation as a Director pursuant to Article 83 of the Articles of Association and being eligible, has offered himself for re-election.

3. To approve a resolution that pursuant to Section 129(6) of the Companies Act, 1965, Puan Sri Datin Tan Swee Bee, who is of the age of seventy, be and is hereby re-appointed as Director of the Company to hold office until the next Annual General Meeting.

4. To approve a resolution that pursuant to Section 129(6) of the Companies Act, 1965, Dato’ Ahmad Khairummuzammil Bin Mohd Yusoff, who is over the age of seventy, be and is hereby re-appointed as Director of the Company to hold office until the next Annual General Meeting.

5. To approve a resolution that pursuant to Section 129(6) of the Companies Act, 1965, Tan Sri Dato' Seri Dr Ting Chew Peh, who is over the age of seventy, be and is hereby re-appointed as Director of the Company to hold office until the next Annual General Meeting.

6. To approve the payment of Directors' Fee of RM150,000 for the financial year ended 31 January 2016. (FY2015: RM150,000).

7. To re-appoint Auditors and to authorise the Directors to fix their remuneration.

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

8. ORDINARY RESOLUTION Retention of Independent Non-Executive Director

“THAT subject to passing of Ordinary Resolution 3, approval be and is hereby given to Dato’ Ahmad Khairummuzammil Bin Mohd Yusoff, who had served as an Independent Non-Executive Director of the Company for a cumulative term of nine years, to continue to act as Independent Non-Executive Director.”

(Please refer to Note A.)

(Resolution1)

(Resolution2)

(Resolution3)

(Resolution4)

(Resolution5)

(Resolution6)

(Resolution7)


Notice of Annual General Meeting cont’d

9. ORDINARY RESOLUTION Authority to Allot and Issue Shares in General Pursuant to Section 132D of The Companies Act,

1965

"THAT pursuant to Section 132D of the Companies Act, 1965 and subject to the approvals of the relevant governmental/regulatory authorities, the Directors be and are hereby empowered to issue shares in the capital of the Company from time to time and upon the terms and conditions and for such purposes as the Directors may, in their absolute discretion, deem fit provided that the aggregate number of shares issued pursuant to this resolution does not exceed 10% of the issued share capital of the Company for the time being AND THAT the Directors be and are also empowered to obtain the approval from Bursa Malaysia Securities Berhad for the listing of and quotation for the additional shares so issued AND THAT such authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company."

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

By Order Of The Board.

TEH YONG FAHGroup Secretary (MACS00400)KUALA LUMPUR31st May 2016

Notes:-

A. This Agenda item is meant for discussion only. The provisions of Section 169 of the Companies Act, 1965 and the Articles of Association of the Company require that the audited financial statements and the Reports of the Directors and Auditors thereon be laid before the Company at its Annual General Meeting. As such this Agenda item is not a business which requires a resolution to be put to the vote by shareholders.

1. A member entitled to attend and vote at the meeting of the Company is entitled to appoint not more than two proxies (who need not be members of the Company) to attend and vote instead of the member. Where a member appoints two proxies, he shall specify the proportion of his shareholdings to be represented by each proxy.

2. Where a holder of the Company 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.

3. The instrument appointing a proxy or proxies must be deposited at the Registered Office of the Company at 11th Floor, Wisma E&C, No. 2 Lorong Dungun Kiri, Damansara Heights 50490 Kuala Lumpur not less than forty-eight (48) hours before the time appointed for holding the meeting.

4. In respect of deposited securities, only members whose names appear on the Record of Depositors on 20 June 2016 (General Meeting Record of Depositors) shall be eligible to attend the meeting or appoint proxy(ies) to attend and/or vote on his/her behalf.

(Resolution8)


Notice of Annual General Meeting cont’d

Explanatory Notes on Special Business

1. Resolution7-RetentionofIndependentNon-ExecutiveDirector

Dato’ Ahmad Khairummuzammil bin Mohd Yusoff has served as an Independent Non-Executive Director of the Company for a cumulative term of more than nine years. In line with the Malaysian Code on Corporate Governance 2012, upon assessment and recommendation of the Nominating Committee, the rest of the Board members were of the unanimous opinion that Dato’ Ahmad Khairummuzammil bin Mohd Yusoff should continue to act as an Independent Non-Executive Director of the Company based on the following justification:-

(a) He fulfilled the criteria under the definition of “Independent Director” as stated in the Listing Requirements, (b) He has over time, developed increased insight with the Group’s business operations and therefore can contribute to the

effectiveness of the Board as a whole,(c) He does not have any conflict of interest as throughout his tenure of office as an Independent Director of the Company, he has

not entered into and is not expected to enter into any contracts which will give rise to any related party transactions with the Company and its subsidiaries,

(d) He remains to be objective and independent in expressing his views and participated in active deliberations and decision making process of the Board and Board Committees in which he is a member. His length of service on the Board and Board Committees does not in any way interfere with his exercise of independent judgement and ability to act in the best interest of the Company,

(e) He had exercised due care during his tenure as an Independent Non-Executive Director and as Chairman of the Audit Committee and Nominating Committee and had carried out his professional duties in the interest of the Company and its shareholders.

2. OrdinaryResolution8-AuthoritytoAllotandIssueSharesingeneralpursuanttoSection132DofTheCompaniesAct,1965

The proposed Ordinary Resolution if passed will empower the Directors to issue shares of the Company up to 10% of the issued capital of the Company for the time being for such purposes as the Directors consider would be in the interest of the Company. This would avoid any delays and costs in convening a general meeting to specifically approve such an issue of shares. This authority unless revoked or varied by the Company in general meeting will expire at the next Annual General Meeting (“AGM”) of the Company.

The Company has not issued any new shares under this general authority which was approved at the last AGM held on 25 June 2015 and which will lapse at the conclusion at this AGM. A renewal of this general authority is being sought at this AGM under the proposed resolution 8. The renewed mandate is to provide flexibility to the Company for any possible future fund raising activities including but not limited to placement of shares for purposes of funding future investments, working capital and/or acquisition.

I/We, (Company/NRIC/Passport No. )

of

being a member/members of JOHAN HOLDINGS BERHAD hereby appoint:-

Name Address NRIC/Passport No.Proportion of

Shareholding (%)

and/or (delete as appropriate)

Name Address NRIC/Passport No.Proportion of

Shareholding (%)

as my/our proxy/proxies to vote for me/us on my/our behalf at the Ninety-First Annual General Meeting of the Company, to be held at George Kent Technology Centre, 1115 Jalan Puchong, Taman Meranti Jaya, 47120 Puchong, Selangor Darul Ehsan on Tuesday, 28th June 2016 at 12:00 noon and at any adjournment thereof.

I/We direct my/our proxy/proxies to vote for or against the Resolutions to be proposed at the meeting as hereunder indicated.

RESOLUTIONS For Against

1 To re-elect Tan Sri Dato' Tan Kay Hock as a Director

2 To re-appoint Puan Sri Datin Tan Swee Bee as a Director

3 To re-appoint Dato’ Ahmad Khairummuzammil Bin Mohd Yusoff as a Director

4 To re-appoint Tan Sri Dato' Seri Dr Ting Chew Peh as a Director

5 To approve the payment of Directors’ fees

6 Re-appointment of Auditors and to authorise Directors to fix their remuneration

7 Retention of Independent Non-Executive Director

8 Authority to Directors to allot shares

(Please indicate with a cross ("X") in the appropriate box against each Resolution how you wish your proxy/proxies to vote. If this proxy form is returned without any indication as to how the proxy/proxies shall vote, the proxy/proxies will vote or abstain as he/they think fit.)

Dated this day of , 2016.

Signature/Common Seal

FORM OF PROXY (Before completing the form, please refer to notes on next page)

No. of Shares HeldCDS Account No.

AFFIXSTAMP

Then Fold Here

First Fold Here

The Company SecretaryJOHAN HOLDINGS BERHAD11th Floor, Wisma E&CNo. 2 Lorong Dungun KiriDamansara Heights50490 Kuala Lumpur

Notes:-

1. Vote may be given personally or by proxy/proxies (not more than two proxies) or in the case of a corporation by a representative duly authorised. Where a member appoints two proxies, he shall specify the proportion of his shareholdings to be represented by each proxy. The instrument appointing proxy/proxies shall be in writing under the hand of the appointor or his attorney or if such an appointor is a corporation under its Common Seal or the hands of its attorney. Proxy/proxies need not be a member of the Company.

2. The attendance of the appointer at the Annual General Meeting and exercising his/her voting rights at the Annual General Meeting personally will automatically revoke the proxy.

3. Where a holder of the Company 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.

4. The instrument appointing proxy/proxies and the power of attorney (if any) under which it is signed or a notarially certified copy of the power or authority, shall be deposited at the Registered Office of the Company at 11th Floor, Wisma E&C, No. 2 Lorong Dungun Kiri, Damansara Heights, 50490 Kuala Lumpur not less than forty-eight (48) hours before the time for holding the meeting or adjourned meeting (as the case may be) at which the person named in such instrument propose to vote but no instrument (other than power of attorney under seal) appointing proxy/proxies shall be valid after the expiration of twelve months from the date of its execution.

5. In respect of deposited securities, only members whose names appear on the Record of Depositors on 20 June 2016 (General Meeting Record of Depositors) shall be eligible to attend the meeting or appoint proxy(ies) to attend and/or vote on his/her behalf.

Group Corporate DirectoryPrincipal Companies

MALAYSIA

Johan Holdings Berhad11th Floor, Wisma E&CNo. 2 Lorong Dungun Kiri,Damansara Heights50490 Kuala LumpurTel : 603 2092 1858Fax : 603 2092 2812Website : www.johanholdings.com

Prestige Ceramics Sdn BhdLot 1115, Batu 15, Jalan Puchong47100 Puchong, Selangor Darul EhsanTel : 603 8062 5388Fax : 603 8062 1418

Lumut International Yacht Club (owned by Lumut Marine Resort Berhad)Lot 4182, Jalan Titi Panjang32200 Lumut, Perak Darul RidzuanTel : 605 680 4200Fax : 605 683 7700

The Orient Star Resort, Lumut(owned by Lumut Park Resort Sdn Bhd)Lot 203 & 366 Jalan Iskandar Shah32200 Lumut, Perak Darul RidzuanTel : 605 683 3800Fax : 605 683 8088Website : www.orientstar.com.my

Diners Club (Malaysia) Sdn Bhd15th Floor, Menara Tan & Tan207 Jalan Tun Razak50400 Kuala LumpurTel : 603 2161 1322Fax : 603 2161 1518Website : www.dinersclub.com.my

Diners World Travel (Malaysia) Sdn BhdSuit 16.03, 16th Floor, Menara Tan & Tan207 Jalan Tun Razak50400 Kuala LumpurTel : 603 2164 0068Fax : 603 2162 4577

Nature’s Farm (Health Foods) Sdn Bhd11th Floor, Wisma E&CNo. 2 Lorong Dungun KiriDamansara Heights50490 Kuala LumpurTel : 603 2092 1858Fax : 603 2092 2812

SINGAPORE

Diners Club (Singapore) Pte Ltd7500-E, Beach Road#03-201, The PlazaSingapore 199595Tel : 65 6416 0800Fax : 65 6294 0534Website : www.dinersclub.com.sg

Diners World Travel Pte Ltd7500-E, Beach Road#02-201, The Plaza, Singapore 199595Tel : 65 6298 8988Fax : 65 6295 1481Website : www.dinerstravel.com.sg

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