realising our vision of excellence - malaysiastock.biz

As one of Malaysia’s leading geotechnical engineering companies, Emas Kiara has always been at the forefront of designing environmentally-friendly engineering solutions through geosynthetics. Throughout the years in the dynamic nature of this competitive environment, we have built a strong foundation due to our extensive team of professionals, and committed stakeholders and customers. Therefore, we are confident in expanding our capabilities to capitalise on new opportunities in property development. One of our current developments in this industry, Pinnacle Towers, serves as a successful embodiment of the merging of Emas Kiara’s green engineering solutions with a luxuriously urban lifestyle.

RATIONALE

Realising Our Vision of Excellence

Corporate Information

Corporate InformationCorporate Structure

23

202185

Financial Reports

Directors’ Responsibility StatementFinancial ReportsSupplementary Information

Board of Directors

Chairman’s StatementProfile of Directors

47

Additional Information

Additional Compliance Information DisclosuresInformation in relation to ESOSList of propertiesShareholders’ InformationNotice of the Seventeenth Annual General Meeting

Form of Proxy

8688899093Governance

Statement on Corporate GovernanceAudit Committee Report Statement on Risk Management and Internal

Control

101518

CONTENTS

EMAS KIARA INDUSTRIES BERHAD2

BOARD OF DIRECTORS

Dato’ Ikmal Hijaz Bin Hashim Independent Non-Executive Chairman(Appointed on 26 February 2016)

Mr. Ng Liang Khiang Non Independent Executive Director(Appointed on 26 February 2016)

Ms. Cindi Sim Non Independent Executive Director(Appointed on 26 February 2016)

Mr. Simon Sim Yow Yung Non Independent Executive Director(Appointed on 26 February 2016)

Ms. Wong Yean Ni Non Independent Executive Director(Appointed on 26 February 2016)

Mr. Pang Siew Heng Independent Non-Executive Director(Appointed on 26 February 2016)

Mr. Chong Jiun ShyangIndependent Non-Executive Director(Appointed on 28 March 2016)

Tan Sri Dato’ Kamaruzzaman Bin Shariff Executive Chairman(Resigned on 26 February 2016)

Mr. Wong Kong Foo (Roger)Deputy Executive Chairman(Resigned on 26 February 2016)

Mr. Lim Yew Hoe Executive Director(Resigned on 26 February 2016)

Haji Abd Talib Bin BabaIndependent Non-Executive Director(Resigned on 26 February 2016)

Mr. Siew Kah Toong Independent Non-Executive Director(Resigned on 31 December 2015)

Mr. Ong Kheng Swee Independent Non-Executive Director(Resigned on 28 March 2016)

AUDIT COMMITTEE

Mr. Chong Jiun Shyang (Chairman) (Appointed on 28 March 2016)

Dato’ Ikmal Hijaz Bin Hashim(Member) (Appointed on 28 March 2016)

Mr. Pang Siew Heng (Member) (Appointed on 28 March 2016)

SENIOR INDEPENDENT DIRECTOR

Mr. Pang Siew Heng

NOMINATION COMMITTEE

Mr. Pang Siew Heng (Chairman) (Appointed on 28 March 2016)

Dato’ Ikmal Hijaz Bin Hashim (Member) (Appointed on 28 March 2016)

Mr. Chong Jiun Shyang (Member) (Appointed on 28 March 2016)

SECRETARIES

Mr. Lee Wee Hee (MAICSA 0773340) (Appointed on 29 February 2016) Ms. Pow Juliet (MAICSA 7020821) (Appointed on 29 February 2016)

Ms. Lim Hooi Mooi (MAICSA 0799764) (Resigned on 29 February 2016)

Ms. Wong Wai Foong (MAICSA 7001358) (Resigned on 29 February 2016)

REGISTERED OFFICE

Suite 5.11 & 5.12, 5th FloorMenara TJB, No.9Jalan Syed Mohd. Mufti80000, Johor BahruJohor Bahru TakzimTel : (60) 7 224 2823Fax : (60) 7 223 0229

SHARE REGISTRAR

Shareworks Sdn BhdNo. 2-1, Jalan Hartamas 8Sri Hartamas50480 Kuala LumpurWilayah Persekutuan, MalaysiaTel : (60) 3 6201 1120Fax : (60) 3 6201 3121

AUDITORS

Crowe HorwathLevel 16, Tower CMegan Avenue II12 Jalan Yap Kwan Seng50450 Kuala Lumpur

PRINCIPAL BANKERS

AmBank (M) BerhadHong Leong Bank BerhadMalayan Banking BerhadStandard Chartered Bank Malaysia Berhad

STOCK EXCHANGE LISTING

Main Market of Bursa Malaysia Securities Berhad

WEBSITE

www.emaskiara.com

CORPORATE INFORMATION

Annual Report 2015 3

EMAS KIARA INDUSTRIES BERHAD

100% Emas Kiara Marketing Sdn Bhd

100% Kiaratex Exports PTE LTD

90% Emas Kiara Electrical Sdn Bhd

100% Noblecorp Capital Sdn Bhd

MB Max Sdn Bhd

100% Emas Kiara Properties Sdn Bhd

100%

100% Noblecorp Lands (Pahang) Sdn Bhd

100% Noblecorp Sdn Bhd

CORPORATE STRUCTURE


CHAIRMAN’S STATEMENT

Dear Shareholders, following the completion of an Unconditional Take-Over Offer by Kim Feng Capital Sdn Bhd on 26 February 2016, I am pleased to present to you on behalf of the Board of Directors, the Annual Report and Audited Financial Statements of Emas Kiara Industries Berhad (“Company”) and the Group for the financial year ended 31 December 2015.

Operating Environment

The past year has been challenging for our Nation as well as for our Group’s business. Malaysia’s economy had been impacted by the global economic slowdown, falling commodity prices particularly crude oil and depreciation of the Malaysian Ringgit. There were also effects from Governmental policies such as the introduction of Good & Service Tax (“GST”), Real Property Gains Tax (“RPGT”), control measures on bank lending and withdrawal of funds by foreign investors from emerging markets due to global risk aversions.

The Group remained active with its geosynthetic engineering and energy efficient lighting solutions business while focusing its efforts and resources expanding its property development business. Given the competitive and dynamic business environment the Group operates in, Management constantly monitors its business environment and adjusts its strategies accordingly.

Review of Operations

Property Development – The Company completed its disposal of approximately 62 acres of land at Kota Kinabalu Industrial Park (“KKIP”), Kota Kinabalu, Sabah. The completion of sale during the year culminated in the recognition of a net profit of RM 4.197 million.

The Company also completed its acquisition of MB Max Sdn Bhd, which is developing a 38-storey service apartment project known as Pinnacle Tower within Johor Bahru City Centre that has an estimated gross development value (“GDV”) of approximately RM 265 million. The Pinnacle Tower development which is expected to be completed by June 2017, spearheads the Company’s business direction to diversify and expand into property development. As of the date of this report I am pleased to state that 145 units of 273 units have been sold and the construction progress achieved is 38 %.

Geosynthetic Engineering – the Division continue to operate with narrow margins due to competition as the industry is experiencing a slowdown of large scale infrastructure projects designed with geosynthetic products. However, demand for the Division’s products and services is sustained by a larger number of smaller scale projects and the Division’s established reputation, track record and accomplishments within the industry enabled the Division to secure projects successfully. During the year, the Division also faced cost pressures from both its suppliers and business partners caused by prevailing economic factors which affected the Divisions overall performance.

Energy Efficient Lighting Solutions - the Division’s “Energy Efficient Lighting Solutions” with Light Emitting Diodes (“LED”) products managed to maintain its sales performance during the year but recorded lower margins as it had direct cost pressures from exchange rate factors which could not be passed onto its customers directly. Demand for LED light source continue to provide good opportunities but similarly attracts keener competition particularly from new local LED producers. Financial Performance

The Group registered revenue of RM 60.922 million for the year under review, an increase of 39 % from RM 43.757 million recorded in 2014. The profit before taxation and profit after tax increased to RM 5.725 million and to RM 5.253 million respectively as compared to loss before taxation and net loss of RM 3.852 million and RM 3.802 million recorded in 2014. The significant increase in Group net profit was mainly contributed from the recognition of gain arising from the disposal of subsidiaries amounted to RM 8.576 million.

Our diversification into Property Development is to develop a consistent income stream and the strategic decision to acquire an on-going development project namely the Pinnacle Tower project meets the objective. The simultaneous disposal of KKIP land paved way for the acquisition without increasing the Group’s gearing and realized a net profit of RM 4.197 million for the year.


CHAIRMAN’S STATEMENT (CONT’D)

During the year, Pinnacle Tower project at Johor Bahru registered a revenue of RM 4.890 million representing approximately 8% of the Group’s revenue and a profit contribution of RM 1.621 million.

The geosynthetic Division registered RM 37.814 million revenue which is approximately 62 % of the Group’s total revenue compared to the previous year revenue of RM 30.637 million. However, despite an increase in revenue of RM 7.177 million or 23 % from the previous year, profit reduced marginally to RM 0.672 million from RM 0.675 million as the Division faced competition and cost pressures.

Energy Efficient Lighting Solutions Division also registered higher revenues compared to 2014, an increase of approximately 2% from RM 9.149 million to RM 9.334 million. The Division’s revenue contribution is approximately 15 % of the Group’s revenue but posted a lower profit of RM 0.09 million compared to a profit of RM 2.020 million last year. The Division’s performance was impacted by the weakening Ringgit during the year leading to lower margins and corresponding increase in operating costs to develop the project team within the Division.

Construction, M&E and other business contributed RM 8.300 million or 14% of the Group’s total revenue. Collectively, the division posted a loss of RM 3.823 million after taking into account the Group’s corporate costs, professional advisory and related expenses of RM 5.672 million.

The Group’s Net Assets per Share was RM 0.854 compared to RM 0.802 in 2014, whilst the Earnings per Share increased to 5.77 sen as compared to Loss per Share of 4.35 sen recorded in 2014.

Dividend

In anticipation of the required working capital by the Group’s new businesses, the Board of Directors does not recommend any payment of dividend for the financial year under review.

Prospects The Global economic environment is widely anticipated to be tumultuous in 2016, as major economies face uncertain growth outlook amidst waning international demand, fluctuating commodity prices and other socio-political factors. Within Malaysia, our economy is likely to mirror these dampened sentiments especially impacts from weaker crude oil prices and stability of Ringgit currency.

While mindful of these developments, the Company remains committed to develop our key business segment to propel our performance and attain long-term earning sustainability for all our stakeholders. Moving forward, we expect the property development segment to contribute significantly to the Group from financial year 2016 onwards, led by our subsidiary MB Max Sdn Bhd which is developing the Pinnacle Tower development in Johor Bahru. With our positive financial position, the Group intends to seek opportunities that would enable us to accelerate the establishment of our presence, branding and reputation within the property development industry.

The Group’s geosynthetic engineering Division and Energy Efficient Lighting Solutions Division performance is expected to be challenging as both the Divisions operate in a highly competitive, fragmented and changing market conditions.

Corporate Governance

The group is committed to uphold the best practices set out in the Malaysian Code of Corporate Governance 2012 in the conduct of its business activities. Governance practices during the year under review are set out in our Statement of Corporate Governance on pages 10 to 14.

Corporate Social Responsibility

The Company advocates a responsible and ethical business conduct as it believes will promote sustainable economic and social development for its shareholders and other stakeholders over the long run. Emphasis is placed on four key areas namely market place, environment, community and workplace.

Market Place & Environment

The Group’s current business of geosynthetic engineering and energy efficient lighting has been recognized as environmental friendly technology. It shall continue to promote the knowledge and applications of such green technologies to all its stakeholders. Moving forward our development projects would incorporate Green Building Index initiatives. Within the Group’s operations, environmental friendly initiatives have been encouraged such as paperless work procedures, recycling and use of eco-friendly products.


CHAIRMAN’S STATEMENT (CONT’D)

Community

We continue to support various causes deem important to the Group and our employees. The Company encourages participation and supports its employees who volunteers for charitable causes. We also support initiatives undertaken by our clients or suppliers where monetary contribution is accorded such as to the SP Setia Foundation.

During the year, the geosynthetic Division helped design a retaining wall and contributed some of its balance materials for the re-construction of a failed slope at Tanah Rata, Cameron Highlands for an orang asli settlement while the Energy Efficient Lighting Solutions Division contributed its LED lights for a charitable skill centre set up by TA Foundation.

Workplace

We take importance in providing our employees with a conducive, safe and nurturing workplace. Office facilities are maintained on a routine basis and upgraded with LED lighting to ensure our employees have a comfortable working environment. The Company is a member of the Rawang Perdana Industrial Estate (RPIE) committee which actively pursues agendas on the safety and wellbeing of employees working within the industrial estate.

All business Divisions are encouraged to organize activities and events to motivate their team members and also improve inter-departmental fellowship. The Human Resource Department organized festive gatherings, birthday celebrations and outdoor activities such as to climb Mt Kinabalu, Sabah. The Group has a defined allocation for each employee to participate in external training and development programs to nurture their talent, improve their knowledge and skills set.

Acknowledgements

I wish to extend my gratitude and well wishes to the previous Board members and welcome my new fellow Board members whom I am confident are capable and motivated to drive and transform the Company to become a formidable property developer.

In closing, the Company would also like to record its appreciation to our valued clients, business associates, partners, bankers and staff for their invaluable contribution and well as to our shareholders for their confidence in the Company.

Dato’ Ikmal Hijaz Bin Hashim Independent Non-Executive Chairman


PROFILE OF DIRECTORS

DATO’ IKMAL HIJAZ BIN HASHIM a Malaysian aged 63, is the Independent Non-Executive Chairman of EKIB. He was appointed to the Board of EKIB on 26 February 2016.

He completed his Bachelor of Arts with Honours from University Malaya and obtained his MPhil. In Land Management from University of Reading, United Kingdom.

Dato’ Ikmal began his career by serving in the Administrative and Diplomatic Service of the Government from 1976 to 1991 in various capacities in the District Office, Regional Development Authorities and other various Ministries. Dato’ Ikmal then joined United Engineers (M) Berhad in 1991 as the General Manager of the Malaysia-Singapore Second Crossing Project.

On 1 January 1993, he became the Chief Operating Officer of Projek Lebuhraya Utara-Selatan Berhad (“PLUS”) and was subsequently appointed as Managing Director from 1 January 1995 to 30 June 1999. He resigned as Managing Director of PLUS in 1999, and was appointed as the Managing Director of Prolink Development Sdn Bhd (“Prolink”).

Dato’ Ikmal was also appointed as President of the Property Division of the Renong Group while maintaining his position as Managing Director of Prolink. He then held the position of

DATO’ IKMAL HIJAZ BIN HASHIM | Non Executive Chairman

Managing Director at Renong Berhad from 2002 until October 2003.

Dato’ Ikmal subsequently was appointed as Managing Director/Chief Executive Officer of Pos Malaysia Berhad and also as Group Managing Director of Pos Malaysia & services Holdings Berhad (“PMSHB”). He served as the Chief Executive of Iskandar Regional Development (“IRDA”) from February 2007 until end of February 2009 and as Chairman of Faber Group Berhad from 1 March 2009 until 26 June 2014.

Currently he is on the boardroom of EP Manufacturing Berhad, Scomi Engineering Berhad, Nadayu Properties Berhad and RISDA Holdings Sdn Bhd. Dato’ Ikmal is also a member of the Board’s Audit Committee and the Nomination Committee. He has no family relationship with any of the other directors and major shareholders of the Company and does not have any conflict of interest with the Company.

He has had no convictions for any offences within the past 10 years and does not hold any shares of the Company.

Since his appointment, Dato’ Ikmal has attended two Board Meetings out of two held to date.

NG LIANG KHIANG a Malaysian aged 65, is the Executive Director of EKIB. He was appointed to the Board of EKIB on 26 February 2016.

He is the Chairman of MB Builders group of companies and has over forty-three (43) years of experience in construction, property development and project management. In 1972, after completing his secondary education in Muar High School, Mr. Ng began his career as a site supervisor with Binajaya Sdn Bhd in Kuala Lumpur, where he spent eleven (11) years and finally attaining the position of project manager.

In 1983, he co-founded Mahabuilders Sdn Bhd., which was principally involved in construction, property development and property management.

He then went on to co-form various other companies which are principally involved in, amongst others, property development, construction, and hotel management under the “MB Group” brand.

NG LIANG KHIANG | Executive Director

Mr Ng does not hold any directorship in any other public Company. He has no family relationship with any of the other directors and major shareholders of the Company.

Mr Ng also holds directorships and has interests in various private limited companies which carries on business/trade some of which are similar to that carried out by the EKIB Group.

He has had no convictions for any offences within the past 10 years.

He does not directly hold any shares of the Company. He is deemed interested in 929,000 ordinary shares of RM0.50 each in the Company held by Ngsinar Sdn. Bhd. by virtue of Section 6A of the Companies Act, 1965.

Since his appointment, Mr Ng has attended two Board Meetings out of two held to date.


PROFILE OF DIRECTORS (CONT’D)

SIMON SIM YOW YUNG a Malaysian aged 21, is the Executive Director of EKIB. He was appointed to the Board of EKIB on 26 February 2016.

He graduated with a Bachelor of Commerce from the University of Western Australia, Western Australia and joined MB Builders Sdn. Bhd. (MB Builders) a property development company as a Business Development Manager upon his graduation in 2015.

Currently he is overseeing the planning and new marketing initiatives to promote the various products and services developed by MB Builders as well as networking and development of training and motivational activities for MB Builders’s human resource.

He does not hold any directorship in any other public company.

He is the brother of Cindi Sim, an Executive Director and major shareholder of EKIB. Apart from this he has no family relationship

SIMON SIM YOW YUNG | Executive Director

with any of the other directors and major shareholders of the Company.

He has no convictions for any offences within the past 10 years.

He does not directly hold any shares of the Company. He is a major shareholder of the Company and is deemed interested in 45,020,000 ordinary shares of RM0.50 each held by Kim Feng Capital Sdn. Bhd. by virtue of Section 6A of the Companies Act, 1965.

He does not have any conflict of interest with the Company.

Since his appointment, he has attended two Board Meetings out of two held to date.

WONG YEAN NI, a Malaysian aged 37, is the Executive Director of EKIB. She was appointed to the Board of EKIB on 26 February 2016.

She graduated with a Bachelor Degree of Accountancy with honours from University Utara Malaysia.

She is an accountant by profession and a member of the Malaysian Institute of Accountant since 2007 with over 12 years of experience garnered from professional firms and commercial Companies in the area of audit, taxation, consultancy and financial management.

WONG YEAN NI | Executive Director

She does not hold directorship in any other public company. She has no family relationship with any of the other directors and major shareholders of the Company.

She has had no convictions for any offences within the past 10 years and does not hold any shares of the Company.

She does not have any conflict of interest with the Company.

Since her appointment, she has attended two Board Meetings out of two held to date.

CINDI SIM a Malaysian aged 27, is the Executive Director of EKIB. She was appointed to the Board of EKIB on 26 February 2016.

She obtained a Bachelor of Science (Honours) Degree in Applied Accounting from Oxford Brookes University, London and a professional qualification from the Association of Certified Chartered Accountant (ACCA) in 2010. She joined Mahabuilders Sdn.Bhd, a property construction and development company upon her graduation in 2011. She was promoted to Business Development Manager with hands on exposure to all major areas of the property development industry covering building planning and development, project management and execution and financial management.

Currently she is the Group Managing Director of MB Group of Companies and hold directorships in various private limited companies, which are involved in the property development,

CINDI SIM | Executive Director

property investment and the hospitality industry, businesses, some of which are similar to that carried out by the EKIB Group.

Ms Cindi Sim is the sister of Mr Simon Sim Yow Yung, an Executive Director and major shareholder of the Company. Apart from this she has no family relationship with any of the other directors and major shareholders of the Company.

She has no convictions for any offences within the past 10 years.

She directly holds 920,000 ordinary shares of RM0.50 each of the Company. She is a major shareholder of the Company and is deemed interested in 45,020,000 shares of RM0.50 each held by Kim Feng Capital Sdn. Bhd. by virtue of Section 6A of the Companies Act, 1965.

Since her appointment, she has attended two Board Meetings out of two held to date.


PANG SIEW HENG a Malaysian aged 54, is the Independent Non-Executive Director of EKIB. He was appointed to the Board of EKIB on 26 February 2016.

He is a businessman with over 35 years of experience and currently involved in a number of companies engaged in construction, property development and metal fabrication and engineering works. He was involved in various large scale property development projects which include Today Mall, in Ulu Tiram, Johor, Hatten Malacca, Millennium Project in Puchong, Selangor, Bayu Marina, Johor Bahru, and Gold Coast Morib International Resort in Selangor.

Mr Pang is also a member of the Board’s Audit Committee and Chairman of the Nomination Committee.

PANG SIEW HENG | Independent Non-Executive

PROFILE OF DIRECTORS (CONT’D)

Mr Pang holds directorships and has interest in several private limited companies some of which carry out businesses similar to EKIB.

Mr Pang does not hold directorship in any other public Company. He has no family relationship with any of the other directors and major shareholders of the Company.

He has had no convictions for any offences within the past 10 years and does not hold any shares of the Company.

Since his appointment, Mr Pang has attended two Board Meetings out of two held to date.

CHONG JIUN SHYANG a Malaysian aged 51, is the Independent Non-Executive Director of EKIB. He was appointed to the Board of EKIB on 28 March 2016.

Mr Chong is a Chartered Accountant by profession. He is a Chartered Accountant of the Malaysian Institute of Accountants (MIA). Mr Chong has over 27 years of experience in the accounting profession during his career with various private and public listed companies.

He is currently the Group Financial Controller of Komarkorp Berhad, a public company listed on the Main Market of Bursa Malaysia Securities Berhad.

CHONG JIUN SHYANG | Independent Non-Executive Director

He does not hold any directorship in any other public company. He has no family relationship with any other directors and major shareholders of the Company and does not have any conflict of interest with the Company. He has no convictions for any offences within the past 10 years. He does not hold any shares of the Company.

Since his appointment, he has attended two Board Meetings out of two held to date.


STATEMENT ON CORPORATE GOVERNANCE

The Board recognises good corporate governance could provide the framework for a professional and an ethical corporate environment, which would further enhance the Company’s business conduct whilst protecting the interests of the Company’s shareholders and stakeholders.

The Corporate Governance Statement outlines the ways in which the Group has met the principles and recommendations of the Malaysian Code on Corporate Governance 2012 (“MCCG 2012”) pursuant to Paragraph 15.25 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”). Any specific MCCG 2012 recommendations not adopted are highlighted and explained together in this statement below.

BOARD OF DIRECTORS

Board Charter

The Board is responsible and accountable to shareholders for managing the business of the Group. The Board takes responsibility for the overall corporate governance in addition to its primary duties - fiduciary duty and the duty to exercise reasonable care, skill and diligence.

The Board has adopted a Charter that sets out the functions of the Board. The Charter establishes the role of the Board in setting the Company’s objectives and its responsibilities in implementation of such objectives. The Charter, as an avenue to communicate the Company’s approach to important governance practices, is accessible to the public for reference at www.emaskiara.com

Board Composition

The Board during the financial year ended 31 December 2015 comprised six Directors, three of whom are Independent and Non-Executive hence there is an appropriate balance of executive and non-executive directors. The Directors have the necessary competency, experience and knowledge to govern the Group and their appointment are considered from different aspects such as ethnicity, educational background, experiences, knowledge and length of service as an added strength in terms of corporate leadership and management.

The Independent Non-Executive Directors provide an objective view of subject matters and balanced judgements as they are not subordinated to operational considerations. They effectively contribute to ensure all relevant subject matters are evaluated objectively, impartial and in the interest of all stakeholders. None of the Independent Directors’ tenure has exceeded a cumulative term of nine (9) years.

During the period under review, the Board was headed by an Executive Chairman, Tan Sri Dato’ Kamaruzzaman Bin Shariff, appointed since the listing of the Group on the Main Market of Bursa Securities in 2004 and a Deputy Executive Chairman, Mr. Wong Kong Foo to have a balance of authority within the Board. The segregation of authority and responsibility enables the Board to effectively manage the Company and promotes deliberation and consideration of matters before decision making.

Mr Wong Kong Foo also assumed the role of the Chief Executive Officer during the period under review and had overall responsibility for management of the business and implementing policies and decisions set by the Board. He was assisted by an Executive Director, Mr Lim Yew Hoe who was responsible for the day-to-day operations of the business including the functions of the Chief Financial Officer.

A brief profile of Tan Sri Dato’ Kamaruzzaman Bin Shariff, Mr Wong Kong Foo and Mr Lim Yew Hoe is presented below:-.

1) Tan Sri Dato’ Kamaruzzaman Bin Shariff, a Malaysian aged 74. He holds a Bachelor of Arts Degree from the University of Malaya, a Diploma in Public Administration from Carleton University, Canada and a Masters in Public Administration (MPA) from the Syracuse University, USA. Tan Sri Dato’ Kamaruzzaman held various senior positions in the Federal and State Government during his thirty-eight (38) years tenure in the Malaysian Administrative and Diplomatic Service. He served his last six (6) years in the Malaysian Administrative and Diplomatic Service as the Mayor of Kuala Lumpur from 1995 to 2001.

2) Wong Kong Foo, a Malaysian aged 55. Mr. Wong is an entrepreneur with more than 25 years’ experience in business and management. He co-founded the EKIB Group and was the Managing Director before becoming the Deputy Executive Chairman of the EKIB Group. His other business investments include interests in oil & gas, property assets and civil engineering construction.

3) Lim Yew Hoe, a Malaysian aged 47. Professionally, he holds an Executive Master’s in Business Administration from Greenwich University, Australia and has work experiences ranging from operations management, finance, marketing and sales particularly in the geosynthetic industry.

Consequent to the Unconditional Take-Over Offer by Kim Feng Capital Sdn Bhd on 26 February 2016, Tan Sri Dato’ Kamaruzzaman Bin Shariff, Mr Wong Kong Foo, Mr Lim Yew Hoe and Haji Abd Talib Bin Baba resigned from the Board and the following new appointments were made:-

Dato’ Ikmal Hijaz Bin Hashim

-- Independent Non-Executive Chairman

Mr. Ng Liang Khiang -- Non Independent Executive Director

Ms. Cindi Sim -- Non Independent Executive Director

Mr. Simon Sim Yow Yung -- Non Independent Executive Director

Ms. Wong Yean Ni -- Non Independent Executive Director

Mr. Pang Siew Heng -- Independent Non Executive Director


STATEMENT ON CORPORATE GOVERNANCE (CONT’D)

On 28 March 2016, Mr Chong Jiun Shyang was appointed as Independent Non Executive Director following resignation of Mr Ong Kheng Swee as director.

At the date of this report, the Board comprises of 4 Executive Directors and 3 Independent Directors. It is helmed by an Independent Non-Executive Chairman, Dato’ Ikmal Hijaz Bin Hashim while the executive function is currently jointly exercised by the 4 Executive Directors. The recommendations under MCCG 2012 in respect of the positions of Chairman and Chief Executive Officer being held by different individuals will be looked into once the current Board has had the opportunity to properly assess the structure, and dynamics between the Board and Management.

The Board has also identified Mr Pang Siew Heng as the Senior Independent Non-Executive Director to whom concerns on governance issues can be addressed to.

The respective profiles of all the Directors are set out on pages 7 to 9 of this Annual Report.

The Board took note of the MCCG 2012 recommendation on best practice in respect of gender diversity of the Board members in appointing female directors and shall prioritize on the gender criterion should any vacancies arises. Currently, the Board has 2 females representation and any new appointment to the Board shall be solely based on merit as recommended by the Nomination Committee. The Board also affirms the policy of equal opportunities with regards to workplace which encapsulates not only to gender, but age and ethnicity.

Roles and Responsibilities

The Board has an important role to play in creating a sustainable future for the Group. A balanced framework is adopted taking into account the interest of all stakeholders and the Group’s strategic plans for sustainability includes business planning, human resource management, risk management and corporate compliances. Segregation of responsibilities within various functions & departments, internal controls and approved policies reinforces the supervisory role of the Board to perform management oversight.

Board Committees

The Board of Directors delegate certain of its governance responsibilities to the following Board Committees, which operate within defined Terms of Reference, to assist the Board in discharging its responsibilities:-

1) Management Committee consists of Executive Directors of the Board. The committee meets regularly to review the Group’s operating units and departments. In attendance are the Heads of Business Units or Department, Finance and relevant personnel. The terms of reference of the performance review includes financial, sales, collection and operational matters.

2) The Audit Committee is comprised solely of the Independent Non-Executive Directors. During the period under review,

Mr. Siew Kah Toong, Haji Abd Talib Bin Baba and Mr Ong Kheng Swee served as the audit committee members. The Nomination Committee is also comprised of the Independent Non-Executive Directors, Mr. Siew Kah Toong and Haji Abd Talib Bin Baba. The summary of the Terms of Reference of the Audit Committee and activities carried out are set out from pages 15 to 17 .

3) The Nomination Committee carried out its duties and responsibilities in accordance with its Terms of Reference. During the financial year, the Nomination Committee held a meeting on 9 February 2015 and the activities undertaken were as follows:-

a. reviewed the Terms of Reference of the Nomination Committee;

b. reviewed the present size, composition of the Board of Directors, the Audit Committee and the Nomination Committee respectively;

c. carried out the overall assessment of the Board, Committees, individual directors and the assessment of independence of directors;

d. reviewed the Board Charter;e. recommended the re-election of Directors who were

retiring pursuant to the Articles of Association of the Company and the re-appointment of Director under Section 129(2) of the Companies Act 1965;

f. Interviewing and recommending the appointment of a new independent director to the Board.

4) The Employee Share Option Committee (“ESOS”) was established on 8 January 2010 comprising of Executive Chairman, Deputy Executive Chairman and an Executive Director. The function of the Committee is mainly to administer the options under the employee share scheme and to regulate the securities. The committee did not hold any meeting during the year. The ESOS Committee tenure ended upon expiry of the Employee Share Option Scheme on 10 January 2015.

The respective Chairman of the Board Committees report the outcome of the Committee Meetings to the Board, and such reports and also the minutes of the Board Committee Meetings would be noted in the Board of Directors’ Meetings.

Board Assessment

The Nomination Committee was satisfied with the performance of the Board and Board Committee. The Board assessment comprises of a Self & Peer Assessment and an Assessment of Independence of Independent Directors.

The Board members were generally satisfied with the evaluation on structure/membership, functionality, terms of reference, Board meetings, content of meetings, Management and their presentations, corporate governance, Board experience and overall effectiveness.

Assessment of Board Committee covered the terms of reference, composition, frequency of meetings, discussions of topics

covered by the committee, independence, access to information, participation, voting of resolutions and overall effectiveness.

All independent directors of the Company fulfilled the requirements as defined under Chapter 1 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad.

Appointment of Directors

The Nomination Committee is responsible for making recommendation for appointment of Directors to the Board. Apart from the annual Board assessment & evaluation review to identify any need to complement the effectiveness of the Board, other circumstances such as retirements, resignations or demise of a Board member or arising from statutory requirements would open the nominations for potential candidates to be considered. Potential Directors would be evaluated on set criteria and including informal meets before any recommendation is made to the Board.

The Company’s Articles of Association provides for all Directors to retire once every three years and such retiring Director shall be eligible for re-election. Directors appointed during the year are subject to election by shareholders at the Annual General Meeting following their appointments. In accordance with Section 129(6) of the Companies Act, 1965 directors over seventy years of age are required to submit themselves for re-appointment annually.

Restriction on Directorship in Listed Company

All directors are required to declare their directorships in other companies. The Board members’ directorship in companies other than the Company and the Group, are well within the restriction of no more than five public listed companies. This is to ensure that their commitment and time are focused on the affairs of the Company thereby enabling them to discharge their duties and responsibilities effectively.

Continuing Education

The Company believes that continuous training for directors is important to enable them to effectively discharge their duties. The Company also recognises the importance of the Directors in keeping abreast with the latest developments in accounting and corporate governance standards and regulatory requirements in order to discharge their duties in an effective manner. The Company will on a continuous basis evaluate and determine the training needs of its directors.

All the Directors of the Company have completed the Mandatory Accreditation Programme (“MAP”) conducted by the Research Institute of Investment Analysts’ Malaysia (“RIIAM”). Apart from MAP, the Directors have also individually or collectively attended various training programmes during the financial year 2015 amongst others, the following:-

a. Advocacy Sessions on Management Discussion & Analysis by Bursa Malaysia Berhad

b. Makmal Transformasi Ekonomi Negeri Terengganu by Performance Management & Delivery Unit (PEMANDU)

c. 2016 Global Outlook Economic Seminar by OCBC Treasury Advisory

d. Malaysia Budget Briefing 2016 by Chartered Institute of Management Accountants

e. 2016 Tax & Budget Outlook Seminar by Crowe Horwathf. Public Practice Programme by Malaysian Institute of

Accountantsg. National Accountants Conference by Malaysian Institute of

Accountantsh. Risk Management & Governance Seminar by Bursa

Malaysia Berhad

REMUNERATION REVIEW

The Board as a whole sets remuneration packages to ensure directors are appropriately remunerated. The Board also review and recommend fees of directors for shareholders’ approval at Annual General Meeting of the Company.

The details of the remuneration of the Directors paid for the financial year 2015 are as follows:-

Executive(RM)

Non-Executive(RM)

Fees 120,000 111,123Salaries and Allowances 894,000 24,500Bonus and Incentives 115,000 - Other Benefits 172,049 -Total 1,301,049 135,623

The Directors total remuneration including salaries, fees, festive bonus, EPF contributions and other benefits in kind during the financial year 2015 falls within the following bands:-

RM Executive Directors

Non-Executive Directors

Nil Cindi SimSimon Sim Yow YungNg Liang KhiangWong Yean Ni

Dato’Ikmal Hijaz Bin Hashim

Pang Siew HengChong Jiun Shyang

Less than 50,000 - Siew Kah ToongHaji Abd Talib Bin

BabaOng Kheng Swee

50,001 – 100,000 - -

100,001 – 150,000 Tan Sri Dato’ Kamaruzzaman Bin Shariff

-

150,001 – 200,000 - -

500,001 – 550,000 Lim Yew Hoe -

550,001 – 600,000 - -

601,000 – 650,000 - -

650,001 – 700,000 Wong Kong Foo -



Foster Commitment

The Directors devote sufficient time to carry out their responsibilities. Time commitment will typically include time needed to prepare for, and attend, board and committee meetings, attend continuous training programmes etc. The attendance record of the Directors at Board of Directors’ Meeting for the financial year 2015, as set out below:-

Directors Attendance at the Board of Directors’ Meeting

Tan Sri Dato’ Kamaruzzaman Bin Shariff 9/9Mr. Wong Kong Foo 7/9Mr. Lim Yew Hoe 9/9Haji Abd Talib Bin Baba 9/9Mr. Siew Kah Toong 8/9Mr. Ong Kheng Swee 8/9

Going forward, the new Board shall look into formulating a policy on time commitment for its Board members and protocols for accepting new directorship in other public companies. At the date of this report, the meeting attendance of Directors is as follows:-

Dato’ Ikmal Hijaz Bin Hashim 2/2Ms. Cindi Sim 2/2Mr. Simon Sim Yow Yung 2/2Mr. Ng Liang Khiang 2/2Mr. Pang Siew Heng 2/2Ms. Wong Yean Ni 2/2Mr. Chong Jiun Shyang 2/2

ETHICAL STANDARDS AND CODE OF CONDUCT

The Company stipulates the standards of ethical behaviour and values expected of Directors and employees in its Code of Conduct. The Board has implemented appropriate internal systems to support, promote and ensure its compliance. The Board through the Nomination Committee will periodically review the Code of Conduct and a summary of the Code of Conduct will be made available on the Company’s corporate website as recommended by the MCCG 2012.

The Board has adopted the Whistleblowing Policy (“Policy”), which sets out the disclosure and protection of whistle blowers and the implementation of the Policy to meet the Company’s ethical obligations. Employees and stakeholders are encouraged to raise serious concerns about any suspected misconduct or malpractice without fear of victimisation in a responsible manner rather than overlooking them or blowing the whistle outside. All concerns can be reported to the Senior Independent Director and he will then report to the Audit Committee.

Upholding Integrity in Financial Reporting

The Board is assisted by the Audit Committee in reviewing the appropriateness of accounting policies applied by the Group

as well as the changes in these policies from time to time. The composition of the Audit Committee, terms of reference and summary of activities during the financial year 2015 are set out in the Audit Committee Report on pages 15 to 17.

The Board is committed to present a balanced and meaningful assessment of the Group’s financial performance and prospects to shareholders, investors and regulatory authorities.

In presenting the annual financial statements and quarterly announcements of financial results, the Board recognises the importance to ensure that the requirements of the accounting standards and relevant regulations are fully complied with in order to present a balanced and fair assessment of the Group’s position and prospects. The Board is assisted by the Audit Committee in overseeing the Group’s financial reporting processes and the quality of its financial reporting. The Board is assisted by the members of the Audit Committee who are financially literate and continue to keep abreast of latest developments in financial reporting requirements and regulatory changes.

Assessment of Suitability and Independence of Auditors

The Group has established a transparent and professional relationship with the external auditors through the Audit Committee. The Audit Committee assesses the suitability and independence of the external auditors. Such procedures entail the provision of written assurance by the external auditors, confirming that they are and have been independent throughout the conduct of the audit engagement with the Company in accordance with the independence criteria set out by the Malaysian Institute of Accountants. Having satisfied itself with the Auditors’ performance, the Audit Committee will recommend their re-appointment to the Board, upon which shareholders’ approval will be sought at the Annual General Meeting.

The Audit Committee had also assessed the independence of Messrs Crowe Horwath as external auditors of the Company as well as reviewed the level of non-audit services to be rendered by Messrs Crowe Horwath to the Company. The Audit Committee was satisfied with Messrs Crowe Horwath’s technical competency and audit independence.

Risk Recognition and Management

The Board has the responsibility for overseeing the principal risks facing the Company and the processes that management has implemented to identify and manage risk. Effective oversight and risk management are a fundamental part of the Company’s business strategy to safeguard shareholders’ investments and the Company’s assets.

The Board, together with senior management, agrees on and review annually the appropriate risk profile and establish an appropriate structure for overseeing risk, involving assistance from the Board Committees and the designated senior management responsible for risk management. Details of the Risk Management and Internal Control Statement are set out on pages 18 to 19.

The Board has established an independent internal audit function that reports directly to the Audit Committee. This internal auditor


13ANNUAL REPORT 2015



function is outsourced to Russell Bedford Malaysia Business Advisory Sdn Bhd. The scope of work covered by the internal auditors is set out in the Statement on Risk Management and Internal Control on pages 18 to 19.

Timely and Reliable Disclosure

The Board recognises that corporate disclosure and information are important for shareholders and investors. The disclosure and decision making process are highly dependent on the adequacy and accuracy of information furnished. As such, in discharging their duties, the Directors have full and unrestricted access to all information pertaining to the Company. The Board ensures that there are adequate processes and systems in place, as well as competent resources to ensure that the financial statements are prepared in a timely manner and represent a true and fair view of the state of affairs of the Company.

Prior to each Board of Directors’ Meeting, the agenda of meeting and board papers would be circulated to all the Directors in advance of meetings to enable full and informed participation, effective discussions and decision making during meetings. Key issues are discussed in depth, alternatives and dissenting points of views and reasons for making a particular decision in spite of those views, responsibility for follow-up action, all are documented clearly in the minutes of meeting, of which would be reviewed to ensure completeness and accuracy. Proper record keeping is evidence of a well-governed company.

Communication and Relationship between the Company and Shareholders

The Board recognises the importance of maintaining an effective two-way communication that enables the Directors and management to communicate effectively with shareholders, other stakeholders and the public generally. The Company’s Corporate Disclosure Policies and Procedures outline the procedures to be followed to ensure timely and full disclosure of material information through Bursa Malaysia.

Material information including the periodic financial results of and developments in the business operations of the Company will be disclosed on a timely basis to Bursa Malaysia and posted to the Company’s website. The release of such information is important part to good corporate governance and in accordance with the Corporate Disclosure Guide. The Company’s corporate website has a clearly dedicated investors’ link which features prominently the corporate information, announcements, financial information as well as the past years annual reports of the Company.

The Company also communicates with its shareholders and other stakeholders through the Company’s Annual Reports and Annual General Meeting (“AGM”). The shareholders’ meetings, particularly the AGM is the principal forum for dialogue with the shareholders of the Company by providing an opportunity for shareholders to attend and participate in an open discussion on any issue with regards to the Group. The Board recognises poll voting for related party transactions and substantive resolutions that require specific shareholders’ approval. Shareholders will be reminded that they have the right to demand a poll vote at general meetings.

The Company’s external auditors attend shareholders’ meetings by invitation and are available to answer shareholders’ questions, where appropriate. Proceedings of the shareholders’ meetings are recorded by the Company Secretary and the Minutes of meetings are available for inspection at the registered office of the Company

Compliance Statement

While the Board is satisfied with the present level of compliance to the recommendations of MCCG 2012, it also recognizes that Corporate Governance is an ongoing and continuing process in line with business expansion and growth. The Board shall continue to review current governance practices, strengthen appropriately and is committed to adopt further recommendations of MCCG 2012 that are relevant for the benefit and interest of all stakeholders.

In light of the recent changes to the Board of Directors on 26th and 29th February 2016, arising from the Unconditional Take-Over Offer by Kim Feng Capital Sdn Bhd, going forward, the new board will be reviewing all Corporate Governance practices to further strengthen the governance practises within the Group.


AUDIT COMMITTEE REPORT

The Board of Directors is pleased to present the following report by the Audit Committee and its activities during the financial year ended 31 December 2015 in accordance with Paragraph 15.15 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad

Membership

During the financial year under review the Audit Committee (“Committee”) comprised of the following members, all of whom are Independent Non-Executive Directors:-

1. Mr. Siew Kah Toong (Chairman) Independent Non-Executive Director

2. Haji Abd Talib Bin Baba (Member) Independent Non-Executive Director

3. Mr. Ong Kheng Swee (Member) Independent Non-Executive Director

The Chairman and members of the Committee, Haji Abd Talib Bin Baba and Mr Ong Kheng Swee are members of the Malaysian Institute of Accountants (“MIA”). Consequent to the Unconditional Take-Over Offer by Kim Feng Capital Sdn Bhd on 26 February 2016, the following directors has been nominated as Audit Committee members.

1. Mr. Chong Jiun Shyang (Chairman) Independent Non-Executive Director

2. Dato’ Ikmal Hijaz Bin Hashim (Member) Independent Non-Executive Director

3. Mr. Pang Siew Heng (Member) Independent Non-Executive Director

Terms of Reference

The Terms of Reference of the Committee are as follows:-

Objectives

The Committee is to serve as a focal point for communication among the Directors, external auditors, internal auditors and the Management on matters relating to financial accounting, reporting and controls. The Committee is to assist the Board in fulfilling its fiduciary responsibilities in respect of accounting policies, reporting practices and auditing of the Group.

The Committee also serves as the Board’s principal agent to ensure independence of the external auditors and the adequacy of disclosure of financial information.

Composition

The Committee shall be appointed by the Board and comprises at least three members all of whom must be Non-Executive Directors

with a majority of them being Independent Directors including the Chairman. The Nomination Committee and the Board review the composition and performance of the Audit Committee, members’ tenure and the effectiveness of the Committee’s structure and processes at least once in three years.

At least one member of the Committee must be a member of the Malaysian Institute of Accountants (“MIA”) or have a degree/masters/doctorate in accounting or finance or at least three years post qualification experience in accounting or finance, or fulfils such other requirements as prescribed or approved by Bursa Malaysia Securities Berhad. No alternate director shall be appointed as a member of Audit Committee. If a member of the Committee resigns or ceases to be a member resulting in the number being reduced to below three, the Board shall fill the vacancy within three months of the event.

Meetings

The Committee shall meet at least four times per year. The quorum for each meeting shall be two members and a majority of members present must be independent directors.

Secretary

The Company Secretary shall be appointed as the Secretary of the Committee. The Secretary shall draw up the agenda for meetings, which shall be circulated together with the relevant meeting papers, to all the members of the Committee and to any other persons who may be required to attend, at least seven days prior to the meeting. Shorter notice is permitted subject to the agreement of all members of the Committee.

The Secretary shall record and circulate the minutes of the meetings of the Committee to all members and to the Directors at their Board of Directors’ Meetings. The minutes must be signed by the Chairman and properly kept at the Registered Office.

Authority

The Committee is authorised by the Board to investigate any matter within its objectives and functions. The Committee has the resources which are required to perform its duties, has full and unrestricted access to any information pertaining to the Company and has direct communication channels with the external auditors, person(s) carrying out the internal audit function or activity and all employees of the Company.

The Committee is also authorised by the Board to obtain independent professional advice as and when necessary.

Representatives of finance, the internal auditors and external auditors shall attend Audit Committee Meetings. Other members of senior management and relevant individuals may attend the meetings


AUDIT COMMITTEE REPORT (CONT’D)

by invitation. At least once a year, the Committee shall meet with the internal auditors and external auditors and in particular with the external auditors without the presence of the Management. The Committee is encouraged to consult the external auditors or independent professionals on the appropriateness of matters and application of approach should a need arises.

Functions

The Committee shall discharge the following functions:-

1. To recommend for approval of the Board the appointment and change of external auditors and their audit fees;

2. To review the quality and effectiveness of the accounting and internal control systems and to review the adequacy of the scope, functions, competency and resources of the internal audit functions that it has the necessary authority to carry out its work;

3. To review the audit plan, scope of examination and audit observations of the internal and external auditors and to ensure that appropriate action is taken by the Management to address the audit observations and the recommendations of the Committee;

4. To review the quarterly and year-end financial statements of the Group prior to submission to the Board for approval. The review should focus primarily on compliance with accounting standards as well as regulatory requirements and the adequacy of information disclosure for a fair presentation of the financial affairs of the Group;

5. To review press releases on financial information, which is of material importance;

6. To review any related party transactions and conflict of interest situations that may arise within the Group, including transactions, procedure on conduct which raises questions of management integrity;

7. To ensure that the internal auditors reports directly to the Committee;

8. To ensure availability of whistleblowing avenues and review fraud detection procedures;

9. To report any breach or non-compliance of the Main Market Listing Requirements if such matters are not satisfactorily resolved by the Board; and

10. To perform such other duties, if any, as may be directed by the Board.

Activities of the Committee

The Committee met six times during the financial year ended 31 December 2015. Details of attendance of the members of the Committee are as follows:-

Name of Member Attendance

Mr. Siew Kah Toong 6/6

Haji Abd Talib Bin Baba 6/6

Mr. Ong Kheng Swee 6/6

Members of the senior management and the Company Secretary were present at all meetings. The External Auditors and the Internal Auditors were also present at the meetings which required their input and advice. During two of the meetings, the Committee held private discussions with the external auditors without the presence of the management.

The minutes of the Committee Meetings were circulated to all members of the Board and material issues were discussed at the Board of Directors’ Meetings. The Committee carried out its duties in accordance with its Terms of Reference during the financial year 2015 as follows:-

1. Financial Reporting

a. In overseeing the Company’s financial reporting focusing particularly on changes in or implementation of major accounting policy changes, significant and unusual events, compliance with accounting standards and other legal requirements, the Committee reviewed the quarterly financial statements for the fourth quarter of 2015 at its meeting held on 24 February 2016.

The quarterly financial statements for the first, second and third quarters of 2015 of which were prepared in compliance with the Malaysian Financial Reporting Standards were reviewed at the Committee Meetings held on 28 May 2015, 21 August 2015 and 23 November 2015.

The Committee’s recommendations were presented

at the respective Board of Directors’ Meetings held subsequently for approval.

b. The Committee reviewed and deliberated at its meeting on 4 April 2016 the annual audited financial statements for the financial year ended 31 December 2015 together with the Reports of the Directors’ and Auditors.

2. External Audit

a. The Committee reviewed the Audit Review Memorandum for the statutory audit of the Group for the financial year ended 31 December 2014 focusing on the areas that would affect the Company’s financial statements and the recent amendments to acts and accounting standards applicable to the Group at its meeting held on 16 April 2015 and its status update on subsequent to the Audit Review Memorandum for the financial year ended 31 December 2014 at its meeting held on 28 May 2015;

b. On 23 November 2015, the Committee reviewed the

Audit Planning Memorandum for the financial year ending 31 December 2015 covering the engagement and reporting requirements, audit approach, significant events, areas of audit emphasis, communication with management, engagement team and the reporting and deliverables.


AUDIT COMMITTEE REPORT (CONT’D)

3. Internal Audit

a. At Meetings held on 28 May 2015 and 21 August 2015, the Committee reviewed the report on the Human Resource Department and one of its subsidiary, Emas Kiara Electrical Sdn Bhd respectively. The report contained the audit objective, scope, operating flow, significant observation, key weaknesses of controls, non-compliance of procedures, summary of findings, management responses and recommendations.

4. Others

a. During the Committee Meeting held on 16 April 2015, the Committee reviewed the related party transactions entered into by the Company and its subsidiaries and the draft Circular to Shareholders on the proposed renewal of shareholders’ mandate and proposed new shareholders’ mandate for recurrent related party transactions;

b. On 16 April 2015, the Committee reviewed the Audit Committee Report, Statement on Corporate Governance and Statement on Risk Management and Internal Control for publication in the 2015 Annual Report;

Internal Audit Function

The Group recognises the importance of an internal audit function in maintaining a sound system of internal control within the Group to safeguard shareholders’ investment and the Group’s assets and to assure the overall effectiveness and efficiency of operations, reliability of financial reporting and compliance with applicable law and regulations.

The size of the operations of the Group does not warrant the Group having an in-house internal auditors division. The Group’s internal audit function is outsourced to an independent professional accounting and consulting firm, Messrs. Russell Bedford Malaysia Business Advisory Sdn Bhd, who reports directly to the Chairman of the Audit Committee.

The internal audit function adopts a risk-based approach in developing its internal audit plan which addresses the potential principal risks associated with the core business processes of the Group. Scheduled internal audits are carried out by the internal auditors based on the internal audit plan and internal audit universe, presented to and approved by the Committee.

The risk assessment is used to examine all auditable areas and its inherent risks. Audits are prioritised according to the assessment of the potential risk exposure. The internal auditors will submit a report to the Committee highlighting the areas for improvement and will subsequently follow-up to review the extent of implementation by the Group of their recommendations. It is the role of the Committee to ensure that the high risks areas are effectively mitigated by controls.

The internal audit plan for the year 2015 was discussed with the internal auditors and approved by the Audit Committee taking into consideration the current level of business activities and importance. During the financial year ended 31 December 2015, the Internal Auditors issued a total of two internal audit reports. The Internal Auditors also reported on the status of implementation and corrective actions taken based previous internal audit findings and recommendations.


Risk management and internal control is fundamental to good corporate governance. The Board of Directors of Emas Kiara Industries Berhad (“Company”) is pleased to provide the following Statement on Risk Management and Internal Control of the Group, which outlines the nature and scope of risk management and internal control of the Group pursuant to Paragraph 15.26(b) of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad.

BOARD ROLES AND RESPONSIBILITIES

The Board recognises the importance of a structured risk management framework and a risk-based internal audit to establish and maintain a sound system of internal control. The Board determines the Company’s level of risk tolerance to safeguard shareholders’ investments and the Company’s assets. The Board affirms its overall responsibility for the Group’s systems of internal control and for reviewing the adequacy and integrity of those systems. Because of the limitations that are inherent in any system of internal control, those systems are designed to manage rather than eliminate the risk of failure to achieve business objectives, and can only provide reasonable and not absolute assurance against material mis-statement or loss.

The Board has been on an ongoing basis identifying, evaluating, responding to and managing the principal risks faced or potentially exposed to, in pursuing the Group’s business objectives. This process has been in place throughout the financial year and up to the date of approval of the annual report.

The Management together with the internal auditors will be reviewing the Group’s Enterprise Risk Management, which involves identifying and assessing principal risks and reviewing the adequacy of the Group’s internal control systems in managing these risks.

RISK MANAGEMENT AND INTERNAL CONTROL SYSTEM

The Board and management practice proactive principal risks identification on a regular basis or as appropriate, particularly any major proposed transactions, changes in nature of activities and/or operating environment, or venturing into new operating environment, of which may entail different risks, and would consider the following appropriate risk response strategies and controls until those risks are managed to and maintained at, a level acceptable to the Board:-

a. accepting the risk, as it may fall within the Company’s risk appetite at that time;b. developing action plans that improve the control structure with the resources it has available to reduce residual risk exposure to an

acceptable level;c. avoiding the risk as the risk may not be manageable or effective controls may be too costly to implement;d. mitigating the risk exposure through strategic partnerships or joint venture arrangement.

The key elements of the Group’s risk management and internal control system are summarised as follows:-

1. Documentation via Terms of Reference and Charters, the responsibilities and functions of the board of directors and each of its board committees;

2. An organisational structure with scopes of responsibilities, lines of reporting and accountability and appropriate levels of delegated authority;

3. Internal policies and procedures for operational, financial and human resource management, some of which have been documented and are subject to yearly review and improvements;

4. Regular, reliable and timely information is provided to the management, covering financial and operational performance for effective monitoring and decision making;

5. Business plans and budgeting process where operating units prepare yearly budget. For the financial year 2015, respective business unit budget was presented to the Board and performances reported each quarter to the Board;

6. Monitoring of performance and financial results against budget at monthly management meeting, with major variances being scrutinized and actions taken, where appropriate; and

7. Active participation and involvement by the executive members of the Board in the objective and strategy setting process and including the day-to-day conduct of business.

Recognising the importance of having risk management processes and practices, the Board continues to follow up on the progress of a formalised and structured framework to enable Management to identify, evaluate, control, monitor and report to the Board the principal risks faced by the Group on an on-going basis, including measures to be taken to address the risks. The framework should be responsive to changes in the business environment and be clearly communicated to all levels within the Company.

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL


The Deputy Executive Chairman and the Executive Director who is also the acting Chief Financial Officer were accountable to the Board for implementing and monitoring the processes for identifying, evaluating, monitoring and reporting of risks and internal control, taking appropriate and timely corrective actions as needed and for providing assurance to the Board that the processes have been carried out. Boththe Deputy Executive Chairman and acting Chief Financial Officer have given assurance to the Board that the Group’s risk management and internal control system is operating adequately and effectively. Consequent to the change of Board on 26th Feb 2016 the Board was provided similar assurances from the current Executive Directors and acting Chief Financial Officer.

INTERNAL AUDIT FUNCTION

The Board acknowledges the importance of internal audit function and has engaged the services of an independent professional accountingand consulting firm, Messrs Russell Bedford Malaysia Business Advisory Sdn Bhd, to provide much of the assurance it requires regarding theeffectiveness as well as the adequacy and integrity of the Group’s systems of internal control.

The internal audit function adopts a risk-based approach in developing its audit plan which addresses all the core auditable areas of the Group based on their risk profile. Scheduled internal audits are carried out by the internal auditors based on the audit plan presented to andapproved by the Audit Committee. The audit focuses on areas with high risk and inadequate controls to ensure that an adequate action planhas in place to improve the controls. For those areas with high risk and adequate controls, the audit ascertains that the risks are effectively mitigated by the controls. On a half yearly basis or earlier as appropriate, the internal auditors report directly to the Audit Committee on areas for improvements and will subsequently follow-up to determine the extent of their recommendations that have been implemented. During the financial year under review, internal audit was performed on the Energy Efficient Lighting Solution Division and procedural reviews on the Group’s Human Resource Department. The total internal audit fees accrued for the financial year 2015 was RM 48,000.00. The Audit Committee considered that the work performed by the Internal Auditors to be adequate considering the level of business activity during the year. The Audit Committee will review the scope of work and the fees of the Internal Auditors in the next financial year.

The Board is of the view that the risk management and internal control systems that had been implemented within the Group is adequate and effective to safeguard Group’s assets and shareholders’ investment. The Group will continue to take measures to strengthen the risk management processes and internal control procedures.

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL (CONT’D)

DIRECTORS’ RESPONSIBILITY STATEMENT FOR THE AUDITED FINANCIAL STATEMENTSThe Directors are required under the Companies Act, 1965 to prepare financial statements for each financial year which have been made out in accordance with applicable Malaysian Financial Reporting Standards (“MFRS”) and the requirements of the Companies Act, 1965 and the Main Market Listing Requirements.

The Directors are responsible to ensure that the financial statements give a true and fair view of the state of affairs of the Group and of the Company at the end of the financial year and of the results and cash flows of the Group and of the Company for the financial year.

In preparing the financial statements, the Directors have:-

• adopted appropriate accounting policies and practices and applied them consistently;

• made judgments and estimates that are prudent and reasonable; and

• prepared the financial statements on a going concern basis.

The Directors are responsible for ensuring that the Group and the Company keep accounting records which disclose with reasonable accuracy the financial position of the Group and of the Company which enable them to ensure that the financial statements comply with the Companies Act, 1965.

The Directors are responsible for taking such steps as are reasonably open to them to safeguard the assets of the Group and of the Company, and to detect and prevent fraud and other irregularities.


FINANCIAL REPORTS

Directors’ Report 22

Statement by Directors 27

Statutory Declaration 27

Independent Auditors’ Report 28

Statements of Financial Position 30

Statements of Profit or Loss andOther Comprehensive Income 31

Statements of Changes in Equity 33

Statements of Cash Flows 35

Notes to the Financial Statements 37

Supplementary Information 85


The directors have pleasure in submitting their report and the audited financial statements of the Group and of the Company for the financial year ended 31 December 2015.

PRINCIPAL ACTIVITIES

The Company is principally an investment holding company. The principal activities of the subsidiaries are set out in Note 6 to the financial statements. There have been no significant changes in the nature of these activities during the current financial year.

RESULTS

Group CompanyRM RM

Profit after taxation for the financial year 5,253,292 3,879,736

Attributable to:-Owners of the Company 5,292,727 3,879,736Non-controlling interests (39,435) -

5,253,292 3,879,736

DIVIDENDS

No dividend was paid since the end of the previous financial year and the directors do not recommend the payment of any dividend for the financial year ended 31 December 2015.

RESERVES AND PROVISIONS

All material transfers to or from reserves or provisions during the financial year are disclosed in the statements of changes in equity.

ISSUE OF SHARES AND DEBENTURES

During the financial year:-

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

(b) the Company increased its issued and paid-up share capital from RM45,126,200 to RM45,929,950 by the of issuance of 1,607,500 new ordinary shares of RM0.50 each for cash pursuant to the exercise of options under the Company’s Employee Share Option Scheme at the exercise price of RM0.50 as disclosed in Note 17 to the financial statements.

The new shares issued rank pari passu in all respects with the existing shares of the Company.

(c) there were no issues of debentures by the Company.

DIRECTORS’ REPORT


OPTIONS GRANTED OVER UNISSUED SHARES

No options were granted to any person to take up unissued shares of the Company during the financial year apart from the issue of options pursuant to the Employees’ Share Option Scheme (‘ESOS’) of the Company.

The ESOS was established with effect on from 11 January 2010 for a period of five (5) years until 10 January 2015. The salient features of the ESOS as per the By-Laws are as follows:

(a) The ESOS is made available to eligible directors and employees of the Group who are employed on a full time basis and are at least eighteen (18) years of age on the date of offer;

(b) The maximum number of options offered under the ESOS does not exceed 15% of the total issued and paid-up share capital of the Company at any point in time during the existence of the ESOS;

(c) The options granted are exercisable anytime within the option period from the date of offer;

(d) The subscription price for the new shares under the ESOS is determined based on the weighted average market price of the Company’s shares as quoted and shown in the Daily Official List issued by Bursa Malaysia Securities Berhad for the five (5) market days immediately preceding the date of offer subject to a discount, if any, of not more than 10%, or at the par value of the shares of RM0.50 each, whichever was higher; and

(e) No director or employee can participate at any time in more than one (1) employees’ share option scheme implemented by any company within the Group.

The options offered to take up unissued ordinary shares of RM0.50 each of the Company and the exercise price were as follows:-

Number of Options Over Ordinary Shares of RM0.50 eachDate ofOffer

ExercisePrice

At1.1.2015 Granted Exercised Lapsed^

At31.12.2015

28.1.2010 RM0.50 3,462,550 - (1,607,500) (1,855,050) -

^ The options expired and lapsed during the financial year.

The Company has been granted exemption by the Companies Commission of Malaysia from having to comply with Section 169(11) of the Companies Act 1965 to disclose the list of option holders who are granted options during the financial year to subscribe for less than 170,000 ordinary shares of the Company.

At the end of the reporting period, the option holders (other than directors), who have been granted options to subscribe for 170,000 ordinary shares and above are as follows:-

Number of Share OptionsName ofOption Holders Grant Date

ExercisePrice

At1.1.2015 Granted Exercised

At31.12.2015

Sandanasamy Richard Douglas 28.1.2010 RM0.50 400,000 - (400,000) -

Edward Thanarajah A/L Easupatham 28.1.2010 RM0.50 40,000 - (40,000) -

DIRECTORS’ REPORT (CONT’D)


DIRECTORS

The directors who have held office since the date of the last report are:

Dato’ Ikmal Hijaz Bin Hashim (Appointed on 26.02.2016)Cindi Sim (Appointed on 26.02.2016)Simon Sim Yow Yung (Appointed on 26.02.2016)Ng Liang Khiang (Appointed on 26.02.2016)Pang Siew Heng (Appointed on 26.02.2016)Wong Yean Ni (Appointed on 26.02.2016)Chong Jiun Shyang (Appointed on 28.03.2016)Siew Kah Toong (Resigned on 31.12.2015)Tan Sri Dato’ Kamaruzzaman Bin Shariff (Resigned on 26.02.2016)Wong Kong Foo (Resigned on 26.02.2016)Lim Yew Hoe (Resigned on 26.02.2016)Haji Abd Talib Bin Baba (Resigned on 26.02.2016)Ong Kheng Swee (Resigned on 28.03.2016 )

DIRECTORS’ INTERESTS

The directors holding office at the end of the financial year and their beneficial interests in the ordinary shares of the Company and of its related corporations during the financial year ended 31 December 2015 as recorded in the Register of Directors’ Shareholdings kept by the Company under Section 134 of the Companies Act 1965 were as follows:

Number Of Ordinary Shares Of RM0.50 EachBalance

At1.1.2015 Bought Sold

BalanceAt

31.12.2015Shares in the CompanyDirect Interests

Tan Sri Dato’ Kamaruzzaman Bin Shariff 6,611,411 - (4,000,000) 2,611,411Wong Kong Foo 21,350,150 - - 21,350,150Lim Yew Hoe 5,374,020 270,000 (5,450,000) 194,020Haji Abd Talib Bin Baba 75,000 25,000 - 100,000

Indirect Interests

Tan Sri Dato’ Kamaruzzaman Bin Shariff 1,645,000 - - 1,645,000Wong Kong Foo 17,839,804 - (8,279,000) 9,560,804Lim Yew Hoe 5,129,000 - (5,129,000) -

By virtue of his interest in the ordinary shares of the Company, Wong Kong Foo is also deemed to have interests in the ordinary shares of all the subsidiaries to the extent that the Company has an interest.



DIRECTORS’ INTERESTS (CONT’D)

The movement of the options granted to the directors in office under the ESOS of the Company at the end the financial year is as follows:-

Number of options over ordinary share of RM0.50 each

Directors Grant DateExercise

PriceAt

1.1.2015 Exercised Lapsed At31.12.2015

Tan Sri Dato’ KamaruzzamanBin Shariff 28.1.2010 RM0.50 180,000 - (180,000) -

Wong Kong Foo 28.1.2010 RM0.50 420,000 - (420,000) -Lim Yew Hoe 28.1.2010 RM0.50 770,000 (270,000) (500,000) -Haji Abd Talib Bin Baba 28.1.2010 RM0.50 75,000 (75,000) - -

DIRECTORS’ BENEFITS

Since the end of the previous financial year, none of the directors has received or become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by the directors as shown in the financial statements) by reason of a contract made by the Company or a related corporation with the director or with a firm of which the director is a member, or with a company in which the director has a substantial financial interest except for any benefits which may be deemed to have been derived by certain directors by virtue of the related party transactions as disclosed in Note 33 to the financial statements.

There were no arrangements during and at the end of the financial year, to which the Company is a party, which had the object of enabling directors to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate except for the share options granted pursuant to the ESOS disclosed in Note 17 to the financial statements.

OTHER STATUTORY INFORMATION

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

(i) proper action had been taken in relation to the writing off of bad debts and the making of allowance for impairment losses on receivables and have satisfied themselves that there are no known bad debts and that adequate allowance had been made for impairment losses on receivables; and

(ii) any current assets other than debts, which were unlikely to be realised in the ordinary course of business had been written down to an amount which they might be expected so to realise.

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

(i) which would necessitate the writing off of bad debts or render the amount of the allowance for impairment losses on receivables in the financial statements of the Group and of the Company inadequate to any material extent; and

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

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

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



OTHER STATUTORY INFORMATION (CONT’D)

The contingent liabilities are disclosed in Note 32 to the financial statements. At the date of this report, there does not exist:-

(i) any charge on the assets of the Group and of the Company which have arisen since the end of the financial year to secure the liabilities of any other person.

(ii) any contingent liabilities of the Group and of the Company which have arisen since the end of the financial year.

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

In the opinion of the directors, the results of the operations of the Group and of the Company during the financial year have not been substantially affected by any item, transaction or event of a material and unusual nature.

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

AUDITORS

The auditors, Messrs. Crowe Horwath, have expressed their willingness to continue in office.

SIGNED IN ACCORDANCE WITH A RESOLUTION OF THE DIRECTORSDATED 14 APRIL 2016

Cindi Sim Ng Liang Khiang



We, Cindi Sim and Ng Liang Khiang, being two of the directors of Emas Kiara Industries Berhad, state that, in the opinion of the directors, the financial statements set out on pages 30 to 84 are drawn up in accordance with Malaysian Financial Reporting Standards, International Financial Reporting Standards and the requirements of the Companies Act 1965 in Malaysia so as to give a true and fair view of the financial position of the Group and of the Company as of 31 December 2015 and of their financial performance and cash flows for the financial year ended on that date.

The supplementary information set out on page 85, which is not part of the financial statements, is prepared in all material respects, in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants and the directive of Bursa Malaysia Securities Berhad.

SIGNED IN ACCORDANCE WITH A RESOLUTION OF THE DIRECTORSDATED 14 APRIL 2016

Cindi Sim Ng Liang Khiang

STATUTORY DECLARATIONPURSUANT TO SECTION 169(16) OF THE COMPANIES ACT 1965

I, Lim Yew Hoe, being the officer primarily responsible for the financial management of Emas Kiara Industries Berhad, do solemnly and sincerely declare that the financial statements set out on pages 30 to 84 are, to the best of my knowledge and belief, correct and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act 1960.

Subscribed and solemnly declared by Lim Yew Hoe, at Johor Bahru in the State of Johor on this 14 APRIL 2016

Before me Lim Yew HoeVasanthi A/P Vadiveloo (No.J258)Commissioner of Oaths

STATEMENT BY DIRECTORSPURSUANT TO SECTION 169(15) OF THE COMPANIES ACT 1965


Report on the Financial Statements

We have audited the financial statements of Emas Kiara Industries Berhad, which comprise the statements of financial position as at 31 December 2015 of the Group and of the Company, and the statements of profit or loss and other comprehensive income, statements of changes in equity and statements of cash flows of the Group and of the Company for the financial year then ended, and a summary of significant accounting policies and other explanatory information, as set out on pages 30 to 84.

Directors’ Responsibility for the Financial Statements

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

Auditors’ Responsibility

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

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

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

Opinion

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

Report on Other Legal and Regulatory Requirements

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

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

(b) We have considered the financial statements and the auditors’ reports of all the subsidiaries of which we have not acted as auditors, which is indicated in Note 6 to the financial statements.

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

(d) The audit reports on the financial statements of the subsidiaries did not contain any qualification or any adverse comment made under Section 174(3) of the Act.

INDEPENDENT AUDITORS’ REPORTTO THE MEMBERS OF EMAS KIARA INDUSTRIES BERHAD(INCORPORATED IN MALAYSIA) COMPANY NO: 485144-H


Other Reporting Requirements

The supplementary information set out on page 85 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the financial statements. The directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants (“MIA Guidance”) and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.

Other Matters

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

Crowe HorwathFirm No: AF 1018Chartered Accountants

Kuala Lumpur14 April 2016

Ooi Song WanApproval No : 2901/10/16 (J)

Chartered Accountant

INDEPENDENT AUDITORS’ REPORTTO THE MEMBERS OF EMAS KIARA INDUSTRIES BERHAD (CONT’D)(INCORPORATED IN MALAYSIA) COMPANY NO: 485144-H


Group Company 2015 2014 2015 2014

Note RM RM RM RMASSETSNON-CURRENT ASSETSProperty, plant and equipment 5 12,404,967 16,653,510 191,893 217,434Investments in subsidiaries 6 - - 12,246,666 44,904,289Investment in an associate 7 2,246 - - -Goodwill 8 4,160,547 - - -Other investments 9 50,000 - - -Trade and other receivables 10 2,679,411 2,969,230 - -

19,297,171 19,622,740 12,438,559 45,121,723CURRENT ASSETSProperty development cost 12 53,936,807 - - -Inventories 13 1,763,261 2,494,159 - -Trade and other receivables 10 50,479,579 58,241,971 47,303,568 14,827,062Current tax assets 3,164,025 921,635 4,975 63,266Cash and cash equivalents 14 21,870,725 20,634,036 17,299,430 13,624,439

131,214,397 82,291,801 64,607,973 28,514,767TOTAL ASSETS 150,511,568 101,914,541 77,046,532 73,636,490

EQUITY AND LIABILITIESEQUITYShare capital 15 45,929,950 45,126,200 45,929,950 45,126,200Reserves 16 32,343,885 26,985,733 24,951,409 21,071,673EQUITY ATTRIBUTABLE TO OWNERS OF THE COMPANY 78,273,835 72,111,933 70,881,359 66,197,873NON-CONTROLLING INTERESTS 181,601 232,007 - -TOTAL EQUITY 78,455,436 72,343,940 70,881,359 66,197,873NON-CURRENT LIABILITIESBorrowings 18 4,575,374 4,106,432 - -Deferred tax liabilities 19 5,712,014 25,000 25,000 25,000Trade and other payables 20 3,146,017 2,931,964 - -

13,433,405 7,063,396 25,000 25,000CURRENT LIABILITIESTrade and other payables 20 56,269,916 20,213,531 6,140,173 7,413,617Borrowings 18 2,352,811 2,293,674 - -

58,622,727 22,507,205 6,140,173 7,413,617TOTAL LIABILITIES 72,056,132 29,570,601 6,165,173 7,438,617TOTAL EQUITY AND LIABILITIES 150,511,568 101,914,541 77,046,532 73,636,490

The annexed notes form an integral part of these financial statements.

STATEMENTS OF FINANCIAL POSITIONAS AT 31 DECEMBER 2015


Group Company 2015 2014 2015 2014

Note RM RM RM RMCONTINUING OPERATIONS

REVENUE 21 60,261,932 43,583,384 - 13,000,000

COST OF SALES (50,522,717) (34,020,258) - -

GROSS PROFIT 9,739,215 9,563,126 - 13,000,000

OTHER INCOME 1,712,759 1,359,346 7,236,465 9,104,942

DISTRIBUTION COSTS (1,037,209) (569,302) - -

ADMINISTRATIVE EXPENSES (8,218,701) (7,191,758) (415,651) (572,267)

OTHER EXPENSES (3,637,733) (1,019,966) (2,941,078) (17,522,229)

FINANCE COSTS 22 (479,236) (430,507) - (160)

SHARE OF PROFIT IN ASSOCIATE 230 - - -

(LOSS)/PROFIT BEFORE TAXATION 23 (1,920,675) 1,710,939 3,879,736 4,010,286

INCOME TAX EXPENSE 24 (471,730) 49,296 - -

(LOSS)/PROFIT AFTER TAXATION FROM CONTINUING OPERATIONS (2,392,405) 1,760,235 3,879,736 4,010,286

DISCONTINUED OPERATIONS

PROFIT/(LOSS) AFTER TAXATION FROM DISCONTINUED OPERATIONS 25 7,645,697 (5,562,512) - -

PROFIT/(LOSS) AFTER TAXATION 5,253,292 (3,802,277) 3,879,736 4,010,286

OTHER COMPREHENSIVE INCOMEItem that may be reclassified subsequently to profit or loss- foreign currency translation 72,306 37,383 - -

TOTAL COMPREHENSIVE INCOME/(EXPENSES) FOR THE FINANCIAL YEAR 5,325,598 (3,764,894) 3,879,736 4,010,286


STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMEFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015


Group Company 2015 2014 2015 2014

Note RM RM RM RMPROFIT/(LOSS) AFTER TAXATION ATTRIBUTABLE TO:- OWNERS OF THE COMPANY 5,292,727 (3,881,414) 3,879,736 4,010,286- NON-CONTROLLING INTERESTS (39,435) 79,137 - -

5,253,292 (3,802,277) 3,879,736 4,010,286

TOTAL COMPREHENSIVE INCOME/(EXPENSES) ATTRIBUTABLE TO:

- OWNERS OF THE COMPANY 5,365,033 (3,844,031) 3,879,736 4,010,286- NON-CONTROLLING INTERESTS (39,435) 79,137 - -

5,325,598 (3,764,894) 3,879,736 4,010,286

(LOSS)/EARNINGS PER ORDINARY SHARE (SEN) Basic - Continuing operations 26 (2.56) 1.88- Discontinued operations 26 8.33 (6.23)Diluted 26 N/A N/A

N/A - Not applicable.


STATEMENTS OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOMEFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015 (CONT’D)


<----------------------- Attributable to owners of the Company -----------------------><------------------- Non-distributable -------------------> Distributable

OrdinaryShare

CapitalShare

Premium

OtherCapital

Reserves

ShareOption

ReserveRetainedEarnings Total

Non-Controlling

InterestsTotal

EquityGroup RM RM RM RM RM RM RM RMBalance at 31.12.2013/1.1.2014 44,622,400 3,175,414 770,742 202,364 26,680,768 75,451,688 39,346 75,491,034

Loss after taxation for the financial year - - - - (3,881,414) (3,881,414) 79,137 (3,802,277)

Other comprehensive income for the financial year:

- foreign currency translation - - 37,383 - - 37,383 - 37,383

Total comprehensive expenses for the financial year - - 37,383 - (3,881,414) (3,844,031) 79,137 (3,764,894)

Contributions by and distribution to owners of the Company:

Exercise of Employee’s Share Options (“ESOS”) 503,800 55,020 - (55,020) - 503,800 - 503,800

Reclassification - - - 114,000 - 114,000 - 114,000

Share Options Cancelled - - - (72,271) 72,271 - - -

Change in ownership interests in subsidiary that do not result in loss of control - - - - (113,524) (113,524) 113,524 -

Total transactions with owners of the Company 503,800 55,020 - (13,291) (41,253) 504,276 113,524 617,800

Balance at 31.12.2014 45,126,200 3,230,434 808,125 189,073 22,758,101 72,111,933 232,007 72,343,940

Balance at 31.12.2014/1.1.2015 45,126,200 3,230,434 808,125 189,073 22,758,101 72,111,933 232,007 72,343,940

Profit after taxation for the financial year - - - - 5,292,727 5,292,727 (39,435) 5,253,292

Other comprehensive income for the financial year:

- foreign currency translation - - 72,306 - - 72,306 - 72,306

Total comprehensive expenses for the financial year - - 72,306 - 5,292,727 5,365,033 (39,435) 5,325,598


Exercise of Employee’s Share Options (“ESOS”) 803,750 87,777 - (87,777) - 803,750 - 803,750

Disposal of subsidiary - - - - (6,881) (6,881) (10,971) (17,852)

Share Options Lapsed - - - (101,296) 101,296 - - -

Total transactions with owners of the Company 803,750 87,777 - (189,073) 94,415 796,869 (10,971) 785,898

Balance at 31.12.2015 45,929,950 3,318,211 880,431 - 28,145,243 78,273,835 181,601 78,455,436


STATEMENTS OF CHANGES IN EQUITYFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015


<------------ Non-Distributable ------------> DistributableOrdinary

Sharecapital

SharePremium

ShareOption

ReserveRetainedEarnings Total

Company RM RM RM RM RMBalance at 1.1.2014 44,622,400 3,175,414 202,364 13,569,609 61,569,787 Profit for the financial year - - - 4,010,286 4,010,286

44,622,400 3,175,414 202,364 17,579,895 65,580,073


Exercise of Employee’s Share Options (“ESOS”) 503,800 55,020 (55,020) - 503,800 Reclassification - - 114,000 - 114,000 Share Options Cancelled - - (72,271) 72,271 -

503,800 55,020 (13,291) 72,271 617,800 Balance at 31.12.2014/1.1.2015 45,126,200 3,230,434 189,073 17,652,166 66,197,873

Profit for the financial year - - - 3,879,736 3,879,736 45,126,200 3,230,434 189,073 21,531,902 70,077,609


Exercise of Employee’s Share Options (“ESOS”) 803,750 87,777 (87,777) - 803,750 Share Options Lapsed - - (101,296) 101,296 -

803,750 87,777 (189,073) 101,296 803,750 Balance at 31.12.2015 45,929,950 3,318,211 - 21,633,198 70,881,359


STATEMENTS OF CHANGES IN EQUITYFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015 (CONT’D)


Group Company 2015 2014 2015 2014

Note RM RM RM RMCASH FLOWS FROM/(FOR) OPERATING ACTIVITIES

(Loss)/Profit before taxation:- continuing operations (1,920,675) 1,710,939 3,879,736 4,010,286- discontinued operations 7,645,697 (5,562,512) - -

5,725,022 (3,851,573) 3,879,736 4,010,286

Adjustments for:-Allowance for impairment losses on:-- amount owing by subsidiaries 23 - - - 937,781- receivables 23 860,026 2,182,679 - -- investments in subsidiaries 23 - - 1,657,823 2,072,255- other investment 23 - - - 14,000,000Depreciation of property, plant and equipment 5 608,615 561,573 25,541 25,541Fair value adjustment on long term trade receivable 227 4,282 - -Fair value adjustment on long term trade payable (68,313) (278,327) - -Interest expense 22 &

25 348,008 269,969 - -Inventories written down 23 218,867 260,664 - -Plant and equipment written off 5 78,860 22 - -Dividend income 23 - - - (13,000,000)Interest income 23 (615,054) (508,348) (497,368) (424,973)Loss/(Gain) on disposal of:- property, plant and equipment 23 14,417 (49,622) - -- investments in subsidiaries 23 (8,576,348) (2,739) (5,672,419) (1,998)Write-back in value of inventories 23 (120,903) (343,016) - -Write-back of allowance for impairment losses on:-- receivables 23 (687,536) (296,997) - -- investments in subsidiaries 23 - - - (1,314,159)- amount owing by a subsidiary 23 - - (1,066,678) (7,363,812)Unrealised gain on foreign exchange 23 (236,978) (20,000) - -Share of results of an associate 7 (230) - - -Operating loss before working capital changes (2,451,320) (2,071,433) (1,673,365) (1,059,079)

Decrease in inventories 632,934 1,846,791 - -Decrease in property development cost 289,843 - - -(Increase)/Decrease in trade and other receivables (2,743,712) 8,355,171 34,625,878 (9,297,991)Increase/(Decrease) in trade and other payables 11,991,490 (1,266,067) (1,273,444) 1,376,195Cash generated from/(for) operations 7,719,235 6,864,462 31,679,069 (8,980,875)Interest paid (348,008) (269,969) - -Tax (paid)/refunded (320,836) (323,601) 58,291 (14,045)NET CASH FROM/(FOR) OPERATING ACTIVITIES 7,050,391 6,270,892 31,737,360 (8,994,920)


STATEMENTS OF CASH FLOWSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015


Group Company 2015 2014 2015 2014

Note RM RM RM RMCASH FLOWS (FOR)/FROM INVESTING ACTIVITIESPurchase of property, plant and equipment 5(a) (435,116) (3,952,835) - (162,254)Purchase of other investment - - - (14,000,000)Net cash outflows from acquisition of subsidiaries 27 (44,264,030) - (69,200) (4,315,886)Dividends received - - - 13,000,000Proceeds from disposal of:- property, plant and equipment 7,000 1,804,058 - -- investments in subsidiaries - - 11,672,419 12,000Net cash inflows from disposal of subsidiaries 28 38,231,059 1,990 - -Increase in fixed deposits pledged to bank (1,308,260) (74,469) (248,450) (51,550)Interest received 615,054 463,203 497,368 427,067(Repayment to)/Advances from subsidiaries - - (40,966,706) 24,614,950NET CASH (FOR)/FROM INVESTING ACTIVITIES (7,154,293) (1,758,053) (29,114,569) 19,524,327

CASH FLOWS (FOR)/FROM FINANCING ACTIVITIES Proceeds from exercise of employees’ share options 803,750 503,800 803,750 503,800(Repayment)/Drawdown of short term borrowings (659,000) 659,000 - -Repayment of hire purchase obligations (412,037) (1,095,845) - -Repayment of term loans (83,024) (327,561) - -Advances to a subsidiary - - - (8,877,910)NET CASH (FOR)/FROM FINANCING ACTIVITIES (350,311) (260,606) 803,750 (8,374,110)

NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS (454,213) 4,252,233 3,426,541 2,155,297

EFFECT OF FOREIGN EXCHANGE TRANSLATION (352,795) 6,870 - -

CASH AND CASH EQUIVALENTS AT BEGINNING OF FINANCIAL YEAR 18,177,614 13,918,511 13,572,889 11,417,592

CASH AND CASH EQUIVALENTS AT END OF FINANCIAL YEAR 14 17,370,606 18,177,614 16,999,430 13,572,889


STATEMENTS OF CASH FLOWSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015 (CONT’D)


1. CORPORATE INFORMATION

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

The registered office of the Company is located at Suite 5.11 & 5.12, 5th Floor, Menara TJB, No. 9, Jalan Syed Mohd Mufti, 80000 Johor Bahru, Malaysia.

The principal place of business of the Company is located at Unit 5.01, Level 5, Plaza DNP, No. 59, Jalan Dato Abdullah Tahir, 80250 Johor Bahru, Malaysia.

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

The financial statements were authorised for issue in accordance with a resolution by the Board of Directors on 14 April 2016.

2. PRINCIPAL ACTIVITIES

The Company is principally an investment holding company. The principal activities of the subsidiaries are set out in Note 6 to the financial statements. There have been no significant changes in the nature of these activities during the current financial year.

3. BASIS OF PREPARATION

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

3.1 During the current financial year, the Group has adopted the following new accounting standards and interpretations (including the consequential amendments, if any):-

MFRSs and IC Interpretations (Including The Consequential Amendments)Amendments to MFRS 119: Defined Benefit Plans - Employee Contributions Annual Improvements to MFRSs 2010 - 2012 CycleAnnual Improvements to MFRSs 2011 - 2013 Cycle

The adoption of the above accounting standards and interpretations (including the consequential amendments, if any) did not have any material impact on the Group’s financial statements.

3.2 During the current financial year, the Group has also early adopted MFRS 15 Revenue from Contracts with Customers & Admendments to MFRS 15: Effective Date of MFRS 15, which is effective for annual periods beginning on or after 1 January 2018. This early adoption did not have any material impact on the Group’s financial statements.

3.3 The Group has not applied in advance the following accounting standards and interpretations (including the consequential

amendments, if any) that have been issued by the Malaysian Accounting Standards Board (“MASB”) but are not yet effective for the current financial year:-

MFRSs and IC Interpretations (Including The Consequential Amendments) Effective DateMFRS 9 Financial Instruments (IFRS 9 issued by IASB in July 2014) 1 January 2018Amendments to MFRS 10 and MFRS 128 (2011): Sale or Contribution of Assets between an Investor and

its Associate or Joint VentureDeferred until further notice

Amendments to MFRS 11: Accounting for Acquisitions of Interests in Joint Operations 1 January 2016Amendments to MFRS 10, MFRS 12 and MFRS 128 (2011): Investment Entities - Applying the Consolidation

Exception 1 January 2016Amendments to MFRS 101: Presentation of Financial Statements - Disclosure Initiative 1 January 2016

NOTES TO THE FINANCIAL STATEMENTSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015


3. BASIS OF PREPARATION (CONT’D)

3.3 The Group has not applied in advance the following accounting standards and interpretations (including the consequential amendments, if any) that have been issued by the Malaysian Accounting Standards Board (“MASB”) but are not yet effective for the current financial year:- (Cont’d)

MFRSs and IC Interpretations (Including The Consequential Amendments) Effective DateAmendments to MFRS 116 and MFRS 138: Clarification of Acceptable Methods of Depreciation and

Amortisation 1 January 2016Amendments to MFRS 116 and MFRS 141: Agriculture - Bearer Plants 1 January 2016Amendments to MFRS 127 (2011): Equity Method in Separate Financial Statements 1 January 2016Annual Improvements to MFRSs 2012 – 2014 Cycle 1 January 2016

3.4 The adoption of the above accounting standards and interpretations (including the consequential amendments, if any) is expected to have no material impact on the financial statements of the Group upon their initial application except as follows:-

MFRS 9 (IFRS 9 issued by IASB in July 2014) replaces the existing guidance in MFRS 139 and introduces a revised guidance on the classification and measurement of financial instruments, including a single forward-looking ‘expected loss’ impairment model for calculating impairment on financial assets, and a new approach to hedge accounting. Under this MFRS 9, the classification of financial assets is driven by cash flow characteristics and the business model in which a financial asset is held. The Group is currently assessing the financial impact of adopting MFRS 9.

4. SIGNIFICANT ACCOUNTING POLICIES

4.1 Critical Accounting Estimates and Judgement

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

(a) Depreciation of Property, Plant and Equipment

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

(b) Income Taxes

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

(c) ImpairmentofNon-financialAssets

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

NOTES TO THE FINANCIAL STATEMENTSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015 (CONT’D)


4. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

4.1 Critical Accounting Estimates and Judgement (Cont’d)

(d) Write-down of Inventories

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

(e) Impairment of Trade and Other Receivables

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

(f) Impairment of Goodwill

Goodwill is tested for impairment annually and at other times when such indicators exist. This requires management to estimate the expected future cash flows of the cash-generating unit to which goodwill is allocated and to apply a suitable discount rate in order to determine the present value of those cash flows. The future cash flows are most sensitive to budgeted gross margins, growth rates estimated and discount rate used. If the expectation is different from the estimation, such difference will impact the carrying value of goodwill.

(g) Fair Value Estimates for Certain Financial Assets and Financial Liabilities

The Group carries certain financial assets and financial liabilities at fair value, which requires extensive use of accounting estimates and judgement. This includes the fair value estimates for the right to a return in respect of the guaranteed profit as set out in Note 6(vi) to the financial statements.

While significant components of fair value measurement were determined using verifiable objective evidence, the amount of changes in fair value would differ if the Group uses different valuation methodologies. Any changes in fair value of these assets and liabilities would affect profit and/or equity.

(h) Recognitionofprofitsfrompropertydevelopmentandconstructioncontract

The Group recognises property development revenue and costs by reference to the progress towards complete satisfaction of that performance obligation at the reporting date. This is measured based on direct measurements of the value transferred by the Group to the customer and the Group’s efforts or budgeted inputs to the satisfaction of the performance obligation. Significant judgement is required in determining:

(i) the completeness and accuracy of the budgets; (ii) the extent of the costs incurred;

Substantial changes in cost estimates can in future periods have, a significant effect on the Group’s profitability. In making the above judgement, the Group relies on past experience and work of specialists.

There is no estimation required in determining the transaction prices as revenue from property development are based on contracted prices.

4.2 Basis of Consolidation

The consolidated financial statements include the financial statements of the Company and its subsidiaries made up to the end of the reporting period.




4.2 Basis of Consolidation (Cont’d)

Subsidiaries are entities (including structured entities) controlled by the Group. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Potential voting rights are considered when assessing control only when such rights are substantive. The Group also considers it has de facto power over an investee when, despite not having the majority of voting rights, it has the current ability to direct the activities of the investee that significantly affect the investee’s return.

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

Intragroup transactions, balances, income and expenses are eliminated on consolidation. Intragroup losses may indicate an impairment that requires recognition in the consolidated financial statements. Where necessary, adjustments are made to the financial statements of subsidiaries to ensure consistency of accounting policies with those of the Group.

(a) Business Combinations

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

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

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

(b) Non-Controlling Interests

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

(c) Changes In Ownership Interests In Subsidiaries Without Change of Control

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

(d) Loss of Control

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

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

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

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




4.3 Goodwill

Goodwill is measured at cost less accumulated impairment losses, if any. The carrying value of goodwill is reviewed for impairment annually or more frequently if events or changes in circumstances indicate that the carrying amount may be impaired. The impairment value of goodwill is recognised immediately in profit or loss. An impairment loss recognised for goodwill is not reversed in a subsequent period.

Under the acquisition method, any excess of the sum of the fair value of the consideration transferred in the business combination, the amount of non-controlling interests recognised and the fair value of the Group’s previously held equity interest in the acquiree (if any), over the net fair value of the acquiree’s identifiable assets and liabilities at the date of acquisition is recorded as goodwill.

Where the latter amount exceeds the former, after reassessment, the excess represents a bargain purchase gain and is recognised as a gain in profit or loss.

In respect of equity-accounted associates, the carrying amount of goodwill is included in the carrying amount of the investment and an impairment loss on such an investment is not allocated to any asset, including goodwill, that forms part of the carrying amount of the equity-accounted associates.

4.4 Functional and Presentation Currency

(a) Functional and Presentation Currency

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

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

(b) Transactions and Balances

Transactions in foreign currencies are converted into the respective functional currencies on initial recognition, using the exchange rates approximating those ruling at the transaction dates. Monetary assets and liabilities at the end of the reporting period are translated at the rates ruling as of that date. Non-monetary assets and liabilities are translated using exchange rates that existed when the values were determined. All exchange differences are recognised in profit or loss.

(c) Foreign Operations

Assets and liabilities of foreign operations are translated to RM at the rates of exchange ruling at the end of the reporting period. Income, expenses and other comprehensive income of foreign operations are translated at exchange rates ruling at the dates of the transactions. All exchange differences arising from translation are taken directly to other comprehensive income and accumulated in equity; attributed to the owners of the Company and non-controlling interests, as appropriate.

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

On the disposal of a foreign operation (i.e. a disposal of the Group’s entire interest in a foreign subsidiary, or a partial disposal involving loss of control over a subsidiary that includes a foreign operation, or a partial disposal of an interest in an associate that includes a foreign operation of which the retained interest becomes a financial asset), all of the exchange differences accumulated in equity in respect of that foreign operation attributable to the owners of the Company are reclassified to profit or loss as part of the gain or loss on disposal. The portion that related to non-controlling interests is derecognised but is not reclassified to profit or loss.

In addition, in relation to a partial disposal of a subsidiary that does not result in the Group losing control over the subsidiary, the proportionate share of accumulated exchange differences are reattributed to non-controlling interests and are not recognised in profit or loss. When the Group disposes of only part of its investment in an associate that includes a foreign operation while retaining significant influence, the proportionate share of the accumulative exchange differences is reclassified to profit or loss.

In the consolidated financial statements, when settlement of an intragroup loan is neither planned nor likely to occur in the foreseeable future, the exchange differences arising from translating such monetary item are considered to form part of a net investment in the foreign operation and are recognised in other comprehensive income.




4.5 Property, Plant and Equipment and Depreciation

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

Freehold land is stated at cost less impairment losses recognised, if any, and is not depreciated.

Depreciation is charged to profit or loss (unless it is included in the carrying amount of another asset) on the straight-line method to write off the depreciable amount of the assets over their estimated useful lives. Depreciation of an asset does not cease when the asset becomes idle or is retired from active use unless the asset is fully depreciated. The principal annual rates used for this purpose are:-

Buildings 2%Plant and machinery 4% - 12%Motor vehicles 20%Furniture and equipment 8% - 40%Renovation 10%

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

When significant parts of an item of property and equipment have different useful lives, they are accounted for as separate items (major components) of property and equipment.

Capital work-in-progress represents progress payments made towards the acquisition of land and building and related capital asset which are not ready to commercial use at the end of reporting date. Capital work-in-progress is stated at cost and will be transferred to the relevant category of long-term assets and depreciated accordingly when the asset are completed and ready for commercial use. Cost of capital work-in progress includes direct costs and related expenditure.

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

An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use. Any gain or loss arising from derecognition of the asset is recognised in profit or loss.

Fully depreciated plant and equipment are retained in the financial statements until they are no longer in use and no further charge for depreciation is made in respect of these plant and equipment.

4.6 Assets under Hire Purchase

Assets acquired under hire purchase are capitalised in the financial statements as equipment and the correspondence obligations are treated as hire purchase payables. The assets capitalised are measured at the lower of the fair value of the leased assets and the present value of the minimum lease payments and are depreciated on the same basis as owned assets. Each hire purchase payment is allocated between the liability and finance charges so as to achieve a constant periodic rate of charge on the hire purchase outstanding. Finance charges are recognised in profit or loss over the period of the respective hire purchase agreements.




4.7 Discontinued Operations

A discontinued operation is a component of the Group’s business that represents a separate major line of business or geographical area of operations that has been disposed of or is held for sale, or is a subsidiary acquired exclusively with a view to resale. Classification as a discontinued operation occurs upon disposal or when the operation meets the criteria to be classified as held for sale, if earlier. When an operation is classified as a discontinued operation, the comparative statement of profit or loss and other comprehensive income is restated as if the operation had been discontinued from the start of the comparative period.

4.8 Investments in Subsidiaries

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

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

4.9 Investment in an Associate

An associate is an entity in which the Group has a long-term equity interest and where it exercises significant influence over the financial and operating policies.

The investment in an associate is accounted for in the consolidated financial statements using the equity method based on the financial statements of the associate made up at the end of the reporting period. The Group’s share of the post acquisition profits and other comprehensive income of the associate is included in the consolidated statement of profit or loss and other comprehensive income, after adjustment if any, to align the accounting policies with those of the Group, from the date that significant influence commences up to the effective date on which significant influence ceases or when the investment is classified as held for sale. The Group’s interest in the associate is carried in the consolidated statement of financial position at cost plus the Group’s share of the post acquisition retained profits and reserves. The cost of investment includes transaction costs.

When the Group’s share of losses exceeds its interest in an associate, the carrying amount of that interest is reduced to zero, and the recognition of further losses is discontinued except to the extent that the Group has an obligation.

Unrealised gains on transactions between the Group and the associate are eliminated to the extent of the Group’s interest in the associate. Unrealised losses are eliminated unless cost cannot be recovered.

When the Group ceases to have significant influence over an associate and the retained interest in the former associate is a financial asset, the Group measures the retained interest at fair value at that date and the fair value is regarded as the initial carrying amount of the financial asset in accordance with MFRS 139. Furthermore, the Group also reclassifies its share of the gain or loss previously recognised in other comprehensive income of that associate into profit or loss when the equity method is discontinued.

4.10 Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined on the first-in-first-out basis and comprises the purchase price and incidentals incurred in bringing the inventories to their present location and condition.

Net realisable value represents the estimated selling price less the estimated costs of completion and the estimated costs necessary to make the sale.

4.11 Financial Instruments

Financial assets and financial liabilities are recognised in the statements of financial position when the Group has become a party to the contractual provisions of the instruments.

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




4.11 Financial Instruments (Cont’d)

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

A financial instrument is recognised initially at its fair value. Transaction costs that are directly attributable to the acquisition or issue of the financial instrument (other than a financial instrument at fair value through profit or loss) are added to/deducted from the fair value on initial recognition, as appropriate. Transaction costs on the financial instrument at fair value through profit or loss are recognised immediately in profit or loss.

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

4.11.1 Financial Assets

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

(a) FinancialAssetsatFairValueThroughProfitorLoss

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

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

Financial assets at fair value through profit or loss could be presented as current assets or non-current assets. Financial assets that are held primarily for trading purposes are presented as current assets whereas financial assets that are not held primarily for trading purposes are presented as current assets or non-current assets based on the settlement date.

There were no financial assets under this category at the end of the reporting period.

(b) Held-to-maturity Investments

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

Held-to-maturity investments are classified as non-current assets, except for those having maturity within 12 months after the reporting date which are classified as current assets.

There were no financial assets under this category at the end of the reporting period.

(c) LoansandReceivablesFinancialAssets

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

Loans and receivables financial assets are classified as current assets, except for those having settlement dates later than 12 months after the reporting date which are classified as non-current assets.




4.11 Financial Instruments (Cont’d)

4.11.1 Financial Assets (Cont’d)

(d) Available-for-sale Financial Assets

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

After initial recognition, available-for-sale financial assets are remeasured to their fair values at the end of each reporting period. Gains and losses arising from changes in fair value are recognised in other comprehensive income and accumulated in the fair value reserve, with the exception of impairment losses. On derecognition, the cumulative gain or loss previously accumulated in the fair value reserve is reclassified from equity into profit or loss. Available-for-sale financial assets are classified as non-current assets unless they are expected to be realised within 12 months after the reporting date.

4.11.2FinancialLiabilities

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

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

Financial liabilities are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the reporting date.

4.11.3 Equity Instruments

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

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

4.11.4 Derecognition

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

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

4.12 Impairment

(a) Impairment of Financial Assets

All financial assets (other than those categorised at fair value through profit or loss), are assessed at the end of each reporting period whether there is any objective evidence of impairment as a result of one or more events having an impact on the estimated future cash flows of the asset. For an equity instrument, a significant or prolonged decline in the fair value below its cost is considered to be an objective evidence of impairment.




4.12 Impairment (Cont’d)

(a) Impairment of Financial Assets (Cont’d)

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

An impairment loss in respect of available-for-sale financial assets is recognised in profit or loss and is measured as the difference between its cost (net of any principal payment and amortisation) and its current fair value, less any impairment loss previously recognised in the fair value reserve. In addition, the cumulative loss recognised in other comprehensive income and accumulated in equity under fair value reserve, is reclassified from equity into profit or loss.

With the exception of available-for-sale debt instruments, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the financial asset at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised. In respect of available-for-sale equity instruments, impairment losses previously recognised in profit or loss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss made is recognised in other comprehensive income.

An impairment loss in respect of unquoted equity instrument that is carried at cost is recognised in profit or loss and is measured as the difference between the financial asset’s carrying amount and the present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment losses are not reversed in subsequent periods.

(b) Impairment of Non-Financial Assets

The carrying values of assets, other than those to which MFRS 136 - Impairment of Assets does not apply, are reviewed at the end of each reporting period for impairment when an annual impairment assessment is compulsory or there is an indication that the assets might be impaired. Impairment is measured by comparing the carrying values of the assets with their recoverable amounts. When the carrying amount of an asset exceeds its recoverable amount, the asset is written down to its recoverable amount and an impairment loss shall be recognised. The recoverable amount of the assets is the higher of the assets’ fair value less costs to sell and their value-in-use, which is measured by reference to discounted future cash flow using a pre-tax discount rate. Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

An impairment loss is recognised in profit or loss immediately unless the asset is carried at its revalued amount. Any impairment loss of a revalued asset is treated as a revaluation decrease to the extent of a previously recognised revaluation surplus for the same asset. Impairment losses recognised in respect of cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to the cash-generating units and then to reduce the carrying amounts of the other assets in the cash-generating unit on a pro rate basis.

In respect of assets other than goodwill, and when there is a change in the estimates used to determine the recoverable amount, a subsequent increase in the recoverable amount of an asset is treated as a reversal of the previous impairment loss and is recognised to the extent of the carrying amount of the asset that would have been determined (net of amortisation and depreciation) had no impairment loss been recognised. The reversal is recognised in profit or loss immediately, unless the asset is carried at its revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

4.13 Cash and Cash Equivalents

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

For the purpose of the statement of cash flows, cash and cash equivalents are presented net of bank overdrafts and exclude deposits pledged to secure banking facilities.




4.14 Income Taxes

Income tax for the reporting period comprises current tax and deferred tax.

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

Deferred tax liabilities are recognised for all taxable temporary differences other than those that arise from goodwill or excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over the business combination costs or from the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit. Deferred tax assets are recognised for all deductible temporary differences, unused tax losses and unused tax credits to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences, unused tax losses and unused tax credits can be utilised. The carrying amounts of deferred tax assets are reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient future taxable profits will be available to allow all or part of the deferred tax assets to be utilised.

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

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

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transactions either in other comprehensive income or directly in equity and deferred tax arising from a business combination is adjusted against goodwill or excess of the acquirer’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities over the business combination costs.

4.15 Borrowing Costs

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

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

Investment income earned on the temporary investment of specific borrowing pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

4.16 Provisions

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

4.17 Contingent Liabilities

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

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




4.18EmployeeBenefits

(a) Short-termBenefits

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

(b) DefinedContributionPlans

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

(c) Share-based Payment Transactions

The Group operates an equity-settled share-based compensation plan, under which the Group receives services from employees as consideration for equity instruments of the Company (known as “share options”).

At grant date, the fair value of the share options is recognised as an expense on a straight-line method over the vesting period, based on the Group’s estimate of equity instruments that will eventually vest, with a corresponding credit to employee share option reserve in equity. The amount recognised as an expense is adjusted to reflect the actual number of the share options that are expected to vest. Service and non-market performance conditions attached to the transaction are not taken into account in determining the fair value.

In the Company’s separate financial statements, the grant of the share options to the subsidiaries’ employees is not recognised as an expense. Instead, the fair value of the share options measured at the grant date is accounted for as an increase to the investment in subsidiary undertaking with a corresponding credit to the employee share option reserve.

Upon expiry of the share option, the employee share option reserve is transferred to retained profits.

When the share options are exercised, the employee share option reserve is transferred to share capital or share premium if new ordinary shares are issued.

4.19 Property Development Cost

Cost is determined based on a specific identification basis. Property development costs comprising costs of land, direct materials, direct labour, other direct costs, attributable overheads and payments to subcontractors that meet the definition of inventories are recognised as an asset and are stated at the lower of cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and applicable selling expenses. The asset is subsequently recognised as an expense in profit or loss when or as the control of the asset is transferred to the customer.

4.20 Contract Assets/Contract Liabilities

(i) Where revenue from property development recognised in the profit or loss exceeds the billings to purchasers, the balance is shown as contract assets. Contract assets are included within “trade and other receivables” under current assets; and

(ii) Where billings to purchasers exceed the revenue recognised for property development revenue recognised in profit or loss, the balance it shown as contract liabilities. Contract liabilities are included within “trade and other payables” under current liabilities.

4.21 Construction Contracts

A construction contract is a contract specifically negotiated for the construction of an asset or a combination of assets that are closely interrelated or interdependent in terms of their design, technology and functions or their ultimate purpose or use. Cost incurred to fulfil the contracts, comprising cost of direct materials, direct labour, other direct costs, attributable overheads and payments to subcontractors are recognised as an asset and amortised over to the statement of profit or loss and other comprehensive income systematically to reflect the transfer of the contracted service to the customer.




4.21 Construction Contracts (Cont’d)

The Group uses the efforts or inputs to the satisfaction of the performance obligation to determine the appropriate amount to recognise in a given period. This is measured by reference to the contract costs incurred up to the end of the reporting period as a percentage of total estimated costs for each contract. Costs incurred in the financial year in connection with future activity on a contract are excluded from contract costs in determining the stage of completion. They are presented as inventories, prepayments or other assets, depending on their nature. When the carrying amount of the asset exceeds the remaining amount of consideration that the Group expects to receive in exchange of the contracted property, an impairment loss is recognised as profit or loss.

The Group presents as an asset the gross amount due from customers for contract work for all contracts in progress for which costs incurred plus recognised profits (less recognised losses) exceed contract liabilities. Contract liabilities not yet paid by customers and retention monies are included within ‘trade and other receivables’.

The Group presents as a liability the gross amount due to customers for contract work for all contracts in progress for which contract liabilities exceed costs incurred plus recognised profits (less recognised losses).

4.22 Related Parties

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

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

(i) has control or joint control over the reporting entity;

(ii) has significant influence over the reporting entity; or

(iii) is a member of the key management personnel of the reporting entity or of a parent of the reporting entity.

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

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

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

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

(iii) Both entities are joint ventures of the same third party.

(iv) One entity is a joint venture of a third entity and the other entity is an associate of the third entity.

(v) The entity is a post-employment benefit plan for the benefit of employees of either the reporting entity or an entity related to the reporting entity. If the reporting entity is itself such a plan, the sponsoring employers are also related to the reporting entity.

(vi) The entity is controlled or jointly controlled by a person identified in (a) above.

(vii) A person identified in (a)(i) above has significant influence over the entity or is a member of the key management personnel of the entity (or of a parent of the entity).

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

Related parties also include key management personnel defined as those persons having authority and responsibility for planning, directing and controlling the activities of the reporting entity either directly or indirectly, including any director (whether executive or otherwise) of that entity.




4.23 Revenue and Other Income

(a) Revenuefromcontractswithcustomers

Revenue which represents income arising in the course of the Group’s ordinary activities is recognised by reference to each distinct performance obligation promised in the contract with customer when or as the Group transfers the control of the goods or services promised in a contract and the customer obtains control of the goods or services. Depending on the substance of the respective contract with customer, the control of the promised goods or services may transfer over time or at a point in time.

A contract with customer exists when the contract has commercial substance, the Group and its customer has approved the contract and intend to perform their respective obligations, the Group’s and the customer’s rights regarding the goods or services to be transferred and the payment terms can be identified, and it is probable that the Group will collect the consideration to which it will be entitled to in exchange of those goods or services.

Recognitionandmeasurement

At the inception of each contract with customer, the Group assesses the contract to identify distinct performance obligations, being the units of account that determine when and how revenue from the contract with customer is recognised. A performance obligation is a promise to transfer a distinct good or service (or a series of distinct goods or services that are substantially the same and that have the same pattern of transfer) to the customer that is explicitly stated in the contract and implied in the Group’s customary business practices. A good or service is distinct if:

• the customer can either benefit from the good or service on its own or together with other readily available resources; and

• the good or service is separately identifiable from other promises in the contract (e.g. the good or service is not integrated with, or significantly modify, or highly interrelated with, other goods or services promised in the contract).

If a good or service is not distinct, the Group combines it with other promised goods or services until the Group identifies a distinct performance obligation consisting a distinct bundle of goods or services.

Revenue is measured at the amount of consideration to which the Group expects to be entitled in exchange for transferring the promised goods or services to the customers, excluding amounts collected on behalf of third parties such as sales and service taxes or goods and services taxes. If the amount of consideration varies due to discounts, rebates, refunds, credits, incentives, performance bonuses, penalties or other similar items, the Group estimates the amount of consideration that it expects to be entitled based on the expected value or the most likely outcome but the estimation is constrained up to the amount that is highly probable of no significant reversal in the future. If the contract with customer contains more than one distinct performance obligation, the amount of consideration is allocated to each distinct performance obligation based on the relative stand-alone selling prices of the goods or services promised in the contract.

The consideration allocated to each performance obligation is recognised as revenue when or as the customer obtains control of the goods or services. At the inception of each contract with customer, the Group determines whether control of the goods or services for each performance obligation is transferred over time or at a point in time. Control over the goods or services are transferred over time and revenue is recognised over time if:

• the customer simultaneously receives and consumes the benefits provided by the Group’s performance as the Group performs;

• the Group’s performance creates or enhances a customer-controlled asset; or

• the Group’s performance does not create an asset with alternative use and the Group has a right to payment for performance completed to date.

Revenue for performance obligation that is not satisfied over time is recognised at the point in time at which the customer obtains control of the promised goods or services.




4.23 Revenue and Other Income (Cont’d)

(a) Revenuefromcontractswithcustomers(Cont’d)

Specific revenue recognition criteria for each of the Group’s activities are as described below.

(i) Sale of Goods

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

(ii) RenderingofServices

Revenue is recognised in the accounting period in which the services are rendered and the customer receives and consumes the benefits provided by the Group, and the Group has a present right to payment for, the services.

(iii) RevenuefromPropertyDevelopmentandConstructionContracts

Revenue from property development and construction contract is recognised when or as the control of the asset is transferred to the customer. Depending on the terms of the contract and the laws that apply to the contract, control of the asset may transfer over time or at a point in time. Control of the asset is transferred over time if the Group’s performance:

• creates and enhances an asset that the customer controls as the Group performs; or

• does not create an asset with an alternative use to the Group and the Group has an enforceable right to payment for performance completed to date.

If control of the asset transfers over time, revenue is recognised over the period of the contract by reference to the progress towards complete satisfaction of that performance obligation. Otherwise, revenue is recognised at a point in time when the customer obtains control of the asset.

The progress towards complete satisfaction of the performance obligation is measured based on one of the following methods that best depict the Group’s performance in satisfying the performance obligation:

• direct measurements of the value transferred by the Group to the customer (e.g. surveys or appraisals of performance completed to date); or

• the Group’s efforts or inputs to the satisfaction of the performance obligation (e.g. by reference to the property development costs incurred up to the end of the reporting period as a percentage of total estimated costs for complete satisfaction of the contract).

(b) Dividend Income

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

(c) Interest Income

Interest income is recognised on a time proportion basis, taking into account the principal outstanding and the effective rate over the period of maturity, unless collectibility is in doubt, in which case it is recognised on a cash receipt basis.

4.24 Operating Segments

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




4.25 Earnings Per Ordinary Share

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

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

4.26 Fair Value Measurements

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using a valuation technique. The measurement assumes that the transaction takes place either in the principal market or in the absence of a principal market, in the most advantageous market. For non-financial asset, the fair value measurement takes into account a market’s participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. However, this basis does not apply to share-based payment transactions.

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

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

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

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

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

5. PROPERTY, PLANT AND EQUIPMENT

Freeholdland Buildings

Capitalwork-in-progress Renovation

Plant andmachinery

Motorvehicles

Furniture and equipment Total

Group RM RM RM RM RM RM RM RM2015Net carrying amount

At 1 January 2015 2,581,741 8,439,903 2,529,773 562,856 1 2,258,378 280,858 16,653,510

Additions

- addition during the year - - 820,360 - 117,781 231,156 212,522 1,381,819

- acquisition of a subsidiary (Note 27) - - - - - - 2,579 2,579

Disposals

- disposal during the year - - - - - (21,417) - (21,417)

- disposal of subsidiaries (Note 28) (1,767,700) (3,110,660) - (272,825) - (145,589) (52,376) (5,349,150)



5. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

Freeholdland Buildings

Capitalwork-in-progress Renovation

Plant andmachinery

Motorvehicles

Furnitureand

equipment TotalGroup RM RM RM RM RM RM RM RM2015Net carrying amount

Written off - - - - - (78,860) - (78,860)

Depreciation charge - (172,120) - (53,331) (20,860) (253,524) (108,780) (608,615)

Translation differences - 415,613 - 10,864 (1,301) - (75) 425,101

At 31 December 2015 814,041 5,572,736 3,350,133 247,564 95,621 1,990,144 334,728 12,404,967

At 31 December 2015

Cost 814,041 5,933,497 3,350,133 350,691 338,881 2,786,528 1,305,781 14,879,552

Accumulated depreciation - (360,761) - (103,127) (243,260) (796,384) (971,053) (2,474,585)

Net carrying amount 814,041 5,572,736 3,350,133 247,564 95,621 1,990,144 334,728 12,404,967

2014Net carrying amount

At 1 January 2014 2,581,741 8,606,461 - 456,163 1 2,075,357 224,734 13,944,457

Additions - - 2,529,773 174,254 - 2,117,364 173,180 4,994,571

Disposals - - - - - (1,699,359) (55,077) (1,754,436)

Written off - - - - - - (22) (22)

Depreciation charge - (196,056) - (68,475) (234,984) (62,058) (561,573)

Translation differences - 29,498 - 914 - - 101 30,513

At 31 December 2014 2,581,741 8,439,903 2,529,773 562,856 1 2,258,378 280,858 16,653,510

At 31 December 2014

Cost 2,581,741 9,802,786 2,529,773 805,194 221,100 3,654,771 1,293,540 20,888,905

Accumulated depreciation - (1,362,883) - (242,338) (221,099) (1,396,393) (1,012,682) (4,235,395)

Net carrying amount 2,581,741 8,439,903 2,529,773 562,856 1 2,258,378 280,858 16,653,510

Furniture and EquipmentCompany RM2015Net carrying amount

At 1 January 2015 217,434

Depreciation charge (25,541)At 31 December 2015 191,893



5. PROPERTY, PLANT AND EQUIPMENT (CONT’D)

Furniture and EquipmentCompany RM2015Net carrying amount

At 31 December 2015Cost 267,910Accumulated depreciation (76,017)Net carrying amount 191,893

2014Net carrying amount

At 1 January 2014 80,721

Additions 162,254Depreciation charge (25,541)At 31 December 2014 217,434

At 31 December 2014Cost 267,910Accumulated depreciation (50,476)Net carrying amount 217,434

(a) During the financial year, the Group and the Company made the following cash payments to purchase property, plant and equipment:

Group Company2015 2014 2015 2014

RM RM RM RMCost of property, plant and equipment 1,381,819 4,994,571 - 162,254Financed by hire purchase (141,500) (1,041,736) - -Financed by term loan (805,203) - - -Cash payments 435,116 3,952,835 - 162,254

(b) As at end of reporting period, the net carrying amount of the Group’s equipment acquired under hire purchase arrangements is as follows:

Group2015 2014

RM RMMotor vehicles 1,279,277 1,498,010

(c) The freehold land and buildings have been pledged to licensed financial institutions for credit facilities (other than hire purchase) granted to the Group.



6. INVESTMENTS IN SUBSIDIARIES

Company2015 2014

RM RM

Unquoted equity shares at cost 22,463,795 38,245,343

Deemed equity - 25,069,000Less: Accumulated impairment losses (10,217,129) (18,410,054)

12,246,666 44,904,289Unquoted equity shares:

Balance at 1 January 38,245,343 33,939,459

Addition during the financial year 69,200 4,315,886

Disposal during the financial year (15,850,748) (10,002)

Balance at 31 December 22,463,795 38,245,343

Deemed equity:


Repayment during the financial year (25,069,000) (931,000)

Balance at 31 December - 25,069,000

Accumulated impairment losses:


Addition during the financial year 1,657,823 2,072,255

Reversal of impairment loss during the financial year - (1,314,159)

Disposal during the financial year (9,850,748) -Balance at 31 December 10,217,129 18,410,054

During the financial year,

(i) Emas Kiara Industries Berhad (“EKIB”), disposed of 4,500,000 ordinary shares of RM1.00 each representing 100% equity interest in Emas Kiara Sdn. Bhd. (“EKSB”) to Intan (Kuala Lumpur) Sdn. Bhd. (“IKL”) for a total cash consideration of RM2,563,173 and settlement of outstanding shareholder loan. Consequently, EKSB ceased to be a subsidiary of EKIB.

(ii) EKIB, disposed of 6,000,000 ordinary shares of RM1.00 each representing 100% equity interest in Noblecorp Lands Sdn. Bhd. (“NLSB”) to IKL for a total cash consideration of RM9,109,246 and settlement of outstanding shareholder loan. NLSB who also owned 100% equity interest in Noblecorp Property (Sabah) Sdn. Bhd. (“NPSB”) effectively ceased to be the subsidiaries of EKIB.

(iii) Noblecorp Builders Sdn. Bhd. (“NBSB”), a wholly-owned subsidiary of EKIB, disposed of 10,000 ordinary shares of RM1.00 each representing 100% equity interest in Noblecorp Construction Sdn. Bhd. (“NCC”) to third parties for a total cash consideration of RM2,000. Consequently, NCC ceased to be a subsidiary of EKIB.

(iv) Emas Kiara Electrical Sdn. Bhd. (“EKEL”), a wholly-owned subsidiary of EKIB, disposed of 55,000 ordinary shares of RM1.00 each representing 55% equity interest in Inesa Sdn. Bhd. (“INESA”) to third parties for a total cash consideration of RM28,203. Consequently, INESA ceased to be a subsidiary of EKIB.

(v) NBSB, disposed of 600,000 ordinary shares of RM1.00 each representing 100% equity interest in Noblecorp Engineering Sdn. Bhd. (“NESB”) for a cash consideration of RM1.00 and settlement of outstanding shareholder loan. Consequently NESB ceased to be a subsidiary of EKIB.



6. INVESTMENTS IN SUBSIDIARIES (CONT’D)

During the financial year, (Cont’d)

(vi) Emas Kiara Properties Sdn. Bhd. (“EKP”), a wholly-owned subsidiary of EKIB, acquired 600,000 ordinary shares of RM1.00 each representing 100% equity interest in MB Max Sdn. Bhd. (“MB Max”) from MB Land Sdn. Bhd. (“MB Land”) for a total cash consideration of RM45.0 million. Consequently, MB Max became a wholly owned subsidiary of EKIB.

It was a term of the sale and purchase agreement that MB Land provide a profit guarantee for the future performance of MB Max. In this respect, MB Land, EKP and the Company had on 13 November 2014 entered into a profit guarantee agreement (“PGA”).

One of the salient terms of the PGA is “In the event MB Max achieves less than the Guaranteed Profit for any of the financial years during the Guaranteed Period, the Guarantor shall be liable on demand to immediately pay the Differential Sum or such other amount which would result in MB Max achieving the Guaranteed Profit for the respective financial year or the Guaranteed Period, as the case may be.”.

Guaranteed Period is defined as the three financial years ending 31 December 2015 to 2017; and Guaranteed Profit is defined as the audited after tax profit of MB Max of Ringgit Malaysia Fifteen Million (RM15,000,000.00) only for Financial Year Ending 2015 (“FYE 2015”) and Ringgit Malaysia Sixteen Million (RM16,000,000.00) only for Financial Year Ending 2016 and an aggregate audited after tax profit of Ringgit Malaysia Fifty One Million (RM51,000,000.00) for three years from Financial Years Ending 2015 to 2017, net of any reversal or adjustment in subsequent years.

Based on the financial statements of MB Max for the financial year ended 31 December 2015, MB Max recorded a profit after tax of approximately RM4.7 million. Accordingly, there is a differential sum i.e. shortfall of RM10.3 million as compared to guaranteed profit for FYE 2015 of RM15 million. The directors are of the opinion that there are reasonable grounds for EKIB not to make a demand for the differential sum of RM10.3 million on MB Land at this juncture for the overall interest and benefits of the Group.

Details of the subsidiaries are as follows:

Name of subsidiary

Principal place of Business

Effective Equity Interest held by

Company Subsidiary2015 2014 2015 2014 Principal activities

Noblecorp Lands Sdn. Bhd. Malaysia - 100% - - Trading of non-woven geosynthetic products and investment holding.

Noblecorp Lands (Pahang) Sdn. Bhd. Malaysia 100% 100% - - Trading of industrial fabrics and geosynthetic products.

Kiaratex Exports Pte. Ltd.* Singapore 100% 100% - - Sales and marketing of geosynthetic products and materials to international market.

Emas Kiara Properties Sdn. Bhd. Malaysia 100% 100% - - Trading of geosynthetic clay liner and fibre. However, it temporarily ceased the business operations during the financial year.

Emas Kiara Electrical Sdn. Bhd. * Malaysia 90% 90% - - Trading of lighting products, electrical components and engineering and contractingservices.

Noblecorp Capital Sdn. Bhd. * Malaysia 100% 100% - - Trading and fabrication of woven industrial packaging.




Details of the subsidiaries are as follows: (Cont’d)

Principal place of Business

Effective Equity Interest held by

Company Subsidiary

Name of subsidiary 2015 2014 2015 2014 Principal activitiesEmas Kiara Sdn. Bhd. Malaysia - 100% - - Management services and trading of

geosynthetic products and technical fabrics.

Noblecorp Sdn. Bhd. Malaysia 100% 100% - - Property investment holding.

Emas Kiara Marketing Sdn. Bhd. Malaysia 100% 100% - - Trading and installation of geosynthetic products and general contracting.

Noblecorp Builders Sdn. Bhd. Malaysia 100% 100% - - General contracting work and trading.

Subsidiary of Noblecorp Lands Sdn. Bhd.

Noblecorp Property (Sabah) Sdn. Bhd.

Malaysia - - - 100% Property development. However, it has not commenced operations during the financial year.

Subsidiary of Noblecorp Builders Sdn. Bhd.

Noblecorp Engineering Sdn. Bhd. Malaysia - - - 100% Mechanical and electrical engineering.

Noblecorp Construction Sdn. Bhd. Malaysia - - - 100% Dormant.

Subsidiary of Emas Kiara Electrical Sdn. Bhd.*

Inesa Sdn. Bhd.* Malaysia - - 20%^ 75% Dormant.

Subsidiary of Emas Kiara Properties Sdn. Bhd.

MB Max Sdn. Bhd. Malaysia - - 100% - Property Development.

* SubsidiariesnotauditedbyMessrs.CroweHorwath^ RefertoNote7(a).

The recoverable amounts of the cash-generating units are determined using the fair value less costs to sell approach, and this is derived from the net assets position of the respective subsidiaries as at end of the reporting period. During the financial year, the Company has carried out a review of the recoverable amounts of its investments in certain subsidiaries that had been persistently making losses. A total impairment losses of RM1,657,823 (2014 - RM2,072,255), representing the write-down of the investments to their recoverable amounts, was recognised in “Other Expenses” line item of the statement of profit or loss and other comprehensive income.




The non-controlling interests at the end of the reporting period comprised the following:

Group2015 2014

RM RMEmas Kiara Electrical Sdn. Bhd. 181,601 214,153Inesa Sdn. Bhd. - 17,854

181,601 232,007

The summarised financial information (before intra-group elimination) for each subsidiary that has non-controlling interests is not presented as the non-controlling interests are not material to the Group.

7. INVESTMENT IN AN ASSOCIATE

Group2015 2014

RM RMUnquoted shares, at cost 15,120 - Share of post acquisition profit 230 -

15,350 - Accumulated impairment losses (13,104) -

2,246 -

(a) During the financial year, the Group disposed of 55,000 ordinary shares of RM1 each representing 55% equity interest in Inesa Sdn. Bhd. ordinary shares, for a total cash consideration of RM28,203. Subsequently, Inesa Sdn. Bhd. became an associate of EKIB.

(b) The Group recognised its share of results in Inesa Sdn. Bhd. based on the audited financial statements drawn up to the most recent reporting date, which is 31 December 2015.

(c) Although the Group holds less than 20% of the voting power in Inesa Sdn. Bhd., the Group is able to exercise significant influence because it has representation on the board of directors of that associate.

(d) The summarised financial information for Inesa Sdn. Bhd. is not presented as the associate is not material to the Group.

8. GOODWILL

Group2015 2014

RM RMCost:-At 1 January - -Acquisition of a subsidiary (Note 27) 4,160,547 -At 31 December 4,160,547 -

Goodwill is stated at cost and reviewed for impairment annually.



8. GOODWILL (CONT’D)

The recoverable amount of a cash-generating unit is determined based on value-in-use calculations using cash flow projections based on financial budgets approved by management covering a period of two years.

The key assumptions used for value-in-use calculations are as follows:-Gross margin : 43%Growth rate : 10%Discount rate : 10%

(a) Budgeted gross margin

The basis used to determine the value assigned to the budgeted gross margin is approximate the gross margin achieved in the year immediately before the budgeted year.

(b) Growth rate

The growth rates used are based on past years achievement and the expected progress of the project under development.

(c) Discount rate

The discount rate used is based on the weighted average cost of capital.

Sensitivity to changes in assumptionsThe management believes that no reasonably possible changes in any of the above key assumptions would cause the carrying value of the goodwill to be materially higher than its recoverable amount.

9. OTHER INVESTMENTS

Group Company2015 2014 2015 2014

RM RM RM RMRedeemable Convertible Preference Shares (“RCPS”) (Note a) - - - -Club membership (Note b) 50,000 - - -

50,000 - - -

(a) RedeemableConvertiblePreferenceShares

Company2015 2014

RM RMRedeemable Convertible Preference Shares (“RCPS”), at cost 14,000,000 14,000,000Less: Accumulated impairment losses (14,000,000) (14,000,000)

- -Accumulated impairment losses:At 1 January 14,000,000 -Addition during the financial year - 14,000,000At 31 December 14,000,000 14,000,000

EKIB had subscribed for 14,000,000 redeemable convertible preference share (“RCPS”) of RM1 each issued by Emas Kiara Marketing Sdn. Bhd. (“EKM”) through the capitalisation of advances made to EKM amounting to RM14,000,000.

The investment in the above unquoted share is designated as available-for-sale financial assets but are stated at cost as its fair values cannot be reliably measured using valuation techniques due to the lack of marketability of the shares.



9. OTHER INVESTMENTS (CONT’D)

(a) RedeemableConvertiblePreferenceShares(Cont’d)

In the previous financial year, the Company assessed the recoverable amount of the unquoted share and determined that an impairment loss of RM14,000,000 be recognised as the recoverable amount was lower than the carrying amount. The recoverable amount of the cash-generating unit is determined using the fair value less costs to sell approach, and this is derived from the net assets position of the subsidiary as at end of the reporting period.

(b) Club membership

Group2015 2014

RM RMClub membership, at cost 50,000 -

The club membership is designated as available-for-sale financial asset.

10. TRADE AND OTHER RECEIVABLES

Group Company 2015 2014 2015 2014

RM RM RM RMNon CurrentRetention monies due and receivables 2,679,411 2,969,230 - -

CurrentTrade Third parties 29,436,124 29,880,295 - -Contract assets (Note 11) 25,252,762 902,912 - -

54,688,886 30,783,207 - -Non-Trade Subsidiaries - - 49,819,694 18,411,443Other receivables 1,310,506 400,493 45,706 41,630Deposits 189,687 29,912,515 10,500 10,500Prepayments 1,204,971 3,776,176 5,771 8,270Advance payment made to trade suppliers 46,251 157,812 - -

2,751,415 34,246,996 49,881,671 18,471,843Less: Allowance for impairment losses- Trade (6,960,722) (6,788,232) - -- Non-Trade - - (2,578,103) (3,644,781)

(6,960,722) (6,788,232) (2,578,103) (3,644,781)50,479,579 58,241,971 47,303,568 14,827,062

Allowance for impairment losses:-At 1 January 6,788,232 5,030,070 3,644,781 10,070,812Addition during the financial year 860,026 2,182,679 - 937,781Writeback of allowance for impairment losses (687,536) (296,997) (1,066,678) (7,363,812)Write-off during the financial year - (134,390) - -Translation differences - 6,870 - -At 31 December 6,960,722 6,788,232 2,578,103 3,644,781



10. TRADE AND OTHER RECEIVABLES (CONT’D)

(a) The normal credit terms granted by the Group range from 30 to 120 days.

(b) Included in trade receivables of the Group are retention sums amounting to RM3,722,076 (2014 - RM3,524,265).

(c) The amounts owing by subsidiaries are unsecured, interest-free and are repayable on demand.

11. CONTRACT ASSETS

Group 2015 2014

RM RMNet carrying amount of contract assets is analysed as follows:-At 1 January (433,585) (777,122)Acquisition of a subsidiary (Note 27) 23,048,736 - Property development and construction revenue recognised during the financial year 19,202,980 14,913,668Less: billings during the financial year (17,867,074) (14,570,131)At 31 December 23,951,057 (433,585)

Contract assets (Note 10) 25,252,762 902,912Contract liabilities (Note 20) (1,301,705) (1,336,497)At 31 December 23,951,057 (433,585)

12. PROPERTY DEVELOPMENT COST

Group2015 2014

RM RMLand at CostAt 1 January - -Acquisition of a subsidiary (Note 27) 20,000,000 -At 31 December 20,000,000 -

Development CostsAt 1 January - -Acquisition of a subsidiary (Note 27) 45,700,000 -Addition during the financial year 2,496,181 -Amortisation of fair value (252,425) -At 31 December 47,943,756 -Cumulative Cost 67,943,756 -

CumulativeCostrecognisedinprofitorlossAt 1 January - -Acquisition of a subsidiary (Note 27) 11,096,429 -Recognised during the financial year 2,910,520 -At 31 December 14,006,949 -Carrying amount 53,936,807 -



12. PROPERTY DEVELOPMENT COST (CONT’D)

The following expense has been included in the development costs:

Group2015 2014

RM RMInterest expenses 6,644 -

The land cost of RM20 million represents the development right to construct and sell 273 units of residential serviced apartment on part of a piece of land located in Bandar Johor Bahru, Daerah Johor Bahru.

13. INVENTORIES

Group2015 2014

RM RMAt costFinished goods 207,680 1,028,541Raw materials - 15,096Inventories in transit - 24,796Consumables - 1,128

207,680 1,069,561

At net realisable valueFinished goods 1,529,710 1,414,950Raw materials 25,871 9,648

1,555,581 1,424,5981,763,261 2,494,159

Recognised in profit or lossInventories recognised as cost of sales 15,048,444 10,461,442Inventories written down 218,867 260,664Write-back in value of inventories (120,903) (343,016)

14. CASH AND CASH EQUIVALENTS

Group Company2015 2014 2015 2014

RM RM RM RMCash and bank balances 1,200,111 1,710,258 801 31,341Fixed deposits with banks 20,670,614 18,923,778 17,298,629 13,593,098

21,870,725 20,634,036 17,299,430 13,624,439

(a) The deposits with licensed banks of the Group and of the Company at the end of the reporting period bore effective interest rates ranging from 3.00 to 3.85% (2014 - 2.23%) per annum and 3.15 to 3.85% (2014 - 2.30%) per annum respectively. The fixed deposits have maturity periods ranging from 1 to 365 (2014 - 1 to 365) days.



14. CASH AND CASH EQUIVALENTS (CONT’D)

(b) Included in the cash and bank balances of the Group is an amount of RM367,885 (2014 - Nil) held pursuant to Section 7A of the Housing Development (Control and Licensing) Act 1966.

(c) For the purpose of the statements of cash flows, cash and cash equivalents comprise the following:-

Group Company2015 2014 2015 2014

RM RM RM RMCash and bank balances 1,200,111 1,710,258 801 31,341Fixed deposits with banks 20,670,614 18,923,778 17,298,629 13,593,098Bank overdraft (Note 18) (1,708,794) (973,357) - -

20,161,931 19,660,679 17,299,430 13,624,439Less: Fixed deposits pledged to banks 2,791,325 1,483,065 300,000 51,550

17,370,606 18,177,614 16,999,430 13,572,889

15. SHARE CAPITAL

Company 2015 2014

Number of shares RM

Number of Shares RM

Ordinary shares of RM0.50 each

At 1 January 100,000,000 50,000,000 100,000,000 50,000,000

Issued And Fully Paid:-At 1 January 90,252,400 45,126,200 89,244,800 44,622,400Employees’ share options exercised 1,607,500 803,750 1,007,600 503,800At 31 December 91,859,900 45,929,950 90,252,400 45,126,200

The Company increased its issued and paid-up share capital from 90,252,400 ordinary shares of RM0.50 each to 91,859,900 ordinary shares of RM0.50 each by shares issued pursuant to the exercise of Employee’s Share Option Scheme of 1,607,500 ordinary shares of RM0.50 each at par. The new shares were issued for cash consideration. The new shares issued rank pari passu in all respects with the existing shares of the Company.

16. RESERVES

Group Company 2015 2014 2015 2014

RM RM RM RMNon-distributable:Share premium 3,318,211 3,230,434 3,318,211 3,230,434Foreign currency translation reserve 130,433 58,127 - -Other capital reserves 749,998 749,998 - -Share option reserve - 189,073 - 189,073

4,198,642 4,227,632 3,318,211 3,419,507DistributableRetained earnings 28,145,243 22,758,101 21,633,198 17,652,166

32,343,885 26,985,733 24,951,409 21,071,673



16. RESERVES (CONT’D)

(a) Share Premium

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

(b) Foreign Currency Translation Reserve

The currency translation reserve is used to record foreign currency exchange differences arising from the translation of the financial statements of foreign operations whose functional currencies are different from that of the Group’s presentation currency. The reserve is not distributable by way of dividends.

(c) Other Capital Reserves

The other capital reserves related to reserve frozen as a result of bonus issue by subsidiary created out of post-acquisition retained profits.

(d) Share Option Reserve

The share option reserve represents the equity-settled share options granted to employees. The reserve is made up of the cumulative of services received from employees recorded over the vesting period commencing from the grant date of equity-settled share options and is reduced by the cancellation or exercise of the share options.

(e) Retained Earnings

Under the single tier tax system, tax on the Company’s profits is the final tax and accordingly any dividends distributed to the shareholders are not subject to tax.

17. EMPLOYEES’ SHARE OPTION SCHEME

The Employees’ Share Option Scheme of the Company (“ESOS”) is governed by the ESOS By-Laws and was approved by shareholders on 8 January 2010. The ESOS is to be in force for a period of five (5) years until 10 January 2015. The terms and conditions of the ESOS are as follows:-

(i) The ESOS is made available to eligible directors and employees of the Group who are employed on a full time basis and are at least eighteen (18) years of age on the date of the offer;

(ii) The maximum number of option to be offered under the ESOS shall not exceed 15%, of the total issued and paid-up share capital of the Company at any one time during the existence of the ESOS;

(iii) The option granted may be exercised anytime within the option period from the date of offer;

(iv) The option price for the new shares under ESOS shall be the five (5) day weighted average market price of the shares as quoted on Bursa Malaysia Securities Berhad, immediately preceding the date of offer with discounts of not more than 10% if deemed appropriate, or at the par value of the shares of RM0.50 each, whichever is higher; and

(v) No director or employee shall participate at any time in more than one (1) employee’s share option scheme implemented by any company within the Group.

The option price and movement of the options granted are as follows:-

Number of Options Over Ordinary Shares of RM0.50 EachDate ofOffer

ExercisePrice

At 1.1.2015 Granted Exercised Lapsed^

At31.12.2015

28.1.2010 RM0.50 3,462,550 - (1,607,500) (1,855,050) -

^ Theoptionsexpiredandlapsedduringthefinancialyear.



18. BORROWINGS

Group2015 2014

RM RMCurrent liabilitiesHire purchase payables (Note 18.1) 248,728 295,122Term loans (Note 18.2) 395,289 366,195Bankers’ acceptances - 659,000Bank overdraft (Note 14) 1,708,794 973,357

2,352,811 2,293,674

Non-current liabilitiesHire purchase payables (Note 18.1) 330,863 555,006Term loans (Note 18.2) 4,244,511 3,551,426

4,575,374 4,106,432

Group2015 2014

RM RMTotal borrowingsHire purchase payables (Note 18.1) 579,591 850,128Term loans (Note 18.2) 4,639,800 3,917,621Bankers’ acceptances - 659,000Bank overdraft (Note 14) 1,708,794 973,357

6,928,185 6,400,106

18.1 Hire Purchase Payables

Group2015 2014

RM RMMinimum hire purchase payments:- not later than 1 year 271,409 328,428- later than 1 year and not later than 5 years 350,503 585,861Total minimum hire purchase payments 621,912 914,289Less: Future interest charges (42,321) (64,161)Present value of hire purchase payables 579,591 850,128

Current - not later than 1 year 248,728 295,122

Non-current- later than 1 year and not later than 5 years 330,863 555,006

579,591 850,128



18. BORROWINGS (CONT’D)

18.2 Term Loans

Group2015 2014

RM RMNon-Current- later than 1 year and not later than 2 years 417,525 385,662- later than 2 year and not later than 5 years 1,376,168 1,287,598- later than 5 years 2,450,818 1,878,166

4,244,511 3,551,426

Current- not later than 1 year 395,289 366,195

4,639,800 3,917,621

(a) The bankers’ acceptances, bank overdraft and term loans as at 31 December 2015 are secured by:

(i) a legal charge over the freehold land and buildings of the Group;

(ii) a pledge of certain deposits belonged to the Group; and

(iii) a corporate guarantee of the Company.

(b) The interest rate profile of the term loans is summarised below:-

Group

Effective Interest Rate %

2015 2014RM RM

Floating rate term loans 4.13 - 5.85 4,639,800 3,917,621

19. DEFERRED TAX LIABILITIES

Group Company2015 2014 2015 2014

RM RM RM RMDeferred tax liabilities 5,712,014 25,000 25,000 25,000

Deferred tax liabilities:At 1 January 25,000 25,000 25,000 25,000Acquisition of a subsidiary 5,293,730 - - -Recognised in profit or loss (Note 24) 456,389 - - -Others (63,105) - - -At 31 December 5,712,014 25,000 25,000 25,000



20. TRADE AND OTHER PAYABLES

Group Company2015 2014 2015 2014

RM RM RM RMNon-CurrentRetention monies due and payables 3,146,017 2,931,964 - -

CurrentTrade Third parties 35,122,411 14,390,877 - -Related parties 49,045 66,349 - -Contract liabilities (Note 11) 1,301,705 1,336,497 - -

36,473,161 15,793,723 - -

Non-TradeSubsidiaries - - 5,659,329 5,824,840Related parties 1,917,602 566,523 - -Other payables 15,220,616 1,233,190 75,399 297,727Accruals 2,600,130 1,346,957 405,445 201,050Deposits received 58,407 1,273,138 - 1,090,000

19,796,755 4,419,808 6,140,173 7,413,61756,269,916 20,213,531 6,140,173 7,413,617

(a) The normal trade credit terms of trade payables range from 30 to 90 days from the date of the invoice. (b) Included in the trade payables of the Group is the total retention sum amounting to RM3,574,236 (2014 - RM3,121,273).

(c) The non-trade balances owing to subsidiaries and related parties are unsecured, interest-free and repayable on demand.

21. REVENUE

Group Company2015 2014 2015 2014

RM RM RM RMSale of products 18,224,097 20,525,837 - -Contract revenue 37,147,790 23,057,547 - -Property Development 4,890,045 - - -Dividend income - - - 13,000,000

60,261,932 43,583,384 - 13,000,000



22. FINANCE COSTS

Group Company 2015 2014 2015 2014

RM RM RM RMInterest expense:- bank overdraft 25,453 3,059 - - - hire purchase 32,454 22,058 - - - term loans 207,205 175,420 - - - trade financing 28,303 39,932 - -

293,415 240,469 - - Fair value adjustment on long term payables 54,113 78,292 - - Fair value adjustment on long term receivables 78,519 58,395 - - Commitment fee 18,593 5,276 - - Bank charges - 8,676 - 160 Bank guarantee charges 34,596 38,973 - - Loan related expenses - 426 - -

479,236 430,507 - 160

23. (LOSS)/PROFIT BEFORE TAXATION

(Loss)/Profit before taxation is arrived at after charging/(crediting):-

Group Company2015 2014 2015 2014

RM RM RM RMAuditors’ remuneration:- Statutory- current financial year 167,970 151,957 34,000 34,000 - underprovision in the prior financial year 6,720 13,996 - 1,000 - Non-statutory 76,000 44,000 76,000 44,000 Depreciation of property, plant and equipment 608,615 561,573 25,541 25,541 Directors’ remuneration:

- fees 120,000 270,000 111,123 120,000 - other emoluments 1,325,549 1,204,666 23,500 21,500 Impairment losses on:- amount owing by subsidiaries - - - 937,781 - investments in subsidiaries - - 1,657,823 2,072,255 - other investment - - - 14,000,000 - receivables 860,026 2,182,679 - - Inventories written down 218,867 260,664 - - Plant and equipment written off 78,860 22 - - Rental of premises 348,126 168,920 16,125 9,000 Bad debts recovered (85,448) (34,464) - - Dividend income - - - (13,000,000)



23. (LOSS)/PROFIT BEFORE TAXATION (CONT’D)

(Loss)/Profit before taxation is arrived at after charging/(crediting):- (Cont’d)

Group Company2015 2014 2015 2014

RM RM RM RMLoss/(Gain) on disposal of:- property, plant and equipment 14,417 (49,622) - - - investments in subsidiaries (8,576,348) (2,739) (5,672,419) (1,998) Gain on foreign exchange:- realised (36,628) (80,300) - - - unrealised (236,978) (20,000) - - Interest income:- deposits with financial institutions (615,054) (508,348) (497,368) (424,973) - fair value adjustment on long term payables (122,426) (356,619) - - - fair value adjustment on long term receivables (78,292) (54,113) - - Rental income - (88,000) - - Write-back of allowance for impairment losses on:- receivables (687,536) (296,997) - - - investments in subsidiaries - - - (1,314,159) - amount owing by a subsidiary - - (1,066,678) (7,363,812) Write-back in value of inventories (120,903) (343,016) - -

24. INCOME TAX EXPENSE

Group Company2015 2014 2015 2014

RM RM RM RMCurrent tax expense- Malaysian income tax 15,010 17,707 - - - Under/(Over)provision in the previous financial year 331 (65,263) - -

15,341 (47,556) - -

Deferred tax expenses (Note 19)- Relating to origination or reversal of temporary differences 456,389 - - -

Real property gains tax:- Overprovision in the previous financial year - (1,740) - - Total income tax expense 471,730 (49,296) - -



24. INCOME TAX EXPENSE (CONT’D)

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

Group Company2015 2014 2015 2014

RM RM RM RMProfit/(Loss) before taxation:-- from continuing operations (1,920,675) 1,710,939 3,879,736 4,010,286- from discontinued operations 7,645,697 (5,562,512) - -Profit/(Loss) before taxation 5,725,022 (3,851,573) 3,879,736 4,010,286

Income tax expense at statutory rate tax rate of 25% 1,431,256 (962,893) 969,934 1,002,572

Tax effects of:Non-allowable expenses 885,046 840,200 714,840 4,417,420Non-taxable income (2,240,108) (64,000) (1,684,774) (5,419,992)Deferred tax assets not recognised during the year 402,705 204,400 - -Overprovision of income tax in the previous financial year - income tax (7,169) (65,263) - -- real property gains tax - (1,740) - -Income tax expense 471,730 (49,296) - -

The statutory tax rate will be reduced to 24% from the current rate of 25%, effective year of assessment 2016.

The components of the deferred tax assets and liabilities during the financial year prior to offsetting are as follows:-

Group 2015 2014

RM RMDeferred tax assetsAllowance for impairment losses on receivables 1,820,750 1,658,750 Unutilised tax losses 3,852,150 3,687,800 Write-down of inventories - 79,000 Unabsorbed capital allowances 1,938,250 1,954,900

7,611,150 7,380,450

Deferred tax liabilitiesAccelerated capital allowances (16,750) (324,250) Unrealised gain on foreign exchange (59,245) -Accelerated depreciation (45,000) - Other temporary allowances (31,250) -

(152,245) (324,250) Net deferred tax assets not recognised 7,458,905 7,056,200



25. PROFIT/(LOSS) AFTER TAXATION FROM DISCONTINUED OPERATIONS

An analysis of the results of the discontinued operations is as follows:-

Group2015 2014

RM RMRevenue 660,701 174,000

Cost of sales (406,765) (1,528,952)Gross profit/(loss) 253,936 (1,354,952)Other Income 199,597 167,370

453,533 (1,187,582)Distribution cost (1,453) (4,657)Administrative expenses (1,154,487) (4,131,086)Other expenses (173,470) (199,582)Finance costs (54,774) (39,605)Results from operating activities (930,651) (5,562,512)Tax benefit - -Results from operating activities, net of tax (930,651) (5,562,512)Gain on disposal of discontinued operations 8,576,348 -Profit/(Loss) after taxation from discontinued operations 7,645,697 (5,562,512)

Attributable to:-

Group2015 2014

RM RMOwners of the Company 7,645,697 (5,562,512)Non-controlling interests - -Profit/(Loss) after taxation from discontinued operations 7,645,697 (5,562,512)

(a) Included in profit/(loss) before taxation from the discontinued operations are the following:-

Group2015 2014

RM RMDepreciation of equipment 93,068 224,108

Rental of premises 62,000 107,560Staff costs 372,138 2,746,359Write-back of impairment loss on receivables - (100,000)Inventories written off - 61,769



25. PROFIT/(LOSS) AFTER TAXATION FROM DISCONTINUED OPERATIONS (CONT’D)

(b) The cash flows attributable to the discontinued operations are the following:-

Group2015 2014

RM RMNet cash for operating activities (2,441,305) (1,904,667)Net cash (for)/from investing activities (1,638,217) 4,980,125Net cash from/(for) financing activities 3,323,978 (7,508,380)Net cash for discontinued operations (755,544) (4,432,922)

26. (LOSS)/EARNING PER ORDINARY SHARE

(i) Basic (loss)/earning per ordinary share

Group2015 2014

RM RMContinuing operations

(Loss)/Profit attributable to owners of the Company (RM) (2,352,970) 1,681,098Number of shares at 1 January 90,252,400 89,244,800Effect of exercise of ESOS 1,550,315 30,922Weighted average number of ordinary shares at 31 December 91,802,715 89,275,722Basic (loss)/earnings per ordinary share (sen) (2.56) 1.88Diluted earnings per share (sen) N/A N/A

Discontinued operations

Profit/(Loss) attributable to owners of the Company (RM) 7,645,697 (5,562,512)Number of shares at 1 January 90,252,400 89,244,800Effect of exercise of ESOS 1,550,315 30,922Weighted average number of ordinary shares at 31 December 91,802,715 89,275,722Basic earnings/(loss) per ordinary share (sen) 8.33 (6.23)Diluted earnings per share (sen) N/A N/A

(ii) Diluted earnings per ordinary share

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

27. ACQUISITION OF A SUBSIDIARY

On 15 September 2015, a wholly-owned subsidiary of the Company, Emas Kiara Properties Sdn. Bhd. acquired 100% equity interests in MB Max Sdn. Bhd. The acquisition of this subsidiary is to enable the Group to expand its business into property development.



27. ACQUISITION OF A SUBSIDIARY (CONT’D)

The following summarises the major classes of consideration transferred, and the recognised amounts of assets acquired and liabilities assumed at the date of acquisition.

Group2015

RMEquipment (Note 5) 2,579Property development cost (Note 12) 54,603,571Contract assets (Note 11) 23,048,736Current tax assets 2,000,000Deposit and prepayments 49,363Cash and bank balances 735,970Trade payables and accruals (34,307,036)Deferred taxation (5,293,730)

Net identifiable assets and liabilities 40,839,453Add: Goodwill on acquisition (Note 8) 4,160,547Total purchase consideration 45,000,000Less: Cash and bank balances of subsidiary acquired (735,970)Total purchase consideration, to be settled by cash 44,264,030

(a) The goodwill is attributable mainly to the control premium paid. In addition, the purchase consideration also included benefits derived from the expected revenue growth of the subsidiary and, its future market development. These benefits are not recognised separately from goodwill because they do not meet the recognition criteria for identifiable intangible assets. The goodwill is not deductible for tax purposes.

(b) The subsidiary has contributed revenue of RM4,890,046 and profit after taxation of RM1,164,375 to the Group since the date of acquisition.

If the acquisition was effective at the beginning of the current financial year, the Group’s revenue and profit after taxation for the current financial year would have been RM20,015,940 and RM4,696,706 respectively.

(c) There were no acquisitions of new subsidiaries in the last financial year.

28. DISPOSAL OF SUBSIDIARIES

During the financial year, the Group disposed of its entire equity interest in Emas Kiara Sdn. Bhd., Noblecorp Lands Sdn. Bhd., Noblecorp Property (Sabah) Sdn. Bhd., Noblecorp Construction Sdn. Bhd., and Noblecorp Engineering Sdn. Bhd. The Group also partially disposed of its equity interest in Inesa Sdn. Bhd. during the financial year.

The financial effects of the disposal at the date of disposal are summarised below:-

Group2015 2014

RM RMProperty, plant and equipment (Note 5) 5,349,150 -Land held for property development 30,009,952 -Property development cost 376,921 -Other receivables 3,241,968 -Amount owing by related companies 656,363 -



28. DISPOSAL OF SUBSIDIARIES (CONT’D)

Group2015 2014

RM RMCash and bank balances 1,379,189 10Other payables (832,685) (749)Amount owing to related companies (9,127,090) -Bank overdraft (975,762) -Fair value of retained interests (2,016) -Non-controlling interest (17,852) -Carrying amount of net assets disposed of 30,058,138 (739)Add: Gain on disposal of subsidiaries 8,576,348 2,739Consideration received, satisfied in cash 38,634,486 2,000Less: Cash and bank balances of subsidiaries disposed of (403,427) (10)Net cash inflow from the disposal of subsidiaries 38,231,059 1,990

29. EMPLOYEE BENEFITS

Group Company2015 2014 2015 2014

RM RM RM RMSalaries, wages, bonuses and allowances 5,519,179 5,707,705 23,500 21,500Defined contribution plan 579,669 652,558 - -Other employee benefits 49,057 123,399 - -

6,147,905 6,483,662 23,500 21,500

30. CAPITAL COMMITMENT

Group2015 2014

RM RMCapital expenditure contracted but not provided for:- property, plant and equipment 3,103,900 3,724,680

31. FOREIGN CURRENCY RATES

The principal closing foreign exchange rates used (expressed on the basis of one unit of foreign currency to RM equivalent) for the translation of the foreign currency balances at the end of the reporting period are as follows:-

Group2015 2014

RM RMIndian Rupee 0.06 0.06Singapore Dollar 3.04 2.65United States Dollar 4.29 3.50



32. CONTINGENT LIABILITIES

Group Company2015 2014 2015 2014

RM RM RM RMUnsecuredPerformance bond issued in favor of third parties for contract

work undertaken by the Group 4,678,272 2,682,066 4,678,272 2,682,066Corporate guarantee given to licensed banks for credit facilities

granted to subsidiaries - - 13,915,800 5,856,017

33. RELATED PARTY DISCLOSURES

(a) Identities of Related Parties

In addition to the information detailed elsewhere in the financial statements, the Group has related party relationships with the following parties:

A company which Wong Kong Foo is also a director:- Excel Engineering & Construction Sdn. Bhd. (“Excel”)

A company which Wong Kong Foo and Lim Yew Hoe is also a director:- Emas Kiara Sdn. Bhd.- Noblecorp Lands Sdn. Bhd.- Noblecorp Property (Sabah) Sdn. Bhd.

A company in which Tan Sri Dato’ Kamaruzzaman Bin Shariff and Lim Yew Hoe and Excel have substantial financial interests:- Innovative Ecological System Sdn. Bhd.

A company in which Wong Kong Foo is a director and has a substantial financial interest in the company:- Intan Kuala Lumpur Sdn. Bhd.

A company in which a substantial shareholder of the Company, See Chii Wei is a director:- See Yong & Sons Construction Sdn. Bhd.

A company in which a director of certain subsidiaries of the Company, Sandanasamy Richard Douglas has a substantial financial interest:- Raswill Representative Pte. Ltd.

Directors of the Company- Dato’ Ikmal Hijaz Bin Hashim (Appointed on 26.02.2016)- Cindi Sim (Appointed on 26.02.2016)- Simon Sim Yow Yung (Appointed on 26.02.2016)- Ng Liang Khiang (Appointed on 26.02.2016)- Pang Siew Heng (Appointed on 26.02.2016)- Wong Yean Ni (Appointed on 26.02.2016)- Chong Jiun Shyang (Appointed on 28.03.2016)- Siew Kah Toong (Resigned on 31.12.2015)- Tan Sri Dato’ Kamaruzzaman Bin Shariff (Resigned on 26.02.2016)- Wong Kong Foo (Resigned on 26.02.2016)- Lim Yew Hoe (Resigned on 26.02.2016)- Haji Abd Talib Bin Baba (Resigned on 26.02.2016)- Ong Kheng Swee (Resigned on 28.03.2016)



33. RELATED PARTY DISCLOSURES (CONT’D)

(b) In addition to the transactions detailed elsewhere in the financial statements, the Group and the Company had the following transactions with the related parties:

Group2015 2014

RM RMSales to- Excel Engineering & Construction Sdn. Bhd. 32,296 320,706- See Yong & Sons Construction Sdn. Bhd. - 25,000- Innovative Ecological System Sdn. Bhd. 8,064 1,600- Emas Kiara Sdn. Bhd. 60,483 -

Purchases from- Innovative Ecological System Sdn. Bhd. 106,705 614,279- Noblecorp Lands Sdn. Bhd. 424 -

Management and Administrative fee receivable from- Noblecorp Lands Sdn. Bhd. 31,500 -- Noblecorp Property (Sabah) Sdn. Bhd. 72,000 -

Factory rental receivable from- Innovative Ecological System Sdn. Bhd - 88,000

Factory rental payable to- Excel Engineering & Construction Sdn. Bhd. 84,000 -- Emas Kiara Sdn. Bhd. 96,000 -

(c) Compensation of key management personnel

The remuneration of directors and other key management personnel are as follows:

Group Company2015 2014 2015 2014

RM RM RM RMDirectorsShort term employee benefits 1,273,500 1,300,500 134,623 141,500Defined contribution plans 121,700 122,216 - -Benefit-in-kind 50,349 51,950 - -

1,445,549 1,474,666 134,623 141,500

Other key management personnelShort term employee benefits 819,253 1,783,554 - -Defined contribution plans 86,964 184,476 - -Benefit-in-kind 16,326 25,100 - -

922,543 1,993,130 - -Total 2,368,092 3,467,796 134,623 141,500



34. OPERATING SEGMENTS

For the management purposes, the Group is ractices into the following business segments based on their products and services as follows:-

Geosynthetic Engineering : Trading, marketing and installation of geosynthetic products and technical fabrics for technical, engineering and industrial applications.

Lighting & Electrical : Trading of lighting products, electrical components and engineering and contracting services.

Construction and M & E : Business of project construction, general contract and mechanical and electrical engineering work.

Property Development : Developing property projects and leasing of properties.

Others : Investment holding, property investment holding and provision of management services.

Management monitors the operating results of its business segments separately for the purpose of making decisions and performance assessment. Segment performance is evaluated based on operating profit or loss. Finance costs and income taxes are managed on a group basis and are not allocated to operating segments.

Segment assets and segment liabilities information are not included in the internal management reports. Hence, no disclosure is made on segment assets and segment liabilities.

Continuing OperationsGeosynthetic

Engineering(Trading &

Installation)Construction

and M&E

Lighting and

ElectricalProperty

Development Others Elimination TotalDiscontinued

Operations Total2015Business Segments

RM RM RM RM RM RM RM RM RMRevenueExternal sales 37,737,143 3,628,182 9,334,406 4,890,045 4,672,156 - 60,261,932 660,701 60,922,633

Inter-segment sales 77,336 - - - - (77,336) - - -

Total 37,814,479 3,628,182 9,334,406 4,890,045 4,672,156 (77,336) 60,261,932 660,701 60,922,633

ResultsSegment results 672,176 314,091 88,774 1,620,764 (4,137,244) - (1,441,439) 7,700,471 6,259,032

Finance costs (479,236) (54,774) (534,010)

Income tax expense (471,730) - (471,730)

Consolidated (loss)/profit after taxation (2,392,405) 7,645,697 5,253,292

Included in segments results are: -

Allowance for impairment losses on receivables (606,075) (100,641) (153,310) - - - (860,026) - (860,026)

Write back of impairment loss on receivables 550,147 133,677 3,712 - - - 687,536 - 687,536

Depreciation of property, plant and equipment (83,090) (39,089) (36,161) (3,977) (353,230) - (515,547) (93,068) (608,615)

Plant and equipment written off - - - - (78,860) - (78,860) - (78,860)

Inventories written off (48,974) - (169,893) - - - (218,867) - (218,867)

Write back in value of Inventories - - - - 120,903 - 120,903 - 120,903



34. OPERATING SEGMENTS (CONT’D)

Continuing OperationsGeosynthetic

Engineering(Trading &

Installation)Construction

and M&E

Lighting and

Electrical Others Elimination TotalDiscontinued

Operations Total2014Business Segments

RM RM RM RM RM RM RM RMRevenueExternal sales 30,620,880 4,463,622 8,517,363 (18,481) - 43,583,384 174,000 43,757,384

Inter-segment sales 16,123 - 631,341 2,657,366 (3,304,830) - - -

Total 30,637,003 4,463,622 9,148,704 2,638,885 (3,304,830) 43,583,384 174,000 43,757,384

ResultsSegment results 674,867 1,778,989 2,020,616 (2,333,026) - 2,141,446 (5,522,907) (3,381,461)

Finance costs (430,507) (39,605) (470,112)

Income tax expense 49,296 - 49,296

Consolidated profit/(loss) after taxation 1,760,235 (5,562,512) (3,802,277)

Included in segments results are: -Allowance for impairment losses on receivables (2,116,269) - (66,410) - - (2,182,679) - (2,182,679)

Write back of impairment loss on receivables 78,712 118,285 - - - 196,997 100,000 296,997

Depreciation of property, plant and equipment (164,347) (22,595) (17,702) (132,821) - (337,465) (224,108) (561,573)

Plant and equipment written off - - - (22) - (22) - (22)

Inventories written off (23,436) - (175,459) - - (198,895) (61,769) (260,664)

Write back in value of Inventories - - - 343,016 - 343,016 - 343,016

In presenting on the basis of geographical segments, segment revenue is based on geographical location of customers.

Geographical information

Source of revenue2015 2014

RM RMDomestic 54,756,069 43,526,859India 6,166,564 230,525

60,922,633 43,757,384

35. FINANCIAL INSTRUMENTS

35.1 Financial risk management objectives and policies

The Group’s financial risk management objective is to practice value creation for shareholders whilst practices the potential adverse impact arising from fluctuations in foreign currency exchange and interest rates and the unpredictability of the financial markets.

The Group operates within an established risk management framework and clearly defined guidelines that are regularly reviewed by the Board of Directors and does not trade in derivative financial instruments. Financial risk management is carried out through risk review programmes, internal control systems, insurance programmes and adherence to the Group financial risk management policies. The Group is exposed mainly to foreign currency risk, liquidity risk, interest rate risk and credit risk. Information on the management of the related exposures is detailed below.



35. FINANCIAL INSTRUMENTS (CONT’D)

35.1 Financial risk management objectives and policies (Cont’d)

(a) Market risk

(i) Foreign Currency Risk

The Group is exposed to foreign currency risk on transactions and balances that are denominated in currencies other than the respective functional currencies of entities within the Group ringgit Malaysia. The currencies giving rise to this risk are primarily United States Dollar, Singapore Dollar and Indian Rupee. Foreign currency risk is monitored closely on an ongoing basis to ensure that the net exposure is at an acceptable level. The Group also holds cash and cash equivalents denominated in foreign currencies for working capital purposes.

United StatesDollar

SingaporeDollar

IndianRupee

RinggitMalaysia Total

Group RM RM RM RM RM2015Financial Assets

Trade and other receivables (excluding prepayments and contract assets) 1,878,935 2,066,515 - 22,755,807 26,701,257

Cash and cash equivalents - 18,151 108,859 21,743,715 21,870,725

1,878,935 2,084,666 108,859 44,499,522 48,571,982

Financial Liabilities

Trade and other payables (excluding contract liabilities) 1,279,255 1,718,552 415,257 54,701,164 58,114,228

Borrowings - 2,190,709 - 4,737,476 6,928,185

1,279,255 3,909,261 415,257 59,438,640 65,042,413

Net financial assets/(liabilities) 599,680 (1,824,595) (306,398) (14,939,118) (16,470,431)

Less: Net financial liabilities denominated in the respective entities’ functional currencies - 1,824,595 - 14,939,118 16,763,713

Currency exposure 599,680 - (306,398) - 293,282

2014

Financial Assets

Trade and other receivables (excluding prepayments and contract assets) 114,356 57,573 - 56,360,184 56,532,113

Cash and cash equivalents 10,688 314,989 811,689 19,496,670 20,634,036

125,044 372,562 811,689 75,856,854 77,166,149

Financial Liabilities

Trade and other payables (excluding contract liabilities) - 605,254 1,079,657 20,124,087 21,808,998

Borrowings - 1,993,447 - 4,406,659 6,400,106

- 2,598,701 1,079,657 24,530,746 28,209,104

Net financial assets/(liabilities) 125,044 (2,226,139) (267,968) 51,326,108 48,957,045

Less: Net financial liabilities/(assets) denominated in the respective entities’ functional currencies - 2,226,139 - (51,326,108) (49,099,969)

Currency exposure 125,044 - (267,968) - (142,924)





(a) Market risk (Cont’d)

(i) Foreign Currency Risk (Cont’d)

Foreign Currency Risk Sensitivity Analysis

Any reasonably possible change in the foreign currency exchange rates at the end of the reporting period against the respective functional currencies of the entities within the Group does not have material impact on the profit/loss after taxation and other comprehensive income of the Group and of the Company and hence, no sensitivity analysis is presented.

(ii) Interest Rate Risk

Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group’s exposure to interest rate risk arises mainly from long-term borrowings with variable rates. The Group’s policy is to obtain the most favourable interest rates available and by maintaining a balanced portfolio of mix of fixed and floating rate borrowings.

The Group obtains its external financing through long-term and short -term borrowings which are based on floating and fixed rates. The Group actively reviews its borrowings in order to ractices on cheaper funding in a low interest rate environment.

The Group’s fixed rate receivables, borrowings and fixed deposits with licensed banks are carried at amortised cost. Therefore, they are not subject to interest rate risk as defined MFRS7 since neither they carrying amount nor the future cash flows will fluctuate because of a change in market interest rates.

Interest rate risk sensitivity analysis

Any reasonably possible change in the interest rates of floating rate term loans at the end of the reporting period does not have material impact on the profit after taxation and other comprehensive income of the Group and of the Company and hence, no sensitivity analysis is presented.

(iii) Equity Price Risk

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

(b) Liquidity Risk

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

Maturity Analysis

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

NoteContractual

InterestCarryingAmount

ContractualUndiscounted

Cash FlowsWithin1 Year

1 - 5Years

Over 5Years

Group % RM RM RM RM RM2015

Hire purchase payables 18.1 2.38 - 3.52 579,951 621,912 271,409 350,503 -

Term loans 18.2 4.13 - 5.85 4,639,800 5,845,320 632,803 2,521,849 2,690,668

Bank overdraft 18 7.85 1,708,794 1,708,794 1,708,794 - -

Trade and other payables 20 6.59 58,114,228 58,114,228 58,114,228 - -

65,042,773 66,290,254 60,727,234 2,872,352 2,690,668





(b) Liquidity Risk (Cont’d)

NoteContractual

InterestCarryingAmount



1 - 5Years

Over 5Years

Group % RM RM RM RM RM2014

Hire purchase payables 18.1 4.77 850,128 914,289 328,428 585,861 -

Term loans 18.2 4.62 3,917,621 4,908,925 524,429 1,585,452 2,799,044

Bankers’ acceptances 18 5.06 659,000 659,000 659,000 - -

Bank overdraft 18 7.85 973,357 973,357 973,357 - -

Trade and other payables 20 5.96 21,808,998 21,808,998 18,877,034 2,931,964 -

28,209,104 29,264,569 21,362,248 5,103,277 2,799,044

CarryingAmount



Company RM RM RM2015Other payables 6,140,173 6,140,173 6,140,173

2014Other payables 7,413,617 7,413,617 7,413,617

(c) Credit Risk

The Group’s exposure to credit risk, or the risk of counterparties defaulting, arises mainly from receivables and cash and cash equivalents. The Group manages its exposure to credit risk by the application of credit approvals, credit limits and monitoring procedures on an on-going basis. For cash and cash equivalents, the Group seek to ensure that cash assets are invested safely and profitably by assessing counterparty risks and allocating placement limits for various creditworthy financial institutions. As for derivative financial instruments, the Group enters into the contracts with various reputable counterparties to minimise the credit risks. The Group considers the risk of material loss in the event of non-performance by the above parties to be unlikely. The Group’s maximum exposure to credit risk is equal to the carrying value of those financial instruments.

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

(i) CreditRiskConcentrationProfile

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

(ii) Exposure To Credit Risk

At the end of the reporting period, the maximum exposure to credit risk is represented by the carrying amount of each class of financial assets recognised in the statement of financial position of the Group and of the Company after deducting any allowance for impairment losses (where applicable).





(c) Credit Risk (Cont’d)

Ageing analysis

The ageing analysis of trade receivables is as follows:-

Grossamount

Individual impairment

Collectiveimpairment

Net carryingamount

Group RM RM RM RM2015

Trade receivables not past due 10,233,472 - - 10,233,472 Retention monies receivables 3,357,369 (481,778) (196,180) 2,679,411 Trade receivables past due:- less than 3 months 4,338,093 - - 4,338,093 - over 3 to 6 months 2,941,731 - - 2,941,731 - over 6 months 1,934,940 - (10,317) 1,924,623 - more than 1 year 9,309,930 (4,974,915) (1,297,532) 3,037,483

32,115,535 (5,456,693) (1,504,029) 25,154,813

2014

Trade receivables not past due 11,669,304 - - 11,669,304 Retention monies receivables 3,994,279 (481,778) (543,271) 2,969,230 Trade receivables past due:

- less than 3 months 5,573,953 - - 5,573,953 - over 3 to 6 months 3,094,629 - (231,941) 2,862,688 - over 6 months 2,550,164 - (201,399) 2,348,765 - more than 1 year 5,967,196 (4,974,915) (354,928) 637,353

32,849,525 (5,456,693) (1,331,539) 26,061,293

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

The Group believes that no impairment allowance is necessary in respect of trade receivables that are past due but not impaired because they are companies with good collection track record and no recent history of default.

(a) Property development segment

The management is of the opinion that the recoverability of the amount owed by the purchases is dully recoverable, due to the following reasons:-

(i) the transfer of the property to the purchaser is subject to the full payment of the outstanding amount;

(ii) most of the purchasers have end financing arrangements, and payments are slow because of the credit processes of the end financiers; and

(iii) in the event the sale is terminated for non-payment, the Group will be able to recover the property.

(b) Other segments

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




35.2 Capital Risk Management

The Group manages its capital to ensure that entities within the Group will be able to maintain an optimal capital structure so as to support its businesses and maximise shareholders’ value. To achieve this objective, the Group may make adjustments to the capital structure in view of changes in economic conditions, such as adjusting the amount of dividend payment, returning of capital to shareholders or issuing new shares.

The Group manages its capital based on debt-to-equity ratio that complies with debt covenants and regulatory, if any. The debt-to-equity ratio is calculated as net debt divided by total equity. The Group includes within net debt, loans and borrowings from financial institutions less cash and cash equivalents. Capital includes equity attributable to the owners of the parent and non-controlling interest.

The Group manages its capital based on debt-to-equity ratio. The debt-to-equity ratio of the Group at the end of the reporting period is not presented as its cash and cash equivalents exceeded the total external borrowings.

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

Under the requirement of Bursa Malaysia Practice Note No. 17/2005, the Company is required to maintain a consolidated shareholders’ equity (total equity attributable to owners of the Company) more than 25% of the issued and paid-up share capital (excluding treasury shares) and such shareholders’ equity is not less than RM40 million. The Company has complied with this requirement.

35.3Classification

Group Company2015 2014 2015 2014

RM RM RM RMFinancial assetsAvailableforsalesfinancialassetsClub membership (Note 9) 50,000 - - -

LoansandreceivablesfinancialassetsTrade and other receivables (excluding prepayments and

contract assets) (Note 10) 26,701,257 56,532,113 47,297,797 14,818,792Cash and cash equivalents (Note 14) 21,870,725 20,634,036 17,299,430 13,624,439

48,571,982 77,166,149 64,597,227 28,443,231

Financial liabilitiesOtherfinancialliabilitiesTrade and other payables (excluding contract liabilities)

(Note 20) 58,114,228 21,808,998 6,140,173 7,413,617Borrowings (Note 18) 6,928,185 6,400,106 - -

65,042,413 28,209,104 6,140,173 7,413,617




35.4 Fair Value Information

The fair values of the financial assets and financial liabilities of the Group and of the Company that maturing within the next 12 months approximated their carrying amounts due to the relatively short-term maturity of the financial instruments. The following table sets out the fair value profile of financial instruments that are carried at fair value and those not carried at fair value at the end of the reporting period:-

Fair Value Of Financial Instruments Carried At Fair Value

Fair Value Of Financial Instruments Not Carried At Fair Value

Total Fair Carrying

Level 1 Level 2 Level 3 Level 1 Level 2 Level 3 Value AmountGroup RM RM RM RM RM RM RM RM2015

Financial AssetTrade and other receivables - - 2,679,411 - - - 2,979,411 2,679,411

Other investment - Club membership - - - - 85,000 - 85,000 50,000

Financial LiabilitiesTrade and other payables - - 3,146,017 - - - 3,146,017 3,146,017

Hire purchase payables - - - - 571,054 - 571,054 579,591

Term loans - - - - 4,639,800 - 4,639,800 4,639,800

2014

Financial AssetTrade and other receivables - - 2,969,230 - - - 2,969,230 2,969,230

Financial LiabilitiesTrade and other payables - - 2,931,964 - - - 2,931,964 2,931,964

Hire purchase payables - - - - 838,684 - 838,684 850,128

Term loans - - - - 3,917,621 - 3,917,621 3,917,621

(a) The fair values of retention sum receivables and payables are measured using discounted cash flow projections based on borrowing rates of 6.59% (2014 - 5.96%) per annum.

(b) The fair values of hire purchase payables and term loans are determined by discounting the relevant cash flows using current interest rates for similar instruments as at the end of the reporting period.



DISCLOSURE OF REALISED AND UNREALISED PROFITS/(LOSSES)

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

Group Company2015 2014 2015 2014

RM RM RM RMTotal retained earnings of the Company and its subsidiaries:- realised profits/(losses) 6,646,955 (11,113,980) 21,658,198 17,677,166 - unrealised losses (5,475,036) (5,000) (25,000) (25,000)

1,171,919 (11,118,980) 21,633,198 17,652,166

Add: Consolidation adjustments 26,973,324 33,877,081 - - At 31 December 28,145,243 22,758,101 21,633,198 17,652,166

SUPPLEMENTARY INFORMATIONFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015


The information set out below is in compliance with the Main Market Listing Requirements of Bursa Malaysia.

1. Share Buybacks

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

2. Options, Warrants or Convertible Securities

On 28 January 2010, the Company through the Option Committee offered and granted options to the eligible directors and the eligible employees based on the eligibility criteria as stated in the Employees’ Share Option Scheme (“ESOS”) By-Laws of the ESOS and at a subscription price of RM0.50 per share.

During the financial year ended 31 December 2015, 1,607,500 and 1,855,050 number of options over ordinary shares of

RM0.50 each was exercised and cancelled respectively pursuant to the ESOS.

The option price and movement of the options granted are as follows:-

Number Of Options over Ordinary Shares Of RM0.50 Each

Date of Offer Exercise Price At 1.1.2015 Granted Exercised Cancelled^

At31.12.2015

28.1.2010 RM0.50 3,462,550 - (1,607,500) (1,855,050) -

^ The options were cancelled during the financial year due to expiration.

Other than share options issued pursuant to the ESOS, the Company did not issue any other options, warrants or convertible securities during the financial year ended 31 December 2015.

3. Utilisation of Proceeds

There was no issuance of new shares, rights issue or issuance of bonds during the financial year to raise any cash proceeds.

4. American Depository Receipt (ADR) or Global Depository Receipt (GDR) Programme

The Company did not sponsor any ADR or GDR programme during the financial year ended 31 December 2015.

5. Imposition of Sanctions and/or Penalties

There were no sanctions and/or penalties imposed on the Company and/or its subsidiaries, directors or management by any regulatory bodies during the financial year ended 31 December 2015, which have material impact on the operations or financial position of the Group.

6. Non-Audit Fees

During the financial year ended 31 December 2015, there was non-audit fees of RM28,000.00 paid to the external auditors, Messrs. Crowe Horwath.

7. Variation in Results

For the financial year ended 31 December 2015, there was no variation in results by 10% or more from the unaudited financial results previously announced. The Company did not during the financial year announce any profit estimate, forecast or projection of any results.

ADDITIONAL COMPLIANCE INFORMATION DISCLOSURES


8. ProfitGuarantee

Save as disclosed below, no profit guarantee was received by the Company during the financial year ended 31 December 2015.

Emas Kiara Properties Sdn. Bhd. (“EKP”), a wholly-owned subsidiary of EKIB, acquired 600,000 ordinary shares of RM1.00 each representing 100% equity interest in MB Max Sdn. Bhd. (“MB Max”) from MB Land Sdn. Bhd. (“MB Land”) for a total cash consideration of RM45.0 million. Consequently, MB Max became a wholly owned subsidiary of EKIB.

It was a term of the sale and purchase agreement that MB Land provide a profit guarantee for the future performance of MB Max. In this respect, MB Land, EKP and the Company had on 13 November 2014 entered into a profit guarantee agreement (“PGA”).

One of the salient terms of the PGA is “In the event MB Max achieves less than the Guaranteed Profit for any of the financial years during the Guaranteed Period, the Guarantor shall be liable on demand to immediately pay the Differential Sum or such other amount which would result in MB Max achieving the Guaranteed Profit for the respective financial year or the Guaranteed Period, as the case may be.”.

Guaranteed Period is defined as the three financial years ending 31 December 2015 to 2017; and Guaranteed Profit is defined as the audited after tax profit of MB Max of Ringgit Malaysia Fifteen Million (RM15,000,000.00) only for Financial Year Ending 2015 (“FYE 2015”) and Ringgit Malaysia Sixteen Million (RM16,000,000.00) only for Financial Year Ending 2016 and an aggregate audited after tax profit of Ringgit Malaysia Fifty One Million (RM51,000,000.00) for three years from Financial Years Ending 2015 to 2017, net of any reversal or adjustment in subsequent years.

Based on the financial statements of MB Max for the financial year ended 31 December 2015, MB Max recorded a profit after tax of approximately RM4.7 million. Accordingly, there is a differential sum i.e. shortfall of RM10.3 million as compared to guaranteed profit for FYE 2015 of RM15 million. The directors are of the opinion that there are reasonable grounds for EKIB not to make a demand for the differential sum of RM10.3 million on MB Land at this juncture for the overall interest and benefits of the Group.

9. Material Contracts

Save as disclosed below, there are no material contracts entered with the Company and/or subsidiaries involving directors’ and/or major shareholders’ interest, which still subsisted as at 31 December 2015 or entered into since 31 December 2014:-

(i) Conditional Share Sale Agreement dated 13 November 2014 between the Company and Intan Kuala Lumpur Sdn Bhd, a

substantial shareholder of the Company for the proposed disposal of the entire issued and paid-up share capital of Noblecorp Lands Sdn Bhd (“NLSB Disposal”), a wholly-owned subsidiary of the Company for a cash consideration of RM9,109,246 and settlement of RM26,970,300 outstanding loan advanced by the Company. The Noblecorp Disposal was completed on 15 September 2015. ;

(ii) Conditional Share Sale Agreement dated 13 November 2014 between the Company and Intan Kuala Lumpur Sdn Bhd, a substantial shareholder for the proposed disposal of the entire issued and paid-up share capital of Emas Kiara Sdn Bhd (“EKSB Disposal), a wholly-owned subsidiary of the Company for a cash consideration of RM2,563,173 and settlement of RM8,496,943 outstanding loan advanced by the Company. The EKSB Disposal was completed on 15 September 2015.

10. Revaluation Policy on Landed Properties

The Group does not have a policy on revaluation of landed properties and neither has the Group re-valued its landed properties during the financial year ended 31 December 2015.

11. Recurrent Related Party Transactions of a Revenue or Trading Nature

At the Company’s Annual General Meeting held on 8 June 2015, the Company had obtained a renewal and new mandate from its shareholders for the Company and/or its subsidiaries to enter into recurrent and new related party transactions of a revenue and/or trading nature which are necessary for the day-to-day operations of the Group, with certain related parties.

Pursuant to Paragraph 10.09(2)(b) and Section 3.1.5 of Practice Note 12 of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad, the details of the transactions conducted pursuant to the mandate during the financial year ended 31 December 2015 are disclosed in Note 33 on pages 75 and 76 of this Annual Report.

The company will be seeking renewal of the shareholders’ mandate for recurrent related party transactions and a new shareholders mandate for new recurrent related party transactions at the forthcoming Annual General Meeting to be convened on 25 May 2016.

ADDITIONAL COMPLIANCE INFORMATION DISCLOSURES (CONT’D)


The Employees’ Share Option Scheme (“ESOS”) is the only share scheme in existence during the financial year ended 31 December 2015. The total number of options granted, exercised and outstanding under the ESOS since its commencement up to 31 December 2015 are set out below:-

Description Number of OptionsGranted 12,399,000Exercised (7,843,900)Cancelled/Expired (4,555,100)Outstanding -

Details of aggregate options granted to and exercised by the Directors of EKIB and the options outstanding under the ESOS since its commencement up to 31 December 2015 are set out below:-

Description Number of OptionsGranted 2,640,000Exercised 1,465,000Cancelled/ Expired 1,175,000Outstanding -

Details of options granted, exercised and outstanding by the Directors and senior management under the ESOS since its commencement up to 31 December 2015 are set out below:-

Directors and Senior Management 2015Aggregate maximum allocation 50%Actual granted 50%

The breakdown of options offered to and exercised by the Non-Executive Directors of EKIB pursuant to the ESOS in respect of the financial year ended 31 December 2015 is set out below:-Non-Executive Director Option Granted Options ExerciseMr. Ong Kheng Swee - -Mr. Siew Kah Toong 150,000 75,000Haji Abdul Talib Bin Baba 150,000 150,000

Total 300,000 225,000

Note:- Further details of the ESOS are set out in the Financial Statements are diclosed in Note 17 on page 64 of this Annual Report.

INFORMATION IN RELATION TO EMPLOYEES’ SHARE OPTION SCHEME


Registered Owner Location

Approximate Land Area/Built-up Area

Description/ Existing Use Tenure

Date of Acquisition

Net book value as at 31.12.2015(RM)

Age of building(years)

Kiaratex Exports Pte Ltd #

1 Pemimpin Drive, #12-01 Singapore 576151

1,216 sq ft Office 999 yrsFrom 6 July 1885

9.9.2011 3,191,894 4

Noblecorp Capital Sdn Bhd

Lot 58917No. 3422Jalan Pekeliling Tanjung 27/1Kawasan PerindustrianIndahpura81000 KulaijayaJohor

2,801.2 sq m (Land)

1,236 sq m(Building)

Single storey detached factory with double storey office

Freehold 18.12.2012 (Date of Sale & Purchase Agreement)

814,041(Land)

2,380,843(Building)

3

LIST OF PROPERTIESAS AT 31 DECEMBER 2015


Authorised Capital : RM50,000,000.00Issued and Paid-up Capital : RM45,929,950No. of Shareholders : 731Class of Shares : Ordinary share of RM0.50 eachVoting Rights : One (1) vote per ordinary share (on poll)

ANALYSIS BY SIZE OF HOLDINGS AS AT 21/03/2016

No. ofHolders %

No. of Shares %

1 - 99100 - 1,0001,001 - 10,00010,001 - 100,00100,001 - 4,592,994 (*)4,592,995 And Above (**)

8161339164

572

1.09422.02546.37522.435

7.7980.273

359131,730

1,590,1816,100,329

33,637,84550,399,456

0.0000.1431.7316.641

36.61954.866

TOTAL: 731 100.000 91,859,900 100.000

Remark:* - Less than 5% of Issued Shares** - 5% And Above of Issued Shares

LIST OF TOP 30 HOLDERS AS AT 21/03/2016(Without Aggregating Securities from different Securities Accounts belonging to the same Registered Holder)

No. Name Holding %

1. KIM FENG CAPITAL SDN BHD 43,179,000 47.005

2. SEE CHII WEI 7,220,456 7.860

3. WONG KONG FOO 4,000,150 4.354

4. SIM SEE KIONG 3,474,000 3.781

5. EMLINK TRADING SDN BHD 3,150,000 3.429

6. LEONG MEI FONG 2,610,800 2.842

7. MIDLANE ENTITY SDN BHD 1,645,000 1.790

8. HANA SENTOSA SDN BHD 1,618,000 1.761

9. NG KOK BOON 1,535,300 1.671

10. PUBLIC NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITES ACCOUNT FOR HING SOH TEE (E-JBU)

1,492,700 1.624

11. CHANG TAI SENG 982,300 1.069

SHAREHOLDERS’ INFORMATIONAS AT 21 MARCH 2016


No. Name Holding %

12. NGSINAR SDN. BHD. 929,000 1.011

13. CINDI SIM 920,000 1.001

14. CHEONG HUI SHEAN 895,600 0.974

15. PEE PHEK YEN 895,600 0.974

16. ALLIANCEGROUP NOMINEES (TEMPATAN) SDN BHDPLEDGED SECURITIES ACCOUNT FOR KER MIN CHOO (8109400)

738,300 0.803

17. HLB NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR TONG SOON XIN

560,000 0.609

18. LING MOOI HONG 539,795 0.587

19. WONG WENG HO 447,800 0.487

20. YEO CHIN KIANG 410,000 0.446

21. LEOW SIEW YONG 292,900 0.318

22. CITIGROUP NOMINEES (TEMPATAN) SDN BHDEMPLOYEES PROVIDENT FUND BOARD (PHEIM) 291,200 0.317

23. ABRAHAM VERGHESE A/L T V ABRAHAM 275,800 0.300

24. HO LI HUA 270,600 0.294

25. CHANG LEE LING 264,500 0.287

26. KWUN YOUNG HWAN 260,200 0.283

27. CIMSEC NOMINEES (ASING) SDN BHDEXEMPT AN FOR CIMB SECURITIES (SINGAPORE) PTE LTD (HOUSE ACCOUNT) 253,800 0.276

28. WONG KONG MENG 235,300 0.256

29. FAN CHUEN YEE 225,000 0.244

30. CIMSEC NOMINEES (TEMPATAN) SDN BHD PLEDGED SECURITIES ACCOUNT FOR CHEW MENG HEAN (J DEDAP-CL) 223,000 0.242

SHAREHOLDERS’ INFORMATION (CONT’D)AS AT 21 MARCH 2016


INFORMATION ON SUBSTANTIAL SHAREHOLDERSAS AT 21 MARCH 2016

Name of Substantial Shareholder

Direct Interest Deemed Interest

No. % No. %

1 Cindi Sim(1) 920,000 1.001 43,179,000 47.00

2 Simon Sim Yow Yung(1) - - 43,179,000 47.00

3 See Chii Wei 7,220,456 7.86 - -

Notes:

(1) Deemed interest by virtue of her / his interest in shares held by Kim Feng Capital Sdn Bhd pursuant to Section 6A of the Companies Act, 1965.

INFORMATION ON DIRECTORS’ SHAREHOLDING AS AT 21 MARCH 2016

Name of Director Direct Interest Deemed Interest

No. % No. %

1 Cindi Sim(1) 920,000 1.001 43,179,000 47.00

2 Simon Sim Yow Yung(1) - - 43,179,000 47.00

3 Dato’ Ikmal Hijaz Bin Hashim - - - -

4 Ng Liang Khiang(2) - - 929,000 1.01

5 Ong Kheng Swee - - - -

6 Pang Siew Heng - - - -

7 Wong Yean Ni - - - -

Notes:

(1) Deemed interest by virtue of her / his interest in shares held by Kim Feng Capital Sdn Bhd pursuant to Section 6A of the Companies Act, 1965.

(2) Deemed interest by virtue of his interest in shares held by NgSinar Sdn Bhd pursuant to Section 6A of the Companies Act, 1965.

SHAREHOLDERS’ INFORMATION (CONT’D)AS AT 21 MARCH 2016


NOTICE OF 17TH ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN THAT the 17th Annual General Meeting of Emas Kiara Industries Berhad will be held at the Hibiscus Room, Amansari Residence Resort, Jalan Persiaran Seri Alam, Bandar Seri Alam, 81750 Johor Bahru, Johor on Wednesday, the 25th day of May, 2016 at 10.00 a.m. for the following purposes:

AGENDA

AS ORDINARY BUSINESS

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

(See Explanatory Note 1)

2. To re-elect the following Directors retiring by rotation pursuant to Article 114 of the Company’s Articles of Association.• DATO’ IKMAL HIJAZ BIN HASHIM• MS CINDI SIM• MR SIMON SIM YOW YUNG• MR NG LIANG KHIANG• MS WONG YEAN NI• MR PANG SIEW HENG• MR CHONG JIUN SHYANG

RESOLUTION 1RESOLUTION 2RESOLUTION 3RESOLUTION 4RESOLUTION 5RESOLUTION 6RESOLUTION 7

3. To approve the payment of Directors’ Fees for the financial year ended 31 December 2015. RESOLUTION 8

4. To approve the payment of Directors’ Fees for the financial year ending 31 December 2016. RESOLUTION 9

5. To re-appoint Messrs Crowe Horwath as Auditors of the Company for the year ending 31 December 2016 and to authorise the Directors to fix their remuneration. RESOLUTION 10

AS SPECIAL BUSINESS

To consider and if thought fit, to pass the following Resolutions :-

6. SPECIALRESOLUTIONPROPOSED CHANGE OF COMPANY’S NAME FROM EMAS KIARA INDUSTRIES BERHAD” TO “MB WORLD GROUP BERHAD”

“THAT the name of the Company be hereby changed from “Emas Kiara Industries Berhad” to “MB WORLD GROUP BERHAD” with effect from the date of Certificate of Change of Name issued by the Companies Commission of Malaysia and that the name of the Company wherever it appears in the Memorandum and Articles of Association be hereby amended accordingly. RESOLUTION 11

7. ORDINARYRESOLUTIONPROPOSED RENEWAL OF SHAREHOLDERS’ MANDATE AND PROPOSED NEW SHAREHOLDERS MANDATE FOR RECURRENT RELATED PARTY TRANSACTION OF A REVENUE OR TRADING NATURE (“PROPOSED SHAREHOLDERS’ MANDATE”)

“THAT approval be and is hereby given for the Proposed Renewal of the Shareholders’ Mandate and Proposed New Shareholders’ Mandate for Emas Kiara Industries Berhad Group of Companies to enter into the category of recurrent related party transactions of a revenue or trading nature falling within the nature of transactions set out in the table in Section 2.3 of the Circular to Shareholders dated 29 April 2016 with the related parties falling within the classes of persons set out in Section 2.2 in the Circular, such transactions which are necessary for the Group’s day-to-day operations and carried out in the ordinary course of business on terms which are not more favourable to the related parties than those generally available to the public and are not to the determent of the minority shareholders.


AND THAT the authority conferred by such Mandate shall continue to be in force until:

(a) the conclusion of the next Annual General Meeting of the Company, at which time it will lapse, unless by resolution passed at the meeting, the authority is renewed;

(b) the expiration of the period within which the next Annual General Meeting is required to be held pursuant to Section 143 (1) of the Companies Act, 1965 (but must not extend to such extension as may be allowed pursuant to Section 143 (2) of the Companies Act, 1965); or

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

whichever is the earlier.

AND THAT the Directors of the Company be and are hereby authorised to complete and do all such acts and things as they may consider expedient or necessary to give effect to this Ordinary Resolution.” RESOLUTION 12

8. ORDINARYRESOLUTIONAUTHORITY TO ALLOT AND ISSUE SHARES PURSUANT TO SECTION 132D OF THE COMPANIES ACT, 1965

“THAT pursuant to Section 132D of the Companies Act, 1965, the Directors be and are hereby empowered to allot and issue shares in the Company at any time and upon such terms and conditions and for such purposes as the Directors may, in their absolute discretion deem fit, provided that the aggregate number of shares issued pursuant to this resolution does not exceed 10% of the issued capital of the Company at any point of time and that the Directors be and are also empowered to obtain the approval for the listing of and quotation for the additional shares so issued on Bursa Malaysia Securities Berhad and that such authority shall continue to be in force until the conclusion of the next Annual General Meeting of the Company.” RESOLUTION 13

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

BY ORDER OF THE BOARD

LEE WEE HEE (MAICSA 0773340)POW JULIET (MAICSA 7020821)Secretaries

Date : 29 April 2016

NOTE :

1. This Agenda item is meant for discussion only as the provision of Section 169(1) of the Companies Act, 1965 and the Company’s Articles of Association do not require a formal approval of the shareholders and hence, is not put forward for voting.

PROXY :

i. A member of the Company who is entitled to attend and vote at a meeting of the Company, may appoint not more than two (2) proxies to attend and vote instead of the Member at the Meeting. The proxy need not be a Member of the Company and the provisions of Section 149(1) of the Companies Act, 1965 shall not apply to the Company.

ii. Where a Member of the Company is an Authorised Nominee as defined in the Central Depositories Act, it may appoint not more than two (2) proxies in respect of each securities account it holds in ordinary shares of the Company standing to the credit of the said securities account.

iii. Where a Member of the Company is an Exempt Authorised Nominee which holds ordinary shares in the Company for multiple beneficial owners in one (1) securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

NOTICE OF 17TH ANNUAL GENERAL MEETING (CONT’D)


iv. Where a Member or the Authorised Nominee appoints two (2) proxies, or where an Exempt Authorised Nominee appoints two (2) or more proxies, the proportion of shareholdings to be represented by each proxy must be specified in the instrument appointing the proxies.

v. A proxy appointed to attend and vote at a meeting of the Company shall have the same rights as the member to speak at the meeting.

vi. The instrument appointing a proxy shall be in writing under the hand of the appointer or of his attorney duly authorised in writing or, if the appointer is a corporation, under its common seal, or the hand of its attorney duly authorised. An instrument appointing a proxy to vote at a meeting shall be deemed to include the power to demand a poll on behalf of the appointer.

vii. The instrument appointing a proxy together with the power of attorney (if any) shall be left at the office at Suite 5.11 & 5.12, 5th Floor, Menara TJB, No. 9, Jalan Syed Mohd. Mufti, 80000 Johor Bahru, Johor at least forty-eight (48) hours before the time appointed for holding the meeting or adjourned meeting at which the person named in such instrument proposes to vote or in the case of a poll, not less than twenty-four (24) hours before the time appointed for the taking of poll, otherwise the person so named shall not be entitled to vote in respect thereof and in default the instrument of proxy shall not be treated as valid. A Member shall not be precluded from attending and voting in person at any general meeting after lodging the instrument of proxy but such attendance shall automatically revoke the proxy’s authority.

viii. In respect of deposited securities, only members whose names appear on the Record of Depositors on 19 May 2016, shall be eligible to attend the meeting or appoint proxy(ies) to attend and/or vote on his behalf.

Statement Regarding Effect Of Resolutions Under Special Business

ix. Proposed Change of Name - Special Resolution No. 11 On 14 April 2016, the Company announced to Bursa Malaysia Securities Berhad that the Board had proposed to change the Company’s

name from “Emas Kiara Industries Berhad” to “MB World Group Berhad”. The Proposed Change of Name to MB World Group Berhad is to reflect a new beginning and identity for the Group.

The proposed name “MB World Group Berhad” was approved and reserved by the Companies Commission of Malaysia (“CCM”) on 21 March 2016. The proposed Change of Name is subject to the approval of the shareholders of the Company by way of a Special Resolution which requires a majority of not less than three fourth of such members of the Company as being entitled so to do vote in person or by proxy at the forthcoming AGM to be convened on 25 May 2016.

The Special Resolution No. 11 proposed in Agenda 6 for the Proposed Change of Name, if approved by the shareholders will be effective from the date of issuance of the Certificate of Change of Company Name by the CCM.

x Proposed Renewal of Shareholders’ Mandate and proposed New Shareholders’ Mandate for Recurrent Related Party Transaction of a Revenue or Trading Nature (“Proposed Shareholders’ Mandate”).

The Ordinary Resolution No. 12 proposed in Agenda 7 is to seek a renewal of the Shareholders’ Mandate and new shareholders’ Mandate to allow the Company and its subsidiaries to enter into recurrent related party transactions of a revenue or trading nature and to enable the Company to comply with Paragraph 10.09,Part E of the Main Market Listing Requirements of Bursa Malaysia Securities Berhad. The mandate will take effect from the date of passing the Ordinary Resolution until the next Annual General Meeting of the Company.

xi. Authority to Allot and Issue Shares pursuant to Section 132D of the Companies Act, 1965. The Ordinary Resolution No. 13 proposed in Agenda 8 is to seek a renewal of the general mandate to provide flexibility to the Company

to issue new securities without the need to convene separate general meeting to obtain its shareholders’ approval so as to avoid incurring additional cost and time. The purpose of this general mandate is for possible fund raising exercise including but not limited to further placement of shares for purpose of funding current and/or future investment projects, working capital, repayment of bank borrowings, acquisitions and/or for issuance of shares as settlement of purchase consideration. As at date of the Notice, the Company has not issued any new shares under this general mandate.

NOTICE OF 17TH ANNUAL GENERAL MEETING (CONT’D)

(Company No. 485144-H)(Incorporated in Malaysia)

I/We ________________________________________________________________________ (Nric No. ________________________________)of (full address) __________________________________________________________________________________________________________a member / members of EMAS KIARA INDUSTRIES BERHAD hereby appoint (full name) ____________________________________________ _____________________________________________________________________________ (Nric No. ________________________________)of (full address) ________________________________________________________________________________________________________ orfailing him, ___________________________________________________________________ (Nric No. ________________________________)of (full address) __________________________________________________________________________________________________________as *my/our proxy to vote for *me/us and on *my/our behalf at the 17th Annual General Meeting of the Company to be held on Wednesday, the 25th day of May, 2016 at 10.00 a.m. held at the Hibiscus Room, Amansari Residence Resort, Jalan Persiaran Seri Alam, Bandar Seri Alam, 81750 Johor Bahru, Johor and at every adjournment thereof to vote as indicated below in respect of the following Resolutions:-

ORDINARYBUSINESS FOR AGAINST

Ordinary Resolution 1 Re-election of DATO’ IKMAL HIJAZ BIN HASHIMOrdinary Resolution 2 Re-election of MS CINDI SIMOrdinary Resolution 3 Re-election of MR SIMON SIM YOW YUNGOrdinary Resolution 4 Re-election of MR NG LIANG KHIANGOrdinary Resolution 5 Re-election of MS WONG YEAN NIOrdinary Resolution 6 Re-election of MR PANG SIEW HENGOrdinary Resolution 7 Re-election of MR CHONG JIUN SHYANGOrdinary Resolution 8 Approval of Directors’ Fee for financial year ended 31-12-15Ordinary Resolution 9 Approval of Directors’ Fee for financial year ending 31-12-16Ordinary Resolution 10 Re-appointment of AuditorsSPECIALBUSINESSSpecial Resolution 11 Proposed Change of Company’s NameOrdinary Resolution 12 Proposed Renewal of Shareholders’ Mandate and New Shareholders’ Mandate for

RRPTOrdinary Resolution 13 Authority to allot and issue shares Pursuant to Section 132D of the Companies Act,

1965.

(Please indicate with an “X” in the space provided above on how you wish your vote to be cast. If you do not do so, the proxy will vote or abstain from voting at his discretion.)

Dated this ______ day of __________________ 2016

No. of shares held :

__________________________________Signature of member/s

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

No of shares PercentageProxy 1: %Proxy 2: %

Total 100%

PROXY FORM

The Company SecretaryEMAS KIARA INDUSTRIES BERHAD(Company No. 485144-H)Suite 5.11 & 5.12,5th Floor Menara TJB,No. 9 Jalan Syed Mohd. Mufti,80000, Johor Bahru,Johor Darul Takzim.

POSTAGE

fold here

fold here

PROXY :i. A member of the Company who is entitled to attend and vote at a meeting of the Company, may appoint not more than two (2) proxies to attend and vote instead of the Member

at the Meeting. The proxy need not be a Member of the Company and the provisions of Section 149(1)(b) of the Companies Act, 1965 shall not apply to the Company.

ii. Where a Member of the Company is an Authorised Nominee as defined in the Central Depositories Act, it may appoint not more than two (2) proxies in respect of each securities account it holds in ordinary shares of the Company standing to the credit of the said securities account.

iii. Where a Member of the Company is an Exempt Authorised Nominee which holds ordinary shares in the Company for multiple beneficial owners in one (1) securities account (“omnibus account”), there is no limit to the number of proxies which the exempt authorised nominee may appoint in respect of each omnibus account it holds.

iv. Where a Member or the Authorised Nominee appoints two (2) proxies, or where an Exempt Authorised Nominee appoints two (2) or more proxies, the proportion of shareholdings to be represented by each proxy must be specified in the instrument appointing the proxies.

v. A proxy appointed to attend and vote at a meeting of the Company shall have the same rights as the member to speak at the meeting.

vi. The instrument appointing a proxy shall be in writing under the hand of the appointer or of his attorney duly authorised in writing or, if the appointer is a corporation, under its common seal, or the hand of its attorney duly authoriosed. An instrument appointing a proxy to vote at a meeting shall be deemed to include the power to demand a poll on behalf of the appointer.

vii. The instrument appointing a proxy together with the power of attorney (if any) shall be left at the office at Suite 5.11 & 5.12, 5th Floor, Menara TJB, No. 9, Jalan Syed Mohd. Mufti, 80000 Johor Bahru, Johor at least forty-eight (48) hours before the time appointed for holding the meeting or adjourned meeting at which the person named in such instrument proposes to vote or in the case of a poll, not less than twenty-four (24) hours before the time appointed for the taking of poll, otherwise the person so named shall not be entitled to vote in respect thereof and in default the instrument of proxy shall not be treated as valid. A Member shall not be precluded from attending and voting in person at any general meeting after lodging the instrument of proxy but such attendance shall automatically revoke the proxy’s authority.

viii. In respect of deposited securities, only members whose names appear on the Record of Depositors on 19 May 2016, shall be eligible to attend the meeting or appoint proxy(ies) to attend and/or vote on his behalf.

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