kamdar group (m) berhad - malaysiastock.biz 2016. 4. 28. · kamdar group (m) berhad company no....

KAMDAR GROUP (M) BERHAD(577740-A)

Corporate Information 2

Notice of Annual General Meeting 3

Directors’ Profile 6

Corporate Structure 8

Chairman’s Statement 9

Corporate Governance Statement 10

Audit Committee’s Report 19

Statement on Risk Management and Internal Control 22

Other Disclosure Requirements Pursuant to the Listing Requirements of Bursa Securities 24

Directors’ Report 26

Statement by Directors and Statutory Declaration 30

Independent Auditors’ Report 31

Statements of Financial Position 33

Statements of Profit And Loss And Other Comprehensive Income 35

Statements of Changes in Equity 37

Statements of Cash Flows 39

Notes to the Financial Statements 41

Supplementary Information 103

Group’s Properties 104

Analysis of Shareholdings 109

Form of Proxy 111

content

1kamdar group (m) bErHad | annual report 2015

Corporate InformatIonKAMDAR GROUP (M) BERHAD

Company No. 577740-A (Incorporated in Malaysia)

NOTICE OF ANNUAL GENERAL MEETING

NOTICE IS HEREBY GIVEN that the Fourteenth Annual General Meeting of the members of the Company will be held at 113, Jalan Tuanku Abdul Rahman, 50100 Kuala Lumpur on Thursday, 26 May 2016 at 10.00 a.m. for the following purposes:- AGENDA AS ORDINARY BUSINESS 1. To receive the Audited Financial Statements for the financial year ended 31st December

2015 together with the Directors' and Auditors' Reports thereon. Please refer to

Note A 2. To approve the payment of Directors’ fees for the year ended 31 December 2015. Resolution 1 3. To re-elect the following directors retiring pursuant to the Company’s Articles of

Association and being eligible, offered themselves for re-election :-

i. Rajesh Kumar A/L Gejinder Nath (Article 102) ii. Simon @ Flam Fernandez (Article 109) iii. Pragna A/P K M Kamdar (Article 109)

Resolution 2 Resolution 3 Resolution 4

4. To re-appoint Messrs SJ Grant Thornton as Auditors of the Company and to authorise the

Directors to fix their remuneration. Resolution 5

AS SPECIAL BUSINESS To consider, and if thought fit, to pass the following Resolution:

ORDINARY RESOLUTION 1. AUTHORITY TO ISSUE SHARES BY THE COMPANY PURSUANT TO SECTION

132D OF THE COMPANIES ACT, 1965

“THAT pursuant to Section 132D of the Companies Act, 1965, and subject to the approvals of the relevant governmental and/or regulatory authorities, the Directors be and are hereby empowered to issue new shares in the Company from time to time upon such terms and conditions and for such purposes as the Directors may deem fit provided that the aggregate number of shares issued pursuant to this resolution does not exceed 10% of the issued share capital of the Company thereat AND THAT such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company AND THAT the Directors be and are hereby also authorised to obtain the approval from Bursa Securities for the listing and quotation of the additional shares so issued.”

Resolution 6

2. To transact any other business which may properly be transacted at an Annual General

Meeting for which due notice shall have been given.

By order of the Board LIM SECK WAH (MAICSA 0799845) M. CHANDRASEGARAN A/L S. MURUGASU (MAICSA 0781031) Company Secretaries Dated this: 28 April 2016 Kuala Lumpur

CORPORATE INFORMATION

BOARD OF DIRECTORS Kamal Kumar Kishorchandra Kamdar – Chairman / Managing Director Chia Lee Hoon – Executive Director Rajesh Kumar A/L Gejinder Nath – Independent Non-Executive Director Simon @ Flam Fernandez – Independent Non-Executive Director Pragna A/P K M Kamdar – Non-Independent Non-Executive Director AUDIT COMMITEE PRINCIPAL BANKERS Chairman Affin Bank Berhad Simon @ Flam Fernandez AmBank Berhad Members Bank Islam Malaysia Berhad Rajesh Kumar A/L Gejinder Nath Bank Muamalat Malaysia Berhad Pragna A/P K M Kamdar CIMB Bank Berhad Hong Leong Bank Berhad REMUNERATION COMMITEE Malayan Banking Berhad OCBC Bank (Malaysia) Berhad Chairman Public Bank Berhad Rajesh Kumar A/L Gejinder Nath RHB Bank Berhad Members Standard Chartered Bank Malaysia Berhad Kamal Kumar Kishorchandra Kamdar United Overseas Bank (M) Berhad Simon @ Flam Fernandez SOLICITORS NOMINATION COMMITTEE Harjinder & Associates Chairman Zeenah, Kirpal & Harcharan Simon @ Flam Fernandez Amrit & Company Members Ganendrah & Associates Rajesh Kumar A/L Gejinder Nath V.M. Mohan, Kareed & Co Pragna A/P K M Kamdar Soo Thien Ming & Nashrah Lim Soh & Goonting COMPANY SECRETARIES Stella Soo Geok Choo & Co Syarikat Ng & Annuar Lim Seck Wah Saigal (MAICSA NO.: 0799845) G. Suresh Ayanger & Associates M. Chandrasegaran A/L S. Murugasu Loke, Chew & Zainal (MAICSA NO.: 0781031) AUDITORS REGISTERED OFFICE SJ Grant Thornton (AF : 0737) Level 15-2, Bangunan Faber Imperial Court Chartered Accountants Jalan Sultan Ismail 50250 Kuala Lumpur STOCK EXCHANGE LISTING Tel: 03-26924271 Fax: 03-27325388 Main Board of Bursa Securities Bursa Securities refers to SHARE REGISTRAR Bursa Malaysia Securities Berhad MEGA CORPORATE SERVICES SDN. BHD. STOCK CODE: 8672 (Company No.: 187984-H) Level 15-2, Bangunan Faber Imperial Court Jalan Sultan Ismail 50250 Kuala Lumpur Tel No. : 03-26924271 Fax No. : 03-27325388

2 kamdar group (m) bErHad | annual report 2015

KAMDAR GROUP (M) BERHAD Company No. 577740-A

(Incorporated in Malaysia)

NOTICE OF ANNUAL GENERAL MEETING NOTICE IS HEREBY GIVEN that the Fourteenth Annual General Meeting of the members of the Company will be held at 113, Jalan Tuanku Abdul Rahman, 50100 Kuala Lumpur on Thursday, 26 May 2016 at 10.00 a.m. for the following purposes:- AGENDA AS ORDINARY BUSINESS 1. To receive the Audited Financial Statements for the financial year ended 31st December

2015 together with the Directors' and Auditors' Reports thereon. Please refer to

Note A 2. To approve the payment of Directors’ fees for the year ended 31 December 2015. Resolution 1 3. To re-elect the following directors retiring pursuant to the Company’s Articles of

Association and being eligible, offered themselves for re-election :-

i. Rajesh Kumar A/L Gejinder Nath (Article 102) ii. Simon @ Flam Fernandez (Article 109) iii. Pragna A/P K M Kamdar (Article 109)

Resolution 2 Resolution 3 Resolution 4

4. To re-appoint Messrs SJ Grant Thornton as Auditors of the Company and to authorise the

Directors to fix their remuneration. Resolution 5

AS SPECIAL BUSINESS To consider, and if thought fit, to pass the following Resolution:

ORDINARY RESOLUTION 1. AUTHORITY TO ISSUE SHARES BY THE COMPANY PURSUANT TO SECTION

132D OF THE COMPANIES ACT, 1965

“THAT pursuant to Section 132D of the Companies Act, 1965, and subject to the approvals of the relevant governmental and/or regulatory authorities, the Directors be and are hereby empowered to issue new shares in the Company from time to time upon such terms and conditions and for such purposes as the Directors may deem fit provided that the aggregate number of shares issued pursuant to this resolution does not exceed 10% of the issued share capital of the Company thereat AND THAT such authority shall continue in force until the conclusion of the next Annual General Meeting of the Company AND THAT the Directors be and are hereby also authorised to obtain the approval from Bursa Securities for the listing and quotation of the additional shares so issued.”

Resolution 6

2. To transact any other business which may properly be transacted at an Annual General

Meeting for which due notice shall have been given.

By order of the Board LIM SECK WAH (MAICSA 0799845) M. CHANDRASEGARAN A/L S. MURUGASU (MAICSA 0781031) Company Secretaries Dated this: 28 April 2016 Kuala Lumpur

notice of AnnuAl GenerAl MeetinG


notice of AnnuAl GenerAl MeetinG (cont'd)

Notes

A. 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.

1. For the purpose of determining a member who shall be entitled to attend and vote at the Annual General Meeting, the Company shall be requesting the Record of Depositors as at 20 May 2016. Only a depositor whose name appears on the Record of Depositors as at 20 May 2016 shall be entitled to attend the said meeting or appoint proxies to attend, speak and vote on his/her stead.

2. A member entitled to attend and vote at the Meeting is entitled to appoint a proxy to attend and vote in his/her stead. A member may appoint up to two proxies to attend the same meeting provided that he specifies the proportion of his shareholding to be represented by each proxy. A proxy may but need not be a member of the Company and a member may appoint any person to be his proxy and the provisions of Section 149(1)(a) & (b) of the Companies Act, 1965 shall not apply.

3. Where a member is an authorised nominee as defined under the Security Industry (Central Depositories) Act, 1991, it may appoint at least one (1) proxy in respect of each Securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.

4. A member who is an exempt authorized nominee is entitled to appoint multiple proxies for each omnibus account it holds.

5. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorized in writing or, if the appointer is a corporation, either under the Corporation’s Common Seal or under the hand of an officer or attorney so authorized.

6. The Form of Proxy must be deposited at the Registered Office of the Company at Level 15-2, Bangunan Faber Imperial Court, Jalan Sultan Ismail, 50250 Kuala Lumpur not less than 48 hours before the time set for holding the meeting or any adjournment thereof.

7. Explanatory Notes To Special Businesses 7.1 Resolution Pursuant to Section 132D of the Companies Act, 1965

The proposed Ordinary Resolution no. 6 is a renewal of the mandate given to the Company by the shareholders at the previous Annual General Meeting held on 16 June 2015, if duly passed, will give the Directors of the Company the flexibility to issue and allot new shares in the Company up to an amount not exceeding in total 10% of the issued share capital of the Company for such purposes as the Directors consider would be in the interest of the Company. This authority, unless revoked or varied at a general meeting, will expire at the conclusion of next Annual General Meeting of the Company. The Company continues to consider opportunities to broaden its earnings potential. If any of the expansion/ diversification proposals involves the issue of new shares, the Directors, under certain circumstance when the opportunity arises, would have to convene a general meeting to approve the issue of new shares even though the number involved may be less than 10% of the issued capital. In order to avoid any delay and costs involved in convening a general meeting to approve such issue of shares, it is thus considered appropriate that the Directors be empowered to issue shares in the Company, up to any amount not exceeding in total 10% of the issued share capital of the Company for the time being, for such purposes. The renewed authority for allotment of shares will provide flexibility to the Company for the allotment of shares for the purpose of funding future investment, working capital and/ or acquisitions. No shares have been issued and allotted by the Company since obtaining the said authority from its shareholders at the last Annual General Meeting held on 16 June 2015.


notice of AnnuAl GenerAl MeetinG (cont'd) notice of AnnuAl GenerAl MeetinG (cont'd)

Notes

A. 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.

1. For the purpose of determining a member who shall be entitled to attend and vote at the Annual General Meeting, the Company shall be requesting the Record of Depositors as at 20 May 2016. Only a depositor whose name appears on the Record of Depositors as at 20 May 2016 shall be entitled to attend the said meeting or appoint proxies to attend, speak and vote on his/her stead.

2. A member entitled to attend and vote at the Meeting is entitled to appoint a proxy to attend and vote in his/her stead. A member may appoint up to two proxies to attend the same meeting provided that he specifies the proportion of his shareholding to be represented by each proxy. A proxy may but need not be a member of the Company and a member may appoint any person to be his proxy and the provisions of Section 149(1)(a) & (b) of the Companies Act, 1965 shall not apply.

3. Where a member is an authorised nominee as defined under the Security Industry (Central Depositories) Act, 1991, it may appoint at least one (1) proxy in respect of each Securities account it holds with ordinary shares of the Company standing to the credit of the said securities account.

4. A member who is an exempt authorized nominee is entitled to appoint multiple proxies for each omnibus account it holds.

5. The instrument appointing a proxy shall be in writing under the hand of the appointer or his attorney duly authorized in writing or, if the appointer is a corporation, either under the Corporation’s Common Seal or under the hand of an officer or attorney so authorized.

6. The Form of Proxy must be deposited at the Registered Office of the Company at Level 15-2, Bangunan Faber Imperial Court, Jalan Sultan Ismail, 50250 Kuala Lumpur not less than 48 hours before the time set for holding the meeting or any adjournment thereof.

7. Explanatory Notes To Special Businesses 7.1 Resolution Pursuant to Section 132D of the Companies Act, 1965

The proposed Ordinary Resolution no. 6 is a renewal of the mandate given to the Company by the shareholders at the previous Annual General Meeting held on 16 June 2015, if duly passed, will give the Directors of the Company the flexibility to issue and allot new shares in the Company up to an amount not exceeding in total 10% of the issued share capital of the Company for such purposes as the Directors consider would be in the interest of the Company. This authority, unless revoked or varied at a general meeting, will expire at the conclusion of next Annual General Meeting of the Company. The Company continues to consider opportunities to broaden its earnings potential. If any of the expansion/ diversification proposals involves the issue of new shares, the Directors, under certain circumstance when the opportunity arises, would have to convene a general meeting to approve the issue of new shares even though the number involved may be less than 10% of the issued capital. In order to avoid any delay and costs involved in convening a general meeting to approve such issue of shares, it is thus considered appropriate that the Directors be empowered to issue shares in the Company, up to any amount not exceeding in total 10% of the issued share capital of the Company for the time being, for such purposes. The renewed authority for allotment of shares will provide flexibility to the Company for the allotment of shares for the purpose of funding future investment, working capital and/ or acquisitions. No shares have been issued and allotted by the Company since obtaining the said authority from its shareholders at the last Annual General Meeting held on 16 June 2015.


Directors’ ProfileDIRECTORS’ PROFILE

1. KAMAL KUMAR KISHORCHANDRA KAMDAR – Chairman / Managing Director

Mr. Kamal Kumar, a Malaysian, aged 46. He graduated with an LLB (Hons) Degree from Leicester University, and completed the Barrister at Law at Middle Temple, United Kingdom. He was previously a manager of KSB. He is also a director of several private limited companies. He was appointed as a Non-Independent Non-Executive Director of KGMB on 16 February 2005 and redesignated to Executive Director on 5 June 2008 and was subsequently redesignated to Managing Director on 27 May 2011. On 24 April 2015, he was appointed as Chairman of the Board. He is a member of the Remuneration Committee. He is also a director of all the subsidiaries under the KGMB Group. He holds 53,468,715 shares in KGMB. He is a sibling to Pragna A/P K M Kamdar and has family relationship with substantial shareholders of KGMB. He has no conflict of interest with KGMB and has no convictions for offences within the past five years except for traffic offences.

2. RAJESH KUMAR A/L GEJINDER NATH – Independent Non-Executive Director

Mr. Rajesh Kumar A/L Gejinder Nath, a Malaysian, age 48. He graduated with a Bachelor of Letters and Law (Hons) from University of London in 1992. In 1995, he was admitted to the Malaysian Bar. He has since been in active practice covering a vast scope of litigation matters pertaining to civil, commercial and corporate litigation, construction claims and disputes, industrial relations and appellate matters. He is currently a partner of Messrs. Vicknaraj, R.D. Ratnam, Rajesh Kumar & Associates. He is also a member of the Malaysian BAR Council Disciplinary Committee. He was appointed as an Independent Non-Executive Director of KGMB on 18 May 2011. He is the Chairman of the Remuneration Committee and a member of the Nomination and Audit Committees. He does not hold any shares in KGMB. He has no family relationship with other directors or major shareholders of KGMB. He has no conflict of interest with KGMB and has no convictions for offences within the past five years except for traffic offences.

3. CHIA LEE HOON – Executive Director

Ms Chia Lee Hoon, a Malaysian, age 53. She is a Certified Chartered Accountant, a member of the Association of Chartered Certified Accountants (ACCA) since 2005 and a member of Malaysian Institute of Accountants (MIA) since 2006. She joined Kamdar as an Accounts Clerk in 1987. She gained vast experience in accounting and was promoted to Group Finance Manager in 2003. She is presently the Group Financial Controller and is responsible for the financial management of KGMB and its group and had been serving the Group for the past twenty-nine (29) years.

She was appointed as an Executive Director of KGMB on 2 March 2009 and resigned on 18 May 2011. Subsequently, she was appointed again as an Executive Director of KGMB on 24 April 2015 which she is currently holding.


Directors’ Profile (cont'd)

DIRECTORS’ PROFILE

1. KAMAL KUMAR KISHORCHANDRA KAMDAR – Chairman / Managing Director

Mr. Kamal Kumar, a Malaysian, aged 45. He graduated with an LLB (Hons) Degree from Leicester University, and completed the Barrister at Law at Middle Temple, United Kingdom. He was previously a manager of KSB. He is also a director of several private limited companies. He was appointed as a Non-Independent Non-Executive Director of KGMB on 16 February 2005 and redesignated to Executive Director on 5 June 2008 and was subsequently redesignated to Managing Director on 27 May 2011. He is not a member of any board committee. He is also a director of all the subsidiaries under the KGMB Group. He holds 53,468,715 shares in KGMB. He has family relationship with substantial shareholders of KGMB. He has no conflict of interest with KGMB and has no convictions for offences within the past ten years except for the traffic offences.

2. DATUK EMAM MOHD HANIFF BIN EMAM MOHD HUSSAIN – Senior

Independent Non-Executive Director Datuk Emam Mohd Haniff, a Malaysian, aged 72. He graduated with a Bachelor of Arts (Hons) degree from the University of Malaya in 1966 and, in the same year, joined the Ministry of Foreign Affairs (Wisma Putra). Since then he has held various positions both in the Ministry as well as in Malaysian diplomatic missions abroad, culminating in his appointment as Malaysia’s Ambassador to Pakistan (1983-1986), Ambassador to the Philippines (1987-1991), and High Commissioner to Singapore (1992-1997). He retired from the Malaysian Diplomatic Service upon reaching the mandatory age of 55 in 1997. He was appointed as an Independent Non-Executive Director of KGMB on 16 February 2005. He is the Chairman of the Nomination Committee and a member of the Audit and Remuneration Committees. He currently also sits on the boards of Edaran Berhad and Lion Corporation Berhad. He does not hold any shares in KGMB. He has no family relationship with other directors or major shareholders of KGMB. He has no conflict of interest with KGMB and has no convictions for offences within the past ten years except for the traffic offences.

3. RAJESH KUMAR A/L GEJINDER NATH – Independent Non-Executive Director

Mr. Rajesh Kumar A/L Gejinder Nath, a Malaysian, age 47. He graduated with a Bachelor of Letters and Law (Hons) from University of London in 1992. In 1995, he was admitted to the Malaysian Bar. He has since been in active practice covering a vast scope of litigation matters pertaining to civil, commercial and corporate litigation, construction claims and disputes, industrial relations and appellate matters. He is currently a partner of Messrs. Vicknaraj, R.D. Ratnam, Rajesh Kumar & Associates. He is also a member of the Malaysian BAR Council Disciplinary Committee. He was appointed as an Independent Non-Executive Director of KGMB on 18 May 2011. He is the Chairman of the Remuneration Committee and a member of the Nomination and Audit Committees.

She does not hold any shares in KGMB. She has no family relationship with other directors or major shareholders of KGMB. She has no conflict of interest with KGMB and has no convictions for offences within the past five years except for traffic offences.

4. SIMON @ FLAM FERNANDEZ – Independent Non-Executive Director

Mr. Simon @ Flam Fernandez, a Malaysian, age 64. He is a Chartered Accountant and a member of the Institute of Chartered Accountants of England and Wales. He started his career since the graduation until December 1984 as Audit Senior in Leigh Sorene and Lawson and Gainsford Elliot, United Kingdom (UK). In January 1985 till October 1994, he joined Schiavi Pole Brett and Fuller Gowing in UK as Audit Manager. In December 1994 to July 1997, he was with HSS Integrated Sdn. Bhd. as Finance Manager. In August 1997 to May 2000, he worked as Chief Financial Officer in Polyfelt Asia (Manufacturing) Sdn. Bhd. and from September 2000 to April 2003, he worked as SAP Consultant with Magnus Management Consultants Sdn. Bhd. Thereafter, he worked as a Project Manager / System Designer from May 2003 till June 2005. In July 2005, he joined Servicom Holdings Sdn. Bhd. as Group Chief Financial Officer, a position he presently holds. He was appointed as an Independent Non-Executive Director of KGMB on 15 September 2015. He is the Chairman of the Audit and Nomination Committees and a member of the Remuneration Committee. He does not hold any shares in KGMB. He has no family relationship with other directors or major shareholders of KGMB. He has no conflict of interest with KGMB and has no convictions for offences within the past five years except for the traffic offences.

5. PRAGNA A/P K M KAMDAR – Non-Independent Non-Executive Director

Ms. Pragna, a Malaysian, aged 48. She graduated in 2010 with CES Certificate, SAEA. She started her career in 2004 as Real Estate Agent, ERA until 2012. From 2012 till 2014, she worked with Dennis Wee Group as Real Estate Agent. She was appointed as a Non-Independent Non-Executive Director of KGMB on 2 March 2016. She is a member of the Audit and Nomination Committees.

She does not hold any directorships in any other public companies. She holds 9,683,456 shares in KGMB. She is a sibling to Kamal Kumar Kishorchandra Kamdar and has family relationship with substantial shareholders of Kamdar Group (M) Berhad. She has no conflict of interest with KGMB and has no convictions for offences within the past five years except for traffic offences.


Corporate InformatIon


corPorAte structure

100%Orisea Trade

Sdn. Bhd.

100%Beauty Gallant

Sdn. Bhd.

100%Kamdar (South)

Sdn. Bhd.

100%Kamdar Sdn. Bhd.

100%Kamdar Holdings

Sdn. Bhd.

100%Pusat

Membeli-BelahKamdar (Penang)

Sdn. Bhd.

100%Mint Saga

(M) Sdn. Bhd.

100%Kesar Sdn. Bhd.

100%Pusat

Membeli-BelahKamdar Sdn. Bhd.

100%Kamdar Stores

Sdn. Bhd.

100%Kamdar (B) Sdn. Bhd.

kAMDAr GrouP (M) berHAD | annual report 2015 8

KAMDAR GROUP (M) BERHAD

cHAirMAn's stAteMent

On behalf of the Board of Directors, I am pleased to present the Annual Report and Audited Financial Statements of Kamdar Group (M) Berhad for the year ended 31st December 2015.

FINANCIAL REVIEW

The Group has faced a difficult year with its many challenges but has nevertheless managed to overcome them. Our turnover decreased by 7.45% from RM183,688,333 to RM170,001,335 and the profit before tax has declined by 96.58% to RM441,454 from RM12,892,960 compared to the previous financial year.

BUSINESS REVIEW

2015 was a very challenging year for Malaysia. The introduction of GST coupled with the decline in the value of the Ringgit led to increasing costs of goods. In the face of declining buying power from consumers in general, the retail sector has slowed down significantly compared to the preceding year especially in soft lines and non-essentials.

Kamdar’s turnover has been sharply affected by the temporary closure for renovation of our flagship and principal store at 113, Jalan Tuanku Abdul Rahman from August 2014 till December 2015. During the year, we further rationalised our outlets by closing the Kemasik outlet. The business in our other stores has nevertheless been relatively resilient and we have managed to cap the drop at around 5% on average.

We face increasing competition from new entrants into the market and more aggressive competition from existing competitors. This has led to decreasing turnover and margins and the situation will prevail for some time. The outlook remains quite challenging but nevertheless we are striving to improve our market presence and position locally as well as explore opportunities overseas.

DIVIDEND

The Board of Directors does not recommend any dividend for the financial year ended 31st December 2015.

ACKNOWLEDGEMENT

I would like to extend my thanks, on behalf of the Board, to the Management and Staff of Kamdar who in these exceptional times have risen beyond expectations and have, striven to grow and improve both themselves and the company and the business.

Thank You.

Yours faithfully,

Kamal KamdarChairman


corPorAte GovernAnce stAteMentCORPORATE GOVERNANCE STATEMENT INTRODUCTION The Board of Directors is committed towards adhering to the requirements and guidelines as per the Malaysian Code on Corporate Governance 2012 (Code) as well as the Main Market Listing Requirements (MMLR) of Bursa Malaysia Securities Berhad and strives to adopt the substance behind the corporate governance prescriptions and not merely the form. This statement describes the practices that the Company had taken with respect to each of the key principles and the extent of its compliance with the Code during the financial year. 1. Board of Directors

Composition of the Board and Board Balance

The Board comprises of a Chairman/Managing Director, an Executive Director, two (2) Independent Non-Executive Directors and a Non-Independent Non-Executive Director. Furthermore, the Board comprises at least one third of Independent Non-Executive Directors as required by the MMLR of Bursa Malaysia Securities Berhad. The names and profile of the Directors are stated in the Director’s profile of this Annual Report.

The roles of the Chairman and Group Managing Director are held by the same Director. This departs from Recommendation 3.4 of the MCCG 2012 which stipulates that the positions of Chairman and Chief Executive Officer / Managing Director should be held by different individuals, and the Chairman must be a Non-Executive member of the Board.

The Board believes that for its current size, it is more expedient for the two (2) roles to be held by the same person as long as there are pertinent checks and balance to ensure no one person in the Board has unfettered powers to make major decisions for the Company. As such, the Board is of the view that the significant composition of Independent Non-Executive Directors, which is made up of 40% of the current Board’s size, provides for the relevant checks and balance.

The Chairman is responsible for ensuring the adequacy and effectiveness of the Board’s governance process and acts as a facilitator at Board meetings to ensure that contributions from Directors are forthcoming on matters being deliberated and that no Board member dominates the Board discussion. As the Group Managing Director, supported by fellow Executive Director, he implements the Group’s strategic initiatives, policies and decision adopted by the Board and oversees the operations and business development of the Group.

The members of the Board have a wide range of skills and experience which bring a wealth of expertise to the leadership of the Group.

The mix of directors on the Board is broadly balanced to reflect the interests of major shareholders, management and minority shareholders. There is no one member of group which dominates the decision making processes that the Board undertakes. Furthermore, the number of Independent Directors ensures that issues of performance, strategy, compliance and resources are discussed and examined in depth in order to take into consideration the long-term interest of the Group’s stakeholders. This framework enables the direction of the Group’s affairs to be firmly in the Board’s control.

The Board, through the Nomination Committee will take steps to ensure that women candidates are sought as part of its gender diversity and recruitment exercise. Selection of women candidates to join the Board will be, in part, dependent on the pool of women candidates with the necessary skills, knowledge and experience. The ultimate decision will be based on merit and contributions the candidate brings to the Board. The Company currently has 2 (two) female Directors on the Board.

Board Duties and Responsibilities

The Board has several duties and responsibilities which encompass the following:

- to review and adopt a strategic plan for the Group in order to enhance its growth and

profitability; - to identify risks and ensure the implementation of suitable internal control systems to manage

these risks; - to approve compensation packages for key management and succession policies for the

Group;

- to oversee the development and implementation of a communication policy for the Group;

- to oversee the Group’s business conduct as well as to evaluate if the Group’s businesses are properly managed; and

- to review the adequacy and the integrity of the Group’s management information and internal

control system as well as systems for compliance with applicable laws, regulations, directives, rules and guidelines.

Board Charter and Code of Ethics

The Company has established the Board Charter on 27 February 2013 which shall be subject to review and update as and when the need arises.

The Company’s Codes of Ethics for directors and employees continue to govern the standards of ethics and good conduct expected of directors and employees respectively.

In addition, the Company’s Whistle-Blower Policy seek to foster an environment where integrity and ethical behaviour are maintained and any illegal or improper action and/or wrongdoing in the Group may be exposed.

Time Commitment

The Directors do observe the recommendation of the Code that they are required to notify the Board before accepting any new directorship and to indicate the time expected to be spent on the new appointment.

To ensure that the Directors have the time to focus and fulfil their roles and responsibilities effectively, they must not hold more than 5 directorships in public listed companies and must be able to commit sufficient time to the Company.

The Board is satisfied with the level of time commitment given by the Directors towards fulfilling their roles and responsibilities as Directors of the Company. This is evidenced by the attendance record of the Directors at Board meetings.


corPorAte GovernAnce stAteMent (cont'd)skills, knowledge and experience. The ultimate decision will be based on merit and contributions the candidate brings to the Board. The Company currently has 2 (two) female Directors on the Board.

Board Duties and Responsibilities

The Board has several duties and responsibilities which encompass the following:

- to review and adopt a strategic plan for the Group in order to enhance its growth and

profitability; - to identify risks and ensure the implementation of suitable internal control systems to manage

these risks; - to approve compensation packages for key management and succession policies for the

Group;

- to oversee the development and implementation of a communication policy for the Group;

- to oversee the Group’s business conduct as well as to evaluate if the Group’s businesses are properly managed; and

- to review the adequacy and the integrity of the Group’s management information and internal

control system as well as systems for compliance with applicable laws, regulations, directives, rules and guidelines.

Board Charter and Code of Ethics

The Company has established the Board Charter on 27 February 2013 which shall be subject to review and update as and when the need arises.

The Company’s Codes of Ethics for directors and employees continue to govern the standards of ethics and good conduct expected of directors and employees respectively.

In addition, the Company’s Whistle-Blower Policy seek to foster an environment where integrity and ethical behaviour are maintained and any illegal or improper action and/or wrongdoing in the Group may be exposed.

Time Commitment

The Directors do observe the recommendation of the Code that they are required to notify the Board before accepting any new directorship and to indicate the time expected to be spent on the new appointment.

To ensure that the Directors have the time to focus and fulfil their roles and responsibilities effectively, they must not hold more than 5 directorships in public listed companies and must be able to commit sufficient time to the Company.

The Board is satisfied with the level of time commitment given by the Directors towards fulfilling their roles and responsibilities as Directors of the Company. This is evidenced by the attendance record of the Directors at Board meetings.


corPorAte GovernAnce stAteMent (cont'd)

Board Meetings and Supply of Information to the Board

The Board is scheduled to meet quarterly with additional meetings to be convened when urgent matter need to be discussed and approved in between these scheduled meetings. Sufficient notice is given to the Board prior to the meeting in order for them to be present.

The board papers are disseminated to all Directors before the meeting, to give sufficient time for them to review and prepare for the meeting. The proceedings are minuted and thereafter confirmed by the Chairman of the meeting. The Directors have access to the Company Secretary and external independent experts who may be engaged at the Company’s expense to seek advice and services.

The Board is also regularly updated on new statutory and regulatory requirements concerning their duties and responsibilities and the operation of the Group.

Appointment and Re-election of Directors

Pursuant to the Articles of Association of the Company, one-third (or the number nearest to one-third) of the Directors are required to retire from office at each annual general meeting. Further, all the Directors are required to retire from office at least once in every three (3) years. However, a retiring Director is eligible for re-election at the meeting at which he or she retires. An election of the retiring Directors shall take place every year. Directors over seventy (70) years of age are subject for re-appointment annually in accordance with Section 129(6) of the Companies Act 1965. Any person appointed as a Director, either to fill a casual vacancy or as an addition to the existing Directors shall hold office only until the conclusion of the next annual general meeting, and shall be eligible for re-election but shall not be taken into account in determining the directors who are to retire by rotation at that meeting.

The Board met four (4) times during the financial year ended 31 December 2015. Attendance by each member of the Board during the financial year ended 31 December 2015 are as follows:-

Name of Board Member Designation Number of

Meetings Attended

(Out of 4 held) Kamal Kumar Kishorchandra Kamdar

Chairman / Managing Director 3/4

Hamendra A/L B.M. Kamdar (resigned w.e.f. 24 April 2015)

Chairman / Executive Director 1/2

Datuk Emam Mohd Haniff Bin Emam Mohd Hussain (resigned w.e.f. 27 August 2015)

Independent Non-Executive Director 3/3

Rajesh Kumar A/L Gejinder Nath Independent Non-Executive Director 4/4 Ong Liang Beng (retired w.e.f. 16 June 2015)

Independent Non-Executive Director 3/3

Chia Lee Hoon (appointed w.e.f. 24 April 2015)

Executive Director 2/2

Pragna A/P K M Kamdar (appointed w.e.f. 2 March 2016)

Non-Executive Non-Independent Director

-



Audit Committee

The Audit Committee has the Board’s authority to:

- assess the independence and objectivity of external and internal auditors; - ensure the internal control system is adequate and effective;

- have full access to information of the Group;

- exercise its full responsibility within the stipulated terms of reference and be given the

necessary resources to do so; and

- investigate matters arising. The composition of our Audit Committee is as follows:-

Name Designation Directorship

Ong Liang Beng (retired w.e.f. 16 June 2015) Chairman Independent Non-Executive

Simon @ Flam Fernandez (apointed w.e.f 15 September 2015) Chairman Independent Non-Executive

Datuk Emam Mohd Haniff bin Emam Mohd Hussain (resigned w.e.f. 27 August 2015)

Member Independent Non-Executive

Rajesh Kumar A/L Gejinder Nath Member Independent Non-Executive

Prana A/P K M Kamdar (appointed w.e.f. 2 March 2016) Member Non-Independent Non-

Executive

The committee’s report is detailed in the Audit Committee Report section of this Annual Report.

Nomination Committee

The Nomination Committee has the responsibility of proposing new nominees to the Board. Besides, it has the task of assessing the performance of the Directors on an annual basis. However, the decision as to who shall be appointed lies with the entire Board but after taking into consideration the recommendations of the Nomination Committee.

Other than reviewing the performance of the members of the Board, assessing the effectiveness of the Board as an entity as well as the contributions of each individual director, the Nomination Committee reviews the needed skills, experience and core competencies which should be possessed by Non-Executive Directors.

New appointments of member are made through a formal and transparent process which is consistent with the Company’s Articles of Association and under the supervision of the Board. The appointment as well as the proposed re-appointment/re-election at the Annual General Meeting (“AGM”) is recommended by the Nomination Committee to the Board for its approval. Continuous reviews are made on the effectiveness as a whole, the various Committees of the Board and the contributions of each director.



The composition of our Nomination Committee is as follows:-


Datuk Emam Mohd Haniff bin Emam Mohd Hussain (resigned w.e.f. 27 August 2015)

Chairman Independent Non-Executive

Simon @ Flam Fernandez (appointed w.e.f. 15 September 2015) Chairman Independent Non-Executive

Rajesh Kumar A/L Gejinder Nath Member Independent Non-Executive

Ong Liang Beng (retired w.e.f. 16 June 2015) Member Independent Non-Executive

Pragna A/P K M Kamdar (appointed w.e.f. 2 March 2016) Member Non-Independent Non-Executive

During the financial year under review the Nomination Committee held one (1) meeting.

Remuneration Committee

The Remuneration Committee is tasked with reviewing the performance of the Executive Directors and then to inform the Board of their recommendations on specific adjustments in remuneration as well as reward payments commensurate the respective contributions of the Executive Directors.

The Remuneration Committee also recommends the framework of fees to the Non-Executive Directors. The remuneration, in this case, reflects the experience, responsibilities shouldered as well as the individuals’ non-involvement in discussions and decision making. The Remuneration Committee is responsible for setting the framework of the Executive Directors’ remuneration packages and makes recommendations to the Board on the elements of the remuneration and terms of appointment. The Directors concern will abstain from deliberation and voting in respect of their remuneration. Nevertheless, it is the responsibility of the Board to approve the remuneration of these Directors. The composition of our Remuneration Committee is as follows:-


Rajesh Kumar A/L Gejinder Nath Chairman Independent Non-Executive

Datuk Emam Mohd Haniff bin Emam Mohd Hussain (resigned w.e.f 27 August 2015)

Member Independent Non-Executive

Hamendra A/L B.M. Kamdar (resigned w.e.f. 24 April 2015) Member Chairman / Executive Director

Ong Liang Beng (retired w.e.f. 16 June 2015) Member Independent Non-Executive

Kamal Kumar Kishorchandra Kamdar (appointed w.e.f. 19 August 2015) Member Chairman / Managing Director

Simon @ Flam Fernandez (appointed w.e.f. 15 September 2015) Member Independent Non-Executive

During the financial year under review the Remuneration Committee held one (1) meeting.



Director’s Training

Save for Pragna A/P K M Kamdar who was appointed as a Board member on 2 March 2016 who has yet to attend the Mandatory Accreditation Programme (“MAP”), all Directors have completed the MAP as prescribed by the MMLR of Bursa Securities. As part of the Continuous Education Programme to keep up to date with new developments Directors are encouraged to participate in seminars, trainings and conferences organised by the relevant regulatory authorities, professional bodies and commercial entities. The objective is to further enhance their skill, knowledge and expertise as well keep up to date with recent development in the industry in order to discharge their duties as Directors.

During the financial year under review, the Directors attended the following training programme/courses and/or conferences listed below:

Name of Director Training

attended Reason for

non-compliance

(a) Mr. Kamal Kumar Kishorchandra Kamdar - Note 1 (b) Mr. Rajesh Kumar A/L Gejinder Nath - Note 1 (c) Ms. Chia Lee Hoon

(appointed w.e.f. 24 April 2015) Note 2 - 4

(d) Mr. Simon @ Flam Fernandez (appointed w.e.f. 15 September 2015)

- Note 1

(e) Pragna A/P K M Kamdar (appointed w.e.f. 2 March 2016)

- -

Note 1: Had an exceptionally committed schedule for 2015, however, throughout the current

financial year, all Directors received updates and briefings, particularly on regulatory requirements and changes to the Malaysian Financial Reporting Standards that would affect the Group’s financial statements.

Mode of training

Title of training Number of hours/days

spent

Seminar Budget 2016 : Income Tax / RPGT / GST Updates and Tax Planning

2 days Note 2

Conference ACCA Annual Conference 2015 Igniting Innovation

Within 1 day Note 3

Seminar GST Review and Planning 1 day Note 4

2. Directors’ Remuneration

Remuneration Policy and Procedures In order to attract and retain Directors of the high calibre, who are pivotal in order to successfully manage the Group, the “Code” states that the remuneration of the Directors needs to be determined.

The remuneration for the Executive Directors link reward to corporate and individual performances. The remuneration of Non-Executive Directors reflects the level of experience and responsibilities they assume during the period reviewed.



The remuneration made available to all Directors of the Company during the financial year ended 31 December 2015 are as follows :

i. Aggregate Remuneration of Directors categorised into appropriate components:

Executive Directors (RM) Non-Executive Directors (RM) Directors’ fees * 20,000 148,943 Salaries 2,786,000 - Other emoluments 321,862 14,500 Benefits-in-kind 22,325 - Total 3,150,187 163,443

* Independent/Non-Independent Directors’ fees will be tabled for shareholders’ approval at the

Fourteenth Annual General Meeting on 26 May 2016. ii. The remuneration paid to the Directors, analysed in the following bands, are as follows:-

Range of Remuneration (RM) Executive Non-Executive 100,000 and below - 4 200,001 – 260,000 1 - 500,000 – 600,000 1 - 2,000,000 – 2,400,000 1 -

3. Shareholders and Investor Relations

Dialogue with Investors and Shareholders

It is of utmost importance that the shareholders and investors are informed of the Group’s business as well as its corporate developments. The Company recognises this and therefore disseminates information via the Company’s annual report, circulars to the shareholders and announcements periodically and adheres to the disclosure requirement of Bursa Malaysia Securities Berhad.

In addition, shareholders also have access and may obtain the Company’s latest announcements via the Investor Relations in the Company’s website at www.kamdar.com.my and through Bursa Malaysia Securities Berhad.

Shareholders are invited to take part in discussions with the Board with regard to the Group’s operations and performance during its annual general meeting which serves as the main platform for dialogue between the management and its shareholders. The management, on its part, will note suggestions and comments put forward by the shareholders for consideration.

Annual General Meeting (AGM)

The Annual General Meeting is the prime forum of dialogue with shareholders. The Notice together with a copy of the Group’s Annual Report is sent to Bursa Securities and all shareholders at least twenty one (21) days prior to the meeting as required by the Companies Act 1965 in order to facilitate full understanding and evaluation of the issues involved. During the AGM, the Board presents the progress and performance of the Group as contained in the Annual Report. Shareholders are encouraged to participate and are given every opportunity to raise questions and seek clarification during the session. The Chairman / Group Managing Director and other Board members are available to respond to all shareholders’ queries.



For Financial Year 2014, the Group’s 13th AGM was held at Royal Selangor Club, RSC Grand Ballroom, 1st Floor, Jalan Raja, 50704 Kuala Lumpur on Tuesday, 16 June 2015. During which all resolutions were approved and was attended by Board of Directors, Company Secretary, Auditors and Senior Management and shareholders. The Chairman / Managing Director held a press conference immediately after the AGM updating the media representatives on current development and also taking question from the media.

As for Financial Year 2015, the 14th AGM which is scheduled to be held on the 26 May 2016, the Notice and Proxy Form are enclosed on pages 3-5 and on the last page respectively of this Annual Report.

Annual Report

The Board’s objective is to provide and present a comprehensive assessment of disclosures in the Annual Report to shareholders. In disclosing this information, the Board is guided by the principles set out in the MMLR of Bursa Malaysia Securities Berhad and the Code. The information covers the areas of business, financials, governance and other key activities of the Group.

Certain contents that form the Annual Report such as the Audit Committee Report and Statement On Risk Management and Internal Control are tabled at the Audit Committee meeting for its comments and recommended to the Board of Directors for review and deliberation before being incorporated into the Annual Report.

Briefings and other forms of communication

Briefings are attended by the Chairman / Group Managing Director and Executive Director of the Company. The Company holds briefings for fund managers, investment analysts, investors and media. During this time updates, progress of current development and status of future developments are provided to the investing public and other stakeholders.

4. Accountability and Audit

Financial Reporting

It is the responsibility of the Directors to prepare the annual audited accounts. The Board, on its part, ensures that the accounts as well as other financial reports of the Group:

-‐ are prepared in accordance with the Approved Accounting Standards and present a balanced

and detailed assessment of the Group’s performance and prospects;

-‐ the Group’s annual report and its quarterly announcements of results aim to give an updated financial performance of the Group from time to time and;

-‐ present a meaningful assessment of all group’s performance and prospects to shareholders,

investors and regulatory bodies. Directors’ Responsibility Statements

Under Paragraph 15.26(a) of the MMLR of Bursa Malaysia Securities Berhad, the Board of Directors are required to issue a statement explaining their responsibilities in the preparation of the annual financial statements.



As stipulated in the Companies Act 1965, the Directors will undertake to prepare the financial statements for each financial year. These financial statements aim to give a true and fair account of the Group’s state of affairs as well as their results at the end of each financial year.

In preparing the financial statements, the Directors have:

(i) Adopted the relevant and appropriate accounting policies consistently; (ii) Made judgements and estimates that are reasonable and prudent; (iii) Ensured that all applicable accounting standards have been appropriately and consistently

adhered to; and (iv) Prepared the financial statements on a going concern basis after the Directors have made

appropriate enquiries that the Company and the Group have the ability to continue operations in the foreseeable future.

Internal Control

It is the responsibility of the Directors to maintain a sound system of internal control which encompasses not only financial controls but also compliance controls.

The Group is continuously revealing into the adequacy as well as the integrity of its system of internal controls as control can only provide reasonable but not absolute assurance against loss or mis-statements.

Information on the Group’s systems of Internal Control is presented in the Statement On Risk Management and Internal Control in this Annual Report.

Whistle Blowing Policy

The company has a structured whistle blowing policy where grievance can be channelled directly to the Chairman of the Audit Committee, Simon @ Flam Fernandez. His contact details are available in the website for employees and the public to address their issues.

Relationship with External Auditors

The Board maintains a transparent as well as professional relationship with the external auditors in order to fulfil the set objectives.


AuDit coMMittee’s rePortAUDIT COMMITTEE 1. COMPOSITION

The Audit Committee (“AC”) was established by the Board on 16 February 2005. The Committee presently comprises the following two (2) members of the Board who are Independent Non-Executive Directors and one (1) Non-Independent Non-Executive Director. Chairman : Mr. Simon @ Flam Fernandez

(Appointed w.e.f. 15 September 2015) Independent Non-Executive

Members : Mr. Rajesh Kumar A/L Gejinder Nath Independent Non-Executive : Ms. Pragna A/P K M Kamdar

(Appointed w.e.f. 2 March 2016) Non-Independent Non-Executive

The AC Chairman, Mr. Simon @ Flam Fernandez is a member of the Malaysian Institute of Accountants and hence, complies with paragraph 15.09(1)(c)(i) of the MMLR of Bursa Malaysia Securities Berhad.

2. ROLE OF AUDIT COMMITTEE

The AC assists, supports and implements the Board’s responsibility to oversee the Group’s operations in the following manner :- - Provides means for review of the Group’s processes for producing financial data, its

internal controls and independence of the Group’s Internal and External Auditors; - Reinforce the independence of the Group’s external auditors; and

- Reinforce the independence and objectivity of the Group’s internal auditors.

3. KEY FUNCTIONS AND RESPONSIBILITIES The key functions and responsibilities of the Audit Committee are as follows:

- to consider the nomination of external auditors, the audit fees and any question of resignation or dismissal;

- to oversee all matters pertaining to audit including the review of the audit plan and report; - to review the adequacy of existing external audit arrangements, with particular emphasis on

the scope and quality of the audit; - to discuss problems and reservations arising from the interim and final results, and any

matters the external auditors may wish to discuss (in the absence of management where necessary);

- to review the quarterly interim results, half-year, annual financial statements and audit

report, focusing on :

• any changes in accounting and operating policies and practices;


AuDit coMMittee’s rePort (cont'd)

• significant adjustment arising from the audit; • adequacy of disclosure of all information in the financial statements essential to a true

and fair representation of the financial affairs of the Company and its subsidiary companies; and

• compliance with applicable approved accounting standards and business practices.

- to review any management letter sent by the external auditors to the Company and the management’s response to such letter;

- to discuss with the external auditors their evaluation of the quality and effectiveness of the

internal control and management information systems; - to review the adequacy of the scope, functions, resources and competency of the internal

audit function and that it has the necessary authority to carry out its work; - to review the internal audit programme, processes, the results of the internal audit

programme, processes or investigation undertaken and whether or not appropriate action is taken on the recommendations of the internal audit function;

- to review and approve the annual audit plan proposed by Internal Auditors;

- to review the co-operation or assistance given by the Company’s officers to both external

and internal auditors;

- to review all areas of significant financial risk and the arrangements in place to contain those risks to acceptable levels;

- to review all related party transactions and potential conflict of interests situations; and

- to consider other matters, act upon the Board of Directors’ request to investigate and report

on any issues or concerns in regard to management of the Group, as defined. 4. ATTENDANCE OF MEETINGS

There were four (4) meetings held during the year 2015. Details of the attendance of the committee members are as follows:

Meetings Attended

(Out of 4 held) Mr. Simon @ Flam Fernandez (Appointed w.e.f. 15 September 2015)

1/1

Mr. Rajesh Kumar A/L Gejinder Nath 4/4 Ms. Pragna A/P K M Kamdar (Appointed w.e.f. 2 March 2015)

-

Mr. Ong Liang Beng (Retired w.e.f. 16 June 2015)

3/3

Datuk Emam Mohd Haniff bin Emam Mohd Hussain (Resigned w.e.f. 27 August 2015)

3/3


AuDit coMMittee’s rePort (cont'd)

The Audit Committee members were served with meeting agendas and relevant papers which were distributed earlier before the meeting. The Company Secretary is the Secretary to all Audit Committee meetings.

5. SUMMARY OF ACTIVITIES UNDERTAKEN BY THE AUDIT COMMITTEE FOR 2015

During the financial year, the activities of the Committee included:- • Reviewing the quarterly financial result announcements of the Group prior to seeking the

Board of Directors’ approval; • Reviewing the audit strategy and planning memorandum of the External Auditors; • Reviewing External Auditors’ reports in relation to audit and accounting issues arising from

the audit, and updates of new developments on accounting standards issued by the Malaysian Accounting Standards Board;

• Reviewing the annual financial statements of the Group and the Company; and • Reviewing the internal audit reports and the recommendations on audit findings.

6. INTERNAL AUDIT FUNCTION

The Group’s internal audit functions are outsourced to, CGRM Infocomm Sdn Bhd, an independent professional consulting firm, which reports to the Audit Committee and assists the Board of Directors in monitoring and managing risks and internal controls. The Audit Committee approves the internal audit plan tabled during the Audit Committee meeting during the financial year. The scope of internal audit covers the audits on risk assessment, internal control, governance and compliance activities of the Group. The reviews were carried out in conformance with the International Standards for the Professional Practice of Internal Auditing issued by The Institute of Internal Auditors. The costs incurred for the internal audit function for the financial year 2015 is RM16,202.50. A risk-based audit approach was adopted to assess and review the implementation and monitoring of controls within the Group. The audit encompasses the following activities: • Review and assess the risk assessment and governance structure of the operating

subsidiaries within the Group. • Review and appraise the soundness, adequacy and application of accounting, financial and

other key controls promoting effective controls of the operating subsidiaries in the Group. • Ascertain the extent to which the Group’s subsidiary assets are safeguarded. • Ascertain the level of compliance to the Group policy and procedures. • Recommend improvements to the existing systems of risk assessment, internal control and

governance.


- 1 -

STATEMENT ON RISK MANAGEMENT AND INTERNAL CONTROL Introduction This Statement on Risk Management and Internal control is made pursuant to paragraph 15.26(b) of Main Market Listing Requirements of Bursa Malaysia Securities Berhad (“Bursa Securities”). The Board of Directors (“the Board”) is pleased to provide this statement which has been prepared in accordance with the “Statement on Risk Management & Internal Control: Guidelines for Directors of Public Listed Companies”. It outlines the key elements of the risk management and internal control systems within the Group for the current financial year. Board of Director’s Responsibility The Board acknowledges its responsibility for the Group’s systems of risk management and internal control and the need to review its adequacy and integrity regularly. However, such a system is designed to manage rather than eliminate the risk of failure to achieve the Group’s objectives and the system by its nature can only provide reasonable but not absolute assurance against material misstatement, fraud or loss. The Risk Management Process The respective business and operational heads are required to evaluate their processes to identify and evaluate significant risks of the Group against a defined risk appetite; thereafter to ensure that appropriate risk treatments were in place to mitigate those risks affecting the achievement of the Group’s business objectives. Issues relating to the operations of the Group are highlighted and brought to the attention of the Board during the Board meetings. Business continuity management is regarded to be an integral part of the risk management process of the Group. In this regard, the Group has commenced implementation of business continuity plans to minimise business disruptions in the event of potential failure of critical IT systems and operational processes. Internal Audit For the financial year, the Group undertook self-assessment of functional risks and controls by the respective operational heads to provide Management and the Audit Committee with sufficient assurance that the system of internal controls was effective in addressing the risks identified. The activities carried out by the internal audit division as below:-

• Carried out stock audit assignments. • Carried out standard operating procedures audit. • Reviewed and analysed certain business processes, reported inadequate controls, reported

ineffective, and make recommendations to improve their effectiveness. Key Elements of Internal Control In order to achieve a sound control environment, the key elements in the framework of the Group’s internal control systems are identified as follows:- • The Board has delegated the specific responsibilities to the relevant committees such as Audit

Committee, Nomination Committee and Remuneration Committee to implement and monitor the Board’s policies and controls within the Group.

• The Board met four (4) times during the financial year to oversee and monitor the respective business, financial and significant operational matters pertaining to potential risks and control issues.

stAteMent on risk MAnAGeMent AnD internAl control


- 2 -

• The Audit Committee meetings were regularly convened to ensure that financial reporting requirements as well as internal and external audit issues and recommendations were carried out effectively by Management

• The Managing Director actively and closely monitors the business operations throughout various reports furnished by the Group’s outlets and business units.

• Adequate insurance policies were purchased covering all assets and identified potential liabilities of the Group.

• Management has been reviewing and improving the best practice in the Standard Operating Policies and Procedures; and it is continuously communicated to all branches and other operating units, where relevant, for implementation.

• Management also ensures that the system users were continuously trained to ensure the consistency and effectiveness of the information keyed in to the system.

• Centralised procurement and warehousing functions for the Group were in place to leverage on economies of scale that aim for timely distribution and delivery.

Conclusion There were no major internal control weaknesses identified for the financial year 31 December 2015 that would require disclosure in this annual report. The Board and Management will continue to take adequate measures to strengthen the risk and control environment in which the Group operates. The Board had received updates and assurance from the Group Managing Director and Group Financial Controller with regards to the adequacy and effectiveness of the Group’s risk management and system of internal control in place for the financial year. Based on the foregoing, the Board is of the opinion that the system of internal control and risk management processes are adequate to provide reasonable assurance in safeguarding shareholders’ investments, the Group’s assets and other stakeholders’ interest. Review by External Auditors Pursuant to paragraph 15.23 of the Main Market Listing Requirements of Bursa Securities, the external auditors have reviewed this Statement on Risk Management and Internal Control for inclusion in this annual report for the year ended 31 December 2015.

This Statement on Risk Management and Internal Control is made in accordance with the resolution of the Board dated 30.3.16.

stAteMent on risk MAnAGeMent AnD internAl control (cont'd)


otHer Disclosure requireMents PursuAnt to tHe listinGs requireMents of bursA securitiesOTHER DISCLOSURE REQUIREMENTS PURSUANT TO THE LISTING REQUIREMENTS OF BURSA SECURITIES

1. UTILISATION OF PROCEEDS FROM CORPORATE EXERCISE

The Company did not undertake any corporate exercise during the financial year, hence no proceeds were raised therefrom.

2. SHARE BUY-BACKS

There were no share buy-back arrangements during the financial year.

3. OPTIONS, WARRANTS OR CONVERTIBLE SECURITIES

There were no options and warrants exercised in respect of the financial year. 4. DEPOSITORY RECEIPTS PROGRAMME

The Company did not sponsor any depository receipts programme during the financial year.

5. IMPOSITION OF SANCTIONS / PENALTIES

There were no public imposition of sanctions or penalties imposed on the Company and its subsidiaries, directors or management by the regulatory bodies during the financial year.

6. NON-AUDIT FEES

The non - audit fees paid to the external auditors by the Group for the financial year ended 31 December 2015 is RM 79,550.00.

7. PROFIT ESTIMATE, FORECAST OR PROJECTION The Company did not undertake any profit estimate, forecast or projection for the financial year.

8. PROFIT GUARANTEE The Company did not give any form of profit guarantee to any parties during the financial year.

9. MATERIAL CONTRACTS AND CONTRACTS RELATING TO LOANS

There were no material contracts entered into by the Company and its subsidiaries which involved Directors’ or major shareholders’ interest (not being contracts entered into in the ordinary course of business).


otHer Disclosure requireMents PursuAnt to tHe listinGs requireMents of bursA securities (cont'd)OTHER DISCLOSURE REQUIREMENTS PURSUANT TO THE LISTING REQUIREMENTS OF BURSA SECURITIES (CONT’D)

10. VARIATION IN RESULTS

There was no material variation in the results for the financial year ended as compared to the announcement made for the fourth quarter ended 31 December 2015.

11. RECURRENT RELATED PARTY TRANSACTIONS OF A REVENUE AND

TRADING NATURE

The recurrent related party transactions of the Company during the year amounted to RM1,216,000.00 with details as stated in Note 32 to the financial statements.

12. REVALUATION POLICY ON LANDED PROPERTIES The Group does not adopt a policy on regular revaluation to its landed properties. 13. CORPORATE SOCIAL RESPONSIBILITY

The Group continues to undertake responsible corporate practices and empower our many stakeholders through impactful corporate social responsibilities initiatives. During the year, the Group continued to work together with various charitable organizations to raise funds through the Group’s extensive retail network and the Group has donated extensively to the following: a) Tabung Amanah Pendidikan Negeri Kelantan b) Tabung Amanah Bencana Banjir Negeri Kelantan c) Buletin Warda Emas Polics d) Citra Spice Mart (M) Sdn Bhd e) Gujarati Association Wilayah Persekutuan & Selangor

The company also donated school uniforms and shoes to the flood victims and provided discounts/vouchers to charitable organizations.


Director's rePort

Company No: 577740 A

4

KAMDAR GROUP (M) BERHAD (Incorporated in Malaysia)

DIRECTORS’ REPORT

The Directors hereby submit their report together with the audited financial statements of the Group and of the Company for the financial year ended 31 December 2015. PRINCIPAL ACTIVITIES The principal activity of the Company is investment holding. The principal activities of its subsidiary companies are disclosed in Note 22 to the financial statements. There have been no significant changes in the nature of these activities of the Company and of its subsidiary companies during the financial year. RESULTS Group Company RM

RM

Loss for the financial year/Attributable to owners of the Company

3,234,206

662,554

DIVIDENDS There were no dividends paid or declared by the Company since the end of previous financial year. The Directors do not recommend any dividend payment for the current financial year. RESERVES AND PROVISIONS There were no material transfers to or from reserves or provisions during the financial year except for those disclosed in the financial statements. DIRECTORS The Directors in office since the date of the last report are:- Kamal Kumar Kishorchandra Kamdar Rajesh Kumar A/L Gejinder Nath Chia Lee Hoon Simon @ Flam Fernandez (Appointed on 15 September 2015) Ong Liang Beng (Retired on 16 June 2015) Datuk Emam Mohd Haniff bin Emam Mohd Hussain (Resigned on 27 August 2015) Pragna A/P K.M. Kamdar (Appointed on 2 March 2016)


Director's rePort (cont'd)Company No: 577740 A

5

DIRECTORS (CONT’D) According to the Register of Directors’ shareholdings, the beneficial interests of those who were Directors at the end of the financial year in shares of the Company were as follows:- Ordinary shares of RM1 each Company Direct Interest

At 1.1.2015

Bought

Sold

At 31.12.2015

Kamal Kumar Kishorchandra Kamdar 52,468,715 1,000,000 - 53,468,715 By virtue of his interest in shares of the Company, Mr Kamal Kumar Kishorchandra Kamdar is also deemed to have interest in the shares of all the subsidiary companies to the extent that the Company has an interest under Section 6A of the Companies Act, 1965. Other than the above, no other Directors in office at the end of the financial year had any shares or had any interest in shares of the Company and of its related corporations during the financial year. DIRECTORS’ BENEFITS During and at the end of the financial year, no arrangements subsisted to which the Company is a party, with the object or objects of enabling Directors of the Company to acquire benefits by means of the acquisition of shares in or debentures of the Company or any other body corporate. Since the end of the previous financial year, no Director has received or become entitled to receive any benefit (other than a benefit included in the aggregate amount of emoluments received or due and receivable by Directors as shown in the Notes to the financial statements) by reason of a contract made by the Company or a related corporation with the Director or with a firm of which the Director is a member, or with a company in which the Director has a substantial financial interest, other than those disclosed in the Notes to the financial statements. ISSUE OF SHARES AND DEBENTURES During the financial year, the Company did not issue any new shares or debentures of the Company. OTHER STATUTORY INFORMATION Before the statements of financial position and statements of profit or loss and other comprehensive income of the Group and of the Company were made out, the Directors took reasonable steps:- (a) to ascertain that action had been taken in relation to the writing off of bad debts and the

making of provision for doubtful debts and satisfied themselves that all known bad debts had been written off and adequate provision had been made for doubtful debts; and



6

OTHER STATUTORY INFORMATION (CONT’D) Before the statements of financial position and statements of profit or loss and other comprehensive income of the Group and of the Company were made out, the Directors took reasonable steps (cont’d):- (b) to ensure that any current assets which were unlikely to be realised in the ordinary course of

business including their values as shown in the accounting records of the Group and of the Company have 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:- (a) which would render the amount written off for bad debts or the amount of the provision for

doubtful debts in the financial statements of the Group and of the Company inadequate to any substantial extent; or

(b) which would render the values attributed to current assets in the financial statements of the

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

liabilities of the Group and of the Company misleading or inappropriate; or (d) not otherwise dealt with in this report or the financial statements which would render any

amount stated in the financial statements misleading. At the date of this report, there does not exist:- (a) any charge on the assets of the Group and of the Company which have arisen since the end

of the financial year which secure the liability of any other person; or (b) any contingent liability of the Group and of the Company which have arisen since the end of

the financial year. In the opinion of the Directors:- (a) no contingent or other liability has become enforceable or is likely to become enforceable

within the period of twelve months after the end of the financial year which, in the opinion of the Directors, will or may affect the ability of the Group and of the Company to meet their obligations as and when they fall due;

(b) the results of operations of the Group and of the Company during the financial year were not

substantially affected by any item, transaction or event of a material and unusual nature; and (c) 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 to affect substantially the results of operations of the Group and of the Company for the current financial year in which this report is made.



7

AUDITORS The Auditors, Messrs SJ Grant Thornton, have expressed their willingness to continue in office. Signed on behalf of the Board of Directors in accordance with a resolution of the Board of Directors. ...................................................................... ) CHIA LEE HOON ) ) ) ) ) ) ) DIRECTORS ) ) ) ) ) ) ............................................…...................... ) KAMAL KUMAR KISHORCHANDRA ) KAMDAR )

Kuala Lumpur 30 March 2016



8


STATEMENT BY DIRECTORS

In the opinion of the Directors, the financial statements set out on pages 33 to 102 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 at 31 December 2015 and of their financial performance and cash flows for the financial year then ended. In the opinion of the Directors, the supplementary information set out on page 103 has been compiled in accordance with the Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants, and presented based on the format prescribed by Bursa Malaysia Securities Berhad. Signed on behalf of the Board of Directors in accordance with a resolution of the Board of Directors.

.................................................................... ..................................................................... CHIA LEE HOON KAMAL KUMAR KISHORCHANDRA

KAMDAR Kuala Lumpur 30 March 2016

STATUTORY DECLARATION I, Kamal Kumar Kishorchandra Kamdar, being the Director primarily responsible for the financial management of Kamdar Group (M) Berhad, do solemnly and sincerely declare that to the best of my knowledge and belief, the financial statements set out on pages 33 to 102 and the supplementary information set out on page 103 are correct and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960. Subscribed and solemnly declared by ) the abovenamed at Kuala Lumpur in ) the Federal Territory this day of ) 30 March 2016 ) ………………............................................................................. KAMAL KUMAR KISHORCHANDRA

KAMDAR Before me: Commissioner for Oaths


8


STATEMENT BY DIRECTORS

In the opinion of the Directors, the financial statements set out on pages 33 to 102 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 at 31 December 2015 and of their financial performance and cash flows for the financial year then ended. In the opinion of the Directors, the supplementary information set out on page 103 has been compiled in accordance with the Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosures Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, issued by the Malaysian Institute of Accountants, and presented based on the format prescribed by Bursa Malaysia Securities Berhad. Signed on behalf of the Board of Directors in accordance with a resolution of the Board of Directors.

.................................................................... ..................................................................... CHIA LEE HOON KAMAL KUMAR KISHORCHANDRA

KAMDAR Kuala Lumpur 30 March 2016

STATUTORY DECLARATION I, Kamal Kumar Kishorchandra Kamdar, being the Director primarily responsible for the financial management of Kamdar Group (M) Berhad, do solemnly and sincerely declare that to the best of my knowledge and belief, the financial statements set out on pages 33 to 102 and the supplementary information set out on page 103 are correct and I make this solemn declaration conscientiously believing the same to be true and by virtue of the provisions of the Statutory Declarations Act, 1960. Subscribed and solemnly declared by ) the abovenamed at Kuala Lumpur in ) the Federal Territory this day of ) 30 March 2016 ) ………………............................................................................. KAMAL KUMAR KISHORCHANDRA

KAMDAR Before me: Commissioner for Oaths

stAteMent by Directors

stAtutory DeclArAtion



10

Company No: 577740 A Report on the Financial Statements (cont’d) 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 at 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 subsidiary companies have been properly kept in accordance with the provisions of the Act.

(b) We are satisfied that the financial statements of the subsidiary companies that have been consolidated

with the Company’s financial statements are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group and we have received satisfactory information and explanations required by us for those purposes.

(c) The audit reports on the financial statements of the subsidiary companies did not contain any

qualification or any adverse comment made under Section 174 (3) of the Act. Other Reporting Responsibilities The supplementary information set out on page 103 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the financial statements. The Directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants ("MIA Guidance") and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.


9

INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF KAMDAR GROUP (M) BERHAD (Incorporated in Malaysia) Company No: 577740 A

Report on the Financial Statements We have audited the financial statements of Kamdar Group (M) Berhad, which comprise the statements of financial position as at 31 December 2015 of the Group and of the Company, and 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 33 to 102. Directors’ Responsibility for the Financial Statements The Directors of the Company are responsible for the preparation of financial statements so as 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 misstatements, 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 gives 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.

inDePenDent AuDitors' rePort


inDePenDent AuDitors' rePort (cont'd)


10

Company No: 577740 A Report on the Financial Statements (cont’d) 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 at 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 subsidiary companies have been properly kept in accordance with the provisions of the Act.

(b) We are satisfied that the financial statements of the subsidiary companies that have been consolidated

with the Company’s financial statements are in form and content appropriate and proper for the purposes of the preparation of the financial statements of the Group and we have received satisfactory information and explanations required by us for those purposes.

(c) The audit reports on the financial statements of the subsidiary companies did not contain any

qualification or any adverse comment made under Section 174 (3) of the Act. Other Reporting Responsibilities The supplementary information set out on page 103 is disclosed to meet the requirement of Bursa Malaysia Securities Berhad and is not part of the financial statements. The Directors are responsible for the preparation of the supplementary information in accordance with Guidance on Special Matter No. 1, Determination of Realised and Unrealised Profits or Losses in the Context of Disclosure Pursuant to Bursa Malaysia Securities Berhad Listing Requirements, as issued by the Malaysian Institute of Accountants ("MIA Guidance") and the directive of Bursa Malaysia Securities Berhad. In our opinion, the supplementary information is prepared, in all material respects, in accordance with the MIA Guidance and the directive of Bursa Malaysia Securities Berhad.


11

Company No: 577740 A Other Matters This report is made solely to the members of the Company, as a body, in accordance with Section 174 of the Companies Act, 1965 in Malaysia and for no other purpose. We do not assume responsibility to any other person for the content of this report.

SJ GRANT THORNTON OOI POH LIM (NO. AF: 0737) (NO: 3087/10/17(J))

CHARTERED ACCOUNTANTS CHARTERED ACCOUNTANT Kuala Lumpur 30 March 2016


stAteMents of finAnciAl Position As At 31 DeceMber 2015

12


KAMDAR GROUP (M) BERHAD(Incorporated in Malaysia)

Note 2015 2014RM RM

ASSETSNon-current assetsProperty, plant and equipment 4 126,304,461 122,923,101 Investment properties 5 36,605,000 40,890,000 Prepaid land lease payments 6 6,024,190 6,116,384 Capital work-in-progress 7 15,721,375 4,667,500 Available for sale investment 8 - 1 Goodwill 9 373,506 373,506

10 186,000 168,000

Total non-current assets 185,214,532 175,138,492

Current assetsInventories 11 125,890,759 127,808,630 Trade receivables 12 10,375,938 6,548,252 Other receivables 13 3,597,196 4,048,889 Tax recoverable 2,533,832 742,654 Fixed deposits with licensed banks 14 5,351,428 5,204,762 Cash and bank balances 15 7,094,699 13,628,937

Total current assets 154,843,852 157,982,124

TOTAL ASSETS 340,058,384 333,120,616

EQUITY AND LIABILITIESEQUITYEquity attributable to owners of the Company:-Share capital 16 197,990,002 197,990,002 Reserves 17 19,611,896 22,846,102

Total equity 217,601,898 220,836,104

LIABILITIESNon-current liabilitiesLong term borrowings 18 43,568,410 47,644,890 Deferred tax liabilities 10 2,313,682 1,895,971 Finance lease liabilities 19 63,361 105,322

Total non-current liabilities 45,945,453 49,646,183

Current liabilitiesTrade payables 20 3,897,207 3,479,427 Other payables 21 21,803,850 14,389,740 Short term borrowings 18 50,484,208 44,482,535 Finance lease liabilities 19 41,843 161,085 Tax payable 283,925 125,542

Total current liabilities 76,511,033 62,638,329

Total liabilities 122,456,486 112,284,512

TOTAL EQUITY AND LIABILITIES 340,058,384 333,120,616

Group

Deferred tax assets

STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER 2015


stAteMents of finAnciAl Position As At 31 DeceMber 2015 (cont'd)

14


Note 2014 2013RM RM

ASSETSNon-current assetInvestment in subsidiary companies 23 256,430,002 256,430,002

Total non-current asset 256,430,002 256,430,002

Current assetsAmount due from subsidiary companies 24 - 3,200,000 Tax recoverable 28,554 45,887 Cash and bank balances 5,666,775 241,851


TOTAL ASSETS 262,125,331 259,917,740


Total equity 204,165,175 212,827,195

LIABILITIESNon-current liabilityLong term borrowings 19 17,436,519 8,267,456

Total non-current liability 17,436,519 8,267,456

Current liabilitiesOther payables 22 4,194,281 2,358,642 Amount due to subsidiary companies 24 35,781,115 32,178,731 Short term borrowings 19 548,241 4,285,716




Company

The accompanying notes form an integral part of the financial statements.

STATEMENTS OF FINANCIAL POSITION

(Incorporated in Malaysia)KAMDAR GROUP (M) BERHAD

AS AT 31 DECEMBER 2014 (CONT'D)

13


Note 2015 2014RM RM



Current assetsOther receivables 13 36,128 -Tax recoverable - 28,554 Cash and bank balances 15 246,452 5,666,775

Total current assets 282,580 5,695,329

TOTAL ASSETS 256,712,582 262,125,331


Total equity 203,502,621 204,165,175



Current liabilitiesOther payables 21 3,295,574 4,194,281 Amount due to subsidiary companies 23 32,436,115 35,781,115 Short term borrowings 18 571,991 548,241 Tax payable 9,139 -




Company


STATEMENTS OF FINANCIAL POSITION AS AT 31 DECEMBER 2015 (CONT'D)



stAteMents of Profit & loss AnD otHer coMPreHensive incoMe for tHe finAnciAl yeAr enDeD 31 DeceMber 2015

14



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

Note2015 2014 2015 2014RM RM RM RM

Revenue 24 170,001,335 183,688,333 - -

Cost of sales 25 (107,353,753) (111,642,968) - -

Gross profit 62,647,582 72,045,365 - -

Other income 26 6,316,709 4,807,187 595,000 630,000

Selling and distribution expenses (3,986,641) (4,429,882) - -

Administration expenses (57,018,999) (55,353,990) (346,667) (626,463)

Other expenses (4,580,835) (1,516,592) - -

Finance costs 27 (2,936,362) (2,509,707) (795,403) (558,128)

Share of gain of equity accounted a former associate company - 6,720 - -

Loss on derecognition of a former associatecompany - (156,141) - -

Profit/(Loss) before tax 28 441,454 12,892,960 (547,070) (554,591)

Tax expense 29 (3,675,660) (5,753,194) (115,484) (187,829)

(Loss)/Profit for the financial year (3,234,206) 7,139,766 (662,554) (742,420)

Other comprehensive income, net of taxItem that will not be subsequently reclassified to profit or lossRevaluation on property, plant and equipment upon transfer to investment properties - 451,473 - -

Income tax relating to revaluation reserve - (22,573) - -

- 428,900 - -

Item that will be subsequently reclassified to profit or lossForeign translation differences from associate company - 1,646 - -Reclassification of foreign translation differences to profit or loss - 156,141 - -

- 157,787 - -

Other comprehensive (loss)/income for the financial year, net of tax (3,234,206) 586,687 (662,554) (742,420)

Group Company


stAteMents of Profit & loss AnD otHer coMPreHensive incoMe for tHe finAnciAl yeAr enDeD 31 DeceMber 2015 (cont'd)

14


Note 2014 2013RM RM



Current assetsAmount due from subsidiary companies 24 - 3,200,000 Tax recoverable 28,554 45,887 Cash and bank balances 5,666,775 241,851


TOTAL ASSETS 262,125,331 259,917,740


Total equity 204,165,175 212,827,195



Current liabilitiesOther payables 22 4,194,281 2,358,642 Amount due to subsidiary companies 24 35,781,115 32,178,731 Short term borrowings 19 548,241 4,285,716




Company


STATEMENTS OF FINANCIAL POSITION


AS AT 31 DECEMBER 2014 (CONT'D)

15



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

Note2015 2014 2015 2014RM RM RM RM

Total comprehensive (loss)/income for the financial year (3,234,206) 7,726,453 (662,554) (742,420)

(Loss)/Profit for the financial year attributable to:-Owners of the Company (3,234,206) 7,139,766 (662,554) (742,420)

Total comprehensive (loss)/income attributable to:-Owners of the Company (3,234,206) 7,726,453 (662,554) (742,420)

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

- Basic 30 (1.6) 3.6

- Diluted 30 - -


Group Company


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stAteMents of cHAnGes in equity for tHe finAnciAl yeAr enDeD 31 DeceMber 2015 (cont'd)

17



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

Non-distributable DistributableShare Retained Totalcapital earnings equity

RM RM RMCompany

Balance as at 1 January 2014 197,990,002 14,837,193 212,827,195

Transaction with owners of the Company:- In respective of the financial year ended 31 December 2013 First and final single tier dividend of 4 sen - (7,919,600) (7,919,600) per ordinary share, paid on 14 August 2014

Total comprehensive loss for the financial year - (742,420) (742,420)

Balance as at 31 December 2014 197,990,002 6,175,173 204,165,175

Total comprehensive loss for the financial year - (662,554) (662,554)

Balance as at 31 December 2015 197,990,002 5,512,619 203,502,621

Attributable to equity holders of the Company



stAteMents of cAsH flows for tHe finAnciAl yeAr enDeD 31 DeceMber 2015


18



CompanyNote 2015 2014 2015 2014

RM RM RM RM

OPERATING ACTIVITIES Profit/(Loss) before tax 441,454 12,892,960 (547,070) (554,591)

Adjustments for:-Amortisation of prepaid land lease payments 92,194 92,194 - -Bad debts written off 16,977 144,831 - -Depreciation on property, plant and equipment 3,988,769 2,975,166 - -Fair value loss/(gain) on investment properties 4,285,000 (397,000) - -Impairment loss on receivables 58,420 197,134 - -Impairment loss on receivables no longer required (68,285) (169,352) - -Interest expenses 4,743,575 4,369,820 795,403 558,128 Interest income (166,371) (233,297) - -Inventories written off - 173,434 - -Inventories written down 2,226,315 2,366,400 - -Impairment loss on available for sale investment 1 286,823 - -Loss on derecognition of a formal associate company - 156,141 - -Loss on disposal of property, plant and equipment 1,186 27,238 - -Property, plant and equipment written off 259,113 994,965 - -Reversal of inventories written down (233,278) - - -Share of gain of investment in a former associate company - (6,720) - -Unrealised gain on foreign exchange (51,105) - - -

Operating profit before working capital changes 15,593,965 23,870,737 248,333 3,537

Changes in working capital:- Inventories (75,166) (12,559,284) - - Payables 11,018,293 4,373,507 2,287,696 14,256 Receivables (3,383,105) (625,204) (36,128) -

Cash generated from operations 23,153,987 15,059,756 2,499,901 17,793

Tax refund 202,258 214,555 30,709 - Tax paid (5,111,002) (6,652,803) (108,500) (170,496) Interest paid (635,519) (410,813) - - Net cash from/(used in) operating activities 17,609,724 8,210,695 2,422,110 (152,703)

INVESTING ACTIVITIES Interest received 166,371 233,297 - - Proceeds from disposal of property, plant and equipment 600 126,907 - - Purchase of property, plant and equipment A (7,631,028) (7,946,263) - - Capital work-in-progress incurred (11,053,875) (4,667,500) - -

Net cash used in investing activities (18,517,932) (12,253,559) - -



CompanyNote 2015 2014 2015 2014

RM RM RM RM

FINANCING ACTIVITIES Net drawdown of bankers' acceptances 3,614,065 3,559,125 - -(Repayment to)/Advances from a subsidiary company - - (3,345,000) 6,802,384 Drawdown of term loans - 24,196,400 - 18,000,400 Dividend paid (3,185,047) (6,099,573) (3,185,047) (6,099,573)


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


Group

STATEMENTS OF CASH FLOWSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015

Group

stAteMents of cAsH flows for tHe finAnciAl yeAr enDeD 31 DeceMber 2015(cont'd)


18



CompanyNote 2015 2014 2015 2014

RM RM RM RM

OPERATING ACTIVITIES Profit/(Loss) before tax 441,454 12,892,960 (547,070) (554,591)

Adjustments for:-Amortisation of prepaid land lease payments 92,194 92,194 - -Bad debts written off 16,977 144,831 - -Depreciation on property, plant and equipment 3,988,769 2,975,166 - -Fair value loss/(gain) on investment properties 4,285,000 (397,000) - -Impairment loss on receivables 58,420 197,134 - -Impairment loss on receivables no longer required (68,285) (169,352) - -Interest expenses 4,743,575 4,369,820 795,403 558,128 Interest income (166,371) (233,297) - -Inventories written off - 173,434 - -Inventories written down 2,226,315 2,366,400 - -Impairment loss on available for sale investment 1 286,823 - -Loss on derecognition of a formal associate company - 156,141 - -Loss on disposal of property, plant and equipment 1,186 27,238 - -Property, plant and equipment written off 259,113 994,965 - -Reversal of inventories written down (233,278) - - -Share of gain of investment in a former associate company - (6,720) - -Unrealised gain on foreign exchange (51,105) - - -

Operating profit before working capital changes 15,593,965 23,870,737 248,333 3,537

Changes in working capital:- Inventories (75,166) (12,559,284) - - Payables 11,018,293 4,373,507 2,287,696 14,256 Receivables (3,383,105) (625,204) (36,128) -

Cash generated from operations 23,153,987 15,059,756 2,499,901 17,793

Tax refund 202,258 214,555 30,709 - Tax paid (5,111,002) (6,652,803) (108,500) (170,496) Interest paid (635,519) (410,813) - - Net cash from/(used in) operating activities 17,609,724 8,210,695 2,422,110 (152,703)

INVESTING ACTIVITIES Interest received 166,371 233,297 - - Proceeds from disposal of property, plant and equipment 600 126,907 - - Purchase of property, plant and equipment A (7,631,028) (7,946,263) - - Capital work-in-progress incurred (11,053,875) (4,667,500) - -

Net cash used in investing activities (18,517,932) (12,253,559) - -



CompanyNote 2015 2014 2015 2014

RM RM RM RM

FINANCING ACTIVITIES Net drawdown of bankers' acceptances 3,614,065 3,559,125 - -(Repayment to)/Advances from a subsidiary company - - (3,345,000) 6,802,384 Drawdown of term loans - 24,196,400 - 18,000,400 Dividend paid (3,185,047) (6,099,573) (3,185,047) (6,099,573)


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


Group

STATEMENTS OF CASH FLOWSFOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2015

Group

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Interest paid (4,109,412) (3,957,651) (796,759) (556,772) Repayment of finance lease liabilities (161,203) (291,951) - - Repayment of term loans (3,886,119) (15,716,809) (515,627) (12,568,812) Placement of fixed deposits (146,666) (131,286) - -

Net cash (used in)/from financing activities (7,874,382) 0 1,558,255 (7,842,433) 5,577,627

CASH AND CASH EQUIVALENTS Net changes (8,782,590) (2,484,609) (5,420,323) 5,424,924 Translation differences 1,813 - - - Brought forward 7,233,460 9,718,069 5,666,775 241,851

Carried forward B (1,547,317) 7,233,460 246,452 5,666,775

NOTES TO THE STATEMENTS OF CASH FLOWS

A. PURCHASE OF PROPERTY, PLANT AND EQUIPMENT

2015 2014RM RM

Total purchase 7,631,028 8,036,263 Purchase by the way of finance lease liabilities - (90,000)

7,631,028 7,946,263

B. CASH AND CASH EQUIVALENTS

Company2015 2014 2015 2014RM RM RM RM

Cash and bank balances 7,094,699 13,628,937 246,452 5,666,775 Fixed deposits with licensed banks 5,351,428 5,204,762 - -Bank overdrafts (8,642,016) (6,395,477) - -

3,804,111 12,438,222 246,452 5,666,775

Less: Fixed deposits with licensed banks (5,351,428) (5,204,762) - -

(1,547,317) 7,233,460 246,452 5,666,775

Group


Cash and cash equivalents included in the statements of cash flows comprise the following items:-

Group

notes to tHe finAnciAl stAteMents


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NOTES TO THE FINANCIAL STATEMENTS - 31 DECEMBER 2015

1. GENERAL INFORMATION

The Company is a public limited liability company, incorporated and domiciled in Malaysia and is listed on the Main Market of the Bursa Malaysia Securities Berhad. The registered office of the Company is located at Level 15-2, Bangunan Faber Imperial Court, Jalan Sultan Ismail, 50250 Kuala Lumpur. The principal place of business of the Company is located at 113, Jalan Tuanku Abdul Rahman, 50100 Kuala Lumpur. The principal activity of the Company is investment holding. The principal activities of its subsidiary companies are disclosed in Note 22 to the financial statements.

There have been no significant changes in the nature of these activities of the Company and of its subsidiary companies during the financial year. The financial statements were authorised for issue by the Board of Directors in accordance with a resolution of the Directors on 30 March 2016.

2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS

2.1 Statement of Compliance

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

2.2 Basis of Measurement

The financial statements of the Group and of the Company are prepared under the

historical cost convention, except for certain properties that are measured at fair values at the end of each reporting period as indicated in the summary of significant accounting policies.

Historical cost is generally based on the fair value of the consideration given in exchange for goods and services.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability, or in the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible to by the Group.


notes to tHe finAnciAl stAteMents (cont'd)Company No: 577740 A

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2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (CONT’D)

2.2 Basis of Measurement (cont’d)

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non-financial market takes into account a market 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.

The Group and the Company use valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to their fair value measurement as a whole: - Level 1 – Quoted (unadjusted) market prices in active markets for identical

assets or liabilities. - Level 2 – Valuation techniques for which the lowest level input that is

significant to their fair value measurement is directly or indirectly observable. - Level 3 – Valuation techniques for which the lowest level input that is

significant to their fair value measurement is unobservable. For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to their fair value measurement as a whole) at the end of each reporting period. The Group has established control framework in respect to the measurement of fair values of financial instruments. This includes a certified independent valuer that has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values, and reports directly to the Board of Directors. The certified independent valuer will review significant unobservable inputs and valuation adjustments. For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of fair value hierarchy as explained above.

2.3 Functional and Presentation Currency The financial statements are presented in Ringgit Malaysia (“RM”) which is the Company’s functional currency and all values are rounded to the nearest RM except when otherwise stated.



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2.4 MFRSs 2.4.1 Standards Issued and Effective

Initial application of the relevant new and revised MFRSs is not expected to have any material impact on the financial statements of the Group and of the Company.

2.4.2 Standards Issued But Not Yet Effective

At the date of authorisation of these financial statements, certain new standards, amendments and interpretations to existing standards have been published by the Malaysian Accounting Standards Board (“MASB”) that are not yet effective, and have not been early adopted by the Group and the Company. Information on those expected to be relevant to the Group’s and the Company’s financial statements is provided below. Management anticipates that all relevant pronouncements will be adopted in the Group’s and the Company’s accounting policies for the first period beginning after the effective date of the pronouncement. New standards, amendments and interpretations to existing standards not either adopted or listed below are not expected to have a material impact on the Group’s and the Company’s financial statements.

MFRS 9 Financial Instruments

MFRS 9 is issued during the financial year, which reflects all phases of the financial instrument project and replaces MFRS 139 Financial Instruments: Recognition and Measurement and all previous version of MFRS 9. The new standard introduces extensive requirements and guidance for classification and measurement of financial assets and financial liabilities which fall under the scope of MFRS 9, new “expected credit loss model” under the impairment of financial assets and greater flexibility has been allowed in hedge accounting transaction. The Group and the Company are currently examining the financial impact of adopting MFRS 9. MFRS 15 Revenue from Contracts with Customers MFRS 15 presents new requirements for the recognition of revenue, replacing the guidance of MFRS 111 Construction Contracts, MFRS 118 Revenue, IC Int 13 Customer Loyalty Programmes, IC Int 15 Agreements for Construction of Real Estate, IC Int 18 Transfers of Assets from Customers and IC Int 131 Revenue – Barter Transaction Involving Advertising Services. The principles in MFRS 15 provide a more structured approach to measuring and recognising revenue. It establishes a new five-step model that will apply to revenue arising from contracts with customers. Under MFRS 15 revenue is recognised at an amount that reflects the consideration to which an entity expects to be entitled in exchange for transferring goods or services to a customer. The Group and the Company are currently assessing the impact of MFRS 15 and plans to adopt the new standards on the required effective date.



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2. BASIS OF PREPARATION OF THE FINANCIAL STATEMENTS (CONT’D) 2.5 Significant Accounting Estimates and Judgements

Estimates, assumptions concerning the future and judgements are made in the preparation of the financial statements. They affect the application of the Group’s and of the Company's accounting policies and reported amounts of assets, liabilities, income and expenses, and disclosures made. Estimates and underlying assumptions are assessed on an on-going basis and are based on experience and relevant factors, including expectations of future events that are believed to be reasonable under the circumstances. The actual results may differ from the judgements, estimates and assumptions made by management, and will seldom equal the estimated results. Information about significant judgements, estimates and assumptions that have the most significant effect on recognition and measurement of assets, liabilities, income and expenses are discussed below.

2.5.1 Estimation Uncertainty

The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. Useful Lives of Depreciable Assets The management estimates the useful lives of the property, plant and equipment to be within 2 to 50 years and reviews the useful lives of depreciable assets at each reporting date. The management assesses that the useful lives represent the expected utility of the assets to the Group. Actual results, however, may vary due to change in the expected level of usage and technological developments, which may result in an adjustment to the Group’s assets. The carrying amount of the Group’s property, plant and equipment at the reporting date is disclosed in Note 4 to the financial statements. The management expects that the expected useful lives of property, plant and equipment would not have material difference from the management’s estimation hence it would not result in material variance in the Group’s profit for the financial year. Impairment of Goodwill An impairment loss is recognised for the amount by which the asset’s or cash generating unit’s carrying amount exceeds its recoverable amount. To determine the recoverable amount, management estimates expected future cash flows from each cash-generating unit and determines a suitable interest rate in order to calculate the present value of those cash flows. In the process of measuring expected future cash flows management makes assumptions about future operating results. These assumptions relate to future events and circumstances. The actual results may vary, and may cause significant adjustments to the Group’s assets within the next financial year.



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2.5 Significant Accounting Estimates and Judgements (cont’d)

2.5.1 Estimation Uncertainty (cont’d)

Impairment of Goodwill (cont’d)

In most cases, determining the applicable discount rate involves estimating the appropriate adjustment to market risk and the appropriate adjustment to asset-specific risk factors. Further details of the carrying values, key assumptions applied in the impairment assessment of goodwill and sensitivity analysis to changes in the assumptions are disclosed in Note 9 to the financial statements.

Deferred Tax Assets Deferred tax assets are recognised for all deductible temporary differences, unutilised tax losses, unabsorbed capital allowances and unused tax credits to the extent that it is probable that taxable profit will be available against which all the deductible temporary differences, unutilised tax losses and unabsorbed capital allowances can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies.

The carrying value of deferred tax assets of the Group at 31 December 2015 was RM186,000 (2014: RM168,000) as disclosed in Note 10 to the financial statements. If the taxable profits of the subsidiary company differ by 1% due to the change in estimated of the subsidiary’s future results from operating activities, the Group’s deferred tax assets will vary by RM1,860 (2014: RM1,680).

Income Taxes/Deferred Tax Liabilities Significant judgement is involved in determining the Group-wide provision for income taxes. There are certain transactions and computations for which the ultimate tax determination is uncertain during the ordinary course of business. The Group recognised tax liabilities based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recognised, such difference will impact the income tax and deferred tax provisions in the period in which such determination is made. Inventories Inventories are measured at the lower of cost and net realisable value. In estimating net realisable values, management takes into account the most reliable evidence available at the time the estimates are made. The realisation of these inventories may be affected by market-driven changes that may occur in the future.



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Impairment of Financial Assets Loans and Receivables The Group and the Company assess at end of each reporting period whether there is any objective evidence that a financial assets is impaired. To determine whether there is objective evidence of impairment, the Group and the Company consider factors such as the probability of insolvency or significant financial difficulties of the debtor and the default or significant delay in payments. Where there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on historical loss experience of assets with similar credit risk characteristics. Available for Sale Investments The Group reviews their available for sale investment at each reporting date to assess whether they are impaired. The Group also records impartment charges on available for sale on investment when there has been a significant or prolonged decline in the fair value below their cost. The determination of “significant’ or ‘prolonged’ requires judgement. The Group evaluates, amongst other factors, historical share price movements and the duration and extent to which the fair value of an investment is less than its cost. Impairment of Non-Financial Assets An impairment loss is recognised for the amount by which the asset's or cash-generating unit's carrying amount exceeds its recoverable amount. To determine the recoverable amount, the management estimates expected future cash flows from each cash-generating unit and determines a suitable interest rate in order to calculate the present value of those cash flows. In the process of measuring expected future cash flows, the management makes assumptions about future operating results. These assumptions relate to future events and circumstances. The actual results may vary and may cause significant adjustments to the Group's and the Company’s assets within the next financial year. In most cases, determining the applicable discount rate involves estimating the appropriate adjustment to market risk and the appropriate adjustment to asset-specific risk factors.

With regards to the assessments of value-in-use of these cash-generating units, management believes that no reasonable possible changes in any of the key assumptions would cause the carrying value of the goodwill to differ materially from their recoverable amounts except for the changes in prevailing operating environment which is not ascertainable. Further details of the carrying values, key assumptions applied in the impairment assessment of goodwill and sensitivity analysis to changes in the assumptions are disclosed in Note 9 to the financial statements.



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Fair Value Measurement and Valuation Processes Some of the Group’s assets and liabilities are measured at fair value for financial reporting. Significant judgement is involved in determining the appropriate valuation techniques and inputs for fair value measurements where active market quotes are not available. In estimating the fair value of an asset or a liability, the Group uses market-observable data to the extent it is available. Management makes maximum use of market inputs, and uses estimates and assumptions that are, as far as possible, consistent with observable data that market participants would use in measuring the assets and liabilities. Where Level 1 inputs are not available, management uses its best estimate about the assumptions that market participants would make. These estimates may vary from the actual prices that would be achieved in an arm’s length transaction at the end of the reporting date. For the valuation of land and buildings, the Group engages third party qualified valuers to perform the valuation.

Information about the valuation techniques and inputs used in determining the fair value of various assets and liabilities are disclosed in the Note 5 to the financial statements.

2.5.2 Significant Management Judgement

The following are significant management judgements in applying the accounting policies of the Group that have the most significant effect on the financial statements. Classification between Investment Properties and Owner-Occupied Properties The Group determines whether a property qualifies as an investment property, and has developed criteria in making that judgement. Investment property is a property held to earn rentals or for capital appreciation or both. Therefore, the Group considers whether a property generates cash flows largely independently of the other assets held by the Group. Some properties comprise a portion that is held to earn rentals or for capital appreciation and another portion that is held for use in the production or supply of goods or service or for administrative purpose. The Group accounts for the portions separately if the portions could be sold separately (or leased out separately under a finance lease). If the portions could not be sold separately, the property is an investment property only if an insignificant portion is held for use in the production or supply of goods or services or for administrative purposes. Judgement is made on an individuals property basis to determine whether ancillary services are so significant that a property does not qualify as an investment property.



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2.5.2 Significant Management Judgement (cont’d)

Leases In applying the classification of leases in MFRS 117, management considers some of its leases of leasehold land and motor vehicles as finance lease arrangements. The lease transaction is not always conclusive, and management uses judgement in determining whether the lease is a finance lease arrangement that transfers substantially all the risks and rewards incidental to ownership, whether the lease term is for the major part of the economic life of the asset even if title is not transferred and others in accordance with MFRS 117 Leases.

Deferred Tax Assets

Deferred tax assets are recognised for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which all the deductible temporary differences can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and level of future taxable profits together with future tax planning strategies.

3. SIGNIFICANT ACCOUNTING POLICIES

The Group and the Company apply the significant accounting policies, as summarised below, consistently throughout all periods presented in the financial statements, unless otherwise stated. 3.1 Consolidation

3.1.1 Basis of Consolidation

The Group’s financial statements consolidate the audited financial statements of the Company and all of its subsidiary companies, which have been prepared in accordance with the Group’s accounting policies. Amounts reported in the financial statements of subsidiary companies have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group. The financial statements of the Company and of its subsidiary companies are all drawn up to the same reporting period. All intra-group balances, income and expenses and unrealised gains and losses resulting from intra-group transactions are eliminated in full. Subsidiary companies are consolidated from the date on which control is transferred to the Group and are no longer consolidated from the date that control ceases.



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3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)

3.1 Consolidation (cont’d)

3.1.1 Basis of Consolidation (cont’d) Changes in the Company owners’ ownership interest in a subsidiary company that do not result in a loss of control are accounted for as equity transactions. In such circumstances, the carrying amounts of the controlling and non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary company. Any difference between the amount by which the non-controlling interest is adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the Company.

3.1.2 Business Combination and Goodwill

Acquisition of subsidiary companies are accounted for using the acquisition method

except for Kamdar (South) Sdn. Bhd., Kamdar Sdn. Bhd., Pusat Membeli-Belah Kamdar Sdn. Bhd., Pusat Membeli-Belah Kamdar (Penang) Sdn. Bhd. and Kesar Sdn. Bhd. which are consolidated using merger method of accounting.

Under the merger method of accounting, the results of subsidiary companies are presented as if the merger had been effected throughout the current and previous years. The assets and liabilities combined are accounted for based on the carrying amounts from the perspective of the common control shareholder at the date of transfer. On consolidation, the cost of the merger is cancelled with the values of the shares received. Any resulting credit differences is classified as equity and regarded as a non-distributable reserve. Any resulting debit difference is adjusted against any suitable reserve. Any share premium, capital redemption reserve and any other reserves which are attributable to share capital of the merged entities, to the extent that they have not been capitalised by a debit difference, are reclassified and presented as movement in other capital reserves. Other business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred, measured at acquisition date fair value and the amount of any non-controlling interest in the acquiree. For each business combination, the Group elects whether it measures the non-controlling interest in the acquiree either at fair value or at the proportionate share of the acquiree’s identifiable net assets. Acquisition-related costs are recognised as expenses in the periods in which the costs are incurred and the services are received (for all the acquisition took place after 1 January 2011). All the subsidiary companies within the Group are acquired before 1 January 2011. Thus, the cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date. This includes the separation of embedded derivatives in host contracts by the acquiree.



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3.1.2 Business Combination and Goodwill (cont’d)

If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date through profit or loss. Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Subsequent changes in the fair value of the contingent consideration which is deemed to be an asset or liability will be recognised in accordance with MFRS 139 either in profit or loss or as a change to other comprehensive income. If the contingent consideration is classified as equity, it will not be remeasured. Subsequent settlement is accounted for within equity. In instances where the contingent consideration does not fall within the scope of MFRS 139, it is measured in accordance with the appropriate MFRS. Goodwill in initially measured at cost, being the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interest over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognised in profit or loss. After initial recognition, goodwill is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquiree are assigned to those units.

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

3.1.3 Subsidiary Companies

Subsidiary companies are entities, including structured entities, controlled by the Group or the Company. Control exists when the Group or the Company is exposed, 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. Besides, the Group or the Company 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.

Investments in subsidiary companies are stated at cost less impairment losses in the Company’s statement of financial position, unless the investment is held for sales or distribution. The cost of investment includes transaction cost. Where an indication of impairment exists, the carrying amount of the subsidiary company is assessed and written down immediately to its recoverable amount.



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3.1.3 Subsidiary Companies (cont’d)

Upon the disposal of investment in a subsidiary company, the difference between the net disposal proceeds and its carrying amount is included in profit or loss.

3.1.4 Loss of Control

Upon the loss of control of a subsidiary company, the Group derecognises the assets and liabilities of the subsidiary company, any non-controlling interests and the other components of the equity related to the subsidiary company. Any surplus or deficit arising on the loss of control is recognised in profit or loss. If the Group retains any interest in the previous subsidiary company, then such interest is measured at fair value at the date that control is lost. Subsequently, it is accounted for as an the equity accounted investee or as an available-for-sale financial asset depending on the level of influence retained.

3.2 Property, Plant and Equipment

All property, plant and equipment are measured at cost less accumulated depreciation and less any impairment losses. The cost of an item of property, plant and equipment is recognised as an asset if, and only if, it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.

Cost includes expenditures that are directly attributable to the acquisition of the assets and any other costs directly attributable to bring the asset to working condition for its intended use, cost of replacing component parts of the assets, and the present value of the expected cost for the decommissioning of the assets after their use. The cost of self-constructed assets also includes the cost of materials and direct labour. For qualifying assets, borrowing costs are capitalised in accordance with the accounting policy on borrowing costs. All other repair and maintenance costs are recognised in profit or loss as incurred.

Depreciation is recognised on the reducing balance method in order to write off the cost of each asset over its estimated useful life. Freehold land with an infinite life is not depreciated. Other property, plant and equipment are depreciated based on the estimated useful lives of the assets as follows:-

Long term/Short term leasehold buildings Freehold buildings Plant and machineries Motor vehicles Equipment, furniture, fittings and renovation

over remaining lease period 2%

10% 20%

5% – 50%



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3.2 Property, Plant and Equipment (cont’d)

The residual values, useful life and depreciation method are reviewed for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable, or at least annually to ensure that the amount, method and period of depreciation are consistent with previous estimates and expected pattern of consumption of future economic benefits embodied in the items of property, plant and equipment. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Gain or loss arising on the disposal of property, plant and equipment are determined as the difference between the disposal proceeds and the carrying amount of the assets and are recognised in profit or loss.

3.3 Investment Properties

Investment properties are properties which are owned or held under a leasehold interest to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes.

Investment properties are initially measured at cost, including transaction cost. Cost includes expenditures that are directly attributable to the acquisition of the investment property. The cost of self-constructed investment property includes the cost of materials and direct labour, any other costs directly attributable to bring the investment property to a working condition for their intended use and capitalised borrowing costs. Subsequent to initial recognition, investment properties are measured at fair value and are revalued annually and are included in the statement of financial position at their open market values. Any gain or loss resulting from either a change in the fair value or the sale of an investment property is immediately recognised in profit or loss in the period in which they arise. The fair values are determined by external professional valuers with sufficient experience with respect to both the location and the nature of the investment property and supported by market evidence. Where the fair value of the investment property under construction is not reliably determinable, the investment property under construction is measured at cost until either its fair value becomes reliably determinable or construction is complete, whichever is earlier. Investment properties are derecognised when either they are disposed of or when they are permanently withdrawn from use and no future economic benefit is expected from the disposal. Any gain or loss on the retirement or disposal of an investment property is recognised in the profit or loss in the financial year of retirement or disposal.



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3.3 Investment Properties (cont’d) Transfers are made to or from investment property only when there is a change in use. For a transfer from investment property to owner-occupied property, the deemed cost for subsequent accounting is the fair value at the date of change. When an item of property, plant and equipment is transferred to investment property following a change in its use, any difference arising at the date of transfer between the carrying amount of the item immediately prior to transfer and its fair value is recognised directly in equity as a revaluation of property, plant and equipment. However, if a fair value gain reverses a previous impairment loss, the gain is recognised in profit or loss. Upon disposal of an investment property, any surplus previously recorded in equity is transferred to retained earnings; the transfer is not made through profit or loss.

3.4 Capital Work-In-Progress

Capital work-in-progress consists of office shoplots under construction for intended use. The amount is stated at cost and includes capitalisation of interest incurred on borrowings related to capital work-in-progress under construction until the capital work-in-progress are ready for their intended use. Assets under construction are not depreciated until they are completed and ready for their intended use.

3.5 Financial Instruments

Initial Recognition and Measurement Financial assets and financial liabilities are recognised when the Group or the

Company becomes a party to the contractual provisions of the financial instrument. Financial assets and financial liabilities are measured initially at fair value plus transactions costs, except for financial assets and financial liabilities carried at fair value through profit or loss, which are measured initially at fair value. Financial assets and financial liabilities are measured subsequently as described below.

Financial Assets – Categorisation and Subsequent Measurement

For the purpose of subsequent measurement, financial assets other than those designated and effective as hedging instruments are classified into the following categories upon initial recognition:- a) loans and receivables; b) financial assets at fair value through profit or loss; c) held-to-maturity investments; and d) available-for-sale financial assets.

The category determines subsequent measurement and whether any resulting income and expenses are recognised in profit or loss or in other comprehensive income. All financial assets except for those at fair value through profit or loss are subject to review for impairment at least at each end of the reporting period. Financial assets are impaired when there is any objective evidence that a financial assets or a group of financial assets is impaired. Different criteria to determine impairment are applied for each category of financial assets.



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3.5 Financial Instruments (cont’d)

Financial Assets – Categorisation and Subsequent Measurement (cont’d) 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 the profit or loss. At the reporting date, the Group and the Company have not designated any financial assets at fair value through profit or loss and held-to-maturity investments. The Group and the Company carry only loans and receivables and available-for-sale financial assets on their statements of financial position.

Loans and Receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. After initial recognition, these are measured at amortised cost using the effective interest method, less provision for impairment. Discounting is omitted where the effect of discounting is immaterial. Gains or losses are recognised in profit or loss when the loans and receivables are derecognised or impaired, and through the amortisation process. The Group’s and the Company's cash and cash equivalents, trade and most of other receivables fall into this category of financial instruments.

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

Available-for-sale Financial Assets

Available-for-sale financial assets are non-derivative financial assets that are either designated to this category or do not qualify for inclusion in any of the other categories of financial assets. The Group’s available-for-sale financial assets include non-quoted equity instruments. Available-for-sale financial assets are measured at fair value subsequent to the initial recognition. Gains and losses are recognised in other comprehensive income and reported within the available-for-sale reserve within equity, except for impairment losses and foreign exchange differences on monetary assets, which are recognised in profit or loss. When the asset is disposed of or is determined to be impaired the cumulative gain or loss recognised in other comprehensive income is reclassified from the equity reserve to profit or loss and presented as a reclassification adjustment within other comprehensive income. Interest calculated using the effective interest method and dividends are recognised in profit or loss. Dividends on an available-for-sale equity are recognised in profit or loss when the Group’s right to receive payment is established.



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3.5 Financial Instruments (cont’d)

Financial Assets – Categorisation and Subsequent Measurement (cont’d) Available-for-sale Financial Assets (cont’d) Investment in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured are measured at cost less impairment loss. Available-for-sale financial assets are classified as non-current assets unless they are expected to be realised within 12 months after the end of the reporting period. Financial Liabilities – Categorisation and Subsequent Measurement After the initial recognition, financial liability is classified as financial liability at fair value through profit or loss, other financial liabilities measured at amortised cost using the effective interest method or financial guarantee contracts.

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.

At the reporting date, the Group and the Company have not designated any financial liabilities at fair value through profit or loss. The Group and the Company carry only other financial liabilities measured at amortised cost on their statements of financial position.

Other Financial Liabilities Measured at Amortised Cost The Group’s and the Company’s other financial liabilities include borrowings, finance lease liabilities, amount due to subsidiary companies, trade and other payables. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Borrowings 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 end of the reporting period.

Financial Guarantee Contracts Financial guarantee contracts issued by the Company are those contracts that require a payment to be made to reimburse the holder for a loss it incurs because the specific debtor fails to make a payment when due in accordance with the terms of a debt instrument. Financial guarantee contracts are recognised initially as a liability at fair value, adjusted for transaction costs that are directly attributable to the issuance of the guarantee. Subsequently, the liability is measured at the higher of the best estimate of the expenditure required to settle the present obligation at the reporting date and the amount recognised less cumulative amortisation.



35

3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 3.5 Financial Instruments (cont’d)

Offsetting of Financial Instruments

Financial assets and financial liabilities are offset and the net amount reported in the statements of financial position if, and only if, there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, or to realise the assets and settle the liabilities simultaneously.

3.6 Impairment of Assets

3.6.1 Financial Assets

The Group and the Company assess at each reporting date whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred “loss event”) and that loss event has an impact on the estimated future cash flows of the financial asset or the group of financial assets that can be reliably estimated. Evidence of impairment may include indications that the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation and where observable date indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

Financial Assets Carried at Amortised Cost For financial assets carried at amortised cost, the Group first assesses whether objective evidence of impairment exists individually for financial assets that are individually significant, or collectively for financial assets that are not individually significant. If the Group determines that no objective evidence of impairment exists for an individually assessed financial asset, whether significant or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses them for impairment. Assets that are individually assessed for impairment and for which an impairment loss is, or continue to be, recognised are not included in a collective assessment of impairment.

If there is objective evidence that an impairment loss has been incurred, the amount of the loss is measured as the difference between the assets carrying amount and the present value of estimated future cash flows (excluding future expected credit losses that have not yet been incurred). The present value of the estimated future cash flows is discounted at the financial asset’s original effective interest rate.



36

3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 3.6 Impairment of Assets (cont’d) 3.6.1 Financial Assets (cont’d)

Financial Assets Carried at Amortised Cost (cont’d)

The carrying amount of the asset is reduced through the use of a provision account and the amount of the loss is recognised in the profit or loss. Interest income continues to be accrued on the reduced carrying amount and is accrued using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. The interest income is recorded as part of finance income in the profit or loss. Loans together with the associated provision are written off when there is no realistic prospect of future recovery and all collateral has been realised or has been transferred to the Group. If, in a subsequent financial year, the amount of the estimated impairment loss increases or decreases because of an event occurring after the impairment was recognised, the previously recognised impairment loss is increased or reduced by adjusting the provision account. If a future write-off is later recovered, the recovery is credited to finance costs in the profit or loss. Available-for-sale Financial Assets For available-for-sale financial assets, the Group assesses at each reporting period whether there is objective evidence that an investment or a group of investment is impaired. In the case of equity investments classified as available-for-sale, objective evidence would include a significant or prolonged decline in the fair value of the investment below its cost. “Significant” is evaluated against the original cost of the investment and “prolonged” against the period in which the fair value has been below its original cost. Where there is evidence of impairment, the cumulative loss - measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that investment previously recognised in the profit or loss - is removed from other comprehensive income and recognised in the profit or loss. Impairment losses on equity investments are not reversed through profit or loss; increases in their fair value after impairments are recognised directly in other comprehensive income.

In the case of debt instruments classified as available-for-sale, impairment is assessed based on the same criteria as financial assets carried at amortised cost. However, the amount recorded for impairment is the cumulative loss measured as the difference between the amortised cost and the current fair value, less any impairment loss on that investment previously recognised in profit or loss. Future interest income continues to be accrued based on the reduced carrying amount of the asset, using the rate of interest used to discount the future cash flows for the purpose of measuring the impairment loss. The interest income is recorded as part of finance income. If, in a subsequent year, the fair value of a debt instrument increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in the profit or loss, the impairment loss is reversed through profit or loss.



37

3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 3.6 Impairment of Assets (cont’d)

3.6.2 Non-financial Assets

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (CGU) fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs to sell, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded subsidiaries or other available fair value indicators.

The Group bases its impairment calculation on detailed budgets and forecast calculations which are prepared separately for each of the Group’s cash-generating units to which the individual assets are allocated. These budgets and forecast calculations are generally covering a period of three years. For longer periods, a long term growth rate is calculated and applied to project future cash flows after the third year. Impairment losses of continuing operations, including impairment on inventories, are recognised in the profit or loss in those expense categories consistent with the function of the impaired asset, except for a property previously revalued where the revaluation was taken to other comprehensive income. In this case, the impairment is also recognised in other comprehensive income up to the amount of any previous revaluation. For assets excluding goodwill, an assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the Group estimates the asset’s or cash-generating unit’s recoverable amount. A previously recognised impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for asset in prior years. Such reversal is recognised in the profit or loss unless the asset is carried at a revalued amount, in which case the reversal is treated as a revaluation increase.



38

3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 3.6 Impairment of Assets (cont’d)

3.6.2 Non-financial Assets (cont’d)

Goodwill is tested for impairment annually as at the end of each reporting period, and when circumstances indicate that the carrying value may be impaired. Impairment is determined for goodwill by assessing the recoverable amount of each cash-generating unit (or group of cash-generating units) to which the goodwill relates. Where the recoverable amount of the cash-generating unit is less than their carrying amount, an impairment loss is recognised. Impairment losses relating to goodwill cannot be reversed in future periods.

3.7 Inventories

Inventories, which consist of textile and textile based products, are stated at the lower of cost and net realisable value.

The cost of inventories comprises the original cost of purchase price and incidental costs incurred in bringing the inventories to their present location and condition. Cost is generally determined on a first-in-first-out basis.

Net realisable value represents the estimated selling price in the ordinary course of business less the estimated costs necessary to make sale. Write-down to net realisable value and inventory losses are recognised as an expense when it occurred and any reversal is recognised in profit or loss in the period in which it occurs.

3.8 Cash and Cash Equivalents

Cash and cash equivalents comprise cash on hand, bank balances, short term demand deposits, bank overdrafts, deposits with licensed banks and highly liquid investments which are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.

Bank overdrafts are shown in current liabilities in the statements of financial position.

3.9 Equity, Reserves and Distribution to Owners

An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Ordinary shares are equity instruments. Share capital represents the nominal value of shares that have been issued. Share premium includes any premiums received on issue of share capital. Any transaction costs associated with the issuing of shares are deducted from share premium, net of any related income tax benefits. The revaluation reserve within equity comprises gains and losses due to revaluation of property, plant and equipment. Foreign currency translation differences arising on the translation of the Group’s foreign entities are included in the exchange translation reserve.

Retained earnings include all current and prior period retained earnings.



39


3.9 Equity, Reserves and Distribution to Owners (cont’d) Final dividends proposed by the Directors are not accounted for in shareholders’ equity as an appropriation of retained earnings, until they have been approved by the shareholders in a general meeting. When these dividends have been approved by the shareholders and declared, they are recognised as a liability. Interim dividends are simultaneously proposed and declared, because the articles of association of the Company grants the Directors the authority to declare interim dividends. Consequently, interim dividends are recognised directly as a liability when they are proposed and declared. The distribution of non-cash assets to owners is recognised as dividend payable when the dividend was approved by shareholders. The dividend payable is measured at the fair value of the shares to be distributed. At the end of the financial year and on the settlement date, the Company reviews the carrying amount of the dividend payable recognised in equity. When the Company settles the dividend payable, the difference between the carrying amount of the dividend distributed and the carrying amount of the dividend payables is recognised as a separate line item in profit or loss. All transactions with owners of the Company are recorded separately within equity.

3.10 Provisions

Provisions are recognised when there is a present legal or constructive obligation that can be estimated reliably, as a result of a past event, when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not recognised for future operating losses.

Any reimbursement that the Group and the Company can be virtually certain to collect from a third party with respect to the obligation is recognised as a separate asset. However, this asset may not exceed the amount of the related provision.

Provisions are reviewed at each end of the reporting period and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of economic resources will be required to settle the obligation, the provision is reversed. Where the effect of the time of money is material, provision are discounted using a current pre tax rate that reflects, where appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

3.11 Leases

The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement at the inception date, whether fulfilment of the arrangement is dependent on the use of a specific asset or asset or the arrangement conveys a right to use the asset, even if that right is not explicitly specific in an arrangement.



40


3.11 Leases (cont’d)

Finance Leases

Leases in terms of which the Group assumes substantially all the risks and rewards of ownership are classified as finance lease. Upon initial recognition, the leased asset is measured at an amount equal to the lower of its fair value and the present value of the minimum lease payments.

Minimum lease payments made under finance leases are apportioned between finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised in finance costs in the profit or loss. Contingent lease payments are accounted for by revising the minimum lease payments over the remaining term of the lease when the lease adjustment is confirmed.

A leased asset is depreciated over the useful life of the asset. However, if there is no reasonable certainty that the Group will obtain ownership by the end of the lease term, the asset is depreciated over the shorter of the estimated useful life of the asset and the lease term. Leasehold land which in substance is a finance lease is classified as a property, plant and equipment.

Operating Lease Leases, where the Group does not assume substantially all the risks and rewards of ownership are classified as operating leases and, except for property interest held under operating lease, the leased assets are not recognised on the statement of financial position. Property interest held under an operating lease, which is held to earn rental income or for capital appreciation or both, is classified as investment property. Payments made under operating leases are recognised in profit or loss on a straight-line basis over the term of the lease. Lease incentives received are recognised in profit or loss as an integral part of the total lease expense, over the term of the lease. Contingent rentals are charged to profit or loss in the reporting period in which they are incurred. Leasehold land which in substance is an operating lease is classified as prepaid land lease payments. The Group’s prepaid land lease payments are amortised on a reducing balance basis over the lease term within 40 to 99 years.



41


3.12 Borrowing Costs Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalised as part of the cost of the assets during the period of time that is necessary to complete and prepare the asset for its intended use or sale. The capitalisation of borrowing costs as part of the cost of a qualifying asset commences when expenditure for the asset is being incurred, borrowing costs are being incurred and activities that are necessary to prepare the asset for its intended use or sale are in progress. Capitalisation of borrowing costs is suspended or ceases when substantially all the activities necessary to prepare the qualifying asset for its intended use or sale are interrupted or completed.

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

3.13 Revenue Revenue is recognised to the extent that it is probable that the economic benefits

associated with the transaction will flow to the Group and the Company and the amount of revenue can be reliably measured. Revenue is measured at the fair value of consideration received or receivable.

Sale of Goods

Revenue relating to sale of goods is recognised net of sales returns and discount upon the transfer of significant risk and rewards of ownership of the goods to the customers. Revenue is not recognised to the extent where there are significant uncertainties regarding recovery of the consideration due, associated costs or the possible return of goods. Rental Income

Rental income is recognised on accrual basis unless collectibility is in doubt.

Interest Income

Interest income is recognised in the profit or loss on time proportion basis taking into account the principal outstanding and the effective rate over the period to maturity, when it is determined that such income will accrue to the Group.

Dividend Income

Dividend income is recognised when the right to receive payment has been established and no significant uncertainty existed with regard to its receipt. Management Fees Management fees are recognised on an accrual on basis when services are rendered.



42


3.14 Foreign Currency Translation The Group’s consolidated financial statements are presented in RM, which is also the

Company’s function currency.

Foreign Currency Transactions and Balances

Transactions in foreign currencies are initially recorded at the functional currency rates prevailing at the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency spot rate of exchange ruling at the reporting date.

All differences are taken to the profit or loss with the exception of all monetary items

that forms part of a net investment in a foreign operation. These are recognised in other comprehensive income until the disposal of the net investment, at which time they are reclassified to profit or loss. Tax charges and credits attributable to exchange differences on those monetary items are also recorded in other comprehensive income.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising in translation of non-monetary items is recognised in line with the gain or loss of the item that gave rise to the translation difference (translation differences on items whose gain or loss is recognised in other comprehensive income or profit or loss is also recognised in other comprehensive income or profit or loss respectively).

3.15 Tax Expense

Tax expense comprises current and deferred tax. Current tax and deferred tax is recognised in profit or loss except to the extent that it relates to a business combination or items recognised directly in equity or other comprehensive income.

Current Tax

Current tax is the expected tax payable or receivable on the taxable profit or loss for

the financial year, using tax rates enacted or substantively enacted by the end of the reporting period, and any adjustment to tax payable in respect of previous financial years.

Current tax is recognised in the statements of financial position as a liability (or an asset) to the extent that it is unpaid (or refundable).

Deferred Tax

Deferred tax is recognised using the liability method, providing for temporary

differences between the carrying amounts of assets and liabilities in the statement of financial position and their tax bases. Deferred tax is not recognised for the temporary differences arising from the initial recognition of goodwill, the initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the end of the reporting date.



43

3. SIGNIFICANT ACCOUNTING POLICIES (CONT’D) 3.15 Tax Expense (cont’d)

Deferred Tax (cont’d)

The amount of deferred tax recognised is measured based on the expected manner of realisation or settlement of the carrying amount of the assets and liabilities, using tax rates enacted or substantively enacted at the reporting date, except for investment properties carried at fair value model. Where investment properties are carried at their fair value in accordance with the accounting policy set out in Note 3.3 to the financial statements, the amount of deferred tax recognised is measured using the tax rates that would apply on sale of those assets at their carrying value at the reporting date unless the property is depreciable and is held with the objective to consume substantially all of the economic benefits embodied in the property over time, rather than through sale. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously. A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred tax assets are reviewed at the end of each reporting period and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

Unutilised reinvestment allowance and investment tax allowance, being tax incentives that is not a tax base of an asset, is recognised as a deferred tax asset to the extent that it is probable that the future taxable profits will be available against the unutilised tax incentive can be utilised.

3.16 Employee Benefits Expense

Short Term Benefits

Wages, salaries, bonuses and social security contributions are recognised as an expense in the period in which the associated services are rendered by employees of the Group and of the Company. Short term accumulating compensated absences such as paid annual leave are recognised when services are rendered by employees that increase their entitlement to future compensated absences, and short term non-accumulating compensated absences such as sick leave are recognised when the absences occur. A provision is made for the estimated liability for leave as a result of services rendered by employees up to the end of the reporting period.

Defined Contribution Plan

Defined contribution plans are post-employment benefit plans under which the Group and the Company pay fixed contributions into separate entities of funds and will have no legal or constructive obligation to pay further contribution if any of the funds do not hold sufficient assets to pay all employee benefits relating to employee services in the current and preceding financial years. Such contributions are recognised as an expense in the profit or loss as incurred. As required by law, companies in Malaysia make such contributions to the Employees Provident Fund (“EPF”).


notes to tHe finAnciAl stAteMents (cont'd)


44


3.17 (Losses)/Earnings per Ordinary Share The Group presents basic and diluted (losses)/earnings per share (LPS)/(EPS) data for

its ordinary shares. Basic LPS/EPS is calculated by dividing the profit or loss attributable to ordinary

shareholders of the Company based on the weighted average number of ordinary shares outstanding during the period.

Diluted LPS/EPS is calculated by dividing the profit or loss attributable to ordinary

shareholders of the Company based on the weighted average number of shares outstanding, for the effects of all dilutive potential ordinary shares during the period.

3.18 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 revenue and expenses that relate to transactions with any of the Group’s other components. All operating segments’ operating results are reviewed regularly by the chief operating decision maker to make decisions about resources to be allocated to the segment and to assess its performance, and for which discrete financial information is available. Additional disclosures on each of these segments are shown in Note 33 to the financial statement.

3.19 Contingencies Where it is not probable that an inflow or an outflow of economic benefits will be

required, or the amount cannot be estimated reliably, the asset or the obligation is not recognised in the statements of financial position and is disclosed as a contingent asset or contingent liability, unless the probability of inflow or outflow of economic benefits is remote. Possible obligations, whose existence will only be confirmed by the occurrence or non-occurrence of one or more future events, are also disclosed as contingent assets or contingent liabilities unless the probability of inflow or outflow of economic benefits is remote.

3.20 Related Parties

A related party is a person or entity that is related to the entity that is preparing its financial statements (“the reporting entity”). A related party transaction is a transfer of resources, services or obligations between the reporting entity and its related party, regardless of whether a price is charged.

(a) A person or a close member of that person’s family is related to the 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.



45


3.20 Related Parties (cont’d)

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

(i) The entity and the reporting entity are members of the same group; (ii) One entity is an associate or joint venture of the reporting entity; (iii) Both entities are joint venture 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 same third entity; (v) The entity is a post-employment benefit plan for the benefits of

employees of the reporting entity or an entity 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 reporting entity; or

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

3.21 Goods and Services Tax (“GST”)

GST is a consumption tax based on value-added concept. GST is imposed on goods and services at every production and distribution stage in the supply chain including importation of goods and services, at the applicable tax rate of 6%. Input GST that the Group and the Company paid on purchases of business inputs can be deducted from output GST.

Revenues, expenses, assets and liabilities are recognised net of the amount of GST except:-

- Where the GST incurred in a purchase of assets or services is not recoverable

from the authority, in which case the GST is recognised as part of the cost of acquisition of the assets or as part of the expense item as applicable; and

- Receivables and payables that are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the customs is included as part of receivables or payables in the statements of financial position.


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,325

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3,10

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47

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

(i) The net carrying amount of certain land and buildings of the subsidiary companies amounting to RM96,718,688 (2014: RM97,860,938) are charged to licensed banks as security for banking facilities granted to the subsidiary companies.

(ii) The strata title deed of land and building of a subsidiary company amounting to

RM3,432,259 (2014: RM3,576,888) are yet to be issued by relevant authorities.

(iii) Assets held under finance lease Group 2015 2014 RM RM Details of assets under finance lease are:- Motor vehicles - additions during the financial year - 119,127 - net carrying amount 295,339 609,989

Leased assets are pledged as security for the related finance lease liabilities.

5. INVESTMENT PROPERTIES \

Group Freehold land Leasehold land Buildings Total RM RM RM RM Fair value

At 1 January 2014 16,000,000 9,073,895 14,589,105 39,663,000 Transfer from property, plant and equipment 830,000 - - 830,000 Fair value adjustment - 176,105 220,895 397,000

At 31 December 2014 16,830,000 9,250,000 14,810,000 40,890,000 Fair value adjustment 115,000 - (4,400,000) (4,285,000)

At 31 December 2015 16,945,000 9,250,000 10,410,000 36,605,000

Investment properties comprise of a number of freehold land, leasehold land and buildings that are leased to third parties. Each of the leases contains a cancellable period ranging from 2 to 3 (2014: 2 to 3) years. Subsequent renewals are negotiated with the leases on an average renewal period of 2 (2014: 2) years. No contingent rents are charged. The fair value of investment properties is determined by external independent property valuers, having appropriate recognised professional qualifications and recent experience in the location and category of properties being valued. The valuation company provides the fair value of Group investment properties at least once a year. The fair value of the investment properties was determined based on the comparison approach. Land and buildings with net carrying amount of RM25,400,000 (2014: RM25,400,000) are pledged to licensed banks for banking facilities granted to the Company and its subsidiary companies.



48

5. INVESTMENT PROPERTIES (CONT’D)

Income and expenses recognised in profit or loss:-

Group 2015 2014 RM RM Rental income 2,118,900 806,700 Direct operating expenses:- - Income generating investment properties

312,663

274,946

6. PREPAID LAND LEASE PAYMENTS

Long leasehold land represent leasehold land with unexpired lease period of more than 50 years.

Long term leasehold land with net carrying amount of RM5,482,307 (2014: RM5,566,034) are pledged as securities for banking facilities granted to certain subsidiary companies.

Group

2015 RM

2014 RM

Long term leasehold land Cost At 1 January/31 December

7,056,562

7,056,562

Accumulated amortisation

At 1 January 940,178 847,984 Amortisation charged to profit or loss 92,194 92,194 At 31 December 1,032,372 940,178

Net carrying amount At 31 December 6,024,190 6,116,384

Analysis as:- Amount to be amortised Not later than one year 92,194 92,194 Later than one year but not later than five years 368,776 460,970 Later than five years 5,563,220 5,563,220

6,024,190

6,116,384



49

7. CAPITAL WORK-IN-PROGRESS

The title deed of the freehold shop/office buildings under construction is yet to be transferred by relevant authorised.

8. AVAILABLE FOR SALE INVESTMENT

Group 2015

RM 2014

RM Unquoted investment outside Malaysia 286,824 286,824 Less: Impairment loss (286,824) (286,823) - 1

9. GOODWILL

Group 2015

RM 2014

RM At 1 January/31 December 373,506 373,506

Impairment test for goodwill

Goodwill has been allocated to the Group’s CGU, being Kesar Sdn. Bhd., which is in the

textiles business. No impairment loss was required for the goodwill on consolidation at its recoverable value was in excess of its carrying values.

Key assumptions used in value-in-use calculations The recoverable amount for the goodwill was based on its value in use. Value in use was determined by discounting the future cash flows generated from the continuing operation of business acquired and was based on the following key assumptions:- (i) cash flows were projected based on actual operating results and a four-year business

plan. (ii) revenue was projected to be increased and remained consistent from 2016 to 2019. (iii) expenses were projected at annual increase of approximately 3% per annum.

Group 2015 2014 RM RM Freehold shop/office buildings under construction Brought forward 4,667,500 - Addition 11,053,875 4,667,500 Carried forward 15,721,375 4,667,500



50

9. GOODWILL (CONT’D) Key assumptions used in value-in-use calculations (cont’d)

A pre-tax discount rate of 5% was applied in determining the recoverable amount of the unit. The discount rate was estimated based on the Group’s existing rate of borrowing. The values assigned to the key assumptions represent management’s assessment of future trends in the industry and are based on external and internal sources. A reasonably possible change in a key assumption does not have any significant difference to the recoverable amount. Sensitivity to changes in assumptions

With regard to the assessment of value-in-use of the CGU relating to trading in textiles products, management believes there are possible changes in key assumptions which could cause the carrying value of the CGU to exceed its recoverable amount. The estimated CGU relating to recoverable amount for the unit exceeds its carrying amount by approximately RM3.2 million (2014: RM1.7 million).

10. DEFERRED TAX (ASSETS)/LIABILITIES

Group 2015

RM 2014

RM At 1 January 1,727,971 1,333,942 Recognised in profit or loss 840,335 123,173 Recognised in other comprehensive income - 22,573 (Over)/Under provision in prior financial year (440,624) 248,283 At 31 December 2,127,682 1,727,971

Group 2015

RM 2014

RM Presented as follows as disclosed in the statements of financial position:-

Deferred tax assets (186,000) (168,000) Deferred tax liabilities 2,313,682 1,895,971 2,127,682 1,727,971




51

10. DEFERRED TAX (ASSETS)/LIABILITIES (CONT’D) The components of recognised deferred tax (assets)/liabilities are made up of temporary

difference arising from:- Group 2015

RM 2014

RM Real property gain tax on investment properties 478,494 692,744 Revaluation on property, plant and equipment upon transfer to investment properties

338,090

338,090

Fair value adjustment in acquisition of subsidiary companies

717,572

736,691

Excess of property, plant and equipment’s carrying amounts over their tax base

2,367,106

1,333,781

Trade receivables (302,000) (304,000) Inventories (1,356,049) (944,385) Unrealised gain on foreign exchange 12,000 - Unabsorbed business losses (117,611) (117,611) Unutilised capital allowances (9,920) (7,339) 2,127,682 1,727,971

The corporate tax will be reduced to 24% for the year assessment 2016 as announced in

Malaysia Budget 2015. Consequently, deferred tax assets and liabilities are measured using this rate.

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

Group 2015

RM 2014

RM Unabsorbed business losses (750,000) (750,000) Unutilised capital allowances (367,000) (367,000) (1,117,000) (1,117,000)

The potential tax benefit at 25% (2014: 25%) not recognised in the statements of profit or loss and other comprehensive income is approximately RM279,250 (2014: RM279,250) as it is not probable that future taxable profits will be available in which the subsidiary companies can utilised the benefits.



52

11. INVENTORIES

Inventories consist of textiles and textile-based products. Group 2015

RM 2014

RM At carrying amount:- Inventories 125,890,759 127,808,630

Recognised in profit or loss:- Inventories written down 2,226,315 2,366,400 Inventories written off - 173,434 Reversal of inventories written down (233,278) -

12. TRADE RECEIVABLES

Group

2015 RM

2014 RM

Gross trade receivables 11,633,480 7,815,659 Less: Allowance for impairment Brought forward (1,267,407) (1,239,625) Recognised (58,420) (197,134) Reversed 68,285 169,352 Carried forward (1,257,542) (1,267,407) 10,375,938 6,548,252 Included in trade receivables is the amount of RM36,159 (2014: RM84,020) due from companies in which a person who connected with a Director has interest.

Trade receivables are non-interest bearing and are recognised at their original invoice amounts which represent their fair values on initial recognition. The Group’s normal trade credit terms granted to the trade receivables ranged from 0 day to 120 days (2014: 0 day to 120 days). Other credit terms are assessed and approved by the management on a case-by-case basis.

13. OTHER RECEIVABLES

Group Company 2015 2014 2015 2014 RM RM RM RM Non-trade receivables 1,239,895 1,117,965 2,113 - Less: Allowance for

impairment

(75,078)

(75,078)

-

- 1,166,930 1,042,887 2,113 - Deposits 1,994,219 2,311,938 - - Prepayments 193,986 694,064 34,015 - GST receivable 244,174 - - -

3,597,196

4,048,889

36,128

-



53

14. FIXED DEPOSITS WITH LICENSED BANKS Group

Included in the fixed deposits with licensed banks is an amount of RM5,351,428 (2014: RM5,204,762) which is pledged to licensed banks as security for banking facilities granted to subsidiary companies. The effective interest rates for fixed deposits with licensed banks ranged from 2.50% to 3.30% (2014: 2.50% to 3.15%) per annum.

15. CASH AND BANK BALANCES The foreign currency profile of cash and bank balances are as follows:-

Group Company 2015 2014 2015 2014 RM RM RM RM United States Dollar 15,819 - - - Ringgit Malaysia 7,078,880 13,628,937 246,452 5,666,775 7,094,699 13,628,937 246,452 5,666,775

16. SHARE CAPITAL

Group and Company No. of ordinary shares of

RM1.00 each Amount

2015 Unit

2014 Unit

2015 RM

2014 RM

Authorised:- At 1 January/31 December 500,000,000 500,000,000 500,000,000 500,000,000 Issued and fully paid:- At 1 January/31 December 197,990,002 197,990,002 197,990,002 197,990,002

The holders of the ordinary shares are entitled to receive dividends as and when declared by the Company. An ordinary share carries one vote per share without restrictions and rank equally with regard to the Company’s residual asset.



54

17. RESERVES

Group Company 2015 2014 2015 2014 RM RM RM RM Share premium 110,000 110,000 - - Merger reserve (176,580,000) (176,580,000) - - Revaluation reserve 6,423,728 6,423,728 - - Total non-distributable

(170,046,272)

(170,046,272)

-

-

Retained earnings 189,658,168 192,892,374 5,512,619 6,175,173 19,611,896 22,846,102 5,512,619 6,175,173

Group

Share premium

Share premium represents the excess of the consideration received over the nominal value of shares issued by a subsidiary company. It is not to be distributed by way of cash dividends and its utilisation should be in the manner as set out in Section 60(3) of the Companies Act, 1965. Merger reserve

Merger deficit mainly arose from the business combination of entities under common control where the amount of the Company’s equity ownership of the entities exceeded their acquisition costs.

Revaluation reserve

The revaluation reserve represents increases in fair value of land and buildings, net of tax, and decrease to the extent that such decreases relate to an increase on the same asset previously recognised in other comprehensive income.

Company Retained earnings The Company adopted the Single Tier Income Tax System in which the Company may declare the payment of the dividends out of its entire retained earnings of which subject to the availability of profits.



55

18. BORROWINGS

Short term borrowings Group Company

2015 2014 2015 2014 RM RM RM RM Secured:- Bankers’ acceptance 28,832,000 17,709,000 - - Bank overdrafts 3,248,346 1,933,998 - - Term loans 4,135,419 3,945,058 571,991 548,241

36,215,765

23,588,056

571,991

548,241 Unsecured:- Bankers’ acceptance 8,874,773 16,433,000 - - Bank overdrafts 5,393,670 4,461,479 - -

14,268,443

20,894,479

-

- 50,484,208 44,482,535 571,991 548,241 Long term borrowings Secured:- Term loans 43,568,410 47,644,890 16,897,142 17,436,519

Group Company 2015 2014 2015 2014 RM RM RM RM Total borrowings Bankers’ acceptance 37,706,773 34,142,000 - - Bank overdrafts 8,642,016 6,395,477 - - Term loans 47,703,829 51,589,948 17,469,133 17,984,760

94,052,618

92,127,425 17,469,133

17,984,760

Maturity of borrowings:- Within one year 50,484,208 44,482,535 571,991 548,241 More than 1 year and less than 5 years

15,343,440

17,184,246

2,563,086

2,456,662

After 5 years 28,224,970 30,460,644 14,334,056 14,979,857

94,052,618

92,127,425 17,469,133

17,984,760

The bankers’ acceptance and bank overdrafts of the Group are secured by:-

(a) fixed charge over certain subsidiary companies’ landed properties; (b) negative pledge over the assets of certain subsidiary companies; (c) a pledge of fixed deposits of certain a subsidiary company; (d) joint and several guarantees by the Directors; and

(e) corporate guarantee by the Company and its subsidiary companies.



56

18. BORROWINGS (CONT’D) The secured term loans of the Group are secured by:-

(a) legal charge on certain subsidiary companies’ landed properties; (b) assignment of rental proceeds over the abovementioned properties; (c) joint and several guarantees by the Directors; and (d) corporate guarantee by the Company.

The secured term loan of the Company is secured by legal charge on certain subsidiary companies’ landed properties.

The effective interest rates of borrowings of the Group and of the Company are ranged from 1.50% to 8.60% (2014: 2.09% to 8.60%) and 4.50% (2014: 4.25% to 4.50%) per annum respectively. The foreign currency profile of short term borrowings are as follow:- Group Company 2015 2014 2015 2014 RM RM RM RM United States Dollar 4,195,043 - - - Ringgit Malaysia 89,857,575 92,127,425 17,469,133 17,984,760 94,052,618 92,127,425 17,469,133 17,984,760

19. FINANCE LEASE LIABILITIES

Group 2015

RM 2014

RM Minimum lease payments:- - not later than 1 year 46,056 170,567 - later than 1 year but not later than 5 years 67,296 113,352 113,352 283,919 Less: Future finance charges on finance lease (8,148) (17,512) 105,204 266,407 Present value of finance lease liabilities - not later than 1 year 41,843 161,085 - later than 1 year but not later than 5 years 63,361 105,322 105,204 266,407

The effective interest rates are ranged from 3.91% to 7.42% (2014: 3.91% to 7.42%) per annum.



57

20. TRADE PAYABLES

Group Trade payables are unsecured, non-interest bearing and with the normal credit terms granted by suppliers ranged from 14 days to 120 days (2014: 14 days to 120 days).

21. OTHER PAYABLES

Group Company 2015 2014 2015 2014 RM RM RM RM Non-trade payables 14,325,033 4,013,046 2,323,825 52,869 Advances from customers 56,271 - - - Dividend payable* - 3,185,047 - 3,185,047 Accruals of expenses 6,384,922 4,972,159 966,975 955,009 Deposits Interest payable

120,824 -

393,132 1,356

- -

- 1,356

Amount due to a Director 380,000 1,825,000 - - GST payable 536,800 - 4,774 - 21,803,850 14,389,740 3,295,574 4,194,281 * The dividend payable is payable to a major shareholder of the Company.

Included in non-trade payables of the Group and of the Company are the amount of RM3,650,000 (2014: RMNil) and RM2,280,000 (2014: RMNil) respectively due from a company in which a person who a Director has interest, which is secured, interest free and repayable on demand. The amount due to a Director is unsecured, interest free and repayable on demand.

22. INVESTMENT IN SUBSIDIARY COMPANIES

Company 2015

RM 2014

RM Unquoted shares, in Malaysia At cost 256,430,002 256,430,002

Detailed of the subsidiary companies are as follows:-

Name of companies

Effective ownership interest and voting interest

Principal activities

Principal place of business/

Country of incorporation

2015 2014 % % Kamdar Sdn. Bhd. 100 100 Retail of textile and

textile-based products Malaysia



58

22. INVESTMENT IN SUBSIDIARY COMPANIES (CONT’D)

Detailed of the subsidiary companies are as follows (cont’d):-

Name of companies

Effective ownership interest and voting interest

Principal activities

Principal place of business/

Country of incorporation

2015 2014 % % Pusat Membeli-Belah Kamdar Sdn. Bhd.

100 100 Letting out of properties Malaysia

Pusat Membeli-Belah Kamdar (Penang) Sdn. Bhd.

100 100 Letting out of properties Malaysia

Kamdar (South) Sdn. Bhd. 100 100 Retail of textile and

textile-based products Malaysia

Kesar Sdn. Bhd. 100 100 Importers, exporters,

retailer and wholesaler of textile and textile-based products

Malaysia

Kamdar Holdings Sdn. Bhd. 100 100 Letting out of properties Malaysia Kamdar Stores Sdn. Bhd. 100 100 Letting out of properties Malaysia Mint Saga (M) Sdn. Bhd. 100 100 Retail and letting out of

properties Malaysia

Kamdar (B) Sdn. Bhd. 100 100 Dormant Malaysia

Held by Pusat Membeli-Belah Kamdar Sdn. Bhd.

Beauty Gallant Sdn. Bhd. 100 100 Letting out of properties Malaysia Held by Kesar Sdn. Bhd.

Orisea Trade Sdn. Bhd. 100 100 Letting moveable and immoveable assets

Malaysia

23. AMOUNT DUE TO SUBSIDIARY COMPANIES The amount due to subsidiary companies are non-trade related, unsecured, non-interest

bearing and repayable on demand. 24. REVENUE

Group Company 2015

RM 2014

RM 2015

RM 2014

RM Sales of goods 167,764,439 182,957,097 - - Rental income 2,236,896 731,236 - - 170,001,335 183,688,333 - -



59

25. COST OF SALES

Group 2015

RM 2014

RM At 1 January - inventories 127,808,630 117,789,180 Purchases 102,283,137 118,622,093 Custom duties 529,696 521,400 Carriage inwards 749,838 650,254 Marine insurance 65,998 8,558 Bankers’ acceptance interest 1,807,213 1,860,113 233,244,512 239,451,598 At 31 December - inventories (125,890,759) (127,808,630) 107,353,753 111,642,968

26. OTHER INCOME

Group Company 2015

RM 2014

RM 2015

RM 2014

RM Fair value gain on

investment properties

-

397,000

-

- Impairment loss on

receivables no longer required

68,285

169,352

-

- Share of gain on investment in a former associate company

-

6,720

-

- Interest income 166,371 233,297 - - Insurance claim 4,987,951 2,366,199 - - Management fee - - 595,000 630,000 Other income 24,742 85,388 - - Realised gain on foreign exchange

142,905

91,540

-

-

Rental income 875,350 1,457,691 - - Unrealised gain on foreign exchange

51,105

-

-

-

6,316,709 4,807,187 595,000 630,000

27. FINANCE COSTS

Group Company 2015

RM 2014

RM 2015

RM 2014

RM Interest expenses:- - term loans 2,293,074 1,646,397 795,403 558,128 - bank overdrafts 635,519 410,813 - - - finance lease liabilities 7,769 452,497 - - 2,936,362 2,509,707 795,403 558,128



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