corporate social responsibility - malaysiastock.biz 2015/11/27 · 14 s t h b 341792w) a r 2015...

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Subur Tiasa Holdings Berhad (341792-W)

Annual Report 2015

CORPORATE SOCIAL RESPONSIBILITY

SuburTiasaHoldingsBerhadiscommittedtowardsCorporateSocialResponsibility(CSR).Webelievethatsuccessisnotonlydefinedbyfinancialperformance,butalsoouremphasisonouremployees,communities,environment,as well as the interest of shareholders and stakeholders.

TheCompanyadherestotheBursaMalaysia’sCSRFrameworkwhichencompassesthefollowingareas:Workplace, Community, Environment, and Marketplace.Further,thecompanyalsoadoptsthe“TripleBottomLine”(asfirstcoined in 1994 by John Elkington) in creating a sustainable corporation, which consists of three Ps: People, Planet and Profit.

Workplace

Our “Diversity in Workforce Policy” outlines ourengagement of a diverse workforce that comes from the community at large. We recognize the strategic advantages of incorporating a wide variety of capabilities, talents and insights which are unique contributions people can make because of their individualbackgroundanddifferentskills,experiencesand perspectives. We respect the diversity of our people and we inculcate fairness and justiceregardless of race, ethnicity, religion and cultural background. Recognising people as our greatest asset, we value their differences and practiseinclusiveness which fosters fair, consistent and equitable treatment for all across the organization.

Our core value is to bring out the best in our employees. A vital part to it is through the continual training programs providedtoouremployeesthroughouttheyear.Wearealwaysenthusiastic inorganizingcreative,fun-filled,andmeaningful trainings, motivational talks, and team building activities to inspire our employees.

Sport implies many positive attributes simultaneously.Thepower to change and inspire, awaken our hope and unite our people in a way that little else does.


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CORPORATE SOCIAL RESPONSIBILITY (contd.)

Embellish the life of our employees through festive events, fun and frolic games. Fill each day with thanksgiving, turn routine jobs into joy, andchange ordinary opportunities into blessings. Spreading love, togetherness and glowing with happiness.

Community

We reach out to the community through our actions of love. Charity isdefinitelyahugepartofourcorporateresponsibility.Wespreadour fellow feeling to the minorities through altruistic society like SibuKidneyFoundation,SibuSpinalCord InjuryAssociation,andSibu Agape Association.

Contributing to the pillar of education has also been a continuing trademarkoftheCompany.Thispastyear,wecontinuedtoextendourcaretoschools,urbanandruralalike.Someofthosebenefitedwere Sekolah Kebangsaan Sungai Arau and Sekolah Tabika RH.Wan Imang.

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Annual Report 2015


Building friendship, family and love is the grassrootsupport to our community. We constitute our simple acts of kindness, such as serving and giving to charity. Serving to the best of our abilities to make a real differenceandenrichthelifesofpeopleinneed.



Environment

TheCompanyiscommittedtopreservinggreenenvironment.Recyclingcampaignwasorganizedtoraiseawarenessamong employees, their friends and family. Our responsibility towards the mother nature did not cease as the campaign ended, yet ongoing as we continue to seek new ways to achieve sustainable green practices.


A healthy natural environment allows each new generation including ours to prosper. Empowering ourselves to be good stewards of the Earth we inherited.

Marketplace

We provide high quality products and services to our customers. The Company is also obligated to keep itsshareholders and relevant authorities updated with the Company’s latest information, which strictly adheres to the requirementsofBursaSecuritiesandtheMalaysianAccountingStandardsBoard.

Allinall,CSRwillcontinuetobeacrucialpartinthegrowthofSuburTiasaHoldingsBerhad.Webelievetheactsofresponsibility and commitment will lead us even further!

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Annual Report 2015

AWARDS & RECOGNITIONS

Our Commitment as a preferred reliable supplier of premium wood based product, well recognised regionally with many accolades won over the years for our quality products

SUBUR TIASA HOLDINGS BERHAD • DiplomaBestEnterpriseAward2012• CenturyInternationalDiamondQualityEraAward2012• 2nd Malaysia Independence Award 2010• InternationalDiamondStarForQualityAward(Geneva2010)• WorldQualityCommitment(WQC)InternationalGoldStarForQualityAward(Paris2007)• BusinessSummitAward2007

SUBUR TIASA PLYWOOD SDN. BHD.• QualitySummitPlatinumAwardForExcellence&BusinessPrestige(NewYork2009)• WorldQualityCommitment(WQC)InternationalGoldStarForQualityAward(Paris2008)• PlatinumTechnologyAwardForQuality&BestTradeName(Rome2008)• CelebrityBrandAward2011CelebrityBrandCenter@TheNomadPavilion

SUBUR TIASA PARTICLEBOARD SDN. BHD.• TheSarawakChiefMinister’sEnvironmentalAward2011/2012• Product Excellence Award In Industry Excellence Awards 2009• TheMajesticFiveContinentsAwardForQuality&Excellence(GENEVA2008)• DiamondEyeAward2007ForQualityCommitment&Excellence• TheTopQualityCustomerSatisfactionAptitudeSealForHighQualityPerformance&

BestCustomerSatisfaction2007• 32ndInternationalAwardForTheBestTradeName2007(NewMillenniumAward)

SUBUR TIASA PLYWOOD SDN. BHD.• JapaneseAgriculturalStandards(JAS)Certification• CaliforniaAirResourcesBoard(CARB)Certification• ISO9001:2008Certification

SUBUR TIASA PARTICLEBOARD SDN. BHD.• JapanMinistryCertification• CaliforniaAirResourcesBoard(CARB)Certification• ISO9001:2008Certification

AWARDS



CORPORATE GOVERNANCE STATEMENT

TheBoardofDirectors(“Board”)ofSuburTiasaHoldingsBerhad(“SuburTiasa”orthe“Company”)subscribesandsupports the Malaysian Code on Corporate Governance 2012 (“Code”) and the relevant provisions in the MainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad(“ListingRequirements”).TheBoardiscommittedto ensuring that the highest standard of corporate governance is founded on core values such as accountability, transparency and integrity is practised throughout the Group as a fundamental part of discharging its responsibilities toprotectandenhanceshareholders’valueandthefinancialperformanceoftheGroup.

SuburTiasaacknowledgesthatcorporategovernanceisacontinuousprocessthatrequiresperiodicreassessmentandrefinementofManagementpracticesandsystems.

Set out below is a statement of how the Group has applied the principles of the Code and the extent to which it has observed the Recommendations of the Code, except where it was stated otherwise.

1 ESTABLISH CLEAR ROLES AND RESPONSIBILITIES

1.1 Functions of the Board of Directors (“Board”) and Management The Board acknowledges its leadership role in the direction and business operations of the Group

toward enhancing shareholders’ value and ensuring long term sustainable development and growth of the Group.

TheBoarddelegates the authority to theGroupManagingDirectorwho is supportedby the seniormanagement team in achieving the corporate objectives. The Group Managing Director remainsaccountabletotheBoardfortheperformanceoftheGroup.

The Board also delegates specific responsibilities to Board Committees, namely Audit Committee,NominationCommitteeandRemunerationCommittee, allofwhichoperatewithindefined termsofreference.AllBoardCommitteesdonothaveexecutivepowerbutreporttotheBoardonallmattersconsidered and the ultimate responsibility for decision making on recommendations presented by the BoardCommitteeslieswiththeBoard.

1.2 Roles and Responsibilities of the Board AneffectiveBoardleadsandcontrolstheGroup.ToensurethatthedirectionandcontroloftheGroupis

firmlyinitsownhands,theBoardreservesappropriatestrategic,financialandorganizationalmattersforitscollectivedecisionand/ormonitoring.TheBoardmeetsatleastfour(4)timesayear,withadditionalmeetingsconvenedasnecessary.All IndependentDirectorsbring independent judgmenttobearonissues of strategy, performance, resources and standards of conduct.

ThefollowingareamongthekeyresponsibilitiesoftheBoard:

a) reviewing, approving and monitoring the strategic direction of Group; b) overseeing and evaluating the conduct and performance of the Group’s business including its

control and accountability systems; c) identifyingandmanagingprincipalrisksaffectingtheGroup; d) approving policies relating to investors relations programme and shareholder communication

and overseeing stakeholders communications; e) reviewing the adequacy of the Group’s internal controls policy; f) providinginputintoandfinalapprovaloftheannualoperatingbudget; g) approvingmajorcapitalexpenditure,capitalmanagementandacquisitionordivestitures; h) reviewing and monitoring systems of risk management and internal compliance controls, code of

conduct,continuousdisclosure,legalcomplianceandothersignificantcorporatepolicies;and i) ensuring that appropriate plans is in place to provide for the succession of the Group.

Upon invitation, management representatives were present at the Board’s meetings and BoardCommittees’ meetings to provide additional insight into matters to be discussed during the Meetings.

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Annual Report 2015

CORPORATE GOVERNANCE STATEMENT (contd.)

1.3 Ethical Standards through Code of Conduct

The Board has adopted a Code of Conduct which set out the standards of business conduct andethicalbehaviourforDirectors intheperformanceandexerciseoftheirdutiesandresponsibilitiesasDirectorsoftheCompany.AsummaryoftheCodeofConductisavailableontheCompany’swebsite at www.suburtiasa.com.my.

TheBoardhasalsoadoptedaWhistleblowingPolicywhichaimstoencouragereportingbyemployeesin good faith, of any suspected and/or known instances of misconduct, wrongdoings, corruption, fraud, waste and/or abuse involving the resources of the Group and the employees making such reports will be protected from reprisal.

1.4 Business Sustainability TheBoardismindfuloftheimportanceofbusinesssustainabilityandtheimpactontheenvironment,

social and governance aspects in conducting the business is taken into consideration. SuburTiasaGroup also embraces sustainability in its operations and supply chain, through its own actions as well as in partnership with its stakeholders including suppliers, customers and other organisations.

TheGroup’sactivitiestopromotesustainabilityduringthefinancialyearunderreviewarealsodisclosedin the report of the Corporate Social Responsibility set out on pages 14 to 17 of this annual report.

1.5 Access to Information and Advice

ManagementhasanobligationtoprovidethewholeBoardwithcomplete,well-focusedandadequateinformationofwhichitisawareofinordertodischargetheBoard’sresponsibilities.TheBoardthereforeexpects to receive timely advice on all material information about the Group, its operating units, its activitiesandperformance,particularlyanysignificantvariancesfromaplannedcourseofprogress.Asageneralrule,theagendasandpapersonsubjectsdiscussedduringBoardmeetingsaredisseminatedtotheBoardinatimelymannerpriortotheBoardmeetingstoaccordsufficienttimefortheirreview,considerationandtoseekclarifications(ifany)soastoenablethemtoparticipateeffectivelyinBoarddeliberationsanddecisionsmaking.This,inturn,enablesthetimeattheBoardmeetingtobeconservedand used for focused discussion. All Directors have the rights and duty to make further enquirieswhenever necessary.

TheBoardmayseekindependentprofessionaladviceattheGroup’sexpense,inthefurtheranceoftheirduties to make well-informed decisions.

1.6 Company Secretaries

AllDirectorshavefullaccesstotheadviceandservicesoftheCompanySecretariesatalltimes.

TheCompanySecretariesarequalifiedsecretariesasrequiredpursuanttotheMalaysianCompaniesAct,1965.TheCompanySecretariesarethemembersoftheMalaysianInstituteofAccountants(MIA)andMalaysianAssociationofInstituteofCharteredSecretariesandAdministrators(MAICSA).TheyarecompetentincarryingouttheirworkandplaysupportingandadvisoryrolestotheBoard.Theyensureadherence and compliance to the procedures and regulatory requirements from time to time.

TheCompanySecretariesattendallBoardandBoardCommitteesmeetingsandensure thatall themeetings are convened in accordancewithBoard procedures and termsof referenceof theBoardCommittees. All proceedings, matters arising, deliberations, in terms of the issues discussed, and resolutions at theBoard’smeetings andBoardCommittees’meetings are properly recorded in theminutesbytheCompanySecretaries,confirmedbytheBoardandBoardCommittees,andsignedbythe Chairman.




TheCompany Secretaries also ensure that theCompany complieswith all applicable statutory andregulatory requirements.Theappointmentand removalofCompanySecretaries is amatter for theBoardtoconsiderasawhole.

1.7 Board Charter

TheBoardhasadoptedaBoardCharterwhichprovidesDirectorswithgreaterclarityregardingtheroleoftheBoard,therequirementsofDirectorsincarryingouttheirroleanddischargingtheirdutiestotheCompanyandtheBoard’soperatingpractices.TheBoardCharterisreviewedandupdatedregularlyinline with changes in the expectations of the investing public and stakeholders of the Company in general and the guidelines issue by the regulatory authorities from time to time.

ThesummaryoftheBoardCharterisaccessiblethroughtheCompany’swebsiteatwww.suburtiasa.com.my.

2. STRENGTHEN COMPOSITION

2.1 Nomination Committee

TheBoardhason19 June2003 setupaNominationCommitteeandmembersof theNominationCommitteeforthefinancialyearended31July2015areasfollows:

Chairperson Madam Ngu Ying Ping SeniorIndependentDirector

Member Mr.TiongKiongKing Non-IndependentNon-ExecutiveDirector

Member Mr.TiongIngMing IndependentDirector

Member YBhg.DatukWilliamLauKungHui(resigned on 01.07.2015)

IndependentDirector

TheNominationCommitteeshallconsistofnotlessthanthree(3)members,allofwhomshallbenon-executivedirectorsandamajorityofwhomareindependent.

TheNominationCommitteewillberesponsiblefor:

• reviewing the Board composition and recommending to the Board, appointments of newDirectorsfortheCompanyandBoardCommittees;

• evaluating the effectiveness of the Board, in particular, its required mix of skills, experience,qualificationandothercorecompetencies;

• establishingamechanismfortheformalassessmentontheeffectivenessandperformanceoftheBoardasawholeandthecontributionofeachDirector,performanceofManagingDirectorand the Senior Finance Manager;

• assessingtheindependenceoftheIndependentDirectors;and

• assessingthetrainingneedsofeachDirector. TheNominationCommitteemetonceduringthefinancialyearended31July2015.

TheactivitiescarriedoutbytheNominationCommitteeduringthefinancialyearended31July2015areas follows:

(a) reviewedthemixofskills,experienceandotherqualitiesrequiredfortheBoard;

(b) evaluated the performance and effectiveness of the Board and Board Committee includingcontribution of each individual director, as well as the Senior Finance Manager;

(c) assessedtheindependenceoftheIndependentDirectors;

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Annual Report 2015


(d) assessed the Directors who are due for retirement and re-appointment pursuant to theCompany’s Articles of Association and the Companies Act, 1965;

(e) assessed the independent director who has served for more than nine (9) years to be retained as independent directors; and

(f) assessedthetrainingneedsofDirectors.

2.2 Criteria for Recruitment and Annual Assessment of Directors

TheCodeendorses,asgoodprinciples,aformalandtransparentprocedureforappointmentofDirectorstotheBoard,wheretheNominationCommitteeshallrecommendtotheBoardthesuitablecandidatestobeappointed.TheCode,however, states that theBoardasawholemayperformthisprocedure,although, as a matter of good corporate governance, it is recommended that this responsibility be delegated to an independent committee.

The Nomination Committee is responsible to recommend the identified candidate to the Board ifthere is vacancy arises from resignation, retirement or any other reasons or if there is a need to appoint additionaldirectorwiththerequiredskillorprofessiontotheBoard.

The assessment or evaluation process on the proposed candidatemay include, at theNominationCommittee’s discretion, reviewing of the candidate resume, curriculum vitae and other biographical information, confirming the candidate’s qualifications and conducting legal and other backgroundsearches as well as formal or informal interview at the Nomination Committee’s discretion. TheNomination Committee would also assess the candidate’s integrity, wisdom, independence, ability to makeindependentandanalyticalinquiries,abilitytoworkasateamtosupporttheBoard,understandingof the business environment and the willingness to devote adequate time and commitment to attend to thedutiesoftheBoard.

Upon completion of the assessment and evaluation of the proposed candidate, the Nomination CommitteewouldmakeitsrecommendationtotheBoardfortheirevaluationanddecisionontheappointment of the proposed candidate. TheNominationCommittee is responsible to ensure thattheproceduresforappointinganynewDirectorsaretransparentandtheirevaluationshouldbebasedontheirmerits,qualification,experience,skill,competencyandknowledge.TheCompanySecretariesaretoensurethatallappointmentsofnewDirectorareproperlycarriedoutandalllegalandregulatoryobligations are met.

TheBoard,throughitsNominationCommitteehasconductedanannualevaluationontheeffectivenessoftheBoardanditsCommitteesandannualassessmentofSeniorFinanceManager.AllassessmentsandevaluationscarriedoutbytheNominationCommitteeareproperlydocumented.TheBoardisgenerallysatisfiedwiththecurrentmixofskillsandquantitiesofDirectors,theperformance,effectivenessandcompositionoftheBoardanditsCommittees.ThecurrentBoardsizeandcompositioniswell-balanced.TheDirectorsandtheSeniorFinanceManagerhavethecharacter,experience,integrity,competenceandtimetoeffectivelydischargetheirrespectiveroles.

TheBoardhasadoptedagenderdiversitypolicyandtarget.TheBoardcurrentlyhas two (2) femaleDirectorsnamelyYBhg.Dato’TiongIngandMadamNguYingPing.TheBoardwillensurethatwomencandidates are sought as part of its recruitment exercise should the needs arise in the future.

TheBoardbelievesthattheDirectorswithdiverseageprofilewillbeabletoprovideadifferentperspectiveandbringvibrancytotheGroup’sstrategymakingprocess.TheageprofileoftheDirectorswererangingfromfiftiestoseventiesyearsofage,whichunderliestheBoard’scommitmenttoagediversityattheBoard level appointment. This creates an environment where each generation bring different skills,experienceandtalenttotheBoard.




TheBoard isawareof the importanceboardroomdiversity includingdiversity inethnicityandage tomaintainanoptimalboardbalance.However, theBoard isof theview that theselectioncriteriaofaDirector, based on the candidates’ competency, skills, character, knowledge and experience shouldremain a priority.

InaccordancewiththeCompany’sArticlesofAssociation,allDirectorswhoareappointedbytheBoardaresubjecttore-electionbyshareholdersattheensuingAnnualGeneralMeeting(“AGM”)aftertheirappointment.

In addition, in accordance with the Company’s Articles of Association and in compliance with the Listing Requirements,theremainingDirectors,includingtheManagingDirectorshallretirefromofficeatleastonceineverythree(3)years,butshallbeeligibleforre-election.TheArticlesprovidethatone-third(1/3)oftheDirectors,excepttheManagingDirectorbutsubjecttotheaforesaid,orifthenumberisnotthree(3)oramultipleofthree(3),thenthenearestone-third(1/3)oftheDirectorsshallretirefromofficeandbesubjectedtore-electionateachAGM.

PursuanttoSection129(6)oftheCompaniesAct,1965,Directorswhoareoforovertheageof70yearsshallbere-appointedateveryAGMtoholdofficeuntiltheconclusionofthenextAGM.

2.3 Remuneration Committee

The Board has on 19 June 2003 set up a Remuneration Committee and the members of theRemuneration Committee are as follows:

Chairperson Madam Ngu Ying Ping SeniorIndependentDirector

Member Mr.TiongKiongKing Non-IndependentNon-ExecutiveDirector

Member Mr.TiongIngMing IndependentDirector

Member YBhg.DatukWilliamLauKungHui(resigned on 01.07.2015)

IndependentDirector

Member Mr.PohKeeEng(appointed on 14.09.2015)

Non-IndependentNon-ExecutiveDirector

The Remuneration Committee will be responsible for developing the remuneration policy andrecommendingtheremunerationpackagesforExecutiveDirectorsoftheCompanyanditssubsidiariesso as to ensure that the remuneration package offered is sufficient to attract and retain Directorswithnecessarycalibre,experienceandquality requiredto runtheGroup inaneffectiveandefficientmanner. In formulating the remuneration package, the Remuneration Committee takes into account theresponsibilityandjobfunctions,remunerationpackagesofcomparablecompanieswithinthesameindustry aswell as individual and corporate performance. The fees forNon-ExecutiveDirectors aredeterminedbytheBoardasawhole.

TheRemunerationCommitteeshallconsistofat leastthree(3)members,allofwhommustbenon-executive directors.

TheRemunerationCommitteemetonceduringthefinancialyearended31July2015.

TheBoardhasadoptedandformalisedRemunerationPoliciesandProceduresfortheDirectors.

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Annual Report 2015


EachindividualDirectorhasabstainedfromtheBoarddiscussionanddecisionmakingonhis/herownremuneration.DetailsoftheremunerationoftheDirectorsforthefinancialyearended31July2015distinguishingbetweenexecutiveandnon-executiveDirectors inaggregatewithcategorization intoappropriatecomponentsandthenumberofDirectorswhoseremunerationfallsintoeachsuccessivebands of RM50,000 are set out as below:

Aggregation Non- Executive Director (RM) Executive Director (RM)

Fees 300,000 74,000

Salary - 1,790,000

Bonus - 877,500

Allowance - 800,000

EPF - 416,100

Total 300,000 3,957,600

Remuneration Non- Executive Director Executive Director

RM50,001 – RM100,000 5 -

RM3,950,001 – RM4,000,000 - 1

TheBoardisoftheviewthatthetransparencyandaccountabilityaspectsofCorporateGovernanceasapplicabletoDirectors’remunerationareappropriatelyservedbythe“BandDisclosure”made.

3 REINFORCE INDEPENDENCE

3.1 Annual Assessment of Independent Directors

The Board has, through the Nomination Committee, undertaken an annual assessment on theindependence of its Independent Directors in accordance to the criteria set out in the ListingRequirementsandissatisfiedwiththelevelofindependencedemonstratedbyallIndependentDirectors.

3.2 Tenure of Independent Directors

ThetenureofanIndependentDirectorshallnotexceedacumulativeorconsecutivetermofnine(9)years.Uponcompletionofthenine(9)years,theIndependentDirectormaycontinuetoservetheBoardsubjecttotheDirector’sre-designationasaNon-IndependentDirector.TheBoardshallneedtojustifyand secure shareholders’ approval annually in the event theDirector is to retain as an IndependentDirector.

3.3 Shareholders’ Approval for Retention of Independent Directors

YBhg.TemenggongDatukKennethKanyananakTemenggongKohisanIndependentDirectorswhohaveservedforaconsecutivetermofmorethannine(9)yearsintheBoard.WiththerecommendationfromtheNominationCommittee,theBoardconcurredthathisindependenceasIndependentDirectorshavenotbeencompromisedinanywaybasedonthefollowingjustifications:

(i) He fulfilled the criteria under the definition of Independent Director as stated in the ListingRequirementsandthereforewouldbeabletoofferimpartialjudgmentandadvicetotheBoard;and

(ii) Hedevotedsufficienttimeandattentiontohisresponsibilitiesas IndependentDirectoroftheCompany.

Havingconsideredtheabove,theBoardstronglyrecommendedtheretentionofYBhg.TemenggongDatukKennethKanyananakTemenggongKohasIndependentNon-ExecutiveDirectoroftheCompanywhich is to be tabled for shareholders’ approval at the forthcoming Annual General Meeting.




3.4 Separation of Roles of Chairman and Group Managing Director

There is a clear division of responsibility between the Chairman and the Group Managing Directorto ensure that there is a balance of power and authority, such that no one individual dominates the decision-makingprocess.ThepositionsofChairmanandGroupManagingDirectorareheldbydifferentindividuals.

TheChairman,Mr.TiongKiongKingisaNon-IndependentNon-ExecutiveDirectorwhoisresponsiblefortheorderlyconductofmeetings,facilitatingmattersbetweentheBoardanditsinvestors,leadership,effectiveness,conductandgovernanceoftheBoard.TheGroupManagingDirector,YBhg.Dato’TiongIng is responsible for the development and implementation of strategy and managing the day-to-day business operations of the Group.

3.5 Composition of the Board

TheBoardcurrentlyhas six (6)members, comprising three (3) IndependentDirectors, two (2)Non-IndependentNon-ExecutiveDirectorandone(1)ManagingDirector.Together,theDirectorsbringwiderangeofbusiness,regulatory,industryandfinancialexperiencerelevanttothedirectionoftheGroup.

TheBoardensuresthatatleastone-third(1/3)oftheBoardmembersconsistofIndependentDirectorsofcaliber,withnecessaryskills,experience,qualificationandothercorecompetencies,inordertocarrysufficientweight inmakingbalanced,objectiveandaccountabledecisions.Althoughall theDirectorshaveanequalresponsibilityfortheGroup’soperations,theroleofIndependentDirectorsisparticularlyimportant in ensuring that the strategies proposed by the executive management are fully discussed and examined, taking into account the long term interest, not only of the shareholders, but also of employees, customers, suppliers and the communities in which the Group operates in.

ThecurrentsizeandcompositionoftheBoardareconsideredadequatetoprovideanoptimummixofskills, experience and expertise except that with the Chairman who is not an independent director, half oftheBoardmembersarenon-independentdirectors.TheBoardisoftheviewthatwiththecurrentBoardsize,thereisnodisproportionateimbalanceofpowerandauthorityontheBoardbetweenthenon-independentandindependentdirectors.TheBoardbelievesthattheChairmaniswellplacedtoactinthebestinterestsoftheshareholdersasawholeashehassignificantinterestsinSuburTiasaGroup.TheBoardwillcontinuetomonitorandreviewtheBoardsizeandcompositionfromtimetotime.

MadamNgu Ying Ping (email address: [email protected]) is identified by the Board as theSeniorIndependentDirectortowhomconcernsorqueriesconcerningtheGroupmaybeconveyedto.

AbriefdescriptionofthebackgroundofeachoftheDirectorsispresentedonpages5to8ofthisannualreport.

4 FOSTER COMMITMENT

4.1 Time Commitment

TheexistingDirectorsareobligedtonotifytheBoardbeforeacceptinganynewdirectorship inotherlistedissuers.ThenotificationwillincludeanindicationoftimespentonthenewappointmenttoensuretheDirectorshavesufficienttimetodischargetheirdutiestotheBoardandotherBoardCommitteesonwhichtheyserve.AlltheDirectorsholdlessthanfive(5)directorshipsinlistedissuersasdefinedinthe Listing Requirements.

AlltheDirectorsarerequiredtosubmittotheCompanyanupdateontheirtotalnumberofdirectorshipsheld by them in listed issuers every six (6) months for monitoring purpose.

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During the financial year ended 31 July 2015, four (4) Board meetings were held. The details ofattendanceofeachoftheDirectorsattheBoardmeetingsareoutlinedasfollows:

Directors Total

Mr.TiongKiongKing 3 out of 4

YBhg.Dato’TiongIng 4 out of 4

YBhg.DatukWilliamLauKungHui(resignedon01.07.2015) 3 out of 4

YBhg.TemenggongDatukKennethKanyananakTemenggongKoh 3 out of 4

Madam Ngu Ying Ping 4 out of 4

Mr.TiongIngMing 4 out of 4

Mr.PohKeeEng(appointedon14.09.2015) N/A

TheBoardissatisfiedwiththeleveloftimecommitmentgivenbyalltheDirectorsinfulfillingtheirrolesandresponsibilitiesasDirectorsoftheCompany.

4.2 Directors’ Training and Continuing Education Programmes

AsanintegralelementoftheprocessinappointingnewDirectors,theNominationCommitteeprovidesforadequateorientationofnewlyappointedDirectorswithrespecttothebusinessstructure,corporatestrategy, risk profile, legal requirements, financial overview as well as expected contributions to theBoardandGroup.

AlltheDirectorshadcompletedtheMandatoryAccreditationProgramme(“MAP”)asrequiredbyBursaMalaysia Securities Berhad (“Bursa Securities”). TheBoard acknowledges that continuous training isimportant to broaden their perspectives and to keep them abreast with latest developments in the industry, particularly on relevant new laws, regulations and changing risk factors in competitive business environment.

The Board through its Nomination Committee has assessed the training needs of itsmembers toensure that they are equipped with the necessary skills and knowledge in discharging of their duties as DirectorsoftheCompany.

Thedescriptionsofthetrainings/seminarsattendedbytheDirectorsduringthefinancialyearended31July 2015 are as follows:

Title of training/seminar Mode of training

Number of day(s) spent

Quantity Surveying International Convention 2014 - Wind OfChange

Conference 2 days

Securities Law & Corporate Governance Programme Seminar 2 days

Company Valuation, Restructuring & Funding - Exit And Sensitivity Analysis

Seminar 1 day

PostBudgetWorkshop Seminar 1 day

TheRoleOfTheChairman Seminar 1 day

TheDirectorsare regularlyupdatedandadvisedby theCompanySecretariesonnewstatutoryandregulatoryrequirementsgoverningtheDirectorsandtheGroup.




5 UPHOLD INTEGRITY IN FINANCIAL REPORTING

5.1 Financial Reporting Standards

Inpresentingtheannualfinancialstatementsandquarterlyannouncementtoshareholders,theDirectorsrealises that they have fiduciary responsibility to present a balanced evaluation and comprehensiveassessment of the Group’s performance, position and prospects.

TheBoardthrough itsAuditCommitteeensuresthatthequarterlyfinancialstatementsandauditedfinancialstatementspreparedaredrawninaccordancewiththeprovisionoftheCompaniesAct,1965,ListingRequirementsandtheapplicableapprovedfinancialreportingstandardsinMalaysia.TheAuditCommittee provides assistance to the Board of Directors in fulfilling these statutory and fiduciaryresponsibilitieswith regards to thefinancial reportingprocess, reviewing thescopeofand resultsofinternal and external auditing processes and monitoring the effectiveness of the internal controlsand riskmanagement to ensure the Boardmakes properly informed decisions and the interests ofshareholders are protected.

TheStatementofDirectors’Responsibilityinrespectofpreparationoffinancialstatementsissetouton page 38 of this annual report.

5.2 Relationship with the Auditors

TheGrouphasestablished transparentandprofessional relationshipwith theGroup’sauditors,bothexternal and internal, through the Audit Committee.

A report of the Audit Committee is as set out on pages 34 to 37 of this annual report.

The Audit Committee has undertaken an assessment of the suitability and independence of theexternal auditors nominated by a shareholder in accordance with the Auditors’ Independence Policy adoptedbytheBoardandrecommendedtheirappointmenttotheBoardforshareholders’approvalinthe forthcoming Annual General Meeting.

TheGroup had obtainedwritten assurance from the retiring external auditors, confirming that theyare, and have been, independent throughout the conduct of the audit engagement in accordance withtheindependencecriteriasetoutbytheMalaysianInstituteofAccountants.TheBoard,withtherecommendation of the Audit Committee, reviewed and concluded that the provision of non-audit servicesprovidedby theexternalauditorsduring thefinancial yeardidnotcompromise theexternalauditors’ independence.

6 RECOGNISE AND MANAGE RISKS

6.1 Sound Framework to Manage Risks

TheDirectorsacknowledgetheirresponsibilityfortheGroup’ssystemofinternalcontrolscoveringnotonlyfinancialcontrolsbutalsooperationalandcompliancecontrolsaswellasriskmanagement.TheInternal Control System involves each business and key management from each business, including theBoard,andisdesignedtomeettheGroup’sparticularneedsandtomanagetheriskstowhichitisexposed.Thissystem,by itsnature,canonlyprovidereasonablebutnotabsoluteassuranceagainstmisstatement or loss.

Information on internal control is detailed in the Statement on Risk Management and Internal Control outlined on pages 32 to 33 of this annual report.

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Risk Management Committee

The RiskManagementCommittee, led by theManagingDirector, YBhg.Dato’ Tiong Ing, comprisesheads of the respective business units.

The Risk Management Committee provides oversight and direction for the implementation andapplication of the Risk Management Policy and framework, reviewing Risk Management Policy and frameworkandmakerecommendationtotheBoardforapproval,reviewingriskmanagementprocessandassessingwhethertheyprovidereasonableassurancethatriskareeffectivelymanaged,reviewingkeybusinessriskstoensurethatactionandriskmitigationplanshavebeenimplementedeffectively,encouragingpromotionof riskmanagementawarenessamong thestaffand reportingkeybusinessrisksoftheGrouptotheBoard.

6.2 Internal Audit Function

TheBoardhasestablishedaninternalauditfunctionwithintheCompany,whichis ledbytheHeadofInternalAuditwhoreportsdirectlytotheAuditCommittee.TheAuditCommitteereviewsandapprovesthe annual internal audit plan and audit programme and ensures there are adequate resources available for the Internal Auditors to carry out their audit responsibilities.

DetailsoftheCompany’sinternalauditfunctionsaresetoutintheAuditCommitteeReportonpage37of this annual report.

7 ENSURE TIMELY AND HIGH QUALITY DISCLOSURE

7.1 Corporate Disclosure Policy

TheBoardiscommittedtoensuringthatcommunicationstotheinvestingpublicregardingthebusiness,operations and financial performance of the Company are accurate, timely, factual, informative,consistent,broadlydisseminatedandwherenecessary,informationfiledwithregulatorisinaccordancewith applicable legal and regulatory requirement.

TheCompanyannouncesitsquarterlyandfullyearresultswithinthemandatoryperiod.Thefinancialstatements and, where necessary other presentation materials presented at the Company’s general meetings, including material and price – sensitive information, are disseminated and publicly released viaBursaLINKonatimelybasistoensureeffectivedisseminationofinformationrelatingtotheGroup.

The Board places importance in ensuring disclosures made to shareholders and investors arecomprehensive, accurate and on a timely and even basis as they are critical towards building and maintaining corporate creditability and investor confidence. As such, the company has adopted aCorporateDisclosurePolicyandProcedurestosetout thepoliciesandprocedures fordisclosureofmaterial information ofGroup to ensure compliancewith the Listing Requirements. TheCorporateDisclosurePolicyandProceduresareapplicabletoallemployeesandDirectorsoftheGroupaswellasthose authorized to speak on their behalf.

7.2 Leverage on Information Technology for Effective Dissemination of Information

TheBoardacknowledges the importanceofcommunicationwithshareholdersand investorson theGroup’s business and corporate developments. The Board endeavours to make timely release offinancialresultsonaquarterlybasis,annualreports,pressreleasesandanyannouncementstoBursaSecurities on material corporate exercises which are the primary mode of disseminating information on theGroup’sbusinessactivitiesandfinancialperformance.

TheCompanyhasestablishedawebsiteatwww.suburtiasa.com.my for shareholders and the public to assess the latest corporate information and announcements related to the Group. Shareholders may also direct their queries to the Company through the email contact provided in the said website.



8 STRENGTHEN RELATIONSHIP BETWEEN COMPANY AND SHAREHOLDERS

8.1 Shareholders’ Participation at General Meeting

The Annual General Meeting is a crucial mechanism as it provides the Board with an important forum for shareholders’ communication. At each Annual General Meeting, the Board encourages shareholders to participate in question and answer session in order to communicate their views and to seek clarifications. The Chairman, members of the Board, as well as external auditors are present to address queries during the meeting.

All concerns or queries regarding the Group may be conveyed to the Senior Independent Director at the Company’s registered address and feedback and responses will be provided where such information can be made available to the public.

Notice of Annual General Meeting is issued and served to all shareholders at least twenty one (21) days prior to the Annual General Meeting in accordance with the provisions of the Company’s Articles of Associations. The outcome of the annual general meeting is announced to Bursa Securities on the same meeting day.

Each item of special business included in the notice of the Annual General Meeting is accompanied by a full explanation of the effects of a proposed resolution in order to facilitate understanding and evaluation of the issues involved. Separate resolutions are proposed at the Annual General Meeting for each separate issues.

8.2 Poll Voting

Generally, all resolutions put forth for shareholders’ approval at Annual General Meeting are voted by a show of hands, except for Related Party Transaction where voting by poll will be conducted. The Chairman will inform the shareholders and proxies of their rights to demand for poll at the commencement of the general meeting. With the current level of shareholders’ attendance at general meetings, the Board viewed that voting by show of hands continues to be effective.

8.3 EffectiveCommunicationandProactiveEngagementwithShareholders

The Board and management value the importance of effective and transparent communications with shareholders and investors. This is achieved through the timely release of annual reports, quarterly announcements and other corporate announcements made to Bursa Securities. Corporate and financial information on the Group are easily accessible by the shareholders and the public through the Company’s website, www.suburtiasa.com.my. The website provides up-to-date corporate details, overview of business activities and operations, Company’s performance and position, annual reports, and all announcements made. This ensures that no selective dissemination of information and there is always symmetry of information disclosure.

The Group values dialogue with investors. The aim of the investor relations programme primarily to convey consistent and accurate information to shareholders and fund managers regarding the Group’s performance and other matters affecting them. In addition, it provides a channel for prompt feedback to our senior management on investors’ concerns and market perceptions, thus, ensuring effectiveness of the information dissemination.

COMPLIANCE STATEMENT

With the introduction of the Code, the Board remains committed to inculcating good corporate governance for the Group. The Group will continue to endeavour to comply with all the key principles and recommendations of the Code where the Board deems appropriates, in its effort to observe high standard of transparency, accountability and integrity.

This statement is made in accordance with the resolution of the Board of Directors dated 13 November 2015.


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Annual Report 2015

ADDITIONAL COMPLIANCE INFORMATION

ThefollowinginformationispresentedincompliancewiththeMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad(“ListingRequirements”):

SHARE BUY-BACKS

At theNineteenthAnnualGeneralMeetingof theCompanyheldon23December2014, theDirectorsobtainedthe approval from the shareholders for the Company to purchase and/or hold up to 20,900,000 ordinary shares of RM1.00 each representing ten percent (10%) of the total issued and paid-up ordinary share capital of the Company.

Duringthefinancialyearended31July2015,atotalof5,000ordinarysharesofRM1.00eachoftheCompanywerepurchased from the open market and retained as treasury shares, breakdown as follows:

Month No. of Shares Purchased

Total Consideration (RM)

Purchase Price Per Share (RM)

Lowest Highest Average

September 2014 100 263 2.22 2.22 2.22

October 2014 300 660 2.05 2.09 2.06

December2014 2,500 5,011 1.96 1.98 1.97

January 2015 1,000 2,013 1.97 1.97 1.97

February 2015 500 1,149 1.95 2.00 1.97

March 2015 600 1,389 1.83 1.95 1.90

Total 5,000 10,485 1.83 2.22 1.97

As at 31 July 2015, a total of 20,875,900 shares were bought back by the Company and retained as treasury shares. Noneofthetreasurysharesheldwereresoldorcancelledduringthefinancialyearended31July2015.

NON-AUDIT FEES

Thenon-auditfeesincurredforservicesrenderedtotheCompanyanditssubsidiariesforthefinancialyearended31July2015bytheCompany’sexternalauditors,MessrsErnst&Young(“EY”),andafirmorcorporationaffiliatedtoEYwere amounted to RM163,260.

MATERIAL CONTRACTS

Therewerenomaterialcontracts(notbeingcontractsenteredintointheordinarycourseofbusiness)enteredintobytheCompanyoritssubsidiariesinvolvinginterestsofthedirectorsandmajorshareholders,eithersubsistingattheendofthefinancialyearended31July2015orenteredintosincetheendofthepreviousfinancialyear.

DISCLOSURE OF REALISED AND UNREALISED RETAINED EARNINGS

Thebreakdownoftherealisedandunrealisedretainedearningsasat31July2015aredisclosedandoutlinedon page 128 of this annual report.



ADDITIONAL COMPLIANCE INFORMATION (contd.)

RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE OR TRADING NATURE (“RRPT”)

ThesignificantRRPTentered intoduringthefinancialyearunder reviewaredisclosed inNote31totheFinancialStatements.Abreakdownof the aggregate valueof theRRPTconductedpursuant to the shareholdermandateduringthefinancialyearwheretheaggregatevalueisequaltoormorethanthethresholdprescribedunderparagraph10.09(1)(a) of the Listing Requirements, are set out below:

Type of RRPT Name of Related Party(ies) Relationship with the Group1

Actual Amount of RRPT for year

ended 31 July 2015 RM’000

Contract fee income for logging / reforestation

RejangHeightSdnBhd A 65,882

Logging contract fee income OceanShoresDevelopmentSdnBhd A 1,452

SaforinSdnBhd A 13,459

SupremeTimberProductsSdnBhd A 2,148

Total 17,059

Sale of logs UniqueWoodSdnBhd B 6,352

Sale of sawn timber UniqueWoodSdnBhd B 2,318

Sale of fresh fruit bunches UniquePalmOilMillSdnBhd B 24,236

Towageandhandlingincome JayaTiasaGroup2 A 431

Freight and handling charges paid /payable

JayaTiasaGroup2 A 30

Logging contract fee paid / payable

HubwoodSdnBhd C 506

MillenniumMidlandSdnBhd A 6,969

PertumbuhanKekalSdnBhd A 10,701

Total 18,176

Purchase of adhesive materials

PetanakEnterprisesSdnBhd A 38,793

Purchase of logs LukutanEnterprisesSdnBhd A 1,778

RejangHeightSdnBhd A 86,692

SupremeTimberProductsSdnBhd A 3,255

Total 91,725

Purchase of veneer JayaTiasaGroup2 A 36,666

Purchase of waste timber UniqueWoodSdnBhd B 1

Note:

1 The relationships denoted by A to C indicate that the following persons have interest in the related parties that transacted with the Group:

A These are companies in which Tan Sri Datuk Sir Diong Hiew King @ Tiong Hiew King, a major shareholder of the Company and a director of certain subsidiaries, has interest, both direct and/or indirect interest.

B The Group’s Managing Director, Dato’ Tiong Ing has indirect interest. C These are companies in which Datuk Tiong Thai King, a director of Sarawak Plywood (M) Sdn. Bhd., has interest, both direct and/or indirect

interest.

2 Jaya Tiasa Group includes Jaya Tiasa Holdings Bhd and its subsidiary, Jaya Tiasa Plywood Sdn Bhd.

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Annual Report 2015

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL

INTRODUCTION

TheBoardofDirectors (“Board”)upholds theircommitment tomaintainingasoundsystemof riskmanagementand internal control to safeguard shareholders’ investments and the Group’s assets. Pursuant to paragraph 15.26(b) ofMainMarket Listing Requirements of BursaMalaysia Securities Berhad and guided by the Statement on RiskManagementand InternalControl:Guidelines forDirectorsofListed Issuers, theBoard ispleasedtopresent theStatement on Risk Management and Internal Control of the Group.

BOARD RESPONSIBILITY

TheBoardrecognisestheimportanceofasoundriskmanagementframeworkandinternalcontrolsystemforgoodcorporate governance and acknowledges its responsibility to establish a sound risk management framework and internal control system.

However, in view of the inherent limitations in any system, such system of risk management and internal control is designedtomanageratherthantoeliminaterisksoffailuretotheachievementoftheGroup’sbusinessobjectives.Thesystemcanthereforeonlyprovidereasonableandnotabsoluteassuranceagainstmaterialmisstatementsorlosses, fraud, contingencies or any irregularities.

RISK MANAGEMENT FRAMEWORK

TheGrouphasput inplaceariskmanagementprocessto identify,evaluate,monitorandmanagesignificantrisksthataffecttheachievementoftheGroup’sbusinessobjectives.Theprocessissupportedbypolicies,procedures,methodologies, evaluation criteria and documentation requirements to ensure clarity and consistency of application across the Group. Risk management is practised within the Group on an iterative basis.

TheGroup’s riskprofile isassessedthroughabottom-upapproachcoveringoperatingandsupporting functions.Major businessunits anddepartments implement risk identificationprocess to assess, evaluate and review riskspertainingtotheirareasofsupervisionandcontrolandimplementcontrolstomanagetheserisks.Riskprofilesofbusinessunitsordepartmentsareregularlyreviewedtoensuretheyremaineffectiveandcurrent.

TheBoardconfirmsthattheriskmanagementprocess in identifying,evaluatingandmanagingkeybusinessrisksfaced by theGroup has been in place throughout the financial year 2015 and up to the date of approval of thisstatement. TheBoardonanannualbasis reviewstheadequacyandeffectivenessof riskmanagementprocessandensuresthat appropriate processes to identify and assess key business risks of the Group are implemented and appropriate measuresaretakentomitigatetheserisksbyManagement.TheGrouphasaRiskManagementCommitteewhichischairedbytheGroupManagingDirectorandcomprisesSeniorManagementoftheGroup,toprovideoversightandadded impetus to the risk management process.

INTERNAL CONTROL SYSTEM

TheGrouphasinplaceasystemofinternalcontrolthatprovidesreasonableassurancethatassetsoftheGrouparesafeguarded,transactionsareproperlyauthorisedandrecordedandrisksaremanagedeffectively.Existinginternalcontrols which are embedded in the daily operations of the Group are stated as follows:-

• Policies and procedures have been established for key business processes and support functions to ensure that thereareadequate riskmanagement,financial andoperationalpolicies,proceduresand rules relating to theroles and responsibilities, delegation and segregation of duties;

• Annual business plans and operating budgets are prepared by business and operating units, and are approved by theBoard.Actualperformancesandsignificantvariancesagainstbudgetaremonitoredonanongoingbasis;



• ManagementandtheBoardreceivestimely,relevantandreliablemanagementandfinancialreportswhicharereviewed on a regular basis;

• TheGrouphasinplaceaManagementInformationSystemthatcaptures,compiles,analyzesandreportsrelevantdata, which enables management to make business decisions in an accurate and timely manner;

• The Group's policies and procedures are reviewed and revised periodically to meet changing business andoperational needs and regulatory requirements;

• Boardmeetingsareheldatleastonaquarterlybasiswithaformalagendaonmattersfordiscussion.Inaddition,regular management and operational meetings are conducted by senior management which comprises the ManagingDirectoranddivisionalheads;and

• TheGroup's InternalAudit functionmonitorscompliancewithpolicies,procedures, lawsand regulations,andprovides independent assurance on the adequacy and effectiveness of the system of risk managementand internal control by conducting regular audits and continuous assessment. Significant audit findings andrecommendations for improvements are highlighted to senior management and the Audit Committee, with periodic follow-up reviews of the implementation of corrective action plans.

The internalcontrolsystem is reviewedbytheBoardthrough itsAuditCommitteewhich issupportedby InternalAudit function. On a quarterly basis, reports are prepared on the adequacy, efficiency and effectiveness of theinternal control system based on the annual audit plan approved by the Audit Committee.

BOARD’S ASSESSMENT

The Board has reviewed the adequacy and effectiveness of the risk management and internal control system.Basedontheresultsofthesereviewsaswellastheassurance ithasreceivedfromtheGroupManagingDirectorandGroupSeniorFinanceManager,theBoardisoftheviewthattheGroup’sriskmanagementandinternalcontrolsystemisoperatingadequatelyandeffectivelythroughoutthefinancialyear2015anduptothedateofapprovalofthis statement.

REVIEW OF THIS STATEMENT

Pursuant to paragraph 15.23 of theMainMarket Listing Requirements of BursaMalaysia Securities Berhad, theexternalauditorshave reviewed thisstatement for inclusion in theAnnualReport for thefinancial yearended31July2015andreportedtotheBoardthatnothinghascometotheirattentionthatcausesthemtobelievethatthisstatementisinconsistentwiththeirunderstandingoftheprocesstheBoardhasadoptedforreviewofadequacyandeffectivenessofthesystemofinternalcontrolandriskmanagement.

ThisStatementismadeinaccordancewiththeresolutionoftheBoarddated13November2015.

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL(contd.)

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Annual Report 2015

TheBoardofDirectors(“Board”)ofSuburTiasaHoldingsBerhadispleasedtopresenttheAuditCommitteeReportforthefinancialyearended31July2015.

MEMBERS AND ATTENDANCE OF MEETINGS

TheAuditCommittee(“Committee”)comprisestheDirectorsas listedbelow.AllmembersoftheCommitteearefinanciallyliterate.Duringthefinancialyearended31July2015,four(4)meetingswereheld.Thedetailsofattendanceof each of them are outlined as follows:

NAME DESIGNATION NO. OF MEETINGS APPLICABLE

ATTENDANCE OF MEETINGS

Madam Ngu Ying Ping Chairman (Senior IndependentDirector)

4 4

YBhg.DatukWilliamLauKungHui(resigned on 01.07.2015)

Member (Independent Director)

4 3

Mr.TiongIngMing Member (Independent Director)

4 4

Mr.PohKeeEng(appointed on 14.09.2015)

Member (Non-Independent Non-ExecutiveDirector)

N/A N/A

DetailsoftrainingattendedbymembersoftheCommitteearedisclosedintheCorporateGovernanceStatementset out on page 26 of this annual report.

Thesemeetingsareheldwiththeinternalauditors.SomeofthemeetingswerealsoattendedbytheSeniorFinanceManager and external auditors upon invitation by the Chairman of the Committee. All proceedings, matters arising and deliberations in terms of the issue discussed, and resolutions at the meetings are recorded in the minutes by the CompanySecretaries,confirmedbytheCommittee,andsignedbytheChairman.TheChairmanreportsonthemainfindingsanddeliberationsatthemeetingstotheBoard.

SUMMARY OF TERMS OF REFERENCE

1. Membership 1.1. ThemembersoftheCommitteeshallbeappointedbytheBoardfromamongtheirmembersbasedon

therecommendationsoftheBoard’sNominationCommitteeandshallconsistofnofewerthanthree(3)members.ThemembersmustbeNon-ExecutiveDirectorswithamajorityofthembeingIndependentDirectors.

1.2. Intheeventthatthemembers,foranyreason,fallbelowthree(3),theBoardshallappointsuchnumberofnewmembersasmayberequiredtofulfiltheminimumrequirementwithinthree(3)monthsofthatevent.

1.3. No alternate directors shall be appointed to the Committee.

AUDIT COMMITTEE REPORT



1.4. At least one (1) member of the Committee must meet the criteria set under Paragraph 15.09 (1)(c) of theMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhad:

i. must be a member of the Malaysian Institute of Accountants; or ii. if he is not a member of the Malaysian Institute of Accountants, he must have at least 3 years’

working experience and – • hemust have passed the examinations specified in Part I of the First Schedule of the

Accountants Act 1967; or • hemustbeamemberofoneoftheassociationsofaccountantsspecifiedinPartIIofthe

First Schedule of the Accountants Act 1967; or iii. fulfilssuchotherrequirementsasprescribedorapprovedbytheExchange.

1.5. Paragraph 15.20 of the Listing Requirements requires the term of office and performance of theCommitteeandeachofitsmemberstobereviewedbytheBoardatleastonceeverythree(3)years.

1.6. ChairmanoftheCommitteemustbeelectedfromamongtheirIndependentDirectorsasaccordingtoParagraph 15.10 of the Listing Requirements.

2. Authority

TheCommitteeisauthorisedbytheBoardto: a) Investigate any matter within its terms of reference; b) Have full and unrestricted access to any information pertaining to the Group; c) Have direct communication channels with both the external auditors and internal auditors; d) Have full access to any employee or member of the management; and e) Obtain independent, legal or other professional advice as it considers necessary and reasonable for the

performance of its duties.

3. Functions and Duties TheCommitteeshallcarryoutthefollowingresponsibilities:

3.1. ReviewthequarterlyresultsandannualfinancialstatementsoftheGrouppriortosubmissiontotheBoard,focusingprimarilyon:

a) anychangesinorimplementationofmajoraccountingpolicyandpractices; b) majorjudgmentalareas,significantandunusualevents; c) significantadjustmentsresultingfromaudit; d) the going concern assumptions; and e) compliance with applicable approved accounting standards and other legal requirements.

3.2. Review with the external auditors on: a) audit plan; b) audit report and evaluation of the system of internal controls; and c) problems and reservations arising from audit activities, management’s response,

recommendations and actions taken. 3.3. Review the assistance provided to the external auditors by the employees of the Group. 3.4. Consider the appointment, re-appointment, terms of reference, audit fee and any matters of resignation

or dismissal of external auditors.

AUDIT COMMITTEE REPORT (contd.)

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Annual Report 2015


3.5. Perform the following, in relation to internal audit function:- a) approve the internal audit charter that specify roles and responsibilities and authority of internal

auditors; b) review the internal audit plan, program, processes, reports, the results of internal audit program,

investigations undertaken and whether appropriate action is taken on the recommendations of the internal audit function;

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

d) reviewandapproveanyappointmentorterminationofseniorstaffmembersoftheinternalauditfunction;

e) appraise or assess the performance of internal audit function; and f) direct any special investigations to be carried out by internal auditors.

3.6. ReviewrelatedpartytransactionsenteredintobytheGroupandanyconflictofinterestsituationthat may arise including any transaction, procedure or course of conduct that raises questions of management integrity.

3.7. UndertakesuchotherresponsibilitiesasmaybeagreedtobytheCommitteeandtheBoard.

4. Conduct of Meetings 4.1. TheCommitteeshallholdatleastfour(4)meetingsayear.

4.2. The Chairman shall convene a meeting of the Committee upon the request by any member, theManagement, internal or external auditors to consider any matter within the scope and responsibilities of the Committee.

4.3. Meetings shall be attended by members of Committee and the Company Secretary(ies).

4.4. TheCommitteemay requestotherdirectors,membersofmanagement,counsels, internalauditors,external auditors and any other employees to attend any of its meetings to assist in resolving and clarifying matters raised.

4.5. TheCommitteeshallmeetwiththeexternalauditors,excludingtheattendanceofotherdirectorsandemployees, whenever deemed necessary.

4.6. Aquorumshallconsistofamajorityofindependentdirectorsineachmeeting.

SUMMARY OF AUDIT COMMITTEE’S ACTIVITIES

In order to discharge its duties and responsibilities in line with its terms of reference, the activities undertaken by the Committeeduringthefinancialyearended31July2015wereasfollows:

a) Review of the internal and external auditors’ annual audit plans, scope of work and discuss results of their examinations and recommendations;

b) Review with the internal and external auditors the results of their audit, the audit report and internal control recommendations and management’s responses thereto;

c) Reviewof the quarterly and annual financial results of theGroup prior to recommendation to theBoard forconsideration and approval;

d) Review of the related party transactions entered into by the Group;e) Consideration of the re-appointment of external auditors and their fees;f) Review of the Statement on Risk Management and Internal Control and Audit Committee Report prior to

recommendationtotheBoardforconsiderationandapproval;andg) Review the adequacy of scope, functions, competency and resources of the Internal Audit and perform annual

assessmentofInternalAuditDepartment’sfunction.




INTERNAL AUDIT FUNCTION

The Internal Audit Department plays an essential role in assisting the Committee in discharging its duties andfunctions. It undertakes independent, regular and systematic review of the system of internal control so as to provide reasonableassurancethatsuchsystemcontinuestooperatesatisfactorilyandeffectivelywithintheGroup.

AnnualauditplanisreviewedandapprovedbytheCommitteeatthebeginningofeachfinancialyear.TheInternalAudit Department performs planned and routine audit covering all operating units within the Group i.e. forestoperations, oil palm operations, manufacturing operations and including head office functions such as finance,human resources, IT andother administrative support. The emphasis is dependent on risk areas and its regularassessment. Internal Audit Department also performs ad-hoc audits and investigative assignments wheneverrelevantandsorequired.AuditreportsareissuedtotheCommitteeincorporatingfindingsandrecommendationstorectify weaknesses or enhance controls as noted in the course of audits. Management’s comments are incorporated intheauditfindingswithacommitmentto improveonanagreedtimeline.Amonitoringorfollow-upsystemis inplace to ensure that all corrective and preventive actions had been taken by the Management on the agreed audit issues and recommendations disclosed in the audit reports.

Thetotalcostincurredfortheinternalauditfunctioninrespectoffinancialyearended31July2015wasRM1,180,420(2014: RM807,248).

38


Annual Report 2015

STATEMENT OF DIRECTORS’ RESPONSIBILITYIn respect of the financial statements

TheDirectorsarerequiredundertheMainMarketListingRequirementsofBursaMalaysiaSecuritiesBerhadtoissueastatementexplainingtheirresponsibilityforpreparingthefinancialstatements.

TheDirectorsarealsorequiredbytheCompaniesAct,1965topreparefinancialstatementsforeachfinancialyear,whichgiveatrueandfairviewoftheaffairsoftheGroupandtheCompanyattheendofthefinancialyear,theresultsandcashflowsoftheGroupandtheCompanyforthefinancialyear.

Inpreparingthosestatements,theDirectorshave:

• adopted suitable accounting policies and apply them consistently;• madejudgementsandestimatesthatareprudentandreasonable;• ensured applicable accounting standards have been followed; and• preparedthefinancialstatementsonthegoingconcernbasisastheDirectorshavereasonableexpectation,

having made enquiries, that the Group and the Company have adequate resources to continue in operational existence for the foreseeable future.

TheDirectors hereby confirm that suitable accounting policies have been consistently applied in respect of thepreparationofthefinancialstatementsandthattheGroupandtheCompanymaintainadequateaccountingrecords.SufficientinternalcontrolsarealsoinplacetosafeguardtheassetsoftheGroupandtheCompanyandtopreventaswell as to detect fraud and other irregularities.

ThisstatementismadeinaccordancewiththeresolutionoftheBoardofDirectorsdated13November2015.

Financial Statements

40 Directors’ Report

43 Statement by Directors and Statutory Declaration

44 Independent Auditors’ Report

46StatementsofProfitorLossandOtherComprehensiveIncome

47 Statements of Financial Position

49ConsolidatedStatementofChangesinEquity 50CompanyStatementofChangesinEquity

51StatementsofCashFlows

53 NotestotheFinancialStatements

128 Supplementary Information

ANNUALREPORT2015

40


Annual Report 2015

ThedirectorshavepleasureinpresentingtheirreporttogetherwiththeauditedfinancialstatementsoftheGroupandoftheCompanyforthefinancialyearended31July2015.

Principal Activities

TheprincipalactivitiesoftheCompanyareinvestmentholding,extractionandsaleoflogs.TheprincipalactivitiesofthesubsidiariesaresetoutinNote17ofthefinancialstatements.

TherehavebeennosignificantchangesinthenatureoftheprincipalactivitiesoftheGroupduringthefinancialyear.

Results Group Company RM’000 RM’000

Profitattributableto: OwnersoftheCompany 2,562 36,051 Non-controllinginterest (7) - ------------------ ------------------ 2,555 36,051 ============ ============

Therewerenomaterialtransferstoorfromreservesorprovisionsduringthefinancialyearotherthanasdisclosedinthefinancialstatements.

Intheopinionofthedirectors,theresultsoftheoperationsoftheGroupandoftheCompanyduringthefinancialyearwerenotsubstantiallyaffectedbyanyitem,transactionoreventofamaterialandunusualnature.

Dividends

TheamountofdividendspaidbytheCompanysince31July2014wereasfollows:

RM’000Inrespectofthefinancialyearended31July2014asreportedin thedirectors’reportofthatyear:

Firstandfinalsingle-tierdividendof5senpershare,on188,125,200 ordinaryshares,declaredon5November2014andpaid on4March2015 9,406 ============ Directors

ThenamesofthedirectorsoftheCompanyinofficesincethedateofthelastreportandatthedateofthisreportare:

TiongKiongKingYBhg.Dato’TiongIngYBhg.TemenggongDatukKennethKanyanAnakTemenggongKohNguYingPingTiongIngMingPohKeeEng(appointedon14September2015)YBhg.DatukWilliamLauKungHui(resignedon1July2015)

DIRECTORS’ REPORT

41


Annual Report 2015

Directors’ Benefits

Neitherattheendofthefinancialyear,noratanytimeduringthatyear,didtheresubsistanyarrangementtowhichtheCompanywasaparty,wherebythedirectorsmightacquirebenefitsbymeansoftheacquisitionofsharesinordebenturesoftheCompanyoranyotherbodycorporate.

Sincetheendofthepreviousfinancialyear,nodirectorhasreceivedorbecomeentitledtoreceiveabenefit(otherthanbenefitsincludedintheaggregateamountofemolumentsreceivedordueandreceivablebythedirectorsorthefixedsalaryofafull-timeemployeeoftheCompanyasshowninNote8tothefinancialstatements)byreasonofacontractmadebytheCompanyorarelatedcorporationwithanydirectororwithafirmofwhichheisamember,orwithacompany inwhichhehasasubstantialfinancial interest,exceptasdisclosed inNote31 to thefinancialstatements. Directors’ Interests

Accordingtotheregisterofdirectors’shareholdings,theinterestsofdirectorsinofficeattheendofthefinancialyearinsharesintheCompanyduringthefinancialyearwereasfollows:

Number of Ordinary Shares of RM1 Each 1.8.2014 Bought Sold 31.7.2015Direct Interest:TiongKiongKing 1,284,043 - - 1,284,043YBhg.Dato’TiongIng 1,759,413 15,800 - 1,775,213YBhg.TemenggongDatukKenneth KanyanAnakTemenggongKoh 70,595 - - 70,595

Indirect Interest:YBhg.Dato’TiongIng 480,475 19,800 - 500,275

NoneoftheotherdirectorsinofficeattheendofthefinancialyearhadanyinterestinsharesintheCompanyduringthefinancialyear.

Treasury Shares

During thefinancialyear, theCompany repurchased5,000of its issuedordinaryshares fromtheopenmarketatanaveragepriceofRM1.97pershare.Thetotalconsiderationpaidfortherepurchase includingtransactioncostswasRM10,485.Thesharesrepurchasedarebeingheldastreasuryshares inaccordancewithSection67AoftheCompaniesAct,1965.

Asat31July2015,theCompanyheldastreasurysharesatotalof20,875,900of its209,000,000issuedordinaryshares.SuchtreasurysharesareheldatacarryingamountofRM55,175,993andfurtherrelevantdetailsaredisclosedinNote27(b)tothefinancialstatements.

Subsequenttothereportingdateanduptothedateof this report, theCompanyrepurchasedanadditional100sharesforatotalcostofRM203.TheaveragecostpaidfortherepurchaseduringtheperiodwasRM2.03pershare.

Other Statutory Information

(a) BeforethestatementsofprofitorlossandothercomprehensiveincomeandstatementsoffinancialpositionoftheGroupandoftheCompanyweremadeout,thedirectorstookreasonablesteps:

(i) toascertainthatproperactionhadbeentakeninrelationtothewritingoffofbaddebtsandthemakingofprovisionfordoubtfuldebtsandsatisfiedthemselvesthatallknownbaddebtshadbeenwrittenoffandthatadequateprovisionhadbeenmadefordoubtfuldebts;and

DIRECTORS’ REPORT (contd.)

42


Annual Report 2015

DIRECTORS’ REPORT (contd.)

Other Statutory Information (contd.)

(a) (ii) toensurethatanycurrentassetswhichwereunlikelytorealisetheirvalueasshownintheaccountingrecordsintheordinarycourseofbusinesshadbeenwrittendowntoanamountwhichtheymightbeexpectedsotorealise.

(b) Atthedateofthisreport,thedirectorsarenotawareofanycircumstanceswhichwouldrender:

(i) theamountwrittenoffforbaddebtsortheamountoftheprovisionfordoubtfuldebtsinadequatetoanysubstantialextent;and

(ii) thevaluesattributedtothecurrentassetsinthefinancialstatementsoftheGroupandoftheCompanymisleading.

(c) Atthedateofthisreport,thedirectorsarenotawareofanycircumstanceswhichhavearisenwhichwouldrenderadherencetotheexistingmethodofvaluationofassetsorliabilitiesoftheGroupandoftheCompanymisleadingorinappropriate.

(d) Atthedateofthisreport,thedirectorsarenotawareofanycircumstancesnototherwisedealtwith inthisreportorfinancialstatementsoftheGroupandoftheCompanywhichwouldrenderanyamountstatedinthefinancialstatementsmisleading.

(e) Asatthedateofthisreport,theredoesnotexist:

(i) anychargeontheassetsoftheGrouporoftheCompanywhichhasarisensincetheendofthefinancialyearwhichsecurestheliabilitiesofanyotherperson;or

(ii) anycontingentliabilityoftheGrouporoftheCompanywhichhasarisensincetheendofthefinancialyear.

(f) Intheopinionofthedirectors:

(i) nocontingentorother liabilityhasbecomeenforceableor is likelytobecomeenforceablewithintheperiodof twelvemonthsafter theendof thefinancialyearwhichwillormayaffect theabilityof theGrouporoftheCompanytomeettheirobligationswhentheyfalldue;and

(ii) noitem,transactionoreventofamaterialandunusualnaturehasarisenintheintervalbetweentheendofthefinancialyearandthedateofthisreportwhichis likelytoaffectsubstantiallytheresultsoftheoperationsoftheGrouporoftheCompanyforthefinancialyearinwhichthisreportismade.

Subsequent events

DetailsofsubsequenteventsaredisclosedinNote38tothefinancialstatements.

Auditors

Theauditors,Ernst&Young,donotseekforre-appointment.AresolutiontoappointnewauditorswillbeproposedattheforthcomingAnnualGeneralMeeting.

SignedonbehalfoftheBoardinaccordancewitharesolutionofthedirectorsdated13November2015.

Tiong Kiong King YBhg. Dato’ Tiong Ing

43


Annual Report 2015

We,Tiong Kiong King and YBhg. Dato’ Tiong Ing,beingtwoofthedirectorsofSubur Tiasa Holdings Berhad,doherebystatethat,intheopinionofthedirectors,theaccompanyingfinancialstatementssetoutonpages46to127aredrawnupinaccordancewithFinancialReportingStandardsinMalaysiaandtherequirementsoftheCompaniesAct,1965soastogiveatrueandfairviewofthefinancialpositionoftheGroupandoftheCompanyasat31July2015andoftheirfinancialperformanceandcashflowsfortheyearthenended.

ThesupplementaryinformationsetoutinNote39tothefinancialstatementshavebeenpresentedinaccordancewithdirective issuedbyBursaMalaysiaSecuritiesBerhaddated25March2010andprepared inaccordancewithGuidanceonSpecialMatterNo.1,DeterminationofRealisedandUnrealisedProfitsorLosses in theContextofDisclosurePursuanttoBursaMalaysiaSecuritiesBerhadListingRequirements,asissuedbytheMalaysianInstituteofAccountants.

SignedonbehalfoftheBoardinaccordancewitharesolutionofthedirectorsdated13November2015.

Tiong Kiong King YBhg. Dato’ Tiong Ing

STATUTORY DECLARATION Pursuant to Section 169(16) of the Companies Act, 1965

I,Ling Chieh Min, being theofficerprimarily responsible for thefinancialmanagementofSubur Tiasa Holdings Berhad,dosolemnlyandsincerelydeclarethattheaccompanyingfinancialstatementssetoutonpages46to128areinmyopinioncorrect,andImakethissolemndeclarationconscientiouslybelievingthesametobetrueandbyvirtueoftheprovisionsoftheStatutoryDeclarationsAct,1960.

Subscribed and solemnly declaredbytheabovenamedLing Chieh MinatSibuintheStateofSarawakon13November2015. Ling Chieh Min

Beforeme,

STATEMENT BY DIRECTORSPursuant to Section 169(15) of the Companies Act, 1965

44


Annual Report 2015

INDEPENDENT AUDITORS’ REPORTto the Members of Subur Tiasa Holdings Berhad (Incorporated in Malaysia)

Report on the financial statements

Wehave audited the financial statements ofSubur Tiasa Holdings Berhad, which comprise the statements offinancial positionasat31July2015of theGroupandof theCompany, and thestatementsofprofitor lossandother comprehensive income, statementsof changes in equity and statementsof cash flowsof theGroup andoftheCompanyfortheyearthenended,andasummaryofsignificantaccountingpoliciesandotherexplanatoryinformation,assetoutonpages46to127.

Directors’ responsibility for the financial statements

ThedirectorsoftheCompanyareresponsibleforthepreparationoffinancialstatementssoastogiveatrueandfairviewinaccordancewithFinancialReportingStandardsandtherequirementsoftheCompaniesAct,1965inMalaysia.Thedirectorsarealsoresponsible forsuch internalcontrolasthedirectorsdetermine isnecessarytoenablethepreparationoffinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror.

Auditors’ responsibility

Ourresponsibilityistoexpressanopiniononthesefinancialstatementsbasedonouraudit.WeconductedourauditinaccordancewithapprovedstandardsonauditinginMalaysia.Thosestandardsrequirethatwecomplywithethicalrequirementsandplanandperformtheaudittoobtainreasonableassuranceaboutwhetherthefinancialstatementsarefreefrommaterialmisstatement.

Anauditinvolvesperformingprocedurestoobtainauditevidenceabouttheamountsanddisclosuresinthefinancialstatements. The procedures selected depend on our judgment, including the assessment of risks of materialmisstatement of the financial statements, whether due to fraud or error. Inmaking those risk assessments, weconsiderinternalcontrolrelevanttotheentity’spreparationofthefinancialstatementsthatgiveatrueandfairviewinordertodesignauditproceduresthatareappropriateinthecircumstances,butnotforthepurposeofexpressinganopinionontheeffectivenessoftheCompany’sinternalcontrol.Anauditalsoincludesevaluatingtheappropriatenessof accounting policies used and the reasonableness of accounting estimatesmade by the directors, as well asevaluatingtheoverallpresentationofthefinancialstatements.

Webelievethat theauditevidencewehaveobtained issufficientandappropriatetoprovideabasis forourauditopinion. Opinion

Inouropinion, thefinancial statementsgivea trueand fair viewof thefinancialpositionof theGroupandof theCompanyasat31July2015andoftheirfinancialperformanceandcashflowsfortheyearthenendedinaccordancewithFinancialReportingStandardsandtherequirementsofCompaniesAct,1965inMalaysia.

Report on other legal and regulatory requirements

InaccordancewiththerequirementsoftheCompaniesAct,1965inMalaysia,wealsoreportthefollowing:

(a) In our opinion, the accounting and other records and the registers required by theAct to be kept by theCompanyanditssubsidiarieshavebeenproperlykeptinaccordancewiththeprovisionsoftheAct.

(b) We are satisfied that the financial statements of the subsidiaries that have been consolidated with thefinancial statementsof theCompanyare in formandcontent appropriate andproper for thepurposesofthepreparationoftheconsolidatedfinancialstatementsandwehavereceivedsatisfactoryinformationandexplanationsrequiredbyusforthosepurposes.

(c) Theauditors’reportsonthefinancialstatementsofthesubsidiarieswerenotsubjecttoanyqualificationanddidnotincludeanycommentrequiredtobemadeunderSection174(3)oftheAct.

45


Annual Report 2015

INDEPENDENT AUDITORS’ REPORTto the Members of Subur Tiasa Holdings Berhad (Incorporated in Malaysia) (contd.)

Other matters

ThesupplementaryinformationsetoutinNote39onpage128isdisclosedtomeettherequirementofBursaMalaysiaSecuritiesBerhadand isnotpartofthefinancialstatements.Thedirectorsareresponsibleforthepreparationofthe supplementary information in accordancewithGuidanceonSpecialMatterNo.1,DeterminationofRealisedandUnrealisedProfitsorLossesintheContextofDisclosurePursuanttoBursaMalaysiaSecuritiesBerhadListingRequirements, as issued by theMalaysian Institute of Accountants (“MIA Guidance”) and the directive of BursaMalaysiaSecuritiesBerhad. Inouropinion, the supplementary information is prepared, in allmaterial respects, inaccordancewiththeMIAGuidanceandthedirectiveofBursaMalaysiaSecuritiesBerhad.

This report ismade solely to themembers of the Company, as a body, in accordance with Section 174 of theCompaniesAct,1965inMalaysiaandfornootherpurpose.Wedonotassumeresponsibilitytoanyotherpersonforthecontentofthisreport.

ERNST & YOUNG YONG NYET YUNNo.AF0039 2708/04/16(J)CharteredAccountants CharteredAccountant

Kuching,MalaysiaDate:

46


Annual Report 2015

STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMEFor the financial year ended 31 July 2015

Group Company Note 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000

Revenue 4 753,947 887,116 423,921 550,348

Costofsales (620,038) (688,609) (291,904) (363,106) ------------------ ------------------ ------------------ ------------------ Gross Profit 133,909 198,507 132,017 187,242

Other item of income

Otherincome 5 22,330 15,828 15,002 7,735

Other items of expense

Administrativeexpenses (59,914) (60,235) (50,443) (51,203)Sellinganddistributionexpenses (66,627) (80,421) (38,266) (45,519)Otherexpenses (10,140) (10,139) (6,899) (6,898)Financecosts 6 (17,192) (12,566) (12,349) (8,723) ------------------ ------------------ ------------------ ------------------ Profit before tax 7 2,366 50,974 39,062 82,634

Incometaxexpense 10 189 (12,347) (3,011) (7,279) ------------------ ------------------ ------------------ ------------------ Profit net of tax for the year 2,555 38,627 36,051 75,355

Other comprehensive income, net of tax to be reclassified profit or loss in subsequent periods

Fairvaluechangesonavailable- for-salefinancialassets 29 (25,541) 6,688 (25,541) 6,688 ------------------ ------------------ ------------------ ------------------ Total comprehensive income for the year (22,986) 45,315 10,510 82,043 ================ ================ ================ ================ Profit net of tax attributable to: OwnersoftheCompany 2,562 38,654 36,051 75,355 Non-controllinginterests (7) (27) - - ------------------ ------------------ ------------------ ------------------ 2,555 38,627 36,051 75,355 ================ ================ ================ ================

Total comprehensive income attributable to: OwnersoftheCompany (22,979) 45,342 10,510 82,043 Non-controllinginterests (7) (27) - - ------------------ ------------------ ------------------ ------------------ (22,986) 45,315 10,510 82,043 ================ ================ ================ ================

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

Basic 11 1.4 20.6Diluted 11 N/A N/A ================ ================

Theaccompanyingaccountingpoliciesandexplanatorynotesformanintegralpartofthefinancialstatements.

47


Annual Report 2015

STATEMENTS OF FINANCIAL POSITION As at 31 July 2015

Group Company Note 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000ASSETS

Non-current assetsProperty,plantandequipment 13 614,522 603,232 261,626 305,959Prepaidlandleasepayments 14 91,446 95,874 13,741 14,120Biologicalassets 15 165,258 142,963 - -Investmentproperties 16 24,496 15,573 - -Investmentinsubsidiaries 17 - - 373,181 341,180Investmentsecurities 18 16,286 35,827 16,286 35,827Intangibleassets 19 9,881 20,021 2,298 9,197Longtermreceivable 20 5,313 6,987 5,313 6,987Deferredtaxassets 30 21,774 13,270 2,748 - ------------------ ------------------ ------------------ ------------------ 948,976 933,747 675,193 713,270 ------------------ ------------------ ------------------ ------------------ Current Assets Inventories 21 178,087 148,034 14,433 21,010Tradeandotherreceivables 22 84,151 62,050 241,135 164,199Othercurrentassets 23 6,270 3,596 3,504 2,092Cashandbankbalances 24 56,277 88,252 7,535 25,636 ------------------ ------------------ ------------------ ------------------ 324,785 301,932 266,607 212,937 ------------------ ------------------ ------------------ ------------------ TOTAL ASSETS 1,273,761 1,235,679 941,800 926,207 ================ ================ ================ ================

EQUITY AND LIABILITIES

Equity attributable to owners of the CompanySharecapital 27 209,000 209,000 209,000 209,000Sharepremium 27 59,680 59,680 59,680 59,680Treasuryshares 27 (55,158) (55,148) (55,158) (55,148)Retainedearnings 28 478,785 485,629 426,125 399,480Otherreserves/available-for- salereserve 29 (18,798) 6,743 (18,798) 6,743 ------------------ ------------------ ------------------ ------------------ 673,509 705,904 620,849 619,755Non-controllinginterests (40) (33) - - ------------------ ------------------ ------------------ ------------------ Total Equity 673,469 705,871 620,849 619,755 ------------------ ------------------ ------------------ ------------------

48


Annual Report 2015

Group Company Note 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000LIABILITIES

Non-Current Liabilities

Loansandborrowings 25 157,020 189,235 54,392 99,881Deferredtaxliabilities 30 20,626 21,019 - 1,520 ------------------ ------------------ ------------------ ------------------ 177,646 210,254 54,392 101,401 ------------------ ------------------ ------------------ ------------------

Current Liabilities

Loansandborrowings 25 279,994 160,591 169,413 103,381Tradeandotherpayables 26 137,877 153,958 92,571 97,602Incometaxpayable 4,775 5,005 4,575 4,068 ------------------ ------------------ ------------------ ------------------ 422,646 319,554 266,559 205,051 ------------------ ------------------ ------------------ ------------------ Total Liabilities 600,292 529,808 320,951 306,452 ------------------ ------------------ ------------------ ------------------

TOTAL EQUITY AND LIABILITIES 1,273,761 1,235,679 941,800 926,207 ================ ================ ================ ================


STATEMENTS OF FINANCIAL POSITION As at 31 July 2015 (contd.)

49


Annual Report 2015

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50


Annual Report 2015

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51


Annual Report 2015

STATEMENTS OF CASH FLOWSFor the financial year ended 31 July 2015

Group Company Note 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000Operating activities

Profitbeforetax 2,366 50,974 39,062 82,634

Adjustmentsfor: Amortisationofbiologicalassets 7 4,693 3,942 - - Amortisationofintangibleassets 7 10,140 10,140 6,899 6,899 Amortisation of prepaid land lease payments 7 4,428 4,266 379 379 Baddebtsrecovered 5 - (5) - - Depreciationofproperty,plant andequipment 7 85,852 77,844 54,219 48,200 Depreciationofinvestment properties 7 109 86 - - Dividendincome 5 (18) (142) (18) (61) Reversaloflossonderivative financialinstruments 5 - (3,420) - (3,131) Gainondisposalofinvestment 5 - (178) - (178) Loss/(gain)ondisposalofproperty, plantandequipment,net 5,7 3,417 (27) 3,472 68 Impairmentofproperty,plant andequipment 7 - 1,048 - 734 Reversalofimpairmentlosson tradereceivables 7 - (24) - - (Reversalof)/inventorywrittendown 7 (1,386) 173 - - Property,plantandequipment writtenoff 7 93 22 - - Unrealisedforeignexchange (gain)/loss,net 5,7 (118) 630 16 104 Shorttermaccumulating compensated absences 8 163 211 116 145 Interestexpense 6 17,192 12,566 12,349 8,723 Interestincome 5 (1,308) (1,377) (1,302) (1,317) ------------------ ------------------ ------------------ ------------------ Operating profit before changes in working capital 125,623 156,729 115,192 143,199

Changesinworkingcapital:(Increase)/decreaseininventories (28,667) (2,378) 6,577 794Increaseintradeandotherreceivables (21,961) (7,384) (76,952) (46,145)Decreaseinothercurrentassets 369 1,736 262 168Decreaseintradeandotherpayables (16,266) (7,742) (5,147) (19,424)(Decrease)/increaseinderivative financialinstruments - (402) - 429 ------------------ ------------------ ------------------ ------------------ Cash flows from operations 59,098 140,559 39,932 79,021

Interestpaid (19,485) (14,431) (12,349) (8,723)Taxespaid,netofrefund (10,307) (11,934) (6,772) (7,166) ------------------ ------------------ ------------------ ------------------ Net cash flows from operating activities 29,306 114,194 20,811 63,132 ------------------ ------------------ ------------------ ------------------

52


Annual Report 2015

Group Company Note 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000 Investing activities

Dividendsreceived 18 142 18 61Proceedsfromwithdrawalof investmentsecurities - 27,912 - 7,527Additionsofbiologicalassets (23,120) (18,891) - -Additionofinvestmentinsubsidiaries - - (32,001) (34,350)Purchaseofinvestmentproperties 16 (9,032) - - -Purchaseofprepaidlandlease payments 14 - (10,706) - -Purchaseofproperty,plant andequipment (78,815) (90,958) (9,845) (1,872)Proceedsfromdisposalofproperty, plantandequipment 8,235 2,505 8,531 3,258Interestreceived 1,308 1,377 1,302 1,317Purchaseofinvestmentsecurities (6,000) (27,345) (6,000) (28,452) ------------------ ------------------ ------------------ ------------------ Net cash used in investing activities (107,406) (115,964) (37,995) (52,511) ------------------ ------------------ ------------------ ------------------ Financing activitiesDrawdownofrevolvingcredit 130,000 50,000 67,500 50,000Proceedsfrombankers’acceptances 159,870 30,500 - -Proceedsfromdrawdownoftermloan 20,050 15,548 - -Purchaseoftreasuryshares 27 (10) (1) (10) (1)Repaymentofbankers’acceptances (171,700) - - -Repaymentofhirepurchaseliabilities (62,320) (49,659) (59,001) (48,211)Repaymentoftermloan (20,359) (21,589) - -Dividendspaid 12 (9,406) (4,233) (9,406) (4,233) ------------------ ------------------ ------------------ ------------------ Net cash flows from/(used in) financing activities 46,125 20,566 (917) (2,445) ------------------ ------------------ ------------------ ------------------

Net (decrease)/increase in cash and cash equivalents (31,975) 18,796 (18,101) 8,176

Cash and cash equivalents at 1 August 88,252 69,456 25,636 17,460 ------------------ ------------------ ------------------ ------------------ Cash and cash equivalents at 31 July 56,277 88,252 7,535 25,636 ================ ================ ================ ================

STATEMENTS OF CASH FLOWSFor the financial year ended 31 July 2015 (contd.)


53


Annual Report 2015

NOTES TO THE FINANCIAL STATEMENTSFor the financial year ended 31 July 2015

1. Corporate information

TheCompanyisapubliclimitedliabilitycompany,incorporatedanddomiciledinMalaysiaandislistedontheMainBoardofBursaMalaysiaSecurities.TheregisteredofficeoftheCompanyislocatedatNo.66-78,PusatSuriaPermata,JalanUpperLanang,C.D.T.123,96000Sibu,Sarawak,Malaysia.

The principal activities of the Company are investment holding, extraction and sale of logs. The principalactivitiesofthesubsidiariesaresetoutinNote17tothefinancialstatements.Therehavebeennosignificantchangesinthenatureoftheprincipalactivitiesduringthefinancialyear.

ThefinancialstatementswereauthorisedforissuebytheBoardofDirectorsinaccordancewitharesolutionofthedirectorson13November2015.

2. Summary of significant accounting policies

2.1 Basis of preparation

Thefinancialstatementsof theGroupandof theCompanyhavebeenprepared inaccordancewithFinancialReportingStandards(“FRS”)andtheCompaniesAct,1965inMalaysia.Atthebeginningofthecurrentfinancialyear,theGroupandtheCompanyadoptednewandrevisedFRSwhicharemandatoryforfinancialperiodsbeginningonorafter1August2014,andtheearlyadoptionofFRS9,asdescribedfullyinNote2.2.

Thefinancial statementshavebeenpreparedon thehistoricalcostbasisexceptasdisclosed in theaccountingpoliciesbelow.

ThefinancialstatementsarepresentedinRinggitMalaysia(“RM”)andallvaluesarerounduptonearest

thousand(RM’000),exceptotherwiseindicated.

2.2 Changes in accounting policies

The accounting policies adopted are consistentwith those of the previous financial year except asfollows:

On 1 August 2014, the Group and the Company adopted the following amended FRSs and ICInterpretationmandatoryforannualfinancialperiodsbeginningonorafter1August2014.TheGroupandtheCompanyalsoearlyadoptedFRS9,whichiseffectiveforannualfinancialperiodsbeginningonorafter1January2018.

Effective for annual periods beginning on or after Description AmendmentstoFRS10,FRS12andFRS127:InvestmentEntities 1January2014 AmendmentstoFRS136:RecoverableAmountDisclosuresfor Non-FinancialAssets 1January2014 ICInterpretation21Levies 1January2014 AnnualImprovementstoFRSs2010-2012Cycle 1July2014 AnnualImprovementstoFRSs2011-2013Cycle 1July2014 AmendmentstoFRS119:DefinedBenefitsPlans:Employeecontributions 1July2014 FRS9FinancialInstruments 1January2018

54


Annual Report 2015

2. Summary of significant accounting policies (contd.)

2.2 Changes in accounting policies (contd.)

ThenatureandimpactofthenewandamendedFRSsandICInterpretationaredescribedbelow:

Amendments to FRS 10, FRS 12 and FRS 127: Investment Entities

TheseamendmentsprovideanexceptiontotheconsolidationrequirementforentitiesthatmeetthedefinitionofaninvestmententityunderFRS10ConsolidatedFinancialStatementsandmustbeappliedretrospectively, subject certain transition relief. The exception to consolidation requires investmententitiestoaccountforsubsidiariesatfairvaluethroughprofitorloss.ThisamendmenthasnoimpactontheGroupandtheCompany,sincenoneoftheentitiesintheGroupandtheCompanywouldqualifytobeaninvestmententityunderFRS10.

Amendments to FRS 136: Recoverable Amount Disclosures for Non-Financial Assets

TheamendmentstoFRS136removetherequirementtodisclosetherecoverableamountofacash-generatingunit(CGU)towhichgoodwillorotherintangibleassetswithindefiniteusefulliveshasbeenallocatedwhentherehasbeennoimpairmentorreversalofimpairmentoftherelatedCGU.Inaddition,the amendments introduce additional disclosure requirements when the recoverable amount ismeasuredatfairvaluelesscostsofdisposal.Thesenewdisclosuresincludethefairvaluehierarchy,keyassumptionsandvaluationtechniquesusedwhichareinlinewiththedisclosurerequiredbyFRS13FairValueMeasurements.

TheapplicationoftheseamendmentshashadnomaterialimpactonthedisclosuresintheGroup’sandtheCompany’sfinancialstatements.

IC Interpretation 21: Levies

IC21definesalevyandclarifiesthattheobligatingeventwhichgivesrisetotheliabilityistheactivitythattriggersthepaymentofthelevy,asidentifiedbylegislation.Foralevywhichistriggereduponreachingaminimumthreshold,IC21clarifiesthatnoliabilityshouldberecognisedbeforethespecifiedminimumthresholdisreached.Retrospectiveapplicationisrequired.TheapplicationofIC21hashadnomaterialimpactonthedisclosuresorontheamountsrecognised intheGroup’sandtheCompany’sfinancialstatements.

Annual Improvements to FRSs 2010–2012 Cycle

TheAnnualImprovementstoFRSs2010-2012CycleincludeanumberofamendmentstovariousFRSs,whicharesummarisedbelow.TheapplicationoftheseamendmentshavenoimpactontheGroup’sandtheCompany’sfinancialstatements.

(i) FRS 3: Business Combinations

The amendments to FRS 3 clarifies that contingent consideration classified as liabilities (orassets)shouldbemeasuredatfairvaluethroughprofitorlossateachreportingdate,irrespectiveofwhetherthecontingentconsiderationisafinancialinstrumentwithinthescopeofFRS9orFRS139.Theamendmentsareeffectiveforbusinesscombinationsforwhichtheacquisitiondateisonorafter1August2014.

NOTES TO THE FINANCIAL STATEMENTSFor the financial year ended 31 July 2015 (contd.)

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Annual Improvements to FRSs 2010–2012 Cycle (contd.)

(ii) FRS 8: Operating Segments

Theamendmentsaretobeappliedretrospectivelyandclarifythat:

- anentitymustdisclosethejudgementsmadebymanagementinapplyingtheaggregationcriteria in FRS 8, including a brief description of operating segments that have beenaggregatedandtheeconomiccharacteristicsusedtoassesswhetherthesegmentsaresimilar;and

- thereconciliationofsegmentassetstototalassetsisonlyrequiredtobedisclosedifthereconciliationisreportedtothechiefoperatingdecisionmaker.

(iii) FRS 116: Property, Plant and Equipment and FRS 138: Intangible Assets

The amendments remove inconsistencies in the accounting for accumulateddepreciationoramortisationwhenanitemofproperty,plantandequipmentoranintangibleassetisrevalued.Theamendmentsclarifythatthegrosscarryingamountisadjustedinamannerconsistentwiththerevaluationofthecarryingamountoftheassetandthataccumulateddepreciation/amortisationisthedifferencebetweenthegrosscarryingamountandthecarryingamountaftertakingintoaccountaccumulatedimpairmentlosses.

(iv) FRS 124: Related Party Disclosures

The amendments clarify that a management entity providing key management personnelservicestoareportingentityisarelatedpartyofthereportingentity.Thereportingentityshoulddiscloseasrelatedpartytransactionstheamountsincurredfortheservicepaidorpayabletothemanagemententityfortheprovisionofkeymanagementpersonnelservices.


TheAnnualImprovementstoFRSs2011-2013CycleincludeanumberofamendmentstovariousFRSs,whicharesummarisedbelow.TheapplicationoftheseamendmentshavenoimpactontheGroup’sandtheCompany’sfinancialstatements.

(i) FRS 3: Business Combinations

TheamendmentstoFRS3clarifythatthestandarddoesnotapplytotheaccountingforformationofalltypesofjointarrangementinthefinancialstatementsofthejointarrangementitself.Thisamendmentistobeappliedprospectively.

(ii) FRS 13: Fair Value Measurement

TheamendmentstoFRS13clarifythattheportfolioexceptioninFRS13canbeappliednotonlytofinancialassetsandfinancialliabilities,butalsotoothercontractswithinthescopeofFRS9(orFRS139asapplicable).

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(iii) FRS 140: Investment Property

TheamendmentstoFRS140clarifythatanentityacquiringinvestmentpropertymustdeterminewhether:

- thepropertymeetsthedefinitionofinvestmentpropertyintermsofFRS140;and

- thetransactionmeetsthedefinitionofabusinesscombinationunderFRS3,

todetermineifthetransactionisapurchaseofanassetorisabusinesscombination.

Amendments to FRS 119: Defined Benefit Plans: Employee Contributions

TheamendmentstoFRS119clarifyhowanentityshouldaccountforcontributionsmadebyemployeesorthirdpartiestodefinedbenefitplans,basedonwhetherthosecontributionsaredependentonthenumberofyearsofserviceprovidedbytheemployee.Forcontributionsthatare independentofthenumberofyearsofservice,anentityispermittedtorecognisesuchcontributionsasareductionintheservicecostintheperiodinwhichtheserviceisrendered,insteadofallocatingthecontributionstotheperiodsofservice.Forcontributionsthataredependentonthenumberofyearsofservice,theentityisrequiredtoattributethemtotheemployees’periodsofservice.

TheseamendmentshavenoimpactontheGroupandtheCompany,sincenoneoftheentitiesintheGroupandtheCompanyhasdefinedbenefitplan.

FRS 9 Financial Instruments

TheGroupand theCompanyhaveearlyadoptedFRS9Financial Instrumentswith thedateof initialapplicationof1May2015.Asaresult,theGroupandtheCompanyhaveclassifieditsfinancialassetsassubsequentlymeasuredateitheramortisedcostorfairvalue,dependingonitsbusinessmodelformanagingthosefinancialassetsandtheassets’contractualcashflowcharacteristics. InaccordancewiththetransitionalprovisionsofFRS9,theGroupandtheCompanydidnotremeasuretheGroup’sandtheCompany’sfinancialassetsinthepriorperiodsbuthaveclassifiedthefinancialassetsthattheGroupandtheCompanyheldat1August2014retrospectivelybasedonthefactsandcircumstancesofthebusinessmodelinwhichtheassetswereheldatthedateofinitialapplication.

FRS 9 introduces new classification and measurement for financial assets and financial liabilities.Financialassetsaretobeclassifiedasamortisedcost,FairValueThroughProfitorLoss(“FVTPF”)orFairValueThroughOtherComprehensiveIncome(“FVOCI”),dependingontheentity’sbusinessmodelformanagingthefinancialassetsandthecontractualcashflowcharacteristicofthefinancialassets.

For equity instruments under FVOCI’s classification, the gains or losses recognised in othercomprehensive income are never reclassified to profit or loss, and consequently, there is no needto review such investments for possible impairment. Dividends earned from such investments arerecognised inprofitor loss,unlessthedividendclearlyrepresentsarepaymentofpartofthecostoftheinvestment.AsaresultoftheearlyadoptionofFRS9,theGroupandtheCompanyhaveelectedtodesignateallequityinstrumentsnotheldfortradingandlongterminvestmentpurposesatthedateof initialapplicationtobemeasuredatFVOCI,theseequity instrumentswerepreviouslyclassifiedas“Available-for-sales”equity instrumentsunderFRS139.There isnodifferencebetweenthepreviouscarryingamountofthesefinancialassetsandtheircarryingamountasat1August2014.

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FRS 9 Financial Instruments (contd.)

TheGroup’sandtheCompany’sfinancialliabilitiesmeasuredatamortisedcostunderFRS139continuedtobemeasuredatamortisedcostsandtherewerenoreclassificationtoorfromtheamortisedcostcategory.BecausetheGroupandtheCompanydonothaveanyfinancial liabilitiesdesignatedat fairvaluethroughprofitorlossorembeddedderivatives,theadoptionofFRS9didnotimpacttheGroup’sandtheCompany’saccountingpolicyforfinancialliabilitiesorderivativefinancialinstruments.

ThenewimpairmentrequirementinFRS9arebasedonan“expectedcreditloss”modelandreplacesthe“incurredloss”modelunderFRS139.Underthenewapproach,itwillnolongerbenecessaryforalosseventtooccurbeforeanimpairmentlossisrecognised.

The initial applicationofFRS9hasnoeffecton theopening retainedearningsof theGroupasat1August2014.ThefollowingsummarisestheclassificationchangesfortheGroup’sandtheCompany’snon-derivativefinancialassetson1August2014.

Original measurement category and carrying New measurement amount under category and carrying FRS 139 amount under FRS 9

Available- Loans and Amortised for-sale receivables FVOCI cost RM’000 RM’000 RM’000 RM’000 Group Investmentsecurities 35,827 - 35,827 - Tradeandotherreceivables - 62,050 - 62,050 Cashandbankbalances - 88,252 - 88,252 ------------------ ------------------ ------------------ ------------------ 35,827 150,302 35,827 150,302 ================ ================ ================ ================

Company Investmentsecurities 35,827 - 35,827 - Tradeandotherreceivables - 164,199 - 164,199 Cashandbankbalances - 25,636 - 25,636 ------------------ ------------------ ------------------ ------------------ 35,827 189,835 35,827 189,835 ================ ================ ================ ================

With the change of classification of available-for-sale investments to FVOCI, the available-for-salereserveoftheGroupandtheCompanyasat1August2014havebeenreclassifiedtotheotherreserves.

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2.3 Amendments/standards issued but not yet effective

Theamendments/standardsissuedbutnotyeteffectiveuptothedateofissuanceoftheGroup’sandtheCompany’s financial statements are listed below. TheGroup and theCompany intend to adopttheseamendments/standards,ifapplicable,whentheybecomeeffective.

Effective for annual periods beginning on or after Description

AnnualImprovementstoFRSs2012-2014Cycle 1January2016 AmendmentstoFRS116andFRS138:ClarificationofAcceptable MethodsofDepreciationandAmortisation 1January2016 AmendmentstoFRS10andFRS128:SaleorContributionof AssetsbetweenanInvestoranditsAssociateorJointVenture 1January2016 AmendmentstoFRS10,FRS12,andFRS128: InvestmentsEntities-ApplyingtheConsolidationException 1January2016 AmendmentstoFRS11:AccountingforAcquisitionsofInterestsin JointOperations 1January2016 AmendmentstoFRS101:DisclosureInitiatives 1January2016 AmendmentstoFRS127:EquityMethodinSeparateFinancialStatements 1January2016 FRS14RegulatoryDeferralAccounts 1January2016

Thedirectorsexpectthattheadoptionoftheabovestandardsandinterpretationswillhavenomaterialimpactonthefinancialstatementsintheperiodofinitialapplicationexceptasdiscussedbelow:


TheAnnualImprovementstoFRSs2012-2014CycleincludeanumberofamendmentstovariousFRSs,whicharesummarisedbelow.ThedirectorsoftheCompanydonotanticipatethattheapplicationoftheseamendmentswillhaveasignificantimpactontheGroup’sandtheCompany’sfinancialstatements.

(i) FRS 5: Non-current Assets Held for Sale and Discontinued Operations

TheamendmenttoFRS5clarifiesthatchangingfromoneofthesedisposalmethodstotheothershouldnotbeconsideredtobeanewplanofdisposal,ratherit isacontinuationoftheoriginalplan.ThereisthereforenointerruptionoftheapplicationoftherequirementsinFRS5.

Theamendmentalsoclarifiesthatchangingthedisposalmethoddoesnotchangethedateofclassification.Thisamendmentistobeappliedprospectivelytochangesinmethodsofdisposalthat occur in annual periods beginning on or after 1 January 2016, with earlier applicationpermitted.

(ii) FRS 7: Financial Instruments - Disclosures

Theamendmentclarifiesthataservicingcontractthatincludesafeecanconstitutecontinuinginvolvement inafinancialasset.Anentitymustassessthenatureofthefeeandarrangementagainst the guidance for continuing involvement in FRS 7 in order to assess whether thedisclosuresarerequired.

Inaddition,theamendmentalsoclarifiesthatthedisclosuresinrespectofoffsettingoffinancialassetsandfinancialliabilitiesarenotrequiredinthecondensedinterimfinancialreport.


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2.3 Amendments/standards issued but not yet effective (contd.)


(iii) FRS 119: Employee Benefits

Theamendmentclarifiesthatmarketdepthofhighqualitycorporatebondsisassessedbasedonthecurrencyinwhichtheobligationisdenominated,ratherthanthecountrywheretheobligationis located. When there is no deepmarket for high quality corporate bonds in that currency,governmentbondratesmustbeused.

Theamendmentmustbeappliedprospectively. (iv) FRS 134: Interim Financial Reporting

FRS134requiresentitiestodiscloseinformationinthenotestotheinterimfinancialstatements‘ifnotdisclosedelsewhereintheinterimfinancialreport’.

Theamendmentstatesthattherequiredinterimdisclosuresmusteitherbeintheinterimfinancialstatementsor incorporatedbycross-referencebetweenthe interimfinancialstatementsandwherevertheyareincludedwithinthegreaterinterimfinancialreport(e.g., inthemanagementcommentaryor risk report).Theother informationwithin the interimfinancial reportmustbeavailabletousersonthesametermsastheinterimfinancialstatementsandatthesametime.

Amendments to FRS 116 and FRS 138: Clarification of Acceptable Methods of Depreciation and Amortisation

Theamendmentsclarifythatrevenuereflectsapatternofeconomicbenefitsthataregeneratedfromoperatingabusiness(ofwhichtheassetispart)ratherthantheeconomicbenefitsthatareconsumedthroughtheuseofanasset.Asaresult,arevenue-basedmethodcannotbeusedtodepreciateproperty,plantandequipmentandmayonlybeusedinverylimitedcircumstancestoamortiseintangibleassets.

Theamendmentsareeffectiveprospectivelyforannualperiodsbeginningonorafter1January2016,withearlyadoptionpermitted.TheseamendmentsarenotexpectedtohaveanyimpacttotheGroupandtheCompanyastheGroupandtheCompanyhavenotusedarevenue-basedmethodtodepreciateitsnon-currentassets.

Amendments to FRS 10 and FRS 128: Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

Theamendmentsclarifythat:

- gainsandlossesresultingfromtransactionsinvolvingassetsthatdonotconstituteabusiness,between investor and its associate or joint venture are recognised in the entity’s financialstatementsonlytotheextentofunrelatedinvestors’interestsintheassociateorjointventure;and

- gainsandlossesresultingfromtransactionsinvolvingthesaleorcontributiontoanassociateofajointventureofassetsthatconstituteabusinessisrecognisedinfull.

The amendments are to be applied prospectively to the sale or contribution of assets occurring inannualperiodsbeginningonorafter1January2016.Earlierapplicationispermitted.

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Amendments to FRS 10, FRS 12 and FRS 128: Investment Entities - Applying the Consolidation Exception

Theamendmentsclarifythattheexemptionfrompresentingconsolidatedfinancialstatementsappliestoaparententity that isasubsidiaryofan investmententity,when the investmententitymeasuresallof itssubsidiariesatfairvalue.Theamendmentsfurtherclarifythatonlyasubsidiarythat isnotaninvestment entity itself and provides support services to the investment entity is consolidated. Inaddition, theamendmentsalsoprovidethat ifanentity that isnot itselfan investmententityhasaninterestinanassociateorjointventurethatisaninvestmententity,theentitymay,whenapplyingtheequitymethod,retainsthefairvaluemeasurementappliedbythatinvestmententityassociateorjointventuretotheinvestmententityassociate’sorjointventure’sinterestsinsubsidiaries.

Theamendmentsaretobeappliedretrospectivelyandareeffectiveforannualperiodsbeginningonorafter1January2016,withearlyadoptionpermitted.TheseamendmentswillnothaveanyimpactontheGroup’sandtheCompany’sfinancialstatements.

Amendments to FRS 11 Joint Arrangement: Accounting for Acquisitions of Interests in Joint Operations

TheamendmentstoFRS11requirethatajointoperatorwhichacquiresaninterestinajointoperationwhichconstitutesabusinesstoapplytherelevantFRS3BusinessCombinationsprinciplesforbusinesscombinations accounting. The amendments also clarify that a previously held interest in a jointoperation is not remeasuredon the acquisitionof an additional interest in the same jointoperationwhilejointcontrolisretained.Inaddition,ascopeexclusionhasbeenaddedtoFRS11tospecifythattheamendmentsdonotapplywhenthepartiessharingjointcontrol,includingthereportingentity,areundercommoncontrolofthesameultimatecontrollingparty.

Theseamendmentsaretobeappliedprospectivelyforannualperiodsbeginningonorafter1January2016,withearlyadoptionpermitted.TheDirectorsoftheCompanydonotanticipatethattheapplicationoftheseamendmentswillhaveamaterialimpactontheGroup’sconsolidatedfinancialstatements.

Amendments to FRS 101: Disclosure Initiatives

TheamendmentstoFRS101includenarrow-focusimprovementsinthefollowingfiveareas: - Materiality - Disaggregationandsubtotals - Notes structure - Disclosureofaccountingpolicies - Presentationofitemsofothercomprehensiveincomearisingfromequityaccountedinvestments

ThedirectorsoftheCompanydonotanticipatethattheapplicationoftheseamendmentswillhaveamaterialimpactontheGroup’sandtheCompany’sfinancialstatements.

Amendments to FRS 127: Equity Method in Separate Financial Statements

Theamendmentswillallowentitiestousetheequitymethodtoaccountforinvestmentsinsubsidiaries,jointventuresandassociate intheirseparatefinancialstatements.EntitiesalreadyapplyingFRSandelecting to change to the equitymethod in its separate financial statementswill have to apply thischangeretrospectively.Forfirst-timeadoptersofFRSelectingtousetheequitymethodinitsseparatefinancialstatements,theywillberequiredtoapplythismethodfromthedateoftransitiontoFRS.Theamendmentsareeffectiveforannualperiodsbeginningonorafter1January2016,withearlyadoptionpermitted.Theseamendmentswillnothaveany impactontheGroup’sandtheCompany’sfinancialstatements.

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Malaysian Financial Reporting Standards

On 19 November 2011, the Malaysian Accounting Standards Board (“MASB”) issued a new MASBapprovedaccountingframework,theMalaysianFinancialReportingStandards(“MFRSFramework”).

TheMFRS Framework is to be applied by all EntitiesOther Than Private Entities for annual periodsbeginningonorafter1January2012,withtheexceptionofentitiesthatarewithinthescopeofMFRS141Agriculture(MFRS141)andICInterpretation15AgreementsforConstructionofRealEstate(IC15),includingitsparent,significantinvestorandventurer(hereincalled‘TransitioningEntities’).

TransitioningEntitieswillbeallowedtodeferadoptionof thenewMFRSFramework foranadditionalthreeyears.Consequently,adoptionoftheMFRSFrameworkbyTransitioningEntitieswillbemandatoryforannualperiodsbeginningonorafter1January2015.Subsequently,on2September2014,MASBhasissuedthefollowingstandards:

(i) MFRS15RevenuefromContractsCustomers (ii) Agriculture:Bearerplants(AmendmentstoMFRS116Property,PlantandEquipmentandMFRS

141Agriculture)

With the issuanceofMFRS14andtheBearerPlantsAmendment,allTransitioningEntitieswouldberequiredtoadopttheMFRSlatestby1January2018.

TheGroupfallswithinthescopedefinitionofTransitioningEntitiesandaccordingly,willberequiredtopreparefinancialstatementsusingtheMFRSFrameworkinitsfirstMFRSfinancialstatementsfortheyearending31July2019.InpresentingitsfirstMFRSfinancialstatements,theGroupwillberequiredtorestatethecomparativefinancialstatementstoamountsreflectingtheapplicationofMFRSFramework.Themajorityoftheadjustmentsrequiredontransitionwillbemade,retrospectively,againstopeningretainedprofits.

Atthedateofthesefinancialstatements,theGrouphasnotcompleteditsquantificationofthefinancialeffects of the differences between Financial Reporting Standards and accounting standards undertheMFRSFrameworkduetotheongoingassessmentbytheprojectteam.Accordingly, thefinancialperformanceandfinancialpositionasdisclosedinthesefinancialstatementsfortheyearended31July2015couldbedifferentifpreparedundertheMFRSFramework.

TheGroupconsidersthatitisachievingitsscheduledmilestonesandexpectstobeinapositiontofullycomplywiththerequirementsoftheMFRSFrameworkforthefinancialyearending31July2019.

2.4 Basis of consolidation

The consolidated financial statements comprise the financial statements of the Company and itssubsidiariesasatthereportingdate.Thefinancialstatementsofthesubsidiariesusedinthepreparationof theconsolidatedfinancialstatementsareprepared for thesamereportingdateas theCompany.Consistentaccountingpoliciesareappliedforliketransactionsandeventsinsimilarcircumstances.

TheCompanycontrolsaninvesteeifandonlyiftheCompanyhasallthefollowing:

(i) Powerover the investee (i.eexistingrightsthatgive it thecurrentability todirect therelevantactivitiesoftheinvestee);

(ii) Exposure,orrights,tovariablereturnsfromitsinvestmentwiththeinvestee;and (iii) Theabilitytouseitspowerovertheinvesteetoaffectitsreturns.

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2.4 Basis of consolidation (contd.) WhentheCompanyhaslessthanamajorityofthevotingrightsofaninvestee,theCompanyconsiders

thefollowinginassessingwhetherornottheCompany’svotingrights inan investeearesufficienttogiveitpowerovertheinvestee:

(i) ThesizeoftheCompany’sholdingofvotingrightsrelativetothesizeanddispersionofholdingsoftheothervoteholders;

(ii) PotentialvotingrightsheldbytheCompany,othervoteholdersorotherparties; (iii) Rightsarisingfromothercontractualarrangements;and (iv) Anyadditionalfactsandcircumstancesthat indicatethattheCompanyhas,ordoesnothave,

thecurrentability todirect therelevantactivitiesat thetimethatdecisionsneedtobemade,includingvotingpatternsatpreviousshareholders’meetings.

Subsidiaries are consolidated when the Company obtains control over the subsidiary and ceaseswhentheCompanylosescontrolofthesubsidiary.Allintra-groupbalances,incomeandexpensesandunrealisedgainsandlossesresultingfromintra-grouptransactionsareeliminatedinfull.

Losseswithinasubsidiaryareattributedtothenon-controllinginterestsevenifthatresultsinadeficitbalance.

ChangesintheGroup’sownershipinterestsinsubsidiariesthatdonotresultintheGrouplosingcontrolover thesubsidiariesareaccounted forasequity transactions.Thecarryingamountsof theGroup’sinterestsandthenon-controllinginterestsareadjustedtoreflectthechangesintheirrelativeinterestsinthesubsidiaries.TheresultingdifferenceisrecogniseddirectlyinequityandattributedtoownersoftheCompany.

WhentheGrouplosescontrolofasubsidiary,againorlosscalculatedasthedifferencebetween(i)theaggregateofthefairvalueoftheconsiderationreceivedandthefairvalueofanyretainedinterestand(ii)thepreviouscarryingamountoftheassetsandliabilitiesofthesubsidiaryandanynon-controllinginterests, is recognised in profit or loss. The subsidiary’s cumulative gain or loss which has beenrecognisedinothercomprehensiveincomeandaccumulatedinequityarereclassifiedtoprofitorlossorwhereapplicable,transferreddirectlytoretainedearnings.Thefairvalueofanyinvestmentretainedintheformersubsidiaryatthedatecontrol is lost isregardedasthecoston initialrecognitionoftheinvestment.

Business combinations

Acquisitionsofsubsidiariesareaccountedforusingtheacquisitionmethod.Thecostofanacquisitionismeasuredastheaggregateoftheconsiderationtransferred,measuredatacquisitiondatefairvalueandtheamountofanynon-controllinginterestsintheacquiree.TheGroupelectsonatransaction-by-transactionbasiswhethertomeasurethenon-controllinginterestsintheacquireeeitheratfairvalueorattheproportionateshareoftheacquiree’s identifiablenetassets.Transactioncosts incurredareexpensedandincludedinadministrativeexpenses.

Anycontingentconsiderationtobetransferredbytheacquirerwillbe recognisedat fairvalueat theacquisitiondate.Subsequentchangesinthefairvalueofthecontingentconsiderationwhichisdeemedtobeanassetorliability,willberecognisedinaccordancewithFRS9orFRS139eitherinprofitorlossorasachangetoothercomprehensiveincome.Ifthecontingentconsiderationisclassifiedasequity,itwillnotberemeasured.Subsequentsettlementisaccountedforwithinequity.IninstanceswherethecontingentconsiderationdoesnotfallwithinthescopeofFRS139,itismeasuredinaccordancewiththeappropriateFRS.


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2.4 Basis of consolidation (contd.)

Business combinations (contd.)

When the Group acquires a business, it assesses the financial assets and liabilities assumed forappropriate classification and designation in accordance with the contractual terms, economiccircumstances and pertinent conditions as at the acquisition date. This includes the separation ofembeddedderivativesinhostcontractsbytheacquiree.

If the business combination is achieved in stages, the acquisition date fair value of the acquirer’spreviouslyheldequityinterestintheacquireeisremeasuredtofairvalueattheacquisitiondatethroughprofitorloss.

Goodwillisinitiallymeasuredatcost,beingtheexcessoftheaggregateoftheconsiderationtransferredand the amount recognised for non-controlling interests over the net identifiable assets acquiredandliabilitiesassumed.Ifthisconsiderationis lowerthanfairvalueofthenetassetsofthesubsidiaryacquired,thedifferenceisrecognisedinprofitor loss.Theaccountingpolicyforgoodwill issetout inNote2.10(a).

2.5 Subsidiaries

AsubsidiaryisanentityoverwhichtheGrouphasallthefollowing:

(i) Powerover the investee (i.eexistingrightsthatgive it thecurrentability todirect therelevantactivitiesoftheinvestee);

(ii) Exposure,orrights,tovariablereturnsfromitsinvestmentwiththeinvestee;and (iii) Theabilitytouseitspowerovertheinvesteetoaffectitsreturns.

IntheCompany’sseparatefinancialstatements,investmentsinsubsidiariesareaccountedforatcostlessimpairmentlosses.Ondisposalofsuchinvestments,thedifferencebetweennetdisposalproceedsandtheircarryingamountsisincludedinprofitorloss.

2.6 Foreign currency

(a) Functional and presentation currency

TheindividualfinancialstatementsofeachentityintheGroupandtheCompanyaremeasuredusing the currency of the primary economic environment in which the entity operates (“thefunctionalcurrency”).Theconsolidatedfinancialstatementsarepresented inRinggitMalaysia(RM),whichisalsotheGroup’sandtheCompany’sfunctionalcurrency.

(b) Foreign currency transactions

Transactions inforeigncurrenciesaremeasured intherespectivefunctionalcurrenciesoftheCompanyanditssubsidiariesandarerecordedoninitialrecognitioninthefunctionalcurrenciesat exchange rates approximating those ruling at the transaction dates. Monetary assets andliabilitiesdenominatedinforeigncurrenciesaretranslatedattherateofexchangerulingatthereportingdate.Non-monetary itemsdenominated in foreigncurrenciesthataremeasuredathistoricalcostaretranslatedusingtheexchangeratesasatthedatesoftheinitialtransactions.Non-monetary itemsdenominated in foreigncurrenciesmeasuredat fairvalueare translatedusingtheexchangeratesatthedatewhenthefairvaluewasdetermined.


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2.6 Foreign currency (contd.)

(b) Foreign currency transactions (contd.) Exchangedifferencesarisingonthesettlementofmonetary itemsorontranslatingmonetary

itemsatthereportingdatearerecognisedinprofitorlossexceptforexchangedifferencesarisingonmonetaryitemsthatformpartoftheGroup’snetinvestmentinforeignoperations,whicharerecognised initially in other comprehensive income and accumulated under foreign currencytranslationreserveinequity.TheforeigncurrencytranslationreserveisreclassifiedfromequitytoprofitorlossoftheGroupondisposaloftheforeignoperation.

Exchangedifferencesarisingonthetranslationofnon-monetaryitemscarriedatfairvalueareincludedinprofitorlossfortheperiodexceptforthedifferencesarisingonthetranslationofnon-monetaryitemsinrespectofwhichgainsandlossesarerecogniseddirectlyinequity.Exchangedifferencesarisingfromsuchnon-monetaryitemsarealsorecogniseddirectlyinequity.

(c) Foreign operations TheassetsandliabilitiesofforeignoperationsaretranslatedintoRMattherateofexchangeruling

atthereportingdateandincomeandexpensesaretranslatedatexchangeratesatthedatesofthetransactions.Theexchangedifferencesarisingonthetranslationaretakendirectlytoothercomprehensiveincome.Ondisposalofaforeignoperation,thecumulativeamountrecognisedinothercomprehensive incomeandaccumulated inequityunder foreigncurrency translationreserverelatingtothatparticularforeignoperationisrecognisedintheprofitorloss.

Goodwillandfairvalueadjustmentsarisingontheacquisitionofforeignoperationsaretreatedasassetsandliabilitiesoftheforeignoperationsandarerecordedinthefunctionalcurrencyoftheforeignoperationsandtranslatedattheclosingrateatthereportingdate.

2.7 Property, plant and equipment and depreciation

Allitemsofproperty,plantandequipmentareinitiallyrecordedatcost.Thecostofanitemofproperty,plantandequipmentisrecognisedasanassetif,andonlyif,itisprobablethatfutureeconomicbenefitsassociatedwith the itemwill flow to theGroup and theCompany and the cost of the item can bemeasuredreliably.

Subsequenttorecognition,property,plantandequipmentexceptforfreeholdland,aremeasuredatcostlessaccumulateddepreciationandaccumulatedimpairmentlosses.Whensignificantpartsofproperty,plantandequipmentarerequiredtobereplaced in intervals, theGroupandtheCompanyrecognisesuchpartsasindividualassetswithspecificusefullivesanddepreciation,respectively.Likewise,whenamajorinspectionisperformed,itscostisrecognisedinthecarryingamountoftheplantandequipmentasa replacement if the recognitioncriteria are satisfied.All other repair andmaintenancecostsarerecognisedinprofitorlossasincurred.

Freeholdlandhasunlimitedusefullifeandthereforeisnotdepreciated.Depreciationiscomputedonastraight-linebasisovertheestimatedusefullivesoftheassetsatthefollowingrates:

Longleaseholdland 1.67% Buildings 2%-10% Watercrafts,trucksandmotorvehicles 10%-25% Plantandmachinery 7.5%-20% Infrastructurefacilities 5%-10% Furniture,fittingsandequipment 5%-20% Computerequipment 10%-20%


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2.7 Property, plant and equipment and depreciation (contd.) Capitalworkinprogressincludedinproperty,plantandequipmentarenotdepreciatedastheseassets

arenotyetavailableforuse.

The carrying values of property, plant and equipment are reviewed for impairment when events orchangesincircumstancesindicatethatthecarryingvaluemaynotberecoverable.

The residual value, useful life anddepreciationmethodare reviewedateachfinancial year-end, andadjustedprospectively,ifappropriate.

Anitemofproperty,plantandequipmentisderecognisedupondisposalorwhennofutureeconomic

benefitsareexpectedfromitsuseordisposal.Anygainorlossonderecognitionoftheassetisincludedintheprofitorlossintheyeartheassetisderecognised.

2.8 Biological assets

New planting expenditure incurred on land clearing, planting, upkeep of immature oil palms, directadministrative expenses and financing costs up to maturity are capitalised under biological assetsandamortisedonastraight-linebasisover25years, theexpecteduseful lifeofoilpalms.Oilpalm isconsideredmature36monthsafterthemonthofplanting.Uponmaturity,allsubsequentmaintenanceexpenditureischargedtothestatementprofitorlossandothercomprehensiveincome.

Replantingexpenditureisalsocapitalisedasbiologicalassetsandamortisedonthesamebasis. 2.9 Investment properties

Investment properties are properties which are held either to earn rental income or for capitalappreciation or for both. Such properties are initially recorded at cost, including transaction costs.Subsequentcostsare included in theasset’scarryingamountor recognisedasaseparateasset,asappropriate,onlywhenitisprobablethatfutureeconomicbenefitsassociatedwiththeitemwillflowtotheGroupandthecostoftheitemcanbemeasuredreliably.Thecarryingamountofthereplacedpartisderecognised.Allother repairsandmaintenancearechargedtothestatementofcomprehensiveincomeduringthefinancialperiodinwhichtheyareincurred.

Subsequent to recognition, investmentpropertiesarestatedatcost lessaccumulateddepreciationandanyimpairmentlosses.Leaseholdlandaredepreciatedovertheperiodoftheleaseswhichrangefrom5yearsto908years.

The residual values, useful life and depreciationmethod are reviewed at each financial year-end toensure that theamount,methodandperiodofdepreciationareconsistentwithpreviousestimatesandtheexpectedpatternofconsumptionofthefutureeconomicbenefitsembodiedintheitemsofinvestmentproperties.

Anitemofinvestmentpropertiesisderecognisedupondisposalorwhennofutureeconomicbenefitsareexpectedfromitsuseofdisposal.Thedifferencebetweenthenetdisposalproceeds,ifanyandthenetcarryingamountisrecognisedinprofitandloss.

2.10 Intangible assets

(a) Goodwill

Goodwill is initiallymeasuredatcost.Following initial recognition,goodwill ismeasuredatcostlessaccumulatedimpairmentlosses.


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2.10 Intangible assets (contd.)

(a) Goodwill (contd.)

Forthepurposeofimpairmenttesting,goodwillacquiredisallocated,fromtheacquisitiondate,toeachoftheGroup’scash-generatingunitsthatareexpectedtobenefitfromthesynergiesofthecombination.

Thecash-generatingunittowhichgoodwillhasbeenallocatedistestedforimpairmentannually

andwheneverthereisanindicationthatthecash-generatingunitmaybeimpaired,bycomparingthe carrying amount of the cash-generating unit, including the allocated goodwill, with therecoverableamountof thecash-generatingunit.Wheretherecoverableamountof thecash-generatingunitislessthanthecarryingamount,animpairmentlossisrecognisedintheprofitorloss.Impairmentlossesrecognisedforgoodwillarenotreversedinsubsequentperiods.

Wheregoodwillformspartofacash-generatingunitandpartoftheoperationwithinthatcash-generatingunitisdisposedof,thegoodwillassociatedwiththeoperationdisposedofisincludedin thecarryingamountof theoperationwhendetermining thegainor lossondisposalof theoperation.Goodwilldisposedofinthiscircumstanceismeasuredbasedontherelativefairvaluesoftheoperationsdisposedofandtheportionofthecash-generatingunitretained.

(b) Other intangible assets

Intangibleassetsacquiredseparatelyaremeasuredinitiallyatcost.Thecostofintangibleassetsacquiredinabusinesscombinationistheirfairvalueasatthedateofacquisition.Followinginitialacquisition, intangible assets are measured at cost less any accumulated amortisation andaccumulatedimpairmentlosses.

Intangibleassetswithfiniteusefullivesareamortisedovertheestimatedusefullivesandassessedfor impairmentwheneverthere isan indicationthatthe intangibleassetmaybe impaired.Theamortisationperiodandtheamortisationmethodarereviewedatleastateachfinancialyear-end.Changesintheexpectedusefullifeortheexpectedpatternofconsumptionoffutureeconomicbenefitsembodiedintheassetisaccountedforbychangingtheamortisationperiodormethod,asappropriate,andaretreatedaschangesinaccountingestimates.Theamortisationexpenseonintangibleassetswithfinitelivesisrecognisedinprofitorloss.

Intangibleassetswithindefiniteusefullivesornotyetavailableforusearetestedforimpairment

annually,ormorefrequentlyiftheeventsandcircumstancesindicatethatthecarryingvaluemaybeimpairedeitherindividuallyoratthecash-generatingunitlevel.Suchintangibleassetsarenotamortised.Theusefullifeofanintangibleassetwithanindefiniteusefullifeisreviewedannuallytodeterminewhethertheusefullifeassessmentcontinuestobesupportable.Ifnot,thechangeinusefullifefromindefinitetofiniteismadeonaprospectivebasis.

Gainsorlossesarisingfromderecognitionofanintangibleassetaremeasuredasthedifferencebetweenthenetdisposalproceedsandthecarryingamountoftheassetandarerecognisedinprofitorlosswhentheassetisderecognised.

(c) Rights in timber licence

Rightsintimberlicenceareexpenditureincurredinrespectofacquisitionoftimberlicencesandareamortisedona straight linebasisover the remaining tenureof the licenceperiods,whichrangefrom7to15years.


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2.10 Intangible assets (contd.)

(d) Computer softwares and licences

Thecomputersoftwareandlicencescostareamortisedusingthestraight-linemethodovertheirestimatedusefullivesof10years.

2.11 Impairment of non-financial assets

TheGroupassessesateachreportingdatewhetherthereisanindicationthatanassetmaybeimpaired.Ifanysuch indicationexists,orwhenanannual impairmentassessment foranasset is required, theGroupmakesanestimateoftheasset’srecoverableamount.

Anasset’srecoverableamountisthehigherofanasset’sfairvaluelesscoststosellanditsvalueinuse.Forthepurposeofassessingimpairment,assetsaregroupedatthelowestlevelsforwhichthereareseparatelyidentifiablecashflows(cash-generatingunits(“CGU”)).

Inassessingvalueinuse,theestimatedfuturecashflowsexpectedtobegeneratedbytheassetarediscountedtotheirpresentvalueusingapre-taxdiscountratethatreflectscurrentmarketassessmentsofthetimevalueofmoneyandtherisksspecifictotheasset.Wherethecarryingamountofanassetexceedsitsrecoverableamount,theassetiswrittendowntoitsrecoverableamount.ImpairmentlossesrecognisedinrespectofaCGUorgroupsofCGUsareallocatedfirsttoreducethecarryingamountofanygoodwillallocatedtothoseunitsorgroupsofunitsandthen,toreducethecarryingamountoftheotherassetsintheunitorgroupsofunitsonapro-ratabasis.

Impairmentlossesarerecognisedinprofitorlossexceptforassetsthatarepreviouslyrevaluedwheretherevaluationwastakentoothercomprehensiveincome.Inthiscasetheimpairmentisalsorecognisedinothercomprehensiveincomeuptotheamountofanypreviousrevaluation.

Anassessment ismadeateach reportingdateas towhether there isany indication thatpreviouslyrecognised impairment lossesmayno longerexistormayhavedecreased.Apreviously recognisedimpairment loss is reversedonly if therehasbeenachange in theestimatesusedtodeterminetheasset’s recoverable amount since the last impairment loss was recognised. If that is the case, thecarryingamountoftheassetisincreasedtoitsrecoverableamount.

Thatincreasecannotexceedthecarryingamountthatwouldhavebeendetermined,netofdepreciation,hadnoimpairmentlossbeenrecognisedpreviously.Suchreversalisrecognisedinprofitorlossunlesstheassetismeasuredatrevaluedamount,inwhichcasethereversalistreatedasarevaluationincrease.Impairmentlossongoodwillisnotreversedinasubsequentperiod.

2.12 Financial assets

Policy for non-derivative financial assets applicable before 1 August 2014

Financialassetsarerecognisedinthestatementsoffinancialpositionwhen,andonlywhen,theGroupandtheCompanybecomeapartytothecontractualprovisionsofthefinancialinstrument.

Whenfinancialassetsarerecognisedinitially,theyaremeasuredatfairvalue,plus,inthecaseoffinancialassetsnotatfairvaluethroughprofitorloss,directlyattributabletransactioncosts.

TheGroupandtheCompanydeterminetheclassificationoftheirfinancialassetsatinitialrecognition,and thecategories includefinancial assetsat fair value throughprofitor loss, loansand receivables,held-to-maturityinvestmentsandavailable-for-salefinancialassets.


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2.12 Financial assets (contd.)

Policy for non-derivative financial assets applicable before 1 August 2014 (contd.)

(a) Financial assets at fair value through profit or loss Financialassetsareclassifiedasfinancialassetsatfairvaluethroughprofitorlossiftheyareheld

fortradingoraredesignatedassuchuponinitialrecognition.Financialassetsheldfortradingarederivatives(includingseparatedembeddedderivatives)orfinancialassetsacquiredprincipallyforthepurposeofsellinginthenearterm.

Subsequenttoinitialrecognition,financialassetsatfairvaluethroughprofitorlossaremeasuredat fair value. Any gains or losses arising from changes in fair value are recognised in profit orloss.Netgainsornetlossesonfinancialassetsatfairvaluethroughprofitorlossdonotincludeexchangedifferences,interestanddividendincome.Exchangedifferences,interestanddividendincomeonfinancialassetsatfairvaluethroughprofitorlossarerecognisedseparatelyinprofitorlossaspartofotherlossesorotherincome.

Financialassetsatfairvaluethroughprofitorlosscouldbepresentedascurrentornon-current.Financialassetsthatareheldprimarily for tradingpurposesarepresentedascurrentwhereasfinancialassetsthatarenotheldprimarilyfortradingpurposesarepresentedascurrentornon-currentbasedonthesettlementdate.

(b) Loans and receivables

Financialassetswithfixedordeterminablepaymentsthatarenotquotedinanactivemarketareclassifiedasloansandreceivables.

Subsequenttoinitialrecognition,loansandreceivablesaremeasuredatamortisedcostusingtheeffectiveinterestmethod.Gainsandlossesarerecognisedinprofitorlosswhentheloansandreceivablesarederecognisedorimpaired,andthroughtheamortisationprocess.

Loansandreceivablesareclassifiedascurrentassets,except for thosehavingmaturitydateslaterthan12monthsafterthereportingdatewhichareclassifiedasnon-current.

(c) Held-to-maturity investments

Financialassetswithfixedordeterminablepaymentsandfixedmaturityareclassifiedasheld-to-maturitywhentheGroupandtheCompanyhavethepositiveintentionandabilitytoholdtheinvestmenttomaturity.

Subsequent to initial recognition, held-to-maturity investments are measured at amortised

costusingtheeffectiveinterestmethod.Gainsandlossesarerecognisedinprofitorlosswhentheheld-to-maturity investmentsarederecognisedor impaired,andthroughtheamortisationprocess.

Held-to-maturity investments are classified as non-current assets, except for those havingmaturitywithin12monthsafterthereportingdatewhichareclassifiedascurrent.

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Policy for non-derivative financial assets applicable before 1 August 2014 (contd.)

(d) Available-for-sale financial assets

Available-for-salearefinancialassetsthataredesignatedasavailableforsaleorarenotclassifiedinanyofthethreeprecedingcategories.

Afterinitialrecognition,available-for-salefinancialassetsaremeasuredatfairvalue.Anygainsorlossesfromchangesinfairvalueofthefinancialassetsarerecognisedinothercomprehensiveincome, except that impairment losses, foreign exchange gains and losses on monetaryinstrumentsandinterestcalculatedusingtheeffectiveinterestmethodarerecognisedinprofitor loss. The cumulative gain or loss previously recognised in other comprehensive income isreclassifiedfromequitytoprofitorlossasareclassificationadjustmentwhenthefinancialassetisderecognised.Interestincomecalculatedusingtheeffectiveinterestmethodisrecognisedinprofitorloss.Dividendsonanavailable-for-saleequityinstrumentarerecognisedinprofitorlosswhentheGroup’sandtheCompany’srighttoreceivepaymentisestablished.

Investmentsinequityinstrumentswhosefairvaluecannotbereliablymeasuredaremeasuredatcostlessimpairmentloss.

Available-for-salefinancialassetsareclassifiedasnon-currentassetsunlesstheyareexpectedtoberealisedwithin12monthsafterthereportingdate.

Afinancialassetisderecognisedwherethecontractualrighttoreceivecashflowsfromtheassethasexpired.Onderecognitionofafinancialassetinitsentirety,thedifferencebetweenthecarryingamountandthesumoftheconsiderationreceivedandanycumulativegainorlossthathadbeenrecognisedinothercomprehensiveincomeisrecognisedinprofitorloss.

Regularwaypurchasesorsalesarepurchasesorsalesoffinancialassetsthatrequiredeliveryofassetswithintheperiodgenerallyestablishedbyregulationorconvention inthemarketplaceconcerned.Allregularwaypurchasesandsalesoffinancialassetsarerecognisedorderecognisedonthetradedatei.e.,thedatethattheGroupandtheCompanycommittopurchaseorselltheasset.

Policy for non-derivative financial assets applicable from 1 August 2014

TheGroupandtheCompanyinitiallyrecognisefinancialassetsonthetradedateatwhichtheGroupandtheCompanybecomeapartyofthecontractualprovisionsoftheinstrument.

Financialassetsareinitiallymeasuredatfairvalue.Ifthefinancialassetsarenotsubsequentlyaccountedforatfairvaluethroughprofitorloss,thentheinitialmeasurementincludestransactioncoststhataredirectlyattributabletotheasset’sacquisitionororigination.On initial recognition,theGroupandtheCompanyclassifyitsfinancialassetsassubsequentlymeasuredateitheramortisedcostorfairvalue,depending on its business model for managing the financial assets and the contractual cash flowcharacteristicsofthefinancialassets.

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Policy for non-derivative financial assets applicable from 1 August 2014 (contd.)

Financial assets measured at amortised cost

Afinancialassetissubsequentlymeasuredatamortisedcost,usingtheeffectiveinterestmethodandnetofanyimpairmentloss,if:

• theasset isheldwithinabusinessmodelwhoseobjective is toholdassets inorder tocollectcontractualcashflows;and

• thecontractualtermsofthefinancialassetgiverise,onspecifieddates,tocashflowsthataresolelypaymentsofprincipalandinterest.

Financial assets measured at fair value

Theseassetsaremeasuredatfairvalueandchangestherein,includinganyinterestordividendincome,arerecognisedinprofitorloss.

However,forinvestmentsinequityinstrumentsthatarenotheldfortrading,theGroupandtheCompanymayelectat initial recognitiontopresentgainsand losses inothercomprehensive income.Forsuchinvestmentsmeasuredatfairvaluethroughothercomprehensiveincome,gainsandlossesareneverreclassifiedtoprofitor loss,andno impairment isrecognised inprofitor loss.Dividendsearnedfromsuchinvestmentsarerecognisedinprofitorloss,unlessthedividendclearlyrepresentsarepaymentofpartofthecostoftheinvestment.

2.13 Impairment of financial assets

Policy for impairment of financial assets applicable before 1 August 2014

TheGroupandtheCompanyassessateachreportingdatewhetherthereisanyobjectiveevidencethatafinancialassetisimpaired.

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

Todeterminewhetherthereisobjectiveevidencethatanimpairmentlossonfinancialassetshasbeenincurred,theGroupandtheCompanyconsiderfactorssuchastheprobabilityofinsolvencyorsignificantfinancialdifficultiesofthedebtoranddefaultorsignificantdelayinpayments.Forcertaincategoriesoffinancialassets,suchastradereceivables,assetsthatareassessednottobeimpairedindividuallyaresubsequentlyassessedforimpairmentonacollectivebasisbasedonsimilarriskcharacteristics.ObjectiveevidenceofimpairmentforaportfolioofreceivablescouldincludetheGroup’sandtheCompany’spastexperienceofcollectingpayments,an increase inthenumberofdelayedpaymentsintheportfoliopasttheaveragecreditperiodandobservablechangesinnationalorlocaleconomicconditionsthatcorrelatewithdefaultonreceivables.

Ifanysuchevidenceexists,theamountofimpairmentlossismeasuredasthedifferencebetweentheasset’scarryingamountandthepresentvalueofestimatedfuturecashflowsdiscountedatthefinancialasset’soriginaleffectiveinterestrate.Theimpairmentlossisrecognisedinprofitorloss.

The carrying amount of the financial asset is reduced by the impairment loss directly for allfinancialassetswiththeexceptionoftradereceivables,wherethecarryingamount isreducedthroughtheuseofanallowanceaccount.Whenatradereceivablebecomesuncollectible, it iswrittenoffagainsttheallowanceaccount.

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2.13 Impairment of financial assets (contd.)

Policy for impairment of financial assets applicable before 1 August 2014 (contd.)

(a) Trade and other receivables and other financial assets carried at amortised cost (contd.)

If inasubsequentperiod,theamountoftheimpairment lossdecreasesandthedecreasecanberelatedobjectivelytoaneventoccurringaftertheimpairmentwasrecognised,thepreviouslyrecognisedimpairmentlossisreversedtotheextentthatthecarryingamountoftheassetdoesnotexceeditsamortisedcostatthereversaldate.Theamountofreversalisrecognisedinprofitorloss.

(b) Unquoted securities carried at cost

Ifthereisobjectiveevidence(suchassignificantadversechangesinthebusinessenvironmentwheretheissueroperates,probabilityofinsolvencyorsignificantfinancialdifficultiesoftheissuer)thatanimpairmentlossonfinancialassetscarriedatcosthasbeenincurred,theamountofthelossismeasuredasthedifferencebetweentheasset’scarryingamountandthepresentvalueofestimatedfuturecashflowsdiscountedatthecurrentmarketrateofreturnforasimilarfinancialasset.Suchimpairmentlossesarenotreversedinsubsequentperiods.

(c) Available-for-sale financial assets Significantorprolongeddeclineinfairvaluebelowcost,significantfinancialdifficultiesoftheissuer

orobligor,andthedisappearanceofanactivetradingmarketareconsiderationstodeterminewhether there is objective evidence that investment securities classified as available-for-salefinancialassetsareimpaired.

Ifanavailable-for-salefinancialassetisimpaired,anamountcomprisingthedifferencebetweenits cost (net of any principal payment and amortisation) and its current fair value, less anyimpairmentlosspreviouslyrecognisedinprofitorloss,istransferredfromequitytoprofitorloss.

Impairment lossesonavailable-for-saleequity investmentsarenotreversed inprofitor loss inthesubsequentperiods.Increaseinfairvalue,ifany,subsequenttoimpairmentlossisrecognisedinothercomprehensiveincome.Foravailable-for-saledebtinvestments,impairmentlossesaresubsequentlyreversed inprofitor loss ifan increase inthefairvalueofthe investmentcanbeobjectivelyrelatedtoaneventoccurringaftertherecognitionoftheimpairmentlossinprofitorloss.

Policy for impairment of financial assets applicable from 1 August 2014

The Group and the Company recognise a loss allowance for expected credit losses based on thefollowingapproaches:

1. Thegeneralapproach 2. Thesimplifiedapproach 3. Thepurchasedororiginatedcredit-impairedapproach

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Policy for impairment of financial assets applicable from 1 August 2014 (contd.)

The following summarise the above approaches in recognising andmeasuring the expected creditlosses:

(a) General approach

Under the general approach, at each reporting date, the Group and the Companymake thefollowingassessment:

• Forcreditexposureswheretherehavenotbeensignificant increasesincreditrisksinceinitial recognition, the Company recognises a loss allowance at an amount equal to12-monthexpectedcreditlosses,i.e,expectedcreditlossesresultedfromdefaulteventthatarepossiblewithin12-monthsafterthereportingdate;

• Forcreditexposureswheretherehavebeenasignificantincreaseincreditrisksinceinitialrecognitiononanindividualorcollectivebasis,theGroupandtheCompanyrecognisealossallowanceatanamountequaltolifetimecreditlosses,i.eexpectedcreditlossesfromallpossibledefaulteventsovertheexpectedlifeofafinancialinstruments.Theassessmentalsoconsidersallreasonableandsupportableinformation,includingthatwhichisforwardlooking;

• In the subsequent reporting periods, if the credit quality of the financial instrumentsimprovessuchthatthereisnolongerasignificantincreaseincreditrisksincerecognition,then the Group and the Company revert to recognise a loss allowance based on 12-monthexpectedcreditlosses.

Thechangesinthelossallowancesbalancearerecognisedinprofitorlossasanimpairmentgainorloss.

(b) Simplified approach Forallthetradereceivablesthatdonotcontainasignificantfinancingcomponent,theGroupand

theCompanyapplythesimplifiedapproach.Underthesimplifiedapproach,theGroupandtheCompanyrecognisealossallowancebasedonlifetimeexpectedcreditlossesateachreportingdate,rightfromorigination.TheGroupandtheCompanyhaveusedpracticalexpedientswhenmeasuringexpectedcreditlosseswhichincludeconsideringprobability-weightedoutcome,thetimevalueofmoneyandreasonableandsupportableinformationthatisavailablewithoutunduecostandeffortatthereportingdate,aboutpastevents,currentconditionsandforecastoffutureeconomicconditions.

However, theGroup and the Company have chosen to apply the simplified approach for thefollowing:

• Alltradereceivablesthatcontainasignificantfinancingcomponent;

• All leasereceivablesthat result fromtransactionsthatarewithin thescopeofFRS117. Thepolicychoicemaybeappliedseparatelytofinanceandoperatingleasereceivables.

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Policy for impairment of financial assets applicable from 1 August 2014 (contd.)

(c) Purchased or originated credit-impaired approach

On initial recognitionofafinancialasset,anentity is requiredtodeterminewhether theassetis “credit impaired”.Afinancial asset is credit-impairedwhenoneormoreevents thathaveadetrimentalimpactontheestimatedfuturecashflowsofthatfinancialassethaveoccurred.

Underthisapproach,theGroupandtheCompanyarerequiredtoapplycredit-adjustedeffectiveinterestratetotheamortisedcostofthefinancialassetsfrominitialrecognition.Subsequently,theCompanyisrequiredtorecognise:

• Thecumulativechangesinlifetimeexpectedcreditlossessinceinitialrecognitionasalossallowances;

• Inprofitorloss,theamountofanychangesinlifetimeexpectedcreditlossesasimpairmentgainorloss.Animpairmentgainisrecognisediffavourableresultsinthelifetimeexpectedcredit lossesestimatebecoming lowerthantheoriginalestimatethatwas incorporatedin the estimated cash flows on initial recognition when calculating the credit-adjustedeffectiveinterestrate.

Theamountoflossallowancesismeasuredatthedifferencebetweenallcontractualcashflowsthatareduetoanentity inaccordancewiththecontractandallthecashflowsthattheGroupandtheCompanyexpecttoreceive,discountedattheoriginaleffectiveinterestrate.Thelossallowanceisrecognisedinprofitorloss.

2.14 Cash and cash equivalents

Cash and cash equivalents comprise cash at bank and on hand, demand deposits, and short-term,highlyliquidinvestmentsthatarereadilyconvertibletoknownamountofcashandwhicharesubjecttoaninsignificantriskofchangesinvalue.ThesealsoincludebankoverdraftsthatformanintegralpartoftheGroup’sandtheCompany’scashmanagement.

2.15 Inventories

Inventories are stated at the lower of cost and net realisable value. Costs incurred in bringing theinventoriestotheirpresentlocationandconditionareaccountedforasfollows:

- Rawmaterialsandgeneralstores:purchasecostsonaweightedaveragebasis.

- Finishedgoodsandwork-in-progress:costsofdirectmaterialsand labourandaproportionofmanufacturingoverheadsbasedonnormaloperatingcapacity.Thesecostsareassignedonafirst-in,first-outbasis.

Netrealisablevalueistheestimatedsellingpriceintheordinarycourseofbusinesslessestimatedcostsofcompletionandtheestimatedcostsnecessarytomakethesale.

2.16 Provisions

Provisions are recognised when the Group and the Company have a present obligation (legal orconstructive)asaresultofapastevent, it isprobablethatanoutflowofeconomicresourceswillberequiredtosettletheobligationandtheamountoftheobligationcanbeestimatedreliably.

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2.16 Provisions (contd.)

Provisionsarereviewedateachreportingdateandadjustedtoreflectthecurrentbestestimate.Ifitisnolongerprobablethatanoutflowofeconomicresourceswillberequiredtosettletheobligation,theprovisionisreversed.Iftheeffectofthetimevalueofmoneyismaterial,provisionsarediscountedusingacurrentpretaxratethatreflects,whereappropriate,theriskspecifictotheliability.Whendiscountingisused,theincreaseintheprovisionduetothepassageoftimeisrecognisedasafinancecost.

2.17 Financial liabilities

Financial liabilitiesareclassifiedaccordingtothesubstanceofthecontractualarrangementsenteredintoandthedefinitionsofafinancialliability.

Financial liabilities,withinthescopeofFRS9orFRS139,arerecognisedinthestatementoffinancialpositionwhen,andonlywhen,theGroupandtheCompanybecomeapartytothecontractualprovisionsof the financial instrument. Financial liabilities are classified as either financial liabilities at fair valuethroughprofitorlossorotherfinancialliabilities.

(a) Financial liabilities at fair value through profit or loss

Financialliabilitiesatfairvaluethroughprofitorlossincludefinancialliabilitiesheldfortradingandfinancialliabilitiesdesignateduponinitialrecognitionasatfairvaluethroughprofitorloss.

FinancialliabilitiesheldfortradingincludederivativesenteredintobytheGroupandtheCompanythatdonotmeetthehedgeaccountingcriteria.Derivativeliabilitiesareinitiallymeasuredatfairvalueandsubsequentlystatedatfairvalue,withanyresultantgainsorlossesrecognisedinprofitorloss.Netgainsorlossesonderivativesincludeexchangedifferences.

TheGroupandtheCompanyhavenotdesignatedanyfinancialliabilitiesasatfairvaluethroughprofitorloss.

(b) Other financial liabilities

TheGroup’sandtheCompany’sotherfinancial liabilitiesincludetradepayables,otherpayablesandloansandborrowings.

Tradeandotherpayablesarerecognisedinitiallyatfairvalueplusdirectlyattributabletransactioncostsandsubsequentlymeasuredatamortisedcostusingtheeffectiveinterestmethod.

Loansandborrowingsarerecognisedinitiallyatfairvalue,netoftransactioncostsincurred,andsubsequentlymeasuredatamortisedcostusingtheeffectiveinterestmethod.Borrowingsareclassifiedascurrentliabilitiesunlessthegrouphasanunconditionalrighttodefersettlementoftheliabilityforatleast12monthsafterthereportingdate.

Forotherfinancialliabilities,gainsandlossesarerecognisedinprofitorlosswhentheliabilitiesarederecognised,andthroughtheamortisationprocess.

A financial liability is derecognised when the obligation under the liability is extinguished. When anexistingfinancialliabilityisreplacedbyanotherfromthesamelenderonsubstantiallydifferentterms,orthetermsofanexistingliabilityaresubstantiallymodified,suchanexchangeormodificationistreatedasaderecognitionoftheoriginalliabilityandtherecognitionofanewliability,andthedifferenceintherespectivecarryingamountsisrecognisedinprofitorloss.

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2.18 Financial guarantee contracts

A financial guarantee contract is a contract that requires the issuer tomake specified payments toreimbursetheholderforalossitincursbecauseaspecifieddebtorfailstomakepaymentwhendue.

Financialguaranteecontractsarerecognisedinitiallyasaliabilityatfairvalue,netoftransactioncosts.Subsequent to initial recognition,financialguaranteecontractsare recognisedas income inprofitorlossovertheperiodoftheguarantee.Ifthedebtorfailstomakepaymentrelatingtofinancialguaranteecontract when it is due and the Group, as the issuer, is required to reimburse the holder for theassociatedloss,theliabilityismeasuredatthehigherofthebestestimateoftheexpenditurerequiredtosettlethepresentobligationatthereportingdateandtheamountinitiallyrecognisedlesscumulativeamortisation.

Asatreportingdate,novaluesareplacedoncorporateguaranteesprovidedbytheCompanytosecurebankloansandotherbankingfacilitiesgrantedtoitssubsidiarieswheresuchloansandbankingfacilitiesarefullycollateralisedbyfixedandfloatingchargesovertheproperty,plantandequipmentandotherassetsofthesubsidiariesandwherethedirectorsregardthevalueofthecreditenhancementprovidedbythecorporateguaranteesisminimal.

2.19 Borrowing costs

Borrowingcostsarecapitalisedaspartofthecostofaqualifyingassetiftheyaredirectlyattributabletotheacquisition,constructionorproductionofthatasset.Capitalisationofborrowingcostscommenceswhentheactivitiestopreparetheassetforitsintendeduseorsaleareinprogressandtheexpendituresand borrowing costs are incurred. Borrowing costs are capitalised until the assets are substantiallycompletedfortheirintendeduseorsale.

Allotherborrowingcostsarerecognisedinprofitorlossintheperiodtheyareincurred.Borrowingcostsconsistof interestandothercoststhattheGroupandtheCompany incurred inconnectionwiththeborrowingoffunds.

2.20 Employee benefits (a) Short-term benefits

Wages,salaries,bonusesandsocialsecuritycontributionsarerecognisedasanexpenseintheyearinwhichtheassociatedservicesarerenderedbyemployeesoftheCompany.Short-termaccumulatingcompensatedabsencessuchaspaidannual leavearerecognisedwhenservicesare renderedbyemployees that increase theirentitlement to futurecompensatedabsences,and short-termnon-accumulating compensated absences such as sick leave are recognisedwhentheabsencesoccur.

(b) Defined contribution plans

TheGroupparticipatesinthenationalpensionschemesasdefinedbythelawsofthecountriesin which it has operations. TheMalaysian companies in theGroupmake contributions to theEmployeeProvidentFundinMalaysia,adefinedcontributionpensionscheme.Contributionstodefinedcontributionpensionschemesarerecognisedasanexpenseintheperiodinwhichtherelatedserviceisperformed.

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2.20 Employee benefits (contd.)

(c) Termination benefit

Terminationbenefitsarepayablewhenemploymentisterminatedbeforethenormalretirementdateorwheneveranemployeeacceptsvoluntary redundancy inexchange for thesebenefits.The Company recognises termination benefits when it is demonstrably committed to eitherterminatetheemploymentofcurrentemployeesaccordingtoadetailedplanwithoutpossibilityofwithdrawal;orprovidingterminationbenefitsasaresultofanoffermadetoencouragevoluntaryredundancy.Inthecaseofanoffermadetoencouragevoluntaryredundancy,themeasurementof termination benefits is based on the number of employees expected to accept the offer.Benefitsfallingduemorethan12monthsafterreportingdatearediscountedtopresentvalue.

2.21 Leases

(a) As lessee

Finance leases,whichtransfertotheGroupsubstantiallyall therisksandrewards incidentaltoownershipoftheleaseditem,arecapitalisedattheinceptionoftheleaseatthefairvalueoftheleasedassetor, if lower,atthepresentvalueoftheminimumleasepayments.Any initialdirectcostsarealsoaddedtotheamountcapitalised.Leasepaymentsareapportionedbetweenthefinancechargesandreductionoftheleaseliabilitysoastoachieveaconstantrateofinterestontheremainingbalanceofthe liability.Financechargesarechargedtoprofitor loss.Contingentrents,ifany,arechargedasexpensesintheperiodsinwhichtheyareincurred.

Leasedassetsaredepreciatedovertheestimatedusefullifeoftheasset.However,ifthereisnoreasonablecertaintythattheGroupwillobtainownershipbytheendoftheleaseterm,theassetisdepreciatedovertheshorteroftheestimatedusefullifeandtheleaseterm.

Operatingleasepaymentsarerecognisedasanexpenseinprofitorlossonastraight-linebasisovertheleaseterm.Theaggregatebenefitofincentivesprovidedbythelessorisrecognisedasareductionofrentalexpenseovertheleasetermonastraight-linebasis.

(b) As lessor

LeaseswheretheGroupretainssubstantiallyalltherisksandrewardsofownershipoftheassetareclassifiedasoperating leases. Initialdirectcosts incurred innegotiatinganoperating leaseareaddedtothecarryingamountoftheleasedassetandrecognisedovertheleasetermonthesamebasesasrentalincome.

2.22 Revenue

RevenueisrecognisedtotheextentthatitisprobablethattheeconomicbenefitswillflowtotheGroupand the revenue can be reliablymeasured. Revenue ismeasured at the fair value of considerationreceivedorreceivable.

(a) Sale of goods

Revenue fromsaleofgoods is recogniseduponthe transferofsignificant riskand rewardsofownershipofthegoodstothecustomer.Revenueisnotrecognisedtotheextentwheretherearesignificantuncertaintiesregardingrecoveryoftheconsiderationdue,associatedcostsorthepossiblereturnofgoods.

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Annual Report 2015



2.22 Revenue (contd.)

(b) Contract fee

Contractfeefromtimberextractionandreforestationoperationsarerecognisedintheincomestatementbasedonthevolumeoflogsextractedandareaplantedrespectively.

(c) Dividend income

Dividendincomeisrecognisedwhentherighttoreceivepaymentisestablished.

2.23 Income taxes

(a) Current tax

Currenttaxassetsandliabilitiesaremeasuredattheamountexpectedtoberecoveredfromorpaidtothetaxationauthorities.Thetaxratesandtaxlawsusedtocomputetheamountarethosethatareenactedorsubstantivelyenactedbythereportingdate.

Currenttaxesarerecognisedinprofitorlossexcepttotheextentthatthetaxrelatestoitemsrecognisedoutsideprofitorloss,eitherinothercomprehensiveincomeordirectlyinequity.

(b) Deferred tax

Deferredtaxisprovidedusingtheliabilitymethodontemporarydifferencesatthereportingdatebetweenthetaxbasesofassetsandliabilitiesandtheircarryingamountsforfinancialreportingpurposes.

Deferredtaxliabilitiesarerecognisedforalltemporarydifferences,except:

- where the deferred tax liability arises from the initial recognition of goodwill or of anassetorliabilityinatransactionthatisnotabusinesscombinationand,atthetimeofthetransaction,affectsneithertheaccountingprofitnortaxableprofitorloss;and

- inrespectoftaxabletemporarydifferencesassociatedwith investments insubsidiaries,associatesandinterestsinjointventures,wherethetimingofthereversalofthetemporarydifferences can be controlled and it is probable that the temporary differenceswill notreverseintheforeseeablefuture.

Deferred tax assets are recognised for all deductible temporary differences, carry forward ofunusedtaxcreditsandunusedtaxlosses,totheextentthatitisprobablethattaxableprofitwillbeavailableagainstwhichthedeductibletemporarydifferences,andthecarryforwardofunusedtaxcreditsandunusedtaxlossescanbeutilisedexcept:

- where the deferred tax assets relating to the deductible temporary difference arisesfrom the initial recognitionof an assetor liability in a transaction that is not a businesscombinationand,atthetimeofthetransaction,affectsneithertheaccountingprofitnortaxableprofitorloss;and

- inrespectofdeductibletemporarydifferencesassociatedwithinvestmentsinsubsidiaries,associatesandinterestsinjointventures,deferredtaxassetsarerecognisedonlytotheextent that it is probable that the temporarydifferenceswill reverse in the foreseeablefutureandtaxableprofitwillbeavailableagainstwhichthetemporarydifferencescanbeutilised.

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Annual Report 2015


2.23 Income taxes (contd.)

(b) Deferred tax (contd.)

Thecarryingamountofdeferredtaxassetsisreviewedateachreportingdateandreducedtotheextentthatitisnolongerprobablethatsufficienttaxableprofitwillbeavailabletoallowallorpartofthedeferredtaxassetstobeutilised.Unrecogniseddeferredtaxassetsarereassessedateachreportingdateandarerecognisedtotheextentthatithasbecomeprobablethatfuturetaxableprofitwillallowthedeferredtaxassetstobeutilised.

Deferredtaxassetsandliabilitiesaremeasuredatthetaxratesthatareexpectedtoapplytotheyearwhentheassetisrealisedortheliabilityissettled,basedontaxratesandtaxlawsthathavebeenenactedorsubstantivelyenactedatthereportingdate.

Deferredtax relatingto itemsrecognisedoutsideprofitor loss is recognisedoutsideprofitorloss.Deferredtaxitemsarerecognisedincorrelationtotheunderlyingtransactioneitherinothercomprehensiveincomeordirectlyinequityanddeferredtaxarisingfromabusinesscombinationisadjustedagainstgoodwillonacquisition.

Deferredtaxassetsanddeferredtax liabilitiesareoffset, ifa legallyenforceablerightexiststosetoffcurrenttaxassetsagainstcurrenttaxliabilitiesandthedeferredtaxesrelatetothesametaxableentityandthesametaxationauthority.

2.24 Segment reporting

Formanagementpurposes,theGroupisorganisedintooperatingsegmentsbasedontheirproductsand services which are independently managed by the respective segment managers responsiblefor theperformanceof therespectivesegmentsundertheircharge.Thesegmentmanagersreportdirectly to themanagement of the Company who regularly review the segment results in order toallocateresourcestothesegmentsandtoassessthesegmentperformance.AdditionaldisclosuresoneachofthesesegmentsareshowninNote37,includingthefactorsusedtoidentifythereportablesegmentsandthemeasurementbasisofsegmentinformation.

2.25 Share capital and share issuance expenses

AnequityinstrumentisanycontractthatevidencesaresidualinterestintheassetsoftheGroupandtheCompanyafterdeductingallofitsliabilities.Ordinarysharesareequityinstruments.

Ordinary shares are recorded at the proceeds received, net of directly attributable incrementaltransactioncosts.Ordinarysharesareclassifiedasequity.Dividendsonordinarysharesarerecognisedinequityintheperiodinwhichtheyaredeclared.

2.26 Treasury shares

When shares of the Company, that have not been cancelled, recognised as equity are reacquired,theamountofconsiderationpaid is recogniseddirectly inequity.Reacquiredsharesareclassifiedastreasurysharesandpresentedasadeductionfromtotalequity.Nogainorlossisrecognisedinprofitorlossonthepurchase,sale,issueorcancellationoftreasuryshares.Whentreasurysharesarereissuedby resale, the difference between the sales consideration and the carrying amount is recognised inequity.


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Annual Report 2015



2.27 Contingencies

Acontingentliabilityorassetisapossibleobligationorassetthatarisesfrompasteventsandwhoseexistencewillbeconfirmedonlybytheoccurrenceornon-occurrenceofuncertainfutureeventsnotwhollywithinthecontroloftheGroup.

ContingentliabilitiesandassetsarenotrecognisedinthestatementsoffinancialpositionoftheGroupandtheCompany.

2.28 Prepaid land lease payments

Prepaid land leasepayments are initiallymeasured at cost. Following initial recognition, prepaid landlease payments are measured at cost less accumulated amortisation and accumulated impairment losses.Theprepaidlandleasepaymentsareamortisedovertheirleaseterms.

2.29 Fair value measurements

TheGroup and theCompanymeasure financial instruments, such as, derivatives, and non-financialassetssuchasinvestmentproperties,atfairvalueateachreportingdate.Also,fairvaluesofthefinancialinstrumentsmeasuredatamortisedcostaredisclosedinNote33.

Fairvalue isthepricethatwouldbereceivedtosellanassetorpaidtotransfera liability inanorderlytransaction betweenmarket participants at themeasurement date. The fair valuemeasurement isbasedonthepresumptionthatthetransactiontoselltheassetortransfertheabilitytakesplaceeither:

• Intheprincipalmarketfortheassetorliability,or • Intheabsenceofaprincipalmarket,inthemostadvantageousmarketfortheassetorliability. TheprincipalorthemostadvantageousmarketmustbeaccessibletobytheGroupandtheCompany.

Thefairvalueofanassetoraliabilityismeasuredusingtheassumptionsthatmarketparticipantswouldusewhenpricing the assetor liability, assuming thatmarket participants act in their economicbestinterest.

Afairvaluemeasurementofanon-financialassettakes intoaccountamarketparticipant’sabilitytogenerateeconomicbenefitsbyusingtheasset in itshighestandbestuseorbyselling it toanothermarketparticipantthatwouldusetheassetinitshighestandbestuse.

TheGroupandtheCompanyusevaluationtechniquesthatareappropriateinthecircumstancesandforwhichsufficientdataareavailabletomeasurefairvalue,maximisingtheuseofrelevantobservableinputsandminimisingtheuseofunobservableinputs.

Allassetsand liabilities forwhich fairvalues inmeasuredordisclosed in thefinancialstatementsarecategorisedwithinthefairvaluehierarchy,describedasfollows,basedonthelowestlevelinputthatissignificanttothefairvaluemeasurementsasawhole:

• Level1 - Quoted(unadjusted)marketpricesinactivemarketsforidenticalassetsorliabilities • Level2 - Valuation techniques forwhich the lowest level input that is significant to the fair

valuemeasurementisdirectlyorindirectlyobservable • Level3 - Valuation techniques forwhich the lowest level input that is significant to the fair

valuemeasurementisunobservable.

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Annual Report 2015



2.29 Fair value measurements (contd.)

Forassetsandliabilitiesthatarerecognisedinthefinancialstatementsonarecurringbasis,theGroupandtheCompanydeterminewhethertransfershaveoccurredbetween levels inthehierarchybyre-assessingcategorisation(basedonthelowestlevelinputthatissignificanttothefairvaluemeasurementasawhole)attheendofeachreportingperiod.

Forthepurposeoffairvaluedisclosures,theGroupandtheCompanyhavedeterminedclassesofassetsandliabilitiesonthebasicofnature,characteristicsandrisksoftheassetsorliabilitiesandthelevelofthefairvaluehierarchyasexplainedabove.

3. Significant accounting estimates and judgements

ThepreparationoftheGroup’sfinancialstatementsrequiresmanagementtomakejudgements,estimatesand assumptions that affect the reported amounts of revenues, expenses, assets and liabilities, and thedisclosureofcontingentliabilitiesatthereportingdate.However,uncertaintyabouttheseassumptionsandestimatescouldresult inoutcomesthatcouldrequireamaterialadjustmenttothecarryingamountoftheassetorliabilityaffectedinthefuture.

Key sources of estimation uncertainty

Thekeyassumptionsconcerningthefutureandotherkeysourcesofestimationuncertaintyatthereportingdatethathaveasignificantriskofcausingamaterialadjustmenttothecarryingamountsofassetsandliabilitieswithinthenextfinancialyeararediscussedbelow.

(a) Deferred tax assets

Deferred tax assets are recognised for all unutilised investment tax allowances (“ITA”) to the extentthat it isprobablethattaxableprofitwillbeavailableagainstwhichthe ITAcanbeutilised.Significantmanagement judgement is required to determine the amount of deferred tax assets that can berecognised, based upon the likely timing and level of future taxable profits togetherwith future taxplanningstrategies.ThetotalcarryingvalueofrecognisedITAoftheGroupwasRM57,633,000(2014:RM51,448,000).

(b) Timber rights

TheGrouphasfivetimberlicenses.Alltimberlicenseswillexpireintheyear2015to2017.TheDirectorsareoftheviewthatallthetimberlicensesarerenewable.

81


Annual Report 2015


4. Revenue Group Company 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000

Saleoflogs 188,486 302,260 389,668 483,383 Saleofplywood 271,424 292,884 - - Saleofrawandlaminatedparticleboard 64,241 74,141 - - Saleofsawntimber,fingerjoint mouldingandby-products 78,534 63,555 - - Contractfeefromtimberextraction andreforestation 96,047 99,951 1,681 1,677 Dividendsincome - - 32,572 65,288 Saleoffreshfruitbunches 43,553 46,339 - - Saleofcharcoal 10,291 6,935 - - Others 1,371 1,051 - - ------------------ ------------------ ------------------ ------------------ 753,947 887,116 423,921 550,348 ================ ================ ================ ================

5. Other income Group Company 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000

Foreignexchangegain -realised 16,317 7,038 9,580 - - unrealised 136 14 - - Freightandhandlingincome 335 844 721 1,667 Gainondisposalofproperty,plant andequipment 58 165 - - Gainondisposalofavailable-for-sale financialassets(Note29) - 178 - 178 Interestincome 1,308 1,377 1,302 1,317 Dividendsincomefrom: -EquityinvestmentsunderFVOCI 18 - 18 - -Available-for-salesfinancialassets -InvestmentsecuritiesquotedinMalaysia - 33 - 33 -Investmentsecuritiesquotedoutside Malaysia - 24 - 24 -Heldfortradinginvestmentsquotedunittrust in Malaysia - 85 - 4 Rental income - land 177 - - - -building 168 406 176 236 -equipment - - 1,141 - Baddebtsrecovered - 5 - - Fairvaluegainonderivativefinancialinstruments - 3,420 - 3,131 Maintenance income 733 623 - - Managementfeereceived 768 - 768 - Sale of scrap materials 228 75 - - Saleofwoodwaste - 87 - - Sundryincome 2,084 1,454 1,296 1,145 ------------------ ------------------ ------------------ ------------------ 22,330 15,828 15,002 7,735 ================ ================ ================ ================

82


Annual Report 2015


6. Finance costs Group Company 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000

Interestexpenseon: Bankborrowings 12,221 6,698 5,662 1,228 Hirepurchaseliabilities 7,264 7,733 6,687 7,495 ------------------ ------------------ ------------------ ------------------ 19,485 14,431 12,349 8,723 Less:Interestcapitalisedin biologicalassets(Note15) (2,293) (1,865) - - ------------------ ------------------ ------------------ ------------------ Netinterestexpense 17,192 12,566 12,349 8,723 ================ ================ ================ ================

7. Profit before tax

Thefollowingamountshavebeenincludedinarrivingatprofitbeforetax: Group Company 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000

Employeebenefitsexpense(Note8) 135,210 131,444 28,158 28,898 Non-executivedirectors’remuneration(Note9) - fees 309 309 280 280 Auditors’ remuneration Statutory audit - current year 246 212 42 37 -overprovidedinprioryear (1) (10) - (4) Otherservices 9 8 9 8 Amortisationofbiologicalassets(Note15) 4,693 3,942 - - Amortisationofintangibleassets(Note19) 10,140 10,140 6,899 6,899 Amortisation of prepaid land lease payments(Note14) 4,428 4,266 379 379 Reversalofimpairmentlossontrade receivables(Note22) - (24) - - Depreciationofproperty,plantand equipment(Note13) 85,852 77,844 54,219 48,200 Depreciationofinvestmentproperties (Note16) 109 86 - - Property,plantandequipmentwrittenoff (Note13) 93 22 - - Rentalof -buildings 190 63 87 60 -land 1,165 526 370 346 -equipmentandvehicles 433 111 38 50 Impairmentofproperty,plantand equipment(Note13) - 1,048 - 734 Unrealisedforeignexchangeloss 18 644 16 104 (Reversalof)/inventorywrittendown (1,386) 173 - 223 Realisedforeignexchangeloss - 1,256 - 1,256 Lossondisposalofproperty,plantand equipment 3,475 138 3,472 68 ================ ================ ================ ================

83


Annual Report 2015


8. Employee benefits expense Group Company 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000

Wages,salariesandbonus 110,254 105,719 24,402 25,582 Contributiontodefinedcontributionplan 8,449 7,438 3,179 2,788 Shorttermaccumulatingcompensated absences 163 211 116 145 Otherbenefits 16,344 18,076 461 383 ------------------ ------------------ ------------------ ------------------ 135,210 131,444 28,158 28,898 ================ ================ ================ ================

IncludedinemployeebenefitsexpenseoftheGroupandoftheCompanyisanexecutivedirector’sremunerationamounting to RM3,958,000 (2014: RM4,775,000) and RM3,939,000 (2014: RM4,756,000) respectively asfurtherdisclosedinNote9.

9. Directors’ remuneration ThedetailsofremunerationreceivablebydirectorsoftheCompanyduringtheyearareasfollows:

Group Company 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000

Executive(Note8) Fees 74 74 55 55 Salaries,bonusandotheremoluments 3,468 4,270 3,468 4,270 Contributiontodefinedcontributionplan 416 431 416 431 ------------------ ------------------ ------------------ ------------------ Totalexecutivedirectors’remuneration 3,958 4,775 3,939 4,756 ------------------ ------------------ ------------------ ------------------ Non-executive(Note7) Fees 300 300 280 280 ------------------ ------------------ ------------------ ------------------ Totalnon-executivedirectors’remuneration 300 300 280 280 ------------------ ------------------ ------------------ ------------------ Totaldirectors’remuneration(Note31(b)) 4,258 5,075 4,219 5,036 ================ ================ ================ ================

The number of directors of the Company whose total remuneration received from theGroup during thefinancialyearfellwithinthefollowingbandsisanalysedbelow:

Number of directors 2015 2014 Executive director:

RM3,950,001-RM4,000,000 1 - RM4,750,001-RM4,800,000 - 1

Non-executive directors:

RM50,001-RM100,000 5 5 ================ ================

84


Annual Report 2015


10. Income tax expense

Major components of income tax expense Themajorcomponentsofincometaxexpensefortheyearsended31July2015and2014are:


Statement of comprehensive income: Incometax: -Currentincometax 10,521 15,920 8,363 10,250 -Overprovisioninrespectofpreviousyears (1,813) (1,327) (1,084) (348) ------------------ ------------------ ------------------ ------------------ 8,708 14,593 7,279 9,902 ------------------ ------------------ ------------------ ------------------ Deferredtax(Note30): -Originationandreversaloftemporary differences (9,844) (3,604) (4,607) (3,143) -ReductioninMalaysianincometaxrate - (453) - - -Underprovisioninrespectofpreviousyears 947 1,811 339 520 ------------------ ------------------ ------------------ ------------------ (8,897) (2,246) (4,268) (2,623) ------------------ ------------------ ------------------ ------------------ Incometaxexpenserecognisedinprofitorloss (189) 12,347 3,011 7,279 ================ ================ ================ ================ IncometaxiscalculatedattheMalaysianstatutorytaxrateof25%(2014:25%)oftheestimatedassessable

profit for the year. The statutory tax ratewill be reduced to 24% from the current year’s tax rate of 25%,effectiveyearofassessment2016.Thecomputationofdeferred taxasat31July2015has reflected thechangesintaxrate.

Reconciliation between tax expense and accounting profit

The reconciliation between tax expense and the product of accounting profitmultiplied by the applicablecorporatetaxratefortheyearsended31July2015and2014areasfollows:

Group 2015 2014 % %

Statutorytaxrate 25 25 Non-deductibleexpenses 236 10 Effectofexpenseseligiblefordoublededuction (122) (7) Effectofreductionintaxrate - (1) Effectofutilisationofpreviouslyunrecognisedunabsorbedcapital allowancesandbusinesslosses (23) (5) Effectofutilisationofcurrentyear’sinvestmentallowance (10) - Overprovisionoftaxexpenseinrespectofpreviousyears (77) (3) Underprovisionofdeferredtaxinrespectofpreviousyears 29 4 Deferredtaxassetsrecognizedonpreviouslyunrecognizedtimingdifferences (70) - Deferredtaxnotrecognisedonunabsorbedtaxlossesandunutilised capitalallowances 4 1 ------------------ ------------------ Averageeffectivetaxrate (8) 24 ================ ================

85


Annual Report 2015


10. Income tax expense (contd.)

Reconciliation between tax expense and accounting profit (contd.)

The reconciliation between tax expense and the product of accounting profitmultiplied by the applicablecorporatetaxratefortheyearsended31July2015and2014areasfollows:(contd.)

Company 2015 2014 % %

Statutorytaxrate 25 25 Incomenotsubjecttotaxation (21) (20) Non-deductibleexpenses 6 3 Underprovisionofdeferredtaxinrespectofpreviousyears 1 1 Overprovisionoftaxexpenseinrespectofpreviousyears (3) - ------------------ ------------------ Averageeffectivetaxrate 8 9 ================ ================ 11. Earnings per share

Basicearningspershareamountsarecalculatedbydividingtheprofitfortheyear,netoftax,attributabletoownersoftheparentbytheweightedaveragenumberofordinarysharesoutstandingduringthefinancialyear,excludingtreasurysharesheldbytheCompany.

Thefollowingtablesreflecttheprofitandsharedatausedinthecomputationofbasicearningspersharefortheyearsended31July:

Group 2015 2014 ProfitnetoftaxattributabletoownersoftheCompany(RM’000) 2,562 38,654

Weightedaveragenumberofordinarysharesinbasicearnings persharecomputation(‘000) 188,126 188,129

Basicearningspershare(sen) 1.4 20.6 ================ ================

There isnodilution in theearningspershareof thecurrentandpreviousyearendas therearenodilutivepotentialordinarysharesoutstandingattheendofthereportingperiod.

12. Dividends Group and company 2015 2014 RM’000 RM’000

Recognised during the year:

Firstandfinaldividendinrespectof2014: 5senpershare,on188,125,200ordinaryshares 9,406 - ================ ================

Firstandfinaldividendinrespectof2013: 3senpershare,less25%taxationon188,129,400ordinaryshares - 4,233 ================ ================

86


Annual Report 2015

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87


Annual Report 2015

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88


Annual Report 2015

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61,43

265

514

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2

Dispo

sals

--

(762

)(3,801

)(4,492

)-

(80)

--

(9,135

)

Writtenoff

--

--

(1)

-(43)

(1)

(4)

(49)

Transfer

--

11,188

10

2,17

62,63

21,97

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147

(118

,814

)-

------

------

------

---

------

------

---

------

------

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---

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---

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------

---

------

------

---

------

------

------

---

------

------

---

At31July2014

17,245

36,000

17

8,70

453

3,14

536

9,97

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21

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8,54

340

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---

------

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------

------

------

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------

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---

------

------

---

------

------

------

89


Annual Report 2015

NO

TES

TO

TH

E FI

NA

NC

IAL

STAT

EMEN

TS

For t

he fi

nanc

ial y

ear e

nded

31

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201

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-37

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assets(N

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At31July2014

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90


Annual Report 2015

NO

TES

TO

TH

E FI

NA

NC

IAL

STAT

EMEN

TS

For t

he fi

nanc

ial y

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nded

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21,014

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7,85

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6

------

------

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---

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6

====

====

====

====

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====

====

====

====

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====

====

====

==

====

====

====

==

91


Annual Report 2015

NO

TES

TO

TH

E FI

NA

NC

IAL

STAT

EMEN

TS

For t

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nanc

ial y

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nded

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20,789

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------

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20,495

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------

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7,51

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Depreciationchargef ortheyear

(Note7)

616

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210

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ote7)

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--

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---

------

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At31July2014

8,718

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------

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et c

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nt

11,777

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9

====

====

====

====

==

====

====

====

==

====

====

====

====

==

====

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====

====

====

====

==

====

====

====

==

====

====

====

====

==

====

====

====

==

92


Annual Report 2015


13. Property, plant and equipment (contd.)

(a) Certain buildings of the Group with net carrying amount of RM6,238,000 (2014: RM4,689,000) aresituated on land which is held by a company in which a director of certain subsidiaries and certainsubstantialshareholdersoftheCompanyhavefinancialinterests.

(b) Thenetcarryingamountoftheproperty,plantandequipmentoftheGroupandoftheCompanywhichthetitlehaveyettoberegisteredunderthenameoftheCompanyanditssubsidiariesareasfollows:


Tractorandtrucks 561 831 488 742 ================ ================ ================ ================

(c) During the financial year, the Group and the Company acquired property, plant and equipment ataggregatecostsofRM110,462,000(2014:RM195,082,000)andRM21,889,000(2014:RM102,563,000)respectivelyofwhichRM31,647,000(2014:RM104,124,000)andRM12,044,000(2014:RM100,691,000)respectivelywereacquiredbymeansoffinanceleasearrangements.Netcarryingamountsofrespectiveproperty,plantandequipmentheldunderfinanceleasearrangementsareasfollows:

Group Company 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000 Tractors,trucksandmotorvehicles 198,939 216,178 190,103 211,045 Plantandmachinery 158 178 158 178 Capitalwork-in-progress 12,682 - - - ------------------ ------------------ ------------------ ------------------ 211,779 216,356 190,261 211,223 ================ ================ ================ ================

DetailsofthetermsandconditionsofthefinanceleasearrangementsaredisclosedinNote32. (d) Thenetcarryingamountofproperty,plantandequipmentpledgedforborrowingsasreferredinNote

25areasfollows: Group 2015 2014 RM’000 RM’000

Powerplant 35,751 38,285 Longleaseholdland 13,058 13,327 ------------------ ------------------ 48,809 51,612 ================ ================

93


Annual Report 2015


14. Prepaid land lease payments

Group Company 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000 Cost

At1August2014/2013 114,533 103,827 15,180 15,180 Additions - 10,706 - - ------------------ ------------------ ------------------ ------------------ At31July2015/2014 114,533 114,533 15,180 15,180 ------------------ ------------------ ------------------ ------------------

Accumulated amortisation

At1August2014/2013 18,659 14,393 1,060 681

Amortisationfortheyear(Note7) 4,428 4,266 379 379 ------------------ ------------------ ------------------ ------------------ At31July2015/2014 23,087 18,659 1,439 1,060 ------------------ ------------------ ------------------ ------------------

Net carrying amount 91,446 95,874 13,741 14,120 ================ ================ ================ ================ Amount to be amortised: -Notlaterthanoneyear 4,428 4,266 379 379 -Laterthanoneyearbutnotlater thanfiveyears 17,717 17,064 1,516 1,516 -Laterthanfiveyears 69,301 74,544 11,846 12,225 ------------------ ------------------ ------------------ ------------------ 91,446 95,874 13,741 14,120 ================ ================ ================ ================

Thenetcarryingamountofprepaid land leasepaymentsoftheGrouppledgedforborrowingasreferred inNote25tothefinancialstatementsisRM10,323,000(2014:RM10,568,000).

PrepaidlandleasepaymentsoftheGroupwithcarryingvalueofRMNil(2014:RM1,435,000)haveyettoberegisteredinthenamesofthesubsidiaries.

15. Biological assets Group 2015 2014 RM’000 RM’000 Cost

At1August2014/2013 156,272 134,088 Additions 26,988 22,184 ------------------ ------------------ At31July2015/2014 183,260 156,272 ------------------ ------------------

94


Annual Report 2015

15. Biological assets (contd.) Group 2015 2014 RM’000 RM’000 Accumulated amortisation

At1August2014/2013 13,309 9,367 Amortisationfortheyear(Note7) 4,693 3,942 ------------------ ------------------ At31July2015/2014 18,002 13,309 ------------------ ------------------

Net carrying amount 165,258 142,963 ================ ================ (a) IncludedinbiologicalassetsoftheGrouparethefollowingexpensesincurredandcapitalisedduringthe

financialyear: Group 2015 2014 RM’000 RM’000

Staffcosts 3,825 3,965 Depreciationofproperty,plantandequipment(Note13) 1,575 1,413 Interestexpense(Note6) 2,293 1,865 Rentalofequipment 1 1 ================ ================

(b) ThebiologicalassetsoftheGroupwithnetcarryingamountofRM151,532,000(2014:RM138,839,000)arepledgedassecurityforthetermloansgrantedtotheGroupasreferredinNote25tothefinancialstatements.

(c) IncludedinbiologicalassetoftheGroupisanoilpalmplantationwithcarryingamountofRM83,652,000(2014:RM66,182,000)issituatedonalandwhichisheldbyacompanywhichasubstantialshareholderof theCompanyhassubstantialfinancial interests.TheGrouphastherightstodevelopandharvestfromtheplantationforaperiodoftwenty-fiveyears.

16. Investment properties Group 2015 2014 RM’000 RM’000 Cost

At1August2014/2013 17,864 17,864 Additions 9,032 - ------------------ ------------------ At31July2015/2014 26,896 17,864 ------------------ ------------------ Accumulated depreciation

At1August2014/2013 2,291 2,205 Depreciationchargefortheyear(Note7) 109 86 ------------------ ------------------ At31July2015/2014 2,400 2,291 ------------------ ------------------

Net carrying amount 24,496 15,573 ================ ================


95


Annual Report 2015


16. Investment properties (contd.)

The fair value of the investment properties as at 31 July 2015 is approximately RM31,398,000 (2014:RM22,365,000).Thefairvaluesofthepropertiesarebasedondirectors’valuationwithreferencetovaluationbysimilarpropertiesperformedbyaccreditedindependencevaluer.

17. Investment in subsidiaries Company 2015 2014 RM’000 RM’000

Unquotedshares,atcost 401,932 369,931 Less:Accumulatedimpairmentloss (28,751) (28,751) ------------------ ------------------ 373,181 341,180 ================ ================

Detailsofthesubsidiaries,allofwhichareincorporatedinMalaysia,areasfollows:

Equity interest held (%) Name of subsidiaries 2015 2014 Principal activities

JPHLoggingSdn.Bhd. 100 100 Loggingcontractor,provisionofhandling servicesandmanagementservices

SarajuHoldingSdn.Bhd. 100 100 Extractionandsalesoftimberlogs

SarawakPlywood(M)Sdn.Bhd. 100 100 Loggingandmarketingoflogs,ceased operation in prior years

SuburTiasaForestrySdn.Bhd. 100 100 Developmentandmaintenanceofplanted forests and forest plantation contractor SuburTiasaPlywoodSdn.Bhd. 100 100 Manufactureandtradingofplywood andveneer

SuburTiasaParticleboardSdn.Bhd. 100 100 Manufactureandtradingofrawand laminated particleboard

BorneoLumberIndustriesSdn.Bhd. 100 100 Manufactureandsaleofsawntimber

GraceMillionSdn.Bhd. 100 100 Manufactureandsaleofsawntimber

RHTimberProcessingIndustriesSdn.Bhd. 100 100 Sawmillingoftimber TrimogreenSdn.Bhd. 100 100 Manufactureandtradingofsawntimber andfingerjointmoulding

DiamondBiowoodSdn.Bhd. 100 100 Manufactureandtradingofcharcoal

ExcelleTimberSdn.Bhd. 100 100 Manufactureandtradingofcharcoal

HometRayaSdn.Bhd. 100 100 Supplyofelectricity

MomawaterSdn.Bhd. 100 100 Manufactureandtradingofdrinkingwater

InfrapalmSdn.Bhd. 100 100 Cultivationofoilpalm

96


Annual Report 2015


17. Investment in subsidiaries (contd.)

Detailsofthesubsidiaries,allofwhichareincorporatedinMalaysia,areasfollows:(contd.) Equity interest held (%) Name of subsidiaries (contd.) 2015 2014 Principal activities

PalmlynSdn.Bhd. 100 100 Cultivationofoilpalm

BlessingsPalmSdn.Bhd. 100 100 Cultivationofoilpalm

TiasaPalmSdn.Bhd. 100 100 Cultivationofoilpalm

AlliedAsiaticSdn.Bhd. 100 100 Towageandtransportationservices

JPHEnterpriseSdn.Bhd. 100 100 Insuranceagency

TiasaCergasSdn.Bhd. 100 100 Insuranceagency

T.Q.OrientalSdn.Bhd. 100 100 Operationofagrocerystore

BlessingsRealtySdn.Bhd. 100 100 Propertyholdinganddevelopment

JoyfulRealtySdn.Bhd. 100 100 Propertyholdinganddevelopment

SupremeStandardDevelopment 100 100 Propertyholdinganddevelopment

VictoryRoundSdn.Bhd. 100 100 Investmentholdingcompany

AAPlywoodSdn.Bhd. 100 100 Dormant

SemarakVeneer&PlywoodSdn.Bhd. 100 100 Dormant

TiasaMesraSdn.Bhd. 100 100 Dormant

OnfireCharcoalSdn.Bhd. 100 100 Dormant

MamoSdn.Bhd. 100 100 Dormant

MomamizuSdn.Bhd. 100 100 Dormant

MomaworldSdn.Bhd. 100 100 Dormant

MerriSdn.Bhd. 100 100 Dormant

MerriMeeSdn.Bhd. 100 100 Dormant

MerriMarketingSdn.Bhd. 100 100 Dormant

UnitedSuperlandSdn.Bhd. 100 - Dormant

Subsidiary of Victory Round Sdn. Bhd.:

VictoryPelitaKabahSdn.Bhd. 60 60 Cultivationofoilpalm

AllthesubsidiariesareauditedbyErnst&Young

97


Annual Report 2015


17. Investment in subsidiaries (contd.)

Acquisitionofsubsidiary

On31December2014,theCompanyacquired100%equityinterestinUnitedSuperlandSdn.Bhd.(“USL”),acompanyincorporatedinMalaysia,foratotalcashconsiderationofRM2.USLiscurrentlyadormantcompanyanditsintendedprincipalactivityistoengageinpropertyholdinganddevelopment.

18. Investment securities Group and Company

Availabe- for-sale FVOCI investment 2015 2014 RM’000 RM’000 QuotedoutsideMalaysia - Income fund 256 256 -Quotedequityinvestment 9,669 34,726 QuotedinMalaysia -Quotedequityinvestment 361 845 UnquotedinMalaysia -Unquotedequityinvestment 6,000 - ------------------ ------------------ 16,286 35,827 ================ ================

Marketvalueof - Incomefund 256 256 - Quotedequityinvestments 10,030 35,571 ------------------ ------------------ 10,286 35,827 ================ ================ Duringthefinancialyear,theCompanyacquired12%equityinterestinBorneoEdibleOilsSdn.Bhd.foratotal

cashconsiderationofRM6,000,000.Astheinvestmentwhichisunquotedandacquiredneartothereportingdate,thefairvalueoftheunquotedequityinvestmentapproximatecost.

There is neither any de-recognition of equity investments measured at FVOCI, nor any transfers of thecumulativegainorlosswithintheequityduringthefinancialyear.

98


Annual Report 2015

19. Intangible assets Rights Computer in timber software licences Goodwill & licences Total RM’000 RM’000 RM’000 RM’000 Group

Costs

At31July2014/31July2015 206,137 2,720 19,014 227,871 ------------------ ------------------ ------------------ ------------------

Accumulated amortisation

At1August2013 178,696 - 19,014 197,710 Amortisation(Note7) 10,140 - - 10,140 ------------------ ------------------ ------------------ ------------------ At31July2014 188,836 - 19,014 207,850 Amortisation(Note7) 10,140 - - 10,140 ------------------ ------------------ ------------------ ------------------ At31July2015 198,976 - 19,014 217,990 ------------------ ------------------ ------------------ ------------------

Net carrying amount

At31July2015 7,161 2,720 - 9,881 ================ ================ ================ ================

At31July2014 17,301 2,720 - 20,021 ================ ================ ================ ================

Rights in timber licenses 2015 2014 RM’000 RM’000 Company

Costs At1August2014/2013andat31July2015/2014 183,447 183,447 ------------------ ------------------ Accumulated amortisation

At1August2014/2013 174,250 167,351 Amortisation(Note7) 6,899 6,899 ------------------ ------------------ At31July2015/2014 181,149 174,250 ------------------ ------------------ Net carrying amount 2,298 9,197 ================ ================ (a) Rights in timber licenses TheGrouphasfivetimberlicenses.Thetimberlicenseswillexpireintheyear2015to2017.TheDirectors

areoftheviewthatallthetimberlicensesarerenewable.


99


Annual Report 2015


19. Intangible assets (contd.)

(b) Impairment testing on goodwill

Goodwillarisingfrombusinesscombinationmainlyarisesfromplantationsegment.Goodwillistestedforimpairmentonanannualbasisbycomparingthecarryingamountwithrecoverableamountofthecashgeneratingunits(“CGUs”)basedonvalue-in-use.Value-in-useisdeterminedbydiscountingthefuturecashflowstobegeneratedfromthecontinuinguseoftheCGUsbasedonthefollowingassumptions:

i. Cashflowsareprojectedfortheremaininglifecycleofoilpalmtrees. ii. Discount rate used for cash flows discounting purpose is the Group’s weighted average

cost of capital. The average pre-tax discount rate applied for cash flow projections is 13.8% (2014:15.7%).

iii. Growthratefortheplantationsegmentisdeterminedbasedonthemanagement’sestimateofcommodityprices,palmyieldsandalsocostofproductions.

iv. Profitmarginsareprojectedbasedonindustrytrendsandhistoricalprofitmarginachieved.

20. Long term receivable

Longtermreceivablerepresentsanadvancepaymentmadetoathirdpartyinrespectofpurchaseofallthemerchantabletimberlogsfromaforestconcessionforaperiodoftwentyyears.Thisamountwillbeset-offagainsttheamountpayableforfuturepurchasesoftimberlogsfromthisthirdparty.

21. Inventories Group Company 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000 Atcost:

Rawmaterials -Logs 18,719 47,399 10,335 19,410 -Wastetimber 202 594 - - -Others 337 9 - - Finishedgoods -Particleboard 8,008 2,987 - - -Plywoodandveneer - 34,491 - - -Sawntimber 23,173 9,887 - - -Charcoal 730 316 - - Work-in-progress 11,977 15,022 765 66 Generalstores 33,557 31,990 1,827 1,534 ------------------ ------------------ ------------------ ------------------ 96,703 142,695 12,927 21,010 ------------------ ------------------ ------------------ ------------------

Atnetrealisablevalue: Rawmaterials -Logs 1,506 5,339 1,506 - Finishedgoods -Plywood 54,894 - - - Work-in-progress 24,984 - - - ------------------ ------------------ ------------------ ------------------ 81,384 5,339 1,506 - ------------------ ------------------ ------------------ ------------------ 178,087 148,034 14,433 21,010 ================ ================ ================ ================

100


Annual Report 2015


22. Trade and other receivables Group Company 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000 Trade receivables Thirdparties 29,557 42,643 6,948 21,965 Relatedcompanies 33,256 6,706 5,677 2,911 Amountduefromsubsidiaries - - 42,631 26,598 ------------------ ------------------ ------------------ ------------------ 62,813 49,349 55,256 51,474 Less:Allowancesforimpairment -Thirdparties (1,752) (1,752) (18) (18) ------------------ ------------------ ------------------ ------------------ 61,061 47,597 55,238 51,456 ------------------ ------------------ ------------------ ------------------ Other receivables Thirdparties 13,513 10,892 5,081 8,355 Relatedcompanies 5,260 - 5,260 - Amountduefromsubsidiaries - - 193,901 124,072 Otherreceivables 769 - - - Less:Allowancesforimpairment -Thirdparties (105) (105) (79) (79) -Amountsduefromrelatedsubsidiaries - - (21,556) (21,556) ------------------ ------------------ ------------------ ------------------ 19,437 10,787 182,607 110,792 Depositsandadvances 3,653 3,666 3,290 1,951 ------------------ ------------------ ------------------ ------------------ 23,090 14,453 185,897 112,743 ------------------ ------------------ ------------------ ------------------ Total trade and other receivables 84,151 62,050 241,135 164,199

Add:Cashandbankbalances(Note24) 56,277 88,252 7,535 25,636 ------------------ ------------------ ------------------ ------------------ Total financial assets classified under amortised cost/ loans and receivables 140,428 150,302 248,670 189,835 ================ ================ ================ ================

(a) Trade receivables

TheGroup’snormaltradecredittermsrangefrompaymentinadvanceto180days(2014:paymentinadvanceto180days).Othercredittermsareassessedandapprovedonacase-by-casebasis.Theyarerecognisedattheiroriginalinvoiceamountswhichrepresenttheirfairvaluesoninitialrecognition.

101


Annual Report 2015


22. Trade and other receivables (contd.)

(a) Trade receivables (contd.)

Ageinganalysisoftradereceivables

TheageinganalysisoftheGroup’sandtheCompany’stradereceivablesareasfollows:


Neitherpastduenorimpaired 35,866 36,708 5,242 20,811

1to30dayspastduenotimpaired 7,397 8,088 4,637 10,697 31to60dayspastduenotimpaired 9,807 30 6,168 2,918 61to90dayspastduenotimpaired 4,265 76 4,268 4,389 91to120dayspastduenotimpaired 2,190 34 11,300 5,068 Morethan121dayspastduenotimpaired 1,536 2,661 23,623 7,573

25,195 10,889 49,996 30,645 Impaired 1,752 1,752 18 18 ------------------ ------------------ ------------------ ------------------ 62,813 49,349 55,256 51,474 ================ ================ ================ ================

Receivablesthatareneitherpastduenorimpaired

TradeandotherreceivablesthatareneitherpastduenorimpairedarecreditworthdebtorswithgoodpaymentsrecordswiththeGroupandtheCompany.

NoneoftheGroup’sandtheCompany’stradereceivablesthatareneitherpastduenorimpairedhavebeenrenegotiatedduringthefinancialyear.

Receivablesthatarepastduebutnotimpaired

TheGroupandtheCompanyhavetradereceivablesamountingtoRM25,195,000(2014:RM10,889,000)andRM49,996,000(2014:RM30,645,000)respectively,thatarepastdueatthereportingdatebutnotimpaired.

Receivablesthatareimpaired

ThemovementoftheallowanceaccountsoftheGroupandtheCompanyusedtorecordtheimpairmentoftradereceivablesareasfollows:

Group Company Impairment Impairment Lifetime allowances Lifetime allowances expected under expected under credit losses FRS 139 credit losses FRS 139 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000

At1August2014/2013 1,752 1,776 18 18 Reversalfortheyear(Note7) - (24) - - ------------------ ------------------ ------------------ ------------------ At31July2015/2014 1,752 1,752 18 18 ================ ================ ================ ================

102


Annual Report 2015

22. Trade and other receivables (contd.)

(a) Trade receivables (contd.)

Receivablesthatareimpaired(contd.)

Therearenofinancialassetsthatarecredit-impairedwhenpurchasedororiginated.

Tradereceivablesthatareindividuallydeterminedtobeimpairedatthereportingdaterelatetodebtorsthatareinsignificantfinancialdifficultiesandhavedefaultedonpayments.Thesereceivablesarenotsecuredbyanycollateralorcreditenhancements.

(b) Amount due from related companies Amountduefromrelatedcompaniesrepresentcompanies inwhichcertaindirectorsandsubstantial

shareholdersoftheCompanyhavefinancialinterests.

(c) Amount due from subsidiaries

Amountsduefromsubsidiariesareunsecured,interest-freeandarerepayableondemandexceptforanamountofRM24,559,000(2014:RM7,775,000)whichbearsinterestof4.7%(2014:4.4%)perannumasatthedateofstatementoffinancialposition.

Otherreceivablesthatareimpaired

Movementinallowancesaccounts:

Group Company Impairment Impairment Lifetime allowances Lifetime allowances expected under expected under credit losses FRS 139 credit losses FRS 139 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000

At1August2014/2013 andat31July2015/2014 105 105 21,635 21,635 ================ ================ ================ ================

Other receivables that are individually determined to be impaired at the reporting date related toamountduefromsubsidiarieswhichhavebeensufferingsignificantfinanciallosses.Thereceivablesarenotsecuredbyanycollateralorcreditenhancements.


103


Annual Report 2015


23. Other current assets Group Company 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000

Prepayment 3,731 2,426 3,504 2,092 Taxrecoverable 2,539 1,170 - - ------------------ ------------------ ------------------ ------------------ 6,270 3,596 3,504 2,092 ================ ================ ================ ================

24. Cash and bank balances Group Company 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000

Cashonhandandatbanks 44,676 80,019 3,949 23,751 Shorttermdepositswithlicensedbanks 11,601 8,233 3,586 1,885 ------------------ ------------------ ------------------ ------------------ Cashandcashequivalents 56,277 88,252 7,535 25,636 ================ ================ ================ ================

Short term deposits of the Group and the Company amounting to RM922,000 (2014: RM2,482,000) andRM347,000(2014:RM335,000)respectivelyhavebeenpledgedtothebanksassecurityfortheborrowingsgrantedtotheGroupandhencewerenotavailableforgeneraluse.

Theweighted average effective interest rates (WAEIR) of short term deposits with licensed banks of theGroupandtheCompanyatthereportingdateare2.93%(2014:2.88%)and2.99%(2014:2.84%)perannumrespectively.

25. Loans and borrowings

Group Company WAEIR 2015 2014 2015 2014 % RM’000 RM’000 RM’000 RM’000 Current

Secured:

Obligationsunderfinance leases(Note32) 5.89 57,349 54,766 51,913 53,381 Termloans 4.82 18,975 17,525 - - ------------------ ------------------ ------------------ ------------------ 76,324 72,291 51,913 53,381 ------------------ ------------------ ------------------ ------------------ Unsecured:

Revolvingcredit 4.53 180,000 50,000 117,500 50,000 Termloans 4.75 - 2,800 - - Bankers’acceptances 4.13 23,670 35,500 - - ------------------ ------------------ ------------------ ------------------ 203,670 88,300 117,500 50,000 ------------------ ------------------ ------------------ ------------------ 279,994 160,591 169,413 103,381 ------------------ ------------------ ------------------ ------------------

104


Annual Report 2015


25. Loans and borrowings (contd.)

Group Company WAEIR 2015 2014 2015 2014 % RM’000 RM’000 RM’000 RM’000 Non-current

Secured:

Obligationsunderfinance leases(Note32) 5.89 69,918 103,174 54,392 99,881 Termloans 5.00 87,102 79,061 - - ------------------ ------------------ ------------------ ------------------ 157,020 182,235 54,392 99,881 ------------------ ------------------ ------------------ ------------------ Unsecured:

Termloans 4.75 - 7,000 - - ------------------ ------------------ ------------------ ------------------ 157,020 189,235 54,392 99,881 ------------------ ------------------ ------------------ ------------------

Loans and borrowings 437,014 349,826 223,805 203,262 ================ ================ ================ ================ Theremainingmaturitiesofborrowingsasat31July2015and31July2014areasfollows:


Withinoneyear 279,994 160,591 169,413 103,381 Morethan1yearandlessthan2years 63,258 80,146 43,843 50,204 Morethan2yearsandnotlaterthan5years 54,712 78,639 10,549 49,677 Laterthan5years 39,050 30,450 - - ------------------ ------------------ ------------------ ------------------ 437,014 349,826 223,805 203,262 ================ ================ ================ ================

ThesecuredtermloanandrevolvingcreditoftheGrouparesecuredagainst longleasehold land,buildings,biologicalassets,watercraftsandinvestmentpropertiesasreferredinNote13,Note14,Note15andNote16tothefinancialstatementandcorporateguaranteeoftheCompany.

26. Trade and other payables

Group Company 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000 Trade payables

Thirdparties 91,088 78,020 25,384 23,083 Amountduetosubsidiaries - - 40,634 23,946 Amountduetorelatedcompanies 26,644 38,676 7,989 18,907 ------------------ ------------------ ------------------ ------------------ 117,732 116,696 74,007 65,936 ------------------ ------------------ ------------------ ------------------

105


Annual Report 2015


26. Trade and other payables (contd.)

Group Company 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000 Other payables Accruals 10,578 17,468 3,739 9,003 Deposits 373 2,201 - 446 Amountduetosubsidiaries - - 13,685 17,785 Otherpayables 9,194 17,593 1,140 4,432 ------------------ ------------------ ------------------ ------------------ 20,145 37,262 18,564 31,666 ------------------ ------------------ ------------------ ------------------ Total trade and other payables 137,877 153,958 92,571 97,602

Add:Loansandborrowings(Note25) 437,014 349,826 223,805 203,262 ------------------ ------------------ ------------------ ------------------ Total financial liabilities carried at amortised cost 574,891 503,784 316,376 300,864 ================ ================ ================ ================

(a) Trade payables

ThenormaltradecredittermsgrantedtotheGrouprangefromcashtermtocreditof180days(2014:Cashtermtocreditofcreditof180days).

(b) Amount due to related companies

Amount due to related companies are non-interest bearing and are repayable on demand. Theseamountsareunsecuredandaretobesettledincash.

(c) Amount due to subsidiaries

Theamountduetosubsidiariesarenon-interestbearingandarerepayableondemand.

106


Annual Report 2015

NO

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107


Annual Report 2015


27. Share capital, share premium and treasury shares (contd.)

Number of Ordinary Shares of RM1 each Amount 2015 2014 2015 2014 RM’000 RM’000

Authorised share capital

At1August/31July 1,000,000,000 1,000,000,000 1,000,000 1,000,000 ===================== ===================== ===================== =====================

(a) Share capital

Theholdersofordinaryshares(excepttreasuryshares)areentitledtoreceivedividendsasandwhendeclaredby theCompany.Allordinarysharescarryonevotepersharewithout restrictionsand rankequallywithregardtotheCompanyresidualassets.

(b) Treasury shares

TreasurysharesrelatetoordinarysharesoftheCompanythatareheldbytheCompany.Theamountconsistsoftheacquisitioncostsoftreasurysharesnetoftheproceedsreceivedontheirsubsequentsaleorissuance.

TheCompany acquired 5,000 (2014: 200) shares in theCompany through purchases on the BursaMalaysiaSecuritiesBerhadduringthefinancialyear.ThetotalamountpaidtoacquiretheshareswasRM10,485(2014:RM504)andthiswaspresentedasacomponentwithinshareholders’equity.

ThedirectorsoftheCompanyarecommittedtoenhancingthevalueoftheCompanyforitsshareholdersand believe that the repurchase plan can be applied in the best interests of the Company and itsshareholders.The repurchase transactionswerefinancedby internallygenerated funds.ThesharesrepurchasedarebeingheldastreasurysharesinaccordancewithSection67AoftheCompaniesAct,1965.

28. Retained earnings

TheCompanymaydistributedividendsoutofitsentireretainedearningsasat31July2015and31July2014underthesingle-tiersystem.

108


Annual Report 2015


29. Other reserves/Available-for-sale reserve

Group and Company Other Available-for- Reserves sale reserve 2015 2014 RM’000 RM’000

At1August 6,743 55

Othercomprehensiveincome:

FairvaluechangesonFVOCI/available-for-salefinancialassets (25,541) 6,866

Recycletoprofitorloss:

Disposalofavailable-for-salefinancialassets(Note5) - (178) (25,541) 6,688 ------------------ ------------------ At31July (18,798) 6,743 ================ ================

Theotherreservesrepresentthefairvaluegainsandlossesoftheinvestmentsinequityinstrumentsthatarenotheld-for-trading,whichtheGroupandCompanyhaselectedatinitialrecognitiontopresentsuchgainsandlossesthroughothercomprehensiveincome.Thegainsandlosseswithinthisreserveareneverreclassifiedtoprofitandloss.However,theGroupandCompanymaytransferthecumulativegainorlosseswithinequitywhentheseinvestmentsarederecognised.

30. Deferred tax Group Company 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000

At1August2014/2013 7,749 9,995 1,520 4,143 Recognisedinprofitorloss(Note10) (8,897) (2,246) (4,268) (2,623) ------------------ ------------------ ------------------ ------------------ At31July2015/2014 (1,148) 7,749 (2,748) 1,520 ================ ================ ================ ================

Presentedafterappropriateoffsetting asfollows:

Deferredtaxassets (21,774) (13,270) (2,748) - Deferredtaxliabilities 20,626 21,019 - 1,520 ------------------ ------------------ ------------------ ------------------ (1,148) 7,749 (2,748) 1,520 ================ ================ ================ ================

109


Annual Report 2015

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(2,230

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---

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2,83

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1,27

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110


Annual Report 2015

NO

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-(12,86

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(939)

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(939)

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(38,33

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(1,447

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====

====

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At1August2013

-(11,21

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(31,68

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)(955

)(47,83

3)

Recognisedin

profitorloss

-(1,645

)(814

)15

2(172

)(1,183

)95

5(2,707

)

------

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At31July2014

-(12,86

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(32,50

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====

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====

====

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111


Annual Report 2015


30. Deferred tax (contd.)

DeferredtaxliabilitiesoftheCompany: Property, plant and equipment RM’000

At1August2014 4,173 Recognisedinprofitorloss (4,992) ------------------ At31July2015 (819) ================

At1August2013 7,065 Recognisedinprofitorloss (2,892) ------------------ At31July2014 4,173 ================

DeferredtaxassetsoftheCompany:

Allowance Derivative Allowances for financial for Accrued inventories instruments impairment liabilities Total RM’000 RM’000 RM’000 RM’000 RM’000

At1August2014 (56) - (1,456) (1,141) (2,653) Recognisedinprofitorloss 2 - 58 664 724 ------------------ ------------------ ------------------ ------------------ ------------------ At31July2015 (54) - (1,398) (477) (1,929) ================ ================ ================ ================ ================

At1August2013 - (675) (1,606) (641) (2,922) Recognisedinprofitorloss (56) 675 150 (500) 269 ------------------ ------------------ ------------------ ------------------ ------------------ At31July2014 (56) - (1,456) (1,141) (2,653) ================ ================ ================ ================ ================

Deferredtaxassetshavenotbeenrecognisedinrespectofthefollowingitems:

Group 2015 2014 RM’000 RM’000 Deductibletemporarydifferencesoninventory,property, plantandequipment 5,677 5,516 Unusedtaxlosses - 9,395 Unutilisedcapitalallowances 2,477 5,641 ------------------ ------------------ 8,154 20,552 ================ ================

Asat31July2015,thedeferredtaxassetsarenotrecognisedasitisnotprobablethatfuturetaxableprofitwillbeavailableagainstwhichtheunusedtaxlossesandunutilisedcapitalallowancecanbeutilised.TheavailabilityoftheunusedtaxlossesandunutilisedcapitalallowancesforoffsettingagainstfuturetaxableprofitsoftheGroupissubjecttotheprovisionsoftheIncomeTaxAct1967.

112


Annual Report 2015

31. Significant related party transactions

(a) Sale and purchase of goods and services

Inadditiontorelatedpartydisclosuresmentionedelsewhereinthefinancialstatements,theGroupandtheCompanyhadthefollowingtransactionwithrelatedpartiesduringthefinancialyear:

Company 2015 2014 RM’000 RM’000 Subsidiaries:

Sales to subsidiaries -logs 201,183 181,123 -property,plantandequipment - 1,355 -freightandhandlingcharges 290 823 - interest income from subsidiaries 865 745 -rentalincome 1,201 - - sundry income 487 320 -dividendreceived 32,572 65,288

Purchasesfromsubsidiaries -logs 12,910 29,931 -sawntimber 20 54 -plywood 4 12 -property,plantandequipment - 232

Servicespaid/payabletosubsidiaries -freightandhandlingcharges 15,402 18,126 -logpondhandlingcharges 5,351 5,769 -contractfee 59,765 59,897 -sundryexpenses - 17 ================ ================ Group Company 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000 Related companies*:

Servicespaid/payabletorelatedcompanies -freightandhandlingcharges 1,126 1,252 95 162 -loggingcontractfee 18,177 37,964 17,655 37,964 -marketingfee 900 900 900 900 -rentalofbuilding 96 21 88 15 - rental of land 130 130 - - Purchasefromrelatedcompanies -purchaseofproperty,plantandequipment 2,575 4,997 1,675 4,346 -purchaseofconsumablestores 8,125 7,550 1,893 2,575 -purchaseofelectricity - 7 - 7 -purchaseoflogs 91,726 109,311 91,725 109,311 -purchaseofadhesivematerials 38,793 43,710 - - -purchaseofwastetimber 98 80 - - -purchaseofveneer 36,666 14,870 - - -purchaseofinvestmentsecurities 6,000 27,832 6,000 27,832


113


Annual Report 2015

31. Significant related party transactions (contd.)

(a) Sale and purchase of goods and services (contd.)

Group Company 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000 Related companies*: (contd.)

Income from related companies - rental income 98 235 98 235 -salesoflogs 6,352 5,263 6,352 5,263 -salesofsawntimber 2,319 5,982 - - -salesoffreshfruitbunch 24,236 - - - -towageandhandlingincome 431 844 431 844 -contractfeeincome 82,940 86,120 1,452 1,676 -managementfeereceived 768 - 768 - ================ ================ ================ ================ * Relatedcompaniesarecompaniesinwhichcertaindirectors,Dato’TiongIngandTiongKiongKing

orsubstantialshareholderoftheCompany,TanSriDatukSirDiongHiewKing@TiongHiewKingorpersonsconnectedwiththemhavesubstantialinterests.

TherelatedpartytransactionsaremainlytoprovidesupporttotheGroup’sday-to-dayoperations.Itis

theGroup’spolicytopurchasematerials,goodsorservicesalsofromrelatedpartieswhentheprices,feesorchargesarecompetitivewithprices,feesorchargesobtainedfromthirdparties;bytakingintoconsiderationoftheavailabilityofrawmaterialsorresources,reliabilityofsupply,delivery,servicesandqualityofmaterialorgoods.

Salesof logsandtimberrelatedproductstorelatedpartiesandother incomereceivedorreceivablefromrelatedpartieshavebeenenteredintointhenormalcourseofbusinessandhavebeenestablishedontermsandconditionsthataremutuallyagreedupon.

(b) Compensation of key management personnel

Theremunerationofdirectorsandothermembersofkeymanagementduringtheyearwereasfollows:


Shorttermemployeebenefits 6,386 6,347 6,338 6,299 Definedcontributionplan 704 704 704 704 ------------------ ------------------ ------------------ ------------------ 7,090 7,051 7,042 7,003 ================ ================ ================ ================

Includedintotalkeymanagement personnelare:

Directors’remuneration(Note9) 4,258 5,075 4,219 5,036 ================ ================ ================ ================


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Annual Report 2015

32. Commitments

(a) Capital commitments Group Company 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000 Capitalexpenditure:

Approvedandcontractedfor: Property,plantandequipment 22,908 19,429 13,290 12,906 Investmentproperties 6,217 9,259 - - ------------------ ------------------ ------------------ ------------------ 29,125 28,688 13,290 12,906 ------------------ ------------------ ------------------ ------------------

Approvedbutnotcontractedfor: Property,plantandequipment 5,845 2,396 - - ------------------ ------------------ ------------------ ------------------ 34,970 31,084 13,290 12,906 ================ ================ ================ ================

(b) Operating lease commitments - as lessee Futureminimumrentalpayablesundernon-cancellableoperatingleases(excludinglanduserights)at

thereportingdateareasfollows: Group 2015 2014 RM’000 RM’000

Notlaterthan1year - 265 Laterthan1yearandnotlaterthan5years - 386 ------------------ ------------------ - 651 ================ ================ (c) Finance lease commitments

TheGroupandtheCompanyhasfinance leasesforcertain itemsofplantandequipment (Note13).Theseleasesdonothavetermsofrenewal,buthavepurchaseoptionsatnominalvaluesattheendoftheleaseterm.


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Annual Report 2015


32. Commitments (contd.)

(c) Finance lease commitments (contd.)

Future minimum lease payments under finance leases together with the present value of the netminimumleasepaymentsareasfollows:

Group Company 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000 Minimum lease payments: Notlaterthan1year 62,272 61,222 55,860 59,636 Laterthan1yearbutnotlaterthan2years 51,475 55,449 45,385 53,872 Laterthan2yearsbutnotlaterthan5years 21,435 53,061 10,771 51,144 ------------------ ------------------ ------------------ ------------------ Totalminimumleasepayments 135,182 169,732 112,016 164,652 Less:Amountsrepresentingfinancecharges (7,915) (11,792) (5,711) (11,390) ------------------ ------------------ ------------------ ------------------ Presentvalueofminimumleasepayments 127,267 157,940 106,305 153,262 ================ ================ ================ ================ Present value of payments: Notlaterthan1year 57,349 54,766 51,913 53,381 Laterthan1yearbutnotlaterthan2years 49,291 51,653 43,843 50,204 Laterthan2yearsbutnotlaterthan5years 20,627 51,521 10,549 49,677 ------------------ ------------------ ------------------ ------------------ 127,267 157,940 106,305 153,262

Present value of minimum lease payments: Less:Amountsduewithin12months(Note25) (57,349) (54,766) (51,913) (53,381) ------------------ ------------------ ------------------ ------------------ Amountdueafter12months(Note25) 69,918 103,174 54,392 99,881 ================ ================ ================ ================ 33. Fair value of financial instruments (a) Set out below, is a comparison by class of the carrying amount and the fair value of the Group’s

and Company’s financial instruments, other than those which carrying amount are reasonable approximation of fair value

2015 2014 Carrying Fair Carrying Fair Note amount value amount value RM’000 RM’000 RM’000 RM’000 Financial liabilities:

Group Loansandborrowings -Obligationsunderfinanceleases 25 127,267 127,330 157,940 157,924 ================ ================ ================ ================

Company Loansandborrowings -Obligationsunderfinanceleases 25 106,305 106,227 153,262 153,214 ================ ================ ================ ================

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Annual Report 2015

33. Fair value of financial instruments (contd.) (b) Determination of fair value

Financial instruments that are not carried at fair value and whose carrying amounts are reasonable approximation of fair value

Thefollowingareclassesoffinancialinstrumentsthatarenotcarriedatfairvalueandwhosecarryingamountsarereasonableapproximationoffairvalue:

Note

Tradeandotherreceivables 22 Cashandbankbalances 24 Loansandborrowings 25 Tradeandotherpayables 26

Thecarryingamountsofthesefinancialassetsandliabilitiesarereasonableapproximationoffairvalues,duetotheirshort-termnatureorthattheyarefloatingrateinstrumentsthatarere-pricedtomarketinterestratesonornearthereportingdate.

Thecarryingamountsofthecurrentportionofloansandborrowingsarereasonableapproximationsoffairvaluesduetotheinsignificantimpactofdiscounting.

Thefairvaluesofcurrentloansandborrowingsareestimatedbydiscountingexpectedfuturecashflowsatmarketincrementallendingrateforsimilartypesoflending,borrowingorleasingarrangementsatthereportingdate.

Obligation under finance lease

Thefairvaluesofthesefinancialinstrumentsareestimatedbydiscountingexpectedfuturecashflowsatmarketincrementallendingrateforsimilartypesoflending,borrowingorleasingarrangementsatthereportingdate.

Derivatives

Forwardcurrencycontractsarevaluedusingavaluationtechniquewithmarketobservableinputs.Themostfrequentlyappliedvaluationtechniquesincludeforwardpricingandswapmodels,usingpresentvaluecalculations.Themodelsincorporatevariousinputsincludingthecreditqualityofcounterparties,foreignexchangespotandforwardrates.

Investment securities

Fair value is determined directly by reference to their published market bid price at the reportingdate.

34. Fair value measurement

Fair value hierarchy

TheGroup andCompany uses the following hierarchy for determining and disclosing the fair value of theGroup’sandCompany’sassetsandliabilities:

• Level1-Quoted(unadjusted)marketpricesinactivemarketsforidenticalassetsorliabilities • Level2-Valuation techniques for which the lowest level input that is significant to the fair value

measurementisdirectlyorindirectlyobservable • Level3-Valuation techniques for which the lowest level input that is significant to the fair value

measurementisunobservable.


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Annual Report 2015


34. Fair value measurement (contd.)

Fair value hierarchy (contd.)

ThefollowingtableprovidesthefairvaluemeasurementhierarchyoftheGroup’sandCompany’sassetsandliabilities.

Quantitative disclosures fair valuemeasurement hierarchy for theGroup’s and theCompany’s assets andliabilitiesasat31July2015.

Level 1 Level 2 Level 3 Total RM’000 RM’000 RM’000 RM’000 Assets measured at fair value Group and Company EquityinvestmentsatFVOCI 10,286 - - 10,286 ------------------ ------------------ ------------------ ------------------ Assets for which fair value are disclosed Group Investmentproperties - - 31,398 31,398 ------------------ ------------------ ------------------ ------------------ Liabilities for which fair value are disclosed

Group Financeleasepayables - 127,330 - 127,330 ------------------ ------------------ ------------------ ------------------ Company Financeleasepayables - 106,227 - 106,227 ------------------ ------------------ ------------------ ------------------ Quantitative disclosures fair valuemeasurement hierarchy for theGroup’s and theCompany’s assets and

liabilitiesasat31July2014.

Level 1 Level 2 Level 3 Total RM’000 RM’000 RM’000 RM’000 Assets measured at fair value Group and Company Available-for-saleinvestments 35,827 - - 35,827 ------------------ ------------------ ------------------ ------------------ Assets for which fair value are disclosed Group Investmentproperties - - 22,365 22,365 ------------------ ------------------ ------------------ ------------------ Liabilities for which fair value are disclosed

Group Financeleasepayables - 157,924 - 157,924 ------------------ ------------------ ------------------ ------------------ Company Financeleasepayables - 153,214 - 153,214 ------------------ ------------------ ------------------ ------------------

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Annual Report 2015

35. Financial risk management objectives and policies

TheGroup’s overall financial riskmanagement objective is to ensure that the Group creates value for itsshareholders.TheGroupfocusesontheunpredictabilityoffinancialmarketsandseekstominimizepotentialadverseeffectsonthefinancialperformanceoftheGroup.TheGroup’soverallfinancialriskmanagementpolicyseekstoensurethatadequatefinancialresourcesareavailableforthedevelopmentoftheGroup’sbusinesseswhilstmanagingitscreditrisks,liquidity,interestrateandforeigncurrency.Financialriskmanagementiscarriedout through risk reviews, internal control systems, insurance programmes and adherence to the Group’sfinancialriskmanagementpolicies.

The Group uses derivative financial instrument on a short term basis such as forward foreign exchangecontracts tohedgeonconfirmed receiptswhen it isdeemednecessary. Itdoesnotengage inspeculativetransactions.

Thekeyfinancialrisksincludecreditrisk,liquidityrisk,interestrateriskandforeigncurrencyrisk.

ThefollowingsectionsprovidedetailsregardingtheGroup’sandCompany’sexposuretotheabove-mentionedfinancialrisksandtheobjectives,policiesandprocessesforthemanagement.

(a) Credit risk

Creditriskistheriskoflossthatmayariseonoutstandingfinancialinstrumentsshouldacounterpartydefault on its obligations. The Group’s and the Company’s exposure to credit risk arises primarilyfrom trade and other receivables. For other financial assets (including cash and bank balances andderivatives), theGroup and theCompanyminimise credit risk by dealing exclusivelywith high creditratingcounterparties.

The Group’s objective is to seek continual revenue growth whileminimising losses incurred due toincreasedcreditriskexposure.TheGrouptradesonlywithrecognisedandcreditworthythirdparties.ItistheGroup’spolicythatallcustomerswhowishtotradeoncredittermsaresubjecttocreditverificationprocedures.Inaddition,receivablebalancesaremonitoredonanongoingbasiswiththeresultthattheGroup’sexposuretobaddebtsisnotsignificant.Fortransactionsthatdonotoccurinthecountryoftherelevantoperatingunit,theGroupdoesnotoffercredittermswithouttheapprovaloftheHeadofCreditControl.

Priorto1August2014,theGrouprecognisedimpairmentlossunder“incurredlosses”model.WiththeadoptionofFRS9on1August2014,theGrouphasadoptedthe“expectedcreditloss”model.AsthecreditriskoftheGroupismainlyfromtradeandotherreceivables,theGrouphasadoptedthesimplifiedapproachwhichmeasuresthelossallowancebasedonlifetimeexpectedcreditlosses.

Exposuretocreditrisk

Atthereportingdate,theGroup’sandtheCompany’smaximumexposuretocreditriskisrepresentedby:

(i) thecarryingamountofeachclassoffinancialassetsrecognisedinthestatementsoffinancialpositionincludingderivativeswithpositivefairvalues.

(ii) AnominalamountofRM213,210,000(2014:RM127,195,000)providedbytheCompanytothebanksonsubsidiaries’loansandborrowings.

InformationregardingcreditenhancementsfortradeandotherreceivablesisdisclosedinNote22.


119


Annual Report 2015


35. Financial risk management objectives and policies (contd.)

(a) Credit risk (contd.)

Creditriskconcentrationprofile

TheGroup’sexposuretocreditriskisinfluencedbytheindividualcharacteristicsofeachcustomer.Thereceivablebalanceconsistsofbusinesscustomerswhicharespreadacrossadiverserangeofindustries.TheGroupdeterminesconcentrationsofcreditriskbymonitoringtheindustrysectorprofileofitstradereceivablesonanongoingbasis.

At the reporting date, approximately 40% and 94% (2014: 11% and 80%) of the Group’s and theCompany’s trade and other receivables respectively, were balances with related company andsubsidiaries.

Financialassetsthatareneitherpastduenorimpaired

InformationregardingtradeandotherreceivablesthatareneitherpastduenorimpairedisdisclosedinNote22.Depositswithbanksandotherfinancialinstitutions,investmentsecuritiesandderivativesthatareneitherpastduenorimpairedareplacedwithorenteredintowithreputablefinancialinstitutionsorcompanieswithhighcreditratingsandnohistoryofdefault.

Financialassetsthatareeitherpastdueorimpaired

InformationregardingfinancialassetsthatareeitherpastdueorimpairedisdisclosedinNote22.

(b) Liquidity risk

Liquidity risk is the risk that theGroup or theCompanywill encounter difficulty inmeeting financialobligations due. The Group’s and the Company’s exposure to liquidity risk arises primarily frommismatchesofthematuritiesoffinancialassetsandliabilities.TheGroup’sandtheCompany’sobjectiveistomaintainabalancebetweencontinuityoffundingandflexibilitythroughtheuseofstand-bycreditfacilities.

TheGroupandtheCompanymanage its liquidity riskbymaintainingadequatereserves,accesstoanumberofsourcesofbankingfacilitieswhicharesufficienttomeetanticipatedfundingrequirements,and reserve borrowing facilities by continuouslymonitoring its forecasts and actual cash flows andmatchingthematurityprofilesoffinancialassetsandliabilities.

Atthereportingdate,approximately64%(2014:46%)oftheGroup’sborrowings(Note25)willmaturein

lessthanoneyearbasedonthecarryingamountreflectedinthefinancialstatements.76%(2014:51%)oftheCompany’sborrowingswillmatureinlessthanoneyearatthereportingdate.

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Annual Report 2015


(b) Liquidity risk (contd.)

Analysis of financial instruments by remaining contractual maturities

The table below summarises thematurity profileof theGroup’s and theCompany’s liabilities at thereportingdatebasedoncontractualundiscountedrepaymentobligations.

Within One to Over one year five years five years Total RM’000 RM’000 RM’000 RM’000 As at 31.07.2015

Group

Financial liabilities: Tradeandotherpayables 137,877 - - 137,877 Loansandborrowings 299,056 133,536 42,177 474,769 ------------------ ------------------ ------------------ ------------------ Totalundiscountedfinancialliabilities 436,933 133,536 42,177 612,646 ================ ================ ================ ================

Company

Financial liabilities: Tradeandotherpayables,excluding financialguarantee* 92,571 - - 92,571 Loansandborrowings 178,688 56,156 - 234,844 ------------------ ------------------ ------------------ ------------------ Totalundiscountedfinancialliabilities 271,259 56,156 - 327,415 ================ ================ ================ ================ As at 31.07.2014

Group

Financial liabilities: Tradeandotherpayables 153,958 - - 153,958 Loansandborrowings 175,225 174,325 32,542 382,092 ------------------ ------------------ ------------------ ------------------ Totalundiscountedfinancialliabilities 329,183 174,325 32,542 536,050 ================ ================ ================ ================

Company

Financial liabilities: Tradeandotherpayables,excluding financialguarantee* 97,602 - - 97,602 Loansandborrowings 111,818 105,016 - 216,834 ------------------ ------------------ ------------------ ------------------ Totalundiscountedfinancialliabilities 209,420 105,016 - 314,436 ================ ================ ================ ================

* Atthereportingdate,thecounterpartytothefinancialguaranteesdoesnothavearighttodemandcashasthedefaulthasnotoccurred.Accordingly,financialguaranteesunderthescopeofFRS9orFRS139arenotincludedintheabovematurityprofileanalysis.


121


Annual Report 2015


35. Financial risk management objectives and policies (contd.) (c) Interest rate risk

Interestraterisk istheriskthatthefairvalueorfuturecashflowsoftheGroup’sandtheCompany’sfinancialinstrumentswillfluctuatebecauseofchangesinmarketinterestrates.

TheGroup’s and theCompany’s exposure to interest rate risk arises primarily from their loans andborrowings,loansatfloatingratesgiventosubsidiariesanddepositsintheapprovedfinancialinstitutions.TheCompany’sloansatfloatingrategiventosubsidiariesformanaturalhedgeforitscurrentfloatingratebankborrowings.AlloftheGroup’sandtheCompany’sfinancialassetsandliabilitiesatfloatingratesarere-pricedtomarketinterestrates.

Sensitivityanalysisforinterestraterisk

Thetablebelowdemonstratesthesensitivitytoareasonablypossiblechangeininterestrateswithallothervariablesheldconstant,oftheGroup’sandtheCompany’sprofitnetoftaxthroughtheimpactoninterestexpensesonfloatingrateloansasborrowings.

2015 2014 Increase/ Effect on Effect on decrease in profit profit basis points net of tax net of tax RM’000 RM’000 Group

Loansandborrowings +50 -914 -560 Loansandborrowings -50 +914 +560 ================ ================ ================

Company

Loansandborrowings +50 -441 -188 Loansandborrowings -50 +441 +188 ================ ================ ================ (d) Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of a financial instrumentwillfluctuatebecauseofchangesinforeignexchangerates.

TheGrouphastransactionalcurrencyexposuresarisingfromsalesorpurchasesthataredenominated

inacurrencyotherthanthefunctionalcurrencyofGroupentities,whichisRM.TheforeigncurrenciesinwhichthesetransactionsaredenominatedaremainlyUSDollars(“USD”),EuropeanDollars(“Euro”)andJapaneseYen(“JPY”).

TheCompanyentersintoforwardforeigncurrencyexchangecontractstolimititsexposureonforeigncurrencyreceiptsandpayments,whenitisdeemednecessary.

TheGroupandtheCompanyalsoholdcashandcashequivalentsdenominatedinforeigncurrenciesforworkingcapitalpurposes.Atthereportingdate,suchforeigncurrencybalances(inUSD)amountedtoRM14,672,000(2014:RM62,126,000)andRM2,242,000(2014:RM15,360,000)fortheGroupandtheCompanyrespectively.

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Annual Report 2015


(d) Foreign currency risk (contd.)

Sensitivityanalysisforforeigncurrencyrisk

ThefollowingtabledemonstratesthesensitivityoftheGroup’sprofitnetoftaxtoareasonablypossiblechange intheUSD,EuroandJPYexchangeratesagainsttherespectivefunctionalcurrenciesoftheGroupentities,withallothervariablesheldconstant.

2015 2014 Profit net of tax Profit net of tax RM’000 RM’000 Group

USD/RM -strengthened20%(2014:5%) +5,086 +3,225 -weakened5%(2014:5%) -1,272 -3,225 Euro/RM -strengthened20%(2014:5%) +115 +32 -weakened5%(2014:5%) -29 -32 JPY/RM -strengthened20%(2014:5%) -13 +70 -weakened5%(2014:5%) +3 -70

Company

USD/RM -strengthened20%(2014:5%) +1,301 +1,351 -weakened5%(2014:5%) -325 -1,351 36. Capital management

TheprimaryobjectiveoftheGroup’scapitalmanagementistoensurethatitmaintainsastrongcreditratingandhealthycapitalratiosinordertosupportitsbusinessandmaximiseshareholdervalue.

TheGroupmanagesitscapitalstructureandmakesadjustmentstoit,inlightofchangesineconomicconditions.Tomaintainoradjustthecapitalstructure,theGroupmayadjustthedividendpaymenttoshareholders,returncapitaltoshareholdersorissuenewshares.Nochangesweremadeintheobjectives,policiesorprocessesduringtheyearsended31July2015and31July2014.

TheGroupmonitorscapitalusingagearingratio,whichisnetdebtdividedbytotalcapitalplusnetdebt.TheGroupincludeswithinnetdebt,loansandborrowings,tradeandotherpayables,lesscashandbankbalancesandheldfortradinginvestments.CapitalincludesequityattributabletotheownersoftheCompany.

Group Company Note 2015 2014 2015 2014 RM’000 RM’000 RM’000 RM’000

Loansandborrowings 25 437,014 349,826 223,805 203,262 Tradeandotherpayables 26 137,877 153,958 92,571 97,602 Cashandbankbalances 24 (56,277) (88,252) (7,535) (25,636) ------------------ ------------------ ------------------ ------------------ Netdebts 518,614 415,532 308,841 275,228 ------------------ ------------------ ------------------ ------------------ Equityattributabletothe ownersoftheCompany 673,509 705,904 620,849 619,755 ------------------ ------------------ ------------------ ------------------ Capitalandnetdebt 1,192,123 1,121,436 929,690 894,983 ================ ================ ================ ================ Gearingratio 44% 37% 33% 31% ================ ================ ================ ================


123


Annual Report 2015


37. Segment information

Formanagementpurposes,theGroupisorganisedintobusinessunitsbasedontheirproductsandservices,andhasfourreportableoperatingsegmentsasfollows:

i. The logging segment is involved in extraction, sale of logs and subcontractor for tree planting(reforestation).

ii. Themanufacturingsegment is inthebusinessofmanufacturingandtradingofplywood,veneer, rawandlaminatedparticleboard,sawntimber,fingerjointmoulding,charcoalandsupplyofelectricityforitsmanufacturingactivities.

iii. Theplantationsegmentisinvolvedincultivationofoilpalmandsalesoffreshfruitbunch.

iv. Theothers segment is involved in salesofgrocery,provisionof towageand transportationservices,insuranceservices,propertyholdinganddevelopment.

Except as indicated above, no operating segments has been aggregated to form the above reportableoperatingsegments.

Management monitors the operating results of its business units separately for the purpose of makingdecisionsaboutresourceallocationandperformanceassessment.Segmentperformanceisevaluatedbasedonoperatingprofitor losswhich, incertainrespectsasexplainedinthetablebelow, ismeasureddifferentlyfromoperatingprofitorlossintheconsolidatedfinancialstatements.Groupfinancing(includingfinancecosts)andincometaxesaremanagedonagroupbasisandarenotallocatedtooperatingsegments.

Transferpricesbetweenoperatingsegmentsareonanarm’slengthbasisinamannersimilartotransactionswiththirdparties.

Nosegmentanalysisonageographicalbasis isprovidedastheGroup’sactivitieswerewhollycarriedout inMalaysia.

124


Annual Report 2015

NO

TES

TO

TH

E FI

NA

NC

IAL

STAT

EMEN

TS

For t

he fi

nanc

ial y

ear e

nded

31

July

201

5 (contd.)

37.

Seg

men

t in

form

atio

n (c

ontd

.)

Adj

ustm

ents

Pe

r con

solid

ated

an

d fin

anci

al

Logg

ing

Man

ufac

turi

ng

Plan

tati

on

Oth

ers

elim

inat

ions

st

atem

ents

20

15

201

4 20

15

2014

20

15

2014

20

15

2014

20

15

2014

N

ote

2015

20

14

RM

’000

R

M’0

00

RM

’000

R

M’0

00

RM

’000

R

M’0

00

RM

’000

R

M’0

00

RM

’000

R

M’0

00

R

M’0

00

RM

’000

Re

venu

e

Externalcustomers

284,881

402,211

424,490

437,515

43,553

46,339

1,023

1,05

1

--

75

3,94

788

7,11

6

Inter-segm

ent

201,183

181,115

702

1,052

-

-17,100

20,360

(218

,985

)(202

,527

)A

-

-

--------

--------

----

--------

--------

----

--------

--------

----

--------

--------

----

--------

--------

----

--------

--------

----

--------

--------

----

--------

--------

----

--------

--------

----

--------

--------

----

----

--------

--------

----

--------

--------

Totalrevenue

486,064

583,326

425,192

438,567

43,553

46,339

18,123

21,411

(218

,985

)(202

,527

)

753,94

788

7,11

6

====

====

===

====

====

===

====

====

===

====

====

===

====

====

===

====

====

===

====

====

===

====

====

===

====

====

===

====

====

===

==

====

====

= ==

====

====

=

Resu

lts

Interestincome

1,400

1,382

600

1,687

13

116

160

113

(865

)(1,921

)A

1,30

81,37

7

Am

ort

isat

ion

of

biologicalassets

--

--

4,693

3,942

--

--

4,69

33,94

2

Am

ort

isat

ion

of

intangibleassets

10,140

10,140

--

--

--

--

10

,140

10

,140

A

mo

rtis

atio

n o

f

pr

epai

d le

ase

paym

ents

379

379

1,115

1,099

33

2,931

2,78

5-

-

4,42

84,26

6

Dep

reci

atio

n o

f

investment

pro

pert

ies

-

- -

- -

- 10

9 86

-

-

109

86

Dep

reci

atio

n o

f

property,plant

andequipm

ent

60,502

53,549

18,380

18,429

3,946

1,363

4,604

5,91

6(5)

-B

87,427

79

,257

Othernon-cash

expenses/(income)

116

1,102

(1,358)

292

612

13

2-

-C

(1,223

)1,40

8

Segment

profit/(loss)

(4,790)

17,214

9,278

26,898

180

6,460

(2,302)

402

--

2,36

650

,974

==

====

====

= ==

====

====

= ==

====

====

= ==

====

====

= ==

====

====

= ==

====

====

= ==

====

====

= ==

====

====

= ==

====

====

= ==

====

====

=

====

====

===

====

====

===

125


Annual Report 2015

NO

TES

TO

TH

E FI

NA

NC

IAL

STAT

EMEN

TS

For t

he fi

nanc

ial y

ear e

nded

31

July

201

5 (contd.)

37.

Seg

men

t in

form

atio

n (c

ontd

.)

Adj

ustm

ents

Pe

r con

solid

ated

an

d fin

anci

al

Logg

ing

Man

ufac

turi

ng

Plan

tati

on

Oth

ers

elim

inat

ions

st

atem

ents

20

15

201

4 20

15

2014

20

15

2014

20

15

2014

20

15

2014

N

ote

2015

20

14

RM

’000

R

M’0

00

RM

’000

R

M’0

00

RM

’000

R

M’0

00

RM

’000

R

M’0

00

RM

’000

R

M’0

00

R

M’0

00

RM

’000

A

sset

s

A

dditi

ons

to

non-

curr

ent

assets

36,025

139,925

69,490

19,892

37,627

44,748

14,560

54,820

(5,220

)(2,961

)D

152,48

225

6,42

4

Segmentassets

627,621

617,851

502,377

373,016

228,958

197,596

142,486

152,81

0

(227

,681

)(105

,594

)E

1,27

3,76

11,23

5,67

9

====

====

===

====

====

===

====

====

===

====

====

===

====

====

===

====

====

===

====

====

===

====

====

===

====

====

===

====

====

===

==

====

====

==

====

====

===

Segment liabilities

342,337

332,527

264,564

137,501

155,915

131,285

60,856

70,424

(223

,380

)(141

,929

)F

600,29

252

9,80

8

====

====

===

====

====

===

====

====

===

====

====

===

====

====

===

====

====

===

====

====

===

====

====

===

====

====

===

====

====

===

==

====

====

==

====

====

===

126


Annual Report 2015


37. Segment information (contd.)

A Inter-segmentrevenuesandinterestincomeareeliminatedonconsolidation.

B Theamountrelatingtogainondisposalofproperty,plantandequipmentbetweenfellowsubsidiariesiseliminatedonconsolidation.

C Othermaterialnon-cashexpensesconsistofthefollowingitemsaspresentedintherespectivenotestothefinancialstatements:

Note 2015 2014 RM’000 RM’000

Reversalofimpairmentlossontradereceivables 7 - (24) Impairmentofproperty,plantandequipment 7 - 1,048 (Reversalof)/inventorywrite-down 7 (1,386) 173 Shorttermaccumulatingcompensatedabsences 8 163 211 ------------------ ------------------ (1,223) 1,408 ================ ================

D Additionstonon-currentassetsconsistof: 2015 2014 RM’000 RM’000

Property,plantandequipment 110,462 195,082 Biologicalassets 26,988 22,184 Prepaidlandleasepayment - 10,706 Investmentproperties 9,032 - Investmentsecurities 6,000 28,452 ------------------ ------------------ 152,482 256,424 ================ ================

E Thefollowingitemsdeductedfromsegmentassetstoarriveattotalassetsreportedintheconsolidatedstatementoffinancialposition:

2015 2014 RM’000 RM’000

Inter-segmentassets 227,681 105,594 ================ ================ F Thefollowingitemsareaddedto/(deductedfrom)segmentliabilitiestoarriveattotalliabilitiesreported

intheconsolidatedstatementoffinancialposition:

2015 2014 RM’000 RM’000

Deferredtaxliabilities 1,593 4,823 Inter-segmentliabilities (224,973) (146,752) ------------------ ------------------ (223,380) (141,929) ================ ================

127


Annual Report 2015


37. Segment information (contd.)

Non-current assets information presented above consist of the following items as presented in theconsolidatedstatementoffinancialposition.

2015 2014 RM’000 RM’000

Property,plantandequipment 614,522 603,232 Biologicalassets 165,258 142,963 Prepaidlandleasepayments 91,446 95,874 Investmentproperties 24,496 15,573 Investmentsecurities 16,286 35,827 Intangibleassets 9,881 20,021 ------------------ ------------------ 921,889 913,490 ================ ================ Information about a major customer

RevenuefromonemajorcustomeramounttoRM84,237,000(2014:RM98,211,000)fromfollowingsegments:

2015 2014 RM’000 RM’000

Loggingsegment 84,237 92,227 Manufacturingsegment - 5,984 ------------------ ------------------ 84,237 98,211 ================ ================

38. Subsequent events

On5August2015,theCompanyhasacquired100%equity interest inSuburPropertiesSdn.Bhd.(“SPSB”),PrestigeSuperlandSdn.Bhd.(“PSSB”)andTiasaHeightsSdn.Bhd.(“THSB”),arecompanies incorporatedinMalaysiaforatotalcashconsiderationofRM2each.Alltheabovesubsidiariesarecurrentlydormantandtheirintendedactivitiesarepropertyholdinganddevelopment.

On11August2015,theCompanyhasacquired12millionordinarysharesofRM0.50eachfromPemandangan

JauhPlantationSdn.Bhd.and40millionordinarysharesofRM0.50eachfromKendaieOilPalmPlantationSdn.Bhd.inRimbunanSawitBerhadatatotalcashconsiderationofRM26,000,000.

On7September2015,theCompanyhasacquired100%equityinterestinSuburTiasaR&DSdn.Bhd.(“STRD”),acompanyincorporatedinMalaysiaforatotalcashconsiderationofRM2.STRDiscurrentlydormantanditsintendedprincipalactivitiesarebiotechlaboratoryandresearch,consultancyandgeneraltradingactivities.

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Annual Report 2015


39. Supplementary information - breakdown of retained earnings into realised and unrealised

The breakdown of the retained earnings of theGroup and of theCompany as at 31 July 2015 and 2014intorealisedandunrealisedearningsispresentedinaccordancewiththedirectiveissuedbyBursaMalaysiaSecuritiesBerhaddated25March2010andpreparedinaccordancewithGuidanceonSpecialMatterNo.1,DeterminationofRealisedandUnrealisedProfitsorLosses intheContextofDisclosurePursuantofBursaMalaysiaSecuritiesBerhadListingRequirements,andissuedbytheMalaysianInstituteofAccountants.


TotalretainedearningsoftheCompany andthesubsidiaries

Realised 476,672 488,619 423,393 401,104 Unrealised 1,030 (8,379) 2,732 (1,624) ------------------ ------------------ ------------------ ------------------ 477,702 480,240 426,125 399,480 Less:Consolidatedadjustments 1,083 5,389 - - ------------------ ------------------ ------------------ ------------------ Retainedearningsasperfinancial statement 478,785 485,629 426,125 399,480 ================ ================ ================ ================

129


Annual Report 2015

LIST

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130


Annual Report 2015

ANALYSIS OF SHAREHOLDINGS

As at 30 October 2015

Share Capital

AuthorisedShareCapital : RM1,000,000,000.00

IssuedandFullyPaid-upShareCapital : RM209,000,000.00

ClassofShares : OrdinarySharesofRM1.00each

VotingRights : One(1)voteperOrdinaryShare

Distribution schedule of ordinary shares

No. of Holders Holdings Total Holdings %

101 lessthan100shares 3,352 0.001

194 100to1,000shares 147,143 0.08

2,591 1,001to10,000shares 6,574,079 3.50

285 10,001to100,000shares 8,189,803 4.36

50 100,001tolessthan5%ofissuedshares 76,492,838 40.66

5 5%andaboveofissuedshares 96,716,785 51.41

3,226 188,124,0002 100.00

1 Lessthan0.01%

2 Excluding20,876,000ordinarysharesofRM1.00eachboughtbackbytheCompanyandretainedastreasurysharesbasedonRecordofDepositorsasat30October2015

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Annual Report 2015

LIST OF SUBSTANTIAL SHAREHOLDERS As at 30 October 2015

DIRECTORS’ INTERESTS As at 30 October 2015

Name No. of Ordinary Shares of RM1.00 each

Direct Interest Indirect Interest

1. TiongTohSiongHoldingsSdn.Bhd. 61,950,0211

(32.93%*)3,507,0122

(1.86%*)

2. KintaHijauSdn.Bhd. 16,937,5323

(9.00%*)-

3. RayaAbadiSdn.Bhd. 16,575,033(8.81%*)

-

4. TeckSingLikEnterpriseSdn.Bhd. 4,679,977(2.49%*)

66,507,0334

(35.35%*)

5. YBhg.TanSriDatukSirDiongHiewKing@TiongHiewKing

1,109,120(0.59%*)

71,187,0105

(37.84%*)

1 37,000,000shares,23,000,000sharesand1,500,000sharesareheldthroughEBNominees(Tempatan)Sdn.Bhd.,RHBNominees(Tempatan)Sdn.Bhd.andRHBCapitalNominees(Tempatan)Sdn.Bhd.respectively

2 DeemedinterestedbyvirtueofitssubstantialshareholdingsinTiongTohSiong&SonsSdn.Bhd.

3 6,900,000sharesareheldthroughEBNominees(Tempatan)Sdn.Bhd.

4 DeemedinterestedbyvirtueofitssubstantialshareholdingsinTiongTohSiongHoldingsSdn.Bhd.,TiongTohSiongEnterprisesSdn.Bhd.andTiongTohSiong&SonsSdn.Bhd.

5 DeemedinterestedbyvirtueofhissubstantialshareholdingsinTiongTohSiongHoldingsSdn.Bhd.,TiongTohSiongEnterprisesSdn.Bhd.,TiongTohSiong&SonsSdn.Bhd.andTeckSingLikEnterpriseSdn.Bhd.

* Excluding20,876,000ordinarysharesofRM1.00eachboughtbackbytheCompanyandretainedastreasurysharesasat30October2015

Name No. of Ordinary Shares Held in the Company

Direct Interest %* Indirect Interest %*

1. Mr.TiongKiongKing 1,284,0431 0.68 - -

2. YBhg.TemenggongDatukKennethKanyananakTemenggongKoh

70,5952 0.04 - -

3. YBhg.Dato’TiongIng 1,775,213 0.94 500,2753 0.27

4. MadamNguYingPing - - - -

5. Mr.TiongIngMing - - - -

6. Mr.PohKeeEng - - - -

TheDirectorsbyvirtueoftheirinterestsinsharesintheCompanyarealsodeemedtohaveinterestsinsharesinallofitsrelatedcorporationstotheextenttheCompanyhasaninterest,pursuanttoSection6AoftheCompaniesAct,1965.

Notes:1 1,221,373sharesand51,000sharesareheldthroughAMSECNominees(Tempatan)Sdn.Bhd.andMayban

Nominees(Tempatan)Sdn.Bhd.respectively

2 SharesareheldthroughPublicNominees(Tempatan)Sdn.Bhd.

3 DeemedinterestedbyvirtueofhersubstantialinterestsinUniqueWoodSdn.Bhd.,ETIBlessedHoldingsSdn.Bhd.andtheinterestsofherchildrenintheCompany

* Excluding20,876,000ordinarysharesofRM1.00eachboughtbackbytheCompanyandretainedastreasurysharesasat30October2015

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Annual Report 2015

LIST OF THIRTY LARGEST SECURITIES ACCOUNTS HOLDERS As at 30 October 2015

NamesNo. of ordinary

shares of RM1.00 each

Percentage%*

1. EBNominees(Tempatan)SendirianBerhad-PledgedsecuritiesaccountforTiongTohSiongHoldingsSdn.Bhd. (UpperLanang)

37,000,000 19.67

2. RHBNominees(Tempatan)SendirianBerhad-BankofChina(Malaysia)BerhadPledgedSecuritiesAccountfor TiongTohSiongHoldingsSdn.Bhd.

23,000,000 12.23

3. RayaAbadiSdn.Bhd. 16,575,033 8.81

4. HSBCNominees(Asing)Sdn.Bhd.-ExemptANforCreditSuisse(SGBR-TST-ASING)

10,104,220 5.37

5. KintaHijauSdn.Bhd. 10,037,532 5.34

6. PertumbuhanTiasaSdn.Bhd. 8,611,032 4.58

7. PertumbuhanAbadiEnterprisesSdn.Bhd. 7,522,295 4.00

8. AsanasSdn.Bhd. 7,200,000 3.83

9. EBNominees(Tempatan)SendirianBerhad-PledgedsecuritiesaccountforKintaHijauSdn.Bhd.(UpperLanang)

6,900,000 3.67

10. InsanAngunSdn.Bhd. 6,800,000 3.61

11. DB(Malaysia)Nominee(Asing)Sdn.Bhd.-ExemptAnForBankOfSingaporeLimited

4,165,500 2.21

12. GlobegateAllianceSdn.Bhd. 3,673,950 1.95

13. TiongTohSiong&SonsSdn.Bhd. 3,507,012 1.86

14. SerranoGroupLimited 2,639,490 1.40

15. RHBCapitalNominees(Tempatan)Sdn.Bhd.-PledgedSecuritiesAccountForTeckSingLikEnterpriseSdnBhd

2,600,000 1.38

16. TeckSingLikEnterpriseSdn.Bhd. 2,079,977 1.11

17. NeohChooEe&CompanySdn.Bhd. 1,711,200 0.91

18. UOBMNominees(Asing)Sdn.Bhd.-UnitedOverseasBankNominees(Pte)LtdforNovelInvestmentGroupLimited

1,574,075 0.84

19. RHBCapitalNominees(Tempatan)Sdn.Bhd-RHBBank(L)LtdforTiongTohSiongHoldingsSdn.Bhd.

1,500,000 0.80

20. UOBMNominees(Asing)Sdn.Bhd.-UnitedOverseasBankNominees(Pte)LtdforMaxFortuneResourcesInc.

1,449,200 0.77

21. AMSECNominees(Tempatan)Sdn.Bhd.-PledgedsecuritiesaccountforTiongKiongKing

1,213,473 0.65

22. Dato’TiongIng 1,211,233 0.64

23. CIMBSECNominees(Tempatan)Sdn.Bhd.-CIMBBankforNustinasSdn.Bhd.(MQ0516)

1,195,950 0.64

24. TanSriDatukSirDiongHiewKing@TiongHiewKing 1,109,120 0.59

25. TiongTohSiongEnterprisesSdn.Bhd. 1,050,000 0.56

26. KenangaNominees(Tempatan)Sdn.Bhd.-PledgedsecuritiesaccountforDatukTiongThaiKing

987,120 0.52

27. CartabanNominees(Tempatan)Sdn.Bhd.-AXAAffinGeneralInsuranceBerhad

845,000 0.45

28. MaybankNominees(Asing)Sdn.Bhd.-ExemptAnForDBSBankLimited(ClientA/C)

770,000 0.40

29. Dato’TiongIng 529,435 0.28

30. DynaquestSdn.Bhd. 460,000 0.24

Total 168,021,847 89.31

* Excluding20,876,000ordinarysharesofRM1.00eachboughtbackbytheCompanyandretainedastreasurysharesbasedontheRecordofDepositorsasat30October2015

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Annual Report 2015

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Twentieth Annual General Meeting of Subur Tiasa Holdings Berhad (“theCompany”)willbeheldat theCompany’sAuditoriumRoom,GroundFloor,No.66-78,PusatSuriaPermata,JalanUpper Lanang, C.D.T. 123, 96000 Sibu, Sarawak on Tuesday, 22 December 2015 at 11.30 a.m. for the followingpurposes:

A G E N D A

As Ordinary Business 1. To receive the Audited Financial Statements for the financial year ended 31 July 2015

togetherwiththeReportsoftheDirectorsandAuditorsthereon. 2. To approve the payment of directors’ fees of RM335,000 for the financial year ended

31July2015. 3. Tore-electMr.TiongIngMingwhoretiresinaccordancewithArticle86oftheCompany’s

ArticlesofAssociation. 4. To re-electMr.PohKeeEngwho retires in accordancewithArticle90of theCompany’s

ArticlesofAssociation. 5. Toconsiderandifthoughtfit,topassthefollowingresolution: “THATpursuanttoSection129(6)oftheCompaniesAct,1965,YBhg.TemenggongDatuk

Kenneth Kanyan anak Temenggong Koh be hereby re-appointed as a director of theCompanytoholdofficeuntiltheconclusionofthenextannualgeneralmeeting.”

6. ToappointauditorsoftheCompanyandtoauthorisetheDirectorstofixtheirremuneration.

A Notice of Nomination pursuant to Section 172(11) of the Companies Act, 1965 from a member of the Company has been received for the nomination of Messrs. Crowe Horwath for appointment as Auditors of the Company and the member has proposed the following Ordinary Resolution:

“THAT, Messrs. Crowe Horwath, having consented to act, be and are hereby appointed as Auditors of the Company in place of the retiring auditors, Messrs. Ernst & Young and to hold office until the conclusion of the next annual general meeting and that the Directors be authorised to determine their remuneration.”

As Special Business 7. Toconsiderand,ifthoughtfit,passthefollowingordinaryresolution: Continuation in office as Independent Non-Executive Director pursuant to

Recommendation 3.3 of the Malaysian Code on Corporate Governance 2012 “THAT, subject to passing of Resolution 4, approval be and is hereby given to YBhg.

Temenggong Datuk Kenneth Kanyan anak Temenggong Koh who has served as anIndependent Non-Executive Director of the Company for a consecutive term of morethannine(9)years,tocontinueinofficeasanIndependentNon-ExecutiveDirectoroftheCompany.”

Resolution 1

Resolution 2

Resolution 3

Resolution 4

Resolution 5

Resolution 6

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Annual Report 2015

8. Toconsiderand,ifthoughtfit,passthefollowingordinaryresolution: Proposed renewal of authority for purchase of own shares by the Company

“THAT,subjectalwaystotheCompaniesAct,1965(“Act”),rules,regulationsandordersmadepursuanttotheAct,provisionsoftheCompany’sMemorandumandArticlesofAssociationand the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“BursaSecurities”)andanyotherrelevantauthorities,theCompanybeherebyunconditionallyandgenerallyauthorisedtopurchaseandholdonthemarketofBursaSecuritiessuchnumberofordinarysharesofRM1.00each(“Shares”)intheCompany(“ProposedShareBuy-Back”)asmaybedeterminedbytheDirectorsfromtimetotimethroughBursaSecuritiesuponsuchtermsandconditionsastheDirectorsmaydeemfit,necessaryandexpedientintheinterestoftheCompanyprovidedthatthetotalaggregatenumberofSharespurchasedand/orheldor to bepurchased and/or held pursuant to this resolution shall not exceed tenpercent(10%)ofthetotalissuedandpaid-upsharecapitaloftheCompanyforthetimebeingandanamountnotexceedingtheCompany’ssharepremiumreserveaccountat thetimeofpurchasebeallocatedbytheCompanyfortheProposedShareBuy-BackANDTHAT,suchSharespurchasedaretoberetainedastreasurysharesanddistributedasdividendsand/orresoldonthemarketofBursaSecurities,orsubsequentlymaybecancelledANDTHATtheDirectorsbeherebyauthorisedandempoweredtodoallactsandthingsandtotakeallsuchsteps and to enter into and execute all commitments, transactions, deeds, agreements,arrangements,undertakings,indemnities,transfers,assignmentsand/orguaranteesastheymaydeemfit,necessary,expedientand/orappropriateinordertoimplement,finaliseandgivefulleffecttotheProposedShareBuy-Backwithfullpowerstoassenttoanyconditions,modifications,revaluations,variationsand/oramendments,asmayberequiredorimposedbyanyrelevantauthorityorauthoritiesANDFURTHERTHATtheauthorityherebygivenwillcommenceimmediatelyuponpassingofthisordinaryresolutionandwillcontinuetobeinforceuntil:

(a) theconclusionofthenextannualgeneralmeeting(“AGM”)oftheCompany,atwhich

timeitwilllapse,unlessbyordinaryresolutionpassedatthatmeeting,theauthorityisrenewed,eitherunconditionallyorsubjecttoconditions;

(b) theexpirationof theperiodwithinwhich thenextAGMof theCompanyafter that

dateisrequiredbylawtobeheld;or (c) revoked or varied by ordinary resolution passed by the shareholders in general

meeting, whicheveroccursfirst,inaccordancewiththeprovisionsoftheguidelinesissuedbyBursa

Securitiesoranyotherrelevantauthorities.” 9. Toconsiderand,ifthoughtfit,passthefollowingordinaryresolution: Proposed renewal of and new shareholder mandate for recurrent related party

transactions of a revenue or trading nature (“Shareholder Mandate”)

“THATapprovalbeherebygiventotheCompanyanditssubsidiaries(“STHGroup”)toenterintoanyofthecategoryofrelatedpartytransactionswhicharerecurrent,ofarevenueortradingnature andarenecessary for day-to-dayoperationsofSTHGroupasoutlined inpoint3(b)of theCircular toShareholdersdated27November2015 (“Circular”),with thespecificrelatedpartiesmentionedthereinsubjectfurthertothefollowing:

(a) thetransactionsareintheordinarycourseofbusinessandareonnormalcommercial

terms which are not more favourable to the related parties than those generallyavailabletothepublicandnotdetrimentaltotheinterestoftheminorityshareholders;and

NOTICE OF ANNUAL GENERAL MEETING (contd.)

Resolution 7

Resolution 8

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Annual Report 2015


(b) disclosure ismade in theannual reportabreakdownof theaggregatevalueof thetransactions conducted pursuant to the ShareholderMandate during the financialyearwhere theaggregatevalue isequal toormore than the thresholdprescribedunder Paragraph 10.09(1) of theMainMarket Listing Requirements, and amongstothers,basedonthefollowinginformation:

• thetypeoftherecurrentrelatedpartytransactionsmade;and • thenamesoftherelatedpartiesinvolvedineachtypeoftherecurrentrelated

partytransactionsmadeandtheirrelationshipwiththeCompany. ANDTHATsuchapprovalwillcontinuetobeinforceuntil: (a) theconclusionofthenextannualgeneralmeeting(“AGM”)oftheCompany,atwhich

timeitwilllapse,unlessbyordinaryresolutionpassedatthemeeting,theauthorityisrenewed;

(b) theexpirationof theperiodwithinwhich thenextAGMof theCompanyafter that

date isrequiredtobeheldpursuanttoSection143(1)oftheCompaniesAct,1965(“Act”)[butmustnotextendtosuchextensionasmaybeallowedpursuanttoSection143(2)oftheAct];or

(c) revokedorvariedbyresolutionpassedbytheshareholdersingeneralmeeting, whicheveristheearlier. ANDTHAT theDirectors of theCompany be hereby authorised to complete and do all

such acts and things as theymay consider expedient or necessary to give effect to theShareholderMandate.”

10. To transact any other business which may properly be transacted at an annual general

meeting, due notice of which shall have been previously given in accordance with theCompaniesAct,1965andtheCompany’sArticlesofAssociation.

By Order of the Board of DirectorsLing Chieh Min (MIA 18531)Voon Jan Moi (MAICSA 7021367)JointCompanySecretaries

Dated:27November2015Sibu,Sarawak

Explanatory Notes on Special Business

(a) Ordinary resolution in relation to the re-election of Independent Non-Executive Director (proposed resolution no. 2)

The Nomination Committee and the Board of Directors had assessed the independence of Mr. Tiong Ing Ming and recommended him to be re-elected as Independent Non-Executive Director of the Company.

(b) OrdinaryresolutioninrelationtocontinuationinofficeasIndependentNon-ExecutiveDirectorspursuantto

Recommendation 3.3 of the Malaysian Code on Corporate Governance 2012 (proposed resolution no. 6) The Nomination Committee and the Board of Directors had assessed the independence of YBhg. Temenggong

Datuk Kenneth Kanyan anak Temenggong Koh who has served as Independent Non-Executive Director of the Company for a consecutive term of more than nine (9) years, and recommended him to continue to act as Independent Non-Executive Directors of the Company based on the following justifications:

• he fulfilled the criteria under the definition of Independent Director as stated in the Listing Requirements and therefore would be able to offer impartial judgment and advice to the Board; and

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Annual Report 2015

• he devoted sufficient time and attention to his responsibilities as an Independent Director of the Company. (c) Ordinary resolution on proposed renewal of authority for purchase of own shares by the Company The proposed resolution No. 7, if passed, will renew the authority for the Company to purchase up to ten per cent

(10%) of the issued and paid-up ordinary share capital of the Company through Bursa Malaysia Securities Berhad. The authority to purchase share will expire at the conclusion of the next AGM, unless revoked or varied by ordinary resolution passed by shareholders at general meeting. Please refer to the Statement to Shareholders dated 27 November 2015 for further information.

(d) Ordinary resolution on Shareholder Mandate for recurrent related party transactions Paragraph 10.09 of Main Market Listing Requirements states that with regard to related party transactions which are

recurrent, of a revenue or trading nature and which are necessary for day-to-day operations (“RRPT”), a public listed company may seek a shareholder mandate.

The proposed resolution No. 8, if passed, will authorise the Company and each of its subsidiaries to enter into RRPT with the mandated related parties as identified in point 3(b) of the Circular to Shareholders dated 27 November 2015 (“Circular”), which are necessary for day-to-day operations of the STH Group, provided that such transactions are in the ordinary course of business and are on normal commercial terms which are not more favourable to the related parties than those generally available to the public and not detrimental to the interest of the minority shareholders.

By obtaining the Shareholder Mandate, the necessity to convene separate meetings from time to time to seek shareholders’ approval as and when such RRPT occur would not arise. This would reduce substantial administrative time and costs associated with the convening of such meetings without compromising on the corporate objectives of the STH Group or adversely affecting the business opportunities available to the STH Group. Please refer to the Circular for further information.

Notes:

1. AproxymaybutneednotbeamemberoftheCompanyandtheprovisionofSection149(1)(b)oftheCompaniesAct,1965shallnotapplytotheCompany.

2. Amembershallbeentitledtoappointmorethanone(1)proxytoattendandvoteatthesamemeetingprovidedthattheprovisionsofSection149(1)(c)oftheCompaniesAct,1965arecompliedwith.

3. Whereamemberappointsmorethanone(1)proxy,theappointmentshallbeinvalidunlesshespecifiestheproportionsofhisshareholdingstoberepresentedbyeachproxy.

4. The instrument appointing a proxy shall be inwriting under thehandof the appointeror his attorneydulyauthorisedinwriting,oriftheappointerisacorporation,eitherunderitscommonsealorunderthehandofanofficerorattorneydulyauthorised.

5. Tobevalid,thedulycompletedproxyformmustbedepositedattheregisteredofficeoftheCompanyatNo.66-78, Pusat Suria Permata, JalanUpper Lanang,C.D.T. 123, 96000Sibu, Sarawak not less than 48 hoursbeforethetimeappointedforholdingthemeetingoranyadjournmentthereof.

6. Where a member of the Company is an exempt authorised nominee which holds ordinary shares in theCompany formultiplebeneficialowners inone (1)securitiesaccount (“omnibusaccount”), there isno limitto thenumberof proxieswhich theexemptauthorisednomineemayappoint in respectof eachomnibusaccountitholds.AnexemptauthorisednomineereferstoanauthorisednomineedefinedundertheSecuritiesIndustry(CentralDepositories)Act1991(“SICDA”)whichisexemptedfromcompliancewiththeprovisionsofsubsection25A(1)ofSICDA.

7. AdepositorwhosenameappearsintheRecordofDepositorsasat16December2015shallberegardedasamemberoftheCompanyentitledtoattendthisAnnualGeneralMeetingorappointaproxytoattendandvoteonhisbehalf.


137


Annual Report 2015

NOMINATION LETTER

138


Annual Report 2015

[Thispagehasbeendeliberatelyleftblank]

I/We (Nameinfull)

(IC/Passport/CompanyNo.)of (Address)

beingamember/membersoftheabovenamedCompany,herebyappoint

(Nameinfull) (IC/PassportNo.)of

(Address)orfailinghim,

(Nameinfull) (IC/PassportNo.)

of (Address)

asmy/ourproxytovoteforme/usandonmy/ourbehalfattheTwentiethAnnualGeneralMeetingoftheCompanytobeheldattheCompany’sAuditoriumRoom,GroundFloor,No.66-78,PusatSuriaPermata,JalanUpperLanang,C.D.T.123,96000Sibu,SarawakonTuesday,22December2015at11.30a.m.andanyadjournmentthereof.

Please indicate with an “X” in the appropriate box against each resolution how you wish your vote to be cast. If you do not indicate how you wish your proxy to vote on any resolution, the proxy shall vote as he thinks fit, or at his discretion, abstain from voting.

My/ourproxyistovoteasindicatedbelow:

No. Resolutions For Against

1. Approvalofthedirectors’feesforthefinancialyearended31July2015.

2. Re-electionofMr.TiongIngMingasDirector.

3. Re-electionofMr.PohKeeEngasDirector.

4. Re-appointmentofYBhg.TemenggongDatukKennethKanyananakTemenggongKohasDirector.

5. ToappointMessrs.CroweHorwathasauditorsfortheensuingyear.

6. ToretainYBhg.TemenggongDatukKennethKanyananakTemenggongKohasanIndependentNon-ExecutiveDirector.

7. ProposedrenewalofauthorityforpurchaseofownsharesbytheCompany.

8. Proposedrenewalofandnewshareholdermandateforrecurrentrelatedpartytransactionsofarevenueortradingnature.

ShareholdingRepresentedbyProxy1

ShareholdingRepresentedbyProxy2

Datedthis dayof 2015 Signatureofshareholder(s)/commonsealNotes :

(1) AproxymaybutneednotbeamemberoftheCompanyandtheprovisionofSection149(1)(b)oftheCompaniesAct,1965shallnotapplytotheCompany.

(2) Amembershallbeentitledtoappointmorethanone(1)proxytoattendandvoteatthesamemeetingprovidedthattheprovisionsofSection149(1)(c)oftheCompaniesAct,1965arecompliedwith.

(3) Whereamemberappointsmorethanone(1)proxy,theappointmentshallbeinvalidunlesshespecifiestheproportionsofhisshareholdingstoberepresentedbyeachproxy.

(4) Theinstrumentappointingaproxyshallbeinwritingunderthehandoftheappointerorhisattorneydulyauthorisedinwriting,oriftheappointerisacorporation,eitherunderitscommonsealorunderthehandofanofficerorattorneydulyauthorised.

(5) Tobevalid,thedulycompletedproxyformmustbedepositedattheregisteredofficeoftheCompanyatNo.66-78,PusatSuriaPermata,JalanUpperLanang,C.D.T.123,96000Sibu,Sarawaknot lessthan48hoursbeforethetimeappointedforholdingthemeetingoranyadjournmentthereof.

(6) WhereamemberoftheCompanyisanexemptauthorisednomineewhichholdsordinarysharesintheCompanyformultiplebeneficialownersinone(1)securitiesaccount(“omnibusaccount”),thereisnolimittothenumberofproxieswhichtheexemptauthorisednomineemayappointinrespectofeachomnibusaccountitholds.AnexemptauthorisednomineereferstoanauthorisednomineedefinedundertheSecuritiesIndustry(CentralDepositories)Act1991(“SICDA”)whichisexemptedfromcompliancewiththeprovisionsofsubsection25A(1)ofSICDA.

(7) AdepositorwhosenameappearsintheRecordofDepositorsasat16December2015shallberegardedasamemberoftheCompanyentitledtoattendthisAnnualGeneralMeetingorappointaproxytoattendandvoteonhisbehalf.

Subur Tiasa Holdings Berhad(CompanyNo.341792-W)(IncorporatedinMalaysia)

FORM OF PROXY

TheSecretarySubur Tiasa Holdings BerhadNo66-78,PusatSuriaPermataJalanUpperLanang,C.D.T.12396000Sibu,SarawakMalaysia

AffixStamp

Here

SU

BU

R T

IAS

A H

OLD

ING

S B

ERH

AD

(341792-W)

Annual R

eport 2015

No. 66-78, Pusat Suria Permata, Jalan Upper Lanang,C.D.T. 123, 96000 Sibu, Sarawak, Malaysia.

T +6084 211555 F +6084 211886E [email protected] www.suburtiasa.com.my

ANNUAL REPORT 2015

corporate social responsibility - malaysiastock.biz 2015/11/27 · 14 s t h b 341792w) a r 2015...

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